Town Meeting, Tuesday, March 4, 2008 9am at Stowe High School
Australian Ballot Articles, Town Meeting Warning & Notice to Voters and 2007 Annual Report...
AUSTRALIAN BALLOT RESULTS HERE... Australian Ballot Articles, Town Meeting Warning & Notice to Voters - For further information, contact the Town Manager's Office at 253-7350. Please read further...Information follows on several of the items before the voters on Town Meeting day. We will continue to provide further info that will help to assist you in making your decisions. Click on 2007 ANNUAL REPORT of the Auditors Town and Town School District for this year's report.
Article 6 - Equipment Reserve Fund
"Will the Town in Town Meeting vote to establish a Capital Equipment Reserve Fund with the Selectboard being authorized to expend monies in the fund to purchase or repair capital equipment without obtaining further voter approval?" ARTICLE PASSED The following information is to assist you in understanding the purpose of capital equipment planning and the creation of a capital reserve fund. If you have any questions, please contact Town Manager Charles Safford or by phone 253-7350. Equipment Reserve Fund The purpose of capital equipment planning is to inventory our existing equipment and plan for its replacement based upon agreed upon assumptions rather than considering equipment replacement on a case by case basis. A capital reserve fund enables you to level out the spending on equipment from year to year due to a planned replacement cycle and the ability to carry money over from year to year. State law requires voters to authorize the establishment of a reserve fund to carry over money from year to year (24 VSA 2804). Once the fund is established it is “under the direction and control of the legislative branch of the municipality.” The main source of funding is from a transfer authorized by the voters each year at Annual Meeting either as part of the General Fund Budget or as a separate article. However, money can also come from grants, trade-ins, sale of equipment, etc. This year the Selectboard is asking voters to approve equipment as part of the Capital Budget approval process (Article 2) and to authorize the establishment of an Equipment Reserve Fund (Article 6). The current amount that is estimated to be transferred from the General Fund to the Equipment Reserve Fund each year is $395,000 (not adjusted for inflation). However, this number can change due to inflation or demands for equipment change. Equipment Reserve Fund FAQs Q. Why plan the replacement of equipment, why not just replace “as you need to?” A. Much of our equipment is for public safety purposes (i.e. ambulances, fire trucks, police cruisers, snow plows, etc.). This equipment should be reliable. A planned replacement cycle helps ensure equipment replacement is recognized as a core cost of doing business and money is set aside for its replacement in a timely manner. Q. Aren’t you depriving me of the opportunity to vote at the Annual Meeting, weather or not I want to replace equipment? A. While voters wouldn’t vote to approve each piece of equipment, they would vote on the amount to be transferred to the equipment fund as a line item in the General Fund or as a separate article. Under the draft equipment fund policy, you would still vote on equipment estimated to cost over $500,000 and long term borrow to replace them. The voter’s focus is on the “macro” and not the “micro.” Q. Isn’t it cheaper for a municipality to borrow money than it is for me? A. Yes. However, Stowe has historically not borrowed to replace the majority of its equipment. The capital budget, including equipment, is voted on and the property taxes are raised in a given year. Q. Why don’t you borrow to replace all your equipment? A. Typically, municipal governments only borrow for larger expenditures. Too much borrowing can tie the hands of future decision makers. This may make it difficult for them to meet unfunded mandates, respond to major emergencies, economic development opportunities, or changing community priorities. Also, the growth in the Grand List can change in the future and you are saddled with debt that you must continue to pay. Q. Why shouldn’t the people that use the equipment pay for it (after all I may move and not be here to enjoy the benefits of the equipment)? A. The intent is to transfer into the equipment fund each year an equal amount of money adjusted for inflation, unless community needs change and equipment is added or deleted, so you will be paying the same as the person before you and the person after you. Q. How will I know what my money is being spent on? A. The equipment fund is a public document and it is very “transparent.” Instead of seeing a “one year snap shot” of what is proposed to be replaced, you can look out several years at the planned equipment replacement and financial needs. Also, expenditures or amendments to the equipment fund can only be done by the legislative body in public session. Q. What happens and how is it handled if a Department Head chooses to exchange one piece of equipment for another (i.e. dump truck for a new loader, etc.)? A. They would have to ask the Board to amend the equipment fund. Q. What happens if there is an unplanned equipment failure? A. While this should be done judiciously, a reserve fund enables the Selectboard to amend it at anytime during the year to respond to meet changing circumstances. If we find that there is a trend where our equipment is not lasting as long as we planned, the Board should change the replacement cycle of the equipment. Q. Would there / could there be other pieces of equipment added to the list each year? A. Yes, with approval of the Board. However, the voters would control the amount of property taxes that are transferred into the equipment fund, so the Board needs to do this judiciously. Q. What is the advantage of having an equipment fund? A. Other than what has already been mentioned, it promotes multi-year financial planning and predictability of your tax rate. It also helps avoid the political temptation not to replace a piece of equipment in order to lower the tax rate for that year, only to have it catch up with you in another year. Finally, it recognizes that we operate 365 days a year and not just one day a year at annual meeting. Q. Do any other municipal governments have reserve funds and/or capital programs? A. Yes. The Government Finance Officers Association (GFOA) recommends that state and local governments prepare and adopt comprehensive multi-year capital plans to ensure effective management of capital assets.
