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Brentwood Budget Committee warns town cannot sustain 2025 fund-balance offset at levels presented to voters
Summary
Committee members examined RSA rules on the 4% tax cap and the 10% limit on legislative appropriations, and recalculated tax projections; they concluded the $1.35 million fund-balance offset shown at the budget hearing would leave retained fund balance below DRA-recommended minimums.
Budget Committee members reviewed state statutes and town accounting estimates and concluded the fund-balance offset presented at the public budget hearing is likely larger than Brentwood can sustain without breaching recommended reserve levels.
Committee members cited RSA 32:5-b on the local tax cap and RSA 32:18 (the so-called 10% rule) on limits of appropriations. The committees analysis showed that warrant articles the legislative body earmarked to be paid from unreserved fund balance are included in the total appropriation base, and under RSA 32:5-b any fund balance used to reduce prior-year local taxes is added back into the tax-cap base for the following year.
The committees working model adjusted two inputs from the public budget presentation: assumed growth in non-property-tax revenue (reduced from the 10 percent figure used at the budget hearing to a conservative 5 percent) and retained fund balance applied to offset taxes (replacing a $1.35 million offset with $1). Under those assumptions the committees projection rose from the February estimate of about a 7 percent townwide tax increase to an estimated 12 percent increase and an additional $1,200 on the tax bill for a $400,000 property.
Members reviewed available figures for year-end retained fund balance. The towns most recent certified retained fund balance was reported about $977,530; the town administrator provided a February estimate of roughly $594,696 in unexpended appropriations. Adding those figures yields an approximate total retained fund balance around $1.57 million. If the legislative body uses $335,611 of that amount for specific warrant articles (as voted at town meeting), the remaining retained balance would be about $1.237 million, about 5.1 percent of general fund operating expenditures (committees calculations). The committee said the Department of Revenue Administration and GFOA guidance recommend a minimum retained balance of roughly 5 percent of general fund operating costs and that several of the scenarios presented at the public hearing would reduce retained fund balance below that guidance.
Committee members emphasized process clarifications: the 10% limit on appropriations restricts how much the legislative body can exceed the budget committees recommended total (after removing fixed charges such as principal and interest), and a separate clause in RSA 32:5-b allows the legislative body to override the cap "by the usual procedures applicable to annual meetings." The committee noted proposed state legislation (HB 200) would clarify that overrides require a 3/5 ballot vote, but that language was not yet final.
As new business, members set up small work groups to research municipal insurance costs, trash/recycling contracts and public communications. The committee appointed two volunteers to lead an insurance work group and said it would seek participation from select-board members, town staff and residents with relevant expertise.
Ending: The committee agreed to continue refining revenue and fund-balance estimates and to provide clearer, updated tax-impact figures to the public before the towns final budget adoption.
