CITY OF NASHUA, NEW HAMPSHIRE
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2021
CITY OF NASHUA
NEW HAMPSHIRE
Annual Comprehensive Financial
Report
For The Fiscal Year Ended
June 30, 2021
Prepared by:
The Financial Services Division
John L. Griffin Rosemarie Evans
Chief Financial Officer Comptroller
Treasurer/Tax Collector
City of Nashua, New Hampshire
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2021
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION:
Transmittal Letter ]
Organizational Chart 9
Principal Officials 10
Division and Department Heads 1]
Geographic Location 14
Certificate of Achievement 15
FINANCIAL SECTION:
Independent Auditors’ Report 16
Management’s Discussion and Analysis 19
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position 32
Statement of Activities 33
Fund Financial Statements:
Governmental Funds:
Balance Sheet 35
Reconciliation of Total Governmental Fund Balances to
Net Position of Governmental Activities in the Statement
of Net Position 36
Statement of Revenues, Expenditures, and Changes
in Fund Balances 37
Reconciliation of the Statement of Revenues, Expenditures,
and Changes in Fund Balances of Governmental Funds to
the Statement of Activities 38
Statement of Revenues and Other Sources, and Expenditures
and Other Uses - Budget and Actual - General Fund 39
Proprietary Funds:
Statement of Net Position
Statement of Revenues, Expenses, and Changes in Fund Net Position
Statement of Cash Flows
Fiduciary Funds:
Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position
Component Units:
Combining Statement of Net Position
Combining Statement of Revenues, Expenses and Changes to Net Position
Notes to Financial Statements
Pennichuck Corporation and Subsidiaries Notes
Nashua Airport Authority Notes
REQUIRED SUPPLEMENTARY INFORMATION:
Pension:
Schedule of Proportionate Share of the Net Pension Liability
Schedule of Pension Contributions
Schedule of Changes in the Net Pension Liability
Schedules of Net Pension Liability, Contributions, and Investment Returns
OPEB:
Schedules of Proportionate Share and Contributions of
the Total OPEB Liability
Schedules of Changes in the Total OPEB Liability and Contributions
E
40
4]
42
43
44
45
46
47
97
140
156
157
158
159
160
161
SUPPLEMENTARY STATEMENTS AND SCHEDULES:
Governmental Funds:
Combining Financial Statements:
Combining Balance Sheet - Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures, and
Changes in Fund Balance - Nonmajor Governmental Funds
Detail and Combining Budget and Actual Statements:
Detail Schedule of Revenues and Other Financing
Sources - Budget and Actual - General Fund
Detail Schedule of Expenditures and Other Financing
Uses - Budget and Actual - General Fund
Internal Service Funds:
Combining Statement of Net Position
Combining Statement of Revenues, Expenses, and
Changes in Fund Net Position
Combining Statement of Cash Flows
STATISTICAL SECTION:
Financial Trends
Net Position by Component - Last Ten Fiscal Years
Change in Net Position - Last Ten Fiscal Years
Fund Balances, Governmental Funds - Last Ten Fiscal Years
Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years
Expenditures and Other Financing Uses by Department and
Budget Category, General Fund - Last Ten Fiscal Years
165
17]
180
181
183
184
185
187
188
189
190
19]
Combined Enterprise Funds Revenue, Expenses, Other
Financing Sources and Uses and Change in Total Net Position -
Last Ten Fiscal Years 192
Revenue Capacity
General Government Tax Revenues by Source - Last Ten Fiscal Years 193
Property Tax Levies and Collections - Last Ten Fiscal Years 194
Assessed and Estimated Full Value of Real Property - Last
Ten Fiscal Years 195
Principal Taxpayers - Current Year and Nine Years Ago 196
Property Tax Rates per $1,000 of Assessed Value -
Direct and Overlapping Governments - Last Ten Fiscal Years 197
Nashua’s Share of the Hillsborough County Tax Apportionment -
Last Ten Fiscal Years 198
Debt Capacity
Ratios of Long Term Debt Outstanding and Legal Debt Limits -
Last Ten Fiscal Years 199
Ratios of Outstanding Debt by Debt Type - Last Ten Fiscal Years 200
Computation of Overlapping Debt - Hillsborough County
Long Term Debt - Last Ten Fiscal Years 201
Demographic and Economic Information
Demographic Statistics - Last Ten Fiscal Years 202
Principal Employers - Current Year and Nine Years Ago 203
Operating Information
Operating Indicators by Function - Last Ten Fiscal Years 204
Capital Asset Statistics by Function - Last Ten Fiscal Years 205
City Government Employees by Division - Full Time
Equivalents - Last Ten Fiscal Years 206
Student/Teacher Statistical Information - Last Ten Fiscal Years 207
School Department Operating Statistics - Last Ten Fiscal Years 208
B) THE CITY OF NASHUA “The Gate City”
Financral Servrces Diwsion
Office of the Chief Financial Officer
April 14, 2022
To the Citizens of the City of Nashua and the Board of Aldermen:
It is our pleasure to present the Annual Comprehensive Financial Report (ACFR) for the City of
Nashua, New Hampshire, for the fiscal year ended June 30, 2021. Responsibility for the accuracy
of the data and the completeness and fairness of the presentation, including all disclosures, rests
with management. To the best of our knowledge and belief, the report accurately presents the
City’s financial position and the results of operations in all material respects in accordance with
the most current generally accepted accounting principles (GAAP). All disclosures necessary to
enable the reader to gain an accurate understanding of the City’s financial activities have been
included. This letter of transmittal is intended to complement and should be read in conjunction
with Management’s Discussion and Analysis (MD&A).
