Nashua faces hard spending choices
NASHUA – A rabbit would be a popular animal right about now in City Hall.
As in a rabbit that could be pulled out of a hat to reduce the potential 11 percent tax rate increase looming on the horizon.
If no trick can be performed, residents may find parks not as well kept, there may be no assistant economic development director to support the business community and emergency workers may not get the usual training.
Mayor Bernie Streeter’s goal is to squeeze the budget to get a tax rate increase of a more palatable 7 percent. “Hope springs eternal,” he said.
A double-digit tax increase would be too high, Streeter said, adding he does not relish presiding over a reduction in city services.
The city is feeling the sting of a decline of $4.4 million in state education aid, and the Solid Waste Department has a deficit of more than $3 million.
“We talked about it,” Streeter said, referring to the solid waste deficit. “We didn’t do anything about it. Now we have to do something about it.”
Overall, city budget writers are foreseeing a hole of nearly $14.9 million in the next fiscal year’s budget because of a combination of rising costs and declining revenue.
The mayor unveiled his budget strategy Monday, telling department managers their budgets have to be level with the current year’s spending. Rising utility costs and rising salaries all have to be covered with the same amounts of money, Streeter said.
The department spending plans will be turned in to Streeter’s office next month, and then Streeter will propose a budget to the Board of Aldermen by April. The fiscal year begins in July.
The mayor said certain cost increases have been anticipated, such as increased bond payments, mostly to pay for the high school construction project. Others are beyond the city’s control, such as a combined $1.9 million increase in public pension contributions and health care costs.
One option city officials have kicked around is asking city unions to reopen labor agreements to put off scheduled raises that will cost taxpayers some $3.5 million next year.
Streeter said that avenue does not appear to be promising, especially since many of the more than a dozen city unions just inked new contracts.
Tim Soucy, the president of the local firefighters union, said there would be mixed reactions from his members, but he did not dismiss the idea outright.
“It’d depend on the circumstance,” he said.
However, Soucy said firefighters remember some 10 years ago when the union agreed to give up a 3 percent salary increase at the request of city leaders with the idea that the sacrifice would be remembered. But Soucy said the union’s favor was never repaid.
“We were the only ones that stepped up,” he said.
Department leaders are starting to do the math, looking to find what can be trimmed.
At this point, the Parks and Recreation Department will not ask athletic leagues to dig deeper into their pockets to pay for services, said Nick Caggiano, the superintendent of park maintenance. Instead, volunteers may be asked to lend a hand.
“Coaches and parents may have to help out a little more,” such as by raking a baseline before a game or handling minor projects, Caggiano said.
While maintenance budgets are being slashed, the parks should remain in good shape for a few years since they have received a lot of attention recently, he said.
“We went through this park renaissance,” Caggiano said. “But obviously we need to make hard decisions. Maybe it’s time just to maintain what we have and look forward to two to three years down the road.”
The department runs on a $2.5 million budget and has to find money to cover recently approved raises of about 6 percent. That means taking money from elsewhere.
A park ranger program, in which six individuals patrolled the city parks, acting as guides and watching out for trouble, will be axed to save $25,000.
A park rehabilitation program, which paid to upgrade neighborhood parks with resurfaced basketball courts and new playground equipment, will be severely cut. The budget is being cut to $50,000 from $230,000.
Officials at Nashua Fire Rescue hoped to move forward with a plan to replace the aging Arlington Street firehouse. Aldermen met with fire officials behind closed doors to talk about the land purchase last week.
Fire Chief Mike Buxton said the fire department has a consensus to offer a price for 30,000 square feet of the Robbins Auto Parts property on East Hollis Street, though he did not reveal the figure. But that might be as far as the project goes for now.
One of the mayor’s budget directives scratched any big projects for the upcoming year.
Streeter said it is possible the city will still buy the land, but it is unlikely construction would start.
In response, Buxton said, “We need to replace the Arlington Street station. It can’t be put off forever.”
The fire department may have to give up additional training for its firefighters and make do with older hoses and protective gear to meet the budget guidelines, Buxton said.
He is awaiting final numbers from City Hall to start crafting the department’s budget, which will be about $12.7 million. Close to 96 percent of the budget comes from personnel costs. And since the department just entered into a new union contract, those higher costs have to be absorbed, he said. On top of that, utility costs are expected to rise some 9 percent, he said.
“We are absolutely looking at every category” to save money, Buxton said.
Community Development Director Kathy Hersh said one option being considered is raising fees charged by the planning and building safety departments. She said the fees were last raised two years ago.
The goal would be to get the people and businesses that use the Building Safety Department to pay for its services, she said.
The school department’s chief number cruncher, business administrator Mark Conrad, said in order to meet Streeter’s demands, the Board of Education would have to shave off more than $2 million from its budget to still be able to meet contractual increases for the next fiscal year. Those include salary hikes for teachers, custodians and non-affiliated employees, out-of-district placements for special education students and transportation costs.
That estimate does not factor in the $1.8 million Streeter has promised for the opening of Nashua South High School.
Conrad said he plans to present the administration’s recommended budget to the school board on Feb. 4.
Last year, the school board faced a different mandate from Streeter, who demanded nothing higher than a 3 percent increase. That mandate went largely ignored, as the school board approved a budget with a 4.5 percent increase, but Streeter pared it back.
Meanwhile, Streeter intends to fill some open positions, even as city administrators are asked to take a hard look at filling vacancies.
He said the Division of Public Works needs key personnel, such as a director, a city engineer and a business manager. Also, he expects to fill the top spot in the Economic Development Department. The position has been vacant since spring. An interviewing committee met with candidates last week.
But the assistant director’s position in the Economic Development Office may remain unfilled, Streeter said.
Aldermen’s responses to the financial news varied last week. Some want to attack the problem immediately, while others want to take a long view.
Alderman-at-Large Paula Johnson said she wants City Hall to implement a hiring freeze, along with freezing salaries of non-union supervisory employees and the mayor.
Alderman-at-Large Steve Bolton, the head of the Budget Review Committee, said the aldermen will probe city departments to learn more about spending and programs. While everyone wants to lower taxes, Bolton said it makes no sense to pick a tax rate without first doing the homework to understand the needs of programs and departments.
The problem stems from Streeter’s “willing acceptance” of the decline of state education aid, Bolton said, an allegation the mayor disputes.
If the city received the same $29 million it got in 2002, the budget season this spring would be no different than in other years, Bolton said.
“I don’t know why this is coming as a surprise to the mayor,” said Bolton, who also ran against Streeter and hit on the financial situation during the campaign.
Others cautioned the Streeter administration about acting in too much haste.
Aldermanic President Brian McCarthy said that while the current fiscal situation is the most serious he has faced in 10 years on the board, it is a long-term problem.
“This is a multi-year problem that will require a multi-year solution,” he said.
Andrew Nelson can be reached at 594-6415 or firstname.lastname@example.org. Staff writer Jonathan Van Fleet contributed to this story.