Finance Committee

REPORT OF THE FINANCE COMMITTEE OCTOBER 7, 2015 A meeting of the Finance Committee was held on Wednesday, October 7, 2015, at 7:02 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-at-Large Jim Donchess Alderman Paul M. Chasse, Jr. Members not in Attendance: Alderwoman Pamela T. Brown Also in Attendance: Alderman-at-Large Lori Wilshire Mr. John L. Griffin, Chief Financial Officer Mr. John Vancor, Project Manager, Broad Street Parkway Officer Rautenberg, Nashua Police Department PUBLIC COMMENT - None COMMUNICATIONS From: Mayor Donnalee Lozeau Re: Emergency Relocation of Paired Poles, Services and Three (3) Primary Transformers in the Millyard MOTION BY ALDERMAN SIEGEL TO ACCEPT AND PLACE ON FILE MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Design/Build Millyard Chimney Restoration Change Order No. 1 (Value: $73,394) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE CHANGE ORDER #1 TO THE CONTRACT WITH INTERNATIONAL CHIMNEY CORPORATION IN THE AMOUNT OF $73,394. FUNDS ARE AVAILABLE IN DEPARTMENT 160, ADMINISTRATION/ENGINEERING; BROAD STREET PARKWAY BOND ON THE QUESTION Alderman Deane Has this work been done? Mayor Lozeau Actually the company started some of the work and they now clearly understand that they don’t have the authority to have done some of the work so they are a little bit at risk if this doesn’t go through. At the Board of Public Works we talked about some different options. Mr. Vancor looked into it and we don’t think we have any other options. The determination is that is part of a historic original part of the chimney and the work needs to be done in order to meet the requirements that we have with the Historic Resources Department. Mr. Vancor is here if there are questions that the committee wants to pursue any deeper. Finance – 10/07/15 Page 2 Alderman Deane Where does that leave us with contingency, with all of these change orders? Mayor Lozeau We are fine with contingencies. Alderman Deane What about the federal money and all of that, has all of that been accounted for and all of that been placed? Mayor Lozeau No because as I’ve mentioned many times now we are still working on making sure that the federal money is all available for the project and we don’t know the final answer to that yet. Alderman Deane That’s troubling. Mayor Lozeau I agree that it’s troubling. Alderman Deane How do we find out where the money is? Mayor Lozeau We have been working with DOT and Federal Highway on a regular basis so we are going to continue to do that work and get some answers. Alderman Deane But aren’t they in charge of the money, didn’t the money go to DOT and Federal Highway? Mayor Lozeau The Federal Highway has the authorized amount of…they are the ones that authorized the amount of funds. It goes through DOT and then to the city. We are still working with what is eligible and what isn’t eligible. As you have heard me say my concern is that I want to make sure there is no money left on the table in end. We have consistently been working on this and we still don’t have some final answers from Federal Highway. Alderman Deane How much money have we gone down out of this with all of the federal money that was earmarked? Mayor Lozeau I don’t have the budget with me, Alderman Deane. Finance – 10/07/15 Page 3 Alderman Deane Does Mr. Vancor know? Alderman Deane What is left and what; if anything might we end up not receiving in the end? Mayor Lozeau I think if I had to determine what is in play we are probably talking around $2 million but that’s without us knowing what is going to happen with some of the properties. Mr. Vancor I don’t have my budget information with me today but I can speak to what the outstanding concern that we have is with DOT and Federal Highway understanding the status of the federal funds. The part that is in question has to do with going back to the acquisition of property. The way, as we understand it, is that as sections of the project come along or major contracts or splits in the project as DOT tracks it are approved, at that point Federal Highway does what they call obligating the funds which is when the funds are really available to be spent. There’s a federal budget that was a total $40 something million dollars for the Broad Street Parkway and of that they didn’t write a check to the NH DOT for $40 million and say manage that and reimburse the city. There was some number of about $20 million that Federal Highway authorized back in the late 90’s for the DOT to use for preliminary engineering and acquisition of property. Along the way, for example, the north contract that oddly is just finishing now, when that contract was approved Federal Highway authorized the federal participation share for that contract as well. It comes to the DOT in chunks and then from the DOT it’s reimbursed back to the city after the actual expenses. The place where there is the question about the funds is on that original authorization for some $20 million of money for right-of-way and preliminary work. Federal Highway has gone back and has looked at some of the properties that were acquired and has said that in hind sight they think some of those acquisitions should have been considered ineligible and federal funds should not have been used for those purposes. They are now looking for and the number is approximately $8.4 million of past expenditures and unspent right-of-way money, money that was budgeted for a right-of-way that hasn’t been spent yet. At this point they are saying that when they take out what they consider to be ineligible expense on the right-of-way and look at what’s left there is $8.4 million that was appropriated for right-of-way that hasn’t been spent for eligible right-of-way costs. That’s got us concerned because in order to make sure that we don’t leave any money on the table we need to find other eligible expenses on the project so that the city can get reimbursed in things other than right-of-way for that $8.4 million. DOT has done their own analysis working with Federal Highway and they have concluded that there is still remaining about $8.8 million in eligible expenses that could