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July tax collection promising, but officials advise caution

July 30, 2020
MEREDITH — The town got some good news on tax collections, though town officials are saying it's too early to say how tax collection will go for the rest of the year.

Administrative services director Robert Carpenter gave a presentation to the selectmen on the town's cashflow so far during the July 20 meeting.

The town has been holding back around $500,000 for road work because of concerns about tax collection given the economic crisis. Additionally money for recreation programs and part time summer staff in Parks and Rec isn't being spent because of pandemic related program cancellations.

So far, the town has collected 95 percent of the taxes that were due on July 1. Carpenter said $726,500 has not been collected, which he said is similar to the percentage collected at this time last year.

"All the concerns that we all had on how this coronavirus and how the economic impact would affect our tax collection, we're doing quite well I would say," said board Chair Ray Moritz.

Carpenter said while they are doing well so far, "We're only halfway there."

Town Manager Phil Warren said he echoed this sentiment, saying he was concerned about how much they would collect when the second round of tax bills go out for December.

"There are a lot of indicators that, based on what happens locally and nationally, with our economy could see a different picture and that's one of the main reasons I'm holding back on paving for the year," Warren said. "That's a nice chunk of money we could use to buttress any collections as they come in in the fall."

Carpenter also reported that the town also got an excellent interest rate for the bond purchases. In previous town meetings the voters approved bonds of $7.6 million for the public works building project and around $4.12 million for the library renovation and expansion project. The town went to the bond bank to purchase a bond for more than $11 million. He said the results of the bond purchase indicates the town will receive a true interest rate of 1.37 percent.

"What that does is over the course of time it saves us a bunch of money on our bond," Carpenter said.

He said they started with a really good premium on the bond. Over the bond's 15 year period that will save $550,196, which is less than they budgeted. He also said changing the term from 20 years to 15 years will also save the town a lot of money. Overall they saved over $3.3 million.

The bond will close on Aug. 12 and the money will be in the town's account after that.

Moritz asked why the paperwork shows a 5.1 percent interest rate. Carpenter said it was explained to him that the 1.37 percent was the true interest rate because of the $1.7 million premium they paid. Instead of paying back $11.6 million they will be paying back $9.8 million plus interest.

Additionally, Carpenter said the town submitted an application for the state portion of COVID-19 relief grants and have been working with the Department of Homeland Security to get the FEMA portion of the grants. The town has expended around $40,000, some of which he said will be covered by FEMA and while the rest will be covered by the state. Some of the expenditures have included technology for department heads to have Zoom meetings and other remote meeting options.

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