Budget Review Committee

BUDGET REVIEW COMMITTEE MARCH 30, 2015 A meeting of the Budget Review Committee was held Monday, March 30, 2015, at 7:04 p.m. in the Aldermanic Chamber. Alderman-at-Large David W. Deane, Chair, presided. Members of Committee present: Alderwoman Pamela T. Brown Alderman Ken Siegel Alderman David Schoneman Alderman Michael Soucy Members not in Attendance: Alderman-at-Large Lori Wilshire, Vice Chair Alderman Richard A. Dowd Also in Attendance: Alderman June M. Caron (Arrived at 7:15 p.m.) Mr. Bill Baukus, President Board of Director’s – Nashua Senior Center PUBLIC COMMENT - None COMMUNICATIONS MOTION BY ALDERMAN SIEGEL THAT THE RULES BE SO FAR SUSPENDED AS TO ALLOW FOR THE INTRODUCTION OF COMMUNICATIONS RECEIVED AFTER THE AGENDA WAS PREPARED MOTION CARRIED From: Sarah Marchant, Director of Community Development Re: R-15-118 MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED From: Alderman June M. Caron Re: R-14-099 MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED UNFINISHED BUSINESS – None NEW BUSINESS – RESOLUTIONS R-15-118 Endorser: Mayor Donnalee Lozeau Alderman Richard A. Dowd Alderwoman Pamela T. Brown RELATIVE TO AN EXPENDITURE FROM THE WATERWAYS AND WATER BODIES EXPENDABLE TRUST FUND IN AN AMOUNT NOT TO EXCEED $50,000 FOR INSPECTION AND ECONOMIC EVALUATION SERVICES RELATED TO THE MINE FALLS DAM MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE R-15-118 Budget Review – 3/30/15 Page 2 ON THE QUESTION Alderman Schoneman I know the prime sponsor of this is not here but this is a study just to take a look at this dam and see what kind of shape it is in so we can make an informed decision as to whether or not we want to purchase the dam. That study would include the economic benefit of owning the dam, is that correct? Chairman Deane It’s a complete and thorough inspection of the Mine Falls Dam structure and supporting facilities and to provide an economic evaluation of the purchase and operations of the facility. Alderman Schoneman On the back of R-15-118 it says “the team evaluating the operation of the dams recommends using an amount not-to-exceed $50,000.” Who is on the team? Chairman Deane I have no idea. Alderwoman Brown I would suspect that it’s under Sarah Marchant. Chairman Deane I would agree with you but a team usually consists of more than one person. Alderwoman Brown That’s what I said, part of the individuals that are under her. Chairman Deane Well, sometimes the Mayor appoints people. Alderman Siegel I am speculating here but going on the discussion that we had regarding the previous dam contract, I would suspect that Mr. Galligani is on that team since he was involved with the previous dam contract. I suspect that Mr. Griffin will have some involvement and probably Ms. Marchant as well. Chairman Deane We also have the attorney’s. They were working on the contracts on another issue. We have speculation and that’s the best that we can do. Budget Review – 3/30/15 Page 3 Alderman Schoneman I don’t mind that at all, I think that’s fine. My guess is and I think we have to be careful moving forward whenever we get a study back because my anticipation is that the team, as described, is probably wanting to buy the dam and perhaps they are hoping to get a study that is favorable to that position. Whatever study comes back I think we need to make sure that we look at it very carefully and make sure that it is objectively true and makes a good objective case, not just a subjective case. Chairman Deane I agree. Alderman Soucy Who currently owns that dam right now, I thought we had purchased it. Chairman Deane It’s leased. Alderman Soucy It is my understanding that they are going to walk away from that lease? Chairman Deane It’s the Mine Falls Limited Partnership and in the mid-80’s the city entered into contract with this group and in the contract the city has opportunities to purchase the facility and pre-specify timeframes at pre-determined prices. This fall the city has the most attractive opportunity to purchase the property for approximately $3,350,000 or 50% of the original construction cost. Alderman Soucy Who are we leasing it from right now? Chairman Deane We are not leasing it, it was constructed and now we have this opportunity to purchase it back as the contract that was in place in the 80’s states. Alderman Siegel I believe we are leasing it from Mine Falls Limited Partners. We have the opportunity to purchase it and I think we also have the opportunity to extend the lease but that second thing is speculative on my part. In any case, the legislation calls for an investigation to what the value of the property is and the economic benefits so I think it’s more than prudent to do this considering that we are