Search

Finance Committee Page 4
March 2, 2016

Alderman Siegel

The unfunded liabilities for pension, that number is large and | assume that is not only the unfunded liability to
make up the gap that we have had at the state level but also the general funding that we have to do to pay for
the pension liabilities that the city has incurred, is that correct?

Mr. McIntire

I’m not sure | understand what you mean by the general fund liability.

Alderman Siegel

No, I’m sorry; | am trying to find the exact page that that’s on. That line was a large number.
Mr. Mcintire

On page 33, it was $190 million.

Alderman Siegel

Right, it was the $184,879,000. It says net pension liability. That’s not just the overhang related to the shortfall
of the pension is it?

Mr. McIntire

Let me try to describe it in a little bit more detail. The disclosure there is the net pension liability. As a
contributing employer you are contributing to a cost sharing plan which means your contributions don’t
necessarily only...the liability is spread amongst the employers based on your level of contributions. After
what you have contributed to the system each year since its inception essentially, the state system has a
shortfall and as a 5% contributor it’s a little bit more complicated than this but essentially 5% of that shortfall is
attributable to the City of Nashua and that’s what is presented here on your financial statements.

Alderman Siegel

Okay, | am familiar with the shortfall but | didn’t realize that this is what we are paying off or is it another 18
years or so?

Mr. McIntire

| think maybe now | understand your question and | am sorry about that, sir. Some of the comments that |
made on the net pension liability earlier, because it’s large | just think part of what | wanted to accomplish
tonight and maybe missed a point or two was to put it in perspective and that is that the plan and as a result
the underlying employers; you are following a funding schedule and | believe the date is 2039 that under the
current funding schedule, if actual results of operations hold true to actual projections, the system and as a
result the underlying employer's will be fully funded by 2039.

Alderman Siegel

So it’s 23 years and not 18. It wasn’t a 25-year payout; it was a 30-year payout.

Finance Committee Page 5
March 2, 2016

Mr. McIntire

Probably, yes. | thank you for that question because | think that it is important for readers and listeners to
understand because it’s such a significant account balance that there is a funding schedule of the city and all
of the underlying employers who are following to help mitigate this liability.

Alderman Siegel

Thank you. | think we are all too painfully aware of the funding liability. It was just that it is a very large
number and | wanted to understand if that was the overhang that we have to pay back because of the handling
of the state pension funds in the past or if that was really a combination of that plus ongoing obligations over
some period of time. You have answered that, it’s the overhang over the next 23 years that we are obligated
to pay.

Mayor Donchess

As a follow-up to the last questions from Alderman Siegel, on the current schedule the pension would go to a
100% by 2039, do you know what the assumption is with respect to the rate of return that will be achieved with
the assets that are in the state pension fund in order to arrive at that 2039 date?

Mr. McIntire

| got really lucky. | happened to turn to page 82; | honestly didn’t have it tagged. The current discount rate
that’s used is 7.75% and to the GASB credit, some of the required disclosures, on page 80 — 82, is here’s
essentially what the net pension liability is using the current discount rate that the Mayor just spoke about at
7.75%. Then adjacent to that disclosure is what the liability would be if that discount rate increased by a
percent or decreased by a percent. | think that’s probably a really good disclosure for financial statement
readers to take a look at because there can be significant fluctuations and it is widely anticipated that this net
pension liability will have significant swings based on market results of operations, more than in the past and
the reason for that is the underlying requirements and the new standards on what are acceptable actuarial
estimating techniques.

Mayor Donchess

What are the numbers for 1% less and 1% more than 7.75%?
Mr. McIntire

If we were looking at a liability in the range of $184 million before on page 33, if the discount rate increased a
percent then the liability drops to $135 million and if it decreased by a percent then the liability increases to
$244 million.

Alderman Siegel
It’s $50 million a point.
Mr. McIntire

| did try to draw a distinction between the long-term perspective and the short-term perspective financial
statements and it’s for that very reason, Mr. Mayor and committee members that | recognize that talking about
that net pension liability number is a daunting number. Hopefully we have done a reasonable job at helping to
putting it into perspective talking about the funding schedule and the like. While it's necessary for us to bring

Finance Committee Page 6
March 2, 2016

this up because of the significance of it, it is with purpose that | tried to talk about the long-term perspective
financial statements and this which may be a little bit unfavorable to talk about it but then when you turn to the
general fund and you see the stability; | did try to talk about those as two distinct issues because one may
seem a little more unfavorable but as | indicated earlier the stability in that general fund balance sheet is
certainly a strength.

