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Special Board of Aldermen Public Hearing Page 17
CFO Griffin

For the purposes of the calculation, the base can increase or decrease each year based on the
approval of the Board of Aldermen’s deliberations and then final budget passage.

Joe Pacello

Two other questions just on the expense side and benefit side. | understand the difficulties in the
benefits. I’ve worked in the private sector for many years. I’m retired now. What is the contributions
the employees are making toward the health benefits and is that comparable to the private sector?

CFO Griffin

The employee’s contribution is 20 percent for an HMO and 30 percent for a PPO.
Joe Pacello

So that’s probably in line with the private sector.

As far as the pension goes and health insurance for that matter. | know we’re upon the year now so
it's hard to make these kind of decisions but going forward for the next 2, 3, 4, 5 years, what’s the
plan to work at getting those numbers down? In the private sector, pensions are by the way the dodo
bird. There are no more pensions per say. They’re more 401Ks or 403Bs. Are there plans in the
works for the future to get that more in line with the private sector?

Mayor Donchess

You may have heard before that we’re in a State pension system. At this point it is a State mandated,
a State run State system. We do not negotiate pensions with any of the unions. That’s a common
misperception that somehow we have negotiated or that these are in the union contracts. They’re
not. As Mr. Teeboom mentioned at some point but it was numerous decades ago, the municipalities
were induced to enter the State pension system through the promise that the State would contribute
35 percent of all municipal pension costs which they did for a whole number of decades until about
2008. Then over a period of several years, they reduced their promised contribution to 30 to 25 and
then to zero percent. That’s one of the largest causes of the increase in the city’s pension budget.
Even though as you’ve already heard, the State is recapitalizing the system and most of the money is
going to try to build up the reserves which now stand at $7.5 million. Even though that’s going on if
the State were still paying their 35 percent, it would reduce our budget by about $8 million. The city
through its legislative delegation, Alderman LeBrun, Alderman O’Brien, and others in the legislative
delegation sought to change the way the State approaches the pensions in various respects. One of
which was to begin to not get up to 35 but to at least begin to restore some of the contribution they
used to make. None of those bills passed. The way to change the pension system or to get the
State to again participate is through the State legislature.

Joe Pacello

Right so if the State does not acquiesce is that upon to decide if we want to participate in that model
into the future or are there ways to get out of that?

Mayor Donchess

Well right now State law says we have to remain in unless we do a few things. One would be to pay
them so that the system is also undercapitalized at this point. We'd have to pay hundreds of millions

Special Board of Aldermen Public Hearing Page 18

of dollars to the State of New Hampshire to get out of this system. That’s just not really feasible.
We're locked in.

Joe Pacello

| think my only point is that we kind of need to look more out into the future and model these benefit
plans as opposed to just explaining it away by what well we can’t control it. Well there’s got to be a
way to control it. That’s my final comment but thank you very much.

Chairman Dowd

Any other comments of the Mayor’s Office or the first 58 pages of the budget?

Christina McKinley

Christina McKinley, Southgate Drive, Nashua. My comments are easier because of those that came
before me. I’m extraordinarily pleased that we have people presenting that are talking about the
numbers behind the budget that most of us are not going to dig into all the details. VWhat I’m hearing
I’ve sat at one other meeting and so | will not have to say as much because of what’s been said
before me. | would agree that it is not acceptable to say that the problems that are in our town now
can’t be addressed because they’re controlled by the State. | think that’s unacceptable. | think it’s
unacceptable in part because the people who are going to support the decisions that were bad, that
were inflated, that were really under fundable, years past are the ones that are going to be paying
those inflated salaries, inflated pensions, all of that now. Most of those people do not have pensions
themselves. | think that perhaps one way to look at this would be to say that city government unless
we’re going to have as we have nationally this sort of government elite that is supported by taxpayers
that those folks should really not be able to be paid within some percentage anyway more than the
people then are paying them. | didn’t hear anything refuted.

| haven't investigated this but the numbers that Mr. Teeboom presented are extraordinary. The
amount of money that we are paying in pensions to people are way higher than many people’s
regular salaries in the private sector. In addition what | heard in terms of what the percentage that
health benefits are the contribution, | have worked in the private industry a long time and | have had
50 percent charged to me for health care and 100 percent for any family member. The company paid
for my insurance not my family’s insurance. That is not uncommon. | just think that there are an
awful lot of budget items that we have sort of acquiesced to a place where we say well there’s nothing
we can do about it. We've elevated to this level and we cannot back up. We have enough examples
across our country of what has happed to towns that don’t do something in advance of a terrible
situation where people lose pensions entirely. People lose jobs entirely because cities go bankrupt.

| think that we need to look carefully now as people in advance of me have suggested and if we’re
looking at it — if that number was accurate that we have a 20 percent reduction in the number of kids
in the schools in this town and yet we keep adding to the budget, there’s something wrong.
Something really wrong. Perhaps we need to be looking at what the problem is deeper and why we
are continuing to support things that don’t match up with the people who are in our schools. The
students that are in our schools. That wouldn't in any private industry I’ve ever been in would that
budget fly.

