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Testimony Regarding Local Option Tax to the House Ways and Means Committee

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1 year 3 months
Submitted by iminot@vlct.org on
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Testimony of the Vermont League of Cities and Towns 
Ted Brady, Executive Director 
House Ways and Means Committee 
Regarding H.546 (Local Option Tax) 
May 2, 2024 

The Vermont League of Cities and Towns enthusiastically supports inclusion of Section 20 of the Senate Proposal of Amendment to H. 546 – authorizing voters of all Vermont municipalities to enact a local option tax at an annual or special meeting by majority vote.  

More than a third of Vermont municipalities – VLCT estimates 92 in total – already have this authority, and I encourage the committee to include this provision in an attempt to provide equity to all of Vermont’s municipalities. 

In 2015, VLCT looked at data from the Department of Taxes and JFO and estimated that 76 communities were given this authority with Act 60 – in recognition that increased education property tax pressure would negatively impact the municipalities’ revenues. One of the qualifiers was if “the combined education tax rate of the municipality will increase by 20 percent or more...” then the community qualified to adopt a local option tax.  Given many Vermont municipalities will experience a similar education property tax increase this year – it seems appropriate that the State recognize the pressure this puts on municipal budgets, and authorize local option taxes to offset those pressures. I’ve included a list of those 76 municipalities with my testimony. Sixteen of these communities have implemented some sort of local option tax. 

Another 16 cities and towns have implemented a local option tax through charters. Meaning 32 of the 92 communities authorized to have a local option tax have implemented one.    

While VLCT appreciates that the Legislature has never voted down a charter change with a local option tax provision, we find the charter process to be a cumbersome and inequitable way to treat the 155 municipalities that could only implement a local option tax by creating or amending a charter. Only 63 cities and towns have charters (another 21 villages are also chartered). It seems unnecessary to require a town to adopt a charter only to implement a local option tax that is almost sure to pass in this building and which more than a third of Vermont communities already have the authority to do. Creating a charter costs money and time that most municipalities don’t have.  

This is a particularly important time to enable municipalities to implement local option taxes because more cities and towns can benefit from them than ever before. Prior to the Wayfair decision, local option sales tax didn’t apply to online purchases. Now they do. Prior to the state taxing short term rentals, local option taxes didn’t apply.  Now they do. Short term rentals pose a particularly compelling argument to allow more towns to adopt local option taxes, as they are present in almost every city and town in Vermont and generate quite a bit of controversy and work for municipalities.  While previously only market towns could benefit from local option taxes, today, any town can. 

I also understand the Legislature and Tax Department may be concerned that making it easier to adopt a local option tax could result in a surge of adoption. I believe history quells this concern. Of the 76 communities authorized to adopt local option taxes in Act 60, only 16 have done so in a quarter century. While there may be a modest increase from the one to three municipalities adopting local option taxes a year as a result of this authorization, I do not believe there will be a significant increase in adoptions. 

Finally, this committee received testimony on the local option tax from the Department of Taxes at the beginning of the biennium. On January 11, 2023, the Department outlined the complexities associated with collecting local options taxes and how they are overcoming them.  During that testimony, the Department shared that the implementation and collection of local jurisdiction taxes is very common across the country, and state governments and businesses have found ways to comply. The Department also shared that a new tool created by VCGI – the Local Option Tax Finder – was helping businesses and customers comply. And they shared that they share information with the Streamlined Sales Tax Alliance that is used by many firms across the country to overcome those complexities. I understand many third-party vendors have also created solutions that overcome the complexities. 

I hope you’ll agree that now is the right time to give parity to the 155 municipalities that do not currently have the authority to implement local option taxes.  Thank you for your time. 

 

VERMONT CITIES AND TOWNS CURRENTLY ELIGIBLE TO ENACT LOCAL OPTION
TAXES UNDER ACT 60

Andover Greensboro Norton Troy 
Athens Groton Orange Vergennes ID 
Baltimore Irasburg Pawlet Vershire 
Barnard Isle La Motte Peru Victory 
Berkshire Jamaica Pittsfield Wardsboro 
Berlin Jay Pittsford Warren 
Bethel Killington Plymouth West Haven 
Brattleboro Kirby Reading West Windsor 
Brighton Landgrove Readsboro Westmore 
Clarendon Londonderry Royalton Weston 
Dorset Lowell Rutland Town Williston 
Dover Ludlow Ryegate Wilmington 
Eden Lunenburg Sandgate Windham 
Essex Junction ID Maidstone Searsburg Winhall 
Essex Town Manchester Sheffield Woodford 
Fairfax Mendon Sheldon Woodstock
Fairfield Middletown Springs Springfield  
Fayston Morgan Stannard  
Grafton Mt. Tabor Stowe  
Granby North Hero Stratton [as of January14, 2015]

 

Title 24 VSA 138(a)(3) provides the following: 

“ a local option tax may only be adopted by a municipality in which: 

(A) the education property tax rate in 1997 was less than $1.10 per $100.00 of equalized education property value; or 

(B) the equalized grand list value of personal property, business machinery, inventory, and equipment is at least ten percent of the equalized education grand list as reported in the 1998 Annual Report of the Division of Property Valuation and Review; or 

(C) the combined education tax rate of the municipality will increase by 20 percent or more in fiscal year 1999 or in fiscal year 2000 over the rate of the combined education property tax in the previous fiscal year.” 

The towns above are listed based on computations done by VLCT based on data from the Vermont Division of Property Valuation and Review. Each listed meets one or more the tests set forth in 24 VSA 318 above.

 

32 Cities and Towns with some form of adopted local option tax. 
Compiled by VLCT using information from Local Option Tax | Department of Taxes (vermont.gov).

Act 60 TownSalesMeals/Rooms/AlcoRoomsMeals and Alco
 Barre CityOctober 2022   
 BrandonOctober 2016October 2016  
XBrattleboroJuly 2019April 2007  
 BurlingtonJuly 2006Yes, Self Administered  
XCity of Essex JunctionOctober 2022October 2022  
 City of RutlandJuly 2023Yes, Self Administered  
 ColchesterOctober 2015October 2015  
XDoverJuly 2007July 2007  
 Elmore  July 2021 
 Hartford October 2017  
XJamaica July 2023  
XKillingtonOctober 2008 (Rescinded as of 7/1/2018) October 2008  
XLondonderry July 2024July 2023 
XManchesterApril 1999April 2008  
 MiddleburyOctober 2008October 2008  
 MontgomeryOctober 2022October 2022  
XRutland TownApril 2009April 2009  
 ShelburneJuly 2023July 2023  
 St. Albans CityOctober 2020October 2020  
 St. Albans TownJuly 2014July 2014  
 South BurlingtonOctober 2007October 2007  
 South Hero   July 2024
XStoweJuly 2023July 2006  
XStrattonJuly 2004July 2004  
XWardsboro  October 2023 
 WaterburyJuly 2024July 2024  
XWestmore  July 2024 
XWillistonJuly 2003July 2003  
XWilmingtonJuly 2012July 2012  
XWinhallJuly 2010July 2020  
 WinooskiJuly 2019July 2019  
XWoodstockJuly 2024July 2015  
      

 

Attachments
Testimony to House Ways and Mean Committee Regarding H.564 and Local Option Tax by Ted Brady – May 2, 2024

Plan NOW for 7/1's BIG Changes to Overtime Pay Eligibility

Member for

1 year 3 months
Submitted by iminot@vlct.org on
photo of binders labeled PAYROLL and OVERTIME on desk near calculator and eyeglasses

The U.S. Department of Labor (DOL) recently announced its final ruling on overtime eligibility under the Fair Labor Standards Act (FLSA). The changes are significant and will affect many employees who currently qualify as exempt from the FLSA and its overtime rules. Elected officials and their assistants may be exempt from the FLSA and therefore not entitled to an overtime pay rate for hours worked over 40. You should consult with counsel to determine if the new thresholds apply to those positions.

