It's Simple Math - balancing contracts and budgets

Let me ask you a question – which three people, aside from your parents, had the greatest impact on your life? In my case, they are all teachers: the late Joan Ruhlman, my 4th grade math teacher; Mr. Rich Andra, my high school physics teacher; and Dr. Min-chang Lee, my thesis advisor at MIT. I’m sure many of you can also think of a teacher or two who greatly improved your life.

Let me ask another question – how does the NH median household income for 2013 compare to that of 2001 or 1989? In inflation adjusted dollars they are all equal, meaning that for at least 30 years the nation’s median household income has tracked inflation almost identically. In other words, salary increases have matched the rising cost of living.

And finally, a third question – what percentage of the Nashua city budget is spent on salaries and benefits? In some departments it’s a little higher, in others it’s lower but, depending on what items you include, it is approximately 75%.

How are these three things related? They all come together when we have to strike the right balance between budget pressures and city employee contracts.

The Nashua School Department is currently faced with a budget challenge. The challenge this year is more difficult than past years because the salary contracts, for which the teachers’ union lobbied, cost more year-over-year than inflation – by about 150%. Sadly, this budget challenge has already resulted in the elimination of ice hockey and skiing as varsity sports. In New England, this is a huge missed opportunity for our young students.

I believe we need to fully fund all aspects of our school system and I also believe that our city budget should be managed so that it does not grow faster than inflation. That way our community’s ability to pay can keep up with our expenditures. The logic is this: our community’s ability to pay is derived from families’ household incomes, and families’ household incomes track inflation. This is why the City Charter has a provision which attempts to limit our budget growth to be no faster than inflation. (This year the law was changed to allow it to grow faster than inflation.)

The salary contracts of the city’s employee unions tend to come up for a vote in the fall, but the budget which pays for these contracts gets voted on in the summer. This six month separation of these two events causes a combination of memory loss and disbelief of claims of future financial challenges. The consequence is salary contracts that grow faster than inflation, which inevitably force cuts in important budget items – like varsity sports and infrastructure investment. The math describing this problem is quite simple. If you have $3,000,000 to spend but you approve $3,000,000 in salary increases there will be nothing left for building maintenance, books, or sports programs.

Some people would rather we raise the school budget faster than we already are; but, that would require us to raise property taxes even more to support that budget. This is not a sustainable approach. As elected officials, we have a duty to ensure that our hard working public servants are rewarded for the important job they do. Yet we also have a duty to protect hard working families from onerous property tax increases. As much as I would like to give every city employee a big salary increase, I also recognize that it is not in our power to give every resident an equally large salary increase to pay for the property tax burden.

I support salary increases for individuals because I know the value of good, well rewarded teachers. But I supported a 2.5% increase, rather than the inflation-busting 3.5% that’s currently in place, because I also know the value of properly funding our school system and keeping property taxes down. I believe most taxpayers and most teachers would agree that a pay raise to match increases in the cost of living is reasonable, even if union bosses don’t see it that way.

I remember well those three teachers who were most impactful on my life and I want every young person in our community to benefit from educators as great as them. The single most important thing those three teachers taught me was how to add. Keeping our budget balanced and our school system well funded isn’t only a case of responsible policy making, it’s just simple math.

Dan Moriarty is a Nashua Alderman-at-Large, triathlete, father of four, and is considering a run for Mayor of Nashua

Dan Moriarty Launches Exploratory Committee 

Moriarty: Nashua deserves a Mayor who can deliver

Nashua, NH – Alderman-at-Large Dan Moriarty has launched a 70 person committee to explore his potential run for Mayor of Nashua.

The committee unites the efforts of Republicans, Democrats and Independents, from all walks of life across the city of Nashua. Members include local business leaders, volunteers at local public service agencies, local activists and grass roots volunteers, conservationists and veterans.

Members also include experienced public servants, such as seven term Congressman Charlie Bass, Mayor Bernie Streeter, Rep Bill Ohm, former Reps Randy Whitehead and Kevin Brown and Fire Commissioner Kevin Gage.

The committee is especially honored to have the support of Reina Flynn, to represent the fiscal prudence of her late husband.

Speaking about the committee, Dan said:

“I’m delighted to announce the formation of this exploratory committee.  Since I began talking to people in Nashua about a potential run, the response has been overwhelmingly supportive.

