SETTLEMENT AGREEMENT

This Settlement Agreement (the Agreement) is made this ____ day of August, 2016, by
and between the City of Burlington, a Vermont municipal corporation (hereinafter Burlington)
and the City of South Burlington, a Vermont municipal corporation (hereinafter South
Burlington) (collectively the Parties).
WITNESSETH:
WHEREAS, Burlington has challenged taxes assessed by South Burlington on properties
owned by Burlington related to Burlington International Airport (BTV) through appeals to
Vermont Superior Court, Chittenden Unit, Civil Division (Court) of the Grand Lists for April
1, 2012, 2013, 2014 and 2015, said appeals being identified as Docket Nos. 183-2-13 CnC,
1222-11-13 Cncv, 937-9-14 Cncv, and 869-9-15 Cncv respectively (the Appeals); and
WHEREAS, by its decision entitled Ruling on Motions for Summary Judgment, dated
March 3, 2016, in the Appeals (Decision), the Court made certain rulings on matters of law,
including the interpretation and application of 5 V.S.A. 754 and 32 V.S.A. 3659 to BTV, that
have informed the Parties in their analysis of the case and upon which they have relied in
negotiating a settlement of the Appeals; and
WHEREAS, the Parties wish to fully, finally, and completely settle the Appeals, and
agree upon a 24 V.S.A. 2742 agreement for valuing BTV-related properties in the future;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements herein contained, and intending to be legally bound, the Parties hereby agree as
follows:
1.

Dismissal of April 1, 2012, 2013 and 2014 Grand List Appeals. Burlington

agrees to dismiss Docket Nos. 183-2-13 CnC, and 1222-11-13 Cncv, and 937-9-14 Cncv, and,

subject to the provisions of section 6 below, hereby relinquishes any claim for refunds, and any
interest which may be payable with respect thereto, for taxes paid under protest for those tax
years.
2.

Grand List 2015 Appeal. The Parties agree that the total correct assessed value of

all Burlington-owned properties as of April 1, 2015, is Fifty Two Million, One Hundred Sixteen
Thousand, Seven Hundred and Twenty and 38/100 Dollars ($52,116,720.38) and shall jointly
request the Court to enter a judgment in that amount in the form of Exhibit A. Except as
otherwise provided herein, 32 V.S.A. 4468 shall control the valuation for the two next ensuing
years (grand lists April 1, 2016 and April 1, 2017).
3.

Allocation of $52,116,720.38. The Parties agree that the $52,116,720.38 appraisal

value for the Grand List as of April 1, 2015 is based upon the following allocation:
A.

Commercial Properties Outside the Fence:

i.

3060 Williston Road -

$892,300

ii.

3062 Williston Road -

$69,500

iii.

3064 Williston Road -

$593,900

iv.

3090 Williston Road -

$379,000

v.

1399 Airport Drive -

$397,500

vii.

Airport Car Rental

$145,900

viii.

1223 Airport Drive -

$163,700

ix.

4016 EX Williston Rd -

$200,000

x.

700 Airport Parkway -

$453,500

Subtotal (A) =
B.

$ 3,295,300

Private Use Buildings:

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i.

1130 Airport Drive -

$197,700

ii.

1120 Airport Drive -

$1,136,300

iii.

1150 Airport Drive -

$489,300

iv.

25 Customs Drive -

$638,000

v.

73 Customs Drive -

$900,000

vi.

15 Eagle Drive -

$2,853,400

Subtotal (B):

$6,214,700

Subtotal (A) + (B) =

$9,510,000

Burlington shall pay property taxes on the properties listed in (3)(A) and (3)(B)
above in this section.
C.

Taxes, PILOT, and Allocation to Land:

As of April 1, 2015, the Parties agree the total acreage comprising BTV, including
21.64 acres associated with the Commercial Properties Outside the Fence as identified
in Section 3.A. above, consists of 893.42 acres. Of this amount, 414.672 acres, which
includes 44.564 acres acquired pursuant to BTVs Federal Aviation Administrationapproved Noise Compatibility Program (NCP) prior to April 1, 2015, are governed by
5 V.S.A. 754 and thereby are exempt from taxation. The remaining 457.11 acres are
subject to taxation pursuant to 32 V.S.A. 3659.
The 44.564 acres purchased pursuant to Burlingtons NCP shall be valued at
$280,000 per acre for a total value, as of April 1, 2015, of $12,477,920, and Burlington
shall make a payment in lieu of taxes upon this amount based on the municipal tax rate.