be used. About six weeks ago DOT came to us and said we are working with Federal Highway for this final tally and we think it’s going to come in that there’s $8.4 million in right-of-way that was appropriated that there is not eligible expenses for. We think it could be reprogrammed for other uses. At this point we’ve got a lot of questions. DOT and Federal Highway have been meeting together and the numbers aren’t final between them and it won’t be final for at least another month or two. We are asking questions because we want to make sure that this $8.8 million in other eligible expenses really is going to be enough to recover everything; that they are accounting for all aspects of the project. There’s surplus property that we talked about before that the city needs to sell and make sure the proceeds can be reimbursed. We want to make sure they are accounting for that. The good news is that for each of the three major construction contracts on the parkway right now we expect that all three will come in significantly below the budget. We want to make sure that in DOT’s calculations they are recognizing that there are savings in the contract so when they say that there is $8.8 million of eligible expenses left that they are accounting for what we think we are going to save on these. We are asking the questions that we need to ask. DOT and Federal Highway still need to finalize their own numbers and their own evaluation of this. At this point when the Mayor says we are worried about potentially as much as $2 million, that’s our own guess at Finance – 10/07/15 Page 4 what’s our worst case if their numbers are wrong or if Federal Highway disagrees with DOT, that’s our guess at this point. Alderman Deane If Federal Highway and DOT come to an agreement with the numbers they have then worst case scenario is that we are going to be short $2 million on reimbursable expenses? Mr. Vancor If this goes the way DOT’s analysis leads them to conclude, we will be okay. DOT’s conclusion of eight weeks ago is that we are okay. There is a question of $8.4 million and there’s $8.8 million in other expenses that could be used. In their analysis we are okay and there’s about $400,000 of extra room. Mayor Lozeau Alderman Deane, when I talked about the $2 million, you have worked with me long enough to know that I want to know what is the worst thing, I mean it’s nice if you tell us that we are okay but what is the worst thing that could happen if you are wrong or if Federal Highway comes up with something else, what happens in the end. That’s why I come up with worst scenario is probably $2 million. That doesn’t mean that the project is going to be short $2 million, we should still be well in the black, it means that $2 million of their money, which should be theirs and not ours. Alderman Deane When we use bonded money, say it did come in at the $2 million mark, where would that $2 million come from? Mayor Lozeau It would come out of our $37 million share and then I think we should fight the battle to get it back. This paperwork and the money is not going to be done by the time my time is up here. Whoever the next Mayor is I am going to offer to continue to work with this project on the financial side to get it wrapped up. As you can appreciate it, there have been multitudes of meetings and I think if I still participate I can at least hold them accountable for things that they have already told us and I am willing to volunteer to help to do that. I think that is important and I don’t feel like the project is done if they can then turn around and say well we can’t make that up. As Mr. Vancor said not only did we have two significant pieces of this project come in well under the engineer’s estimates, we think that the work itself is going to come in below budget. I don’t think we should be short changed for that, we should be ahead. From my perspective this project should end with the city still having $6 to $7 million that we don’t have to bond. That’s if everything worked perfectly. Alderman Deane So in four weeks from tonight we should probably have an answer for that? Mayor Lozeau We don’t know, we are saying that’s probably the soonest we will have an answer. We’ve been asking these questions for more than a year. We go up to Concord on a regular basis. The next step is the meeting with Federal Highway, DOT and the city again. We have our attorneys involved, we have our financial staff involved; we have everybody involved that should be at the table and we are watching it as closely as we can. Finance – 10/07/15 Page 5 Alderman Moriarty Is the reimbursement 50/50? Mr. Vancor There are different types of funds that have been obligated to the project. Some of the money was earmarked at 100% federal funds and much of it was an 80/20% split, 20% city match. The money that we are talking about that was spent first on the right-of-way that is now apparently being deemed ineligible was largely the original earmark so it’s 100%. Mayor Lozeau That was back in the 90’s. It’s hard for us to go back and the argument we are making is if you made it eligible then and provided the funds then you shouldn’t be able to change your position on it. Alderman Siegel So Federal Highway was a participant in the discussions in the 90’s along with DOT, is that correct? Mayor Lozeau That’s correct. The city wasn’t managing the project then it was the state and the feds. Alderman Siegel So the state and the feds were wholly responsible at that point in time for making these decisions, is that correct? Mayor Lozeau That’s correct. Alderman Siegel But we still might be facing $2 million worst case. Mayor Lozeau I hope that’s not the case and we will keep working at it but it’s the number that I have in the back of my mind that I am working really hard to make sure we don’t have that problem. Alderman Deane I just wanted to understand that we hadn’t heard much about this in a while and that’s why I raised the question. I know that you have mentioned it before but we haven’t had any real discussions and that’s why I asked tonight, I just wondered where we were with that. I know you had mentioned