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Governmental Activities

(In Thousands)
Total Cost ofServices Net Cost of Services
2021 2020 2021 2020
General government $ 27.675 $§ 39590 $ 12,106 $ 28,901
Police 42,345 38,682 38,763 36,529
Fire 33,418 28,524 31,666 26,974
Water fire protection
services 3,173 3,053 3,173 3,053
Education 191,548 178,945 128,459 121,617
Public works 16,592 15,824 12,979 10,654
Heaith and human services 4,074 3,596 2,128 2,361
Culture and recreation 6,595 7,641 4,602 6,627
Community development 35,619 10,964 25,292 2,959
Communications 1,527 1,390 1,505 1,044
Hydroelectric 891 941 (136) (362)

$ 363,457 $ 329,150 $ 260,537 $ 240,357

Business-Type Activities
Overall, business-type activities increased the City’s net position by $2.9 million or 2.7%.

Key elements of this change are as follows:

The Wastewater Fund increased its total net position by $0.8 million. Wastewater operations
generated an operating income of $0.1 million. Capital contributions less transfers out account
for the remaining $0.7 million. The operating income is largely due to a 20% user rate increase
effective January 1, 2021 for both demand and flow charges. An additional 15% increase will be
effective January |, 2022.

The Solid Waste Fund increased its total net position by $2.1 million resulting in an overall
positive net position. This increase is largely due to the subsidy provided by the City to
supplement Solid Waste operations. The subsidy is raised through property taxation for the
residential costs of collection and disposal. There is currently no separate fee charged to the City’s
residential population.

The Solid Waste Fund negative unrestricted net position of $4.8 million is primarily due to the
fund’s non-capital (landfill closure costs) related debt, as well as the GAAP requirement to
record closure and post closure care liability (the amount the City would be required to spend
should the landfill cease operations).

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Financial Analysis of the City’s Funds

As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-
related legal requirements.

Governmental Funds

The focus of the City’s governmental funds is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the City’s
financing requirements. In particular, unassigned fund balance may serve as a useful measure of a
City’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City’s governmental funds reported combined ending
fund balances of $123.3 million, representing an increase of $10.9 million over the prior year and
summarized as follows (in thousands):

The components of fund balance for all governmental funds are as follows (in thousands):

Nonspendabk $ 28,536
Restricted 19,961
Committed 41,936
Assigned 17,188
Unassigned 15,636

Total $ 123,257

Unassigned fund balance represents $15.6 million or 12.7% of the total combined ending
governmental fund balances. The remaining components of fund balance, $107.6 million, are not
available for new spending.

GOVERNMENTAL FUNDS
FUND BALANCES
Fiscal Year Ended June 30, 2021

Unassigned
| 12.78

Nonspendable
23.2%

Restricted
16,2%

Committed
34.0%

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General Fund

The General Fund is the chief operating fund of the City. At the end of the current fiscal year,
unassigned fund balance of the General Fund was $31.7 million compared to $30.7 million last
year, while total general fund balance was $70.2 million compared to $63.1 million last year. The
$7.1 million change in fund balance is a result of utilizing $4.5 million in unassigned fund balance
toward the FY21 budget, favorable auto permits and intergovernmental revenues, and
approximately $6.8 million in unspent appropriations that were approved to carry forward into
fiscal year 2021.

As a measure of the General Fund’s change in financial position, it may be useful to compare both
unassigned fund balance and total fund balance to tota! fund expenditures over time. Unassigned
fund balance, represents 10.9% of total General Fund expenditures and transfers out, compared to
10.6% in the prior year, while total fund balance represents 24.2% of total General Fund
expenditures and transfers, compared to 21.8% in the prior year.

Debt Service Fund

The Debt Service Fund is used to account for resources and debt service payments associated with
the bond issuance for the acquisition of Pennichuck Corporation. The Debt Service Fund has break
even results as expected as contributed revenue is for the scheduled principal and interest
payments.

Nonmajor Governmental Funds
The nonmajor governmental funds changed by $3.8 million primarily from timing differences
between the receipt and disbursement of grants and permanent financing of capital projects.

