Concord’s proposed 2020 budget kick-starts major infrastructure projects

Monitor staff
Published: 5/16/2019 6:22:40 PM

Concord has put forward a budget that city staff says will put the breaks on tax rate increases while moving ahead on some long-desired infrastructure projects.

The fiscal year 2020 budget includes a $66.5 million operating budget, an increase of $1.4 million over this year’s budget.

Deputy city finance manager Brian LeBrun described the budget as being “pretty bland” this year, with employee compensation costs being the biggest driver behind the increase. But in an unexpected twist, costs that traditionally rise – health insurance and retirement costs – have gone down.

But that doesn’t mean the city doesn’t have big goals for next year. City Manager Tom Aspell is planning to ask the city council to kick-start the Storrs Street extension project, which could be downtown’s new frontier, according to Aspell’s budget letter.

The city council is expected to begin publicly discussing the budget this Monday and will continue its hearings through June 17. Here’s a look at what’s inside.

Numbers worth noting

About two-thirds of the city’s proposed $66.5 million operating budget will be raised through property tax revenues, which are expected to go up by 2.6%.

If approved, the city’s spending plan would offer the second-lowest increase in the operating budget in the last six years, according to city data. In the last decade, city spending has gone up by $19.7 million or 70%. Over the same time period, median household income in the city has gone up by about 17%, according to U.S. Census data.

Aspell said the budget was crafted with the idea of slowing down the tax rate after city councilors expressed concerns about the projected 4% increase in the current budget which was approved last year.

“There were a lot of changes and some increases beyond our control,” Aspell said, citing an $800,000 increase in health insurance costs as one such obstacle facing the city during the last budget cycle. The challenge this year, Aspell said, was to cover the city’s basic services.

The budget would raise the city’s portion of the tax rate by about 19 cents, which would mean an extra $50 on the tax bill for a house worth $250,000.

Whether the taxes will increase that much is uncertain since tax rates can be influenced by assessments and revenues and aren’t locked in until later in the year.

The $1.4 million increase in spending would give the city an additional $227,000 for general infrastructures, like additional paving and the operational costs of the White Park skate house; $70,300 in public safety investments; and $59,000 new spending in “human capital” like more overtime for the Parks & Recreation staff and $13,000 in elections overtime.

It also covers almost a million dollars in wage and benefit changes and $354,000 in additional debt services costs. The bulk of that new debt service comes from paying off the City Wide Community Center and stormwater system improvements.

Retirement costs are expected to decrease for the first time in many years by $64,000, according to city documents. Those costs make up about 8.6% of the total budget, for a total expense of $5.8 million.

That change is due to a decrease in the state’s employer contribution rates. According to the state’s retirement system website, the rates for general employees dropped about 0.21%, police by 1% and fire by 1.8%.

Any decrease is welcome, Aspell said, because the city knows that rate will be good through next year. But the state’s contribution rates have been rising fast as the state strives to fund its unfunded pension liability through 2039. That can make budgeting a challenge.

On the revenue side, fines and penalties are expected to decrease by $78,600 due to changes in the state’s interest rates for delinquent taxes, LeBrun said.

But licenses and permits fees – generated any time structures like a garage, addition or new building are built – are expected to increase by $95,130. Aspell said Concord Hospital’s multi-million addition makes up a large chunk of the increase.

Capital improvementprojects

The city is also putting forward a capital improvement plan that is about $500,000 smaller than usual, Aspell said. But that doesn’t mean the city’s plans aren’t ambitious.

The plan “moves Concord residents’ priorities from thought to action,” Aspell wrote in his transmittal letter.

The city will ask the council to invest a good chunk of money into Storrs Street, long dreamed of as a site for economic expansion.

And with the run-down Department of Transportation buildings set to be demolished by the state and the Interstate 93 widening project on the 10-year horizon, the city is looking to make that happen sooner than later, Aspell said. Pan Am Railways, which owns the stretch of rail snaking between North Main Street and Stickney Ave, has also talked about selling their properties, he said.

The proposed budget includes $650,000 for the design and permitting of extending Storrs Street north to Constitution Avenue. That money would be funded through the North End Opportunity Corridor tax increment finance district, according to city documents.

The next year, the city wants to use $6.6 million to bring the project to life. Expanding the street south would take place in 2024/2025. If bonded over 10 years, the entire project would cost about $12.8 million. Money for the project would come from a combination of TIF district and general fund bonds.

The city is also looking to move on repairing the Loudon Road bridge over the Merrimack River, another key development tied to the I-93 widening. Designing the deck, rail and expansion joint rehabs alone will cost $1 million. In 2021, the city will look to fix the bridge at a cost of $10.6 million.

About 80% of the project will be covered by state aid, meaning the city will invest about $2.3 million in the project altogether.

Repairing the Hooksett Turnpike and Birchdale Road bridges is also on the docket.

Also worth noting is a $100,000 investment in the design of “potential intersection improvements” for the Route 4/Whitney Road/Old Boyce Road intersection. Then in 2022 – funded by $2 million of “general donations” – improvements would actually take place.

Extending Whitney Road to Sewalls Falls is another project that has been eyed by the city for a while. It could go from concept to reality sooner than we think depending on who – and when – someone buys the hundreds of acres of land for sale along the Merrimack River.

The intersection in question is notorious for getting backed up during rush hour. And when the Rauseos were lobbying to get a parcel of land’s zoning changed to allow for bigger commercial development, it was discussed whether developers or the state should be the ones to improve the intersection.

But Aspell said state plans to improve the road are far out in the future. And there will be “no connection and no development” if the intersection isn’t improved, he said.

“We’re looking at what can be done out there and what is the best use,” he said. “We have to decide whether the city should put some money in it.”

(Caitlin Andrews can be reached at 369-3309, or on Twitter at @ActualCAndrews.)

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