Budget Review Committee

BUDGET REVIEW COMMITTEE MAY 11, 2015 A meeting of the Budget Review Committee was held Monday, May 11, 2015, at 7:23 p.m. in the Aldermanic Chamber. Alderman-at-Large David W. Deane, Chair, presided. Members of Committee present: Alderman-at-Large Lori Wilshire, Vice Chair Alderman Richard A. Dowd Alderman Ken Siegel Alderman David Schoneman Alderman Michael Soucy Alderwoman Pamela T. Brown Also in Attendance: Mayor Donnalee Lozeau Alderman-at-Large Brian S. McCarthy Alderman-at-Large Jim Donchess Mr. John L. Griffin, CFO/Comptroller Mr. Stephen Dookran, City Engineer PUBLIC COMMENT - None COMMUNICATIONS – None NEW BUSINESS – RESOLUTIONS R-15-137 Endorsers: Mayor Donnalee Lozeau Alderman June M. Caron Alderman Richard A. Dowd Alderman-at-Large Lori Wilshire Alderwoman Mary Ann Melizzi-Golja RELATIVE TO THE SUPPLEMENTAL APPROPRIATION OF $300,000 OF UNANTICIPATED REVENUE TO THE POLICE DEPARTMENT FOR THE PURPOSE OF PURCHASING A GENERATOR AND $200,000 OF WASTEWATER FUND UNRESTRICTED NET ASSETS TO THE WASTEWATER DEPARTMENT FOR THE PURPOSE OF FUNDING UNANTICIPATED COSTS ASSOCIATED WITH PLANT OPERATIONS MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE OF R-15-137 ON THE QUESTION Mayor Lozeau The legislation before you tonight is relatively obvious; $300,000 for the police generator and also $200,000 for wastewater. To begin with the police generator I would begin by saying that we have had some significant problems with it over the years which Captain Hammond can speak to. Suffice it to say that it is original to the building so its 36 years old. It has its limitations and we there are two things that are worth noting. One is that we are trying to apply for grants because the $300,000 is likely not enough for the generator. We anticipate it to be somewhere between $300,000 and $450,000. Most federal grants will require us to have a match. Sometimes they don’t fund us at the full request either way. In addition, should we not get the grant Budget Review – 5/11/15 Page 2 we will likely come in through the escrow process and try to make up the difference between the $300,000 and whatever the generator may cost? We needed to come in now for a couple of reasons. One is because we really can’t wait and two because we have room under the spending cap this year as long as we can appropriate the money. Next year for the 2106 budget I don’t anticipate that we will have a lot of room under the spending cap. As far as wastewater, Mr. Chairman, if you don’t mind maybe we can let the captain talk about the generator and take up wastewater later. Chairman Deane We all understand that generators are circa 1979 don't meet the capacity limit and things have changed and it’s obsolete. Now we are hearing that it’s going to be more than $300,000 and there’s another match and another possibility that it might have to come through escrow. My question has to do with wastewater. Is the wastewater overtime such an issue, Mr. Griffin? Mr. Griffin Yes. Chairman Deane What’s the current deficit of the wastewater running in the overtime line? Mr. Griffin Currently the wastewater overtime is $121,000 overspent. Chairman Deane For all of the open positons that we have in the line above it; line 11, what are we carrying for a surplus in there that could be moved to cover the overtime? There are some positions that have been vacant for quite some time. Mr. Griffin Right. Mayor Lozeau That’s another driver of the overtime. Chairman Deane But Mayor, if you move that down to the overtime line you could probably make up that $121,000? Mr. Griffin The expectation from the superintendent of wastewater is that there will be approximately $60,000 spent in the months of May and June to do a few things. One is to schedule maintenance and then work on any other projects that have manifested over the last several months. Budget Review – 5/11/15 Page 3 Chairman Deane My question doesn’t have to do with what they anticipate to spend money on, it has to do with what currently exists. Mr. Griffin Right and I can answer that with specificity. Currently in the 51 series salaries and wages, there’s $381,000 remaining as of last week’s payroll, taking approximately $40,000 with nine weeks to go in the fiscal year, that’s $360,000. Chairman Deane Is that with all current positions filled? Mr. Griffin No, that’s using the run rate of the weekly payroll of $40,000. Mayor Lozeau We have filled some positions now as well. Chairman Deane But that was last Thursday; I’m just trying to untangle some of this. Mr. Griffin The $360,000 remaining full-time payroll coupled with the $60,000 expected overtime spend for the two months yields a $39,000 deficit in total. My recommendation was that we put $100,000 towards that particular operation so it