Town manager Kevin Smith gave the Budget Committee an update on town finances through May 15, in light of the spending freeze he imposed in February. He said the numbers are good, and the spending freeze was to be lifted June 1.
“Typically we look at the figures every 30 days,” he said, noting that the numbers through May 15 are “good news.”
When he implemented the spending freeze, the budget was running at about 6 percent over-expenditures, with revenues running slightly behind. ”I felt like it was a prudent thing to do at the time to put a spending freeze on all nonessential items, and each month we’ve been closing that gap,” he told the committee at its Thursday, May 22 meeting. “Now that we’re almost toward the end of May, it appears that we’ve closed the gap entirely.”
Smith said that on the expenditure side, the town should be at 92 percent expended on the budget by the end of May. As of May 15, it had expended 87 percent.
Legal costs have been the largest over expenditure and are running at about 173 percent, “due to the continuing litigation mostly on the impact fee side,” he said. “That case against the town, which the plaintiff lost in Superior Court, that has been appealed to the New Hampshire Supreme Court so we’re continuing to spend a little bit more. If the Supreme Court decides not to take the case, then it’s over and done with. Obviously if they decide to take it, it costs us more.
“I mentioned at the Town Council meeting that firefighter overtime is running at $188,000 over budget on their overtime line,” he added. “The fire department itself is running at about 91.4 percent, so their bottom line budget is right in line with where they should be at this time of the year, but obviously a big portion of that is being caused by their overtime overruns.”
Highway operations were at 86 percent, even with the severe winter.
“I credit Janusz (Public Works Director Janusz Czyzowski) with really keeping that budget in check, because what we usually budget for snow removal ran over this year but he’s kept the rest of the budget in check,” Smith said.
The police department is running at about 83 percent, the town manager’s line at 75 percent and the library is at about 84 percent.
“The departments have done a really nice job of keeping their budgets in check,” Smith said. “Last year at this time, we were running at 96 percent, so we’re way under where we were.”
As for revenues, Smith said they have caught up to where they need to be.
“At the end of May we should be running at 91 to 92 percent collected, and as of May 15 we had collected about 88.3 percent, and that does not include the recent PILOT (Payment In Lieu of Taxes) we received from the airport, which is $620,000. So I think that by the end of May we’ll see that we’re pretty close to where we should be on the revenue side,” Smith said.
He said he planned to lift the spending freeze June 1 but will continue to monitor expenditures.
“I met with department heads and told them that that is not a green light to go on a spending spree,” Smith noted.
Committee member Gary Vermillion asked about the status of building permits and Smith said he had spoken to Building Inspector Richard Canuel and Canuel had said it had been pretty steady.
Committee member Bill Mee said the school district had been saying that with new developments coming into town, they’ve been trying to figure out if that means more kids, but with enrollment down locally and nationally, it didn’t appear to be so.
Smith said six months ago, enrollment was down by 1,000 students but with workforce housing projects such as Wallace Farm coming to town, “that usually means young families with children.”
Committee member Dana Coons questioned how two firefighters were able to go to Las Vegas for training, as previously reported in the Londonderry Times, with a spending freeze in effect, even if it didn’t cost the department money. He questioned having two firefighters gone when staffing is an issue.
“If we are so short handed, how can we afford to give up two people and spend money we don’t have?” Coons said.
Smith said he’d have to look at the specifics of when the money was encumbered. “Secondly, I know that we get federal money for trainings that would not necessarily fall under the spending freeze,” he said. “That being said, why are guys going out on training when we’re shorthanded – that’s something I’d like to talk to the chief about.”
Coons said if the training pertained to their everyday jobs, he would be behind it 3,000 percent, but it was training for what he called a nuclear disaster, “in the whole grand scheme of things, (that) is very unlikely in Londonderry.”
The training, as previously reported in the Londonderry Times, involved radiological and nuclear weapons of mass destruction.
Mee asked about the outlook for the new budget.
“From the get-go I think we’ll be in a good place and I say that because we budgeted 9.9 percent in health insurance costs and it’s only going to be 3.1 percent,” Smith responded. “Savings was probably around $200,000.”
Smith said the town needed to build up the undesignated fund balance, as it had been used in past years more than it should have been.