“Nashua deserves a Mayor who cares passionately about its hard working families and who will bring opportunities for everyone to our great city.

“The most important question for me right now is how I can best serve the people of Nashua, be that as Alderman-at-Large, as Mayor or in another capacity.”

A formal decision on the run for Mayor is expected by the end of March.

The full list of endorsers is as follow:

Mayor Bernie Streeter

Sen. Gary Lambert

Henry Goodwin

Fmr US Congressman Charlie Bass

NFR Commissioner Kevin Gage

Gov. James Douglas (R-VT)

Fmr Alderman Fred Teeboom

Fmr Alderman Dave MacLaughlin

Rosemary Russell

Mrs. Reina Flynn

Phil Stylianos

Tom Jenkins

Jack Currier

David Gleneck

Rep Bill Ohm

Rep Tim Twombly

Linda Twombly

Ann Bannister

Barbara Beierl

Fmr Rep Kevin Brown

Fmr Rep Randy Whitehead

Fmr Rep Lawrence Artz

Lt Col Richard Attardo

Col Terry Negron

Steven Negron

Capt William Joransen

Cmdr Charles Ringleben

Dani Podvojski

Rock Standish

Laura Standish

Jeff Foster

Nancy Foster

Bill Sutton

Laurie Sutton

Tom Forrest

Cheryl Forrest

George Stergion

Barry Warhola

Sharon Bubar

Jay Clair

Charles Michaud

Dan Kelly

Thomas White

William Machell

Karen Thoman

Kathy Snyder

Don Winn

Gary Henkel

Robert Duffy

Matthew Moroney

Andrew Iucci

Natalie Iucci

Peter Temperino

Linda Temperino

Dave Duprat

Ed Lopez

Marie Lopez

Deborah Foster

Lynn L'Heureux

Daniel Burk

Kevin Murray

Joshua Reynolds

http://www.nashuatelegraph.com/news/1055484-469/alderman-moritary-is-semi-officially-running-for-nashua.html

City of Nashua Strategic Plan

The City of Nashua needs a Strategic Plan. In fact there is an ordinance which requires our strategic plan be updated at least once per two-year term and that the Strategic Planning Committee (SPC) meet in order to do that.

As the Chairman of PEDC (the Planning and Economic Development Committee) I am also the chairman of the SPC. We met about a month ago and decided to delegate the task of updating the strategic plan back to PEDC. I welcome the opportunity to lead the discussion, to collect data, and to compile a document that may sometime in the future become a point of reference for policy decisions.

One challenge in creating the strategic plan is that of finding time and people to accomplish the task. For example, the city has a Master Plan which focuses on land use. In principle it is generated by the Planning Board while in practice it is written by full-time paid staff of the city’s development office. For the strategic plan we don’t have any paid staff. One main reason the strategic planning committee adjourned was because the mayor was hesitant to have her staff (members of the SPC by ordinance) dedicating their time to the project.

The Plan: We shall begin by inviting the members of the various commissions who already have been meeting – in some cases for decades – to summarize their findings and present them to PEDC. Already we have met with the Arts Commission and have received their 80 page document. I’ve extended invitations to the chairmen of the Board of Education, the Cultural Connections Committee (formerly the Ethnic Awareness Committee), and the Conservation Commission.

This is a work in progress so please tune in from time to time to see our progress on PEDC. Of course, if you would like to participate feel free to contact me @ (603) 891-1020 or at aldermanmoriarty@gmail.com.

Nashua Arts and Culture Plan

Tuesday at the Planning and Economic Development Committee we had three guest speakers: Chairman of the Nashua Arts Commission Liz Racioppi, President of the City Arts Nashua Kathy Hersch, and incoming NAC Chairman Charlie Matthews. The topic of discussion was the Nashua Arts and Culture Plan which is the product of the Nashua Arts Commission.
The 80 page document is intended to provide a plan of action to grow the Arts and Culture in Nashua. I feel it is a great document mo...stly because of its size and wealth of content. The layout, font, and organization is different than I might have chosen but that is less important than the fact that it exists.

