Continuing efforts to increase efficiency and reduce costs

As budget deliberations continue, we continue to highlight ongoing efforts across city departments to find creative ways to deliver quality services more efficiently and at lower costs to taxpayers. The previous edition of the Budget Revealed newsletter provided some examples of recent cost-saving initiatives undertaken by city staff. Additional initiatives aimed at fiscal responsibility and sustainability will continue to be presented here each week throughout the budget process. Implementing careful spending controls and identifying opportunities to streamline operations require diligence and collaboration across all areas of city government.

J. Michael Joyal, Jr.

City Manager

Citywide Resilience Plan developed in-house saves costs

Dover Planning staff undertook the work of completing the Citywide Resilience Plan internally, foregoing external consultants. This strategic decision represents a substantial cost-saving measure, as consultant fees for such comprehensive planning efforts can often reach tens of thousands of dollars. By leveraging the expertise and dedication of in-house staff, the City of Dover not only minimized expenses but also fostered a greater sense of ownership and alignment with local needs and priorities. This approach underscores Dover's commitment to fiscal responsibility while advancing its resilience and sustainability objectives.

Click here to read the Citywide Resilience Plan.

Grant-funded website redesign enhances Dover Public Library's online presence

The Dover Public Library successfully leveraged a $22,370 grant in 2022 to transform its online presence, partnering with Applewood Interactive to create a modern, user-friendly website. This redesign focused on easy maintenance, scalability, mobile responsiveness, and compliance with 508/ADA standards, ensuring accessibility for all users. The investment has paid off, as indicated by the feedback from patrons and staff, who have noted a significant improvement in the website's ease of use.

The impact of the redesign is demonstrated by a dramatic increase in page views, a testament to the enhanced user experience. Prior to the redesign, the website garnered 264,720 views in fiscal year 2021. Post-launch, page views surged to 483,130 in fiscal year 2022 and doubled to 1,003,531 in fiscal year 2023, highlighting the website's growing appeal and utility. This substantial improvement in engagement not only serves the library's mission of accessibility and service but also represents a strategic use of grant funding to benefit the wider community.

Energov: Streamlining operations and reducing administrative costs

The adoption of the Energov platform by Dover's Planning and Community Development Department has marked a significant improvement in operational efficiency and cost savings.

This comprehensive permit and plan management portal has improved the way the city handles its administrative tasks by automating uploads, invoicing, and follow-ups. The transition to this digital system eliminates the need for paper applications, reducing both physical storage needs and the environmental impact of paper use. With features like automatic invoicing and streamlined communication, Energov not only saves considerable administrative time but also reduces operational costs, aligning with the city's goal of transitioning to digital processes across all departments. This strategic investment in technology underscores the city's commitment to modernizing services, enhancing accessibility for residents and builders, and promoting a more sustainable and efficient municipal operation.

Dover Welfare advocacy leads to legislative change reducing financial burden

Dover Welfare joined several other New Hampshire communities to advocate for legislative change that has significant financial implications for municipalities, including Dover. The passage of Senate Bill 110, which was signed into law by Gov. Sununu last year, represents a pivotal shift in defining residency for municipal welfare purposes. This new legislation clarifies that individuals will not change their original residency status while residing in temporary accommodations such as hospitals, correctional facilities, treatment centers, and emergency shelters, including hotels and motels, when these are paid for by municipalities or other service providers. The legislation helps ensure a more equitable distribution of financial responsibility among municipalities and has already resulted in some cost reductions for Dover.

How the tax cap works

To meet the requirements of the City of Dover Charter, the Finance Department annually calculates the maximum amount the City and School portions of the property tax levy can increase in the next fiscal year budget and be adopted by a simple majority vote of the City Council. This maximum amount is widely known as the tax cap. The tax cap's official name is "Limitation on Property Tax Levy Increase" and can be found in Section 3.1 of Article VI of the City of Dover's Charter. It states, in part: 

The City Council shall adopt the annual municipal budget for city and school purposes to limit the property tax levy on taxpayers to the property tax levy from the previous tax year increased by the amount of inflation calculated from the Consumer Price Index-Boston and the net increase in new construction. 