The one other comment that | heard about the opioid crisis and we all feel bad when anyone has that
kind of problem. | would like to make note — | hope we are spending as much time and energy
focused on supporting kids and adults who are doing the right thing. Who are taking positive steps
as we spend towards people who are choosing not to.

Special Board of Aldermen Public Hearing Page 19
Chairman Dowd

Is there anyone else that would like to speak to the first part of the budget or the Mayor’s Office?
Paula Johnson

| love this woman. | think she was just spectacular. Question here. You added a restructured

position Mayor from Public Works that’s going to be in your office now — a PR person or is that going
into Public Works?

Mayor Donchess

That position is not a new position and it’s in Public Works. It’s a person who answers constituent
calls and tries to explain for our Public Works Department Division what their activities are.

Paula Johnson

| just want to follow up. What is the average deductible and out of pocket for city worker’s healthcare
benefit?

Mayor Donchess

| think we need Mr. Budreau to answer the questions of how much a city employee on average pays
for health insurance. | would say the number is about $14,000 per person depending on the plan. |’ll
let Mr. Budreau answer that.

Director Budreau

Good evening. Yours was a question of the plan design the average deductible and out of pocket.
Paula Johnson

Well if you go to the doctor like | have a $2,000 per person.

Director Budreau

We have several plan choices. Many of the employees are in an HMO and that’s a $20 co-pay plan
for most visits and it’s a $250 single deductible and a family deductible of $500 or $750 for outpatient
surgery and the like. We're encouraging employees and we now have about 250 in the high
deductible health plan. That’s a $2,000 individual deductible, $4,000 family deductible.

Paula Johnson

That’s the average what’s going out there in the private sector now. How much is the long term?
How much do they have to take out before everything is totally covered? | know my husband’s is like
$6,000 total. That’s totally out of pocket.

Director Budreau

The high deductible plan is $4,000.

Special Board of Aldermen Public Hearing Page 20
Paula Johnson

So the private sector is still higher than the city than what we pay for city employees.

Director Budreau

| can’t speak to the private sector. | can just tell you what we have.

Paula Johnson

| can speak to the private sector because | see the plan every year — my husband's health care plan
jumped up from $1,000 - $1,500; $2,000 now $6,000 — two people out of pocket. The cost of it is
going up and | know that we’re paying for it here. Thank you.

Also | want to get back to one other thing. I’m done with the healthcare. | want to get back to the
kindergarten and | want to touch on what Mr. Teeboom said and what that wonderful woman said
about it. We are giving full day kindergarten. We have half day now and we're going to implement it
throughout the city. | totally believe and when Alderman LeBrun made a comment, it was a horrible
comment that | do believe is more babysitting because people drop off in the morning and then
before school and will have after school 5:00 — 6:00 at night. I’ve heard studies talk about that kids
do not need kindergarten full day. The time needs to be socializing with other kids and play time.

Chairman Dowd

Ms. Johnson, that’s going to be brought up during the school...
Paula Johnson

Well everybody else brought it up. Okay fine. Thanks.
Chairman Dowd

Anyone else for the Mayor’s department?

Fred Teeboom

| won't be here that much longer but the previous speaker brought up the effect of what you call
“government elite”. The ring to that is true and here’s why. | mentioned some of these outrageous
retirement benefits that some people get. I’m never going to get those outrageous benefits. You
really have to spend a lifetime studying how to really maximize and implement. | wrote a guest
editorial back in January 22. | addressed the question about what’s your average retirement pay.
The average retirement pay and that applies to whether you stay a couple of years or you stay 40
years. Average retirement pays $21,000. That’s okay and then they out, quit, and collect social
security benefits. The average retirement is 21.

The average police officer retirement and few of them wait until 65 to retire. Many of them retire after
20 -25 years. The average police $36,000 a year. The average firefighter — $39,000 a year and then
they can get another job and collect on their social security. So the question | also asked is what is
the social security benefits? Social security benefits by comparison if you work for 35 years, made
$108,000, and you retired at 65, the very most — so the maximum you can make in social security is
$31,000. The average however in social security recipient in this country is $16,000. Compare that
with the $22,000 average, the $36,000 and we truly have what | call a government elite. A
government elite when they work and get all these benefits, the government elite when they retire and

Special Board of Aldermen Public Hearing Page 21

get far more money and those like myself who have to pay those benefits. It’s important to note.

