Essex Junction previews FY26 budget with 3% spending rise, new stormwater utility proposal
January 26, 2025 | Essex Junction City, Chittenden County, Vermont
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Essex Junction City officials presented the proposed fiscal year 2026 general fund and capital budgets at a public meeting on Jan. 25, 2025, saying the draft would raise overall spending 3% and increase the city tax rate about 2.5% if approved.
City Manager Regina Mahoney told attendees, “so what you see today may not necessarily be the exact same thing once you get your, once you vote,” and that the meeting was an opportunity for public input before the council’s Feb. 12 public hearing and the Feb. 26 meeting to set the ballot.
Why it matters: The draft budget would shift some programs out of the general fund, create a new stormwater utility, and move more money into capital and reserves. The tax-rate change shown in staff slides would raise the tax burden on a home assessed at $280,000 by about $69 compared with FY25; staff said that $280,000 reflects the city’s current median assessed value and will change after an upcoming reappraisal. The city also plans a near-15% aggregate increase to utility charges (staff said the utility-rate work will continue through the spring and be finalized later).
Key budget numbers and programs
- Overall proposed general fund increase: 3%; staff tied that to council guidance from last spring.
- Projected tax-rate change: about 2.5%; example given: $69 annual change for a $280,000 assessed home.
- Employee compensation: a proposed 4% salary/wage increase for employees and an additional $50,000 proposed for public works to address vacancies.
- Health insurance: a projected 17.9% increase in premiums was cited; a recently negotiated association contract raises employee contributions slightly.
- Fund balance: staff proposed a $110,000 transfer to the unassigned fund balance (described as a “rainy day” fund), which they said increases the proposed tax change from a 1.5% to a 2.5% tax-rate impact.
- Capital and debt: the budget increases the annual capital allocation by about $84,000 and forecasts a roughly $16,000 overall debt service reduction for the year.
Stormwater utility proposal
City staff described a proposal to establish a stormwater utility and move stormwater program costs out of the general fund into an enterprise fund paid by property users. Regina Mahoney said the proposal is intended to spread stormwater costs across all property owners rather than funding them solely from general taxes, and to ensure the city can meet its stormwater permit requirements.
Staff projected an average user impact and provided two figures during discussion: a per-parcel illustrative rate of about $84.75 and a separate statement that the change equates to an 8.6% increase and “about $250 on an average user,” reflecting different ways fees were being modeled. Staff told the council that stormwater work now funded in FY25’s general fund (roughly several hundred thousand dollars) would move into the new utility budget if the council starts the utility in the coming fiscal year. Staff said they aim to have the utility set up so a position (stormwater coordinator) could start in July if the council approves the change.
Local option tax, capital priorities and other funds
Staff said the local option tax (referred to as “LOT”) brings in about $900,000 annually. City policy directs 25% of that income to sidewalk repair and the remainder to capital projects; staff said roughly $200,000 will go to sidewalks this year (earlier chart lines were clarified during questions) and about $800,000 to the capital fund. The city’s economic-development “penny” on the tax rate is projected at about $870,000; staff said $750,000 of that is budgeted as a match for redesigning the Amtrak station on Railroad Street.
Projects noted in the presentation include sidewalk and roadway work from West Street to Susie Wilson, water-line improvements in the same area, multiple water-line projects in coming years, and fire department radio replacements. Brownell Library budget increases largely reflect building maintenance, and staff said the library will mark its 100th anniversary in 2026 and is planning roof work.
Amtrak station and federal funding
Chris Yuan, community development director, described the Amtrak station effort as in a pre-design and grant-obligation phase. “The plans that exist for the Amtrak station renovations are conceptual plans,” Yuan said; consultants will advance the work to roughly 30% design to secure federal railroad-grant obligations. He said the Federal Railroad Administration views the grant as unlikely to be in danger but that the city cannot guarantee funding until obligations are finalized. Yuan also clarified that Amtrak’s own work on station platforms (ADA accessibility upgrades) is related but separate from the city’s station project and uses different funds.
Public questions and clarifications
Several residents asked for clarity on how figures are presented (for example, using a $280,000 assessed-home example) and how shared services with the town (police, assessing) are budgeted. Regina Mahoney and finance staff said shared services are negotiated with the town and that some costs—like police—are driven by personnel contracts negotiated on multi-year timetables.
On stormwater accounting, staff explained that FY25 figures shown in some materials reflected a transitional presentation (the city had budgeted stormwater in the general fund while modeling the utility). Staff said they will provide clearer multi-year comparisons at the council’s Feb. 12 meeting.
Process and next steps
City staff outlined the schedule: a public hearing on the budget at the Feb. 12 council meeting, final council action to set the ballot on Feb. 26, a deadline for petition articles and nominations in late February and March, an informational hearing March 25, and the annual meeting on April 8. Staff also said the council will place a bond vote on the ballot for pump-station improvements on West Maple and River Street and that town/city cost shares will apply to some sanitation work; details will be provided at the Feb. 12 meeting.
No formal council vote on the FY26 budget was taken at the Jan. 25 meeting; council members encouraged written comments via comment cards or an on-table QR poll during the meeting.