talking about $3.5 million dollar investment should the city choose to exercise its option. MOTION CARRIED Budget Review – 3/30/15 Page 4 R-15-121 Endorser: Alderman Michael Soucy Alderman-at-Large Brian S. McCarthy Alderman-at-Large Lori Wilshire Alderwoman Mary Ann Melizzi-Golja Alderman Richard A. Dowd CREATING A SPECIAL REVENUE FUND FOR FIRE TRAINING FACILITY RENTAL FEES MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE R-15-121 ON THE QUESTION Alderman Schoneman I want to make sure I understand the source of the funds that are going into the special revenue fund. I’m not quite clear on the rentals. Where is the money coming from? Chief Morrissey Last fall we accepted a federal grant to purchase of fire training prop, a burn facility that looks like Conex boxes, about five of them that get stacked and put together. The funds for the prop came from Homeland Security. When we enter these things, there’s about eight of them in New England and they are generally used with our mutual aid partners in neighboring communities. When they come in here, in order to help us offset the cost of running the prop year over year; there are parts like the windows, the doors, the control board, the gas and electricity – so when our mutual aid partners come in sometimes we will get in kind like they may buy a hose or a window or a door to put into it. To meet all of the pieces of the grant we have to show that we are going to be able to maintain this thing over the anticipated life. We have legislation that enables us to take in money from area communities. You may call it a rental but they will come in potentially, like maybe Hudson will come in during the week or Merrimack or Hollis. Depending on how much they use it and the gas cost they might have to physically write us a check. The prop costs about $450,000 so when the Feds send you all of this paperwork we have to show that we would be able to sustain it with help from our neighbors. MOTION CARRIED NEW BUSINESS – ORDINANCES – None TABLED IN COMMITTEE R-14-046 Endorser: Alderman-at-Large Brian S. McCarthy AMENDING THE PURPOSE OF A FISCAL YEAR 2014 ESCROW FOR THE ECONOMIC DEVELOPMENT DEPARTMENT  Tabled – 6/30/14 MOTION BY ALDERMAN DEANE TO TAKE FROM THE TABLE R-14-099 MOTION CARRIED Budget Review – 3/30/15 Page 5 R-14-099 Endorsers: Alderman-at-Large David W. Deane Alderman June M. Caron Alderman-at-Large Lori Wilshire Alderwoman Pamela T. Brown Alderwoman Mary Ann Melizzi-Golja Alderman-at-Large Jim Donchess Alderman-at-Large Diane Sheehan Alderman Paul M. Chasse, Jr. RELATIVE TO THE TRANSFER OF $55,284 FROM DEPARTMENT 194, ACCOUNTING CLASSIFICATION 70 – CONTINGENCY INTO DEPARTMENT 109 – CIVIC & COMMUNITY ACTIVITIES, ACCOUNTING CLASSIFICATION 56 – OUTSIDE AGENCIES FOR THE PURPOSE OF DONATING TO THE NASHUA ASSOCIATION FOR THE ELDERLY  Tabled – 2/18/15 Chairman Deane I had met with Alderman Caron and we had looked at a sum total. This legislation has been tabled since the February 18, 2015. Alderman Caron As you know, the senior center has had some issues and President Deane, myself and others sponsored R- 14-099 to help the senior center with some of those issues. We went back and looked at the numbers of what we needed. I was waiting for the final balance for 2014 in order to work from that. They had a loss in 2014 of about $15,000 and then the other thing is that there is some general maintenance that hasn’t been done within the senior center building like the front entrance, the floors and carpeting needs to be cleaned, the kitchen area which is used by Meals on Wheels has not had a real general maintenance cleaning. We decided that $10,000 would cover that. We are also looking at a new tenant that may be utilizing one of the office spaces so we are looking to repaint that. The final amount is the unassigned restricted reserve. We didn’t know what to call it but we thought we’d ask for $10,000 to put aside so that they do not use; they have a line of credit that they can use for emergencies that they have to pay back but we felt that instead of them using that they could use this but it has to be restricted and it has to be for a real emergency. The Board of Director’s would have to approve it for our Treasurer to do that. The total out of that legislation is for $35,000. I did ask the Bill Baukus, President of the Board of Director’s to stop by to speak about the senior center because we don’t want you to think that the senior center is not doing its due diligence. They are working really hard. Mr. Bill Baukus, President of the Board of Director’s – Nashua Senior Center The senior center is very appreciative of your potential contribution but we are also acting independently, we don’t just wait for the city to give us