Fred Teeboom
24 Cheyenne Drive
Nashua, NH 03063
(603) 889-2316
fredtee(@comcast.net
30 September 2020
Board of Aldermen
City of Nashua
P.O. Box 2019
Nashua NH 03061
Copy: --Mayor Jim Donchess
--CFO John Griffin
Subject: Fixing the calculation of tax offset from undesignated general fund balance.
Dear Aldermen:
Every year the board allocates, by resolution, a part of the undesignated (unassigned) general
fund balance to offset taxes. Every 2 million dollars thus allocated lowers the annual property tax
rate by around 1%.
The enabling NRO 5-135A requires the undesignated general fund balance to be maintained at a
minimum level, thus guaranteeing the city a favorable credit rating for its borrowing, plus
providing for a healthy “rainy day” fund for emergency use not covered in the annual budget.
NRO 5-135A reads:
itis the policy of the Board of Aldermen to maintain an undesignated general fund balance
as of each June 30 equal to a minimum of 10% of the municipality's fiscal year
appropriations, plus the statewide enhanced education amount, the local school net tax
commitment, and the county appropriation,
The city’s traditional method, for decades, is to maintain the minimum undesignated general fund
balance above 10% of the current year general fund appropriation. This is in variance with NRO 5-
135A, which considers “all” municipal fiscal year appropriations and includes county taxes.
The city annual budget contains a general fund plus special revenue funds plus enterprise funds
(wastewater and solid waste). Combined, these make up the city’s fiscal year annual budget.
County taxes, about $13 million, do not enter into the annual budget presumably because their
assessment is not available when the city’s annual budget is finalized.
I recommend the following change to NRO 5-135A, where stt#ke+throvek signifies deleted text
and boldface signifies added text, as follows:
It is the policy of the Board of Aldermen to maintain an undesignated general fund balance
es-ofecchitune 30 equalteaminimintef not less than 10% of the saunicipatite’s fiscal year
epprepretiens-city’s general fund adopted in its current fiscal year annual budget. pilusthe
