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RESOLUTION R-17-098
AMENDED

Neither the approval and adoption of this budget, or any appropriation contained herein,
or to any City department or agency, including the Nashua School District, whether as proposed
or amended, shall be deemed to mean that the City has approved any program or responsibility
for funding in accordance with Part 1, Article 28-a of the Constitution of the State of New
Hampshire. Notwithstanding any appropriation herein, the city hereby expressly declines to
approve funding for any program or responsibility for which it is entitled by law to payment
from the State of New Hampshire pursuant to Part 1, Article 28-a of the State Constitution,
whether it has previously been determined that the City is entitled to said funding or not.

AMENDED
O-17-035

ORDINANCE

ADOPTING THE ALL VETERANS’ TAX CREDIT

CITY OF NASHUA

In the Year Two Thousand and Seventeen

WHEREAS the City of Nashua has adopted the optional veterans’ tax credit in the
amount of $500, pursuant to NH RSA 72:28;

WHEREAS the qualifications for this optional veterans’ tax credit are found in NH RSA
72:28, IV, and one category of eligibility is “every resident of this state who served not less than
90 days on active service in the armed forces of the United States in any qualifying war or armed
conflict” and was honorably discharged or honorably separated from service or the spouse or
surviving spouse of such resident;

WHEREAS a recent state law which became effective on August 8, 2016 (RSA 72:28-b),
allows the City to adopt an all veterans’ tax credit, which shall be the same amount as the
existing optional veterans’ tax credit, and removes the requirement to have served in a qualifying
war or armed conflict. The law would allow a resident to qualify for the all veterans’ tax credit if
they “served not less than 90 days on active service in the armed forces of the United States and
was honorably discharged or an officer honorably separated from service” or the spouse or
surviving spouse of such resident; and

WHEREAS the City of Nashua would like to adopt the all veterans’ tax credit.

NOW THEREFORE, the City of Nashua ordains that Part II “General Legislation”,
Chapter 295 “Taxation”, Article VI “Veterans’ Tax Credit” of the Nashua Revised Ordinances,
as amended, is hereby further amended by deleting the struck-through language and adding the
new underlined language as follows:

“ARTICLE VI
Veterans’ Tax Credits

§ 295-13. Optional veterans’ tax Ecredit established.

The City of Nashua hereby adopts the provisions of New Hampshire Revised Statutes
Annotated 72:28, as it may be amended from time to time, relative to an optional

veterans’ tax credit. Effective April 1, 2007, the optional veterans’ tax credit shall be
$500. This stated optional veterans’ tax credit shall replace the standard veterans’ tax
credit in its entirety and shall not be in addition thereto.

§ 295-13.1. All veterans’ tax credit established.

The City of Nashua hereby adopts the provisions of New Hampshire Revised Statutes
Annotated 72:28-b, as it may be amended from time to time, relative to an all veterans’
tax credit. Effective April 1, 2017, the all veterans’ tax credit shall be $165.00. Effective
April 1, 2018, the all veterans’ tax credit shall be $330.00. Effective April 1, 2019, the
all veterans’ tax credit shall be $500.00. The all veterans’ tax credit is only available to
persons who are not eligible for and are not receiving a tax credit under New Hampshire
Revised Statutes Annotated 72:28 (the optional veterans’ tax credit, see NRO §295-13) or
New Hampshire Revised Statutes Annotated 72:35 (the optional tax credit for service-
connected total disability, see NRO §295-15).

§ 295-14. Requirements.
The requirements for the optional veterans’ tax credit_and the all veterans’ tax credit shall
be as stated in New Hampshire Revised Statutes Annotated 72:28_and 72:28-b, as #may

be amended from time to time. Proof of eligibility shall be submitted to the Assessing
Department.”

Changes to these ordinances shall take effect for the tax year commencing April 1, 2017.

Final passage is contingent upon final passage by the State of New Hampshire of Session Year
2017 Senate Bill 80.