money. In the past year we have done a number of things. First of all, we have elected a new Board of Director’s which has been very effective for us and we are growing as well from a standpoint of by-laws. There was a controversy last year about membership rules and by-laws and we have resolved that effectively without having to spend any money so we now have a new set of by-laws in place that allows us to run the senior center in an effective manner. The other thing that we are doing is that we are growing financially and spending time and effort to create events that allows the senior center to make some money. You might be most familiar with an event called Fire & Fusion. That is our flagship event this year and it will be held on May 6th at Alpine Grove and it’s a local chef’s competition where they are given mystery ingredients and asked to come up with an interesting presentation. I want you to know that at this point in time that even is totally sold out. We have about $78,000 of income in our budget that we expect to get and this Budget Review – 3/30/15 Page 6 will cover about $20,000 of it. We are doing quite well in terms of programs that allow the center to make money. Just this last Saturday there was the flea market and it was reasonably well attended even though the weather was not that good. Obviously the senior center and the city are closely connected in terms of wanting to take good care of our seniors so we thank you for whatever support you can give us. Alderman Caron We think that this will help the center, the staff and the members feel like they are moving in the right direction. The building does belong to the city and I know how many times we have talked about our buildings not being maintained. It’s very difficult when you have to choose between trying to run a program and paying an instructor or trying to get the floors really clean. We felt that this was a good amount of money; it will help them to get out of the red and get them on their feet. I know that they will appreciate whatever we can get from the city. As I told them before, the senior center does not belong under the city but we certainly can work to help them to keep them going because our seniors are a vital part of our community and we are all getting older, me especially. Alderman Soucy I am going to support this resolution but I do have a couple of questions. For the 2014 loss of $15,000, is this the first year that you have operated at a loss? Mr. Baukus No, we have operated at a loss for every year that the center has been in existence. Alderman Soucy Approximately how much, is it about the same every year? Mr. Baukus No, this has probably been the smallest amount of loss. In the past it has varied. It’s gone as high as $20,000 to $30,000 and as low as $7,000. Alderman Soucy Is there one significant contributing factor for the loss? Mr. Baukus It is a combination of things but basically it’s the operating cost that really kills us on a daily basis. Alderman Soucy What have you done in the past to cover your losses? Mr. Baukus We have a fund that was put in place and it is an annuity type of fund. We have been taking from the principle of that fund to pay down our loss. As president I have decided that we are not going to do that anymore Budget Review – 3/30/15 Page 7 because it’s self-defeating in the long run so we do need a source of income to cover potential losses. Alderman Soucy Do you anticipate that you will be running about even next year? Mr. Baukus With your help, if we can start with a zero sum I believe that we will end at a zero sum or maybe even in the black. We are doing quite well this year. Our membership seems to be increasing a little bit, we have a pretty active Board and we are actively recruiting members. Right now we 10 Board members and my goal is to have 15 by the end of the year and we are going out to the city to get city leaders to help us. Alderman Siegel I appreciate that there is a new president of the Board and I thank you for stepping up to the plate. That was one of my principle objections originally. I think that the new leadership is clearly doing a much better job. I’m definitely going to support this; I am very much in favor of supporting the seniors. Alderman Schoneman I will support this as well but I have a couple of questions. What is your overall budget for the year? Mr. Baukus It’s about $300,000. Alderman Schoneman When you mentioned $78,000, what was that amount for? Mr. Baukus The $78,000, it’s likely lower than that but it’s an amount that we put into a category that we would call program input and that’s the amount of money that we would bring in from events such as the Fire & Fusion, the arts sales and other things other