wouldn’t have to come back again and they have the ability to expend funds in the payroll lines to do the work that they would like to do. Chairman Deane Are there other areas in the budget that have funds contained within that could be used to cover the overtime line? Mr. Griffin The other part of the resolution is to appropriate $100,000 towards three studies and one potential legal obligation. The professional and technical services budget is virtually spent at this point. Chairman Deane What does the rest of the budget look like? Mayor Lozeau The rest of the wastewater budget? Budget Review – 5/11/15 Page 4 Chairman Deane Yes. My point Mayor is that if…I understand what you are doing but I think if you are going to replace a generator you should replace a generator. If you need $450,000, is that what you said it was? Mayor Lozeau We don’t know that, our best estimate right now is that’s the highest it will cost us. We are anticipating that the lowest it will cost us is $300,000. We have another $20,000 under the spending cap that we could move over but I was hoping that this would be sufficient. I understand what you are saying. Chairman Deane I’m struggling to see wastewater in dire straits. Mayor Lozeau We just wanted to appropriate funds that were already in the fund balance for that purpose that haven’t been appropriated, that’s all. If you are recommending that maybe we do less than $200,000 for that so that we can do $350,000 for the generator I can understand that conversation. Chairman Deane The generator wasn’t in CERF? Mayor Lozeau No, it was not but it would have been a good place to put it. Chairman Deane I think if we are going to do this we should fund the generator at what you are anticipating for a cost in its entirety and I am going to sit there and go through the wastewater budget and look at all of these problems. At the end of the day I don’t think wastewater is going to have any issues come year end but that’s just my feeling. I would take the $300,000 for the generator and put it to $450,000 so you know that you are going to be able to get something. Has it been sized to the building and sized to take care of the needs of the department? Captain Hammond We are presently doing that. We’ve got a meeting on Wednesday. I’ve been working with Justin Kates and we’ve got a proposal that’s been put out there and a contractor is coming in to spec it out to make sure we have the right amperage and the right coverage for the police department. Based on that we should be able to get some hard numbers coming in as to what it’s going to cost. Chairman Deane I think it’s essential that we have a generator for the police department of all places. Mayor Lozeau I agree. Budget Review – 5/11/15 Page 5 Alderman Siegel I’m a little bit confused because when I first saw the legislation I had a conversation with Chief Lavoie and he explained the obvious deficiencies and clearly they need a generator but I was under the impression that we had some actual costing. I thought that $300,000 would cover it so I’m worried that we don’t have enough money to cover that. The wastewater was a little bit unclear to me because again we do have those salary line items but I wouldn’t want to fall short so as you may have suggested, Mayor I certainly would like to be able to fund the generator purchase to the extent that we know we can buy it. Again, now I’m being asked to vote on something where the cost is uncertain. Like, let’s set aside a chunk of money even though we really don’t have a good idea of what it is that we are ultimately going to buy. I’m all for getting the generator replaced but I’d like to know what it is that we are buying. Captain Hammond We are going to end up getting something in the range of a 400KW generator. The generator that we have currently is only a 275KW. As I am sure the chief has explained; it doesn’t do our HVAC or any of that other stuff. If we lose it, we lose all radio communications and booking area. We are anticipating getting a generator large enough to supply the needs of the police department and going up to that size all we can say is that we’ve had companies tell us that it’s in the range of $350,000. So without going out to bid on it or having an electrical engineer come in here and really specify what our needs are and our amperage, we are not going to have a hard number. Alderman Siegel So what we are basically doing is setting aside a slot that says here’s the amount of money that we are going to allow for this, we don’t have to spend it all hopefully. It’s just an allowance so that when you do spec it you are getting a generator that’s going to solve the problem. Captain Hammond That’s correct. Chairman Deane We are going to have an anticipated maintenance overtime cost at