Alderman Cookson
Do you have the ability to share with us who manages the state pension fund?
Mr. Mcintire

| think it’s all on-line at the NHRES.ORG website. There are some great disclosures on there. We go to that
website all of the time to use their audited financial statements and the audit of the actuarial evaluation which
essentially allocates the liability to you and all the other employers. They have a whole page on their
investment returns and things like that.

Alderman Siegel

| recognize my question might not be specific to Nashua but what extent has the pension obligation gone up? |
know that it is reset every couple of years, an actuarial reset based on returns. What percentage are we going
up or down in our contribution?

Mr. McIntire

That’s a great question. Let me start with a little bit of background. As | indicated earlier, FY 2015 was the first
year that you were required to implement this net pension liability but of course in that implementation the
actuaries needed to determine the net pension liability at the beginning of the year so there could be the proper
income statement impact there. With GASB 67 and 68 and some of the restrictions on the actuarial
assumptions that can be used, it is widely anticipated that there will be significant swings in this liability. Again,
| say those two things as quick reminders because the answer to your question may surprise listeners in that
from June 30, 2014, to June 30, 2015; this net pension liability actually went down about $4 million. | have my
theories on that but | am not an actuary. My theory is for the period ending...the liability that you see present
here on your June 30, 2015, financial statements is actually measured as of June 30, 2014. It’s on your
balance sheet for June 30, 2015, but it really relates to the year prior and the timing of all of this getting done
and to be able to produce timely financial statements is why that’s permitted to be that way. The market
returns through June 30, 2014, as | recall, were quite favorable. For June 30, 2015, | am not sure if your
liability that will be present on this page on your June 30, 2016, financial statements. We've looked at the new
reports that have come out, the June 30, 2015, reports which will report your June 30, 2016, liability and if your
liability decreased in this report then the liability is going up for your next report.

Alderman Siegel

We are under the constraint of a spending cap so unfortunately that’s an external factor that we have to deal
with so anything above 1.5% in an increase is a big problem for us. It sounds like we have a big problem.

Mr. McIntire

Well, just remember that, and | tried to draw the distinction between the long-term perspective financial
statements and the short-term being your general fund, so there is a little bit of a distinction there but certainly
there have been a lot of legislative changes in the system in recent years that have put pressures on the local
communities, there’s no doubt about that.

Finance Committee Page 7
March 2, 2016

Alderman Siegel

| understand in the long-term you can look at the balance sheet and say well Nashua is really good and we
have an 11% reserve and that’s great but year-to-year we have to do this path so year-to-year we have to
make a budget to account for this. As those numbers fluctuate beyond our control, something has to give.
That’s a big concern and that’s what makes it so much fun to sit here.

Mr. Mcintire

| understand.

Mayor Donchess

If our portion of the state pension fund is 5% and if we are at $195 million net liability that | think means that the
net liability of the whole system is 20 times that or $3.7 billion approximately, is that roughly correct?

Mr. McIntire

I’m not able to process the math that quickly. The math sounds like it makes sense to me and | haven’t done
the calculation. | think your underlying premise of what you are thinking is proper.

Mayor Donchess
Thank you very much for coming in and informing us about the audit.
MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Contract Award for Field Day and Fireworks (Value: $14,500)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
ATLAS PYRO-VISION ENTERTAINMENT GROUP, INC. IN THE AMOUNT OF $14,500. FUNDS ARE
AVAILABLE IN DEPARTMENT 177, PARKS AND RECREATION; GENERAL FUND; 55, OTHER
SERVICES

ON THE QUESTION

Alderman Clemons

Just for a quick clarification, in reading this it looks like this is a multi-year contract, is that the case?

Mr. Kooken

We have an option for a second and third year but right now we are only at the first year and we may not take
the option for the second or third year. We can put it back out to bid next year.

Alderman Clemons

Okay so we are not committed to all three? It looked like they were giving us the discount if we went for all
three years but that’s not the case.

Finance Committee Page 8
March 2, 2016

Alderman Caron

| noticed that this isn’t the low bidder. Is Pyro-Vision someone that we have used before in the last ten years?
Mr. Kooken

It actually is the low bidder.

