Council Debates $1 Million Rebate to Local Taxpayers

Londonderry Town Council Vice-Chairman John Farrell made a major proposition during the Oct. 2 meeting when he asked fellow council members to give one million dollars back to the taxpayers after finding out their would be a surplus in the budget.

During this week’s Town Council meeting, on Oct 16, a debate took place on whether to give back the entire million in December, return some of the money, or wait until spring. The Unassigned Fund Budget (UFB) currently has enough money in it to allow the council to give a hefty amount back to the resident of Londonderry as a minor tax cut. Farrell wanted to return the full million. Councilmen Joe Green and Jim Butler were not so sure.

Green was afraid that by returning the entire million it could possibly create a tax spike. Just because it would lower the tax rate for next year, doesn’t mean the 2019 tax rate wouldn’t go up even higher than it is now. He doesn’t want to “Kick the can down the road,” over a one-time repayment.

Farrell responded,” I don’t see a spike in the taxes.”

Butler thought the money would best be used toward the Police and Fire Communication system.

Farrell then mentioned that the communications money was already written into the Woodmont Commons Agreement.

Councilman Ted Combes, on the other hand, said that he would prefer the money go to warrant articles to keep the tax rate level. It’s currently 4.77 dollars on every thousand.

Town Manager Kevin Smith said Londonderry is currently looking at an increase of 29 cents or more for next year. However, he said “we had a pretty big surplus if you recall.” In fact, the UFB has around 8.9 million dollars in it.

Chairman Dolan opined that the council should give the money back to the taxpayers, but they should also put some of it towards strengthening the infrastructure of the communications system, making it have a zero-tax impact. In short, Dolan wanted to let the people decide by making it a ballot issue. The system is projected to cost 2.7 million dollars to update the infrastructure and $500,000 for new radios. Green believed that any money that could go towards baying down the cost of the system would be worth it.

Earlier, during public comment, some residents who attended the meeting were concerned that not having the impact fees would put the town at risk for tax spikes in the next few years. The council assured those present that it would not.

Butler tried to table to issue so the council would have more time to consider their options, but Farrell and Smith explained that time was not on their side. Legally, the council had to decide so Smith could submit any additional revenue to the state so it could calculate the next year’s tax rate.

The Director of Finance, Doug Smith said he and Town Manager Smith are waiting for the New Hampshire Department of Revenue to get back to them with the calculated rate so they can submit any “additional revenue to be applied” (the possible million dollars) back to the state for a final recalculated tax rate. Luckily, the turnaround for the new rate is swift. But it does mean the council had to decide on Monday how much would be returned to citizens of Londonderry.

The council came to a compromise, saying they would split the million dollar surplus.

The taxpayers in town will get a $500,000 offset and the communications system will get $500,000 to put towards the infrastructure.

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