Proprietary Funds

The City’s proprietary funds provide the same type of information found in the government-wide
financial statements, but in more detail. Unlike governmental funds, proprietary funds utilize the
accrual basis of accounting. Therefore, no reconciliation is needed between the government-wide
financial statements and the proprietary fund financial statements.

Factors concerning the finances of these two funds have already been addressed in the discussion of
the City’s business-type activities.

General Fund Budgetary Highlights
The following reconciles the City’s adopted budget with the “original budget” columns of the

Budget and Actual Financial Statements on page 39 and the Budget and Actual Detail Schedule on
pages 180 - 181 (in thousands).

Total Adopted Budget $ 282,884,408
Plus: Hillsborough County appropriation 11,993,150
Plus: Appropriation to Solid Waste Fund 5,748,376
Plus: Supplemental appropriations 401,088
Total Original Budget, per Financial Statements/Schedules $ 301,027,022

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The difference between the original and final amended budget resulted in an overall increase in
appropriations of $0.65 million and is summarized as follows:

Total Original Budget, per budgetary financial statements/schedule $ 301,027,022
Plus: Transférs in from Retirement Trust and

Police Overtime Reserve Fund 650,416
Total Final Budget, per Financial Statements/Schedules $ 301,677,438

The combined difference between the final amended budget and actual results reflects an overall
surplus of $8.7 million.

Actual revenues, transfers, and other financing sources on a budgetary basis were $303.1 million which
represents a $6.2 million surplus over the final revenue budget. Significant revenue surpluses and
deficits are summarized as follows:

e $5.5 million in motor vehicle registrations
e¢ $0.4 million in intergovernmental revenues
¢ $0.3 million in miscellaneous revenue

¢ $0.3 million in licenses and permits

* $(0.3) million in property taxes

Actual expenditures, transfers, and other financing uses on a budgetary basis were $299.2 million,
(inclusive of carryforward appropriations), resulting in a $2.5 million surplus below the final
expenditure budget.

Capital Asset and Debt Administration

Capital Assets

The City’s investment in capital assets for its governmental and business-type activities as of June
30, 2021 amounted to $540.6 million, net of accumulated depreciation, an increase of $30.1 million
over the prior fiscal year. This investment in capital assets includes land, buildings, vehicles,
equipment, and infrastructure (in thousands):

CAPITAL ASSETS AS OF JUNE 30, 2021 AND 2020
(net of accumulated depreciation)
(in thousands}

Governmental Business-Type
Activities Activities Total
2021 2020 2021 2020 2021 2020
Land and improvements $ 31.839 $ 31,116 §$ 11.528 $ 12.279 $ 43,367 § 43.395
Buildings and systems 150,614 156,775 35,947 37,713 186,561 194,488
Machinery and equipment 36.311 33,718 24,631 23.879 60,942 57.597
Infrastructure 105,680 101,026 85.714 86,846 191,394 187,872
Construction in progress 38.076 10,825 20,288 16,400 58,364 27,225

$ 362,520 $ 333,460 $ 178.108 $ 177117 $ 540,628 $ 510.577

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Major capital asset additions during the current fiscal year included the following (in thousands):

Governmental Activities

Citywide Streets Paving Program $ 8,643
Fairgrounds Middle School Renovations 8,312
School Energy Saving Equipment 6,672
Pennichuck Middle School Renovations 4,696
School Technology - Software & Hardware Upgrades 3,146
Public Health Building Improvements 3,083
New Middle School Construction 2,482
Vehicles 2,093
55 Franklin Street Land & Building 1,825
School Technobgy - Software & Hardware 1,697
Jackson Falls Hydro Facility Improvements 1,643
2021 Pierce Arrow XT1500 Ladder Truck 1,357
City Hall Buildings Improvements 1,038
DPW Fuel Island Upgrades 400
Sidewalk Improvements 345

Business-Type Activities

Sewer Infrastructure Improvements $ 1,808
Wet Weather Influent Screening 1,182
2021 Pump Station Upgrades 1,056
CLIPP Lining Project Phase II 836
Primary Tanks Upgrades 817
CMOM Implementation Engineering Services 706
Solid Waste Packer Rear Loader Trucks (2) 556
Landfill Expansion Construction Phase IV 530

Additional information concerning the City’s capital assets can be found in Note 8 on pages 63 - 64.