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: School Zone Speed Radar Feedback Signs for Ordinance 0-15-074 (Value: $19,600)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE FROM
MARLIN CONTROLS, INC. IN THE AMOUNT OF $19,600. SOURCE OF FUNDING IS DEPARTMENT 161,
STREETS; GENERAL FUND; 61, SUPPLIES & MATERIALS

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: 2016 Paving Program (Value: $2,677,902)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND, CONTINGENT UPON BOARD OF
ALDERMEN APPROVAL, AWARD THE CONTRACT TO BROX INDUSTRIES, INC. IN THE AMOUNT OF
$2,677,902. FUNDS ARE AVAILABLE IN DEPARTMENT 161, STREET DEPART-MENT; GENERAL
PAVING AND PROPERTY SERVICES TRUST FUNDS; AND, DEPARTMENT 169, WASTEWATER, SEWER
STRUCTURES & SEWER REHAB

ON THE QUESTION
Alderman Clemons

How are the streets determined on this list?

Alderman Siegel

As a Board of Public Works liaison | will tell you that there is a program that is used that looks at a matrix of
traffic count and street condition based on observation. | will also say that there almost completely finished
with migrating to a brand new software system that we purchased last term and so it will be even more flexible
and formalized. My hope would be given that the format of the data is compatible with our GIS system that we
might even be able to incorporate it into that but I’m not sure about that. There is a logical system and it’s very
specifically designed to avoid any kind of favoritism in any Ward than another.

Alderman Clemons

I’ve heard that there’s a new piece of technology but | didn’t know if it were going to show different results than
what we are seeing here or if it’s just an easier way to calculate what we are already doing.

Alderman Siegel

It’s not clear whether it will show different results but last term there was a concern by the Board of Aldermen
about bonding a significant amount of money for paving citywide, specifically because we wanted to implement
the system and have it in place and get better detailed information. The company that we purchased this
software from is also doing a street-by-street survey. To the extent that we have had surveys done in the past

Finance Committee Page 9
March 2, 2016

and the data has been kept, it’s on an old DOS computer and the existing system is almost frightening but the
good news is that we’ve migrated prior to its expiration. | think they have been doing a fairly decent job
considering the technology that was available. This will be the last time that we have the streets determined
on this. | can only say for my own Ward anecdotally that the right streets were chosen. You can look at the list
that is incorporated here and you can correlate that with your own Ward and see if it makes sense.

Mayor Donchess

Once the new system is on-line we will be able to look at all 1,300 streets all at the same time and we will be
able to have a ranked order of street condition comprehensively all at once. It should result in a more objective
or acompletely objective analysis of what streets are in the worst shape.

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Citywide Infiltration Inflow Analysis (Value: $168,893)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
WRIGHT-PIERCE IN THE AMOUNT OF $168,893. SOURCE OF FUNDING IS DEPARTMENT 169,
WASTEWATER; INFLOW AND INFILTRATION

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Biosolids Disposal Contract (Value: $1,215,000)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND, CONTINGENT UPON BOARD OF
ALDERMEN APPROVAL, AWARD THE MULTI-YEAR CONTRACT TO CASELLA ORGANICS FOR A
THREE-YEAR TOTAL AMOUNT OF $1,215,000. FUNDS ARE AVAILABLE IN DEPARTMENT 169,
WASTEWATER; 54, PROPERTY SERVICES

ON THE QUESTION

Alderman Siegel

| just wanted to point out some good news here. While this is a large number, our per ton disposal cost for the
bio solids has decreased significantly. | believe it went from something like $58 per wet ton to $40 and that is a
reflection of the desire for this type of bio solids | guess used in fuels but there is a market for it so that’s
helping us. In addition, the plants dewatering operation is far more efficient and so not only are we paying less
to get rid of this waste but we are dewatering more efficiently so we are actually carting less out. That was all
good news that we learned at Monday’s Board of Public Works meeting and | thought that was worth sharing.

