Board of Aldermen 09-22-2020 Page 4
| wanted to mention, Madam President, the escrows which were reviewed by the Budget Committee last
night. The escrows are a process that we have gone through for decades. What we do is we generate
surplus in two ways. First of all revenue which exceeds the budget estimates, $4.5 million of that as | said
is being applied to the taxrate. The other way that surplus is generated is we work throughout the various
departments work throughout the year to save money and not spend everything that is appropriated. Asa
result, we have money thatis left over at the end of the year. And in the so-called escrow process that is
reappropriated to various needs that the City has. Again, this is money that we have already collected from
taxpayers which is being redirected.
The biggest items are really deposits into reserve accounts of various nature. The biggest being nearly
half the money would be directed to the Capital Equipment Reserve Fund which is the fund from which we
buy equipment. As you will recall, Madam President and Members of the Budget Committee and the whole
Board, we didn’t budget much for equipment for the Capital Equipment Reserve Fund during the regular
budget and over some years now we have been using money saved of these so-called escrows to deposit
into that reserve account. We've also got money going into the reserve accounts for City Buildings for
other uses that we could detail. And there was one amendment recommended by the Committee which |
expect that you will adopt and pass.
The issue came up last night, Madam President, of well why did this or was this considered by the
Committee one night before the final vote. And of course that’s something we wanted to think about and
we looked into wnat we’ve done in prior years. And what we found is that in prior years we have been able
to make the escrow proposals one meeting before we did this year, one Aldermanic Meeting. And this year
things were slower, really because of COVID-19. In order to figure out wnat your surplus is, you need to
have all of the bills that are provided by the vendors at the end of the year, the last month or so come to the
City and then paid and then all those bills reconciled so that you can come up with the final tally as to how
much money is left over.
Now sometimes the City does not receive — we are on accrual basis here — so sometimes the City does not
receive bills that were incurred say in June until late July or even early August. Then those have to be paid
and then the reconciliation has to be done by the Financial Department. This year some of the bills came
in more slowly. It was more difficult because people were working remotely so we were one meeting
slower. But | can guarantee you that, at least in the Mayor’s Office, as soon as we get the number we
proposed the escrows as soon as we could. Now you Madam President suggested thatwe should do it
earlier next year if we can and certainly this having happened, we will be glad to try to target the meeting in
August rather than the meeting in September to get this done. But this year we were significantly impacted
by COVID.
Now people on the Budget Committee asked, well could we have more time to consider this, this list of
escrows? We need to have the accounting done, the audit done by the end of the year, by December 31°
in a so-called CAFR prepared, that’s a financial report. We could wait another two weeks if you think that’s
really necessary. | mean it will make life more difficult for the accountants, it’s not ideal but given the impact
of COVID if you feel, you the majority of the Board feel you want to wait two weeks, it would cause a few
problems but would not be you know a disaster of any kind. So if you decide you want to wait two weeks
that would be alright under all of these circumstances. Again, we will keep this in mind next year and try to
make sure that we get it to you in August, one meeting earlier than we did this time. But again, really
COVID was what caused us the delay. And|am available to answer any questions regarding the escrows
and Mr. Griffin is on here as well if people have them. We talked through some of the issues with the
Budget Committee last night.
Of course we have the mask ordinance, Madam President, and! know that will engender a lot of
discussion but think it has helped protect us, us the community, the public members, all of our families,
our friends, our neighbors, from the spread of the virus. Nashua has had relatively few cases. | mean 900
but significantly less than the cities of similar size around us: Manchester, Lowell, Lawrence in part. |am
sure there are other factors, but that we have been quite careful about the public safety steps thatwe have
taken.
