Search

City of Nashua

Purchasing Department
Administrative Services Division (603) 589-3330
229 Main Street - Nashua, NH 03060 Fax (603) 594-3233

February 23, 2022
Memo #22-243

TO: Mayor Donchess
Finance Committee

SUBJECT: Pedestrian Infrastructure Conditions Assessment in the amount not to exceed $42,500
funded from 55699 Other Contracted Services/Bond

Please see attached communications from Daniel Hudson, City Engineer, dated February 24, 2022 for
project specific details related to this purchase. Below please find a summary of the purchase approval
request:

Item: Conditions assessment to establish an inventory of pedestrian infrastructure
needs to enhance ADA compliance and identify priorities for improvement &
maintenance planning.

Value: $42,500

Vendor: Nashua Regional Planning Commission

Department: 160 Admin/Engineering

Source Fund: 55699 Other Contracted Services/ Bond

Ordinance: Pursuant to NRO § 5-83 Professional Services (A) In the purchase of accounting,
architectural, auditing, engineering, legal, medical and ambulance services and
purchases of independent professional consultant services for personnel, data
processing, actuarial, planning, management and other comparable purchases
competitive bidding shall not be required.

The Board of Public Works (2/24/2022 BPW meeting), Division of Public Works: Engineering, and the
Purchasing Department respectfully request your approval of this contract.

Regards,
Kelly Parkinson

Purchasing Manager

Ce: D Hudson
C O'Connor

A special meeting of the Board of Aldermen was held Thursday, July 1, 2021, at 7:55 p.m. in the
aldermanic chamber as well as via Zoom teleconference.

President Lori Wilshire presided; City Clerk Susan Lovering recorded.

Prayer was offered by City Clerk Susan Lovering; Alderman Linda Harriott-Gathright led in the Pledge to
the Flag.

To join by Zoom — please refer to the agenda or the website for the meeting link and telephone number.

Let’s start the meeting by taking a roll call attendance. When each member states their presence, please
indicate if participating via Zoom state why you are not meeting in person and whether there is anyone in the
room with you during this meeting which is required under the Right-To-Know Law.

City Clerk Lovering called the roll and asked them to state the reason he or she could not attend, confirmed
that they could hear the proceedings, and stated who was present with him or her.

The roll call was taken with 11 members of the Board of Aldermen present: Alderman Michael B. O’Brien,
Sr., Alderman Patricia Klee, Alderman Richard A. Dowd, Alderman June M. Caron, Alderman Thomas
Lopez, Alderman David C. Tencza (via Zoom), Alderman Ernest Jette, Alderman Jan Schmidt, Alderman
Skip Cleaver, Alderman Linda Harriott-Gathright, Alderman Wilshire.

Alderwoman Kelly, Alderman Clemons, Alderwoman Lu, and Alderman Laws were recorded absent.
Mayor James W. Donchess, Corporation Counsel Steven A. Bolton were also in attendance.
President Wilshire

Mayor did you wish to say a few words before we get started?

Mayor Donchess

Yes thank you Madam President. Well first | wanted to thank everybody in the city, our employees, and
everyone else for helping us achieve the award of the fourth best run city in the United States. This is an
award we’ve received in the past. We've never been this high. If you go through the ranking, a very
predominate factor is the efficiency of city services. In other words, the quality of services versus the cost.
On that score, Nashua has been scoring very high and it’s been due to the efforts of all of our citizens who
work hard to pitch in and of course the Board of Aldermen and all of our city employees.

Now going into this budget year was, of course, a very tough year because of the actions taken by the
State of New Hampshire and we have discussed this at some length. The State raised our pension costs
unrelated to current wages by $4 million, $4.4 million actually and cut school aid. So what do we do with
that? | mean the citizens, the homeowners, the taxpayers of Nashua expect us to set priorities, make some
difficult decisions. Even though we are being used as a cash register by the State of New Hampshire and
we should offset as much as we can and | think that’s what our residents would expect but we can’t offset
an entire $12 million hit.