AMENDED
O-17-038

ORDINANCE

ALLOWING RESIDENTS OF ASH STREET, FROM KINSLEY STREET TO LAKE
STREET, AND RESIDENTS OF MORGAN STREET TO PURCHASE OVERNIGHT
ON-STREET PARKING PERMITS

CITY OF NASHUA

In the Year Two Thousand and Seventeen

The City of Nashua ordains that Part II “General Legislation”, Chapter 320 “Vehicles
and Traffic”, Article XHI “Night Parking”, Section 320-78.1 “Overnight on-street parking
program in designated downtown area” of the Nashua Revised Ordinances, as amended, be and
hereby is further amended by adding the new underlined language as follows:

“320-78.1. Overnight on-street parking program in designated downtown area.

There shall be a program for on-street overnight parking as described below.

A. On-street overnight parking shall be allowed between the hours of 12:00 a.m. and
6:00 a.m. on designated streets only to vehicles with a permit. On-street
overnight parking for any time period between the hours of 12:00 a.m. and 6:00

a.m. on designated streets without a permit is a violation of § 320-78 and is not
allowed.

1. Residents of the streets where overnight parking is permitted will be
allowed to purchase an annual permit, with a maximum number of 400
permits to be issued. Additionally, residents of the following locations are
also allowed to purchase annual permits:

1. Ash Street, from Kinsley Street to Lake Street

2. Morgan Street”

This ordinance shall become effective upon passage.

SPECIAL BOARD OF ALDERMEN
PUBLIC HEARING
JUNE 6, 2017

A Public Hearing was conducted by the Board of Aldermen on Tuesday, June 6, 2017, at 7:00 p.m. at
the Nashua High School North Auditorium, 8 Titan Way, Nashua, New Hampshire.

President Brian S. McCarthy presided: City Clerk Patricia D. Piecuch recorded.

The roll call was taken with 12 members of the Board of Aldermen present; Alderman McGuinness,
Alderman Moriarty and Alderman Clemons were recorded absent.

His Honor Mayor James W. Donchess was also in attendance.
PUBLIC HEARING
R-17-098
RELATIVE TO THE ADOPTION OF THE FISCAL YEAR 2018 PROPOSED

BUDGET FOR THE CITY OF NASHUA GENERAL, ENTERPRISE,
AND SPECIAL REVENUE FUNDS

Alderman Dowd

Good evening and welcome to the public hearing on the budget. Before | introduce the Mayor to give
a brief overview of the budget, | just want to go over the ground rules. I’m going to go through the
various departments in the budget. If you have a question on that particular department, please
come forward to the microphone and ask your question. If the Mayor or Mr. Griffin can’t answer the
question, they may ask assistance from one of their Division Directors. Please give everyone an
opportunity to ask their questions and limit any statements to a reasonable length and only ona
department that’s being currently discussed. With that, | will turn it over to the Mayor.

Mayor Donchess

Thank you Mr. Chair and thank you everybody for showing up tonight — Division Directors,
Department Heads, employees and of course most importantly our citizens. Mr. Chair | just have a
brief overview of the budget which CFO Griffin and | are going to provide.

The first slide talks about the presentation of the budget. So this year we asked that the departments
include more information to try to make the budget clear and provide more information to the
members of the public who do not deal with the budgets or the departments every day. This is part of
an effort that we’ve made to try to create more transparency and more citizen involvement. So you
can see that at the beginning of each department, each division, there are various mission
statements, description of services provided, some goals and objectives. We hope to build on this
and continue to make the budget a clearer explanation for people who have not gotten deeply into the
past.