Australian Ballot Articles 6 - 8 PASSED
FOR IMMEDIATE RELEASE Stowe Electric Department’s Proposed Plan Provides Voters the Most Economical Solution to the Town’s Present and Future Electric Needs Articles 6, 7 and 8 on the March Ballot Must Pass In Order To Keep the Rate Increase at or Below 4.5%. February 11, 2008 – Stowe, Vermont – The Stowe Electric Department (SED) today announced that it is essential for town voters to pass all three ballot items presented at the upcoming March 4th election in order to protect the 4.5% rate increase. By approving all three ballot items, ratepayers will authorize the funding necessary to protect the minimal rate increase that resulted from the negotiation of Stowe’s dispute with its transmission provider, Vermont Transco, LLC (VELCO). Without voter approval, Stowe electric ratepayers will face dramatically higher rate increases. The current 34.5kV transmission line providing service to Stowe has not been upgraded since 1948 and is no longer able to adequately serve the community’s needs. The Vermont Public Service Board has issued a Certificate of Public Good for the 115kV Lamoille County transmission line upgrade which means this project will move forward whether or not Articles 6, 7 and 8 are passed. Should the articles not pass, Stowe will be responsible for a much larger share of the upgrade cost. However, passage of the three Articles will ensure that the 4.5% increase will be protected and that the average residential customer would experience an increase of approximately $3.79 on their monthly bill. The three Articles are detailed as follows: Article 6 authorizes the Stowe Electric Department to secure a bond to finance $4.6 million, Stowe’s newly negotiated cost for the necessary transmission improvements. By securing the bond, rate payers will be able to pay back the $4.6 million over 30 years, thereby decreasing the financial burden on current ratepayers, and allowing future consumers to share the cost of the required upgrade. Article 7 addresses the need for the Stowe Electric Department to invest $2.4 million in several distribution system upgrades that had been on hold pending resolution of the transmission line funding issues. Article 8 allows Stowe Electric Department to borrow or issue general obligation bonds in an amount not to exceed $20 million dollars in order to take an equity interest in VELCO. Revenues from the electric department will be used to repay this note and are included in the 4.5% rate increase. Further details about the equity interest financing arrangement will be shared when the confidentiality conditions of the agreement allow. “It is clear that the presently proposed strategy for funding the mandated 115kV Lamoille County transmission line upgrade is the most economical approach available,” said Ellen Burt, General Manager, Stowe Electric Department. “Yes, we incurred significant legal fees to secure this solution, but I would hope voters realize that by investing to contest the original plan, we are now able to provide Stowe’s rate payers the opportunity to save close to $20 million dollars. That savings will not be realized unless voters support the current plan as authorized by passage of Articles 6, 7 and 8. We’ve worked very hard to be able to present the ratepayers of Stowe with a reasonable rate impact for this needed upgrade. Without voter approval of all three ballot items, Stowe rate payers will face dramatically higher electric rates.” Individuals interested in learning more details about the proposed plan for addressing the Town’s electric needs, as well as other ballot items, are invited to attend an informational meeting on Monday, February 25th at 7:00 PM at the Stowe High School auditorium.
Questions and Answers to Articles 6, 7 and 8
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