So what | did going into the budget was | asked departments to exercise frugality and consider the interest
of our taxpayers and our residents. We've just come off the pandemic and certainly many people ordinary
Nashuans, everyday people are struggling to pay many of their bills. So | asked City Hall for frugality and
they definitely came through. City Hall reduced the budget for the fiscal year that begins today by $2.9
percent. Meaning the budget for this building and all of the associated departments — Public Health and
everything else, is 2.9 percent lower today than it was yesterday. Public Works down 1.3 percent. Same
thing. That budget is lower today that it was yesterday. The Library also 1.9 percent. So those things
helped and it also helped that we have a new healthcare plan which has been adopted by a number of
employee groups which helped us save money there.

Special Board of Aldermen 07-01-2021 Page 2

So with some of the other departments, | asked them also not to make the kind of sacrifices that we’ve
made in City Hall here but to exercise frugality and to come in, and this what | proposed in the budget,
come in at the cost of living. Note not below the cost of living but at the cost of living. | know the Fire and
Police Department have taken issue with this but those departments have gone up significantly more than
the cost of living for year after year for a whole number of years. So this year for one year given what we’re
facing, | asked for cost of living.

| think if the budget is passed as | proposed it, we would see about a 3.5 or 3.6 percent tax increase. Now
this is more than we would like no question about it. But give what the State has done, it seems about the
best we can do. We've offset a lot of what the State has done but certainly we can’t devastate quality
services. | think what citizens are looking for, what they want and deserve, is for us to balance the need for
quality services which | think we have, balance the need for fairly paid employees which | believe we have
with the needs to keep tax increases to at least as low as we can reasonably make them and | think 3.5
percent in this case, at least in my judgement, is about where the limit of what people can afford. So that’s
how | got to this budget and those are the circumstances that we’re all dealing with.

Now Madam President there is one issue that | know Attorney Bolton and CFO Griffin are going to raise
related to the Senate Bill 52 which was passed by the Legislature affecting the cap. They can give you the
details but they are going to propose that there be an increase in the budget to take into account the grants
that we get and an offsetting revenue amount to offset the grant amounts. This has no effect on the tax
rate because it’s grant money coming in and being recorded as revenue and also being recorded as
expenditures but they can explain in more detail the rationale behind this and I’m sure I'll expect that you
Madam President are going to at some point have them offer that explanation. So that is all that | have
Madam President and unless people have questions, thank you for the opportunity.

President Wilshire

You’re welcome. At this point I’m going to call for anyone to give public comment who signed up on items
expected to be acted upon this evening. The first speaker is Fred Teeboom. Just to set the stage here, it’s
a 3 minute comment period and we need your name and address for the record.

PUBLIC COMMENT
Fred Teeboom

My name is Fred Teeboom. | reside at 24 Cheyenne Drive. | like the new setup. | don’t see any portraits.
What happened to all the portraits? I’m missing the portraits.

I'd like to say the cap is back. SB52 that was just mentioned the cap is back. If you hold this Resolution til
August 20" | think, you’re going to have to meet the override conditions of the cap because the budget
exceeds the cost of living limits on the cap.

Now what I'd like to address is the R-21-142 first of all. In the back of R-21-142 there’s an analysis. The
analysis deals with the fact that the increase or addition to the budget opposed by the Mayor requires a 2/3
vote of the members of the Board. There’s a wishy washy statement — faulty City Attorney opinion — that
suggests that a court may find this provision, etc., etc. that’s about as wishy washy as you can get. The
fact is the opinion ignores the 22,000 (inaudible) laws which came following the mentions to case 2010
cited and that took care of the 2/3 vote. So 2/3 vote to override the budget in adding line items that the
Mayor did not proposed is perfectly legitimate. If there’s a question on this Mayor vote, then | suggest you
contact the Mayor and have the Mayor sue the city because it’s Charter provision.

