City Taxes Could Rise in Lebanon

Lebanon — City residents are likely to see increases in their municipal tax and sewer rates as Lebanon comes off a year that added unexpected and costly infrastructure projects to what was already a lengthy to-do list.

Since the summer, city officials have discovered a complication underneath Interstate 89 that doubled the anticipated cost of sorely-needed sewer work in the Route 120 corridor. On top of that, the city must plan for an extensive rebuilding of Slayton Hill Road, which washed out during cloudburst rainstorms in early July, as well as the repair of other storm-damaged properties.

Nonetheless, City Manager Greg Lewis described his proposed $52.2 million budget for 2014 as a pivot away from the “survival years” of 2012 and 2013, during which he said he attempted to better understand and stabilize the city’s fiscal situation.

“To get to a sustainable community, we have to make investments,” Lewis said last week. “And there has to be a return on those investments.”

For 2014, total spending is projected to increase by 13 percent — or $6 million — to $52.2 million. If the spending plan were approved, the municipal tax rate is expected to rise 3.5 percent to $9.76 per $1,000 of assessed value, bring annual taxes on a $250,000 property to $2,440.

As was the case last year, the sewer rate will rise by 9 percent, though no increase is slated for the water rate, which also rose last year and was anticipated to rise again in 2014. Both the water and sewer funds are supported by user fees, not taxes.

Finance Director Len Jarvi said that the city’s water fund is “in better shape” than its sewer fund, and that the second phase of wastewater treatment facility improvements — at a cost of more than $3 million — is largely driving the sewer rate increase. Given the proposed increases for the sewer and municipal tax rates, Jarvi said, he decided to hold off on a water rate increase that was not imminently needed.

The bulk of the new proposed spending is attributable to an additional $4.7 million in capital projects compared to the previous year. Capital projects proposed for the 2014 budget amount to nearly $14.2 million, more than a quarter of the entire budget.

Nearly half of the proposed 2014 capital budget is for street, road and utility improvements, which total just under $7 million. More than 65 percent of those projects are attributable to the combined sewer overflow mandate from the Environmental Protection Agency that requires the city to separate its sewer and stormwater systems.

The EPA-mandated sewer work, which would have been largely covered by federal funding if city officials acted sooner to move on the projects in past decades, is a perpetual reminder of the cost of that missed opportunity. The city has spent $43.2 million on the projects since receiving the mandate from the EPA. Work on the sewer projects is anticipated to be completed by the end of 2020.

The city manager has also proposed a two-phase $2.7 million city hall renovation to be paid for over the next two years. He said he anticipates some public feedback on that item, but maintained that the improvements are needed to help the city government interface with its citizens.

“We’re doing the best we can in spite of where we’re working, and customers are receiving the services as best they can receive considering how it’s being delivered,” Lewis said. “It’s not bad, but I aspire higher. Others might not share that aspiration.”

Jarvi added that he doesn’t see any obvious places where city councilors could look to shave expenditures from the bulkier-than-usual capital improvements plan.

“Those are things the Council is going to have to certainly consider,” Jarvi said. “But there are no runts in the litter.”

The financial impact of the early July storms is not yet finalized, and has been hanging over the budgeting process. The total cost of repairs could range from the city’s initial estimate of $6.5 million up to $10 million, depending on how the Federal Emergency Management Agency completes its internal estimates.

The federal agency’s final estimate will determine how the city will pay for its share of the repair costs and could also affect the scale of the Slayton Hill Road reconstruction project, not to mention other capital projects in the budget. Jarvi anticipates applying for about $8 million in aid from FEMA.

Jarvi said that the city is not yet at a “decision-making point” regarding its fiscal response to the storms.

“We need to get to that decision-making point, then we can decide how the balance is going to be funded and how the balance is going to be funded is going to have a meaningful influence on what is done,” Jarvi said. “What may seem the most desirable now may not be the most desirable in the final analysis.”

The city manager will present the proposed 2014 budget to the City Council tonight at 5:30 p.m. at City Hall. Three additional question-and-answer sessions are planned for later in the month, with City Council action on the budget is slated for mid-December.

Ben Conarck can be reached at or 603-727-3213.