it in the past and there were numerous times that we were in disagreement and people were struggling with the numbers and I just wondered if there was any update available. Mayor Lozeau The language changes quite frequently also. Mr. Vancor, did you update the Committee on Infrastructure at the last meeting. Finance – 10/07/15 Page 6 Mr. Vancor Yes I did. Mayor Lozeau For Finance it’s good for us to know too. Alderman Deane I wasn’t at the last Infrastructure meeting. Mayor Lozeau I understand that you are not a member of that committee. Alderman Deane I am a standing member of all committees except for this one and the Joint Special School Building Committee but I am a member of this committee. Mayor Lozeau Okay, all I am trying to do is to make sure that everybody has the information. Alderman Deane Thank you very much. Alderman Moriarty I have a question about the specific contract. It’s hard to tell from the photos whether the deteriorated bricks are at the bottom or the top and did they only discover this once they started pulling bricks out? Mr. Vancor The location of the repair is near the base of the chimney, the walls of the chimney are vertical and then it goes to a long taper to the top and this is right where it goes from the vertical walls to the taper. It’s probably about 20’ off the ground. And yes, this was a case of as they working along there was one area that was deteriorated on this collar but most of it looked to be in the same condition as the rest of the chimney. They expected that they were simply going to be repointing this and as they got and put their scaffolding up and started looking at it they realized that this entire collar area was deteriorated. Alderman Moriarty I was surprised that it was still standing. Mayor Lozeau It would have solved a lot of problems. Finance – 10/07/15 Page 7 Mr. Vancor This is a non-structural element and apparently was added as an enhancement. It was actually placed against the structural part of the chimney and it’s pulling away from that and so it seems to be entirely an enhancement for esthetics. Alderman Siegel Going back to the Board of Public Works meetings where we had the discussion about underneath that, replacing that with just a flat old cement collar, are you telling me the geniuses up at the state have decided that somehow those bricks that were added in well after the fact that would never have been added again by people that had to do the repair should they have come up, have suddenly have such a historical significance that we are now spending $73,000? Mr. Vancor When I had the discussion at the Board of Public Works at that point, based on information largely from International Chimney, I understood that it was their opinion that this had been added after the original construction of the chimney. After the Board of Public Works I went back to International Chimney and said I would really like to put all of the information together and go up to Concord and say this wasn’t an original part of the chimney. In looking at it closer we really can’t make that case. International Chimney’s conclusion is that it was in fact probably an original enhancement. As the Mayor said they have done some work, the lose material that they were concerned about because of all of the vibration in the area; they pulled the lose bricks off and so now in some sections you can really see what it was like before. Once they did that there conclusion was that this was an original element on the chimney and that there really wouldn’t have been any reason to have added it later. Two sides of the chimney were inside the boiler house that was previously demolished so if it was an add-on to the chimney it really would not have made sense to go inside the boiler house and do it as well. Alderman Siegel That really was not part of the element about the discussion I had in mind at the Board of Public Works, it was really not so much if it was original or not but who cares if it’s original, just put the cement in and put new older style bricks outside and it looks hunky dory and these people that want us to spend all this money on this chimney could potentially be satisfied and we could save ourselves maybe $50,000. Was that ever discussed? Obviously I used sarcastic terms but did we ever approach Concord and say this is not part of the visible part of the structure so can we just patch this up and put a nice façade up and it will look the same and have historic significance even though it doesn’t? Mr. Vancor The short answer is no. That specific question wasn’t asked. I was hoping to go up to Concord and be able to say it wasn’t an original element of the chimney. If we go up and we suggest either a concrete repair or something other than replacing all of these bricks, I am sure and I am comfortable saying that it would take months to get a resolution as to whether they would allow us to do that. It will involve studies and involving experts. It’s just the way it is. We went through quite an ordeal on the final resolution and what the mitigation for impacts that Historic Resources are and so that’s what I would offer. If we choose to ask that question I think it will be months before we have a definitive answer. Alderman Siegel Thank you and that’s fantastic. If any of our state reps are watching this meeting now feel free to defund to that entire department because this is absolutely ridiculous. I can’t believe this, this is insanity. Unfortunately it looks like yet another gun the state has put to our head. Finance – 10/07/15 Page 8 Alderman Deane We built a bridge over another bridge that you can’t see anymore. Alderman Siegel That’s fantastic. Alderman Deane Bureaucrats are hard at work. Mayor Lozeau You’ve heard my opinion on this as well. Alderman Wilshire Is the lettering staying on there? Mayor Lozeau I am going to send the Board a memo. In the current contract it is $2,600 cost to repaint the word Millyard. To remove it is $28,000. The Board of Public Works in discussing it has decided what we think is best is to just leave it alone and let it fade away on its own. We are going to bring that to the