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The remaining 370.108 acres that are governed by 5 V.S.A. 754 shall be valued
at $25,750 per acre for a total value, as of April 1, 2015, of $9,530,281, and Burlington
shall make a payment in lieu of taxes upon this amount based on the municipal tax rate.
The 457.11 acres subject to taxation pursuant to 32 V.S.A. 3659 shall be valued
at $25,750 per acre for a value, as of April 1, 2015, of $11,770,582.50. This amount shall
be multiplied by 1.75 pursuant to 32 V.S.A. 3659 for a total value of $20,598,519.38,
and Burlington shall pay property taxes on this amount based on the non-residential
statewide education property tax rate and the municipal tax rate.
(A) + (B) + (C) = $52,116,720.38.
As acres are added or deleted from these categories, or if Burlington establishes
that the use of any of the properties identified in section 3.A. or 3.B. changes to a public
use, necessary adjustments will be made to the value of taxable property. If there is a
change to non-public use of any lands or improvements subject to this agreement,
necessary adjustments will be made to the value of taxable property. Burlington shall
provide South Burlington with reasonable access to land and improvements, as well as
other reasonable information, to allow such determinations to be made.
4.

Refund for 2015 Overpayment: The agreed upon appraised value of

$52,116,720.38 equates to a total liability for taxes and payments in lieu of taxes for Burlington
of $717,070.20 for BTV-related properties as of April 1, 2015. BTV has previously made
payments to South Burlington under protest totaling $1,597,348.30 for BTV-related properties
owned by Burlington as of April 1, 2015. South Burlington shall refund to Burlington the
overpayment of the local (municipal) portion of the total tax bill (exclusive of any claimed
interest) of $117,955.25, payable in credits against Burlingtons tax bills for Fiscal Years (FY)

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2017 and 2018. Fifty percent (50%) of the credit ($58,977.63) shall be payable in FY 2017, and
the remaining 50% shall be payable in FY 2018. Burlington is waiving any right it may have in
and to a refund of any taxes, and any interest which may be payable with respect thereto, paid by
it in FY 2016 (July 1, 2015 through June 30, 2016) for education property taxes under 32 V.S.A
Chapter 135.
5.

24 V.S.A. 2742 agreement: The Parties shall enter into an agreement pursuant

to 24 V.S.A. 2742, and South Burlington City Charter 1505, commencing in FY 2019 in the
form attached hereto as Exhibit B.
6.

Foregone Refunds: The Parties agree that the value of refunds Burlington claims

it has foregone by dismissing its appeals of the Grand Lists for April 1, 2012, 2013 and 2014 as
set forth in section 1, above, inclusive of interest (to the extent interest could be payable), is in
excess of Two Million Dollars ($2,000,000). In the event that (1) the 24 V.S.A. 2742
agreement is altered or held to be invalid by final adjudication initiated by a party other than
Burlington or South Burlington (including, but not limited to, a reduction of acreage of land
which the Parties agree is properly designated as governed by 5 V.S.A. 754 consistent with the
Decision or land designated as subject to 5 V.S.A. 754 is determined to be subject to statewide
education property taxes), or (2) if the statewide education tax attributable to BTV increases
through a circumstance causing alteration of the 24 V.S.A. 2742 agreement, but not including
modification of the applicable tax rates, then South Burlington shall be responsible for payment
of any resulting increase (beyond the amount that would have otherwise been payable in the
absence of either (1) or (2) taking place) in the statewide education property tax assessed on
BTV up to an aggregate maximum amount of Two Million Dollars ($2,000,000) (the Foregone
Refund) over the period the 24 V.S.A. 2742 Agreement is in effect or, if invalidated, was

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intended by the Parties to be in effect. The amount of the Foregone Refund shall diminish each
year that the 24 V.S.A. 2742 agreement is in effect by ten percent (10%) of the aggregate
maximum amount. By way of illustration, if the 10-year 24 V.S.A. 2742 agreement becomes
ineffective after year 5, the remaining credit available to Burlington would be $1 Million.
Burlington shall be solely responsible for any statewide education property taxes assessed on and
payable with respect to BTV on an annual basis that exceed a $200,000 annual allocation of the
Foregone Refund attributable to the year in which such increased statewide education property
taxes are assessed. South Burlington shall only be responsible for up to a $200,000 per year
statewide education property tax increase due to events described in (1) or (2) if all of the
following conditions are met: (a) Such increase is due to the Parties 24 V.S.A. 2742
agreement being altered or held to be invalid either through final adjudication or some other
circumstance causing alteration of the 24 V.S.A. 2742 agreement, either of which is initiated
by a party other than Burlington or South Burlington, which increases the amount of statewide
education property taxes assessed on and payable with respect to BTV, (b) the Parties have
jointly defended the 24 V.S.A. 2742 agreement and shared equally in the costs associated
therewith, (c) the Parties have pursued reasonable avenues for defending the 24 V.S.A. 2742
agreement, including seeking approval from the Vermont Economic Progress Council, (d) the
Parties are unable to achieve an outcome via other means which is reasonably equivalent in yearto-year taxation to the 24 V.S.A. 2742 agreement, and (e) the increase in statewide education
property taxes is not attributable to a change of statewide education property tax rates.
In the event that the 24 V.S.A. 2742 agreement is altered or held to be invalid either by
final adjudication or some other circumstance causing alteration of the 24 V.S.A. 2742
agreement, either of which is initiated by a party other than Burlington or South Burlington, and

