Finance Committee

REPORT OF THE FINANCE COMMITTEE APRIL 15, 2015 A meeting of the Finance Committee was held on Wednesday, April 15, 2015, at 7:00 p.m. in the Aldermanic Chamber. Mayor Donnalee Lozeau, Chair, presided. Members of the Committee present: Alderman-at-Large Daniel T. Moriarty, Vice Chair Alderman-at-Large David W. Deane Alderman Ken Siegel Alderman Paul M. Chasse, Jr. Alderman-at-Large Jim Donchess Alderwoman Pamela T. Brown Also in Attendance: Mr. Dan Kooken, Purchasing Manager Attorney Stephen M. Bennett Mayor Lozeau I would like to take a moment to introduce you to the new Purchasing Manager, Mr. Dan Kooken. Please tell the committee a little bit about yourself. Mr. Kooken I have been in procurement/purchasing materials management for a long time. I’ll limit it to 30 years. Most recently I was with School Specialty who many of you may know as Delta Education out on Northwest Blvd. I am very pleased to be here and I’ve been very warmly welcomed and I’m really looking forward to getting into the public sector as opposed to the private sector. It’s a lot different but I am making adjustments quickly. On a personal note I have been in New Hampshire for the last 10 years but prior to that I have spent most of my life in Ohio. My wife lives out here and works locally and I have four children and three grandchildren who are all out in Ohio so we occasionally make quick trips back there. I am very happy to be here and I’m looking forward to working here. There are good people in place and I’m kind of a continuous improvement guy, I think you can always do a little bit better than what you did the day before so that’s what we are looking to do; to do those kinds of improvements incrementally and try to take advantage of some big opportunities. Mayor Lozeau Thank you, Mr. Kooken. 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 Finance – 04/15/15 Page 2 From: Stephen M. Bennett, Corporation Counsel Re: Broad Street Parkway – Outside Counsel MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE THE CITY TO RETAIN ATTORNEY SPINELLA FOR AN AMOUNT NOT-TO-EXCEED $50,000 PLUS EXPENSES. FUNDS ARE AVAILABLE IN DEPARTMENT 160, PUBLIC WORKS ADMINISTRATION/ ENGINEERING; CAPITAL PROJECTS FUND; BROAD STREET PARKWAY MOTION CARRIED From: Mayor Donnalee Lozeau Re: Outside Counsel for Appeal of Final NPDES Permit (Wastewater) MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE ON THE QUESTION Alderman Donchess Are you asking for approval here or are you just informing us? Mayor Lozeau I am informing you. We had to actually to approve it in time to get our appeal in under the deadline. Alderman Donchess Are you able to quantify what the potential liability is if the EPA’s current position is sustained on this appeal? Mayor Lozeau We believe it to be very significant. It will be standards higher than any other community in the state. We think that the cost could be upwards of $1 million or better depending on how it moves forward and how they expect us to carry it out. Alderman Donchess Why do you think that there’s being holding us to a different standard. Mayor Lozeau It’s a strange thing, we’ve been operating under a temporary permit since 2005 and apparently we they have given us certain requirements that they want. The division has responded to them with their concerns and we’ve not heard back from them until recently. We have learned that they did a similar thing to Manchester and Manchester appealed and was successful. I think that some of it is just the way that you want to go. The EPA wants to go in the future for the environment in general. The problem is that I don’t think municipalities can ramp something up to the levels that they are looking for and be able to manage it. Alderman Donchess Who are we appealing to? Finance – 04/15/15 Page 3 Mayor Lozeau Attorney Bennett, would you please join us. Attorney Bennett There is an appeal procedure set forth. When the final permit came in, which was on March 12th; along with that as the Mayor indicated, we had made comments in the past, I had put out a proposed permit back in November of 2013. When that came in the city had an opportunity to respond to their concerns about some of the increased levels of regulations. There are a number of substances that we hadn’t been required to regulate before. The have added some substances and they have increased levels. Phosphorus is one of the substances that the permit has increased the level on. We made our comments; March 12 th the final permit comes in and that’s when they responded to our comments from 2013. They waited until then, they give you the final permit; they don’t discuss anything with you, they just give it to you and then you have 30 days from the date that you received it to make your