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Long-Term Debt

At the end of the current fiscal year, the City had total debt outstanding of $337 million compared
to $310 million in the prior year. Of this amount, $297 million represents general obligation debt, which
is backed by the full faith and credit of the government.

OUTSTANDING DEBT AS OF JUNE 36, 2021 and 2020

(m thousands)
Govemmental Busimess-Type
Activities Activities Total
2021 2020 2021 2020 2021 2020
Bonds and notes $ 141,081 $ 112,543 $ 59,310 $ 64,092 $ 200,391 $ 176,635
Unamortized bond premiums 8,071 7,189 2,367 2,466 10,438 9,655
Pennichuck acquisition bonds 119,745 123,435 - - 119,745 123,435
Capital leases 6,766 186 - - 6,766 186
Total $ 275,663 §$ 243,353 $ 61,677 $ 66,558 $ 337,340 $§ 309,911

During the fiscal year, the City issued $52 million new debt and retired $25.4 million of
outstanding debt through scheduled principal payments.

State statutes limit the amount of general obligation debt a governmental entity may issue to 3%
of its total assessed valuation for the City or 7% of its total assessed valuation for the School. The City
of Nashua has imposed more restrictive limits for City and School respectively of 2% for and 6% of
total assessed valuation. The current debt limitation for the City and School combined is $1.0
billion, which is significantly above the $330.6 million of general obligation debt subject to these
limitations. Wastewater, Solid Waste, and Pennichuck acquisition debt of 216.4 million is not subject
to these limitations.

The City maintains a AAA credit rating from both Fitch and Standard & Poor’s Rating Services, both
agencies citing the City’s strong management procedures and improved local economy.

Additional information on the City’s long-term debt can be found in Note 15 on pages 66 - 72.

Economic Factors and Next Year’s Budget And Rates

The City experienced growth in local revenue, specifically in motor vehicle registration fees and
intergovernmental revenues. The City also continues to realize increased development activity
throughout its commercial and residential zones. Likewise, the City continues to invest in road
paving, capital equipment replacement, capital improvements for buildings and City-related
infrastructure, traffic mitigation, and other initiatives that promote economic growth and vibrancy. As
noted by rating agencies, the City has a diverse and expanding economic base, above-average
socioeconomic factors, and a manageable debt burden.

During calendar year 2020, the City’s unemployment rate averaged at 8.0% due to the COVID-19
pandemic. The City’s average unemployment rate for calendar year 2021 is at 4.2%, returning near
historical levels following a temporary spike in the early months of the COVID-19 pandemic.

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The City adopted a fiscal year 2022 General Fund operating budget of $309.5 million (inclusive of the
subsidy transfer to solid waste, the Hillsborough County appropriation, and supplemental
appropriations), compared to an adopted budget of $301.0 million for fiscal year 2021. The budget
reflects an overall increase of 2.9% over the prior year. $4.0 million of assigned fund balance is
planned to be used as a funding source towards the fiscal year 2022 tax rate.

Requests for Information

This financial report is designed to provide a general overview of the City of Nashua’s finances for all
those with an interest in the government’s finances. Questions concerning any of the information
provided in this report or requests for additional financial information should be addressed to:

Accounting and Financial Reporting
City of Nashua
229 Main Street
Nashua, New Hampshire 03061

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CIM OF NASHLA, NEW HAMPSHIRE