wastewater for two months at $60,000. Mr. Griffin Correct. Chairman Deane Whatever the majority of the committee wants to do – if we took wastewater and put the $60,000 towards that purpose and then took the $440,000 and put it towards the police generator that would probably help us cover the cost of the generator and plus wastewater would…and then there other $100,000 that they needed for other purposes they could maybe find within their operating budget for the three studies. That way we’d be assured that…and then if the monies weren’t needed for the generator I guess we could redirect that purpose. Mayor Lozeau I would agree. Also, if we are successful in a grant that money could come back to the city as well. Budget Review – 5/11/15 Page 6 Chairman Deane Yup, so we can flip it but that way we are guaranteed that we will have the money in there for the generator and we will trust the diligence of the police department when it comes to the Finance Committee. Alderman Donchess Shouldn’t these issues been divided into two different resolutions because they are totally different subjects? You could have different groups of people that are for or against two different things. Mayor Lozeau We were looking at the two issues and we were looking at what our restrictions were with how much money that we had under the spending cap and we just decided if we brought it in and said this is how much money we have under the spending cap and these are the two things that we anticipate having problems with and now is a good time to increase that; that’s why we did it. I don’t disagree with what the Chairman is proposing to divide it up that way and look closer at wastewater. As long as we can continue with the maintenance we need at wastewater and putting the money aside for the generator I think will have better pricing if they know that we have the funds available to make it happen. Alderman Donchess Why has so much extra overtime been generated at the wastewater treatment plant? Mayor Lozeau The shear amount of work that’s been taken place at wastewater, as you recall, back in October or November we were dealing with issues surrounding concerns that D.E.S. had with us. While we were always in compliance we did have some deficiencies that they were concerned about so we’ve had to work on doing that. We’ve also had vacancies in staff so in order to fill those vacancies we’ve used overtime. Some of the police, fire, or any other department; when you have to have someone working the third shift or the second shift or whatever the case may be it’s been a significant challenge and because we had the funds available but they haven’t been appropriated we thought it would be reasonable to come in and ask for that. I don’t disagree that the $60,000 might get us through what we need to for maintenance and maybe we pay for a couple of these reports as we go onto the new fiscal year instead of currently. I think this is a workable solution to accomplish both tasks. Alderman Donchess I think when Mr. Griffin was explaining part of this he mentioned that some of the $200,000 is needed for some kind of legal liability. Could you please elaborate on that? Mr. Griffin $15,000 was earmarked for legal representation associated with the EPA permit. Mayor Lozeau We had mentioned that we were appealing their requirements. Alderman Donchess Is there any progress or any news on the EPA appeal? Budget Review – 5/11/15 Page 7 Mayor Lozeau We are meeting with the EPA next week I believe. We are going to have a conversation and maybe we’ll save some legal expenses. Alderman Siegel I like the idea of shuffling the money around but the problem is the funding sources are a little skewed at this point to shuffle them around. I mean $300,000 was the amount that was going to go to that generator and that was from unanticipated revenue from motor vehicle registration so if we wanted to put a $140,000 more into that that the other money was coming from the wastewater fund in restricted net assets. Mayor Lozeau I believe that the unanticipated revenue from motor vehicles would be enough to cover that full amount. Alderman Siegel So if we amended this legislation to change that $300,000 to $440,000 then we would have enough money. Mayor Lozeau The same funding source. Alderman Siegel And then we could also make an amendment to reduce the $200,000 to $60,000 and apply it strictly to the overtime. Mayor Lozeau Right, from the same funding source for wastewater. Alderman Schoneman I have a question about the funding and how it affects the spending cap. This is a supplemental appropriation for FY 15’, is that correct? Mr. Griffin That’s correct. Alderman Schoneman So if we do this and appropriate $500,000 into 2015, what is the effect on the spendable amount of