The Town learned last week that health insurance rates could come in twice as high as was budgeted for the fiscal year, likely due to an increased number of claims for work-related injuries.
Town Manager Kevin Smith told the Budget Committee at its Oct. 29 meeting that the Town estimated rates would increase 7.5 percent over last year’s rate, but has been notified rates could increase a maximum of 15.5 percent.
“We have added $350,000 to the budget to cover the increase,” he said, explaining the Town must budget conservatively for the 15.5 percent increase. ”You’ll see, on the operating budget, when we present in a couple weeks, the current default level is about $1 million higher than last year’s operating budget, mostly due to increases in health care costs, the additional four firefighters voted in last year and the additional resource officers.”
Additionally, Smith reported expenditures are tracking slightly higher than in FY15, with 28 percent of the total budget expended during the first quarter, through Sept. 30. Smith noted 50 percent of the Tax Increment Finance (TIF) district contract is expended under the Town Manager’s line.
“The first portion of the TIF contract was paid right in the beginning of the quarter. Because of several up-front expenses, expenditures are running a little over,” he said.
On the revenue side, the budget is running a little behind compared with first quarter revenues in FY15.
“There are no big surprises here,” Smith said. “We probably budgeted revenues more appropriately in FY16 than in FY15. We upped our revenue projections for FY16 and a lot of these things don’t come in until closer to the end of the calendar year or in the spring. Everything else is pretty much right on track where we expected this time of year, and the TIF revenue will come in through December tax bill payments.”
Overall, with future development in the area of Pettengill Road anticipated to come online by FY17 and completed projects in the TIF having already generated $78 million in new assessed value for the Town, Smith said the Town is in a good position financially.
In addition to the more than 300,000-square-foot manufacturing facility proposed for construction on Pettengill Road in the newly adopted TIF District, which is moving through the Town’s permitting process, Smith said he spoke with a developer last week interested in developing a 1 million-square-foot manufacturing facility on the remaining parcel in the TIF.
“Depending on when they get started, we could start to see real payback from those in FY17,” Smith said.
The unnamed developer interested in constructing the substantial facility has not yet been to the Planning Board for a conceptual review, but Smith anticipates it will be presenting plans to the Town soon.
“We’re looking at $1.2 to $1.3 million annually from those two properties, which basically doubles what we’re getting up there now. It’s pretty significant,” he said. “Another real estate broker has a client looking for 10 to 15 acres of industrial land with water and sewer. I said come to Pettengill Road.”
Members of the Committee asked if Smith has heard from any developers interested in constructing a hotel or convention center in the area of Pettengill Road.
Smith said he thinks the Town will see construction of a restaurant hotel, but there isn’t the demand in Londonderry at this time for a convention center.
Moving forward with budget planning for FY17, the Town will hold its annual budget workshop for all town departments on Saturday, Nov. 17, at 8 a.m.
More information and updates about the planning process are available on the Town’s website at HYPERLINK “http://www.londonderrynh.org” www.londonderrynh.org.