To be classified as exempt from overtime requirements and other FLSA rules, a typical municipal employee’s job must meet one of the DOL-defined “job duties tests.” There are separate tests for Administrative, Executive, and Professional (EAP) exemptions. Additionally, to qualify for one of these EAP exemptions, employees must earn a minimum salary, regardless of the number of hours worked during the week. The current minimum is $684 per week, or $35,568 annualized. In other words, if an employee earns less than $684 per week, even if they are performing Administrative, Executive, or Professional work, an employer must pay them hourly, and the employee is entitled to earn overtime for hours worked over 40 in a week. 

The new FLSA rules will be implemented in two steps that substantially increase the minimum salary that an employer must pay an employee to be properly classified as exempt, regardless of their job duties. The new minimums are as follows:  

  • Effective July 1, 2024: $844 per week ($43,888 annually)  
  • Effective January 1, 2025: $1,128 per week ($58,656 annually) 

Also, in order to qualify for the Highly Compensated Employees (HCE) exemption, the minimum annual salary requirement will increase from $107, 432 to $132,964 on July 1, 2024 and then to $151,164 on January 1, 2025. 

The new rules also provide a mechanism to increase these minimum salary thresholds every three years.  

In practical terms for VLCT members, the changes mean employees who earn less than $844 per week as of July 1, 2024, will be eligible for overtime pay if their hours worked exceed 40 during the work week. Likewise, as of January 1, 2025, employees who earn less than $1,128 per week will be eligible for overtime. To prepare for these changes, members should identify which employees, if any, are currently classified as exempt and whose status will change with these new rules. If any exempt employees earn less than the new salary amounts, the employer must reclassify them as non-exempt.  

Of course, it’s important to remember that the minimum salary is required, but not sufficient, for a position to be classified as exempt. The DOL’s job duties tests are a required part of the exempt analysis.  

At this time, you may want to evaluate your budget and operation in view of these changes. Some relevant considerations are: 

  • Do you have appropriate time and attendance processes in place for employees who may become hourly? 
  • If employees are on the borderline, can you increase their base salary to maintain exempt status? 
  • Also, if you maintain an employee’s current rate and convert them to non-exempt status, can you forecast how much overtime they are likely to earn? Remember that activities such as attending night meetings, responding to work email or texts after hours, being on call on weekends, and checking email or responding to calls on vacation are all compensable activities for which employees would be entitled to pay. 
  • Closely look at your job descriptions to be sure that the duties or qualifications that support a position’s FLSA exemption are clearly defined. 

Also remember that any time you change an employee’s pay or method of performing work, you should talk to them about it first! And if a labor union is involved, you cannot change a term or condition of employment without fulfilling any relevant bargaining obligations. 

For more information, your US DOL contact person is Ana Maria Rogers
Community Outreach and Resource Planning Specialist
Northern New England District Office
United States Department of Labor  
Wage and Hour Division   
Direct Phone: 207-420-0165
Fax: 603-606-3140
Email: rogers.ana.m@dol.gov

OSHA Proposes Updates to Emergency Response Regulation

Member for

1 year 3 months
Submitted by iminot@vlct.org on
photo of row of flack jackets hanging near ambulance in fire/rescue station

On February 25, 2024, the federal Occupational Safety and Health Administration (OSHA) published a notice of proposed rulemaking in the Federal Register which would update the existing fire brigade standard, 1910.156. The updated standard would create new training and medical evaluation requirements for fire departments, EMS entities, and hazmat responders. While this proposed Emergency Response standard is generally good for the safety and well-being of emergency responders, many of its elements would require a substantial increase in annual medical examination expenses for both private and municipal departments that provide these services.  

The proposed standard is still in the early stages of development at the federal level. We believe that members should be aware of the potential impacts of the standard as proposed. The public comment period is open now and will close on June 21, 2024. We encourage VLCT members to review the proposed standard and provide OSHA with comments if appropriate. 

Also know that the proposed language would have to become a final federal standard before it would be adopted by Vermont Occupational Safety and Health Administration (VOSHA) and take official effect in Vermont.

Attachments
PDF of the proposed Emergency Response standard excerpted from the Federal Register, without preamble

Selectboard Manual

How To Use This Manual 

This manual is designed for use by a municipality’s legislative body (e.g., selectboard, city council, aldermen, village trustees, or prudential committee) or their support staff.  In this manual we will use the term selectboard for consistency’s sake, but the information contained within is applicable to any legislative body.  This manual is intended to focus your efforts navigating the wide range of MAC resources relevant to the selectboard's discharge of their duties. The information contained in the former publication, The Selectboard Handbook, has been updated and posted to the website as distinct resources organized by topic and are updated on an ongoing basis.  

Use the table of contents to browse a listing of everything included in this manual. 

This manual explains the overarching context of the information for selectboards. While it is possible to download and print the full manual, using it on the web will ensure you always are referencing the most current information. This manual will be regularly updated as we develop more resources and to account for changes in the law; therefore, we recommend reviewing previously printed materials for accuracy before you rely on the information.

Visit the Municipal Assistance Center (MAC) webpage to find in-depth information and resources from VLCT and other relevant organizations on various municipal topics.

The Municipal Assistance Center attorneys and staff are here to help you. If you have any questions about your role as a member of a selectboard, city council, village board of trustees, or prudential committee, please call 800-649-7915, submit a question using the Municipal Assistance Portal (MAP), or email info@vlct.org. 

DR-4720 Governor's Selection of 30-Day Window for 100% FEMA PA Reimbursement

Member for

1 year 3 months
Submitted by bwaninger@vlct.org on
tree and other flood debris on paved road

To: Municipal Applicants for FEMA Public Assistance under DR4720 ("severe storms and flooding, July 7-21, 2023").

From: Canarecci, Kim <Kim.Canarecci@vermont.gov>

Date: Friday, February 9, 2024 7:15 AM

 

President Biden has approved 100% federal reimbursement for DR-4720 for Category A: Debris and Category B: Emergency Protective Measures projects for a 30-day window to be selected by Governor Scott. Governor Scott has selected the following dates:

Cat A – July 9 through August 7

Cat B –July 13 through August 11

Vermont appreciates the partnership and support from the Federal Emergency Management Agency in our response and recovery from the historic flooding of DR-4720. This additional level of assistance will certainly help Vermont applicants recover and allow us to focus more resources on investing in long-term recovery and resilience.

