Granite Ridge Tax Abatement Expected to Have Budget Impact

By John Seidenberg

As Londonderry prepares for the next budget season, Town Manager, Kevin Smith and Superintendent Scott Lalibertie presented their overviews of what’s ahead before the Budget Committee’s June 24 meeting.
Although Smith did not give many details about it at the meeting, he divulged that because of a recent tax abatement awarded to the Granite Ridge Power Plant, there would most likely be a need to raise residential property taxes to make up for the loss. More details on this revalation will be discussed at the next Town Council meeting he said.
He also mentioned the fact that property reevaluations are currently being done.
The Town Council is expected to recommend a default budget once the process of consideration begins in the fall, said Smith.
When looking at personnel versus non-personnel expenses, the town is able to increase the non-personnel lines through contractual obligations in collective bargaining agreements, he noted.
However, being in a default budget means the non-personnel lines cannot be increased. Even though the town hasn’t increased those lines, the expenses have continued to go up.
Consequently, the town has been covering non-personnel costs with savings in the personnel expense line through retirements or police and fire positions not being readily filled, Smith stated. Those funds are used to cover other expenses.
Last year’s budget was presented in the midst of the pandemic with questions raised then about revenues. The town manager had suggested freezing certain lines until the actual revenue picture became clearer.
Ultimately some $250,000 was cut from the budget the last time.
Spending can only be up to what is appropriated even if revenues are higher, Smith pointed out. Lines therefore can’t be increased despite higher revenues coming in.
Revenue numbers have been exceeded and Smith anticipates revenue projections for the FY23 budget to increase – in terms of what the town receives from the state and actual town revenues.
Most likely the greatest loss in value will be from the Granite Ridge Energy power plant, the largest taxpayer in Londonderry, and in back money owed to the company in abatements it’s made since 2017. That could affect the tax rate base on town valuation.
Houston-based Calpine Corporation purchased Granite Ridge, which began operating in 2003 and had been owned by Granite Ridge Holdings.
The current fiscal year is ending with a surplus though some of that will go to the abatement credits owed to Granite Ridge, Smith said.
Funding of most town projects is done separately in warrant articles. Londonderry has held off on an addition to the Town Hall due to construction costs going up.
A related area of impact, he added, may be in maintenance work that could be limited given the increased costs.
As to the FY23 budget, the school system’s objective for the coming year is to return to a normal year in the wake of COVID-19, Superintendent Scott Laliberte told the budget committee.
He sees no major programmatic adjustments in the year ahead, and also expects a budgetary target at the default level.
Most of the work inside the school district is on professional development, instructional strategies, and curriculum development. Those are done internally with little marginal costs.
The system is moving ahead with its facilities study 10-year master plan development process. A July 20 school board meeting will hear preliminary results of the educational program assessment done by the Trident Group and on future potential cost items.
The ongoing consideration of prospective school district office sites will be tied in to the long range master plan, Laliberte said.
In addition, the school system is approaching the third year of a three-year collective bargaining agreement with the teachers association and the Londonderry Association of Allied Health Professionals. Negotiations begin this summer.
If another three-year agreement is reached, the entire tax impact would be included in a warrant article next year, the superintendent said.
The federal assistance of $3.4 million has offset much of the pandemic’s local impact and improvements have been made to school facilities.
The remote instruction has accelerated the technological side of the curriculum, Laliberte noted. As an example, Google Classroom was introduced a year before covid and now is widely used to make and submit school assignments.
Separately, Budget Chair Chad Franz referenced the $50,000 the town appropriates each year for local nonprofits through community services grants.
Member Tim Siekmann will head up the effort to examine how to award those funds. That will include defining the terms of qualifications which are now being a 501c3 and being of service to residents.
Sept. 30 is the projected deadline for applying online for the grants.

Newsletter Updates

Enter your email address below to subscribe to our newsletter