arguments to the Appeals Board of the United States Environmental Protection Agency and it’ Region 1 so I believe they are down in Boston. The appeal would go to them. It may be merely on the appeals filed or they can, at their discretion, have an actual hearing on it. We won’t know that until they have had a chance to review the appeal which went in only on Monday which was the deadline. Alderman Donchess What happens in the interim? Are we under the old standards under the temporary permit or under the new standards that the EPA has suggested? Mayor Lozeau We are under the existing temporary permit. We had somebody that we hired from March 12th to look at the final permit that was brought in and lay out for us what the concerns were and what the potential liability is. Alderman Donchess How long do you think the appeals process will take? Attorney Bennett I was unable to find any of that in the literature. We can get that information from the counsel we have hired. There are two counselors; as you can see there is one local counsel and one out of Washington, D.C. Attorney Hall was retained at the advice of New Hampshire Counsel because he had just successfully fought an appeal on the 8th Circuit of the U.S. Court of Appeals on some of these same issues so he was right up on it. We had a relatively short period of time. When the permit came back, the first thing that happened was that we gave it to our wastewater consultants. They have to go through it and find out exactly what the impact is going to be. By the time they get through that process we had about a week or ten days actually to get counsel on this and get this prepared so it was a very small window of opportunity to make the appeal and if you miss any issues then you’ve lost them so you have to really address every issue. Alderman Deane Was there any communications from Wastewater about this? Attorney Bennett In what form? Finance – 04/15/15 Page 4 Alderman Deane Whose attention were the deficiencies brought to? Mayor Lozeau There are no deficiencies. Alderman Deane Well, they want to change our levels of discharge in certain areas, is that correct? Mayor Lozeau There is a whole host of things where they are changing the regulations and the standards; we are not the only community where that has happened. That started in 2005. Alderman Deane But when you look at what’s north of us, those regulations like Manchester, for instance, isn’t subjected to those regulations like they are trying to subject us to. Mayor Lozeau That’s correct but that’s because they appealed and they were successful. They had that same final permit that we got that raised the standards. Alderman Deane Was there a list of supposed deficiencies or let me re-word that, a list of improvements that would have to be made to satisfy the new requirements of discharge? Mayor Lozeau Yes and if you would like to see them I would be happy to send it to you. Alderman Deane I’d like to see a copy of that. I am going to support doing this. If we are looking long-term and what we are being subjected to as a community; our treatment plant is never going to go away so if we are subjected to this and we are not successful in getting some of the items repealed we are going to end up shouldering the brunt of that cost in perpetuity. I think we should be trying to get it repealed, absolutely! Mayor Lozeau I’ll make sure we provide that list to you. MOTION CARRIED Finance – 04/15/15 Page 5 From: John L. Griffin, Chief Financial Officer Re: Independent Appraisals for 5 Properties – Owner Manukian Abatement Appeals Requested by Assessing Department (Value: $15,000) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE OF APPRAISALS FROM J. CHET ROGERS, MAI, IN AN AMOUNT NOT-TO-EXCEED $15,000. FUNDS ARE AVAILABLE IN DEPARTMENT 132, ASSESSING; OVERLAY FUND ON THE QUESTION Mayor Lozeau I want to call your attention to the second paragraph from the bottom in this memo where it says Superior Court it should say BTLA which is the Board of Tax and Land Appeals. Alderman Moriarty I was curious if you could give us an overview. Mayor Lozeau If you look on the second page it breaks out the particular properties for this owner, their location, what the city has them assessed at, what the taxpayer believes they should be assessed at and we are having a little trouble finding the middle ground. They filed for an abatement and the abatement was denied by the Board of Assessor’s so they have taken the next step in going to the Board of Tax and Land Appeals so we are hiring outside counsel to help us resolve it. We are about $1 million apart. Alderman Moriarty Is his name correctly? Mayor Lozeau I didn’t think it was either and I didn’t have a chance to look it up. I think there should be an “O” in there. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Independent Appraisal for Radisson Hotel Abatement Appeal Requested by Assessing Department (Value: $12,700) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND APPROVE THE PURCHASE OF AN APPRAISAL FROM PROPERTY VALUATION ADVISORS IN AN AMOUNT NOT-TO-EXCEED $12,700. SOURCE OF FUNDING IS DEPARTMENT 132, ASSESSING; OVERLAY FUND ON THE QUESTION Alderman Donchess So this is another dispute with the Radisson? Finance – 04/15/15 Page 6 Mayor Lozeau Originally what happened is that we had them assessed back in 2009 at $15 million. We ended up in court over it. Their assessment information came in at $5 million. The judgement call was made not to include the assessment that we had done because our folks on the ground in court at that time thought that they had already dug their hole and thought it was best to leave it that way and then we lost. Alderman Donchess I’ve never really gotten into that particular… Mayor Lozeau I’m just walking you through. Alderman Donchess I’m not going to even comment on that. Mayor Lozeau It’s hard to Monday morning quarterback that. So the Radisson thinks that there value should be $5.8 million and the city believes it should be $12.8 based on the improvements that they have made between 2009 and today. Again, we can’t seem to find our way to a middle ground. This one is actually heading to Superior Court. Alderman Donchess In this case we will definitely call our expert as a witness? Mayor Lozeau Yes, we will and submit their information as well. Alderman Chasse How come Valuation Research wasn’t retained instead of Property Valuations? Mayor Lozeau The reason is because first of all, the way that assessing has done the math, if you look at the $10,000 plus $135 per hour for court, assessing figured that out to be about 20 hours which came out to $12,700. If you did the same calculation on value research at $250 per hour they actually come out to $10,500 based on that same comparison. It’s about at $2,200 difference and from assessing’s prospective, they have worked with Property Valuation before and so they just feel more confident with them. They are interested in working with Valuation Research at some point but this wasn’t the case they wanted to test drive that on. MOTION CARRIED Finance – 04/15/15 Page 7 From: John L. Griffin, Chief Financial Officer Re: Contract Award for Library Security Gate Replacement (Value: $13,363) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO 3M TRAFFIC SAFETY & SECURITY IN THE AMOUNT OF $13,363. FUNDS ARE AVAILABLE IN DEPARTMENT 179, NASHUA PUBLIC LIBRARY; FINES; 71, EQUIPMENT ON THE QUESTION Mayor Lozeau Let me just fill you in on why 3M is not even a bidder on this until after they were called and asked to bid. The two bids that we had received were not correct bids. One company had the wrong frequency. When you are leaving the library there are those little gates and an alarm will go off if you are leaving with something that hasn’t been checked out. It requires a particular frequency. One company had the wrong frequency and the other one didn’t have a gate robust enough to manage the system. 3M was the original provider of the gate that they currently have and they were willing to bid on it when we reached out to them and that’s why they have been recommended. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: City Hall Security System Upgrade Requested by Information Technology (Value: $21,085) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE CHANGE ORDER #3 TO THE CONTRACT WITH TYCO INTEGRATED SECURITY IN THE AMOUNT OF $21,085. SOURCE OF FUNDING IS DEPARTMENT 129, CITY BUILDINGS; CAPITAL PROJECTS FUND, CITY BUILDINGS SECURITY UPGRADES; 81, CAPITAL IMPROVEMENTS ON THE QUESTION Alderman Deane Will everybody need New Hampshire badges? Mayor Lozeau No, the system that we have is about 15 years old so some of the doors have been slowly upgraded so the badges that they have will work, it will just be a computer programming thing. MOTION CARRIED UNFINISHED BUSINESS – None NEW BUSINESS - None DISCUSSION Alderman Donchess When is the yard waste pick-up? Finance – 04/15/15 Page 8 Mayor Lozeau It has already begun; yard waste and bulky pick-up. Alderman Moriarty Has there been an announcement of when they should put their bags out for yard waste? Mayor Lozeau There has been an announcement and there is also something on the website. RECORD OF EXPENDITURES MOTION BY ALDERMAN SIEGEL THAT THE FINANCE COMMITTEE HAS COMPLIED WITH THE CITY CHARTER AND ORDINANCES PERTAINING TO THE RECORD OF EXPENDITURES FOR THE PERIOD MARCH 27, 2105 THROUGH APRIL 9, 2015 MOTION CARRIED PUBLIC COMMENT - None POSSIBLE NON-PUBLIC SESSION ADJOURNMENT MOTION BY ALDERMAN CHASSE TO ADJOURN MOTION CARRIED The