For the second year in a row, Concord city council is expected to dip into its savings and hope to use federal aid to pay for new spending and avoid soaring taxes.
The council is due to vote on a $ 109.3 million budget proposal after a public hearing Monday night. Overall spending is expected to increase by $ 3.1 million from this year’s projected spending, an increase of approximately 2.9%, when the fiscal year ends at the end of June.
Much of the new spending is due to salary increases and benefits for municipal employees, including an increase in the city’s required contribution to the state’s pension system that will add more than $ 1 million.
Despite the additional expense, the reduction was not factored into the board’s deliberations.
“The decrease in spending means you have to cut back on services,” City Manager Tom Aspell said. “As far as I know city council has not received any significant input from anyone who said ‘we really don’t need to pick up leaves anymore’ or ‘we really don’t need fire departments at night “.”
The budget includes a 2.5% tax rate increase to meet new spending demands, but also draws on $ 1.75 million from the city’s unrestricted fund balance, which is made up of savings budgets from previous years that the city can spend in an emergency, to avoid a larger tax increase. Last year’s budget used $ 1.5 million of that money to keep the increase in the property tax rate at zero percent.
“The purpose he’s there for is when a financial emergency arises, which is what COVID has caused,” Aspell said. “Why not take the money out instead of raising people’s property taxes? ”
In his letter to city council presenting the budget, Aspell warned that “the continued use of the balance of unrestricted funds decreases the city’s fiscal health and poses future challenges.”
The city has felt the impact of COVID-19 in some revenue areas, although more people have made their property tax payments than initially expected. Special funds for parking and the Everett Arena suffered losses due to the pandemic, but revenues are expected to rebound next year.
Although Concord received federal funding from the CARES Act, Aspell said the money paid for new costs caused by COVID-19, such as paying firefighters to distribute vaccines at the Steeplegate shopping center. The city also expects to receive $ 4.3 million from the federal government over the next two years from the US bailout.
One of the main areas of new spending comes from rate increases from the New Hampshire Retirement System. To offset the state’s unfunded liability for its pension fund, the rate that municipalities must contribute for each of its employees has increased from 19% to 26%.
However, the overall contribution rates are more than double for police and firefighters compared to all other city employees. For example, the city would contribute about $ 14,000 per year to the retirement of one of its division heads earning $ 100,000 per year, but would pay nearly $ 34,000 per year for the pension of a police officer earning the same amount. .
“Everything is state controlled,” Aspell said. “We tried to work with the state to return the money as they promised, but they decided not to.”
The public safety budget will increase by $ 1.3 million, of which $ 516,000 will go to the police department.
Aspell said agent pay needs to be competitive with salaries in neighboring cities and Massachusetts in order to attract quality candidates and reduce overtime paid by the department.
“We’ve found that if we’re able to raise salaries, we can fill positions,” Aspell said. “It really wasn’t a big raise, but it was something that really made a big difference in attracting people and keeping people.” Aspell told advisers 16 officers were hired in 2020 and three more joined the department in 2021. Three officer positions remain vacant.
There are also staff changes in this year’s proposed budget, including replacing the Director of Economic Development with a new Fellow position, which will save the city $ 170,000. Funding is also allocated for a help desk technician to improve the city’s technological infrastructure and a new part-time ranger position.