March 3, 2011

Derry 'In Great Financial Shape'

Union Leader Correspondent
DERRY -- After reviewing financial reports up to December, town staff say Derry’s financial health is solid.
“Overall, we’re in great financial shape,” said Derry Chief Financial Officer Frank Childs at a presentation before the Town Council Tuesday. “There are things out there on the horizon we have to be watching all the time, absolutely. And there is some legislation playing out in Concord that has some significant impacts, and we’re watching that as well.”
The town’s governmental activities net assets grew by $1.4 million in fiscal year 2010 to $127.4 million, according to the town’s annual financial report.
The report, prepared by Childs and town Controller Janice Mobsby, analyzes Derry’s finances for the period ending in June 2010.
Derry’s governmental activities net
 assets is the difference between the town’s assets and its expenses or liabilities, said Mobsby. That number excludes the town’s water and sewer systems, which are considered “business activities,” she said. 

And a net increase of $1.4 million means good things for Derry’s financial strength, she said. 
“The question is in the general operations of the town, are we doing better or worse?” said Mobsby in an interview Wednesday. “And the message is that the town is effectively managing their resources in order to maintain a strong net asset position, growing their infrastructure or their cash balance.” 
According to the report, that increase was largely due to expenses coming in at less than the budgeted amount and stronger property tax revenues than were anticipated. 
The town retained $10.3 million in its general fund unreserved fund balance at the end of fiscal year 2010, which is equal to about 11 percent of its appropriations for that year. 
In a financial audit presentation before the council, Scott McIntire of Melanson Heath and Company in Nashua, said that number falls within the recommended Government Finance Officers Association standards. 
“That really puts you almost at the midpoint of what the GFOA recommends communities have for unreserved fund balance,” said McIntire. “It’s slightly below the midpoint, but nonetheless, 11 percent is a strong fund balance position.” 
That $10.3 million fund balance represents a $2.2 million net decrease over the prior year, said Mobsby. 
Those expenditures were largely made to fund capital projects, including a $1.2 million appropriation for improvements to the Fordway Bridge and $450,000 to fund the Drew Road Bridge project, Mobsby said. 
Once federal and state bridge reimbursements are processed, Mobsby said she expects the town to return about $750,000 to the general fund. 
About $1.3 million was transferred to the general fund during the year, after department heads were instructed to hold the line on spending, Mobsby said. 
“We knew that our fund balance was going to decline because of those projects, so as a result, management made changes in how they manage their operations for the last fiscal year because we wanted to replenish the fund balance,” she said. 
As another indicator of Derry’s financial health, more motor vehicles were registered in 2010 than in the prior year, though the average vehicle value was less, according to the report. 
More than 38,250 vehicles were registered in 2010, according to the report, up 3,700 from fiscal year 2009. But the average value of each registration fell by about 8.5 percent, to $105 per registration, showing that people are buying and registering older cars than in years past, according to the report. 
Most recent unemployment numbers show Derry is faring better than at this time last year, though still above the state average, according to the report. 
In October 2010, Derry had an unemployment rate of 5.5 percent of 1,130 people, the report says. The state rate as of October 2010 was 5 percent. In June 2009, Derry had 1,570 unemployed people, a rate of 7.8 percent. 

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