MANCHESTER, NH – Last season’s mild winter created some budget surpluses here in Manchester, as well as for the state Department of Transportation.
So where does all the “extra” money go?
Investments in the future, including new state-owned equipment, a municipal bridge program, the city’s “rainy day” fund and, with any luck, toward reducing next fiscal year’s tax rate here in Manchester.
NH DOT’s Bill Boynton says the statewide savings on snow plowing and salting was $4.6 million for the winter of 2016.
“That was after being budgeted $5 million less than the previous year, so we started at $5 million less than 2015, with $34.1 million in the budget,” Boynton said. As per state legislation, half of the $5 million savings will go toward upgrading the state’s aging fleet of DOT equipment, and the other half toward the municipal bridge program, Boynton said.
In the city of Manchester, only about $750,000 of the $1.2 million allocated for winter operations was used, says Public Works Director Kevin Shepard. The savings will automatically go into the city’s overall fund balance, accumulated from across all departments.
“It’s usually divided up, half to the reserve fund and half to reduce the tax rate,” says Shepard. Also, what they did this year was they created a snow reserve fund, and they put $200,000 in there, so if we have a bad year and it costs us, say, $1.3 million instead of $1.2 million, there are funds available to address the shortfall,” Shepard says.
City Finance Director Bill Sanders confirmed that the overall anticipated city-wide budget surplus of about $2.3 million – which includes the winter operations surplus – will be divided equally between the city’s rainy-day fund and reduction of next year’s tax rate.
“We don’t have a final surplus number yet, but we anticipate the surplus to be somewhere over $2.2 -2.3 million,” Sanders said. Although the Board of Aldermen have the right to override how surplus money is distributed, Sanders said they normally follow the city ordinance, which dictates a 50-50 split.
“In my tenure, they have rarely they overridden the ordinance. It takes 10 votes, and also, the rating agencies like that we put aside 50 percent for a rainy day,” Sander says.
Although a $2.3 million surplus is “healthy,” it’s not extraordinary, Sanders says.
“The previous year we probably saw about a $1.3 million budget surplus. When dealing with a $300 million budget, I’d say this is a good surplus, but as a percentage of the overall budget, it’s not exorbitant,” Sanders says. “Getting the budget exactly right 15-months before the year starts is challenging.”