Finance Committee - 4/4/2018 Page 9
Mr. McIntire
They really run the gamut. For example and | am not trying to avoid your question, in New Hampshire virtually
all are involved in the one state system and you see the numbers on Page 130. Our firm does some work in
Massachusetts where probably one-third of the communities have their own pension plan. We have done
some work in Vermont where they have their own plans. A lot of it quite frankly depends upon the
demographics of certain communities. Some of those plans in Massachusetts are 88% to 94% funded. |
actually have one that is scheduled to be fully funded in about 3 years. There are other plans that we audit
with some of our Massachusetts communities that are below the percentage that you see on Page 130. There
really is a wide variation.
Mayor Donchess
The City does operate a single pension fund for Public Works. Public Works employees are the only
employees in Nashua that are not in the State System. We have a pension board, the last | learned, it’s in the
mid-80s% - the percentage of the liabilities that are funded was in the mid-80%s. There might have been a
little bit of a change, but obviously it’s in good shape as compared with this.
Alderman Klee
The question | am looking for is for credit rating, obviously 100% is going to give you a great credit rating, but
to maintain a good credit rating, that’s what I’m looking for. What are they looking for? Are they looking for an
80%, 85%? Obviously they are, for the most, they are not going to look for 45% for the credit rating.
Mr. McIntire
They probably are going to look as your unassigned fund balance and they are going to look at the
demographics of the community. Of course, the Net Pension Liability is going to come into play but that’s
going to be down on their check list of the things they are going to look at it. They are going to look at
management; they are going to look at policies and procedures that you have. If your unassigned fund
balance represented 10.8% of your expenditures, if that was fluctuating greatly, up one year, way down the
next back up a little bit. Those things probably even if it was one year got up to almost 11% but in the past it
fluctuated tremendously, that probably would not be viewed favorably. Remember that key unassigned fund
balance number didn’t really change and it’s been quite steady for a couple of years. I’m trying to focus in that
there is undoubtable a rating agency that will look at that pension liability but | truly think they are going to
focus on the unassigned fund balance and the other characteristics of the community.
Alderman Klee
Thank you. My concern was that | didn’t want to lose our good standing.
Mr. McIntire
The question and hopefully my answer contributes to what | said earlier as far as making sure | put it in
context. We think there we would be remiss if we didn’t talk about it because it is a significant liability. But |
think there are some factors that like me answering your question about rating agencies are more going to
focus on unassigned fund balance. Hopefully that puts it in perspective a little bit.
Alderman Klee
It does, thank you.
Mayor Donchess
Any other questions or comments?