STATEMENT OF NET POSITION
JUNE 30. 2021
(Except for Pennichuch Coup Comp Und, which 3 as of Deecmber 3}. 2020}
Primary Go. ermment
Business- Govemment
Governmental Type Wide Component
Asirines Tots! Unas.
Assets
Current
Cash and shortdenm myestmenis $ 209.220.0656 $ 17,117,692 $ = 226,337,708 $ 851.873
lavestments 55.978, 1 4.320.365 GO.R07469 37374
Resincted cash ond mvcstments - . + 9,072,000
R bes wet of alk for Bectibk
Property taxcs 21,385,882 - 21 385,882 -
Taxdeeded property iw . S312 -
User fees . 4430517 4,436,517 9,789,762
Deparimcatal and other 432.628 - 632,625 *
lntergov-ermmental TARE SSG 250,974 7.739,500 2.160569
Loans 1.003.993 * 1,003,995 -
Intemal balances 3,604,140 (3,604,140) - +
Duc from exicmal partics 469,436 a 469,436 .
Other assets 4,208,010 - 4303,040 2.395.000
Total Current Assets 309.922.7286 23.030.358 327.953, 144 2586582
Noncuncat
Capiial assets being depreciated
net of accumulaled deprecialion 292,604,759 L57S587, 317 450,192,076 2373S
Capaal assets not beng depreciated $9,915.22 20,520,308 WAI S27 13.169.217
Acquisition premum - . - 67,202,000
Equay mierestn Pennichuck b49.745,000 - 119,745,000 5
Total Noncutrent Assets 482,264 981 478,107,622 660,372,603 SH4960
Total Asses ‘7A? 187,767 201,137,980 ORR 325,747 358301542
Deferred Outflons of Res ources
Related to pensions 88,725.98) 755,64 BY AB L SRS .
Related to OPEB 6,955,335 197,274 9.152009 132.133
Total Deferred Ouiflows of Resources 97,681 316 952,878 98,634,194 7,147,033,
Liabilities
Current
Accounts payabke 1438191 ee 14394, 745 4.940,053
Retainage pay able 2.480.250 - 2.480.250 -
Salanes payable 8.392.190 101,107 8,499,297 -
Accrued liabildies 12,538,036 1,266,975 13,805,011 2.208.892
‘Uneamed revcnucs 6.876.529 * 6.876529 .
Notes pavabk - Tb.191 480 11,141,486 -
Customer advances - - : 437465
Linc of credit . * . 5,480,000
Other 5,061,665 . 5,061,665 .
Current portion of long-term babibtics
Bonds and notes payable 14,321,412 6345504 20,666,916 6,018,000
Acquisnion bonds pavabke 3.795.000 . 3,795,000 -
Compensated absences 1,738,056 62,174 1,800,230 .
Capnial keases 338,716 . 338,716 5
Total Current Liabibaics 69.996.045 18,967,434 8803479 19,084,410
Noncurrent
Bonds and notes payable 13.831473 S5.331,020 190,162,493 226,914,000
Acquisition bonds payable 115,950.00 . 115,980,000 -
Compensated absences 15,642,505 599.565 16,202,070 Ban
Capnal keases 6.427.183 - 6.427.283 a
Landfill closure and post closure - 9.840, 185 9,840,185 -
Net and total OPEB habia, 76,683 136 1.760289 T8ASBAS 4917214
Nei pension babilty - State of NH 321,002,458 . 320,002,453 15,837.263
Net pension Babilty - Board of Public Works 140,639 116.706, 2525 .
Conn in aid of - - : $6.536,000
Other noncurrent babiluies = : : 10,794,000
Total Noncurrent Liabilities 669,677,744 $7,607,735 737285 49 315.021, 756
Total Liabilaics 799,613.789 36,575,169 826, 186,958 34.106, 166
Deferred inflows of Resources
Related lo pensions 12856515 5,483. 184 16,369,099 6438
Related to OPEB 5.682308 180,459 5.862767 2l
Other 117,652,305 - 117,652,305 18,402,000
Total Deferred Inflows of Resources 136,191,128 3.633.643 1399.824.771 15,408,459
Net Position
Net investment in copual assets 235,153,904 OS, 737,012 HI 890,916 63,352.421
Resincted for
Grants and other slatutor: resinchions 10,159.233 . 10,189,233 .
Capaal propels 9,363,508 242? 685 16.7913 .
Permanent funds.
Espeadabke 2,195,621 - 2,091,621 -
Nonexpendabk: 204.130 . 23.204.130 -
Unrestricted idefica) (276.008.2315 (2.282.651) (278.290.381) 137.413.471b
Total Net Position 5 9.064 166 $1 382.046 $__ 120946212 $28. 993 95)

