The upshot of Thursday's joint meeting of the Essex Junction trustees and the Town of Essex selectboard is that the village will vote in November on whether or not to merge, while the selectboard argued there were too many issues still to be resolved to go forward with a merger vote.
The largest area of disagreement is representation, but it was equally clear that the urgency coming from the trustees is driven by taxes. Village residents pay taxes to both the town and village. They pay, for example, for their own library, recreation and public works departments, and then help to pay for those same services in the town. In fact, 42 percent of the town's grand list is in the village. But the trustees, and the villagers they represent, do not believe they receive 42 percent of the municipal services provided by the town.
Lurking behind the merger discussion is the other option which would end dual taxation for village residents — separation. Later in September, the town's finance director is expected to report on the financial impact of separating the two municipalities.
Even without the final numbers, selectboard member Patrick Murray was certain of one thing, separation would mean a sudden and steep increase in property taxes in those portions of Essex outside of the village (referred to as the town outside the village or TOV).
In March, former selectboard member Irene Wrenner and local businessman Ken Singnorello petitioned to change representation on the town selectboard from five members, elected by the whole town, to six members, split evenly between the village and town.
The proposal was approved by 61 percent of Essex voters in March, but most of the support came from the TOV. It failed in the village.
Selectboard members repeatedly cited the vote as a reason for wanting 3+3 in the charter of a new, unified Essex Town.
All charters and charter changes must be approved by the legislature. That approval process starts in the House Government Operations Committee, which refused to approve the change to 3+3. The committee sent a letter to the town citing the lack of clarity around how the new board would be put into place, how adjustments in representation would be made should the relative populations of the TOV and the village change, and concerns about the risk of tie votes on an even-numbered board. Earlier this month the selectboard chose to send a letter to the committee addressing those concerns.
Members of both boards repeatedly quizzed attorney Dan Richardson about how the committee might handle a charter for a merged Essex that included 3+3.
"You're going to get a lot of questions if you put 3+3 in there," he said.
Although even boards have been allowed in Act 46 school mergers, those are exceptions, according to Richardson. Generally, even numbered boards fly in the face of state law. "You're going outside of the norm," he said. "You're pretty much forcing yourself into consensus lawmaking."
To allay the committee's concerns Essex officials would need to present data showing that when working together the selectboard and trustees have been able to reach consensus regularly, Richardson said.
Some argue that consensus is the only way to unify the town and village. However, there is also the risk that 3+3 would simply replicate existing divisions on the new board. One member of the public suggested the possibility of three wards rather than two. Of course, the new selectboard could have as many wards as members, but last spring's vote has meant that 3+3 has dominated the discussion of representation.
To avoid deadlock on the future board, the trustees have suggested 3+3+1, with three members from the village, three from the TOV and one at large.
Critics of that proposal argue that because the village is more densely populated, it is easier to campaign there and the at large seat would always go to someone from the village. Trustee George Tyler called that idea a "fantasy," and said the Government Operations was unlikely to accept it as a reason for having 3+3 rather than 3+3+1.
Richardson explained that Government Operations could change the charter rather than simply approving it. Municipalities are "creatures of the legislature," in that their authority derives from the legislature and the rules under which they operate are determined by it. The legislature could even order a merger of the two municipalities, but is unlikely to do so, Richardson said.
Should the town and village approve merger, but with differing charters, the committee might choose to resolve any differences between them, although they would likely take testimony from Essex officials and residents first, according to Richardson. The committee could also reject both charters outright. Even if the town and village approved the same charter, the legislature could still alter it prior to approval.
Selectboard member Andy Watts said 3+3 was a hill on which he was willing to die.
Trustee Raj Chawla suggested that if selectboard members were willing to die on swords for 3+3, that was an opportunity to revisit another issue: taxation.
Equalizing the tax rates
The merger plan the trustees and selectboard have spent the past three years creating calls for a gradual equalization of tax rates between the TOV and the former village in a new merged Essex. Town taxpayers with a house valued at $280,000 would see a tax increase between $26 and $30 each year for 12 years, barring any large changes to the grand list, such as a substantial new development. That means after 12 years, the typical TOV residential property owner would see an increase between $312 and $360.
The reason for the 12-year phase in is that a bond owed by the village will be retired in 12 years. However, if the merger is being delayed by a year, then the phase in should also be shortened, Chawla suggested, to coincide with the retirement of the village's bond. The village would also retain responsibility for any capital projects during that same period.
According to Chawla, the village has offered to create a sidewalk district to handle approximately $140,000 in sidewalk maintenance annually.
The net effect of those efforts is to slow the speed at which TOV municipal property taxes would increase, while delaying the arrival of what the village views as tax equity.
Frustrated villagers and separation vs. merger
The trustees indicated one of the reasons for placing merger before village voters in November is to determine if village residents want to merge.
Tyler said that he was surprised by the number of people at the recent Open Outside event who asked him why the village and town aren't separating. "That's part of the conversation we need to be hearing," he said. "If the real desire of the people in the village is that they want to separate from the town, are we doing a disservice [by pursuing a merger]?"
"I still think in my heart a merger is much better," said Tyler. "Separating is almost as impossible as merging."
Village President Andrew Brown noted that all of the current trustees ran on a merger. "There isn't a side plan. The plan is merger," he said. But he also added, "The status quo is intolerable. We're not going to keep that up."
At one point a member of the public asked why village residents get to vote on a merger as village residents and then again on the town ballot. Selectboard chair Elaine Haney explained it's because village residents are residents of both municipalities.
Trustee Daniel Kerin put it more bluntly. "Voting is tied to taxation," he said. "We're taxed twice. We get to vote twice."
He also cautioned the town. "You don't choose a merger, and I see that as choosing separation," Kerin said.
Both Haney and Murray acknowledged the frustration of village residents, with Murray saying, "Our constituents in the village are fed up."
Continuing to talk
Both boards agreed that the conversation about a merger will continue. The trustees have until Sept. 3 to finalize the charter village voters will either approve or reject on Nov. 3. They asked for selectboard members to share any suggestions they may have on the current draft of that document so that the trustees can consider selectboard members' suggestion when creating the final draft.
Haney also suggested that with budget season just around the corner, it would be possible to look at how the town's capital spending is divided between the village and TOV.
Should village voters approve a merger in November, that would place the ball firmly in the selectboard's court. The selectboard would then have to decide whether or not to move forward with a merger vote on Town Meeting Day and what the charter they put before voters should include.
Update: This story was updated on Aug. 31 to clarify information about the 12-year time frame for tax equalization between the village and TOV.