than our standard activities such as trips and instruction. Alderman Schoneman Is that $78,000 value higher than it’s been in years past? Mr. Baukus I’m not sure I have an answer to that question. I can check and get back to you but it’s probably about the same, if anything, maybe slightly higher. Alderman Schoneman If you expect to possibly end up in the black this year, what is the difference that is accounting for that? Budget Review – 3/30/15 Page 8 Mr. Baukus More than anything else it is effective management and being able to conduct the center appropriately given the personnel that we have. We did have sort of a left handed improvement this year in that we lost our executive director and the person that is taking over that position is operating at a lower salary. That is a difference of about $20,000 and that made a significant difference in the center’s bottom line. Alderman Schoneman How many paid positions do you have? Mr. Baukus Two and a half. Alderman Siegel Are we going to amend the legislation to reflect this new amount? Chairman Deane Yes, I have a figure here. Alderwoman Brown I want to thank Mr. Baukus and Alderman Caron for putting this together. I thoroughly support our seniors and I’m a member too. Chairman Deane Just so we all understand this, this unassigned restricted reserve dollars, do we all understand what that is all about? Mr. Baukus Do you mean the amount of money you are going to be giving us? Chairman Deane The loss covers, that’s going to go back into that account that you tapped into that we shouldn’t be doing. That account doesn’t really have any revenue stream so every time you tap into whatever you got for interest on it, which is probably next to nothing, you just keep reducing that balance. The general maintenance – I don’t run the place and it’s up to the Board to figure it out but I can tell you this much, if you need some help walking through that place, I can point out some things that I’d love to see done. We can start with the floors. I’d like to have the lighting looked at and the carpets cleaned. Alderman Caron I would feel about them going back to the request they made to Review and Comment. I don’t know what the funding is but they did put in for some cleaning of the facility and those are the numbers that I worked with. I Budget Review – 3/30/15 Page 9 don’t know what Review and Comment is giving them but that is what they should work with for the general maintenance of the building which I think was steam cleaning of the kitchen, the carpets and a room upstairs. Whatever that $10,000 can do that’s what they should do first and if they have anything left over they can look at the lighting in the hallway. Mr. Baukus Our intention of using the funds is to first of all pay down our loss and once we get to the zero sum then we will judicially use the rest of it. Chairman Deane The $15,000 was for that purpose from 2014. The $10,000 when we looked at the floors, the carpets, some lighting repair – I don’t know what they are doing for a fit-up for a building for a tenant in there but if this $10,000 wasn’t here what would they be using for that? Was there money set aside for painting that room? Alderman Caron No, I am just saying that they are looking at someone coming in so obviously if they have a little money then they probably could paint it. Chairman Deane We as a city own that building and our senior population uses it for $1.00 per year which is great. Now is the time to get it cleaned up. Alderman Caron The other thing is that $10,000 is that restricted reserve that has to be put aside and not to be used except for… Mr. Baukus We need to make sure that our financial person knows where the money needs to be and be appropriately budgeted. Chairman Deane That fund to me is a doomsday fund. Look a little harder, work a little harder. It’s there in case something becomes unglued then it is there to help you. Mr. Baukus We have a pretty frugal treasurer. We just recently got our line of credit through the Triangle Credit Union which allows us to make sure that we are cash liquid as the need be. Before when we ran out of cash we stole from accounts that we probably shouldn’t have been stealing from. Budget Review – 3/30/15 Page 10 Chairman Deane We don’t want to do that again. Mr. Baukus No, we can’t do that. MOTION BY ALDERMAN DEANE TO AMEND BY REDUCING THE AMOUNT BY $20,284 MOTION CARRIED MOTION BY ALDERMAN DEANE TO RECOMMEND FINAL PASSAGE AS AMENDED MOTION CARRIED GENERAL DISCUSSION - None PUBLIC COMMENT - None REMARKS BY THE ALDERMEN - None POSSIBLE NON-PUBLIC SESSION - None ADJOURNMENT MOTION BY ALDERMAN SOUCY TO ADJOURN MOTION CARRIED The meeting was declared closed at 7:36 p.m. Alderman Ken Siegel Committee Clerk