If you have a DR4720 CAT A or CAT B project that has already been obligated at 75% federal share and paid, our finance team will adjust your subgrant agreements as FEMA reobligates them for the additional 25% federal share.  For all other projects, they will need to be formulated with your FEMA PDMG through the documentation process and will be paid from our finance team in the order of obligation.

 If you have any questions, please reach out.

 Thank you,

 Kimberly Canarecci

Vermont State Public Assistance Officer

802-585-4209

Kim.Canarecci@vermont.gov

Highlights of Your 2023 Compensation and Benefits Survey Responses

Member for

1 year 3 months
Submitted by iminot@vlct.org on

Every year since 1968, VLCT has collected compensation and benefits information from its member towns, cities, and villages and shared it with all members to provide insight as to how they compare with each other. In our latest such survey, conducted in the summer of 2023, we collected the most responses ever, despite a record number of communities dealing with the results of catastrophic flooding. We received 182 responses to our online survey and 171 payroll reports, with a total of 184 distinct municipalities participating. 

Our goal for the survey is to provide hard to find contextual and comparison data in a format that is easy to use and understand. We organize all responses into the year’s report, to which every responding municipality receives free access both digitally and in a bound print. We know that municipalities rely on this resource to assess their pay rates, develop their budgets, and compare budgets and employee benefits with similar communities. 

During the last five years we have radically redesigned the survey to make it easier for municipalities to contribute their data. For example, we ... 

  • moved from a manual process to an online survey platform, 
  • worked with NEMRC to incorporate automated payroll reports for their users, 
  • extended the time for participation, 
  • reformulated questions to reduce the size of the survey, 
  • added an iPad raffle incentive for participating, and 
  • incorporated more contextual data (such as hire and termination dates) to help communities compare positions more accurately. 

These changes have increased participation in the survey and also the value of the data. If your municipality hasn’t responded in the last few years, we hope you will participate in 2024.

The timing of the annual survey is always a bit tricky given that two thirds of respondents operate on a July 1 to June 30  fiscal year and most municipalities begin their budget planning in the fall to prepare for their annual meeting (Town Meeting in March). Therefore, municipalities with a July-June budget cycle have a tight timeline after June 30 in which to provide their current year financial information. To ensure that our members have access to a robust dataset for their budget planning and salary setting endeavors in the fall, we leave the survey open through the first week of August and compile and format the data in a few short weeks to prepare it for the printer in October. Responding members receive free digital access to the report in October, and a bound print is mailed to their municipal office as soon as possible after that. We also make the report available in our web store for purchase by other members and non-members. 

Below we share with you a few highlights aggregated from the 2023 report. Some of these items include comparisons with the 2022 report to illustrate changes in the data or items that have remained relatively static. 

 

Population of Responding Municipalities

More than 79 percent of 2023’s 184 responding municipalities have between 169 and 3,000 residents, according to the 2020 U.S. Census. In the table below, the missing population ranges had no respondents.

PopulationNumber of Responding Municipalities
0-1,50099
1,501-3,00047
3,001-4,50018
4,501-6,0006
6,001-7,5005
7,501-9,0004
10,501-12,0003
21,001-22,5001
42,001-43,5001
Total184

 

Budget Cycles Used by Responding Municipalities

Of the municipalities that responded to our 2023 survey, nearly two thirds operate on a July 1 to June 30 fiscal year, one third are on a calendar year budget cycle, and a mere five individual members use a different budget cycle. This is represented in this pie chart:

 

Budgets and Payroll Changes

Operating and personnel budgets remained surprisingly static this year despite the uptick in annual cost of living increases provided to municipal employees. Additionally, average personnel budgets as a percentage of total operating budgets increased by about only one percent this year. However, it is important to note that these are not exclusively apples-to-apples comparisons because responding municipalities may change from year to year. In fact, 137 of 2023’s respondents had also provided their total operating budget and personnel data in 2022. Twenty-five of 2022’s respondents were unable to participate in the 2023 survey, whereas 57 of the 2023 respondents had not participated in 2022.

Average and Median Operating and Personnel Budgets

Calculations2023 Personnel2023 Operating2022 Personnel2022 Operating
Average

$1,158,014.06 (36% of operating budget)

$2,975,163.67

$1,099,622.53 (36% of operating budget)

$2,587,007.23

Median

$528,614.00 (34% of operating budget)

$1,534,659.00

$1,437,786.00 (33% of operating budget)

$432,552.00

n=

175

175

170

170

 

Statutory Officials

Of the 2023 respondents, 64 (28 percent) have a chief administrative officer (CAO) to lead municipal operations, whether a statutory municipal manager or a non-statutory municipal administrator. In 2023, one municipality added a municipal manager position and three added a municipal administrator position. 

Most positions that are required by state law were still elected in 2023, as you can see from the Elected vs. Appointed chart below. 

 

 

Stay tuned! In 2024 we will re-launch the municipal census (last conducted in 2014) to gather more in-depth information from members on the status of Vermont local government operations.

Publication Date
01/17/2024

Potential Big Increase to Exempt Minimum Salary Requirement

Member for

1 year 3 months
Submitted by iminot@vlct.org on
FLSA Fair Labor Standards Act

Employees who qualify as exempt are not covered by the Fair Labor Standards Act (FLSA) and thus not entitled to overtime pay. However, the minimum salary required to meet the definition of an exempt employee may increase substantially in 2024, because the U.S. Department of Labor (USDOL)'s proposed rules would increase the minimum salary threshold from $684 per week ($35,568 annualized) to at least $1,059 per week ($55,068 annualized). The new figure reflects the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage census region, currently the South. The highly compensated employee exemption salary threshold would also increase, from $107,432 to $143,988 per year, to reflect the 85th percentile of full-time salaried workers nationwide. The proposed rules would also require automatic increases in salary thresholds every three years. 

Though not certain, the USDOL predicts that the final rules will be issued in April 2024. 

Employers need to remember that while the minimum salary threshold is necessary for an employee to qualify as exempt, it is not sufficient. Exempt positions also need to meet one of the so-called white collar job duties tests. See the US Department of Labor’s Fact Sheet 17A for more details.

Advocacy Updates: Municipal Capacity, Revenue, and Governance

VLCT has identified capacity, revenue, and governance as a key topic to follow during the 2024 legislative session. Check back for the latest updates on this issue. Or, view our Weekly Legislative Reports page to see everything we're following. 

VLCT’s overarching Legislative Priorities are to expand the capacity of and increase revenue for local government. The ever-increasing responsibilities of local government and lack of state funding necessary for effective municipal governance demand legislative action. Several bills being discussed this session have the potential to support our efforts or, as noted in the issues discussion below, further strain local government. 

H.629, Changing Municipal Tax Abatement and Municipal Tax Sales Procedures, Passes Both Chambers

The House concurred with the Senate-amended H.629, found on page 764 of the Senate Journal, which included changes requested by VLCT. H.629 needs one more procedural vote and then will be referred to the governor for signature. As a refresher, the changes included returning the interest rate for properties purchased at tax sale back to 1% and removing the expensive and time-consuming Personal Service Requirement for municipalities conducting tax sales. Please see the most recent Testimony to Senate Government Operations Committee on H.629 (Tax Sales) for an overview of these concerns.  
 