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: SCADA Upgrades Design Services (Value: $188,500)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
WOODARD & CURRAN IN THE AMOUNT OF $188,500. SOURCE OF FUNDING IS DEPARTMENT 169,
WASTEWATER; WERF; 81, CAPITAL OUTLAY/IMPROVEMENTS

MOTION CARRIED

Finance Committee Page 10
March 2, 2016

From: Dan Kooken, Purchasing Manager
Re: Pump Station Upgrades Design Services (Amendment 1) (Value: $15,000)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE AMENDMENT #1

TO THE CONTRACT WITH WOODARD & CURRAN IN THE AMOUNT OF $15,000. FUNDS ARE
AVAILABLE IN DEPARTMENT 169, WASTEWATER; PUMP STATION UPGRADES

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Steam Boiler Water Treatment Services (Value: $2,492)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE CHANGE ORDER #1 TO
THE CONTRACT WITH CLARITY WATER TECHNOLOGIES IN THE AMOUNT OF $2,492. SOURCE OF
FUNDING IS DEPARTMENT 169, WASTEWATER; 54, PROPERTY SERVICES

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Installation of Flow Meter (Value: $15,860)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
METHUEN CONSTRUCTION IN THE AMOUNT OF $15,860. FUNDS ARE AVAILABLE IN DEPARTMENT
169, WASTEWATER; WERF; 81, BUILDINGS & IMPROVEMENTS

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Roof Replacement (Value: $25,723)

MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE CHANGE ORDER #2 TO
THE CONTRACT WITH ROCKWELL ROOFING IN THE AMOUNT OF $25,723. SOURCE OF FUNDING IS
DEPARTMENT 169, WASTEWATER; WERF; 81, CAPITAL OUTLAY/IMPROVEMENTS

MOTION CARRIED

UNFINISHED BUSINESS — None

NEW BUSINESS — None

DISCUSSION

Alderman Caron

| know that there are a lot of things for the wastewater treatment plant but I’m really glad that we are moving
along and making sure that plant is working and up-to-date and ongoing because it is important to the city that
we keep that viable and that we don’t have any structural or other fails. | am pleased with that. | know it’s a lot
of money but | think people have to understand that our wastewater treatment plant is very important to the
city.

Mayor Donchess

| think Mr. Simmons has been doing a very good job bringing it up to standard.

of
Vie

oo x CLEAR 2 GALA Mire
. / # PROPOSED SUT FENCE
TRENCH PATCH art i = 13" pveSveR

Seaman
se DETAILS) ‘Propased Shi iff

| anions par GURY TO BE FLOW FILMED

forse AGRUS Lim ~ceonmane
a

an

APPROA JOLE OF 1840 1 PIPE
AND en (2) 20 ROLIO SEEMS

<a AT AN ATS
CONSTRUCTION NOTE
FOR WATER LINE WORK

PLAN VIEW

SCALE: 17 4 20"

Aa REEMEE ASSCMALY (SEE DETAR)

VERTICAL SGALZ: 1° aa"

sh AND RE-ANSTALL
ROX, AF 24" REP

er PASE PUMPING, IF
REG

jemcoaeeneen

RED)

CONTRACTOR TO
SHLD A WEW BRICK,
INVERT IN EASTING
STRUCTURE

me.
IN me

\ co enocness ;
., FENCE AS NCEDED

Aa, 7d AM STATE PLANE

a

a

DETAIL “
SCALE: 1's

Herfedint yh tte ath

EE

a Hi
370 fd
14
1a
14
ld
iG
ia
165 bey
: bee
CALMED SAME tals
a ii al
Ta eet
. Pty
i 4 eT gaat roar
ABD ne ana ae woe" TYPICAL 2” AIR RELEASE VALVE
, S18 ter PVE Y #16 40010 ie! INSTALLATION ON DUCTILE IRON
a : ; ran bene rere
CONNECT TO
exgTNcows | 4 Fenscaty
ANG INSTALL Paveent Pats
355 BRICK INVERT saweast seen
: ay
GONNEST TO "jaro th
ExSTid Ske ee ew r
ia : a) re”
: INV IN TSESORDOSTING 127° CLAY ur Back brikaedl
ABQ ee pheratd ied _ NY -OUT & 158.59 PROPOSED U0" PYG SOfI5) eon i
sa reamed : : roy
IN OUT # "Sr baal
: rem AMES Se eaUahED ama,
wot want noun Tg Rat GH toe
745 Teas Re . PAVEMENT THIGHS |? MEIC
pe ins 380 86 (PROPOSED 16 PYG)
[BAW a Mead ERIE 0 : TYPIGAL SECTION SEWER TRENCH TYPICAL SECTION
i mee Wont Best at] id TOH WITH TEMPORARY PAVEMENT PATCH
+00 a+so 1400 #450 2+00 2+50 “ee ee
Oo JATST., Aaynor/Swenson, Inc PREPARED FOR CLEMENT STREET
SHEET
fs OER a DIVISION OF PUBLIC WORKS tz? SEWER
— ae Sie ‘Balen 1 CITY OF NASHUA r Wa 4
ew da pnoramanecon SD IMERSOE STREET KASHUA, Nt MAsSSRE oON2 (605) 5803120 REPLACEMEN: PROFE Or 47
* © emp vemeen 5 MERE FED Bon ee es TP ag08
at Sina cae a VSDSE AGA IG tea rae beta 12 JANUARY ZOe2

