Londonderry sees a budget albatross on horizonBy APRIL GUILMET
Union Leader Correspondent
June 19. 2012 10:56PM
LONDONDERRY - Town officials believe that in another decade, if current trends continue, approximately 17 percent of the municipal budget could be going toward retirement expenses.
During Monday night's Town Council meeting, the board discussed the long-term implications of the New Hampshire Retirement System (NHRS), where costs continue to be downshifted to towns.
'We definitely see a trend going on,' Council Chairman John Farrell said this week.
According to an analysis completed by Councilor Tom Freda, Londonderry has a municipal workforce of around 190 employees. That level has remained steady over the past five years, he said.
Until last year, town officials devoted approximately 5.29 percent of the budget toward retirement costs.
Last year, when the NHRS began downshifting costs to municipalities, that number increased to 7.19 percent.
'We were told we could expect a half-million dollar increase next year,' said Freda. 'So in fiscal year 2014, we're looking at a minimum of 9 percent for those same 190 employees. It's staggering and affects our programs and services. And frankly, there's little we can do about it right now.'
'It's about time our state legislators began to take a good look at this, because 10 years from now, we're going to be spending 17 percent of the budget (on retirement costs),' Freda added.
The council unanimously agreed to reach out to local legislators. The goal, Farrell said, is to better understand the NHRS's plans going forward.
In February 2011, Gov. Lynch revealed his proposed $10.7 billion budget plan, calling for millions of dollars worth of budget cuts, including a reduction in state reimbursements for teacher, police and firefighter retirements from 35 percent to zero.
As a result, this year the town of Londonderry was forced to come up with an additional $468,000 to cover those retirement contributions.