This ACFR presents the City’s financial statements as required by the Governmental Accounting
Standards Board (GASB) Statement No. 34, which established a new financial reporting model for
state and local governments. It also complies with GASB Statement No. 44, which “identified the
specific information required by the statistical section standards and set forth the overarching
objectives of statistical section information. The statistical section provides crucial data to many
different kinds of consumers of governmental financial information, ranging from municipal credit
analysts to state legislators, municipal governing bodies, oversight bodies, and citizen and taxpayer
organizations” (www.gasb.org/news). The ACFR covers all funds that, by law or other fiduciary
obligation, the City administers. These include, but are not limited to, funds for the City of Nashua,
the Nashua School District, and the component units, Pennichuck Corporation and Nashua Airport
Authority.
History and Government
The City of Nashua encompasses an area of thirty-two square miles in Hillsborough County along
the Merrimack River in Southern New Hampshire. It is approximately thirty-four miles northwest
of Boston, Massachusetts, and eighteen miles south of Manchester, New Hampshire. Nashua was
part of the settlement of Dunstable, Massachusetts, until the division line between Massachusetts
and New Hampshire was settled in 1741. It was then known as Dunstable, New Hampshire, until
its name was changed to Nashua in 1836.
Originating from England, the pioneers of Dunstable arrived in the 1600s to settle on grants of
land. The livelihood of the community at that time was farming and mercantile/commercial trade.
The settlement period continued into the 1700s as sawmills and gristmills were established to
harness the many streams and brooks throughout the town. The late-1700s were a significant
period for the region due to construction of the 27.75-mile-long Middlesex Canal System linking
the Merrimack River to Charlestown-Boston. Direct water access to Boston markets immensely
increased trade opportunities.
During the 1800s, two massive cotton textile mills were established by harnessing waterpower
with canal systems. Metal manufacturing, iron industries and other heavy industries were
established as ancillary and support businesses to the mills. Railroads built throughout the region
in the mid-1800s dramatically reduced the general expense of travel and transportation of goods,
allowing Nashua's manufacturing and retail sectors, along with its population, to grow and
diversify.
The City Charter was issued by the State of New Hampshire and signed by Governor Noah Martin
on June 28, 1853. It was not until a new charter was written in 1913 that the current form of
government was adopted (The Nashua History Committee 1978: The Nashua Experience. Canaan,
New Hampshire: Phoenix Publishing). The Mayor and fifteen-member Board of Aldermen, as the
chief executive and legislative officers of the City, are responsible for the prudent administration
of the City’s affairs in accordance with laws set forth in the City Charter.
Municipal Services
The City provides services such as police and fire protection; refuse disposal; sewer services and
highway, street, and sidewalk maintenance. It maintains fifty-six athletic fields, four ice skating
rinks, three outdoor swimming pool complexes, and seventeen hard courts. The City also preserves
1,200 acres of park sites including Holman Stadium, a 4,500-seat open-air stadium. The stadium
is used for sports, concerts, recreational activities and other City sponsored events.
Nashua is fortunate to have a municipal airport, Boire Field. It is located in the northwest corner
of the city on 396 acres of land that the Nashua Airport Authority leases from the City. The
Authority was created by State Statute in 1961 and is “tasked with setting policy and procedures
to operate the airport for the City of Nashua in conjunction with the rules and regulations of the
Federal Aviation Administration (FAA) and New Hampshire Department of Transportation,
Division of Aeronautics” (www.nashuaairport.com).