One other point | wanted to make is on the debt service on page 18. | don’t have a specific question
except that the city bought what | call a “white elephant” on Burke Street. The white elephant on
Burke Street — | forgot how much it cost. There was a white elephant on Burke Street a year ago and
it’s still a white elephant on Burke Street today. Mayor what did we pay for that building and save that
money into this debt service, and what do you expect to do with this white elephant on Burke Street
and what are the renovation costs on the white elephant on Burke Street? All of that is bonded
money.

Mayor Donchess

It’s not the cost of renovating Burke Street are not in this budget. | think the brief answer is that the
city pay $4.2 million based upon Mayor Lozeau’s recommendation. To accomplish the acquisition of
land to enable a treatment plant expansion when that becomes necessary and to potentially renovate
the garage and office building. | forget what the rest of the question was but that’s how much we paid
and the city is examining the costs. It’s turned out to be a lot more than was estimated at the time.
We’re trying to get the cost down but as was presented to the Budget Committee the other night, the
costs that’s been projected by one architect at least is in the range of $49 million for the office and for
at that point a tear down and a construction of a new Public Works garage.

Fred Teeboom

Now that’s the problem. He said he hasn’t been in this business very long. I’ve been looking at this
stuff for 20 years. When you look at this, you’ve got to do some planning. When you get to this point

of this budget book which is hundreds of pages, a lot have gone into that. You're talking about
buying a building $4 million — you said $49 million to renovate?

Mayor Donchess

The $4 million is in here but none of the other money is there because that hasn’t been approved.
Fred Teeboom

Right. What are you going to do with it? Are you going to spend $49 million and is that going to wind

up in this debt service item from five years from now we'll stand around and say oh the budget is so
tight. It’s so tight. What are you doing about the building?

Mayor Donchess

| don’t Know what’s going to happen with the project.
102 BOARD OF ALDERMEN

103 LEGAL DEPARTMENT

107 CITY CLERK’S OFFICE

109 CIVIC AND COMMUNITY ACTIVITIES

111 HUMAN RESOURCES

113 BENEFITS

Special Board of Aldermen Public Hearing Page 22

115 CITYWIDE PENSIONS

118 OTHER GENERAL GOVERNMENT

131 HUNT BUILDING

156 EMERGENCY MANAGEMENT

157 CITYWIDE COMMUNICATIONS

Fred Teeboom

I’m looking to (inaudible) many of these line items. It’s up to the Aldermen to figure that out. The
Mayor may recall we had a discussion about that. At one time there was one person that managed
that and ran it because it’s (inaudible) contract to maintain this thing. Motorola pretty much is the sole
source contractor. You have the den manager became a part timer for a little while to help transition.
| forgot his name. He used to be a police department guy. | think he’s still there. You have a full
time guy and an 8/10" of a guy. Why do you need two people to run it for that department?

Bill Mansfield

Bill Mansfield — Citywide Communications. So your question is how come we need...

Fred Teeboom

As you remember right, you ran that department years ago and then you retired, and then you came
back as a full time or a part time guy to help transition.

Bill Mansfield

Part time.

Fred Teeboom

When you ran it there was only one person.

Bill Mansfield

| was managing it when | was in another position.
Fred Teeboom

How many people when you had it how many people were full time?
Bill Mansfield

One person.

Fred Teeboom

How many people are there now?

Special Board of Aldermen Public Hearing Page 23
Bill Mansfield

One person plus a part time person.

Fred Teeboom

And how much is the part time?

Bill Mansfield

32 hours a week.

Fred Teeboom

That’s you, correct, .8.

Bill Mansfield

That’s correct.

Fred Teeboom

So it’s 1.8 and it used to be one?

Bill Mansfield

No. There was always the 8 because my job with the police department was to manage that as well.
Fred Teeboom

So you had .8 before and now you’re at 1.8.

Bill Mansfield

No. We had 1.8 and we’re still at 1.8.

Fred Teeboom

Now you're confusing me. There used to be just one...

Bill Mansfield

When | was on the Police Department, | managed the radio communications system.
Fred Teeboom

Do you have a guy in the police department now taking your place?

Bill Mansfield

No.

Special Board of Aldermen Public Hearing Page 24
Fred Teeboom

No. So before you had .8 and a guy in the police department and now you have 1.8 guy and no guy
in the police department.

Bill Mansfield
No. It’s a full time employee who’s been there since 2000. Then | was managing the system on the
police department at that point in time. Now I’m managing it for the city now.

