Henniker school board sets retained earnings at $389,504 after review of year-end finances

The Henniker School District School Board voted Oct. 1 to set the district's retained earnings at $389,504 after the business office presented final 2024-25 revenue and expenditure figures.

Business office staff member Chris told the board that the district ended the fiscal year with a fund balance that would offset next year's taxes by $387,670.76, with $206,749.08 reserved for encumbrances and $50,000 placed in a buildings reserve as previously approved by voters. Chris reported that several revenue lines exceeded budget projections, including Medicaid reimbursement, interest income and facility-use fees, while special-education aid and tuition came in slightly lower than expected.

Board members discussed the options for using retained earnings for tax-rate stabilization versus holding a larger reserve for unanticipated costs such as a high-cost special-education placement or facilities emergencies. Under state law the board may retain up to 5% of its net assessment; Chris explained the legal cap during the presentation and showed the math used to calculate the allowable maximum.

Why it matters: retained earnings affect the amount the town must raise through the local tax rate. Keeping some funds in reserve can smooth tax bills from year to year and provide a cushion for out-of-cycle costs, while lowering retained earnings would reduce next winter's tax collection.

Details from the report: Medicaid reimbursements rose late in the year, producing a better-than-expected revenue outcome. Chris said Medicaid collections have been volatile in past years, so the business office intends to continue conservative budgeting for Medicaid in future years even as collection practices improve. The board also heard that the district sold some equipment to another district and received slightly more than planned in other local revenue.

Board Chair Matt (board member) and other board members asked follow-up questions about how retained earnings are calculated, how the figure affects the December tax bill, and whether large one-time revenues should be used to offset taxes or added to reserves. Chris said final decisions on how much to hold in retained earnings are timed to the Department of Revenue tax-rate setting process in the fall.

The board's vote setting retained earnings to $389,504 was taken by voice and recorded on the meeting agenda; separate vote records and the formal motions are listed in a "Votes at a glance" summary of the meeting.

The business office said updated state reimbursement figures and the Department of Revenue's tax-rate calculations will be available during the tax-rate setting conversations in the coming weeks. The board will revisit budget guidance, and members said they expect to continue using retained earnings as a tool for tax-rate stability.

Sources: presentation and year-end report from the district business office; Oct. 1 board meeting discussion and vote.