The second slide speaks of the fiscal 2018 priorities as I’ve incorporated them into the budget. First
public safety which is our police and fire departments. We are in the midst of an opioid crisis that
people are well aware of. There was an article actually in the front page of the NY Times today
talking about how the number of deaths in the country is rising year after year and projecting that for
2016 there were probably about 59,000 deaths as a result of ODs. They expect 2017 to be higher.
We of course here in New Hampshire are part of this whole issue. We suffer this public health crisis
ourselves and as a result we, in my view and it’s expressed in the budget, need to maintain the level
of services with respect to our public safety agencies. The police department is doing a tremendous
job of arresting those who are involved in illegal drug trade having made over 800 drug arrests last
year in 2016 and they're ahead of that pace in 2017. Of course the fire department has been

Special Board of Aldermen Public Hearing Page 2

involved for years in terms of responding to medical calls and saving people’s lives through the
administration of Narcan. In addition to that now since November 17, 2016, they’ve taken on the role
of the safe stations role where they accept anyone who wants help 24 hours a day, 7 days a week, at
any of our fire stations. They’re providing a critical service to the community and therefore the fire
department and the police department our public service agencies are important and one priority of
the budget or a central priority was to make sure that they are able to continue to provide the same
level of service that they always have.

In the schools, the priority was to maintain but also to improve by adding full day kindergarten. This is
something that the Governor has promoted. Something that all of the studies show that results for
those who have full day kindergarten and lower dropout rates, higher grades, and more successful
life. Superintendent Brown did a very good job of reallocating resources so that this important
objective of full day kindergarten at all 12 elementary schools could be accomplished without a huge
increase in the budget. The schools are up 1.9 percent which is less than the public safety agencies
but more than some of the city departments. So those were | think the main priorities of the budget.

CFO Griffin is going to address the next three slides which give more of the financial detail regarding
the budget.

CFO Griffin

Thank you Mayor. The first slide as you can see highlights a few of the cost rivals that the city is
facing in fiscal 2018 namely increase of hydrant rentals, the Pennichuck Water rate increase, capital
equipment reserve fund that’s commonly known as CERF. That increase $1.2 million. Pension costs
duly noted over the last several years increased $2.23 million. Healthcare costs are increasing in a
similar fashion to the rest of the country - $3.64 million. We did have some relief towards the tax rate
which is a decrease in the debt service of $919,000.

With regard to a typical slide that we provide a proposed operating budget for the general fund is
$258.5 million. Spending cap percentage is calculated 1.4 percent. The dollar amount under the
spending amount at this time based on the calculation is $1.9 million. Increase over the fiscal 2017
budget is 4 percent. As the Mayor alluded to during his remarks to the Board of Aldermen, the
projected tax rate should be approximately 3.2 percent. Worst case, we hope to do better than that.

On the revenue side of the ledger, we continue to budget conservatively that provides us some good
revenues above budget. We have been fortunate to have an increase in motor vehicle registrations
over the last several years and that continues although modestly. We do have a low interest rate
environment which constrains our investments to some degree but also allows us to borrow quite
effectively. As we’ve seen over the last several years, there’s always a potential that the State cuts
the revenue to the city.

Taking a look at fiscal ’19 challenges, so we don’t look at this particular budget in a vacuum,
spending cap is tracking slowly upward. It’s a three year trailing average over the last three years.
Assuming a 1.6 percent spending cap percentage, the new allowable spend would be approximately
$4 million. Again potential reductions in State related revenue. As noted on the previous page,
anticipated increases and other employee related costs such as pension and benefits. With that Mr.
Mayor, that concludes my remarks.

Mayor Donchess

Thank you very much. That is our presentation Mr. Chair. Thank you for the opportunity.

Special Board of Aldermen Public Hearing Page 3
Chairman Dowd

I’m going to call out the various departments. If you have a question concerning that particular
department, please come down to the microphone, state your name and address, and ask your
question.

101 MAYOR'S OFFICE
Fred Teeboom

My name is Fred Teeboom, 24 Cheyenne Drive. I’m going to comment on the budget. | have in my
hand 56-A the Charter. It says we’re going to comment on the budget and not just your little agenda.
Your agenda starts on page 59. I'd like to address some other things in the budget before we get to
page 59.

First of all on the resolution itself — R-17-098. I’m going to go into detail because there’s a lawsuit
against the city. There’s two lawsuits against the city but R-17-098 in the bottom paragraph says:
“Based on the combined annual budget of $265 million, you have $1.9 million under the cap.” It is
false and |’m going to test further subject to litigation. The fact is this budget is $8.1 million above the
cap.