H.546: Conference Committee will Consider Statewide Authorization for Municipal Local Option Tax 

VLCT testified this week in favor of statewide authorization of Local Option Tax, included in the Senate amended version of H.546, as recorded starting on page 2141 of the 4/16 Senate Calendar. Unfortunately, the House Ways and Means Committee did not concur with the Senate-amended H.546 which included Section 20 stating  “Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues, if the legislative body of a municipality by a majority vote recommends, the voters of a municipality may, at an annual or special meeting warned for that purpose, by a majority vote of those present and voting, assess any or all of the following: a one percent sales tax; a one percent meals and alcoholic beverages tax; a one percent rooms tax.”

A Committee of Conference has been established to reach agreement on the House and Senate differences over H.546. Please let the Conference Committee members, listed below, know your support for the statewide authorization of Local Option Tax. This provision in an important step to providing equity to all of Vermont’s municipalities. Please review VLCT’s latest testimony for additional reference on the benefits and justification for Local Option Tax authorization at this time.  

Rep. Emilie Kornheiser 
Rep. Carl Demrow 
Rep. Julia Andrews 
Sen. Ann Cummings 
Sen. Mark MacDonald 
Sen. Thomas Chittenden 
 

Final Days for S.55, a Must-Pass Bill Making Changes to Open Meeting Law       

VLCT testified this week on the latest draft 4.1 of S.55. In an effort to help municipalities better operationalize and implement new provisions in the bill, VLCT continues to provide feedback to the House Government Operations Committee, which has final possession of the bill. This is considered a must-pass bill, due to the remote or electronic meeting authorization expiring June 30, 2024. A number of state, regional, and local public bodies have influenced this bill, and it is considered a consensus bill. For some background, see this webpage’s updates from January 19, February 23, and March 1.   

House Likely to Concur with Senate-Passed H.629, Changing Municipal Tax Abatement and Municipal Tax Sales Procedures  

The full House is scheduled to vote on concurring with the Senate-amended H.629, recorded on page 764 of the 4/18 Senate Journal, with changes requested by VLCT. The changes included returning the interest rate for properties purchased at tax sale back to 1% and removing the expensive and time-consuming personal service requirement for municipalities conducting tax sales. Please see Ted Brady’s Testimony to Senate Government Operations Committee on H.629 (Tax Sales) for VLCT’s most recent overview of these concerns. 
 

Senate Likely to Approve Miscellaneous Tax Bill with Statewide Authorization for Local Option Tax, but Passage is Less Likely in House 

New since our 4/19 update on this bill, the full Senate is scheduled to vote on the amended H.546 which includes Sec. 20 on page 2148 of the Senate Calendar: “Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues, if the legislative body of a municipality by a majority vote recommends, the voters of a municipality may, at an annual or special meeting warned for that purpose, by a majority vote of those present and voting, assess any or all of the following: a one percent sales tax; a one percent meals and alcoholic beverages tax; a one percent rooms tax.” Unfortunately, the provision creating a Local Government Revenue Working Group, which VLCT testified in support of, was removed due to the belief that this amendment satisfied the need.    

The Local Option Tax authorization in H.546 incorporates S.60 from the 2023 session, which also passed the Senate but died in the House. VLCT has long supported Local Option Tax authorization for all municipalities, if they so choose, giving them the ability to raise tax revenue and support the needs of residents. The House, and in particular the House Ways and Means Committee, has been a roadblock to approval. Please let your representatives on the House Ways and Means Committee know your support for this authorization.   

Senate Passes Amended H.629, RE: Municipal Tax Abatement and Tax Sales Procedures  

The full Senate passed an amended H.629 found on page 764 of the Senate Journal, which included changes requested by VLCT. The changes requested included returning the interest rate for properties purchased at tax sale back to 1% and removing the expensive and time-consuming Personal Service Requirement for municipalities conducting tax sales. Please see the most recent Testimony to Senate Government Operations Committee on H.629 (Tax Sales) for an overview of these concerns. If the House does not concur with changes made in the Senate, a conference committee will be formed to work out their differences.  
 

Senate Finance Adds Statewide Authorization for Municipal Local Option Tax in the Miscellaneous Tax Bill  

The Senate Finance Committee amended H.546, adding Sec. 20 on page 2148 of the Senate Calendar, which reads:   

Local option taxes are authorized under this section for the purpose of affording municipalities an alternative method of raising municipal revenues, if the legislative body of a municipality by a majority vote recommends, the voters of a municipality may, at an annual or special meeting warned for that purpose, by a majority vote of those present and voting, assess any or all of the following:  
(1) a one percent sales tax; 
(2) a one percent meals and alcoholic beverages tax; 
(3) a one percent rooms tax. 

This amendment essentially incorporates S.60  from last session, which passed the Senate but died in the House. VLCT has long supported local option tax authorization for all municipalities. Please let your representatives know your support for this authorization, as we suspect the House Ways and Means Committee will, again, be hesitant to approve this authorization.

Senate Government Operations Committee Makes Changes We Sought to H.629, a Bill Changing Municipal Tax Abatement and Municipal Tax Sales Procedures  

The Senate Government Operations Committee passed Draft 1.4 of H.629 on a 6 to 0 vote out of committee on April 11.  Our advocacy efforts, with your help, convinced this committee to address the remaining concerns in H.629. Our primary concern was reduction in the interest rate from 1% to .5% for investors that purchase properties at tax sale and the requirement for Personal Service of Tax Sale Notice. We believed, from talking with many Delinquent Tax Collectors, this will result in fewer investors interested bidding at tax sales and instead force municipalities to pay more delinquent property taxes to the state. This places a further burden on taxpayers who do pay their property taxes on time and takes away tools that help municipalities collect delinquent taxes. 

The version that was passed out of committee raises the interest rate for properties purchased at tax sale back to 1%  and removes the expensive and time consuming Personal Service Requirement for municipalities conducting tax sales. Please see our most recent Testimony to Senate Government Operations Committee on H.629 (Tax Sales) for an overview of these concerns, and please thank members of the Senate Government Operations Committee for making these changes.  
 

Municipal Ethics and Conflicts of Interest Bill Now Being Considered in the Senate Government Operations Committee  

VLTC continues stress its strong support for Municipal Ethics, but does not support the approach in H.875 as passed the House. The Senate Government Operations Committee started to take testimony on H.875, including from Ted Brady, on April 11. The Committee members seemed open to some of the changes requested by VLCT and stressed that they will make time for testimony from VLCT members and communities of all sizes as they consider this bill. The Secretary of State (SOS) also expressed concerns about the new training requirements and coordination with existing training. The Committee asked VLCT, SOS, and the State Ethics Commission to work on revisions to the training required in Section 22 §1995 and Section 23. VLCT’s concerns are also summarized in Ted’s Testimony from March 12. VLCT’s bottom line: remove Section 22 § 1995-1997 and remove Section 23!  
 

Senate Appropriations Moves Quickly to Finalize Changes to H.883 (FY25 Budget) 

The Senate Appropriations Committee is racing through its work on H.883, “the BIG BILL” or the FY25 budget bill. The committee is reviewing their priorities and the spending priorities of each Senate committee compared to the House passed budget. In the March 29 Advocacy Update, we provided a comparison of Governor Scott’s proposed budget and the House-passed $8.58B budget, highlighting the increase to the Town Highway Program. Unfortunately, this small but meaningful increase of $1.9M to the $100.6M in town highway aid was reduced in the Senate Transportation Committee when they reallocated $1M of it to Green Mountain Transit. 