Voters instituted the tax cap through a charter amendment in the 2011 municipal election, and it went into effect for the 2013 fiscal year. The tax cap only applies to the City and Local School portions of the property tax levy; it does not include enterprise funds, dedicated funds, capital reserve funds, grants, or other revenue sources. The tax cap does not apply to the County or State Education portions of property taxes.

Finance Department staff provides a preliminary tax cap calculation annually in December for budget planning purposes. The final tax cap calculation is determined in January after the net new construction value for the previous calendar year in Dover is finalized and the U.S. Department of Labor releases the previous calendar year Consumer Price Index for Boston-Cambridge-Newton, MA-NH.

Per the City Charter requirements, the Finance Department uses the following steps to calculate the capped tax levy for the next fiscal year for the Local School and City portions of the budget.

1. Start with the current fiscal year's net amount to be raised by property tax levy for the City and Local School portions as certified by the New Hampshire Department of Revenue.

2. Calculate inflation by taking the average percent change of the last three calendar years of the U.S. Department of Labor's Consumer Price Index for Boston-Cambridge-Newton, MA-NH, not seasonally adjusted, available here.

3. Multiply the previous calendar year's net increase in new construction value by the current fiscal year's certified tax rate and divide by 1,000; this calculates an estimated property tax levy related to increased assessed value from new construction. The net increase in new construction value is the total value of building permits minus the total value of demolition permits based on information provided by the city's Inspection Services Division.

4. Add the totals from steps 2 and 3. This equals the capped amount the City and Local School portion of the property tax levy can increase in the next fiscal year budget from the current fiscal year.

5. Add totals from step 4 to the current fiscal year's property tax levy in step 1. This is the total amount allowed to be raised by the capped tax levy the City Council can adopt through a simple majority vote. If the proposed budget is above the capped levy calculation, the City Council may still adopt the budget, but it needs a two-thirds majority vote of all elected members of the City Council.

Tax cap calculation for the FY2025 budget

The final FY2025 tax cap was calculated on Jan. 24, 2024 and can be viewed here. Below are the numbers used in the calculation.

1. Current fiscal year 2024 net amount raised by property tax levies as certified by the Department of Revenue:

City portion: $37,498,386

School portion: $51,743,398

2. Multiplied by 4.7%, the Consumer Price Index for Boston-Cambridge-Newton, MA-NH, not seasonally adjusted, percent change average for the last three calendar years. (2021: 3.3%, 2022: 7.1%, and 2023: 3.7%)

City portion: $37,498,386 x 4.7% = $1,762,424.14

School portion: $51,743,398 x 4.7% = $2,431,939.71

3. Multiply the net increase in new construction value for the 2023 calendar year ($120,060,390) by the current fiscal year certified tax rate for City ($6.69) and Local School ($8.94) portions, and divide by 1,000.

City portion: ($120,060,390 x $6.69)/1,000 = $803,204.01

School portion: ($120,060,390 x $8.97)/1,000 = $1,076,942.70

4. Add the bolded amounts for the City and Local School portions in steps 2 and 3 to calculate the capped tax levy increase for FY2025:

City portion: $1,762,424.14 + $803,204.01 = $2,565,628.15

School portion: $2,431,942.71 + $1,076,942.70 = $3,508,881.41

5. Add the amounts from steps 1 and 4 to calculate the total capped amount for FY2025 to be raised by tax levy for the Local School and City portions of the budget.

City portion: $37,498,386 + $2,565,628.15 = $40,064,014.20

School portion: $51,743,398 + $3,508,881.41 = $55,252,279.40

The proposed budget's Local School portion of the property tax levy is $2,136,019 more than the amount reflected in the tax cap formula. The tax cap overage attributable to the Local School portion of the tax cap formula is slightly offset by the estimated City property tax levy being $25,069 less than the amount reflected in the City portion of the tax cap formula. As a result, the proposed budget as assembled exceeds the tax cap requirements of the Dover City Charter by $2,110,950. Therefore, adopting the budget as currently presented will require a two-thirds affirmative vote by the City Council instead of a simple majority.