Peterborough proposes near-zero tax increase; seeks new reserves and community power fund

Town Administrator Nicole MacStay told the joint Select Board and Budget Committee on Feb. 17 that the proposed fiscal-year budget aims for a net-to-raise-and-appropriate that is effectively flat, at $12,337,017 — $3,199 more than the previous year, a 0.03 percent increase that MacStay called "essentially zero."

Staff and committee members said the primary upward pressure on the budget comes from benefits and insurance: health insurance premiums are projected to rise about 7.5 percent, workers’ compensation costs about 14 percent, and property and liability insurance about 9 percent. Finance Director Lilli Gilligan explained that electricity supply is now budgeted at 18.5 cents per kilowatt-hour; Gilligan said every penny increase in the kilowatt rate translates to roughly $11,000 in budget impact and that a four-cent change equates to roughly $44,000. The town also expects higher electricity use when the new fire station and the Cold Stone Springs facility are fully operational.

To absorb rising costs, staff proposed several offsets: trimming the ambulance diesel line after reviewing lower inter-facility transfer usage, removing a road sign rental from the operating budget, and aligning water and sewer revenues with projected expenditures (water $1,807,464; sewer $2,015,734). MacStay proposed moving a $42,663 balance from the Main Street Bridge project into the bridges, culverts, and dams expendable trust fund to reduce future tax burden, and using $275,000 in bond interest from the fire station project to offset the cost of a new ambulance. The dispatch-center upgrade was increased from $325,000 to $375,000 to add fire dispatching equipment, which town officials said would help coordinate communications during major emergencies like floods or ice storms.

The committee also reviewed proposals to seed three new expendable trust funds from the unassigned fund balance: a Health and Dental Expendable Trust Fund to build reserves for unexpected insurance bills, an Accrued Benefits Liability Expendable Trust Fund to address payouts for accrued sick and vacation time, and a Peterborough Community Power Expendable Trust Fund to collect an estimated $230,000 in community-reserve adders for future municipal green-power projects such as solar arrays for the fire station. Chief Walker confirmed the new fire station is being designed to accept solar panels and battery storage once funding is available.

Finance staff reviewed FY22–FY25 budget-to-actuals and noted multiple instances where departments overspent line items; Gilligan said overspending has generally been accommodated but warned that this winter’s heating and storm-related costs might require a temporary freeze on discretionary spending to protect a $215,000 emergency allowance used earlier for a SchoolCare bill.

Committee members also noted several upcoming warrant articles, including a Veterans Tax Credit increase and a citizen petition to prohibit Keno gambling. The joint meeting adjourned at 6:50 p.m.