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Dunbarton taxpayers await court ruling as school district tries to spend $1M surplus

New Hampshire Union Leader

July 16. 2018 6:29PM

DUNBARTON — A hearing has been scheduled this week at Merrimack Superior Court on a complaint filed by Dunbarton taxpayers looking to prevent a special meeting this September to determine the use of $1 million the school district collected but never spent.

A school audit completed earlier this year found $1.06 million more available in Dunbarton’s fund balance than previously believed, according to information provided by the school district last spring.

School Administrative Unit 19, which includes Goffstown and New Boston, reported in a December news release that an auditor found that since 2011, more than $10 million — $9.1 million of which was paid by Goffstown taxpayers — could have been used to reduce property taxes but was overlooked.

The audit showed SAU officials made errors reporting end-of-year fund balances for several years dating back to 2007, when Dunbarton was still part of the district. The errors resulted in money being retained in the schools’ general fund, rather than being put toward reducing the tax rate.

The audit report showed an additional $9.1 million in Goffstown’s fund balance and $1.1 million in New Boston’s fund balance.

Raymond Labore, SAU 19’s business administrator, resigned after the results of the audit were made public.

The additional $1 million in Dunbarton’s fund balance was identified during an independent audit performed by the firm Plodzik and Sanderson, and was not part of the SAU 19 review.

School officials have filed a petition in Merrimack County Superior Court seeking permission to hold a special school district meeting on Sept. 26, at which residents would consider warrant articles outlining how the funds would be spent. Two options have been discussed — putting the money in the genera fund and lowering taxes when the tax rate is set in October, or placing the money in a capital reserve fund to help cover costs associated with a voter-approved $2.2 million renovation of Dunbarton Elementary School.

But a group of nearly two dozen taxpayers has filed a complaint to prevent the meeting, arguing that overcollection of taxes does not constitute an emergency requiring a special meeting to determine how those funds should be spent.

“We, the undersigned, as residents of the town of Dunbarton, object to the Dunbarton School District’s request for a special district meeting,” reads the complaint, filed July 9 in Merrimack County Superior Court. “The district alleges it inadvertently overcollected taxes for tax years 2007-2014 because accounting errors caused unspent funds to accrue. It alleges that the discovery of the accumulated overcollections — totaling more than $1 million — is an emergency that justifies a special meeting to spend the accumulated overcollection.

“Having excess unspent taxpayer funds is not an emergency. Therefore the court must dismiss and/or deny the district’s petition and allow the excess property taxes to be used to reduce the December 2018 property tax bill as required by law.”

New Boston, Goffstown

The complaint points out the towns of New Boston and Goffstown experienced the same overcollection of taxes and subsequently allowed the funds to remain in the unspent account and returned to the taxpayers.

“The other two towns that were part of SAU 19, with larger populations, have already addressed this issue without holding a special meeting,” reads the complaint. “The district should not be permitted to conduct an end-run around the annual meeting to correct for its overcollection of taxes when it had sufficient reason at the time of the annual meeting to believe that such an overcollection had likely occurred.”

Under RSA 197:3, the court can approve a special school district meeting for appropriating money only if an emergency exists.

“Although an emergency need not always involve a crisis, it must be a ‘sudden or unexpected situation or occurrence’” reads the complaint. “Here, the School Board members were aware of the accounting anomalies at the time of the annual meeting and had already hired an accounting firm to investigate the errors.

Therefore, the accumulated overcollected taxes cannot be a ‘sudden or unexpected situation’ to find an emergency exists.”

The complaint concludes by stating “no serious harm” will come to the taxpayers or the district if no special meeting is held.

“The overcollected taxes are returned to the taxpayers, and the district will still have all of its programs funded as provided for at the annual meeting,” concludes the complaint. “Therefore this court should find that an emergency does not exist.”

A hearing on the taxpayers complaint has been scheduled for Tuesday at 10 a.m. at Merrimack County Superior Court, 163 N. Main St. in Concord.

Courts Education Dunbarton Local and County Government

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