Fred Teeboom

Oh okay but there’s no one in the police department that took your original position. Does that
position no longer exists?

Bill Mansfield

Not as far as the communications no. | had other duties to do along with that.
Fred Teeboom

So you're saying that the net is zero. That increase is zero?

Bill Mansfield

That increased at what?

Fred Teeboom

In this department. It’s always run by 1.8 you said and not (inaudible)?
Bill Mansfield

Since 2008 that 1.8 has been in there. That’s not new this year.

Fred Teeboom

And before that it was .8 right?

Bill Mansfield

No it was one. There’s always been a full time employee there.

Fred Teeboom

So is it — | can’t get through to you. Is it sum total of people that run that department and operate that
department the same today as it was in 2000 the (inaudible)?

Bill Mansfield

It’s the same as it was in 2008 but not when it was in 2000.

Special Board of Aldermen Public Hearing Page 25
Fred Teeboom

Okay why is it different now?

Bill Mansfield

Because my job on the police department was to manage the radio system. That’s what | was doing
and there was somebody else working at that point in time full time. Then | retired and | was hired as
a part time employee to manage the radio system.

Fred Teeboom

And the work you did before in the police department what happened to that?

Bill Mansfield

That has gone onto someone else.

Fred Teeboom

| guess Mayor the answers |’m not quite understanding it. I'll let you figure it out.

Chairman Dowd

166 PARKING LOTS

183 ECONOMIC DEVELOPMENT

126 FINANCIAL SERVICES

128 RISK MANAGEMENT

129 CITY BUILDINGS

130 PURCHASING DEPARTMENT

132 ASSESSING

134 GIS

120 TELECOMMUNICATIONS

122 INFORMATION TECHNOLOGY

150 POLICE DEPARTMENT

Special Board of Aldermen Public Hearing Page 26

152 FIRE DEPARTMENT

Christina McKinley

This is probably both police and fire. | don’t know. | can’t turn pages fast enough. For overtime is
anybody looking into whether — this looks like if I’m reading this correctly over $1 million. Is that
correct in overtime? | don’t know how that gets determined. It seems as though if we’re doing that
much overtime and maybe that’s true for fire as well, | don’t know, would it make sense to just hire
somebody so we eliminate overtime. Just my question is how is that calculated and is someone
looking into whether or not it would make more sense to just hire somebody so that you reduce that.
| assume that the overtime is at a higher costs. Just a question.

Chief Lavoie

Overtime is contractually mandated depending on the number of hours in a day, the number of hours
in a week. In addition to the standard overtime, within the police department there’s all kinds of
coverage overtime. We only have a set amount of people. We have minimum staffing. Let’s say
whatever number you pick 15, 16 officers on the street and we do a training which we do constantly
training, we need to pull officers from every shift and that causes overtime just for coverage overtime.
In addition to coverage overtime, you have investigative overtime. When a crime happens, it doesn’t
get solved immediately, 20 minutes without commercials on television — that’s not reality. If it’s a
major crime, the detectives literally work 48 straight hours without even going home. In addition to
that to your question, so there’s many reasons to incur over time. There’s training overtime when
you're training. You have travel overtime. You have all kinds of things in a department of our size.

In a department that trains like we do because certainly training helps with liability with the city when
our officers are properly trained.

As far as the difference between overtime and hiring someone full time, you have to include the
benefits. Certainly when you hire somebody, | believe at least $20,000 of every person’s initial hire a
year is benefits. So you talk about is it cheaper to pay overtime or cheaper to hire full time people, it
depends is the answer. You’d certainly would have to look at it but we incur our overtime budget is
right around $1 million and we spend $1.5 million a year. So certainly we’re not even properly funded
on the overtime we have. As far as adding officers, that would be great. | know we're always trying
to do that but certainly you have the benefit cost that in addition to the salary you have to think about.
Often times overtime maybe the most cost effective way to do it.

Christina McKinley

If you divided an officer’s salary into $1 million, that seems like an awful lot of officers. If you added
even just a couple of officers to cover when you're doing some sort of a training, it just seems like
that would be an enormous savings to just add a couple of officers. Maybe I’m missing something.
That’s my question. It just seems as though you could hire an awful lot of police officers for $1 million
a year or at least | presume you could.

Chief Lavoie

Again the number of officers to offset that amount of overtime would be dozens certainly and then
they're outfitting their equipment and all that. As far as the overtime you incur, you can incur — some
weeks we spend $30,000 in overtime in a week. Hirer the officer is to offset that, their training, their
equipment, and things of that sort, you’d have to hire many, many, many officers to offset that. We
certainly would like as many officers as we could possible get but | don’t think that’s really something
we'd be able to get.