Board of Aldermen 6-23-2020 Page 4
Secondly, Madam President, of course we have the Budget tonight. Now this is an issue which | know we are
all concerned about under the conditions that we are operating, no Budget is easy to make. People can
disagree and have reasonable points of view and still disagree about exactly how these issues should be
handled. But we are dealing with three major challenges at this point, looking at this Budget and the ones that
are coming, next year particularly. First, the rising healthcare costs; for two years of running up $3 million
dollars, that $3 million dollar figure is a 1 % on the tax rate or the combined 6 is 3% on the tax rate just by itself.
Now that was a condition when | proposed the Budget; | proposed the Budget back in February pre-COVID-19.
We knew we had to deal with healthcare, we have a plan to reduce costs over time involving changes to the
design of the healthcare plan that we offer. We have talked about the details of that before. Then we proposed
the Budget, you began to consider it through the Budget Committee and then we get hit with COVID-19 which is
an unprecedented disease, a pandemic, one that has had very large economic impacts. One that the economic
impacts are being deferred as a result of aid that the Federal Government is providing to the thousands and
thousands of unemployed workers in Nashua. So we haven't yet really seen the impact of that, but that
$600.00 a week aid is ending on July 31. So then we got COVID-19.
Then 10 days or so ago, the State hits us at exactly the wrong moment with up to, we are still estimating, but we
will see, up to about a $3 million dollar increase in pension costs. The pension bill that the City pays to the
State Pension System will increase by $3 million dollars, or $2.8 or something in that neighborhood. Again, a
major hit especially on top of the other two factors. | would like to say that we do not know what is coming with
this economic — we know the $2.8, the $3 million dollars, we think we can deal with healthcare costs if
everybody cooperates. But we don’t know what is coming with economics. Automobile registrations are down
to some degree. We expect that State Revenue could be off, we just don’t know. And not all of you have been
in City Government when a major recession hits if that’s coming, we don’t know. It has a significant impact on
revenues and assessments, commercial assessments which could go down and cause the tax rate to go up,
just based on that. So we don’t know what is coming.
Jon Griffin, CFO has done a Memo where he looks at future tax rates, the one after this year, next year Fall of
2021 using a set of very middle of the road projections and we could at some point talk about what exactly all
those factors are but those are the ones that create the tax rate. He projects at 7% increase for taxpayers. Now
that is, in my mind, obviously far too high, much more than we want. Therefore, before COVID | had proposed
2.25% budgets for all the major Budgets; Fire, Police, and Schools. 2% for Public Works and City Hall
Departments. But based upon input from our Police and Fire Departments, the Budget Committee has
recommended increases in their Budgets. Now | have concerns about any increase to anything under this set
of conditions. Of course we respect the Fire Department, the Police Department, we respect the Officers, we
appreciate the sacrifice that they have made to the City over the years. We are grateful for their service. But
we also need to factor in the interest especially in the uncertain times that we face of the hardworking taxpayers
of the City of Nashua. Therefore, in my opinion really the Budget Committee has recommended some
reductions, fine but increases but | don’t think in my view are not a good idea. | know that obviously people
disagree about that, but my priority would be to maintain services basically as we have them and hold fast and
then try to do the best we can with the tax rate as circumstances develop.
| will now move to another subject, Madam President that being the Firefighter's Contract. As | mentioned, of
course, we respect the Firefighters, we appreciate everything they have done and | think the way that
negotiations were handled before the current contract was arrived at by the Fire Commission reflects that. We
had offered, in mediation, 11% over four years. 2 %4% every year a four year increase. As you, Madam
President, and other members of the Board of Aldermen approved for the Police Sergeants. So we are trying to
have equity, the same amount was offered, yet we don’t have a contract. And there’s different ways you can
look at what this contract would do in terms of cost. Yes, it’s four 3 1/2 % raises, which without any
compounding equals 14%/ But sometimes when we consider the cost of contracts, we consider what they are
actually going to cause in terms of the outflow of dollars. And because there are also step increases within the
contract, the actual cost would be a 17% increase for one that, in my opinion, and again — with utmost respect,
in my opinion one we, under these circumstances cannot afford.
