January 10, 2011


Union Leader Correspondent
DERRY -- Derry officials will need to fill a nearly $1 million budget gap to avoid increases to the town’s portion of the tax rate next year.
“We need to do our best to bring in a budget that’s level funded and obviously we will have some pain,” said Derry Town Administrator John Anderson in an interview last week. “Those difficult decisions are going to be made, and we’re going to do our best.”

Staff are bracing for an anticipated increase of $939,000 in total personnel costs for next year, including a net increase of $312,000 in the town’s contributions to the state’s retirement system, said Derry Chief Financial Officer Frank Childs Friday. 
Childs said he is also expecting low rates to contribute to an estimated $60,000 loss in interest income next year. 
Under Derry’s tax cap, the town’s fiscal year 2012 budget could increase by more than $372,000 to help offset those costs, which would mean 15 cents on the tax rate, Childs said. 
But councilors have asked Anderson to put together a budget that would avoid increasing the town’s portion of the tax rate, as has been the charge for the past several years, Childs said. 
The council approved a fiscal year 2011 town services budget of nearly $35 million, Childs said. The town’s portion of the 2010 tax rate was approved this fall at $9.41. 
Without increasing that rate next year, staff will need to fill an initial budget gap of more than $961,000 with increases in revenue or reductions elsewhere, Anderson said. 
“I’ve asked staff to all be creative and to think outside the box about sharing resources across departments,” Anderson said. “No crazy idea is too crazy to think about.” 
But Anderson said that plenty of factors could still change, including any pension reform at the state level. 
At this point last year, Childs said staff were facing a $1.6 million budget gap for fiscal year 2011. 
“The optimistic view is that we’re in better shape this year than last year, but the problem is that these deficits are cumulative,” Childs said. “Each year you struggle to find more (reductions) and then you get into decisions about levels of service.” 
Anderson said he expects to receive department budgets by March 4, and he will deliver his fiscal year 2012 budget and Capital Improvement Plan proposals to council on March 31. 
The council will examine the budget proposal through the spring and is scheduled to adopt a final budget and CIP on May 17. 

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