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it is found that statewide education property taxes are owed with respect to BTV for tax years
prior to the tax year of such an event or circumstance, the Parties agree that South Burlington
shall be responsible for its $200,000 annual allocation of the Foregone Refund as contemplated
by this Section, for each prior tax year for which it is found that additional statewide education
tax is owed with respect to BTV as though the event or circumstance occurred during each of
those tax years.
In the event the 24 V.S.A. 2742 agreement is altered or held to be invalid by way of a
final adjudication or some other circumstance causing alteration of the 24 V.S.A. 2742
agreement, either of which is initiated by a party other than Burlington or South Burlington and
meets all of the criteria as described above, there shall be no unique reappraisal of Burlingtonowned property related to BTV (with the exception of properties identified in Sections 3 A. and
B. above) during the term that the 24 V.S.A. 2742 agreement would otherwise have been in
effect.
7.

Vested Rights. Nothing herein shall be construed to prohibit or inhibit any

contractual rights tenants in the Private Use Buildings identified in section 3.B. above may
have to contest the individual assessments against the parcels they occupy or utilize. South
Burlington does not waive its right to contest or dispute the right or standing of the tenants of the
Private Use buildings to contest the individual assessments on the parcels they occupy or
utilize.
8.

General Provisions.

a.
Amendment; Waiver. This Agreement may be modified only by a written
amendment signed by the Parties, and no waiver of any provision of this Agreement or
the breach thereof shall be effective unless expressed in a writing signed by the waiving
Party. The waiver by either Party hereto of any of the provisions of this Agreement or of
the breach thereof shall not operate or be construed as a waiver of any subsequent or
other breach. Waiver of any provision of this Agreement, in whole or in part, in any one
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instance shall not constitute a waiver of any other provision in the same instance, nor any
waiver of the same provision in another instance, but each provision shall continue in full
force and effect with respect to any other then-existing or subsequent breach. No delay
or omission to exercise any right, power or remedy under this Agreement by either Party
upon a breach or default by the other Party shall impair any such right, power or remedy
of the non-defaulting Party, nor shall it be construed to be a waiver of any such breach or
default.
b.
Counsel. This Agreement was reviewed and approved by counsel for both Parties
and the language of all parts of this Agreement shall in all cases be construed as a whole
according to their meaning and not strictly for or against either Party. Each Party shall be
responsible for their own legal fees and expenses arising in connection with the Appeals
and this Agreement and the documents and transactions contemplated hereby.

c.
Consent to Jurisdiction. The Parties agrees that any suit, action or proceeding
instituted against such Party under or in connection with this Agreement shall be brought
only in Vermont Superior Court, Chittenden Unit, Civil Division. By execution hereof,
each Party hereto irrevocably waives any objection to, and any right of immunity on the
grounds of improper venue, the convenience of the chosen forum, the personal
jurisdiction of such court or the execution of judgments resulting therefrom. Each Party
hereby irrevocably accepts and submits to the jurisdiction of such court in any such
action, suit or proceeding.
d.
Miscellaneous. This Agreement: (i) may be executed in any number of
counterparts, whether in original or via electronic copy of facsimile, each of which, when
executed by the Parties to this Agreement, shall be deemed to be an original, and all of
which counterparts together shall constitute one and the same instrument; (ii) shall be
governed by and construed under the law of the State of Vermont, without application of
principles of conflicts of laws; (iii) shall constitute the entire agreement of the Parties
with respect to the subject matter hereof, superseding all prior oral and written
communications, proposals, negotiations, representations, understandings, courses of
dealing, agreements, contracts, and the like between the Parties in such respect; (iv)
contains headings only for convenience, which headings do not form part, and shall not
be used in construction, of this Agreement; and (v) shall bind and inure to the benefit of
the Parties and their respective legal representatives, successors and assigns, except that
neither Party may delegate any of its or obligations under this Agreement, or assign this
Agreement, without the prior written consent of the other Party.
e.
The Parties agree that this Agreement has been entered into by each of them in
order to avoid further litigation in the Appeals, and that no Party hereby admits or
acknowledges any actionable act or omission.
f.

This Agreement is subject to approval of each Partys City Council.

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IN WITNESS WHEREOF, the Parties have hereunto executed this Agreement on the
date first above written.
CITY OF BURLINGTON

By:
Name:
Duly Authorized Agent

CITY OF SOUTH BURLINGTON

By:

________________________________
Name:
Duly Authorized Agent

[Settlement Agreement Signature Page]