The Senate Appropriations Committee will continue to work through each section of the budget highlighting differences such as the Transportation Budget and making their own funding recommendations, including priorities from Senate Bills not included in the house version. The acceleration of work in the Appropriations Committee seemed to catch some Senate committee chairs off guard and unprepared to submit their funding priorities by the new April 12 deadline, asking why so soon? Legislative leadership’s reported adjournment goal of May 10 leaves the Senate only a few weeks to work through the many remaining funding decisions and allow time for the Conference Committee to work out the differences in the House and Senate budgets. 
 

Concerns in H.546, The Miscellaneous Tax Bill and H.657, Communication Taxes and Fees Bill 

The House-passed H.546, the Miscellaneous Tax bill, has several provisions we are following. VLCT Testimony to Senate Finance Committee this week highlighted our concerns with Sections 6 and 7 that would repeal the $15 penalty for late property tax credits and Section 8 that would require municipalities to accept the Department of Tax’s valuation for utility transmission lines and infrastructure. VLCT continued to express our support for the Local Government Revenue Working Group in Section 13. 

The Senate Finance Committee is also considering H.675, an act relating to modernization of Vermont’s communications taxes and fees. Section 10 places all communications property in the grand list as real estate, requiring the Division of Property Valuation and Review (PVR) to provide listers in each municipality with the valuation of all taxable communications property of any communications service provider. Communication providers have expressed opposition to this new taxing scheme and the requirement that they provide sworn inventory of all taxable communication property. The Vermont Assessors and Listers Association and PVR are scrambling to understand the implications and consequences of this significant change in taxing process for communication property. Early assessments are that it may increase municipal and state property tax revenue, as it puts these communications properties on the Grand List and no longer just paying corporate tax. However, there are real concerns about a lack of cost benefit analysis and the capacity to conduct this new valuation and assessment work. Aside from those concerns, VLCT opposes Section 13, which raids the PILOT Special Fund to fund the initial property valuation model for communications property. 

Library Modernization Bill 

As reported in our March 29 update on this topic, the Senate passed an amended Library Modernization and Protection Bill (S.220). VLCT has been working with the Vermont Commissioner of Libraries and the Vermont Library Association to make a small but meaning change to the governance and budgeting language in the bill which, as is, could add more confusion to the relationship between library trustees and selectboards. Section 5 of the bill may cause confusion with the additional language that municipal library trustees “shall have the power to establish a library budget.” Library trustees may propose their library budget to the selectboard, but the selectboard ultimately has control over the town meeting warning and proposed budget for the town, including what the library budget should be. While the trustees can make strong recommendations, they can’t force the selectboard to use the library trustees’ proposed budget. Some may interpret this to mean that the library trustees’ recommended budget to the selectboard must be accepted ‘as is’ by the selectboard for placement on the town meeting warning to be voted on by the town. We disagree with this interpretation, as the selectboard still controls the town meeting warning and the articles thereon. To avoid confusion, we have proposed this provision be changed to “municipal library trustees shall have the power to establish a library budget for consideration by the legislative body of the municipality for inclusion in the municipality's annual budget."  The Department of Libraries, Commissioner of Libraries, and the Vermont Library Association are all in support of our language proposal and plan to suggest the change during their next testimony. In addition, we all agreed to continue our governance conversation because much confusion exists with current statute around library trustees and selectboards. 
 

H.55, Relating to Miscellaneous Unemployment Insurance 

Joe Damiata and Ted Brady provided testimony to the Senate Committee on Economic Development, Housing and General Affairs related to provisions of H.55 affecting firefighters. The comprehensive testimony highlighted the challenges of providing workers’ compensation to firefighters, covering cancer presumption claims, and the desire for cancer screening coverage. Joe stressed that any increased costs must be passed on to PACIF members and then collected back from them to offset any increase in expenses. VLCT stressed that containing costs, defining appropriate screening criteria, and caring for our firefighters should be a cost shared at the state level and not by just by our already cash-strapped municipalities.  

Senate Government Operations Committee Continues to Discuss the Municipal Tax Abatement and Municipal Tax Sales Bill, H.629

The Senate Committee on Government Operations took additional testimony on H.629 as passed by the House. As we have reported each week on this webpage, many of VLCT’s original concerns with the bill as first introduced have been addressed. The remaining concerns are best summarized in Executive Director Ted Brady's April 3 testimony and include reducing the interest rate from 1% to .5% for investors that purchase properties at tax sale. We believe, from talking with many Delinquent Tax Collectors, this would result in fewer investors interested in bidding at tax sales and instead would force municipalities to pay more delinquent property taxes to the state. This places a further burden on taxpayers who do pay their property taxes on time and takes a way tools that help municipalities collect delinquent taxes.

The committee also heard from tax sale attorneys, who expressed the same concerns as VLCT, and from Vermont Legal Aid, which sponsored the bill and supports dramatic changes to Vermont’s tax sale process. The committee seems open to addressing some of VLCT’s concerns, so it’s important that they hear from you. Please let the Senators on both the Senate Government Operations and Senate Finance Committee  know your concerns with this bill.  
 

Municipal Ethics Bill, H.875, Passes the House  

The House passed H.875, a lengthy bill that also impacts statewide office holders, creates new ethics requirements for municipalities. The amendments put forth by Rep. Jim Harrison (Chittenden), Rep. Pat Brennan (Colchester), and Rep. Kelly Pajala (Londonderry) that would remove the training, reporting, investigatory, and new legal right to civil action against a municipality failed by a 41 to 83 vote found on pages 1083 to 1087 of the April 2 House Journal. 

As we have reported here throughout the session, VLCT testified on January 24, February 26, and March 12, and also provided recommended alternative language on February 21. Our testimony was crystal clear: we support the fundamental goal of establishing ethical standards, educating people about those standards, and holding people accountable to those standards. But we didn’t support their approach, which was top-down and prescribed by the State Ethics Commission without regard for the impact the new obligations would have on volunteer officials. H.875 as passed by the House now heads to the Senate Government Operations Committee for consideration. VLCT encourages municipal officials to reach out to members of the Senate Government Operations Committee and share your concerns about these new requirements. Now, while every legislator is acknowledging the capacity constraints of municipalities, is not the time to layer additional bureaucracy and unfunded mandates on you.

The full House is considering H.875, a bill that would create new ethics requirements for municipalities, and VLCT hopes you will contact your representative to ask them to support a change on the House floor early next week that would remove the training, reporting, investigatory, and new legal right to civil action against a municipality. It would retain the proposed uniform municipal code of ethics. Rep. Jim Harrison (Chittenden), Rep. Pat Brennan (Colchester), and Rep. Kelly Pajala (Londonderry) plan to offer an amendment striking provisions objected to by VLCT in our write up of the bill on March 21st (see entry directly below).  Now’s the time to reach out to your representative and encourage them to support the Harrison, Brennan, Pajala amendment. 