The other thing you should have on your desk, | hope, Donna told me that she would send a copy of my
Memo that | dated June the 30"". First of all | mentioned in there that the Mayor had on pages | think 8 and
9 given the presentation about the comparison of the increase. He’s ignored the pension, FICA, and
Medicare but the fact is that we the taxpayers have to pay the bill for the pensions. So you can’t ignore

Special Board of Aldermen 07-01-2021 Page 3

that. If you take that into account that’s on the table on page 1 of my Memorandum — hopefully you all have
a copy — you'll see that it says 1.7 increase. For the Police, it’s 6.6 percent increase in the budget. For Fire
— the Fire people are here, the Police is here looking to get their raises...

Alderman O’Brien

30 second.

Fred Teeboom

9.1 percent. Completely unacceptable. If you look why, you'll find that there’s a 23 % percent increase in
the pension costs. Besides the fact that the pension fund was mismanaged by over a billion dollars, it’s
well documented, and the fact that the insanity of asking for 100 percent funding, you can take a look at my
example of a Deputy Fire Chief — now an Alderman — and the kind of money he makes as a pension.
Alderman O’Brien

Madam Chairman President the time.

President Wilshire

Time is up Sir.

Fred Teeboom

Well | hope you put the same gag rule on these aldermen when they make the comments that you put on
the public when they make comments about what affects their taxes.

Lou Juris

Good evening. Lou Juris here from 56 Haines Street. This is the result of the downshifting and as a result,
these cuts had to be made. A higher than normal tax increase is probably going to happen but what this
budget will do is guarantee that when the alarms up, bells go off the Fire Department shows up within a
reasonable time within the time specifications. That goes with the same with the cops. If something
happens, they’re going to be there under this budget. The ambulance, educating our students, public
health in this past year and a half where we’ve had a pandemic, and in addition to the continued upgrades
of our roads and the maintenance of our roads, and our sewer system, and of course keeping the water
flowing, this is what this budget is going to continue to do. If there are those who are speaking and making
comments against it, then they should have tried to reach out to those in the Legislature and the State
Senate who voted to push these downshifting costs especially in regards to the pension costs. This is
where the rubber meets the road and | think the city has done its best to try to mitigate that. It’s my opinion
that this full Board should pass the budget. Thank you.

President Wilshire

There is no one else signed up for public comment.
Laura Colquhoun

Laura Colquhoun

President Wilshire

Oh I’m sorry. Ms. Colquhoun.

Special Board of Aldermen 07-01-2021 Page 4

Laura Colquhoun

Laura Colquhoun at 30 Greenwood Road. | find it funny that the Mayor keeps telling the taxpayers that his
budget is $290 million. However, the Telegraph reported the budget to be $290 million on June 22™ and
$346 million on June 26". That’s on page 28 of the budget. | guess the Nashua Mayor does not like to tell
the whole truth or he just likes to think that the Nashua taxpayers are stupid. There are other expenses
that the taxpayers have to pay but the Mayor just drops them off the budget.

The budget is simple. We take the revenues and we minus the appropriations. That balance has to be
paid by the Nashua taxpayers — both the residential and commercial property owners. Our Mayor has not
told the truth to the Nashua resident taxpayers because they will be hit hard by the fact that the Nashua
Assessing Department is dropping the valuations on commercial properties. So far the valuation on
commercial properties have gone down by $65 million and that number is continuing to climb. This means
the residential properties will have to pick up the difference. This is not something the Mayor can blame the
State on, however, residential property taxes will go up because of this valuation change. The Board of
Aldermen knows this fact and has completely looked away. This Board should have cut more expenses,
however, this Board is following the Mayor’s lead in keep spending, spending, spending. | hope all Nashua
residents remember this the next election and vote all of you out of office. Thank you.

President Wilshire
Is there anyone else wishing to give public comment via Zoom?
Laurie Ortolano

Laurie Ortolano, 41 Berkeley Street. First of all I’d like to correct the attendance that was read into the
record. It was stated that there were 11 in attendance and 2 via Zoom. There are actually 9 in attendance.
Kelly, Clemons, Lu and Laws were not recorded as being on the record. I’m interested in seeing how the
2/3 votes go with regard to passing the increases that the Board proposed on Tuesday in their budget
meeting.