Board because the Board of Aldermen should take a vote on that to agree to what that conclusion is because that overall contract will change based on that. MOTION CARRIED MOTION BY ALDERMAN DEANE TO TAKE FROM THE TABLE R-15-161 MOTION CARRIED R-15-161 Endorser: Alderman-at-Large Lori Wilshire APPROVING AN AGREEMENT WITH THE NASHUA TOWING AND RECOVERY ASSOCIATION  Re-Referred to Cmte – 9/9/15; Tabled 9/16/15 pending Approval of Legislation to Change Certain Motor Vehicle Fines & Towing Ordinances (O-15-69)  Personnel/Administrative Affairs Committee Recommended Final Passage of O-15-69 – 9/28/15 MOTION BY ALDERMAN DEANE TO AMEND R-15-161 BY ADDING APPENDIX A TO IT MOTION CARRIED MOTION BY ALDERMAN DEANE RECOMMEND FINAL PASSAGE OF R-15-161 AS AMENDED ON THE QUESTION Alderman Deane It’s the price scheduling – general rates for the towing contract. The police department brought in some amendments to the cost because of the changes in the contract. Finance – 10/07/15 Page 9 Officer Rautenberg In comparing prices across the state with three of the neighbor cities, we discovered the Nashua contract was actually below. The contract did expire in June. We sat down and came up with some new rates for the towing for vehicles through the Nashua Police Department. These are the rates that we came up with. They are very reasonable compared to the other major cities in the state. We are still right in the middle. Mayor Lozeau The goal, of course, is to discourage people from illegally parking so they don’t have to be towed. Officer Rautenberg This covered abandoned motor vehicles, parking unregistered motor vehicles on city property, snow tows, and snow rates for snow emergencies. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of NFR Mechanical Division Replacement Vehicle (Value: $33,673) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO FORD OF LONDONDERRY IN THE AMOUNT OF $33,673. SOURCE OF FUNDING IS DEPARTMENT 152, FIRE; CERF MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Bicentennial Park Improvements (Value: Not To Exceed $30,000) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO MORIN’S LANDSCAPING IN AN AMOUNT NOT-TO-EXCEED $30,000. FUNDS ARE AVAILABLE IN DEPARTMENT 184, URBAN PROGRAMS; CDBG FUNDS ON THE QUESTION Alderman Deane What did you take out? Mayor Lozeau If you look towards the very last sheet on the back, the excel spreadsheet, you can see there are items we are using the city workforce on in order to keep the pricing to the amount of money we have in CDBG. Some of Park-Rec and Street will be doing some of the work, some of the demo, some of the tree removal, the flagging that might be necessary. That’s what got it into the range that we could afford. You can see the largest cost is putting in the concrete pad for the staging because there are issues with topography over there and the sidewalk and all sorts of things. Alderman Deane Where does this fall in the park rehab? Finance – 10/07/15 Page 10 Mayor Lozeau Bicentennial started actually as a project under Community Development, an identified project as part of the Riverwalk. At some point we are hopeful to see a similar walkway like you have at Peddler’s around 4 Water Street that will bring you into Bicentennial Park from the Riverwalk where the French Park is. We had hope to make it all part of that project, but that part of the project was just a little bit out of reach right now because of the associated costs, but fixing Bicentennial and making it less of a tripping hazard and a little more ADA has been a goal for a long time. These are funds that were escrowed from CDBG in FY15 for this purpose. Alderman Deane When is going to start? Mayor Lozeau Tomorrow if we approve it. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Southwest Park at Yudicky Farm Access Road Improvements (Value: $81,080) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO J PARKER & DAUGHTERS CONSTRUCTION IN THE AMOUNT OF $81,080. SOURCE OF FUNDING IS DEPARTMENT 160, ADMINISTRATION/ENGINEERING; SOUTHWEST PARK ROAD IMPROVEMENTS GENERAL FUND ($60,000) AND PRIOR YEAR ESCROW ($20,486); AND, DEPARTMENT 161, STREETS; GENERAL FUND; 55, OTHER SERVICES ($594) ON THE QUESTION Mayor Lozeau I thought the committee might be interested in knowing that this J Parker & Daughters Construction found out about this bid because they were doing the work at the Armory. I don’t know if any of you have seen the work done down at the Armory. Alderman Deane That took about 1 ½ year to do, that project? Mayor Lozeau I don’t know how long it took. I just know they were the company that did that work. Because they were in the city, they found out about this bid and bid on it. We’ve been told by the folks involved with the project at the Armory that they really did a great job. I think it’s nice to have a new contractor in the area that might be interested in some of our work. Alderman Deane The prior year escrow, is that a like-for-like? Mayor Lozeau No, that was on the escrows that were passed in the budget committee. It was an unlike. The match money Finance – 10/07/15 Page 11 we had in escrows for the transit bus match was less than expected that were needed so we moved that money and it was provided as an amendment to the unlike escrows. We didn’t know where we were going to come up with the difference because we had budgeted 60. Alderman Deane There’s no asphalt here. Mayor Lozeau Yes there is. This is to build it and to pave it. They will do the base coat this year before winter. They will come back in the spring to put the final coat down. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of One (1) Front Wheel Loader (Value: $216,450) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO MILTON CAT IN THE AMOUNT OF $216,450. FUNDS ARE AVAILABLE IN DEPARTMENT 161 STREET; CERF ON THE QUESTION Alderman Chasse Is this a replacement? Mayor Lozeau It is. It’s replacing a 2001 vehicle. We’ll keep that vehicle. We’re going to keep in on the backline and use it in the yard loader. This one will be able to mount the blower that we bought, the snow blower. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of One (1) 4-Wheel Drive Backhoe Loader (Value: $114,900) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO SOUTHWORTH-MILTON IN THE AMOUNT OF $114,900. SOURCE OF FUNDING IS DEPARTMENT 161 STREET; CERF ON THE QUESTION Mayor Lozeau This is also a replacement. They are getting a $25,000 trade-in. Alderman Deane, are you looking at the memo and saying it doesn’t make sense because they talk about the low bidder and that’s not the low bidder? Alderman Deane No, Mayor, I think you already made a brutal mistake by buying things from other manufacturers that didn’t work out and what did we end up doing in the end? We went back and started purchasing CAT equipment. Finance – 10/07/15 Page 12 They make it in this country; the parts are in this country. I’m just amazed how these people failed the bid specs. Mayor Lozeau There were three that failed. One of them had five safety related failures. Alderman Deane I read all of that. It’s just amazing. If I was running one of these companies that had people bidding on this stuff and this was happening, I would want to find out why what they were missing. I think we should be buying CAT equipment. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of One (1) Fleet Maintenance Service Truck (Value: $83,660) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO MHQ TRUCK EQUIPMENT IN THE AMOUNT OF $83,660. FUNDS ARE AVAILABLE IN DEPARTMENT 161 STREET; CERF ON THE QUESTION Mayor Lozeau This is replacing a 450, Item #6, 2001 vehicle. They are going to keep this one and make it a welder truck. The new one will be out on the road to service the vehicles. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of FY16 Winter Road Maintenance Sand (Value: $16,000); MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE THE PURCHASE FROM F.L. MERRILL CONSTRUCTION IN THE AMOUNT OF $16,000. SOURCE OF FUNDING IS DEPARTMENT 161, STREET; GENERAL FUND; 61 – SUPPLIES AND MATERIALS ON THE QUESTION Mayor Lozeau Unlike salt, this bid went up ten cents a ton. I wish I could say the same thing about salt when we get to it, but I can’t. Alderman Deane We used to use another company; I forget the name of it, for years. Finance – 10/07/15 Page 13 Mayor Lozeau They went out to bid, and the same company that won the bid the last time won it again this time. I don’t know who the company was before off the top of my head. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of FY16 Winter Maintenance Road Salt (Value: $465,000) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AUTHORIZE THE PURCHASE FROM GRANITE STATE MINERAL IN THE AMOUNT OF $465,000. FUNDS ARE AVAILABLE IN DEPARTMENT 161, STREET; GENERAL FUND; 61 – SUPPLIES AND MATERIALS ON THE QUESTION Mayor Lozeau This went up $3.34/ton. Normally we have two salt vendors. Eastern Mineral was our main vendor and Granite State was our backup. We were unable to get a price out of Eastern so that’s a little bit concerning. I think people are worried whether this winter will be like last winter. Eastern Mineral has made some commitments to the state and then ordinarily we have been able to piggy-back on the state’s bid and they have honored that. But they are not yet willing to do that. We keep talking to them, but in the meantime, it’s Granite State. Last year when we were having challenges with salt, Granite State let us send down trucks and fill up until our heart’s content because their problem was getting it to us, not providing the commodity. Alderman Deane They were making more money moving snow than trucking salt. There’s a big mining problem with salt. Why didn’t we get a price from the other company? Mayor Lozeau They won’t give us one. Alderman Siegel It’s very possible that they are seeing significant amount of bidding from southern states now that they realize when they get ice, they have to deal with it. They are probably planning on some plans down there, putting strain on supply. My guess is they have no experience bidding on this stuff, and they are probably overpaying. I’m sure Eastern Mineral is happy to sell it to them for higher prices. Mayor Lozeau That was a discussion at the Board of Public Works that the southern states are getting that. I think they also say that we’ll do these states and you do those states. However it works, but we need the salt. I just call it to your attention because I suspect that the finance committee is going to be dealing with this in January and February. Alderman Deane It’s kind of bad when there’s one company. If they don’t deliver, you have no backup, no contingency plan. That’s why we always dealt with two different vendors. Finance – 10/07/15 Page 14 Mayor Lozeau We’re going to continue to try to work with Eastern Mineral and get a price because we agree. We should at least have two. Alderman Deane Is that $465,000 the totally budgeted amount for the fiscal year? Mayor Lozeau It is, but that’s not for the contract with Granite State. If we end up with them being the only one, we can go up to the $465,000. If we spend $200,000 with them then we still have $265,000 for somebody else. It’s not contracting with them for the full amount. We maintain the flexibility. Alderman Moriarty The salt I assume washes away with the snow and goes to the waste treatment plant. Where does the sand go? I assume some of it washes into the drain. Mayor Lozeau Some of it washes into the drain and goes through the process, but I can tell you we pick up a fair amount of it in the spring when our sweepers go out. Alderman Moriarty And then that goes to the landfill? Mayor Lozeau It does. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Purchase of One (1) 30 Ton Caterpillar Articulated End Dump (Value: $322,000) MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO MILTON CAT IN THE AMOUNT OF $322,000. FUNDS ARE AVAILABLE IN DEPARTMENT 168, SOLID WASTE; CERF ON THE QUESTION Mayor Lozeau It’s replacing #81, and they are getting $75,000 for a trade. Alderman Deane Is there a maintenance plan through this purchase? Finance – 10/07/15 Page 15 Mayor Lozeau Are they purchasing a maintenance plan? Alderman Deane Is there one with this purchase? Mayor Lozeau Yes, I believe that is part of the purchase of this vehicle. Alderman Deane What are the particulars on that? Mayor Lozeau I don’t’ have the particulars; I would be happy to get them for you. Alderman Deane How come we received but one piece of paper on this? Mayor Lozeau I do not know. I did not look at the packet before it went out. You’re right. Alderman Deane Sometimes it’s overkill. I’m not busting anybody’s stones, but sometimes its overkill. We received more information about the sand than we did about a $300,000 piece of equipment. Like we did with the compactor, are they are going to buy a plan to have somebody come in? Mayor Lozeau Yes. Alderman Deane I’m very supportive of that. I think that’s a very good idea. MOTION CARRIED From: Dan Kooken, Purchasing Manager Re: Boiler Installation WWTF (Value: Not To Exceed $61,080); MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO ARMAND E. LEMIRE CO., INC. IN AN AMOUNT NOT-TO-EXCEED $61,080. SOURCE OF FUNDING IS DEPARTMENT 169, WASTEWATER; 81, CAPITAL IMPROVEMENTS Finance – 10/07/15 Page 16 ON THE QUESTION Alderman Siegel Isn’t this to make up for the fact that the previous contractor kind of vaporized? How are we doing with getting some money back? Mayor Lozeau It’s in the hands of the legal department and we are hopeful that we will get it. When the music stops this is going to cost us $18,000 more because that company left and that’s what we are working on trying to recover. Alderman Donchess How do you feel the overall work at the sewage treatment plant in terms of restoring its capabilities is going? Mayor Lozeau I think we are doing very well there. This boiler problem should not have happened the way it played out and that’s unfortunate but a lot of the equipment that we bought is being installed and upgrades that are necessary are being done. We just settled the EPA permit problem so I think we are on track and doing pretty well. Alderman Donchess Will the settlement involve any additional treatment or expenses or were we able to maintain things as they were? Mayor Lozeau No, we knew there was more coming. our permit has been expired for more than ten years and so there are, as always with the EPA and others as things change so we will have to be treating phosphorus moving forward. When we get the final permit from them we will send it out with a memo explaining the difference between that and the other. There will be a requirement for us to build some treatment for phosphorus and then chemically treat it as well. It’s not as bad as it could have been. I think the last number that we looked at in terms of cost avoidance was between $7 - $9 million. Alderman Deane How did we make out with the legal fees because we had appropriated some money? Do we have enough money to pay the legal fees and whatever else was done by whomever? Mayor Lozeau I think we are fine with the legal fees. I think there was some confusion over the consultant fees for the engineering for Hazen and Sawyer so we are probably going to come in with something to the Finance Committee for that and I think Mr. Griffin is working on getting is working on getting the totals on the work that they have done. I think what happened is… Alderman Deane Is this a change order? Who did the work, Hazen and Sawyer? Finance – 10/07/15 Page 17 Mayor Lozeau What happened was when we hired the attorney and we put together the team to work on the permit I think that the wastewater staff assumed that the Hazen and Sawyer engineering work that needed to be done in order to work on the permit was part of what the legal services that we had hired were going to take care of. That didn’t go through the process the way it should have but I think that altogether we are still below where we thought we would be and that’s why I know some of the cost avoidance numbers. That will be coming to the Finance Committee, Mr. Griffin; do you think it will be ready for the next meeting? Mr. Griffin It should. Alderman Deane So the work has already been done? Mayor Lozeau The work has been done with the EPA. Alderman Deane But the additional work that we are being billed for has already been done as part of the legal process with the EPA? Mayor Lozeau Exactly but as I explained to the staff… Alderman Deane Even if the mistake was made and it didn’t follow the process, at the end of the day, the work that was done, what did that do for us, in the long-term? Mayor Lozeau What service did they perform, is that what you are asking? Alderman Deane The services that they performed that were provided to the legal people that were there that were used with the demands of being safe for the phosphorus issues and whatever else. From a cost avoidance perspective how did we do in that area? If Hazen and Sawyer didn’t do the work what would have happened? Mayor Lozeau We would have been in real trouble. We would have been looking at an additional $7 to $9 million. Together the legal work and the engineering technical work that was done by the two entities that worked a partnership with wastewater and our legal department allowed us to end up with a final permit that has us avoiding $7 t0 $9 million in cost. It still treating phosphorus but not doing things for copper and some other things. Finance – 10/07/15 Page 18 Alderman Deane So at the end of the day the work that was performed by Hazen and Sawyer saved us $7 to $9 million. Was that in construction costs? If you look at out years of operations and depreciation and amortization? Mayor Lozeau We are going to build a couple of buildings, a chemical treatment building, a phosphorus treatment area and we are probably talking about $3 to $6 million when you put everything in. The chemical treatment is an additional $200,000 to $250,000 a year and I’m just trying to remember this off the top of my head because we just completed the conversation last week. The building is probably a 3,000 square foot building plus the pumps and other things that are going to go in there. If we had to do everything that EPA sent us in the original permit it would have been up to an additional $9 million. Alderman Deane Are these guys ready to get in