Cannabis Bill, As Amended Allows Setback Restrictions on Cultivation   

The full House approved the Cannabis Bill (H..612) as amended by a voice vote. This bill would change a number of provision to Vermont’s laws on medical and recreational cannabis, including a. change to how highly potent, hemp-derived products are regulated by the Cannabis Control Board and a change that would allow adult recreation cannabis retailers to apply for a special license to sell medical-grade cannabis.  

Of importance to municipalities are new provisions that would give the cannabis board and towns greater authority to regulate the siting of outdoor cannabis cultivation. Municipalities would be given the ability to enforce minimum setback distances of cannabis cultivation operations. Existing law regulates cannabis cultivation in the same manner as “farming” and not as “development” on the tract of land where cultivation occurs for the purposes of permitting. Conflicts have developed in several communities with cannabis grow operations interfering with residential neighbors and other incompatible uses, especially in more densely developed areas. The changes referenced below attempt to address some of these issues by:  

  1. if the cultivation occurs in a cannabis cultivation district adopted by a municipality pursuant to 24 V.S.A. § 4414a, the setback shall be not larger than 25 feet as established by the municipality;  
  1. if the cultivation occurs outside of cannabis cultivation district adopted by a municipality pursuant to 24 V.S.A. § 4414a or no cannabis cultivation district has been adopted by the municipality, the setback shall be not larger than 100 feet as established by the municipality;  
  1. if a municipality does not have zoning, the setback shall be 10 feet; 

 

Library Modernization and Protection Bill Passes the Full Senate  

The Senate passed an amended Library Modernization and Protection Bill (S.220) on a vote of 23 to 6. Largely an uncontroversial bill, S.220 seeks to modernize library procedures, provide better privacy for library records and prevent political interference such as book bans. However, the governance relationship between library trustees and selectboards has been marked by confusion in the past and this bill does little to address these concerns.        

In the case of Hartford Board of Library Trustees v. Town of Hartford, 174 Vt. 598 (2002) the Vermont Supreme Court was presented with the question of determining the relative authority of the town and board of trustees with respect to a town librarian's salary and benefits. In resolving this issue, the Court focused on the Vermont Legislature's use of the phrase “full power to manage” in describing the trustee's breadth of authority governing library matters as granted in 22 V.S.A. § 143(a). “The Legislature could have simply said ‘to manage’ in § 143(a), but instead chose the phrase ‘full power to manage.’”  Though the Court did highlight the “spirit of cooperation” that is necessary for the efficient operations of the affairs of the town given the ambiguity of the controlling statutes at play [“In this way, library trustees and town managers across the State of Vermont can agree to a wide variety of power-sharing schemes that best suit the needs of each particular town…”] when that “spirit” is not present or lost the Selectboard “cannot, in the name of administrative efficiency, infringe upon the Board's ‘full power to manage’ the library.” In short, this case supports the rule that libraries already have the authority to manage their own affairs, property, staff, and funds (once appropriated/gifted).  

In VLCT’s opinion, this bill does little to change the existing municipal library/trustee authority. However, one could argue this bill creates an additional area of confusion.   

Currently, we think that while library trustees may propose their library budget to the selectboard, the selectboard ultimately has control over the town meeting warning and proposed budget for the town, including what the library budget should be. While the trustees can make strong recommendations, they can’t force the selectboard to use the library trustee’s proposed budget. Section 5 of the bill may cause confusion with the additional language added that municipal library trustees “shall have the power to establish a library budget.” Some may interpret this to mean that the library trustees recommended budget to the selectboard must be accepted ‘as is’ by the selectboard for placement on the town meeting warning to be voted on by the town. We would disagree with this interpretation, as the selectboard still controls the town meeting warning and the articles thereon. To avoid confusion, this provision could be changed to; municipal library trustees “shall have the power to: “establish a library budget for consideration by the legislative body.”  

 

Municipal Tax Abatement and Municipal Tax Sales Bill Receives Testimony in the Senate  

VLCT Executive Director, Ted Brady provided testimony on the Municipal Tax Abatement and Tax Sales Bill, (H.629) as passed by the House, to the Senate Committee on Government Operations. As reported each week, many of VLCT’s original concerns with the bill as first introduced have been addressed. The remaining concerns are best summarized in, VLCT’s latest testimony and include reducing the interest rate from 1% to .5% for investors that purchase properties at tax sale. We believe, from talking with many delinquent tax collectors, this will result in fewer investors interested bidding at tax sales and instead force municipalities to pay more delinquent property taxes to the state. This places a further burden on taxpayers who do pay their property taxes on time and takes away tools that help municipalities collect delinquent taxes.  

On March 28, Carol Dawes- Barre City Clerk and Treasurer, Jeff Mobus- Springfield Town Manager and Marco Tallini- Town of Dover Treasurer provided testimony to the Senate Committee on Government Operations also supporting many of the concerns raised by VLCT.  Please let your Senators on both the Senate Government Operations and Senate Finance Committee  know your concerns with this bill.  

 

County Governance Study Bill Easily Passes the Full Senate   

The County Governance Study Bill (S.159) as amended, creates the County and Regional Governance Study Committee to address local government capacity challenges, enhance and optimize public safety, regional collaboration and planning, efficient, equitable, and transparent public resource allocation, and effective regional public services for individuals and municipalities.  

The study committee, consisting of three members of the House of Representatives and three members of the Senate, shall study and make recommendations to the General Assembly on how to improve the structure and organization of county and regional government, including:  

  • enhancement and optimization of public safety;  
  • enhancement of regional collaboration and planning;  
  • efficient, equitable, and transparent allocation of public resources;  
  • promotion of effective regional public services for individuals and municipalities;  
  • clarification of the role and oversight of elected county officials and their departments;  
  • reduction of duplicated public services and promotion of opportunities for intermunicipal collaboration;  
  • balance of availability and cost of services across municipalities in each county;  
  • mechanisms of county and regional government structures in other states; and  
  • impact of climate change and resiliency on the maintenance of public infrastructure, delivery of regional government services, and coordination of regional emergency planning. 

The committee is granted administrative, technical, and legal assistance of the Office of Legislative Operations, the Office of Legislative Counsel, and the Joint Fiscal Office and appropriated $50,000. On or before November 1, 2025, the Committee shall report to the House Committee on Government Operations and Military Affairs and the Senate Committee on Government Operations with its findings and any recommendations for legislative action.  

VLCT and other partner organizations are named members of the County and Regional Governance “Technical Advice Participants” to support the legislative study committee. VLCT has remained supportive, but cautious of the breadth and scope of this effort. We support a “fresh look”; however, we have concerns that S. 159 too narrowly charges the committee to evaluate “county government” and Vermonters may be better served by making recommendations to encourage and stimulate regional collaboration. Narrowing the scope of the legislation to address specific government services may prove to be a more reasonable task.   

 

The House Government Operations and Military Affairs Committee voted to send an ethics bill including the municipal code of ethics, new municipal training and reporting requirements related to ethics, and a new right of civil action against municipalities related to whistleblower protections to the full House for consideration by a vote of 10-2. These provisions were tacked on to a state ethics bill, H. 875.   
 
