The Derry Town Council has adjusted the projected amount residents will pay in property taxes after Chairman Tom Cardon stated that he presented the wrong figures in the Oct. 20 Town Council meeting.
In that meeting (see story page 1), Cardon said that with the eight petition items from the budget cuts restored, the residents would still see a drop of $1.04 in their tax rate. His estimate was based on pro-rating the funds needed to restore the items cut.
But town legal counsel and the New Hampshire Department of Revenue Administration (DRA) have mandated otherwise, due to the citizens’ vote and the language in the petitions. The actual cut to the tax rate is 56 cents.
Cardon’s figures were based on an assumption that the town would have to raise an additional $1.2 million through taxation, after voters approved restoring the items in an Oct. 13 special election. But in a special meeting Monday night, Acting Town Administrator and Chief Financial Officer Susan Hickey said that while the projected actual needs are coming in at $1.2 million, the Council is obligated, by the language in the petitions, to restore the entire $1.6 million that had been cut.
Hickey explained that due to various factors, the “actuals” of what it would take to restore the cut positions and overtime are coming in at less than the amount that was cut. Restoring four firefighters is coming in at $128,141 instead of $384,424, she noted in a spreadsheet, because the hiring is not expected to be completed until March 1, 2016. Four police positions were cut in May for a total of $300,000, but the estimated actual cost of restoring those positions is $100,000.
Police Chief Ed Garone spoke at the meeting and said that fewer people are going into law enforcement and he is having trouble filling open positions with qualified candidates.
Filling of the two deleted Department of Public Works (DPW) positions is also coming in under, at $90,000 compared to the original cut of $150,000. Those positions will be filled by Dec. 1, DPW Director Mike Fowler said.
The elimination of the Human Resources Director position was a cut of $150,000, salary and benefits, but the projected hire is Dec. 1, leaving $50,000 to be raised between now and the next budget year.
Cardon said the $1.04 cut to the tax rate was based on a conversation with Hickey before the election.
“I should have checked with her and done follow-up,” he said. “I saw a silver lining that was not there.”
Councilor David Fischer said, “You are correct that that is what you stated on Oct. 20. And we voted as a Council to put the entire $1.6 million back.”
Fischer said, “There is a $1.2 million difference between what we voted to restore and what we knew the next day. How did that happen? What was the rationale? Where did the $1.04 come from?”
Hickey said she had conversations with both Atty. Lee Smith and the DRA and received information that the $1.6 million was what needed to be restored.
“That is what the town voted on,” she said.
Fischer said, “When we voted on Oct. 20 there was no discussion on what we were voting on and the actual cost.”
Fischer pressed Hickey, “Prior to Oct. 20, did you tell Mr. Cardon that the tax rate cut would be closer to 56 cents?”
Both Hickey and Cardon said they did not discuss that.
The FY 16 budget after the cuts was $34,726,774, and would reduce the tax rate by an estimated $1.21. With the positions and overtime restored, the budget is $36,358,478 and comes out to a 56 cent drop in the tax rate.
In the meeting, the issue was also raised of what to do with the “extra” money. Because of the timing of the restoration, there will be a surplus of $526,923 in the revised budget. The DRA has recommended that the money be put into the Unexpended Fund Balance, from which the Council originally drew $695,000 to balance this year’s budget.
Councilor Richard Tripp asked Hickey the monetary impact of restoring the money to Fund Balance and Hickey estimated it could result in a 26-cent cut to the tax rate.
“So we’ve already got a 26-cent tax cut for next year,” Tripp said, adding, “I hope we do a better job communicating with the townspeople.”
Monday night’s meeting was called at the request of councilors Fischer, Phyllis Katsakiores and Tripp per the Derry Town Charter, with its purpose stated “to correct the misinformation that was presented at the Oct. 20, 2015 Town Council meeting regarding the revised FY2016 Budget, including a financial analysis of the impact of the election results and to consider any follow-up action based on the new information.