The Mad River Valley Steering Committee’s executive committee will consider new funding alternatives, presented by the Community Economic Development Committee (CEDC), and report back to its full board and the community at large.
The steering committee heard a presentation from CEDC members on June 16 after the steering committee asked the CEDC to explore different funding mechanisms this spring.
The CEDC was formed after last year’s Economic Vitality Series workshops, which were organized by the Mad River Valley Chamber of Commerce and the Mad River Valley Planning District (MRVPD).
SENSE OF PLACE
The workshops, which sought feedback from Valley businesses and residents, illuminated areas with potential for growth – recreation, wellness, food and creative services that incorporate the arts and technology.
They also revealed barriers to doing business in The Valley, such as the availability of affordable housing, modes of transportation beyond individually owned cars and a shared Valley identity, dubbed “sense of place.”
This work, coupled with a request from Sugarbush to reconsider the mechanism by which the planning district is funded, guided the work of the CEDC this spring and summer. The planning district is funded equally by Sugarbush, Warren, Waitsfield and Fayston. When it was created, the planning district worked primarily on ski area development issues and it now works on much more broad-based Valleywide issues.
At last week’s meeting, steering committee members and members of the public heard about potential ways to fund the MRVPD as well as the work that the CEDC identified through the economic workshops and summit going forward.
FUNDING METHODS
To get to those potential funding methods, the CEDC looked at current funding and sources and attempted to align funding with needs going forward. Explaining its work, CEDC members recapped the workshop findings as well as The Valley vision statement that came out of them. Members identified all the tasks and costs currently being undertaken by the planning district, the rec district and the chamber and envisioned how current and future needs could be aligned and how to do so in a way that benefits The Valley’s economic vitality.
They offered several key messages including the fact that The Valley’s needs have outgrown the current funding capacity and that it may be time for the various groups to consider creating a new entity. The chamber has a full-time executive director and part-time administrator; the rec district has no staff, yet it is supported by $15,000 from each town.
Currently, the MRVPD consists of two full-time employees – executive director Joshua Schwartz and recently hired Kristine Keeney, who will focus on barriers to doing business in The Valley.
Last year, each funding entity provided additional funding for the hiring of Keeney, but neither the towns nor Sugarbush are committed to providing this extra backing in future years.
CURRENT SPENDING
CEDC members compared current spending on transportation, recreation, community development, staff, tourism (destination marketing and event support) and business support, education and mentoring and then proposed future spending that might be appropriate.
Currently The Valley towns are spending $320,000 total in those areas and a change of approximately $505,000 is proposed.
The draft budget presented shows an additional $75,000 for transportation projects (up from $0); $55,000 for recreation projects (up from $45,000); $100,000 to build a common identity for The Valley (up from $0); $50,000 for staffing (added to existing the $175,000); $150,000 to promote tourism (up from $0); and $75,000 for event support (up from $0).
Support, education and mentoring for businesses would remain at $100,000. The additional $500,000 of funding would bring the overall budget to $825,000.
How will the funds be collected? MRVPD steering committee member and CECD member Jared Cadwell referred to the funding mechanism of grants as “golden handcuffs” – with many strings often attached. These grants, as well as private donations, are not sufficient to meet the ongoing needs of the community, he added.
ALL THREE TOWNS
The CEDC presented the steering committee with various options for raising the funds including adoption of a local option tax (LOT) on rooms, meals, alcohol and retail sales or increasing the municipal property tax. Either would occur in all three towns.
By raising the property tax by 1 cent per $100 of property value, the towns could raise about $144,000. By raising it by 3 cents, they could collect about $469,000. The tax impact of adding 1 cent to the property tax for a $400,000 house would be $40 a year. To add 2 cents a year would add $80 annual for a $400,000 home.
With the LOT, the groups could collect $220,000 for rooms, meals and alcohol and an additional $474,000 from retail sales if an LOT were expanded to sales. In both cases, the state would also keep 30 percent of the tax.
Residents from Fayston, Waitsfield and Warren would need to vote to pass an LOT and would have to approve town budgets that included additional funding from municipal property taxes.
REDUCE SUGARBUSH CONTRIBUTION
The budget scenario presented would reduce Sugarbush’s contribution to the planning district by a not yet specified amount.
Fayston Select Board member Ed Read said that while tourists will not be bothered by the LOT, Valley residents cannot afford it. “Why would employees pay an extra $2 to eat out and an extra $100 in property taxes?”
Read said that residents in the three towns would be spending more so that business owners can earn more. “Those measures are actually defeatist to what we want to accomplish,” he said.
Warren Select Board member Andy Cunningham agreed. “You might do detriment to your own pile of money,” he said.
HOUSING FOR EMPLOYEES
On the same note, Read raised the issue of the lack of affordable housing in The Valley – problematic because if businesses grow, they cannot staff this growth without reasonably priced housing for employees.
MRVPD steering committee chair Bob Ackland replied, “That has to be looked at.”
“I don’t think the affordability issue will ever be addressed in a resort community. ... We are what we are,” he said. “If we’re trying to find a perfect solution, we’ll just keep treading water forever.”
CEDC member AnneMarie DeFreest called this issue a Catch-22, questioning how the groups could offer affordable housing to employees without the funding to create it.