VLCT testified on January 24,  February 26, March 12, and provided recommended alternative language on February 21.  Our testimony was crystal clear: we support the fundamental goal of establishing ethical standards, educating people about those standards, and holding people accountable to those standards. But we didn’t support their approach, which was top-down and prescribed by the State Ethics Commission without regard for the impact the new obligations will have on volunteer officials.    
 
Aside from VLCT’s philosophical concerns with the state dictating how municipalities should approach ethics policies, we have several practical concerns that members should be aware of: 

  • The bill discards existing conflict of interest policies municipalities have been required to adopt since 2019, and which VLCT has created model policies and training on. (Section 20) 
  • The bill creates the first and only training requirement for municipal officials – an unspecified ethics, open meeting law, and public records act training to be approved by the State Ethics Commission in consultation with the Secretary of State. (Section 22, § 1995) 
  • Every municipality will be required to appoint a “State Ethics Commission liaison”. (Section 22, § 1995) 
  • Municipalities will need to maintain a record of every municipal officer who received ethics training. (Section 22, § 1996) 
  • Municipalities will need to designate a municipal officer or body to receive complaints. (Section 22, § 1996) 
  • Municipalities will need to investigate ethics complaints. (Section 22, § 1996) 
  • Municipalities will need to maintain records of complaints and the disposition of those complaints on every municipal officer for the entirety of their term plus five years. (Section 22, § 1996) 
  • Municipalities must provide the State Ethics Commission with a summary of every complaint, plus the outcome of the complaint. (Section 22, § 1996) 
  • Municipal officers, employees “or any other individual” are given a new right of civil action against municipalities related to whistleblower protections. (Section 22, § 1997) 

Several municipalities had asked the committee to exempt communities that have similar or more robust ethics policies already in place. The committee chose not to do so but added language that attempted to ensure any ethics training those communities did would be honored by the State Ethics Commission. 
 
VLCT encourages municipal officials to reach out to the representatives and share your concerns about these new requirements. At a time when every legislator is acknowledging the capacity constraints of municipalities, now is not the time to layer additional bureaucracy and unfunded mandates on you.  

Amended H.629, a Bill Changing Municipal Tax Abatement and Municipal Tax Sales Procedures, Advances 

The full House of Representatives amended and passed H.629 on Thursday, February 29. The “leap year surprise” passed primary on party lines with Independents and several Democrats (the members joining the minority in opposition were former town clerks and treasurers familiar with the existing process). See pages 328 to 348 of the House Journal to view the amended version and a record of who voted Yea and Nay. 

As reported last week, many of VLCT’s concerns have been addressed and are summarized in VLCT latest Testimony from February 27. The most distressing change remaining in H.629, cuts the interest rate from 1% to .5% for investors that purchase properties at tax sale. We believe, from talking with many Delinquent Tax Collectors, this will result in fewer investors interested bidding at tax sales and instead force municipalities to pay more delinquent property taxes to the state. This places a further burden on taxpayers who do pay their property taxes on time and takes away tools that help municipalities collect delinquent taxes. 

The recent amendments made to H.629 – allowing similar types of abatements to proceed as a group or class and allowing selectboards to forgive de minimis amounts of taxes for the purpose of reconciling municipal accounts – are supported by VLCT and have been requested by many members for years. This makes our support for, or opposition to, the amended version of H.629 challenging. We hope the Senate Finance Committee, where H.629 is expected to go next, will support VLCT’s requested changes.

 

Hybrid Meeting Flexibility Remains for Municipalities 

The latest version of S.55, Draft 5.4 was voted out of the Senate Committee on Government Operations by a vote of 6 to 0. If you have been following S.55, the original three-page bill proposed to amend the Open Meeting Law to continue the COVID procedures allowing public bodies to meet remotely. However, the Senate Government Operations Committee added several new sections and a hybrid meeting requirement, which would not work for many municipalities. Your advocacy against that unfunded and unrealistic mandate convinced a majority of the committee members to remove the mandatory hybrid requirement instead studying the future implementation for municipalities. The bill creates a working group charged with making recommendations to increase participation and accessibility of municipal public meetings and elections. The Vermont Secretary of State is charged with leading the working group and is allocated $50,000 to support the study. S.55’s next stop is likely the Senate Committee on Appropriations.  

 

Committee Hears Your Backlash on Plans for State Ethics Commission to Control Municipal Ethics and Conflicts of Interest 

The House Committee on Government Operations and Military Affairs heard powerful testimony on February 29 from the Town of Colchester (starting at 10 minutes in the recording) and the Town of Lunenburg (starting at 58 minutes) against the their plans to hand over control and oversight of municipal ethics and conflicts of interest to the unelected State Ethics Commission. The testimony provides two very different perspectives on the latest version of the Committee Municipal Ethics Bill and how it would affect their community and the elected officials & volunteers who work hard to ensure that local government works for everyone. 

It is distressing that the committee crafting this bill – which would directly affect every municipal employee, every elected and appointed official, and thousands of volunteers, over 9,000 in all – has heard the concerns of only two municipalities. We know many of you have reached out to your legislators and asked them to slow down and work with us to support municipal ethics reform that is focused on and centered at the local level. Please continue to reach out to your legislators and tell them about your concerns with this bill as drafted and how seriously you take conflicts of interest in your municipality.  

As you know, VLCT makes model conflict of interest policies available to you and provides training on the subject. VLCT Executive Director Ted Brady provided comprehensive written testimony to the committee a few weeks ago. We hope the committee members slow down, get this right, and work with municipalities for the outcome we all want: “Good government for the people and by the people.”   

For history and background on this update, see the January 19 entry below.
 

House Ways and Means Moves Improved Municipal Tax Abatement and Municipal Tax Sales Bill  

The House Committee on Ways and Means moved out of committee the latest version of H.629 on a vote of 9 to 3.  Many of VLCT’s most pressing concerns have been addressed and are summarized in VLCT Testimony from Feb. 16.  The most distressing change remaining in H.629 would cut the interest rate from 1% to 0.5% for investors that purchase properties at tax sale. After talking with many collectors of delinquent taxes, we believe this would result in fewer investors interested in bidding at tax sales, which would in turn force municipalities to pay a higher share of delinquent property taxes to the state. This would place a further burden on taxpayers who do pay their property taxes on time and would take away tools that help municipalities collect delinquent taxes.  

Although VLCT succeeded, thanks to your input and advocacy, in making significant positive changes to this bill, we cannot support it at this time and will continue advocating to restore tools that help municipalities collect and pay delinquent property taxes.   

 

Hybrid Meeting Mandate Removed 

If you have been following S.55, the original three page bill proposed to amend the Open Meeting Law to authorize public bodies to meet through electronic means without designating a physical meeting location — and VLCT strongly supported that effort. However, the Senate Government Operations Committee added several new sections and a very problematic Hybrid Meeting requirement.  

Because of your advocacy against that unfunded and unrealistic mandate, we are pleased to share that the committee removed the mandatory hybrid meeting requirement for municipal meetings. Thank you for taking time to write to your legislator, testify, and have conversations! Without your advocacy, the bill would have almost certainly left that committee with the new requirement. The only senator who remained steadfast on retaining the hybrid meeting requirement was Senator Tanya Vyhovsky, who represents Essex Junction, Colchester, Winooski, and Burlington. You may wish to send your thanks to Senators Hardy, White, Clarkson, Norris, and Watson for their willingness to change their minds. 