I’m opposed to the additional money being added per Police and Fire. | think they’re funded adequately. |
feel the response time issue from the Fire Department is you know difficult to quantify to a certain extent.
When we put all the barriers up downtown, | didn’t hear anyone from the Fire Department and couldn’t
really get any response on what happened to response times when we cut the road down to a single lane
on each side? We did that without any problem or concerns that we were impacting our fire safety issues.

So | feel like we need to be careful how often we point to those situations and use those to justify positions.
| think we have a lot of positions that ought to be looked at closely and I’m going to go back and tell you.
I’m sure you didn’t your cut your Assessing office but | don’t know why we’re funding 2 commercial
assessors in there because you all know how hot under the collar | am about what’s happened with
abatements and what’s gone in there and what gets done in the commercial area. We pay for it endlessly.
You know | just found out | didn’t realize the Chief we hired is only here for a year on a 12-month contract.
So basically he’s almost a consultant. So you know we’re going to be back in a Chief position. You have a
new assessment level coming up next year.

I’m concerned about the IT Department. I’ve been calling around getting some good information. What are
we doing about third party sourcing for our e-mails and what’s going on in that area? | am not at all
interested in seeing the Administrative Services Director run an IT Department. |’m not at all interested in
seeing that position continue or a Right-to-Know Coordinator, or some of these upper management
positions. They don’t belong in the city budget and they’re not doing what they should do.

Alderman O’Brien

30 seconds.

Special Board of Aldermen 07-01-2021 Page 5
Laurie Ortolano

| object to Attorney Bolton sitting in this chamber. There should be somebody else sitting in this chamber
representing the Legal office. Thank you.

President Wilshire

Anyone else — public comment?

Sherry Dutzy

Sherry Dutzy 18 Swart Terrace. | am also a State Rep. for Ward 3 and | can verify what Mayor Donchess
is saying. Six months sitting in sessions in the House and | have seen over and over again where
Representatives from the rural parts of the State not only have no interest in supporting the cities but
actively work to downshift and pass bills that will make the spending more difficult and delivering services
more difficult for our cities and for our towns. | support this budget.

| am also the Chair of the Nashua Conservation Commission. We work very closely with the Community
Development. They do a great job. | believe they are understaffed. | see the hours that many of them work
to be able to support us. We are a small part of what they do. They support the Zoning Board and they
support the Planning Board and it takes enormous amounts of time because of the detail that’s involved.
So | appreciate the effort that is made by everybody. | have said this again and again that New Hampshire
wouldn’t exist without the volunteers and without underpaid, overworked government employees. Thank
you.

President Wilshire

Thank you. Anyone else wishing to give public comment? Seeing no one, I’m going to move on to Reports
of Committees.

REPORTS OF COMMITTEE

There being no objection, President Wilshire suspended the rules to allow for the oral report of the
Budget Review Committee meeting held Monday, June 28, 2021, regarding proposed Resolution
R-21-142.

Alderman Dowd

Yes thank you. The Budget Committee went through all of the Departments over the last month and half,
two months listening to all of their requirements. We heard that they all tried to meet the requirements that
were put forth by the Mayor. | know the Mayor has said he allowed cost of living increases to Police & Fire
but | think we determined that the cost of living increase doesn’t protect our public safety. The lack of
money coming down from the State or the amount of money that we are having to send to the State to
cover their expenses is costing the citizens of Nashua a public safety issue. And we don’t think that’s
correct. So the motions that were made or the first motion that was made was to add to the bottom line of
the Police Department — Department 150, Account 90120 the amount of $241,338.00. The next motion
that was made was to take the Police Command Van Vehicle that was going to be bought this year out of
cash in the CERF Special Revenue Fund to the bond line because of the cost of the vehicle and the
amount of years that it would be on-line, the current one is at 16 years. It needs to be upgraded because
the equipment on it is antiquated and it is, again, a public safety issue. That's the command vehicle that
they use on all major events in the City. So that amount $495,745.00 was moved from the cash line in the
CERF acquisition to the bond line. That will allow us to keep $500,000.00 in the CERF Capital Reserve
which has not been funded this year as part of the budget and all of our finance people will tell you it is
woefully underfunded. So this will help that.

