Hanover Town Manager Julia Griffin presented what she called an "extremely conservative budget proposal" on Monday that includes a maximum property tax rate increase of 3.82 percent for the town's 2010-2011 fiscal year budget. The budget discussion which reflected the country's recent economic downturn and took place at the Hanover Board of Selectmen public hearing primarily addressed public works, town properties, the Sewer Fund and the new Water Utility Fund, and was the first of three public budget hearings scheduled for this week.
At the three-hour hearing, Griffin presented a proposal she said reflects the state of New Hampshire's "bleak" fiscal future, according to her written introduction to the budget proposal.
"We have [budgeted] with the knowledge that the downturn is likely to be fairly long, in recognition that we have likely reached the bottom of the trough but are continuing to experience significant turbulence while at bottom," Griffin wrote in the proposal.
Gov. John Lynch, D-N.H., announced plans to cut $140 million from the state budget on Feb. 11, the Union Leader reported. Lynch said the cuts are likely to result in layoffs of state workers. Hanover's budget plan does not call for layoffs of town employees.
The town could minimize the amount it must increase property taxes with increased building permit fees particularly by changing permit fees to assess the College for the Thayer Dining Hall renovation project, according to Griffin's budget proposal. This revenue increase of approximately $45,000 would reduce the proposed tax rate increase from 3.82 to 3.24 percent.
On Jan. 19, College President Jim Yong Kim announced that the renovation of Thayer Dining Hall will begin this Summer term.
The construction project, which is slated to finish by fall 2011, will be funded by a $12-million donation from the Class of 1953.
Without the change, building permit revenues are expected to increase by $41,122, primarily because of the College's construction of the new Visual Arts Center, according to the proposal.
The elimination of contracted recycling services the second-most significant reduction would reduce expenses by $33,383 and, with the building permit fee revenue, reduce the tax rate increase from 3.24 to 2.81 percent, according to the proposal.
The projected total expenditures of $23,536,787 for the town represent a 19.4 percent increase over the total expenditures for the 2009-2010 fiscal year, largely as a result of the creation of the Water Utility Fund and further improvements to the Water Reclamation Facility.
The proposal estimated a total increase of $388,958 in town employees' salaries and benefits in the coming fiscal year an increase of 4.8 percent, according to the proposal. This change reflects a 3 percent wage scale adjustment and projected increases in health care premiums, workers' compensation premiums and employer contributions to the New Hampshire Retirement System.
Employees' salaries and benefits comprise 70 percent of the operating budget for the General Fund, the largest of the town's seven funds, according to the proposal.
Other expenditures include $95,000 to repair the bridge on River Road, $90,000 to continue improving Lyme Road, $20,000 to replace Hanover Police officers' vest equipment, $25,000 to fund a joint Upper Valley celebration of Hanover's 250th Charter Date and $20,000 to fund a more "functional and appealing" town web site, according to the proposal.
In a meeting last November, the Board requested that Griffin submit a budget proposal reflecting a 4 percent tax rate increase, a 2 percent increase and no increase, according to Griffin's written proposal. The budget presented on Monday called for a maximum 3.82 percent increase and included a list of reductions that, if instituted, could balance the 2010-211 fiscal year's expenditures and eliminate the tax increase.
"We tackled this year's budget with some one-time reductions and some changes in operations that are designed to reduce our expenses over time," Griffin said during the hearing.
Throughout the hearing, Griffin and Deputy Town Clerk Betsy McClain reiterated that proposing this year's budget was particularly difficult. This year, the town had to compensate for a higher-than-expected cost of living adjustment and adjust for an "unstable" state economy, according to the proposal.
Public works, town properties and the Sewer Fund were all discussed in detail during Monday's meeting. The Board scrutinized energy costs, including those for electricity, heat and water, for every town-owned building.
Although many buildings, such as the Howe Library, have seen a decrease in fuel usage since fiscal year 2006, the Police Department building has proposed increased electricity and heat budgets $22,000 up from $20,750 last year, and $16,250 up from $15,540 last year, respectively.
The hearing also addressed the upcoming municipalization of the Hanover Water Works Company, which will become the Hanover Water Utility on July 1. The proposal estimates that the Water Utility Fund will see revenues of over $1.5 million, which will balance the approximated $1.5 million expenditures.
Griffin wrote that although this year's budget proposal proved difficult, the state's 2011 legislative session "promises to further devastate" local municipal and school budgets.
"I think next years budget is going to be even more tough," Griffin said during the hearing. "I'm concerned about what the state is going to do to balance their own budget."
The Board will hold additional meetings tonight and Thursday night and will vote to adopt the budget plan on Monday.
