Dunbarton residents to get tax break after judge’s ruling on $1M in unspent funds

  • Dunbarton residents raise their hands to indicate support for letting $1.06 million worth of excess taxes lapse into the school district’s undesignated fund balance during a straw poll at a Tuesday information meeting on June 12, 2018. Caitlin Andrews / Monitor file

Monitor staff
Published: 7/23/2018 2:27:40 PM

Dunbarton residents will have a little extra money for Christmas this year, thanks to a break on their December tax bills.

But the relief – about $921 for a home worth $300,000, according to district documents – will be short-lived, as taxes will go back to normal levels the following June. A Merrimack County Superior Court judge ordered $1 million in unspent tax money held by the Dunbarton school district to lapse back to residents, leading to a one-time dip in taxes.

Judge Richard McNamara denied the school district’s petition for a special meeting in a written ruling issued Friday, saying he disagrees that a potential sudden dip in the tax rate is an emergency or that the board couldn’t have dealt with the issue during the regularly scheduled town meeting.

The district cited RSA 197:3, which states that a school board must petition for a special meeting in cases of emergencies including an immediate expenditure of money. They argued that the one-time tax rate dip “could interfere with taxpayers’ ability to budget, affect private mortgage insurance policies/payments and wreak havoc with planned mortgage escrow arrangements.”

McNamara was not persuaded.

“It is difficult to see how a reduction in the tax rate can constitute an emergency,” he wrote.

He noted the district had not provided evidence that the tax rate dip could, in fact, imperil residents.

“The use of conditional tense in the District’s Petition ... is a tacit concession that the District has no persuasive evidence that an emergency does, in fact, exist,” he wrote.

The judge also pointed out that the board knew some amount of money was coming back to the school district from the independent audit around March’s town meeting, but that the exact amount was unknown. The board could have taken action then, but did not, he wrote.

The school district had requested permission from the court to host a special meeting to allow voters to decide what to do with $1.06 million after an independent audit of School Administrative Unit 19, which contains Goffstown and New Boston, found the extra money paid in from Dunbarton taxpayers.

SAU 19 first reported in December that it had made errors in how it reported its end-of-year fund balances for several years dating back to 2007, when Dunbarton was still part of the district.

The report led to the discovery of $9.1 million retained in Goffstown’s fund balance and $1.1 million in New Boston’s fund balance. Both New Boston and Goffstown let their excess money lapse into their undesignated fund balances.

Had the school district succeeded, it would have faced a tight timeline: The special meeting would have had to be held in August, early September at the latest, before the Department of Revenue Services would need the district’s final financial reviews in September. Tax rates are typically set in October.

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

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