money for 2016? Mr. Griffin It increases the base budget moving into FY 16’. Budget Review – 5/11/15 Page 8 Alderman Schoneman So it means that we will be allowed to spend $500,000 more in FY 16’ plus 1.5% of $500,000, is that correct? Mr. Griffin Correct. Alderman Schoneman I’m concerned about doing things that inflate what we are allowed to spend in 2016. I understand the rationale for the generator. I don’t like that that’s a consequence. I think that if we are ever going to manage a budget then we need to manage it and not do things whether they are intentional or not to inflate that base number. Alderman Siegel With regard to Alderman Schoneman’s comments, whatever the number is a hurdle or a metric that’s there, it doesn’t mean we have to meet it. That happened last year, I believe we were $550,000+ under. We took the budget that was given to us and we knocked it down and reorganized priorities. I think you should view them as separate issues. Do we need the items that are in this legislation, I think certainly the generator is for sure and then secondly what would happen if we are given more space. Well, we spend money wisely when review the budget; we don’t have to take the space if we don’t feel it’s appropriate. I really think that this is something that we should do. Not because oh good now we have more space under the cap, that’s a side effect; we should do it because we don’t want our communication system to go down at the police department and they can’t repair the generator they have right now and that’s a big problem. Alderman Schoneman I understand the argument completely but I don’t like that it’s an unintended consequence is all I am saying. I know there was a shortfall on the police department’s current funding in the regular budget, how are we doing on that? Mr. Griffin The police department is still managing their overtime to the best extent possible. We’ve kept track of that, myself and Ms. Smith who is the business manager. They will be coming close on the combination of the surpluses in electricity and gasoline and the overtime cost. They had a half of million number on January 1st and that’s an awful lot to make up in six months so they are doing the level best that they can but the expectation is that the bottom line of the police department budget will be zero. Alderman Donchess Is it appropriate to comment on the police overtime issue? Chairman Deane Why don’t we just deal with the legislation, I don’t want to get off the beaten path. MOTION BY ALDERMAN WILSHIRE TO AMEND RESOLUTION 15-137 TO CHANGE THE $300,000 TO $440,000 IN THE TITLE AND IN THE BODY FOR THE GENERATOR FOR THE POLICE DEPARTMENT AND TO CHANGE THE $200,000 TO $60,000 FOR THE WASTEWATER DEPARTMENT Budget Review – 5/11/15 Page 9 ON THE QUESTION Chairman Deane Out of that we would strike that $100,000 that would be appropriated for department 169 and make that $60 and then get rid of – right after the word related costs, we’d remove “and $100,000 would be appropriated to department 169, wastewater; accounting classification 53, professional and technical services we will remove that as well. MOTION CARRIED MOTION BY ALDERMAN WILSHIRE FOR FINAL PASSAGE AS AMENDED MOTION CARRIED Chairman Deane Mayor, the resolution will appear tomorrow evening on our agenda. Mr. Griffin, are we going to get the budget resolution any earlier? Are we going to get that tomorrow during the day maybe? What about the budget books? Mr. Griffin Tomorrow. Chairman Deane When you get your numbers in, I know that they have to go to the Mayor and finance but could you please drop me an e-mail and let me know where we are with numbers on the generator just so I can let the committee know. R-15-140 Endorsers: Mayor Donnalee Lozeau Alderman Richard A. Dowd Alderman-at-Large Jim Donchess Alderman-at-Large Brian S. McCarthy Alderman Sean M. McGuinness Alderman-at-Large Lori Wilshire AUTHORIZING THE MAYOR AND CITY TREASURER TO ISSUE BONDS NOT TO EXCEED THE AMOUNT OF FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) FOR ROAD AND TRAFFIC IMPROVEMENTS ON AMHERST STREET BETWEEN CHARRON AVENUE AND DIESEL ROAD MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE ON THE QUESTION Alderman Dowd I just want to say that there’s been a lot of discussion and negotiation with the private entities up there to get the amount of money that we have and with this we will be able to resolve a major issue on Amherst Street at half the cost to the city. Budget Review – 5/11/15 Page 10 Alderman Schoneman When it comes to issuing bonds I am often opposed but I am not in this case. I go through this intersection frequently and it’s very difficult to get through and secondly I think this will benefit a large number of citizens in Nashua and people that come into Nashua. Given