there and put in that last boiler? Mayor Lozeau Yes. Alderman Deane So they can start immediately? Mayor Lozeau They said they would be done by Thanksgiving. Alderman Donchess What is the duration of the permit that has been issued by the EPA? Mayor Lozeau They are typically five years but our experience has been that at the end of five years it takes a little bit longer so the one that we’ve been operating on has been expired for ten. Alderman Donchess So they give us a five year permit but it could drag on for the ten. Mayor Lozeau Exactly. MOTION CARRIED Finance – 10/07/15 Page 19 UNFINISHED BUSINESS – RESOLUTIONS R-15-168, Amended Endorser: Mayor Donnalee Lozeau APPROVING A PROPOSED CABLE TELEVISION FRANCHISE AGREEMENT RENEWAL BETWEEN THE CITY OF NASHUA AND COMCAST  Amended & Referred to CTAB & Re-Referred to Committee – 9/22/15 Mayor Lozeau This is still in CTAB. CTAB is meeting on Friday morning to take that up. I anticipate at the next Finance Committee meeting, we will be able to deal with that. UNFINISHED BUSINESS – ORDINANCES – None NEW BUSINESS – RESOLUTIONS R-15-175 Endorser: Mayor Donnalee Lozeau APPROVING A FIRST AMENDMENT TO THE SITE LEASE AGREEMENT WITH SPRINT SPECTRUM REALTY COMPANY, L.P. (SUCCESSOR-IN-INTEREST TO SPRINT SPECTRUM, L.P.) TO RELOCATE THE LESSEE’S COMMUNICATION EQUIPMENT LOCATED AT WHIPPLE STREET, MINE FALL PARK TO THE NEW REPLACEMENT TOWER  Also assigned to the Board of Public Works; to appear on its 10/22/15 agenda MOTION BY ALDERMAN SIEGEL TO RECOMMEND FINAL PASSAGE ON THE QUESTION Mayor Lozeau This is something that the legal department has been negotiating with Verizon. It doesn’t change the agreement that we already have with them. This is for the Mine Falls Tower replacement and this is about moving the other carriers on and this agreement just puts into place that the other carriers on the pole have to cover the cost associated with Verizon doing the relocation. Alderman Moriarty What is the monthly rent or lease’s value, how much are they paying us? Mayor Lozeau Off the top of my head I don’t think I can answer that. I want to say that annually it’s about, I don’t want to guess. It goes into a Mine Falls account and I would be happy to give you an accounting but I don’t want to guess. Alderman Moriarty For the life of me I couldn’t tell the difference between the four different contracts, the drawings all look the same. Finance – 10/07/15 Page 20 Mayor Lozeau They are all basically the same. It’s just the different carriers that are using the same pole. MOTION CARRIED DISCUSSION Alderman Chasse I have a special request by someone who watches all these meetings and at the full Board. When we say I’d like to make final passage of R-15-175, they have no clue what they are talking about. I don’t know if it is possible to say R-15-175, which concerns the towers. I don’t know if we can do that at the full Board. Alderman Deane We can do that. Alderman Chasse Yes, read the title, for people who are keeping an eye on us. Alderman Deane The city clerk reads the title. Sometimes the titles don’t tell you anything. Alderman Chasse Sometimes you’re in committee and it’s just I want to pass Ordinance O-15-175 and nothing is said and they don’t know what it’s about. Mayor Lozeau Alderman Siegel is dying to read the information as it relates to the one we just passed, 15-175. Alderman Siegel The one time I don’t read it is when this comes up, but I appreciate it. Thank you, I will do that in the future to. So R-15-175 is entitled “Approving a First Amendment to the Site Lease Agreement with Sprint Spectrum Realty Company, L.P. (Successor-In-Interest to Sprint Spectrum, L.P.) to Relocate the Lessee’s Communication Equipment Located at Whipple Street, Mine Fall Park to the New Replacement Tower” 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 SEPTEMBER 11, 2015, THROUGH OCTOBER 1, 2015 ON THE QUESTION Alderman Deane I have a question for Mr. Griffin. In the payroll lines I’ve noticed that under human resources there is a $514.70 dollar amount for a Citizen Services Director. Is there a Citizens Services Director in HR? Finance – 10/07/15 Page 21 Mayor Lozeau No. We have a Citizen Services Director in my office. It shouldn’t be in human resources. Alderman Deane Clothing and uniforms, it seems like this 6100 is being co-mingled into payroll labor lines. Is that because the clothing and uniforms are taxable items that the employees have to pay federal tax on? Mr. Griffin That’s correct. Alderman Deane Employee background checks, should that be under payroll? Mr. Griffin I’d have to check, it could be miscoded. Alderman Deane That’s in human resources as well. The Mayor has a Citizen Services Director in her office and then when you look at human resources it’s found in there too. The Citizen Services Director is also found in the benefits and self-insurance fund. Mr. Griffin It might be a miscoding because the current Citizen Services Director was the former interim HR Director so I am assuming there was…when Ms. Valaitis came back they might have kept her old title but I’ll check that out. Mayor Lozeau What Mr. Griffin is saying is that Mrs. Valaitis came back and worked as the interim HR Director until we hired a HR Director. When we hired a HR Director I was able to snag her and get her to work in the office as Citizen Services Director. They still may have her coded in HR even though she has a new title but we will check and make sure that’s correct. Alderman Deane I also found in the 5100 lines telephone cellular so is that all the telephone cellular reimbursements to employees are all found in payroll lines now? Mr. Griffin Those are allowances for cell phones and for personal use it’s a taxable event. Mayor Lozeau So that $50.00 allowance, the taxes are paid on that so it’s part of their paycheck. Finance – 10/07/15 Page 22 Alderman Deane Okay so when I look at every 5100 line for every department where there is a reimbursement through the city we are going to start seeing that. We never used to see this before. Mayor Lozeau We’ve been doing it ever since the IRS requested it. The whole reason that we went into how