Ending
Staff asked residents to submit written comments or to speak at the Feb. 12 public hearing. The council adjourned the meeting at the end of the session.
City Manager Regina Mahoney told attendees, “so what you see today may not necessarily be the exact same thing once you get your, once you vote,” and that the meeting was an opportunity for public input before the council’s Feb. 12 public hearing and the Feb. 26 meeting to set the ballot.
Why it matters: The draft budget would shift some programs out of the general fund, create a new stormwater utility, and move more money into capital and reserves. The tax-rate change shown in staff slides would raise the tax burden on a home assessed at $280,000 by about $69 compared with FY25; staff said that $280,000 reflects the city’s current median assessed value and will change after an upcoming reappraisal. The city also plans a near-15% aggregate increase to utility charges (staff said the utility-rate work will continue through the spring and be finalized later).
Key budget numbers and programs
- Overall proposed general fund increase: 3%; staff tied that to council guidance from last spring.
- Projected tax-rate change: about 2.5%; example given: $69 annual change for a $280,000 assessed home.
- Employee compensation: a proposed 4% salary/wage increase for employees and an additional $50,000 proposed for public works to address vacancies.
- Health insurance: a projected 17.9% increase in premiums was cited; a recently negotiated association contract raises employee contributions slightly.
- Fund balance: staff proposed a $110,000 transfer to the unassigned fund balance (described as a “rainy day” fund), which they said increases the proposed tax change from a 1.5% to a 2.5% tax-rate impact.
- Capital and debt: the budget increases the annual capital allocation by about $84,000 and forecasts a roughly $16,000 overall debt service reduction for the year.
Stormwater utility proposal
City staff described a proposal to establish a stormwater utility and move stormwater program costs out of the general fund into an enterprise fund paid by property users. Regina Mahoney said the proposal is intended to spread stormwater costs across all property owners rather than funding them solely from general taxes, and to ensure the city can meet its stormwater permit requirements.
Staff projected an average user impact and provided two figures during discussion: a per-parcel illustrative rate of about $84.75 and a separate statement that the change equates to an 8.6% increase and “about $250 on an average user,” reflecting different ways fees were being modeled. Staff told the council that stormwater work now funded in FY25’s general fund (roughly several hundred thousand dollars) would move into the new utility budget if the council starts the utility in the coming fiscal year. Staff said they aim to have the utility set up so a position (stormwater coordinator) could start in July if the council approves the change.
Local option tax, capital priorities and other funds
Staff said the local option tax (referred to as “LOT”) brings in about $900,000 annually. City policy directs 25% of that income to sidewalk repair and the remainder to capital projects; staff said roughly $200,000 will go to sidewalks this year (earlier chart lines were clarified during questions) and about $800,000 to the capital fund. The city’s economic-development “penny” on the tax rate is projected at about $870,000; staff said $750,000 of that is budgeted as a match for redesigning the Amtrak station on Railroad Street.
Projects noted in the presentation include sidewalk and roadway work from West Street to Susie Wilson, water-line improvements in the same area, multiple water-line projects in coming years, and fire department radio replacements. Brownell Library budget increases largely reflect building maintenance, and staff said the library will mark its 100th anniversary in 2026 and is planning roof work.
Amtrak station and federal funding
Chris Yuan, community development director, described the Amtrak station effort as in a pre-design and grant-obligation phase. “The plans that exist for the Amtrak station renovations are conceptual plans,” Yuan said; consultants will advance the work to roughly 30% design to secure federal railroad-grant obligations. He said the Federal Railroad Administration views the grant as unlikely to be in danger but that the city cannot guarantee funding until obligations are finalized. Yuan also clarified that Amtrak’s own work on station platforms (ADA accessibility upgrades) is related but separate from the city’s station project and uses different funds.
Public questions and clarifications
Several residents asked for clarity on how figures are presented (for example, using a $280,000 assessed-home example) and how shared services with the town (police, assessing) are budgeted. Regina Mahoney and finance staff said shared services are negotiated with the town and that some costs—like police—are driven by personnel contracts negotiated on multi-year timetables.
On stormwater accounting, staff explained that FY25 figures shown in some materials reflected a transitional presentation (the city had budgeted stormwater in the general fund while modeling the utility). Staff said they will provide clearer multi-year comparisons at the council’s Feb. 12 meeting.
Process and next steps
City staff outlined the schedule: a public hearing on the budget at the Feb. 12 council meeting, final council action to set the ballot on Feb. 26, a deadline for petition articles and nominations in late February and March, an informational hearing March 25, and the annual meeting on April 8. Staff also said the council will place a bond vote on the ballot for pump-station improvements on West Maple and River Street and that town/city cost shares will apply to some sanitation work; details will be provided at the Feb. 12 meeting.
No formal council vote on the FY26 budget was taken at the Jan. 25 meeting; council members encouraged written comments via comment cards or an on-table QR poll during the meeting.
Ending
Staff asked residents to submit written comments or to speak at the Feb. 12 public hearing. The council adjourned the meeting at the end of the session.
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