Finance Committee meeting was adjourned at 7:20 p.m. Alderman Ken Siegel Committee Clerk  CITY OF NASHUA OFFICE OF CORPORATION COUNSEL MEMORANDUM TO: John Griffin, CFO/Comptroller FROM: Stephen M. Bennett. Esq., Corporation Counsel DATE: April 10,2015 RE: Compensation for Outside Counsel for Broad Street Parkway This memorandum summarizes the need to retain Attorney f rank Spinella of the law firm of Hall, Morse, Anderson & Spinella, P,C. of Concord, New Hampshire to represent the City in regard to anticipated claims by and against the City between the City and E.D. Swctt, Inc. and Albuncse D & S, Inc. These companies have contracted tor work on the Broad Street Parkway. E.D. Swctt, Inc. contracted to construct the Nashua River and Fairmont Street bridges. Albanese D & S, Inc. contracted to replace the Millyard Association's fire pump. E.D. Swctt, Inc. is currently well behind scheduling in completing drilled shafts ncccssary for constructing the bridge across the Nashua River. E.D. Swctt. Inc. and its drilling subcontractor have stated that the conditions on site are different lhan those provided in the bid documents, Delays in completing the shafts arc causing delays with the overall completion of the Nashua River bridge . 229 Vtftin Street - P. O. Boi 2019! Nashua, NH 03061-2019) Telephone <603) 589-32501 FAX (603) 589-3259  Aibancse D & S, Inc. contracted to replace the lire pump owned by the Millyard Association. The fire pump had been housed in the Millyard Boiler Building which was taken and demolished for the parkway. Aibancse D & S, Inc. completed its work on March 10,2015, three (3) months behind schedule. The delay caused by Albanese D & S. Inc. has negatively impacted completion of work by other contractors. The contract with Aibancse D & S, Inc. provides for liquidated damages, under certain circumstances, for failure to meet the scheduled completion date. Due to the complex nature of construction litigation and the anticipated scope and duration of litigation in this matter, the Office of Corporation Counsel believes that outside counsel with expertise in construction law should be retained by the City for these matters. See the attached Scope of Services and Resume of Attorney Spinclla. l'his office requests your approval to retain Attorney Spinella for an amount initially not to exceed $50,000 plus expenses. Should additional funds be required during litigation, a request will be made to this committee. Funds sufficient to cover the anticipated cost of litigation arc available from Broad Street Parkway funds, Account fi 1061.60 05.65. 229 Main Street P. O. Bo* 2019 / Nashua, NH 03061-2019 / Telephone (603) 589-12501 FAX (603) 589-3259  HALL, MORSE, ANDERSON & SPINELLA, P.C. ATTORNEYS AT I.AW M CENTRE STRF.KT. P.O. BOX 22SV CONCORD. N il. 03302.2JB9 TtL (bOi) 22Ì-6655 FAX (6O3)J461005 WRiTKR'S H MAIL ipiocU»@hjnimirtaw.com THOMAS W MOKSfc WILLIAM S. MALI. (OfC.mrwl) HtANK l>, SPINELLA. JR O. VVtLLb ANUCKSON (tcfired) (Also ,vf«niriw> IN CT. DC. MA (i NY) April 6. 2015 Stephen lieimclt. Esq. Corporation Counsel City of Nashua 299 Main Street Nashua, Nil 03061 Rc E.D Swell. Inc. Dear Mr Bennett. Hall, Morse, Anderson & Spinella, P C is pleased to undertake representation of the City of Nashua in the above referenced matter. Our representation is based on your acceptance of the conditions of this letter: A. Client Responsibilities. 1. To pay for all expenses incurred in connection therewith, including court costs, sen-ice costs -md othrr reasonable disbursements. 2. To cooperate fully and to provide all information known or available to you which may aid us in preparing this matter. 3. To honor any commitments to any opponent in litigation made by us on your behalf and with your knowledge an<j consent 4 To retain, and cease the destruction or deletion of, all documents and writings (whether in paper or electronic format) or any other thing that may be or bccome evidence in any litigation, until further notice. Mr. Stephen Bennett, Esq. April 6, 2015 Page 2 R Authorization You authorize and direct us to take all actions which are deemed advisable in this matter. We will notify you promptly of all significant developments and consult with you in advance as to any significant decisions. We reserve die right to discontinue our representation in these matters if a conflict of interest arises or if our withdrawal is otherwise required by the ethical rules of Professional Conduct as applicable to our practice. C. Legal Fees and Expenses. Our representation will he billed at the customary and usual rates charged by attorneys and paralegals of this fin«. The attorney with responsibility for this matter is Frank P. Spinella, Jr., whose hourly rate is $275.00 Billing is done on a monthly basis, with