City of Dover Budget Adoption for FY12

With the recent City of Dover budget adoption for FY12, we have anticipated approximately $425,000 of expense specific to NHRS legislative changes being downshifted to the overall local budget (City and School). This is associated with the State’s adoption of the biennial budget for FY12-13 and the corresponding reduction made to the State of NH’s NHRS payment obligations for teachers, police and fire employees. This approximate $425,000 expense shifted down from the State of NH and incorporated into our local budget recently adopted by the City Council was based upon information provided during legislative sessions indicating that the State of NH would be making legislative changes to the NHRS, keeping communities whole as if the State of NH were continuing to pay their NHRS obligation throughout FY12 for teachers, police and fire at the 25% share level as opposed to their previously legislated 35% share.

As reflected in the information below, our community, along with all other cities and towns, will be assuming the full amount of the State of NH NHRS contribution for teachers, police and fire employees effective with payroll issued on and after July 1st. At the same time, employee contributions will also be increased. The full amount to be paid by the cities and towns beginning July 1st is based upon the State of NH paying 0% of the obligation for NHRS teacher, police and fire employees and, at this time, does not reflect keeping communities whole at the 25% share level. Within the next few months, it is anticipated that in accordance with the adopted NH budget, the NHRS will recalculate rates to account for the higher employee contributions and lower them for cities and towns for FY12 and FY13. The expectation is that those lower rates will approximate the amount communities would be paying if the State of NH were contributing to NHRS contributions for teacher, police and fire employees at the 25% level.

At this point, you will want to note that we expect the recalculation of the NHRS rates to be retroactive to July 1st and therefore the amounts we will be required to pay towards NHRS contributions will be consistent with the amounts that were anticipated and therefore allocated in our adopted FY12 budget. If the recalculated rates ultimately are not retroactive to July 1st or are not sufficiently lower as we and other others have anticipated by the information conveyed during the legislative discussions, additional adjustments within our existing adopted budget will become necessary.

J. Michael Joyal, Jr.

City Manager

City of Dover, NH

288 Central Avenue

Dover, NH 03820-4169

e: m.joyal@dover.nh.gov

p: 603.516.6023 f: 603.516.6049