LACONIA — With one dissenting vote, the City Council on Monday night adopted the 2015-2016 municipal budget, which with a grand total appropriation of $63,989,938 represents an increase of $1,679,516, or 2.7 percent, over the budget for the fiscal year that ended on June 30.
Only Councilor Brenda Baer (Ward 4), voted against the budget, primarily because it funded the positions of four firefighters who were originally funded for two years with federal funds. Councilors Ava Doyle (Ward 1), David Bownes (Ward 2), Henry Lipman (Ward 3), Bob Hamel (Ward 5) and Armand Bolduc (Ward 6) all backed the budget.
The council trimmed $184,600 from the budget recommended by City Manager Scott Myers, with $42,500 to replace radios and $50,000 to reduce overtime at the Fire Department representing the largest reductions to city appropriations. At the council's direction, the School Board agreed it could live with having its appropriation cut by $100,000 by elimination one full-time position at the middle school, a part-time position in the elementary schools and deferring a program intended to provide every student access to a computer.
The total amount to be raised by property taxes is projected to $41,699,930, which includes $4,402,329 from the state education tax, an increase of of $1,105 032, or 2.7 percent over the tax commitment in 2014-2015. The property tax rate, including the state education tax rate of $2.43, is projected to rise from $22.40 per $1,000 of assessed value to $22.59, an increase of 19 cents.
Before the council turned to the budget Mike Persson of the School Board, who stressed that he was speaking as "a resident, business owner and taxpayer," urged the council not to reduce the city manager's budget. "These cuts are unlikely to catastrophic impacts on city services this year," he said. "However, these cuts will carry forward to future budgets and will erode the amounts that can be raised by taxes in future years."
Persson explained that the mechanics of the property tax cap limit the annual increase in the amount to be raised by property taxes to the percentage increase in inflation and taxable value of new construction. When both significantly limit the allowable increase, he warned, the council will face the choice of reducing municipal services or overriding the tax cap.
"All indications are that next year is likely to be such a year, " he continued, alluding to the negative rate of inflation that has prevailed in the first five months of this year.
Persson calculated that the budget reductions proposed by the council will spare the owner of an average home, priced at $146,000, about $16 in property taxes — "the cost of a burger and a beer at the Holy Grail."
Bownes, offered a motion to restore $50,000 to the school budget. Lipman seconded the motion "for discussion", then referred to Persson's statement only to discount his concerns. "We can manage through a zero percent inflation rate," he said. "I'm comfortable we can work together to overcome next year's financial challenge."
Lipman's reference to the undesignated fund balance or accumulated surplus prompted Mayor Ed Engler to ask Lipman if he intended to compensate for any shortfall by drawing from it. This year the city applied $835,000 from fund balance to supplement revenue and next year will apply $935,000. In response, Lipman suggested the fund balance could be part of a package to address a shortfall. "I think we can get through this," he repeated.
With that Bownes's proposal failed five-to-one and the budget was adopted by the same margin.
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