Special Board of Aldermen 07-01-2021 Page 6

And then the third motion was to add to the bottom line Fire Department — Department 152 Fire, Account
90120 the amount of $418,771.00. That would allow the Fire Department to retain the Fire Company that
they predicted they would have to lose with the Mayor’s cut and would add 6 months to a new employee in
the Fire Marshall's Office. That person is our inspector that needs to be doing, by State statute, two
inspections of each school in the City twice a year and that has not been being done and with the safety of
children | think that is a critical item. Also this is the same person that checks the occupancy requirements
in restaurants and meetings and other things and that’s only been done on a spotty basis based on the
staffing. So it adds $660,109.00 to the budget and changes the Mayor’s Budget from $290,366,852.00 to
$291,028,961.00. | have another motion to make.

MOTION BY ALDERMAN DOWD TO CHANGE THE AMOUNT (ON PAGE 34) ACCOUNT #48320 TO
$77,411,477.00 AND (ON PAGE 271) ACCOUNT #70160 CONTINTENCY GRANTS TO THE AMOUNT
OF $77,411,477.00. IN ADDITION R-21-042 CHANGE THE NUMBERS OF LINE 7 FROM

$291 026,961.00 TO $368,438,438.00 AND ON LINE 8 CHANGE THE $64,979,022.00 TO
$142,390,499.00.

ON THE QUESTION
Chairman Dowd

| would like those to be taken together. |. will also try to explain what those changes are. Those changes
are if we don’t take this action on the budget and those numbers — and by the way those numbers do not
impact the tax rate. It’s for grants that we would accept during the year. Under the new Legislation
coming out of Concord, we would not be able to accept any grants. And we get grants for the Public Health
Department, the Fire Department, the Police Department, School Department; several of our Departments
rely on grants. Like | say, it doesn’t impact the tax rate because money comes in by grant and it gets
spent. So there’s no additional monies collected from the individual taxpayers. And we’ve been getting
those types of grants for years. But if we don’t do this tonight, if we get a grant to put these grants in we
won't be able to accept it. And if we need further explanation on it, | think Mr. Griffin is here. But that’s the
motion and I'd like us to act on the motion.

Alderman Klee

Thank you Madam President. | want to add, | know that my little grant that is coming in for Ward 3 out of
the million dollars is nothing compared to this. But the truth of the matter is, with the spending cap put in
place, etc., we would not even be able to accept that grant if we don’t budget for it, if we don’t put this
money in. And the monies that Alderman Dowd has spoken about literally are monies into one account as
possible spending and monies in as a revenue account. So it is a zero balance at the very end and it does
not affect the tax dollars. It is extremely important that we do this. Ward 3 has been waiting a long time to
get that grant money and it is coming in this fall. So thank you so much.

President Wilshire
Thank you. Mr. Griffin, would you mind giving us an overview of this motion.

John Griffin, CFO

Certainly. John Griffin, Chief Financial Officer. Subsequent to the passing of the Senate Bill it reinstates
the spending cap. We touched on it a little bit the other night. A lot of the interpretations of the former
spending cap which allowed us to not include appropriations for grants is eliminated. So essentially what
we are left with is a spending cap that looks at any and all appropriations as a base and the only two
exclusions that you may consider during any particular year is the debt service associated with bonded
capital and capital projects in that given year. And | do have an exhibit that | can distribute but those
particular items would not be able to be accepted and appropriated even with exclusion. Because the
exclusion, if you think about, it is about $17 million dollars of debt service and about $1 million dollars’

Special Board of Aldermen 07-01-2021 Page 7

worth of capital projects. What Budget Chairman Dowd indicated is to put in, and we can discuss it, we
would be happy to discuss it, we are going to put in the $77 million and that includes and maybe | could
hand this out. So what we have, what you will be receiving is what | refer to as - what Budget Committee
Chairman Dowd indicated is typical grants for the City and typical grants for the School.

