ST. ALBANS CITY — The city council’s regular meeting Monday also included the first statutorily required public hearing on a proposed local option tax — though none of the public attended this first hearing.
Council members didn’t seem surprised.
“I’m not sure the public is actually tuned in yet,” councilor Tim Hawkins said.
Hawkins’ fellow councilors noted the proposed community pool at Hard’ack has generated far more attention as a topic of social media than the LOT. But Hawkins pointed out that the pool is no sure thing unless voters approve the city’s proposed LOT, and neither, he said, is proposed sidewalk improvements.
As he, his fellow councilors and Dominic Cloud, the city manager, said Monday night, the purpose of the LOT is largely to fund those capital improvement projects, proposals like the community pool or sidewalk upgrades, without property tax increases.
“One of the questions we got a lot is ... ‘Well, tell me what this means in terms of the property tax,’” Cloud said. “Well, it’s fourteen cents on the tax rate. So that’s significant.”
Tom Leitz, the city’s administration director, approached the Messenger after the meeting to clarify that figure is not precise. The actual property tax savings are probably between 13-15 cents, Leitz said, either slightly less or slightly more than Cloud’s statement. Leitz is calculating the precise figure, which the Messenger will include in a follow-up on the LOT, including a conversation with economist Jeff Carr about specifics of the proposal.
The city council praised Leitz and Cloud for the city’s proposed Fiscal Year 2021 budget, which the council reviewed at this meeting (and which the Messenger will cover in depth in a future edition).
The council’s praise centered on the fact that the proposed budget is a zero percent increase from that of the prior fiscal year. Hawkins said that would have seemed unbelievable in prior years.
But he also said the LOT is key to that level-funded budget.
“Without having that local option tax there, the zero percent doesn’t happen,” Hawkins said. “If we want ... to be taking care of police, [recreation], sidewalks, roads, we need to have some additional help or else this isn’t zero ...
“That’s why it’s important for the public to know — one of the things they want is they want the burden off the taxpayer for the property tax. And the only way that’s going to happen is with the local option tax.”
And as for the proposed community pool, Hawkins stressed, “It doesn’t work without both of them” — voters passing the pool proposal and the proposed LOT.
Hawkins actually said he’s reversed his opinion on the LOT.
He said a resident approached him on New Year’s Eve, “and they said, ‘Really? A one percent tax on all of us?’”
Hawkins said there was too much going on at the time, namely celebrating the new year, and he felt it wasn’t an appropriate time to get into a discussion — which he said he now regrets.
“I wish I would have said, ‘Hey, call me tomorrow and I’ll tell you about it.’”
Tim Smith, the city’s mayor, said he thinks people don’t yet understand the nature of the proposed tax — a one percent tax on rooms, meals, alcohol and sales within city limits.
“People still view it as a direct tax,” Smith said. And he said in some cases — a person’s cable or electric bill, for example — it would be that.
But Smith stressed the LOT wouldn’t be a direct tax otherwise. It would be just be an additional one percent tacked on to bills when someone stayed at the Hampton Inn, when someone ate at a local restaurant or stopped at a bar — and also, as Cloud emphasized, when someone made an online purchase, the obvious example being from Amazon.
“This really is a new opportunity that allows us to capture some of those revenues off the Internet and reinvest them in the community,” Cloud said.
The city’s estimated LOT revenue in Fiscal Year 2021 is more $630,000.
The council generally resolved that the LOT revenue “should reduce pressure on the property tax while continuing the city’s record of public investment,” as Cloud put it. But more specifically, the council decided at least 7.5 percent of the annual LOT revenue should go toward reducing recreation programming costs for disadvantaged people, five percent toward a “rainy day fund” and another five percent toward replenishing the city’s redevelopment fund.
The city government proposed putting the FY 2021 LOT revenue toward the pool proposal and neighborhood sidewalk projects. The combined cost of those two projects is more than $4 million.
“It will directly benefit St. Albans City residents and builders,” Cloud said. “That would otherwise have to be paid for just by the property tax or not done at all.
“I think, for St. Albans City voters, it’s really a no-brainer. ... It’s big enough to make a difference.”
Cloud stressed that voters aren’t giving up any budgetary control by approving the LOT — it would go through the same public budgeting process as any other city funds.
The city government hosts a second public hearing on the LOT on Feb. 10 at 7 p.m. in City Hall. Cloud said he expects Carr will attend to answer voters’ questions.
City officials have also scheduled a third public hearing for Feb. 24.