While the bill isn’t perfect –it removed the $250,000 grant program for communities), has a few technical issues that should be corrected, and creates a time-consuming study committee to evaluate how to host more inclusive municipal meetings – it is far better than where it was, and we’re thankful the committee worked with municipalities to make the most important change of eliminating the hybrid meeting requirement for municipalities. Please see the latest version of S.55 Draft 4.2. Thanks again for your advocacy! 

    

Power Grab in Montpelier: State Control of Municipal Ethics and Conflicts 

The House Committee on Government Operations and Military Affairs has been working on a Municipal Ethics Bill (still in Draft form so no bill number has been assigned) since the beginning of the session. This bill largely follows the recommendations of Christina Sivret, Executive Director of the Vermont State Ethics Commission, and dismisses the efforts of municipal officials across the state who care deeply about ethics and work hard to earn the public trust of residents. 

As you know, VLCT provides model policies and regular training on the subject of conflicts of interest. VLCT Executive Director Ted Brady provided comprehensive written testimony to the committee a few weeks ago. It’s distressing to see the committee move ahead without incorporating feedback from our members and addressing the concerns we have raised. VLCT has provided a compromise framework and draft legislation that would result in a uniform municipal conflict of interest and unethical conduct policy for adoption by every municipality. Both the House Committee on Government Operations and Military Affairs and the State Ethics Commission appear to be more interested in taking away local control and accountability and holding municipal officials accountable in Montpelier by an unelected board. 

The current draft bill would repeal the existing laws governing municipal ethics and conflicts of interest and: 

  • Create a new 10-page Municipal Code of Ethics  
  • Require a new mandatory training (the number of hours determined by the State Ethics Commission) within 120 days for every municipal officer (elected or appointed) 
  • Have the State Ethics Commission determine continuing education and training requirements for all municipal officials every three years 
  • Require each municipality to designate a “senior-level” employee as a liaison to the State Ethics Commission and would be required to attend “educational seminars” determined by the State Ethics Commission on a regular basis 
  • Require all municipalities to post the new Municipal Code of Ethics and ensure it is made available to all members of the public 
  • Maintain records of who has received required ethics training  
  • Designate a municipal officer responsible for receiving complaints alleging violations of the new Municipal Code of Ethics, investigate complaints and maintain records of each compliant and disposition of each compliant for the duration of the municipal officer service plus a minimum of five years and, upon request by the State Ethics Commission, promptly provide a summary and outcome of each complaint. 

See our Legislative Alert about this issue – and please consider sharing your concerns with a member of this House committee or your town's representative!  

Concerning Changes to Municipal Tax Abatement and Municipal Tax Sales 

H.629 proposes to make significant changes to the municipal tax abatement and tax sale process. Testimony from VLCT Executive Director Ted Brady expressed our members’ concerns with the bill as proposed. VLCT has committed to work with this bill’s sponsors and other interested partners to find common sense solutions that don’t further strain municipal budgets and that do recognize the challenges some lower income property owners face under the existing process. Please let us know if you have questions, concerns, or suggestions about this issue. You can also visit our MAC resources on property tax abatement and tax sale. 
 

Making Remote Open Meetings Permanent  

S.55  proposes to amend the Open Meeting Law to authorize public bodies to meet through electronic means without designating a physical meeting location. VLCT strongly supports this bill as proposed; however, a new draft of the bill is in the works which seeks to compromise on the concerns expressed by the Secretary of State, who does not support remote-only meetings. Ted Brady’s testimony shared our members’ support for remote meetings and noted the resources VLCT provides to help members manage both remote and hybrid meetings.     
 

Requiring a State-Run Municipal Ethics Framework 

The House Committee on Government Operations and Military Affairs heard testimony from Christina Sivret, Executive Director of the Vermont State Ethics Commission, on a proposed Municipal Ethics Framework. We know Vermont municipal officials care deeply about ethics and VLCT provides model conflict of interest policies and regular training on the subject. Please read Ted Brady’s December 8, 2023 Feedback to the Vermont Ethics Commission expressing our concerns about the current approach and unintended consequences. 

Please stay tuned for updates on these issues and more legislation affecting municipal capacity, revenue, and governance.   

Publication Date
12/14/2023

ARPA: Single Audit? Or Alternative Compliance Examination Engagement (ACEE)?

The U.S. Department of Treasury (Treasury) recognizes that due to the receipt of a State and Local Fiscal Recovery Funds (SLFRF)/ARPA award, many recipients may expend $750,000 or more in federal awards during their fiscal year and newly be required to complete a Single Audit or a Program-Specific Audit. Section IV of the SLFRF/ARPA Compliance Supplement describes an alternative approach for SLFRF/ARPA recipients that are required to undergo an audit pursuant to 2 CFR Part 200, Subpart F solely for the expenditures of SLFRF funds directly awarded by Treasury. An SLFRF/ARPA recipient may still elect to undergo a Single Audit or a Program-Specific Audit under 2 CFR Part 200, Subpart F. 

Eligibility Criteria 

SLFRF/ARPA recipients that expend $750,000 or more in federal awards during the recipient’s fiscal year and that meet both criteria listed below have the option to follow the Alternative Compliance Examination Engagement (ACEE) Report: 

  1. The recipient’s total SLFRF/ARPA award received directly from Treasury or received (through states) as a non-entitlement unit (NEU) of local government is at or below $10 million; and 
  2. Other federal award funds the recipient expended (not including their SLFRF/ARPA award funds) are less than $750,000 during the recipient’s fiscal year.

Further details are included in:

Examination Guidance 

The alternative approach to a Single Audit or Program-Specific Audit under 2 CFR Part 200, Subpart F permits eligible recipients to engage a practitioner (professional auditor) to perform a compliance examination engagement in accordance with the Government Accountability Office (GAO) Government Auditing Standards. These standards direct practitioners to conduct these engagements in accordance with the American Institute of Certified Public Accountants (AICPA) Statements on Standards for Attestation Engagements. The AICPA attestation standards are codified in the AT-C section of the AICPA’s Professional Standards and AT-C Section 315, Compliance Attestation, which is the standard to be followed.

Some Additional Details to Remember about Local SLFRF/ARPA Awards
  • Notice the name of the SLFRF/ARPA funding: STATE and LOCAL Fiscal Recovery Funds. The State of Vermont received state ARPA (~$1 billion) and municipalities received local ARPA (~$200 million).  
  • The amount of your total local SLFRF/ARPA award is HERE.
  • All recipients of local SLFRF/ARPA funds are direct recipients (not beneficiaries or subrecipients).
  • All recipients of local SLFRF/ARPA funds have a grant agreement (HERE and HERE) directly with the U.S. Department of Treasury.
  • If a municipality receives state SLFRF/ARPA from the State of Vermont, then the municipality is most likely considered a subrecipient of these funds. If you are unsure, look at the first section of the first page of your grant agreement. It should look like THIS.
  • Expenditures of local SLFRF/ARPA funds should be included on a municipality's Schedule of Expenditures of Federal Awards (SEFA).
Other Supporting Documents

 

Publication Date
12/14/2023
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