Lines #1 through 18 identify most of the grants that were received this past year along with an estimated
Fiscal22 number. And those typical grants total about $10 million dollars for the cityside and $16 million
for the schools — so there’s $26 million. However, we know that through the hard work of everyone we are
going to get about $16 million dollars of American Rescue Plan Act Funding for the City. That’s going to
need to be accepted and appropriated. And then we have, as Mr. Donovan indicated at your Budget
Review Committee, he had a nice slide that illustrated about $35.5 million dollars of CARES Act funding
and the companion ESRA Funding coming from the American Rescue Plan Act. So the thought for
discussion was to start off appropriating the funds in this particular budget and doing a companion off-set
of the appropriations that you are going to need in this particular budget. | know this budget is time
sensitive.

We probably will need some clear transfer legislation because as you know, the various reports that we
have for the DRA and on the school side the reports that they make to the Department of Education, they
need to be in sync. So there will be another analysis that will take place, but | wanted you to consider this
particular funding. With the Federal Government and the acceptance of some of these grants through the
Department of Education in New Hampshire, you never know when you are going to be able to pull those
funds. As Mr. Donovan said his grants are reimbursement grants, so they spend the money, get it
approved and then get reimbursed. So the thought was that we would combine the typical grants along
with what | would consider one-time grants which total $51.546 million and put them in this budget. So I’d
be happy to answer any questions at this time and Attorney Bolton will be able to help on some of the
nuances of the Senate Bill that was passed. Thank you.

President Wilshire
Questions? Alderman Jette?
Alderman Jette

Thank you Madam President. So all of this grant money this $51,546,000.00 this is not in this budget that
we have been looking at, this budget book?

Mr. Griffin

Madam President, I’d be happy to answer that. It is not included in this budget book.

Alderman Jette

And where — I’m sorry when Alderman Dowd explained it, | didn’t catch where it was going to go.
Mr. Griffin

Right. Yes | can recap that. Given the time sensitivity of the budget passing and knowing that you all
would like to pass it with due consideration, we put the revenue on page 34, | actually gave it a new
account number 48320 Grant Revenue. So that’s in the financial services area. And as far as the
appropriations, page 271 — 194 Department Contingency and new account 70160 Contingency — Grants.
So that’s the offset, as Alderman Dowd indicated and the Mayor indicated, there’s no increase in local tax
dollars, it is simply accepting the revenue, budgeting for it and budgeting for the appropriations. So those
two numbers are designed to be the same.

Special Board of Aldermen 07-01-2021 Page 8

With regard to the revenue side, it is an estimate in this budget book anyway. So to the extent grants don’t
come in as timely as we would like or want, that revenue would be offset by the grant, the amount of grants
that come in. So at the end there would not be surplus with that nor would there be appropriations in
excess of revenue.

Alderman Jette

OK could | follow up?

President Wilshire

Alderman Jette?

Alderman Jette

So | don’t know if you or Attorney Bolton would be more appropriate to explain, why would we, as this
grant money why would not be able to accept it without doing what you are suggesting tonight? What
prevents us from accepting that money.

Mr. Griffin

Well kind of the tactical accounting side of it is you are going to be outside the limitations of the cap, that’s
a potential. Attorney Bolton might have a more legal answer than that.

President Wilshire
Attorney Bolton?

Steve Bolton, Corporation Counsel

The issue is two-fold; the State Law currently with the passage of Senate Bill 52 and it is being signed by
the Governor takes effect 60 days after it was adopted by the House — that is mid-August. Supplemental
appropriations that are made to this budget will after that date in August have to conform to the budget
limitations, the so-called Spending Cap Provisions of the City Charter which means that you cannot
exceed last year’s total budget by more than a percentage of a 3 year rolling average of this certain
government index. Just estimating that perhaps that amount would be approximately $3 million dollars
that increase - $3 million dollars. But we have never in the past included grants as being part of that whole
spending cap calculation. So it wasn’t in last year’s budget. But if you look at the law as it currently exists
or will exist come that date in mid-August, it says that a Charter can provide for exceptions for grants,
Enterprise funds, gifts, and other revenues from sources other than property taxes. And those can be
exempted in the Charter. Our Charter doesn’t exempt them. So if we can only raise the budget that we
passed last year by $3 million dollars well we would not be able to accept and appropriate grants. And we
are expecting grants of approximately $77 million. This is money that we get from other sources, not from
property taxes.

