Concord City Manager Proposes $170.5M Budget, 3.89% Property Tax Rate Increase

CONCORD, NH — A lack of one-time federal funds, higher solid waste costs, and benefit expenditures are just a few of the line items leading to a 3.89 percent property tax increase proposed by the city manager in his fiscal year 2025 municipal budget.

Tom Aspell has proposed a nearly $170.5 million budget for next year — about a $40 million increase compared to FY24. The increased budget includes significant capital increases but does not include about $3 million in requests made by department heads. The general fund budget — city employees, police, fire, general services, etc., is a little more than $83 million, while the capital budget is $53.6 million. Wastewater and water budgets, which are separate funds, will cost residents around $19.6 million.

The Concord City Council’s Finance Committee — essentially, all the city councilors who meet to discuss financial issues, will begin hearings on Thursday. Five hearings will be held with a public comment period and vote on June 3.

According to Aspell, health insurance costs increased by about 10.5 percent in the coming fiscal year, while compensation and dental rates increased by about 5 percent. About $900,000 in federal funds used in the current fiscal year are not available for next year, while solid waste costs also increased by about $300,000.

At around $500,000, which amounts to 1 percent in taxes, the city is down more than 2 percent on just those two figures, he said. The proposed 3.89 percent property tax increase amounts to $130 for a home assessed at $350,000. Property taxpayers are paying the highest taxes ever while the highest school district tax rate in more than a quarter of a century, according to the data.

About $1.4 million spent on bonuses, overtime, and employment retention will not be spent in FY25. Aspell said tax increases proposed in city budgets in recent years have all been between 0 percent and 4.2 percent annually.

Read the full fiscal year 2025 budget proposal linked here in PDF. To eye sections of the budget, visit this link.

Aspell said department heads were asked to make recommendations based on starting with a zero budget outside of personnel.

Personnel costs, including contractual increases, cost-of-living, etc., “are all centralized now,” so departments do not budget those individually.

“We plug those numbers in,” Aspell said.

From there, each department makes requests and considers new ideas, maybe “changing the way they are doing something like service delivery or new equipment.” He said staffers forwarded “a lot of really good ideas that would really improve service, but we just can’t afford them.”

Capital Budget Costs

Increases in the capital budget are one of the main drivers of the steep increase in the FY25 budget compared to last year.

Four main projects — sewer mains from the Concord Heights to the wastewater treatment plant on Hall Street will cost about $17 million. Another $7.7 million will be spent on pump station improvements in the Heights, too. However, the projects are necessary for repairs and growth on the east side of the city. A third of the new 3,000 apartments slated to be constructed in the city during the next seven years will be on the east side of the Merrimack River. Those costs will be amortized for sewer ratepayers and will not come from the general fund.

About $3.4 million will be spent on designing a new police station on Bouton Street while $5.1 million will be spent on improving the airport terminal. The airport, like sewers, is also in a separate fund and includes grant monies.

These four projects make up 99 percent of the capital budget increases for the year, Aspell said in a letter to councilors.

Asepll said interest payments for the police station property would kick in next year.

The city is proposing millions of dollars for improvements to the Pleasant and Green streets intersection; $10,000 for tree planting; nearly $2.9M in paving; basketball court improvements at White Park; a new fire engine for $1.1M; four police SUVs for $280,000; nearly $1.5M for general services vehicles; and $1M for skateboard park improvements and $221,000 to design the Merrimack River Greenway Trail that will partially be paid for by donations and grants.

Current Property Tax Rates

Concord residents pay $26.86 per thousand. Of that cost, $15.18 is for the school district, $9.51 is for the city, and $2.17 is for the county.

In Penacook, residents pay $29.15 per thousand. Penacook residents pay higher school taxes — $17.47 per thousand as well as the same rate for the city and county taxes.

As an aside, and in no relation to what Aspell has control over, the uneven costs associated with the schools have been a historical issue that could be alleviated by merging the two school districts, something that, for whatever reason, is not being considered by either school district.

According to the New Hampshire Department of Education, during the past two decades, enrollment in public schools has declined by more than 42,500 students. The Concord School District, due to a nosedive in enrollments, 14 percent in the last decade alone, is now the fifth largest school district — behind Bedford and Londonderry, when it used to be the third largest district.

According to the data, Merrimack Valley School District enrollment has dropped by 12 percent during the past decade. MV is 18th on the state list, with around 2,200 students.

Combining the districts would bring Concord and neighboring towns into the third-largest school district in the state, far behind Manchester and Nashua.

Some Line Items

According to Aspell, personnel makes up the bulk of the general services budget, with public safety being the highest line item, followed by general government and general services.

Compensation and benefits make up 73 percent of the budget.

Debt service makes up about 15 percent of the budget, a figure Aspell is concerned about even if the expenses are long-term projects like capital projects.

Unlike other departments, water and sewer, for example, have a third of the staffing but require large amounts of capital funding to replace pipes and infrastructure.

“The capital costs,” he said, “are spread over a generation. I’m concerned about the ridiculous cost of everything. (But) it’s an investment in the future. You only fix (those) lines every 50 to 70 years. We could limp along for a while, but we could be changing one of the best water and sewer systems in New England to one of the worst.”

Committing to staffing a fourth ambulance in the city was a significant undertaking and took several years. Since that time, it appears, anecdotally, calls are increasing even more than before, and the need for a fifth ambulance might be something on the horizon.

Aspell agreed the growth of the community had seen fire calls reaching “a new plateau,” adding, “I don’t see it stopping … the more the community grows, the more activity, the need is going to continue to grow.” Fire staffing, like police, too, has been difficult, with several openings available and shifts in personnel. Aspell said the key would be, “What is the best model? How do we do this? Do we put the focus on fire prevention where it needs to be, going the traditional route and all the costs associated with that … it’s something we’re going to need to figure out.”

One future issue will be a site analysis of where the next fire station might be located and how it would be staffed with firefighters and equipment. An emergency medical service substation might be considered, too.

Recreation is another department that may see some changes in the future, especially around fee structure and usage.

Before the former Dame School was renovated into the citywide community center, a consultant was brought in to recommend how it could be used and pay for itself through fees. It was optimistic, Aspell said, but it was not believed, at the time, that it would work in Concord. The recreation department was revenue-neutral in the past, and programs paid for themselves via fees. However, that changed after the city performed a fee analysis and began to get more requests to allow usage for little or nothing.

“A lot of people believe the community rooms (and the center itself) should be free to everyone,” Aspell said. “The building shouldn’t be exclusive to only some. Since (the fee analysis) we’ve dramatically reduced the fees.”

The city had no collect base minimum fees and had absorbed the Concord School District’s adult education program, which now covers its costs. Aspell said recreation and use of the community was “kind of in an in-between stage” of a self-financed center and a completely free center.

“We’re charging some rates to offset costs,” he said, “but, in reality, we do get requests from groups to waive fees … (we’re ) going through this cycle that every community goes through — what is a community center, and who does it serve?”

Budget Hearings

The Concord City Council’s Finance Committee will hold budget hearings on the following dates. The meetings will be held in the council meeting room at 5:30 p.m.

• Thursday, May 16: Budget presentation with a nonpublic session.
• Monday, May 20: Police, fire, and general services.
• Thursday, May 23: Community development, library, recreation, human services, and capital improvement.
• Thursday, May 30: Special revenue funds (parking, airport, golf course, arena, solid waste) and enterprise funds (water and sewer).
• Monday, June 3: Committee work session, public hearings, public hearing action (budget adoption).

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