we changed how that worked to do an allowance was because of the tax issue. I don’t know if they just didn’t break it out separately in payroll? Alderman Deane Does Mr. Griffin know? Mr. Griffin We’ve been doing that since I arrived five years ago so I am assuming that it has been coded as such but I’ll certainly check. Mayor Lozeau We have been doing it for a long time I just don’t know if they broke it out the way you are seeing it. Alderman Deane I don’t remember ever seeing it like that. Mayor Lozeau I would imagine that you would prefer to see it broken out like that. Alderman Deane Could you please let us know? Mr. Griffin I will let you know, I don’t think it’s new but I will let you know. Mayor Lozeau Can you send it out, the questions that Alderman Deane asked, just confirm that we are correct and send it out in an e-mail to the full committee. Mr. Griffin I will do that, absolutely. Alderman Chasse Was it less than $50.00 prior to…did we just recently make the $50.00 mark? Finance – 10/07/15 Page 23 Mr. Griffin It was $85.00 when I first arrived and we brought it down to $50.00 as an allowance. It’s not meant to be full compensation of a data package for your phone; it’s supposed to be an allowance. Alderman Deane That was $30.00. Urban Programs is $30.00. Mayor Lozeau It was different in different places so we made it uniform so it’s $17.00 if you just have a regular phone and its $50.00 if you have a Smart Phone so we can reach you by text or e-mail. If people have a city phone there is no.. Alderman Chasse So $50.00 and below is free? Mayor Lozeau What do you mean free? Alderman Deane He’s talking about taxes. Alderman Chasse Anything over $50.00 has to go on the compensation. Mayor Lozeau I know that we’ve been paying taxes on $50.00. Our allowance is $50.00 per month and we’ve been paying taxes on it every year, $600.00. Alderman Siegel This is something I brought up at the previous Finance Committee meeting regarding welfare assistance and the Country Barn Motel payments. I understand that we are restricted in that we can’t say you can’t stay there to somebody but I broached the idea of whether or not we should pay the bill until such time as we found that the services provided were acceptable. What is the disposition of that since I see that we have actually paid several payments to the Country Barn Motel and it is within our power to put a brake on that until we figure out what is going on there. Mayor Lozeau Actually they are in compliance. Mr. Griffin can’t answer because I don’t think he’s dealt with this. He’s not on the team that’s been looking into this. As we said before, the voucher goes to wherever the client chooses to be and although we are all horrified by what was seen regarding the Country Barn, we have looked into it and thus far they actually in compliance with all of the regulations that they need to be. We are putting that packet together to bring in and set up a meeting to review what went on there and what categories they fall under and we can talk more about it at that time. We can’t not allow a citizen to stay at Motel 6 or Country Barn or Temple Street or anywhere else, we don’t restrict that. Finance – 10/07/15 Page 24 Alderman Siegel I understand that and that’s why I phrased my question very specifically. We are not looking to restrict anybody from going anywhere but we do control whether we pay for the bill. Mayor Lozeau No. If welfare says to you that they will cover “X” amount for your overnight tonight and you stay there unless we say no, which we can’t do if they are in compliance, the bill gets paid. Alderman Siegel So they go where they want and they choose the Country Barn and bill the city. The city says thank you for your bill but the city is investigating whether or not the conditions are appropriate and when we resolve that we will be happy to pay the bill. Mayor Lozeau We can’t do that. Alderman Siegel It’s not obvious to me why we can’t decide to withhold payment depending on the fulfillment of the services contracted for. It’s fairly standard operating procedure. Mayor Lozeau They have fulfilled the contract. The person stayed there and was accommodated at that facility. That facility is open and operating so it gets paid for. Alderman Siegel I’m going to be very hyperbolic here. In a very extreme case somebody decides to stay at the Country Barn and they walk through the front door and they are asked to sleep on a bed of razor blades and there is chlorine being pumped into the air. Clearly, would we under those circumstances say that’s probably not the best choice of residences and this person chose that but that’s not contracting for services in the best interest of humanity. Under those extreme circumstances wouldn’t we be able to say we are not going to pay the bill until you get rid of the chlorine and the razor blades. That’s intentionally hyperbolic; obviously that’s not what is going on. Mayor Lozeau I would say that rather than trying to anticipate in the worst conditions what we might do, I think this discussion will be better suited until we have the staff that makes those decisions and operates in those conditions is here to respond to the questions. I’ve asked them to put things together and they are doing some investigative work and they are putting together dates and times that they have been at the site. I want to bring them into the Infrastructure Committee to have that conversation unless the president tells me a different committee. Alderman Siegel One approach is to say that we will penalize you if we find out this is an issue or we can say based on what we know so far and what we’ve seen we would like to withhold payment until you can actually prove that you are not actually infesting people with bed bugs. Finance – 10/07/15 Page 25 Mayor Lozeau Bed bugs don’t fall under the city’s jurisdiction any longer. Alderman Deane We should just put legislation in that doesn’t allow businesses to be doing that anyway, it’s real simple. We get to choose where we spend our money. 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 8:07 p.m. Alderman Ken Siegel . Committee Clerk