I'd like to address first of all page 21. Page 21 deals with the funds. You'll see that under line item
52050 pension expense. Last year that pension expense was $21.7 million. This year, it’s $23.9
million. There was a presentation made, various presentations made and even the Mayor pointed out
as of the New Hampshire Retirement System points out in their literature that 70 percent on average
of that amount of money, the total amount of money collected by the State is designed to have the
State pension fund 100 percent funded. Nobody funds the pension fund 100 percent. As a taxpayer,
| resent the fact that the State insists on that. The cost to the Nashua taxpayers is enormous. You
still have $24 million at least $18 million if not more is used to get 100 percent funding of the New
Hampshire pension fund about 20 years from now. Not only is that a problem, the other problem is
the New Hampshire Retirement System itself admits that the pension fund is mismanaged by $900
million. Who is blamed? Did anybody get called before some State committee, State House, State
Senate, the Governor held accountable for a $900 million mismanagement that we are now paying
for? The retirees covered by this expense the $900 million haven’t paid a penny towards the $900
million. Guess who has to make up the $900 million mismanagement? Us the taxpayers.

My tax bill now is $7,000. It ain’t easy to pay $7,000 but | can afford it because | tried to take care of
some retirements. A lot of people can’t afford their tax bill. The average tax bill in Nashua average
over 28,000 properties is $7,000. The average residential tax bill is around $6,400. So why do we
have to pay for $900 million of mismanagement? Why do we have to pay for 100 percent funding?
Why did the City of Nashua even buy into the State system? The City of Nashua — and | think when
Donchess was Mayor, the city belonged to its own system. That was before your time. Sometime
the city bought into the State system and the reason bought into the State system is the State said
we’re going to contribute 35 percent towards your bill. Twenty-five percent to 50 percent today is
nothing. The State contributes not a penny. We’re on our own, is funding 100 percent. We all know
the funding that’s mismanagement and | resent it. | also advise the city to not pay the bill. To only
pay what the city is liable for which is about $6 million. You can ask for the listing of all the retirees.
Look how much money they earn. The city refused to do it. You know you sued the State because
you felt they didn’t pay you enough for the education grant. Why aren't you suing the State when you
know that they have mismanaged the pension fund?

Now the Aldermen say hey we have nothing to do with this. If you look why we’re paying $24 million
— that’s 8 percent of the $300 million total budget. That’s a lot of money. We had the previous Chief

Special Board of Aldermen Public Hearing Page 4

the Fire Department. He is now making $140,000 a year. His highest pay when he left the city was
$124,000. Former Chief of Police Seusing is now getting $139,000 a year. His highest pay when he
left the city compensation was $131,000. Both of these individuals are making more retirement than
the highest paid in the highest year just before they retire. We have sitting alderman he retired and
his money was $93,000 when he retired. That was his highest pay. He is now earning $121,000 a
year. You said thank you. | don’t thank him. We have to pay for it. | have to pay for that. Do you
know what his severance pay was? You can accumulate sick leave. You can accumulate vacation
time. Fire Chief Soucy left with $84,000 cash. That’s in addition to his retirement. Chief of Police
Seusing left with $81,000 cash and said thank you. He left with $65,000 in cash. These are
unacceptable conditions. These are union contracts negotiated and approved by you the Mayor and
approved by the aldermen. They are unacceptable. You say well we have nothing to do with it. You
have a lot to do with it.

Now | want to talk about page 21 the benefits which was also mentioned. That’s my first question
because the question wasn’t really answered. The benefits went up from $23,662,000 — by the way
that number does not match the 2007 budget book number. It’s off by $6,700. You may want to
check that. | don’t know why that number is in 2007 into 08. The proposed budget book don’t match
the numbers in the adopted budget book that you may want to look at line item 52300. But now that
line item reads $27,301,000. Almost a $4 million increase. The first question is why did the benefits
in this city go up by $4 million?