Finance Committee Page 11
March 2, 2016

Alderman Siegel

| would like to echo what Alderman Caron is saying. | want to point out that because of some of the
improvements we are going to end up saving some money; recouping some. There is a lot of money going out
but it’s saving because the plant is operating as it should be. Our anaerobic digester is finally functioning like it
is the way we paid for it so it’s very encouraging.

UNFINISHED BUSINESS — None
NEW BUSINESS — None

RECORD OF EXPENDITURES

MOTION BY ALDERMAN SIEGEL THAT THE FINANCE COMMITTEE HAS COMPLIED WITH THE CITY
CHARTER AND ORDINANCES PERTAINING TO THE RECORD OF EXPENDITURES FOR THE PERIOD
TO FEBRUARY 12, 2016 TO FEBRUARY 285, 2016

MOTION CARRIED

PUBLIC COMMENT

POSSIBLE NON-PUBLIC SESSION

ADJOURNMENT

MOTION BY ALDERMAN WILSHIRE TO ADJOURN
MOTION CARRIED

The Finance Committee meeting was adjourned at 7:55 p.m.

Alderman Ken Siegel
Committee Clerk

FINANCE COMMITTEE
MARCH 2, 2016

7:00 PM Aldermanic Chamber
ROLL CALL

PUBLIC COMMENT

COMMUNICATIONS

From: John L. Griffin, CFO/Comptroller
Re: Melanson Heath Presentation
° Tabled 2/17/16

From: Dan Kooken, Purchasing Manager
Re: Contract Award for Field Day and Fireworks (Value: $14,500); Department: 177 Parks and |
Recreation; Fund: General; Account Classification: 55 Other Services

From: Dan Kooken, Purchasing Manager
Re: School Zone Speed Radar Feedback Signs for Ordinance 0-16-074 (Value: $19,600);
Department: 161 Streets; Fund: General; Account Category: 61 Supplies & Materials

From: Dan Kooken, Purchasing Manager

Re: 2016 Paving Program (Value: $2,677,902); Department: 161 Street; Fund: General: Activity:
Paving Department: 161 Street; Fund: Trust Account Category; 54 Property Services
Department: 169 Wastewater; Fund: Wastewater; Activities: Sewer Structures and Sewer Rehab

From: Dan Kooken, Purchasing Manager
Re: Citywide Infiltration Inflow Analysis (Value: $168,893); Department: 169 Wastewater; Fund:
Wastewater; Activity: Inflow and Infiltration

From: Dan Kooken, Purchasing Manager
Re: Biosolids Disposal Contract (Value: $1,215,000); Department: 169 Wastewater; Fund: Wastewater
Account Classification: 54 Property Services

From: Dan Kooken, Purchasing Manager
Re: SCADA Upgrades Design Services (Value: $188,500); Department: 169 Wastewater; Fund: WERF
Account Classification: 81 Capital Outlay/Improvements

From: Dan Kooken, Purchasing Manager
Re: Pump Station Upgrades Design Services (Amendment 1) (Value: $15,000); Department: 169
Wastewater; Fund: Wastewater; Activity: Pump Station Upgrades

From: Dan Kooken, Purchasing Manager
Re: Steam Boiler Water Treatment Services (Value: $2,492); Department: 169 Wastewater; Fund:
Wastewater; Account Classification: 54 Property Services

From: Dan Kooken, Purchasing Manager
Re: Installation of Flow Meter (Value: $15,860); Department: 169 Wastewater; Fund: WERF
Account Classification: 81 Buildings & Improvements

From: Dan Kooken, Purchasing Manager
Re: Roof Replacement (Value: $25,723); Department: 169 Wastewater, Fund: WERF
Account Classification: 81 Capital Outlay/Improvements