So it makes sense to say, OK let’s put in the budget, just like you do with other things, put in the budget
the amount you expect to receive in revenue from grants and the amount you expect to spend of those
grant monies, typically you’d have to spend them all, they are not giving you money just to hang around,
there are things you are supposed to do with it. And that’s in light of what one of the public commenters
said earlier, you take the revenue you subtract the appropriations and the amount left is what has to be
raised in taxes and that’s exactly correct. And that is what this proposes to do, it proposes to treat these
grant revenues just like any other revenues and expenditures from those grant revenues just like other
expenditures. And the reason we want to do that now is because of the way the law now reads with the
recent legislative changes. And we are dealing with sort of shifting sands situation, trying to react to

Special Board of Aldermen 07-01-2021 Page 9

something that basically happened less than a month ago with the passage of Senate Bill 52 and its
approval by the Governor. So yes it does seem last minute but as has been repeated many times, this has
no effect on the amount of money we are going to raise from taxes. It’s just a more accurate reflection of
the fact that we are getting revenue and spending that revenue from a source other than taxation. Itis
what has been done for many years but the proper way to account for it, given the current state of the law,
is to include both sides; the revenue side and the expenditure side in the budget.

Alderman Jette

Obviously you think that by doing this that this will work, this will allow us to accept the grant money? |
understand how putting it in this year’s budget assuming that everything else stays the same, putting it in
this year’s budget will give us more room to expand next year because it will be putting in this year’s
budget these appropriations that when we spend this grant money it will give us a higher starting point. |
guess | am not sure why we wouldn’t be able to accept the grant money. | understand with all apologies to
Mr. Teeboom | think the spending cap, | think a lot of people understand but | think a lot of people don’t
understand that the spending cap is not a tax cap, it is a spending cap. And in its worse effect, it prevents
us from spending money even though that money might not come from the taxpayers at all and that’s the
problem that you are trying to solve here at least in part that this money that we are getting from the
Federal Government or State Grants or gifts, count in the limit on the appropriation also it doesn’t take into
consideration if the tax base increases as property values go up or new businesses come in, new
apartment buildings are built and the tax base increases, which would allow us to reduce taxes because of
the increased share of the burden. We are still limited on what we can spend and | think that’s a flaw in
the current law and if we have to live with that, it is going to make it difficult.

It doesn’t necessarily reduce the tax rate, it reduces the amount that we can spend - whatever the source
of that money might be. | understand that part of it, | didn’t realize that we wouldn't be able to even accept
this money during the next fiscal year without making these changes.

Attorney Bolton

Shall | respond? The issue is that grants were not included in the budget last year. So if you just look at
what was in the budget last year and then say that the total appropriations in this year including any
supplemental appropriations in the course of the year have to stay beneath this cap, you would be looking
at last year’s budget which did not have the grants in it. Today you can appropriate this money as it is
being called “Contingency Grants”. So you can do the appropriation now, this resurrection of the spending
cap does not go into effect until sometime in August. But to accept and appropriate grant money after this,
after that August date, that’s an appropriate. So if we don’t appropriate before that date, we are going to
run up against this limit. This limit is going to enable something like $3 million dollars in excess of last
year’s total budgeted expenditures which didn’t consider grants.

The reason for that is they hadn’t been considered in many years after the original passage of the
spending cap charter provisions, the Board of Aldermen adopted an Ordinance intended to explain and
define things in the spending cap provisions and so they defined combined annual municipal budget as
excluding expenditures from grants. | believe the current state of the State Law which governs us would
render those Ordinances null and void. Now if you want to exclude things like grants and other monies
that aren’t raised from taxes, it has to be a provision in the Charter itself. Our Charter doesn’t have those
provisions. So if we are going to make a change in the accounting, now is the time to do it.

President Wilshire

All set Alderman Jette?