time charges calculated to die tenth of an hour. To the extent that work on this matter can be done more cost effectively by others wtth a lower hourly rate, every reasonable effort will be made to do so. It is further agreed that you will promptly reimburse the firm for all out-of-pocket expenses incurred that are directly related to the performance of legal services undertaken, such as sheriffs" service fees, expert witness fees, deposition fees, court filing charges, mileage reimbursement at tht: federal rate, and the like, regardless of the outcome of the case. In lieu of any separate charges for telephone calls, faxes, copies (paper or electronic), postage or Federal Express charges, we typically add an administrative surcharge of 4% of attorneys fees hilled. Overtime, wc have found that on average this number runs roughly 6% of attorneys fees billed, but there is a savings to our firm in not tracking them a savings we otter to our clients, if you prefer that we track and bill these matters separately, please advise us promptly; otherwise, we will simply add the 4% surcharge. Mo retainer ts requested, but we do ask that our billings be promptly paid, interest at the rate ol 1 -1 2% pLT month, or 18% per annum, will be charged on outstanding balances unpaid for more than 30 days 1). General Matters. 1. Information ;o be Made Available to the Client. We will inform you as to the status of this matter and as to the courscs of action which arc being followed or being recommended. We will make available to you all written materials sent or received by us pertaining to the matter. 2 Compromise or Settlement: Wc agree to make no compromise oi settlement of any disputed issue without your express appro\ al Mr Stephen Bennett, ksq. April 6 , 2 0 1 5 Page 3 Please have an appropriate official date and sign the enclosed duplicate of this letter to indicate agreement to its terms, and return ii to us. We will then pursue the action and will contact you as matters progress. If at any time you have any questions or comments please do not hesitate to contact us. Sinccrely yours, Frank P. Spinella. Jr [•PS/a I w City of Nashua Dated. By:  ^òowialee ï£osceau MAYOR TO: Board of Aldermen FILED WITH: FROM: DATE: RE: Outside Counsel for Appeal of Final NPDES Permit (Wastewater) Pursuant to NRO 5-90 G, I have authorized the hiring ot Attorneys Cheryl Young and Marcia Brown of the firm of Rath, Young and Pignatelli, P.C., Concord, New Hampshire and Attorney John Hall of Washington, D. C. to prepare an appeal to the Appeals Board of the U. S. EPA of certain requirements set torth in the final National Pollutant Discharge Elimination System ("NPDES") Permit recently issued to the City. The City's last NPDES Permit for its wastewater was issued on May 31,2000 and expired on May 31,2005. Since that time, the EPA has administratively extended the permit. In 2013, the EPA issued a proposed draft permit and solicited public comments for a five (5) month period. The City filed its comments in a timely manner. The final permit was issued by the EPA on March 10,2015 and received by the City on March 12,2015. The City immediately began a review of the final permit with its consultants and determined that the final permit imposed new conditions and limits for discharge of certain substances that would be overly burdensome and very expensive for the City to comply with. It was determined that an appeal should be made to the EPA. The appeal was due on or before April 13, 2015. The appeal procedures require that the City specifically identify the basis for the appeal and the applicable law and regulations that support the City's position. The preparation of the appeal requires expertise in environmental law and permitting procedures which are beyond the capabilities of the City's legal department. Once the City's wastewater consultants had reviewed the permit requirements and conditions and identified the issues for appeal, there remained only a few days to locate outside counsel capable of preparing the appeal. Because of the short window available to locate and retain counsel, it was not possible to submit a request to the finance committee as would be the usual course of events. Attorneys Young and Brown, who practice environmental law in New Hampshire are invoicing the City at hourly rates of $335 and $275, respectively. Attorney Hall who is based in Washington, D. C. specializes in environmental law and has been successful in addressing many of the new limits imposed pursuant to the final permit issued by the EPA. His hourly rate is $380. It is anticipated that the final cost to the City will exceed $10,000. Thank you. 229 Main Slreel • PO Box 2019 * Nashua, NH 03061-2019 603.589.3260 - fax 603.594.3450 • NashuaMayor@NashuaNH.gov