Concord is sitting on $15M surplus. Will it be used to lower your taxes?
Published: 01-19-2025 8:01 PM
Modified: 01-20-2025 3:42 PM |
With more income than expected from property tax bills, vehicle registrations and ambulance charges, the City of Concord ended the 2024 fiscal year with a more than $1.4 million surplus in its general operating budget.
For the most part, surplus dollars will find their way into reserve accounts, set aside to be spent later on things like roads, economic development initiatives and capital projects. But they also go toward the city’s pool of unspent funds, which now totals $15.6 million.
If you’re wondering whether that money could be returned directly to the taxpayer, the answer is yes. But don’t expect a sudden reduction in tax bills.
“If we were to take $15 million, reduce the taxes in the upcoming year, that would be great for that year,” Deputy City Manager Brian LeBrun said to city councilors. “The following year, you’re going to have a big tax rate increase.”
The city’s approach instead is to use small amounts of that money to shave some off the top of regular tax increases an approach that LeBrun said is “the prudent thing to do.”
In 2024, the city put $295,000 to offset a tax increase. In the current budget, it was a little less than double that.
Local governments keep this pool of money set aside, formally called an unassigned fund balance, to cover unplanned expenses, fund special projects and, yes, provide some relief to taxpayers.
In recent years, the city council also has used this money to pay for retention bonuses for police officers, a grant program for local events, and to front the purchase of PFAS-free firefighting suits.
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Concord, though, keeps more money tucked away than the state recommends is necessary.
The Department of Revenue Administration — which sets local tax rates — suggests that unassigned funds be between 5% and 17% of a local government’s regular operating expenses. Concord aims higher with a target of 20.5%. The current total of $15.6 million is even higher than that.
By comparison, the city of Nashua requires that its fund balance be no lower than 10% of expenses. Franklin requires at least 15%.
The reason Concord keeps more money aside, LeBrun said, is to get a higher bond rating and, therefore, better interest rates on bonds. Because of Concord’s median income, LeBrun said, maintaining its high bond rating requires keeping more money saved than the state might determine necessary.
Concord’s approach, he continued, is that the savings over time on interest are greater than the one-time tax relief of putting unused money directly back into the budget.
Feeding the city’s surplus is roughly a quarter million dollars extra in property taxes and motor vehicle registrations than anticipated, just under $800,000 more in ambulance charges and $1.4 million more in investment income than was budgeted. With numerous vacancies, the city again spent less on wages and benefits than it had set aside for them, $1.3 million less, according to a finance report.
These helped make up for shortfalls in income from some fees and fines as well as police special duty services and overspending in retirement costs, professional development and supplies in multiple departments.
City Council approved the report as well as transfers out to a range of its reserve accounts at its January meeting.
Other things the City Council approved last week include:
■$150,000 to replace an air conditioner at the Concord Public Library. The library is on the capital budget for a major upgrade in the next five years — this repair is aimed at tiding things over until the Council decides whether and when it’s going tackle that project.
■A new, part-time elections specialist who will support the city clerk’s office during election seasons, including with election worker training.
■A quarter-million dollar federal homeland security grant that will buy moveable blockades to protect Main Street from vehicle traffic during public events and festivals — known as a “modular vehicle barrier system.” It’s just two systems for now — one for each end of Main Street that would be closed. It comes just weeks after the terrorist attacks in New Orleans.
■Four new union contract agreements, covering more than half the city payroll and all unionized employees outside the fire department.
Catherine McLaughlin can be reached at cmclaughlin@cmonitor.com. You can subscribe to her Concord newsletter The City Beat at concordmonitor.com.