Avon’s 2022 budget represents shift toward improving infrastructure, enhancing services
Budget includes a 5-year capital improvement plan, increased tax revenue, and more
Following three public hearings and two budget retreats, the Avon Town Council approved the proposed 2022 budget this week.
Heading into the New Year, the budget highlights town priorities of hiring new staff to provide additional services and activities. There is also an emphasis on public works and maintaining public infrastructure, as well as new ways the town will support climate action goals. The budget also shows an increase in tax revenue.
However, even as the town shows positive signs of recovery from the height of the pandemic, there is still a lot of economic uncertainty.
“The town of Avon’s financial standing is strong,” wrote Town Manager Eric Heil in an email. “Sales tax, accommodation tax and real estate transfer tax are all up over previous years. However, inflation, escalating housing costs, competitive salary increases and supply chain related costs have all contributed to increased costs for the town of Avon’s operations.”
Heil went on to say that it’s “too soon to understand if increased revenues balance with increased costs. Costs and pricing are more volatile and unpredictable at this time than during past economic cycles.”
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Still, the town’s budget and finances are healthy, Heil said.
Coming to the end of 2021, the town’s ending general fund balance is at $12,722,729, and the town is projected to end 2022 at $12,875,689.
The town collects tax revenue from a number of different avenues, and as previously stated by Heil, it has seen an increase in revenue from all of these taxes as evident in the 2022 budget.
In total, the town’s proposed 2022 budget has the total projected tax revenue at just over $24 million. Aside from the taxes listed below, the town also levies and collects property taxes, specific ownership taxes, utilities taxes, a cigarette tax, a tobacco tax as well as other tax revenue included from cable, electric and gas franchise fees, a Village at Avon retail sales fee and property tax increment revenue from the Avon Urban Renewal Authority.
Based on sales tax revenue collected through October 2021, the 2022 budget estimates an increase in sales tax revenue by $358,683 in 2022. In a written report in the Town Council agenda, 2021 sales tax revenue generated $8,992,913.71 as of October 2021.
Based on accommodation tax revenue collected through October 2021, the 2022 budget estimates an increase in accommodation tax revenue by $230,659 in 2022. In the same written report, 2021 accommodation tax revenue collected through October 2021 amount to $1,683,649.69.
The revenue generated from both the sales and accommodation tax is allocated to the town’s general fund.
The town also budgeted a projected increase of its real estate transfer tax of $1.5 million. As of November 2021, the town had collected just over $6 million from the real estate transfer tax. The 2022 budget states that total revenue generated from this tax in 2022 will be around $3.3 million. However, using past projections, it’s likely to exceed this amount.
Scott Wright, the town’s finance director, said that the projected revenue for this tax in 2022 is what the town has used for the past several years.
“One of the things we try to avoid is to overestimate our taxes in that fund just because of the projects that are based on those revenues,” Wright said at Tuesday’s council meeting.
Revenue from the real estate transfer tax is allocated to the town’s capital improvements fund. This tax has become somewhat controversial in recent years as it was named as one of the main justifications for the failed recall of Mayor Sarah Smith Hymes and Council member Tamra Underwood.
At Tuesday’s meeting, Underwood emphasized the need for the town to create education around what RETT revenue was spent on.
“RETT money is absolutely essential for big ticket items in town, like the rec center, like town hall and we should have a plaque that explains, that’s what the RETT is used on,” she said. “People would be astonished of the little things that cost millions of dollars, people just have no concept: that‘s what we spend RETT money on, that’s RETT money at work. Please put up signs and educate the public on what RETT is spent on.”
The town also has a new 2% short-term rental tax, which was overwhelmingly approved by voters in the November 2021 election. The tax applies to all residential, non-commercial properties rented for less than 30 days. The revenue generated from the tax — estimated in the 2022 budget as $750,000 — will go toward the community housing fund.
Part of the reason Avon has maintained a healthy budget and finances, according to Heil, is it has remained lean, both in spending and in staffing.
“The Town has maintained and grown healthy reserves in several funds due to conservative spending practices and restraints on the growth of the town government,” Heil wrote. “The town of Avon had 112 full-time employees immediately prior to the 2008 recession and has been operating with only 100 full-time positions through 2021 while providing more services and activities and maintaining more public infrastructure.”
However, heading into 2022, the town is looking to allocate funds toward several new staff positions that will better enable the town to provide additional services and events as well as maintain its infrastructure.
In the 2022 budget, the town has allocated funds for the following positions, some new to the town and others that were adjusted in position scope to fill vacancies and better serve town needs:
- $81,103 (plus benefits) for a year-round special events coordinator, reinstating a prior position
- $86,510 (plus benefits) for a new grant administrator position
- $55,690 (plus benefits) for a new full-time operator position shared between special events and public works
- $17,000 (plus benefits) to increase an existing part-time position to a full-time administration services officer supporting the clerk’s office, shared part-time with the police department
- $69,208 (plus benefits) for a new Planner I position that would be allocated as 50% planner and 50% climate action planner
- $104,136 (plus benefits) for a planner manager or senior manager position, replacing a Planner II position that was recently vacated
- $173,020 (plus benefits) for a new public works director position to oversee a consolidated department consisting of public works, engineering, mobility and fleet
These budgeted salaries, Heil noted in an email, are at or near the top of the budget. Actual salaries, he said, are consistently less than budgeted amounts each year due to turnover and when positions are not hired at the top of the range.
In addition to these new budget allocations for town staff, all employees of the town are receiving salary increases, unless they are already at the top of their salary range.
“Action was taken in the fall to increase the salaries for police officers, transit drivers, and public works operators to maintain competitiveness and respond to market conditions. Other positions will receive salary increases effective on Jan. 2, 2022,” Heil wrote.
A significant portion of the town’s budget is appropriated toward making both routine maintenance and one-off improvements around town.
“The town’s financial priorities have shifted toward supporting public works and maintenance of Town’s public infrastructure, improvements in Nottingham Park, investments in Community Housing and investments in Climate Action strategies,” Heil wrote, adding that in terms of climate change, the town, “is heavily investing in hybrid vehicles for Avon Police Department and electric vehicles for other Departments in 2022.”
Many of the public infrastructure improvements are identified as part of the town’s 5-Year plan for its Capital Improvements Fund. While this plan includes a number of diverse projects, a few of those highlighted in the 2022 budget report include the following:
- $45,000 grant to allow the town to purchase five additional electric vehicle chargers
- $100,000 for the initial planning and site design of a new public works facility that will allow the town to consolidate its public works equipment and operations as well as allow the department to grow with the increased demand and growth of transit and public works.
- $25,000 for the Wildridge Siren Project
- $1,057,000 for the reconstruction of the tennis and pickleball courts in Nottingham Park
- $450,000 for the construction of restrooms north of the beach at Nottingham Lake
- $75,000 for the town to add its drainage infrastructure to a geographic information system as part of its ongoing efforts to mitigate the risk of future flooding and mudslide events
In addition to the projects budgeted in 2022, the 5-year plan highlights other future-looking projects including the Stonebridge Road and U.S. Highway 6 roundabout, which has a $2.5 million budget over 2022 and 2023; demolition of the old fire station at 351 Benchmark Road, with $750,000 budgeted in 2023; improvements on the Old Town Hall Site in East Nottingham Park, with just under $3 million budgeted between 2022 and 2023; and much more.
As the town continues to budget for future improvements, Heil said this year, “Avon expects to adopt a formal inventory of all public infrastructure and facilities with a projected 20 year maintenance and replacement schedule in 2022 to improve our long term financial planning and maintenance of public assets at a high level of quality.”