Nashua mayor defends city’s nest egg
NASHUA — Despite a loss of $1.5 billion in assessed property value over the past five years, Mayor Donnalee Lozeau says there have been some positive financial gains for the Gate City.
According to Lozeau, the city’s assessed property values totaled about $9.5 billion when she took over as mayor in 2008. Now, the city is predicting those numbers are closer to $8 billion, Lozeau told the aldermanic Budget Review Committee this week.
However, the mayor stressed that during the last budget cycle, Nashua’s revenues increased by $2.3 million.
“We are seeing signs that our community is stronger,” she said. The majority of the unexpected revenue consisted of an additional $1 million from motor-vehicle registrations and an additional $200,000 in planning and building revenue, mostly from extra building inspections, said Lozeau.
Although the books for fiscal year 2013 have not yet been closed, Lozeau said the numbers are nearly finalized. On Wednesday, the committee voted to use $4.3 million in surplus from that budget to offset the tax rate.
Effective June 30, the balance in the city’s unassigned fund account was $32,280,691. Once $4.3 million of the undesignated funds is used toward the tax rate, the newly adjusted balance of the unassigned fund account — if approved by the full Board of Aldermen — will be nearly $28 million.
Therefore, the city’s undesignated fund balance will be about 12 percent of the total general fund appropriations of $236 million. City regulations require 10 percent.
With this being a city-wide revaluation year, Lozeau expects that 58 percent of residential property owners in Nashua will owe the same amount or less on their upcoming tax bill compared to last year.
The remaining 42 percent of homeowners will see an increase in property taxes, with about 14 percent having an increase of less than $100, about 10 percent having an increase of between $100-$200, 5 percent jumping up $200-$300 and the remaining percentage facing a hike of more than $300.
“That is really how the numbers are breaking down,” Lozeau said.
Alderman-at-Large David Deane said he was pleased that Nashua has nearly 12 percent of its operating budgeting sitting aside in an undesignated fund balance.
“I think it is important for us … that we have some cash behind us as a community,” said Deane.
At least one alderman disagreed.
Alderman-at-Large James Donchess said the city is holding more money than necessary. If the undesignated fund balance stayed closer to 10 percent rather than the proposed 12 percent, it could save taxpayers an additional $4.4 million, which would result in a savings of about $140 for an average property tax bill hovering around $6,000.
That extra 2 percent should be returned to the taxpayers, according to Donchess.
“I just don’t think that is responsible,” Lozeau said. While most city officials would like to save the taxpayers money, she said now is not the appropriate time. “I think we should be very careful.”
Taking money out of the undesignated fund balance will not serve the taxpayers well, according to the mayor, who said three rating agencies recommend putting money into the fund balance rather than removing cash.
“We should all take great pride in the fiscal management of the city,” said John Griffin, the city’s chief financial officer.
Using $4.3 million to offset the tax rate is a consistent and comfortable number, Griffin said.
“In my mind, we should return more than the $4.3 million,” Donchess said.