Proposed city budget up 6.8%

LACONIA — City Manager Scott Myers kicked off the discussion about Laconia’s FY 2023 budget on April 11, recommending that the City Council agree to increase wages and fill new employee positions, while meeting increased costs for health insurance and solid waste contracts. The proposed budget also includes money for capital projects and City Council priorities.

The budget increases city-side spending by $1,952,250, or 6.8%, and school spending by $1,703,100, or 4.6%, for a total increase of $3,655,350.

Myers noted that the tax assessment from Belknap County shows an 18.6% increase of $473,165.

On the revenue side of the budget, non-property tax income increases by $974,000, or 3.8%; and the assessed valuation of the city increases by $48.6 million. Myers also proposes using $685,000 from the city’s fund balance — previously collected tax money that has been set aside to cover potential abatements, court costs, and other unanticipated expenses — to help dampen the impact of spending on the tax rate.

Myers reviewed the city’s tax cap which, since around 2005, has limited the annual increase in spending to the rate of inflation plus the value of new construction. The Consumer Price Index-Urban for 2021 was 4.7%, which allows additional spending of $2,287,995. New construction in the city between April 1, 2021, and March 31, 2022, amounted to $48.6 million, allowing additional spending of $916,688.

While the total increase in the operating budget exceeds that spending level by $450,667, the additional revenues bring the budget well within the tax cap.

Motor vehicle registrations, for instance, have increased by $255,600. The city also saw increases in intergovernmental revenue (Rooms and Meals Tax and Highway Block Grants), as well as in miscellaneous revenue items.

Myers said that developing this budget was much easier than the last two years, when the impact of the coronavirus created a lot of uncertainty. There also was uncertainty last year because the state was developing its biennial budget and there was no clear indication of what that would mean to the city.

He also noted that the city had been unsure what federal assistance would be available through the American Rescue Plan Act.

“Last year at this time, we were waiting on guidance,” he said. “There was money coming down, but yet communities didn’t know what they were allowed to spend it on at that time.”

He also said, “We didn’t know what was gonna happen with city revenues, whether people were going to be replacing cars, and what our motor vehicle registration was going to do. Were we going to have have additional operating expenses … what was going to happen to our employee workforce? Were we going to have a lot of people out, either themselves being sick or family members sick that they were home taking care of? …

“Now we’ve got 24 months of history under our belt. We’ve got the trends of what has happened with people being able to meet their commitments to pay property taxes. We’ve seen what the motor vehicles are doing. We’ve seen the rebound from the state and the gas tax and the Rooms and Meals. So we feel we’re on much more solid ground today than even where we were last year and especially where we were two years ago.”

The budget priorities, he said, “are a lot of the same things we’ve been focusing on for years: core municipal services, public safety, education, infrastructure maintenance, and our water and sewer services.”

He noted that the city is negotiating on four collective bargaining agreements, and said, “Our employees are feeling the same pinches that you and I feel, that the city feels when we’re going to fuel up our vehicles and we’re going to purchase asphalt for our road projects, which has a petroleum component to it; and we replace vehicles and we do other things that the city does.

“Inflation running at 4.7 [percent] certainly is tying into some of the labor negotiations that are currently ongoing with our groups, and also for our non-union folks.”

Health insurance is increasing by 9.26%, he said.

Solid waste costs are increasing in several areas: curbside collection, hauling costs due to the increase in diesel prices, and in the “tipping fees” — the per-ton cost of material sent to landfills.

The budget also includes the remaining expenses associated with preparing the Colonial Theater for “coming online,” Myers said.

“We probably have a little bit too much money in the wage line item and probably not enough in the health insurance line, but it’s fungible, if you will, and we can slide one to the other as far as employee costs,” he said.

Some of the new employee positions are likely to be covered by grants, such as the new police officers associated with the community prevention, enforcement, and treatment program initiated by Eric Adams, who now will be expanding the program to other New Hampshire communities. One new position would be paid from the city’s general fund, with the other three positions eligible for grant funding.

“There’s challenging times in hiring in public safety right now,” Myers said.

The city also wants to add a full-time assistant prosecutor next January, so this budget would cover six months’ salary.

The city also has applied for a SAFER (Staffing for Adequate Fire and Emergency Response) grant to add four positions in the fire department. The budget anticipates paying for them starting next January.

“If the grant materializes,” Myers said, “we can certainly back out the dollars that are in the budget and the Council can decide what to do with those funds. If we’re not successful with the grant, the intention would be that we can start hiring for firefighters and that would bring the four platoons we have at a full staffing level, from nine firefighters to 10 firefighters.”

The budget also calls for a new, year-round recreational facilities employee, “and we know that has been a topic of conversation and a priority for the Council over the past year, if not more,” Myers said.

Finally, he wants to increase a part-time code administrative support position to full-time.

Over the next few months, the City Council will be reviewing the proposed budget in preparation for adopting a final version prior to the start of the new fiscal year on July 1.