South Burlington council approves FY26 budget, capital plan, ARPA climate funding and utility rate increases; sends budget to voters

The South Burlington City Council on Jan. 13 approved the city’s proposed FY26 general fund budget, the FY26–35 capital improvement plan and several supporting resolutions — including use of ARPA‑inspired one‑time funds for climate work and new utility rates — and voted to send the budget to voters at Town Meeting Day on March 4, 2025.

City Manager Jesse Baker and Finance Director Martha Machar presented the plan before the council took unanimous votes to approve: Resolution 2025‑1 to use ARPA‑inspired fund balance for climate CIP projects; Resolution 2025‑2 adopting the FY26–35 capital improvement plan; Resolution 2025‑3 approving the FY26 city budget and enterprise funds for submittal to voters; the Town Meeting Day warning and a March 3 public information hearing; and Resolution 2025‑4 setting FY26 water, wastewater and stormwater rates and allocation fees.

The package is a level‑services budget intended to preserve current service levels while limiting property tax impacts. The administration estimated a 3.33% increase in the estimated property tax rate — described by staff as “just over a penny and a half” — driven in part by statewide education funding pressures and higher insurance and workers’ compensation costs. Staff said the budget assumes 1.5% grand list growth and 20% TIF grand list growth, includes contractual cost‑of‑living adjustments, and reflects a 4% increase in health insurance costs after renegotiating stop‑loss coverage. The presentation estimated the average condo owner would pay about $49.69 more and the average homeowner about $73.47 more annually under the plan.

Martha Machar told the council the general fund is about 65% of the city budget and that staff increased the capital contribution incrementally: $4.46 million to the general fund CIP in FY26, with $1.1 million of that tied to projects with a climate component. On utilities, staff said stormwater, sewer and water rates will rise roughly 3%–8% to support capital projects such as the water tower replacement and the Bartlett Bay wastewater treatment plant, which was reported to be at roughly 60% design.

Councilors and staff also noted several items not funded in the FY26 package, including further work on a recreation center, expanded cemetery funds, a formal parking enterprise fund, or significant additional community development staffing. The city manager earlier described the budget as designed to “continue our current level of service delivery” while maximizing non‑property tax revenues and limiting municipal property tax impact.

Votes at a glance

- Resolution 2025‑1 (use of ARPA‑inspired funds for climate CIP): approved, unanimous (council vote: aye 5, no 0). Motion and second not specified in the record. - Resolution 2025‑2 (FY26–35 capital improvement plan): approved, unanimous (council vote: aye 5, no 0). Motion and second not specified in the record. - Resolution 2025‑3 (FY26 city budget and enterprise funds; send to voters): approved, unanimous (council vote: aye 5, no 0). Motion and second not specified in the record. - Town Meeting Day warning and public information hearing (set March 3, 2025 at 6:30 p.m.): approved, unanimous (council vote: aye 5, no 0). - Resolution 2025‑4 (set FY26 water, wastewater and stormwater rates and allocation fees): approved, unanimous (council vote: aye 5, no 0). Council discussion confirmed that debt service for Bartlett Bay and the water tower projects is built into the enterprise fund budgets; the debt was approved in prior years and is part of the enterprise rate calculations.

Why it matters

Councilors and staff framed the votes as enabling the city to continue services (police, fire, public works and core departments), invest in preventive capital maintenance, and fund targeted climate and transit priorities while keeping the municipal portion of the tax increase modest for the community. The calendar now moves to the joint steering committee meeting with the school board on Jan. 22, followed by the March 3 public hearing and March 4 town meeting day voting.

Council and staff requested that administration help with voter education about the package and noted several items that could be considered for future budgets if additional revenues or one‑time funds become available.