City budget adopted on second reading

Twenty days after the start of its new fiscal year, the city has an official operating budget — $58-million.

City Council approved that number on a second and final reading last night at a special meeting that lasted 11 minutes, as long as it took to rear a series of motions and record unanimous 'yes' votes.

Some long time City Hall watchers believe this is only the second time in at least a half-century that the council has not adopted a budget before start of a new fiscal accounting year. The delay was caused by apprehension over the level of funds coming from Concord for both the city and the School District, with councilors deciding to wait until after the Legislature adjourned late in June to begin the final, decision-making process.

The City Charter gives the council until July 27 of each year to adopt a budget without the spending plan prepared months earlier by the city manager from going into effect without its approval.

The $58-million number approved is $760,000 lower that the figure submitted by City Manager Eileen Cabanel in March, primarily because of a lack of the traditional level of support from state government.

After accounting for some $24.75-million in non-property tax revenue sources, the budget leaves $33.25-million to be raised the old-fashioned way. That's 5-percent more than last year.

The city's property tax cap would have allowed for a slightly higher rate of growth but councilors wanted to keep the projected tax rate increase to 75-cents per $1,000 of valuation because of the recession. Another 9-cents could have been squeezed in under the cap.

The School District budget of $33.4-million accounts for 58-percent of the total and is exactly $500,000 lower than the plan submitted for approval by the School Board.

The school budget does not as yet, however, include up to $324,000 of Federal Individuals with Disabilities Act (IDEA) money school officials have been told to expect as part of the economic stimulus package approved by Congress. School Budget Committee Chair Marge Kerns said last night that Laconia still has to formally apply for that money and that if and when it comes, in a lump sum or incrementally, the School Board will be back before City Council asking for a supplemental appropriation that will not effect the property tax burden.

In May, the School Board offered to in effect transfer that $324,000 to the city side of the ledger to help the city make-up for an expected $610,000 shortfall in state revenue sharing that did, in fact, materialize. It did so believing the Federal legislation behind the money would allow it to be spent on a "maintenance of effort" in the area of special education, rather than on new programs. If that turned out to be the case, the schools could spend the same amount as planned on their special education effort but collect $324,000 less in property tax revenue to pay for it. The city, then could collect $324,000 more without the bottom line going over the tax cap.

If the $324,000 does materialize and the School Board does decide to spend all of it on "maintenance of effort", it will still have to trim $176,000 from its original budget request. Those cuts are likely to come in the area of supplies, as the board has expressed its desire to keep the number of employees at the planned level.

Kerns said a final decision on what exactly to do with the IDEA money would be made down the road, but did acknowledge that any part of it not spent of the existing special education program would have to be made up for in cuts elsewhere in the school budget.