Mayor Donchess

Mr. Teeboom the city is self-insured. So we do not pay any insurance company to provide benefits.
The city pays the medical costs for all city employees. Now the city does pay two different insurance
carriers in order to administer the benefits but that is a very small number — like $500,000 or
something compared to the total amount of benefits which we’re budgeting here $27 million. The
estimated amount of health costs which we will pay out based upon the experience we’ve had over
the last few years is based upon the opinion of the expert that we have is that we will pay out in fiscal
18 $27 million for health benefits for the employees that we have. So it is important | think that we
give as close to an accurate number as we possibly can and that is the number that we’ve come up.

Fred Teeboom

That was not the question.

Mayor Donchess

You said why are they up | thought.
Fred Teeboom

Yeah | can read $27 million just like you can which you just did. The question is why did it go up $4
million? What's the reason for that?

Mayor Donchess

One think | think for the last couple of years, the city was optimistic. Now these are always just
projections because it’s not like an insurance company sends you a bill with a specific number and
agrees to cover everything. These are projections or estimates. The city was optimistic over the last
couple of years and as a result actually paid out more in health benefits than was budgeted. It had to
draw on the healthcare reserves. In order to avoid doing that again, the most conservative approach
is to not be so optimistic and budget what we expect we will have to pay out.

Special Board of Aldermen Public Hearing Page 5
Fred Teeboom

Is it paid to be self-insured?

Mayor Donchess

Yes, definitely.

Fred Teeboom

Do you have the numbers on that?

Mayor Donchess

We can have Mr. Budreau who is the personnel person come up and discuss that but | think we
believe we saved millions of dollars as a result of being self-insured.

Fred Teeboom
I'd like to see it. I’ve never seen the percent.

Mayor Donchess

Because a health insurance company is going to be paying the same claims. It’s just that they will
have a margin of error and profit on top of the claims that they pay out. The benefits of being self-
insured are considerable.

Fred Teeboom

$4 million.

Mayor Donchess

| think Mr. Budreau can compare us to some other municipalities where we do pretty well as
compared with what other people are paying. | don’t know if you want to have him address that now
or when the personnel comes up. He can come up now and do that if you want.

Fred Teeboom

Let him do that now. I’m not going to stick around. I’m not worried about the little line items. I’m
interested in the big ticket items.

Director Budreau

I’m Larry Budreau the Human Resources Director for the city. What question would you like me to
address?

Fred Teeboom

Explain to me on page 21 you see the benefits...

Special Board of Aldermen Public Hearing Page 6

Mayor Donchess

Well | think the first question was do we save money as a result of being self-insured and how much
might that be?

Fred Teeboom

Okay we can.

Director Budreau

| reviewed comparable data from seven communities in Southern New Hampshire, including
Manchester. Six of them are fully insured or actually participating through Healthtrust therefore
they're paying a premium. Manchester is also self-insured. Our per employee per month rates are at
the lowest of any of those organizations. We have an upside and none of them do except for
Manchester. They upside meaning that if we’re paying what we call premium equivalence which are
less than those other communities and we have the potential of not spending all that money because
we’re self-insured as the Mayor said.

Fred Teeboom

Have you prepared what we’re paying in previous years to 2017, 2016, 2015 being insured against
the self-insured and show let’s say consistently below the cost of being insured through an insurance
company?

Director Budreau

So our costs have increased in the last four or five years by no more than 5 percent per year. The
two carriers that would do business with Harvard Pilgrim and Anthem, they maintain that same
measure for their entire book of business and that’s averaged 9 percent between the two carriers for
the same period of time. So we’ve been increasing it 5 percent while they’ve increased it 9.

Fred Teeboom

So we can verify that.

Director Budreau

Oh yes.

Fred Teeboom

So we'll verify that.

Director Budreau

| can provide exhibits through the Board of Aldermen or whatever is appropriate.

Fred Teeboom

I'd also like to see is some historical data with the insurance company is going forward independent

population that we insure versus what our costs and are we consistently below the costs if we were
not self-insured. I'll tell you $4 million is a hell of a bite.