the broad base of benefit I will support this. MOTION CARRIED R-15-141 Endorsers:Mayor Donnalee Lozeau Alderman Richard A. Dowd Alderman-at-Large Jim Donchess Alderman Sean M. McGuinness Alderman-at-Large Brian S. McCarthy Alderman June M. Caron Alderman-at-Large Lori Wilshire RELATIVE TO THE ACCEPTANCE AND APPROPRIATION OF $550,000 FROM THREE PROPERTY OWNERS AS CONTRIBUTIONS TOWARD THE ROAD AND TRAFFIC IMPROVEMENTS ON AMHERST STREET BETWEEN CHARRON AVENUE AND DIESEL ROAD MOTION BY ALDERMAN SIEGEL TO AMEND BY REPLACING R-15-141 IN ITS ENTIRETY BY THE COPY THAT MAYOR LOZEAU HANDED OUT TO US THIS EVENING MOTION CARRIED MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE AS AMENDED ON THE QUESTION Alderman Schoneman As this relates to the project overall, what happens if this project comes in more expensive than anticipated? Are we going to maintain this percentage balance between private investment and city funds or will it be more by the city? How will that work? Chairman Deane I’m sure these fine folks will pony up a little bit more money, right Mayor? Mayor Lozeau The group of individuals that we have been working with understand that should there be more cost associated with that that they will have the responsibility there. We also did not touch any of the Amherst Corridor funds; there’s $128,000 in that fund. We are hoping not to have to use that on this project because we would really like to be able to have that money available for other locations on Amherst Street where we may have other challenges but it would be something that we’d have to discuss. I have some confidence with the city engineer and the group bringing it to full design that we might be able to some value engineering that may help us. The expectation of costs that was at the 1.1% made it were based on snow conditions when they went out there so we are hopeful that they find the conditions should not actually exceed the 1.1% but stranger things have happened. Chairman Deane Is there another expendable trust fund, is the Amherst Street Mitigation Fund; is there an Amherst Street Corridor Fund too? Budget Review – 5/11/15 Page 11 Mayor Lozeau No, it’s the same. Chairman Deane So it’s traffic mitigation, it’s not a corridor fund? Mayor Lozeau Well, I think we’ve changed it to corridor funds. Chairman Deane Was it changed legislatively or was it changed administratively, there’s a big difference. Mayor Lozeau I agree, I think the legislation creates traffic mitigation. I think when staff talks about it they talk about it in corridors. So sidewalks have a different name to the fund than roads do. Chairman Deane So the money should be used on Amherst Street. Mayor Lozeau It has to be used on Amherst Street. The money I am referring to is the Amherst Street funds. So if you need something on West Hollis Street you can’t have it from these funds. Chairman Deane Okay so it’s going to be used on a street named Amherst Street. Mayor Lozeau That’s correct. Alderman Siegel There’s no expendable trust fund associated with this, it just says that we are going to take this money so when it shows up on a budgetary line item, where does it show up? Mayor Lozeau It will show up in a capital project line that financial services creates when we do projects, it will go directly to that. MOTION CARRIED UNFINISHED BUSINESS – None NEW BUSINESS – ORDINANCES – None Budget Review – 5/11/15 Page 12 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 GENERAL DISCUSSION Alderwoman Brown I would like to thank the three businesses, 270 Amherst Street, LLC, the Nelson Family LLC and Anshop Acquisition LLC for contributing for this project. What a perfect example of public/private partnership, we appreciate it, thank you. Alderman Dowd I would echo that. There’s been a lot of meetings and work and I think the ultimate major winner of this is the City of Nashua. PUBLIC COMMENT Mr. Brian Lahey, Sacks & Partners, LLC. We are the owners of 270 Amherst Street and we want to thank the Board for their help in pursuing this and the Aldermen that contributed to the negotiations. When we started this off with the city it was a cooperative effort. The city, ourselves and the Whole Foods Plaza contributed towards a traffic report that brought this all about and it’s been a great group to work with and I think it’s worked out quite well for everybody. We appreciate all of the assistance. Chairman Deane You still have a couple of hurdles to go yet. The full Board has to approve this, it needs ten votes and then the Mayor has the opportunity to veto it if she cares to do so. REMARKS BY THE ALDERMEN - None POSSIBLE NON-PUBLIC SESSION ADJOURNMENT MOTION BY ALDERMAN WILSHIRE TO ADJOURN MOTION CARRIED The meeting was declared closed at 7:57 p.m. Alderman Ken Siegel Committee Clerk