By Polly Lynn
KILLINGTON— Killington Select Board Chair Patty McGrath said that new rate for municipal property taxes would be 0.3333, “only slightly higher than we anticipated,” she said. The Select Board unanimously approved the rate at its regular meeting Tuesday, July 5, there was no further discussion.
The 2015-16 rate was $0.4633 for an 18-month budget cycle (approximately 0.3109 if extrapolated to 12-months.) In 2014, the 12-month rate was $0.2959, according to Town Manager Deborah Schwartz.
The state education property tax rate for residents (homestead) and non-residents for the fiscal year, which started July 1, is $1.6227 and $1.4852 respectively. That compares to the 2015-16 rates of $1.7364 for residents and $1.5052 for non-residents, Schwartz stated.
Presenting a financial update to the Select Board, Tuesday, she noted: “The operating note was funded on June 30 to the tune of $900,000, the interest rate is 1.4 percent. To look to see how much of that was from prior year or years vs. going forward, Lucretia did some calculations, which you have in front of you,” she said. Further explaining, she added, “The balance forward from July expenses is just under $66,000. The amount that is needed for June is the lions share of the note.”
Tax delinquencies through June 30 were $395,554, which includes delinquencies, penalties and interest, she continued. Of that number $373,000 was from 2015 alone.
“So if you remove the tax delinquency from the amount needed for June we have a post-tax balance of almost $438,700,” Schwartz said. Additionally, “we have our hands out to FEMA for about $539,000, it is still to be determined what the outcome of that is going to be.
“So the lion’s share of this note was to cover expenses for the last fiscal year which ended last week,” Schwartz concluded.
In order to get away from tax anticipation and/or operating notes in the future, the Board discussed the timing of tax collection.
Board member Ken Lee asked if it would make more sense to go to three payments instead of the current four. Patty McGrath said she thought it would.
“When we do it as four payments there’s a six week gap before we collect our first payment… so that puts us behind,” she said. “If we went to three payments it would still provide benefit, breaking it up and lower tax payments, but it would also get us ahead. So, if our finances are running smoothly, we wouldn’t have to be going for the tax anticipation notes.”
Chris Bianchi said, “The only way we don’t go for a tax anticipation note is if we have a reserved fund balance. Because even if everyone paid their taxes on time come June 30, the end of the fiscal year, and all our bills our paid, the budget’s paid, the state’s paid — we have no money and we don’t collect any until August but we have bills in July and August,” he said. “So unless we build up a reserve fund of a couple months operating, as suggested, we will always need an operating note… we used to have a reserve fund but the balance that we used to carry got used up when Irene happened — we had to deplete that.”
Bianchi suggested that discussing such options, including switching to a different payment schedule and building up the reserve fund balance again, should be brought up at the next town meeting in March.
McGrath agreed but felt discussing the pros and cons of such options and getting that information out to the public early was a benefit.