Board of Aldermen 12-23-2019 Page 2
Now a subject that we have discussed a number of times in the past is the health costs for City employees.
These costs this year are budgeted to go up 11% from last year. That is a $3 million dollar increase and the
projections suggest that next fiscal year, healthcare costs will go up another 8.6%. Now when you put those
two, the 11% this year and the 8.6% next year together, that is roughly a 20% increase in healthcare costs. For
a City employee making $60,000.00 with a family plan, that is about a 10% increase in compensation Because
a family costs about $2,500.00 this year, so over a two year period you would see about a $5,000.00 increase,
hence nearly for a $60,000.00 employee | guess that is a 8% increase in compensation over two years. Fora
$50,000.00 employee a 10%.
This is a cost item that we have discussed quite a bit; we have discussed it in great detail at the time of the
budget last spring. We had Ms., Kleiner and the consultant for the City do a lengthy presentation to the Budget
Committee in October with a whole series of slides discussing all of the ins and outs of the healthcare problem
and making recommendations, all of which we are following in order to try and control costs. The problem with
a $6 million dollar increase in a single line item is that it puts a lot of pressure, not only on services but on taxes.
So $6 million dollars equates to 3% increase in the tax rate; the one line item. So we will struggle, we did
struggle last year and we will struggle, when | say last year — in our current budge. We will struggle next year in
terms of trying to meet that one additional cost plus all of the other costs that go up and pay employees and
meet all the City’s needs.
| have said that | don’t think, under these circumstances, while we are still in the midst of these rapidly rising
costs, that we should approve labor contracts for our employees, regardless of how good they are. They are
good, they work hard, but everybody in Nashua works hard, including those who pay the bills. | have said that |
don’t think we should approve contracts which include raises above the cost of living which is 2%; 2% a year.
Now | was approached just in the last couple of days by someone who said, “You are kidding me”. When the
City’s costs are going up as much as they are, 8%, 10% over two years, based on wages, you know for the
health care, you are willing to pay the cost of living, | think you should try to tell our hardworking employees that
we’ve just given them an 8% or 10% raise and try to save off the cost of living.
Well in my judgement we want to be fair to our employees, we want to make sure that they don’t lose against
the cost of living but while we are faced with this kind of cost increase, | don’t think it is unreasonable le to say
that should be what we would agree to. The trouble with the two contracts, first the Civilian Contract, it does two
things; it increases wages about 11 %%, 11 72% over four years with a whole series of 3% raises. And
something that we have discussed in great detail before, which | won’t get into too much now, but it still does
expand the sick leave buy out, for the first time, people will be, if they resign but don’t retire, for the first time
they will get paid sick time as long as they have a certain amount with the City.
The other contract raises wages again 3% a year for 4 years or 12% or 11 %%. Now the problem with raises
which go up more than the cost of living, year after year after year, if we had new revenue coming in which we
don’t really, or if we at least had a stable health care system, maybe we could afford that. But to approve these
contracts that have over the cost of living, year after year, long term contracts, we create a situation for
ourselves where the budgets for these departments are not sustainable. The only way we will be able to
maintain the budgets with the healthcare costs going up as much as they are and with wages going up more
than the cost of living at the same time, the only way you can sustain that is to either increase taxes or reduce
services or both.
| don’t think we want to create an unsustainable situation for the City, its employees, the people who rely on
services and the taxpayer. So | have suggested that the raises be limited to the cost of living, short term
contract we could do, there’s a lot of different things we could do but that’s what | recommend we do in terms of
the fiscal health of the City. The Police Department, of course, feels strongly that these raises should be
granted. | am looking for them to be a partner, to do more than just advocate for the Police Department and get
as much as they can but to be a partner in kind of helping to move the City forward. | hope they will reconsider
their position on all of this.