The accompany mg holes are an mitegfal part of these financasl statemeniis

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CITY OF NASHUA, NEW HAMPSHIRE

STATEMENT OF ACTIVITIES

FOR FISCAL YEAR ENDED JUNE 30, 2021
(Except for Pennichuck Corporation Component Unit, which is for the year ending December 31, 2020)

Program Revenues
Operating Capital
Indwect Cost Charges for Grants and Grants and Net (Expenses}
Eqgenses Allocation Services Contributions Contributions Revenue
Primary Government
Governmental Activities
General government $ 19,911,586 § 7,763,453 6641023 $ 8927644 § . $ = (12,106,372)
Police 42.242,068 103,183 938,791 2,643,882 - (38,762 578)
Fire 33,207,366 210,962 490,858 1,261,835 - (31,665,635)
Water fire protection services 3.172524 - - - - (3,172,524)
Education 190,034,232 1,514,132 433,543 62,655,825 - (128,458,996)
Public works 14,346,518 2,245,449 646,989 966,710 1,999,134 (12,979, 134)
Health and hurran services 4,074,319 - 156,333 1,789,561 . {2,128,425}
Culture and recreation 6,569,655 24,698 1,962,052 29,817 - (4,602,484)
Community development 35,385 849 233,440 1,269,584 246,967 8,811,081 (25,291,657)
Communications 1,270,939 255.753 . . 21,345 (1.505,347)
Hydroelectric 729.151 161,84) 1,026,971 - - 135,979
Interest and costs 12,512,911 {12,512,911 . - . :
Total Governmental Activities 363,457,118 - 13,566,144 78,522,241 10,831,560 (260,537,173)
Business-Type Activities
Wastewater services 15,588,786 - 14,258,627 - 888,291 (441,862)
Solid waste services 8.697.455 - 4,424 195 - : (4,273,260)
Total Business-Type Activities 24,286,235 - 18,682,822 - 888,291 (4,715,122)
Total pnmary goverment $ 387,743,353 § - 32,248,966 $ 78522241 $ 11,719,851 $ (265,252,205)
Component Units
Pennichuck Corporation $ 52418000 § - 50.091,000 § - $ - $ (2,327,000)
Nashua Auport Authonty 3,192,954 - 717,487 . 2,160,569 685,102
Total component units $ 54610954 = § a 50,808,487 = § - $2,160,569 $ (1,641,898)

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(continued }

CITY OF NASHUA, NEW HAMPSHIRE
STATEMENT OF ACTIVITIES

FOR FISCAL YEAR ENDED JUNE 30, 2021
(Except for Pennichuck Corperation Component Unit, which is forthe year ending December 31, 2020)

(continued )

Business-
Govemmental Type Component
Activities Activities Total Units

Change in Net Pesitien

Net (Expenses) Revenue from previous page § (260,537,173) $ = 4,715,122} § (265,252,295) $ = (1,641,898)
General Revenues:

Property taxes 216,376,307 - 216,376,307 -

Auto pennits 16,916,065 - 16,916,065 -

Penalties, interest and other taxes 1,239,839 - 1,239,839 :

Grants and contributions not resincted

to specific programs 9,216,815 1,514,628 10,734,443 -

Investment income 1,890,023 36,747 1,926,770 2,872

Miscellaneous 952,420 - 952,420 -
Permanent fund contributions 105,673 - 109,673 -
Transfers in (out) (6,085,231) 6,085,231 - -
Total General Revenues, Permanent Fund Contnbutions, and Transfers 240,615,911 7,636,606 248,252,517 2,872

Change in Net Position (19,921,262) 2,92 1.484 (16,999,778) (1,639,026)
Net Position

Beginning of year 28,985,428 108,960,562 137,945,990 27,572,976

End of year 3 9,064,166 $ 111,882,046 $ 120,946,212 $25,933,950

The accompanying notes are an integral part of these financial statements.

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