The City is responsible for providing education to its citizens in compliance with requirements
established by the State of New Hampshire. Public education is offered for grades kindergarten
through twelve, providing a comprehensive program of general education, business, and college
preparatory courses. An elected nine-member School Board manages the school district’s affairs
with fiscal autonomy on certain matters; however, the School Board does not represent an
autonomous governmental unit independent from the City of Nashua. Financial management and
reporting, as well as the issuance of debt obligations, are the City’s responsibility.
Financial Structure and Management
In accordance with the City Charter and Code of Ordinances, the Financial Services Division is
responsible for establishing an accounting and internal control structure designed to ensure that
the City’s assets are protected from loss, theft, and misuse, and to ensure that adequate accounting
information is maintained and reported in conformity with GAAP. The internal control structure
is designed to provide reasonable, but not absolute, assurances that these objectives are attained.
In providing these reasonable assurances, it is recognized that the expenses related to the cost of
control should not exceed the benefits and the valuation of costs and benefits requires
management’s judgment.
Budget Control Charter Amendment
By way of background, in 1993, Nashua voters passed a Budget Contro] Charter Amendment,
(also referred to as a Spending Cap) that limited the budget to an increase of no more than the
average annual consumer price index (CPI-U) over the past three years.
On February 12, 2018 the budget limitation provisions of the City Charter were found to be
unenforceable by the Hillsborough County Superior Court Southern Judicial District. This decision
was appealed to the New Hampshire Supreme Court. On July 2, 2019, the New Hampshire
Supreme Court upheld the decision of the Hillsborough County Superior Court Southern Judicial
District.
As part of the 2021 Legislative Session, the Spending Cap was reinstated and became effective on
August 26, 2021.
Appropriating Authority
The Board of Aldermen is the Appropriating Authority for the City of Nashua. From a budgetary
control perspective, management cannot overspend its approved and authorized budget without
gaining approval from the Board of Aldermen. In addition, the Board of Aldermen must approve
all interdepartmental transfers as well as the transfer of appropriated funds within departments
from non-salary accounts to salary accounts. The City also maintains a system of encumbrance
accounting to further control budgetary expenses.
Minimum Unassigned Fund Balance
The City has an ordinance stating that its policy to maintain a minimum unassigned general fund
balance of 10% of the fiscal year appropriations. If a portion of unassigned general fund balance
is used to offset property taxes in any given fiscal year, it is the policy of the Board to replenish it
to the 10% level within a three-year period.
Single Audit
As a recipient of federal and state funds, the City is required to undergo a yearly single audit in
conformance with the provisions of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal
Awards (Uniform Guidance). The City is also responsible for implementing an adequate internal
control structure to ensure compliance with the rules and regulations of these funds. This internal
control structure is subject to ongoing and/or periodic evaluation by management and the external
audit firm retained by the City for this purpose. Information related to this single audit including a
Schedule of Expenditures of Federal Awards; findings and recommendations; and auditor’s reports
on the internal control structure and compliance with applicable laws and regulations is available
in a separately issued single audit report. The single audit for the fiscal year ended June 30, 2021
is in progress and management does not anticipate that there will be any instances of material
weakness in the City’s internal control structure.
Enterprise Operations
The City’s enterprise operations are comprised of both a Wastewater Fund and a Solid Waste Fund.
Wastewater is fully self-supported by user fees. The most recent rate study was presented to the
Board of Aldermen in January 2021 recommending the approval of a 20% increase in the
wastewater user fee rates effective January 1, 2021 and a 15% increase in the wastewater user fee
rates effective January 1, 2022. These increases were approved by the Board of Aldermen in
February 2021.
Hydroelectric Operations
The City owns two hydroelectric dams. The Jackson Mills Dam (JMD), a one-megawatt
hydroelectric project is located on the Nashua River, just east of the Main Street Bridge, below
Margarita’s restaurant. The Mine Falls Dam (MFD), a three-megawatt hydroelectric project is
located on the Nashua River in Mine Falls Park.
Long Term Financial Planning
The City uses a multi-year model to plan for future budget periods. This exercise is designed to
provide the city’s financial planners the ability to project the magnitude and timing of certain fiscal
decisions as they relate to programs and services. The City also manages its capital budget process
looking out over a six-year time horizon. The capital budget submittals are updated annually. As
part of this planning process, the participating departments project their respective capital
expenditure needs over the next six-year period and submit the necessary documentation for
review by the members of the Capital Improvements Committee (CIC). The CIC reviews the
requests and ranks them based on several factors including the scope of the proposed project,
service, facility or equipment; the needs criteria such as a legal mandate, scheduled replacement,
improved working environment, increased public health and safety improved coordination and/or
more cost effective; conformance with the City’s Master Plan; and other factors such as anticipated
future revenues and expenses. The City has also developed and implemented a capital equipment
