By MICHAEL KITCH, LACONIA DAILY SUN
LACONIA — Anticipating that the next city budget will be as tight or tighter than the last, City Manager Scott Myers has told the City Council that he will forgo another increase in his annual compensation of $125,000.
In November, Myers advised the council of the challenges of tailoring the 2017-2018 city budget to the limits of the tax cap. The tax cap limits the annual increase in total expenditures funded by property taxes to the rate of inflation, measured by the Consumer Price Index — Urban (CPI), for the prior calendar year, plus an additional amount representing the value of new construction, which is calculated by multiplying the value of building permits less the value of demolition permits issued between April 1 and March 31 by the prior year's property tax rate.
Myers recalled that last year the rate of inflation was a mere 0.1 percent while the value of new construction was $27.2 million. This year, the values of the two multipliers are reversed, as the CPI has risen to 1.2 percent, but after nine months the value of new construction has fallen to $15.7 million and Myers projects it will end the tax year at $20 million. From these numbers, Myers has calculated that city expenditures can increase by approximately $367,000 without breaching the tax cap. Moreover, Myers said he does not anticipate significant increases in municipal revenues from sources other than property taxes to supplement the budget.
But, contributions to the New Hampshire Retirement System alone, Myers said, will increase by some $200,000. At the same time, he estimates that the city's contribution to the cost of health insurance premiums for its employees to increase by about $170,000. And Myers expects the Belknap County budget, which for some years has risen in pace with what the city's tax cap allows, will increase at a higher rate in 2017.
Meanwhile, the collective bargaining agreements with the four unions representing city employee— the Laconia Professional Firefighters, Laconia Police Association, State Employees Association and American Federation of State, County and Municipal Employees — expire in June. Myers said that negotiations for new contracts present an opportunity to address some costs.
While Myers's salary remained flat, the council increased the city's contribution to his retirement account from 12 percent to 13 percent. Mayor Ed Engler pointed out that the city manager contributes twice the percentage share as other city employees to the cost of his health insurance premiums.