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 requires diligence and collaboration across all areas of city government.

J. Michael Joyal, Jr.

City Manager

Planning Department secures nearly $1 million in grant funding to offset local costs

The Department of Planning and Community Development secured $942,414 in grant funding in calendar year 2025, reducing the financial burden on local taxpayers while advancing key city initiatives.

The grant funding supported conservation efforts and other planning initiatives, including the coordination of more than 10 acres of land conserved by the City of Dover.

In addition, the department expended $286,000 in Community Development Block Grant funding for public facilities and $38,000 for public services, further leveraging federal resources to support community needs.

By actively pursuing competitive grants and managing entitlement funding, the Planning Department is able to advance Council goals related to housing, resiliency, infrastructure and quality of life without increasing the General Fund request beyond necessary operational costs.

These external funds help offset project expenses that might otherwise require local tax dollars, demonstrating continued commitment to fiscal responsibility while supporting long-term community planning.

Dover Public Library expands offerings with virtual author events at no cost

The Dover Public Library has innovatively expanded its program offerings by providing virtual access to events featuring well-known authors, thanks to a collaborative initiative with Massachusetts libraries. This resource-sharing arrangement allows the Dover Public Library to offer these high-quality events without any financial impact on its budget, demonstrating a cost-effective approach to enhancing cultural and educational opportunities for the community.

Enhanced case management and verification saves costs for Dover Welfare

The Welfare Department has implemented a strategic approach to case management and client verification, leading to significant cost savings for the city. By adopting a more meticulous case management process, the department delves into the underlying reasons clients seek assistance, setting specific conditions for continued support. This approach not only addresses immediate needs but also encourages clients towards self-sufficiency, reducing long-term dependency on welfare services.

Furthermore, the department's rigorous verification of client information ensures that financial assistance is provided only when genuinely needed, preventing unnecessary expenditure. This careful scrutiny and follow-up mean resources are allocated more efficiently, safeguarding city funds while supporting those in real need. These measures reflect the city's commitment to responsible fiscal management and the effective delivery of social services.

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, though the 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. Multiply the amount from step 1 with the inflation average. 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.

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 FY2027 budget

The FY2027 tax cap calculation is posted on the FY2027 Budget Revealed webpage. Below are the numbers used in the calculation.

1. Current fiscal year 2026 net amount raised by property tax levies as certified by the Department of Revenue:

City portion: $43,756,878

School portion: $63,394,250

2. Multiplied by 3.36%, the Consumer Price Index for Boston-Cambridge-Newton, MA-NH, not seasonally adjusted, percent change average for the last three calendar years. (2025: 3.1%, 2024: 3.2%, and 2023: 3.7%)

City portion: $43,756,878 x 3.36% = $1,470,231

School portion: $63,394,250 x 3.36% = $2,130,047

3. Multiply the net increase in new construction value for the 2025 calendar year ($173,459,290) by the current fiscal year certified tax rate for City ($6.91) and Local School ($9.78) portions, and divide by 1,000.

City portion: ($173,459,290  x $6.91)/1,000 = $1,198,604

School portion: ($173,459,290  x $9.78)/1,000 = $1,696,432

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 FY2027:

City portion: $1,470,231 + $1,198,604 = $2,668,835

School portion: $2,130,047 + $1,696,432 = $3,826,479

5. Add the bolded amounts from steps 1 and 4 to calculate the total capped amount for FY2027 to be raised by tax levy for the Local School and City portions of the budget.

City portion: $43,756,878 + $2,668,835 = $46,425,713

School portion: $63,394,250 + $3,826,479 = $67,220,729

The proposed budget's Local School portion of the property tax levy is $1,912,546 more than the amount reflected in the tax cap formula. The tax cap overage attributable to the school portion of the tax cap formula is partially offset by the estimated city property tax levy being $1,035,273 less than the amount reflected in the city portion of the tax cap formula. The net result is the proposed budget as assembled exceeds the tax cap requirements of the City Charter by $877,273.Therefore, adopting the budget as currently presented will require a two-thirds affirmative vote by the City Council instead of a simple majority.

CITY OF DOVER, NEW HAMPSHIRE | www.dover.nh.gov 

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