town office image

The proposed new Pownal town office building. Voters will be asked to approve funding during the March 2 annual meeting.

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POWNAL — The town will bill taxpayers for a new town offices bond through normal property assessments, after the Select Board dropped consideration of a flat tax payment on advice of a bond attorney.

Discussing tax repayment options for a proposed $600,000 bond for the office project, board members said they were advised by the town’s bond attorney that a flat tax — similar to one in place for the Pownal wasterwater treatment plant bond — would not be legally possible in this case.

Asked about taxing options, attorney J. Paul Guiliani, of Primmer, Piper, Eggleston & Cramer of Montpelier, stated in an email to town officials that with this type of bond, “There really is no debt service payment option other than a budget appropriation funded by a general tax levy.”

The Select Board had been discussing how to tax for the bond — including whether there should be a flat tax similar to the tax of approximately $70 annually paid by all property owners on a 2006 bond for the Pownal wastewater treatment plant and system.

A flat tax was possible under state law in that case because the facility serves a specific set of taxpayers, not all residents, since not everyone in town is connected to the system. The flat sewer tax is shown separately on property tax bills.

Board member Robert Jarvis had raised the issue for discussion, saying the board should consider whether a flat tax payment — as initially proposed — would be unfair to some taxpayers with multiple properties of low assessed value.

TWO HEARINGS

During the first of two hearings on the proposed $600,000 bond for the town office project, which will go before voters on the March 2 ballot, the board appeared to agree on a normal tax levy, based on the assessed value of each property.

Jarvis said the estimated annual cost with a property valued at $100,000 was for a payment of between $13 and $14, based on current town grand list figures and current interest rates.

In a chart provided by Jarvis and board liaison Rebecca Dragon, the overall cost to the entire town would be $30,000 to $39,000 annually over 20 years for the bond, based on current rates.

Total interest was estimated at $130,729 over 20 years on the $600,000 to be borrowed.

Resident Jim Kocsis told the board he had favored a flat tax and that was one reason he supported the bond. He asked during the hearing Thursday whether the board could send him the Vermont statutes related to the information provided by the bond attorney.

However, Kocsis said in an email after the meeting that he was primarily interested in learning more about the legal restrictions on flat tax assessments.

“Whether it’s a flat tax or an assessed tax, we desperately need a new town hall,” he said. “I just want people to see the numbers and be informed.”

Kocsis also asked about the proposed use of an additional $25,000 that was added to a town office building fund, which will be tapped for the project if it is approved March 2.

He also asked how a pledged $25,000 from the Pownal Historical Society for the town office project will be used.

The office fund, built up over the years Pownal has considered options for replacing the cramped town offices on Center Street, now contains more than $200,000, Kocsis said. The bonding proposal would use the $600,000 to be borrowed, along with $175,000 from the existing fund, plus $90,000 from undesignated surplus funds in the budget to cover the estimated $865,000 project cost.

Dragon said Monday it is her understanding that the additional amount in the town office fund “will be there for contingency [costs], and if not needed for contingency, it will be for [building] maintenance ongoing.”

She added that the Pownal Historical Society gift was factored into the overall project budget.

PROJECT DETAILS

The project involves moving a nearby historic schoolhouse to the former Bartels Lodge site near the current offices and adding two modular additions to it for a new town office and meeting facility.

A $600,000 bond was approved in October 2019 for the project, but it did not go to a groundbreaking by early 2020 as anticipated. The board said in the fall that cost increases following permitting and other delays meant that another $90,000 was required to meet the contract costs.

Initially, a new $690,000 bond was considered, but that was dropped, and taking $90,000 from current surplus funds rather than paying interest on the amount over the life of the bond was proposed. Voters are therefore asked to approve both the bond and the use of surplus funds in the ballot article.

Whether it would be better to borrow an additional $90,000 rather than use surplus funds was also discussed during the hearing. However, to change the bond amount now would require another townwide vote because the amounts are specified in the ballot question.

A second Zoom videoconference Select Board hearing on the proposed bond is scheduled for Wednesday at 7 p.m.

Jim Therrien writes for New England Newspapers in Southern Vermont. Email jtherrien@benningtonbanner.com

Reporter/editor

Jim Therrien reports for the three NENI newspapers in Southern Vermont. He previously worked as a reporter and editor at the Berkshire Eagle, the Bennington Banner, the Springfield (Mass.) Republican and the former North Adams Transcript.


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