The first half of the document discusses 6 perspectives or categories of interest: Identity, centralization, education, marketing, commerce, and growth. The second half of the document is a series of appendices which include results from a survey and a list of organizations directly related to the Arts & Culture.
We tabled the motion to accept and endorse the document so that we may submit some comments for the Nashua Arts Commission to consider in a revision #2 of the document.
The key suggestion I have can be summarized as follows. Nashua is likely to have a large number of people who participate in the arts in various forms (e.g. playing the guitar or painting at home). We should seed to identify and contact as many people as possible to establish a network of interested individuals. Some may be ideally suited to take on action items and to lead other groups as volunteers or simply to explore their own interests more fully. Collectively we can address all six of the areas listed above and help our community thrive.
http://www.unionleader.com/…/20…/NEWS0606/141219040/0/SEARCH

Passenger Rail Study Summary Presentation Nov 20th

Thursday’s summary presentation of the recently concluded passenger rail study was exactly what most people in the audience came to hear. Unfortunately a key element was missing – the persuasive argument to convince those who are skeptical. The intangible benefits of rail are obvious to many of us and so we are inclined to forgive when we don’t receive a high level of tangible certainty. To many others the unknown risks outweigh its benefits so they focus on the facts actually displayed on the big screen primarily the large capital costs and subsidy requirements.

 In the business of defense contracting once an opportunity has been officially posted it is illegal to campaign to the offering committee on one’s behalf. We are forced to make our case in 11 point Ariel, 20 pages maximum for example. We cannot simply ask a group of state legislators to vote for us because we are ideologically aligned. Instead the contracting decisions are based on facts defensible in a court of law. I am naturally inclined to approach the new majority in Concord in this way - as customers whom I am obligated to persuade. I believe we stand a good chance of success if we take the time to learn their language so they might receive our message.

Their language is one of maximizing economic benefit while minimizing government involvement. Using this as our guide we can build a case from one key fact offered to us at the rail study presentation – an investment of ten million dollars per year results in about 5000 full time jobs. A quick estimate suggests that 5000 full time jobs equates to approximately 500 million dollars of economy. I base this on previous rail studies that predict an average income of 50 thousand dollars per year and an equal value of commercial revenue. In summary that’s a return on investment of 50:1. An experienced entrepreneur could strengthen the argument by comparing this passenger rail ROI to other proposals for funding being submitted to the state and municipal governments.

It is also commonplace in crafting proposals to address the primary counter-arguments of the competition as well as those in the minds of the source selection committee. In this case we know one of those to be the idea that if the generated revenues are so large then a profit making venture should take the lead. A crucial step here is to recognize that there are no direct mechanisms for a private company to extract the revenues generated by the commuter rail; whereas, state and local government are capable of receiving the necessary fraction of those revenues through the mechanisms already in place such as business taxes. In fact this is the basis of those who support increasing state revenues via reduced tax rates. The near-term shortfall is closed by the expanded economy of the future.

If time and budget remains in the contract I urge the managers of the Feasibility Study to focus resources toward preparing the case to move forward. For commuter rail to gain the support of our state government it is paramount that its proponents can defend the statement that “passenger rail can and will pay for itself.”

Pennichuck Water Special Committee

We had another excellent and educational meeting with the Pennichuck Corp. executives yesterday at the Pennichuck Water Special Committee. Don't miss the channel 16 reruns or the online archive re-broadcasts.
Mr. Goodhue the CFO gave an overview of their quarterly report and we learned more about how they are a debt financed company. On the way out the door after the meeting I said that this company could be the source of a journal article in the future. It's a special combination as a publicly held private company running for-profit but regulated by the NH Public Utilities Commission.
Each of the four guests (CEO Patenaude, COO Ware, CFO Goodhue, and Board Chairman Leonard) answered different parts of the questions to give a complete picture of the company.

Finance Committee Recap

We had a good stress relieving laugh at the Finance Committee around 7:42 pm yesterday. "I'm going to personally go over there and disassemble that mower piece by piece," cracked our Mayor and chairman. That discussion took all of three minutes until we voted unanimously to replace the well used infield mower.

We spent 24 minutes talking out a $170,000 project to upgrade most of the lighting at each of the firehouses in the city. We got bogged down in the details of a few of the fixture/light replacements that paid for themselves over a period of 100 years (one of them at least). Eventually the item got tabled and we shall wait for a presentation from a deputy fire chief or from the contractor. After two years of planning this project I think it can wait another two weeks so I can help micro-manage it in the Finance committee. Frankly I'm more motivated to witness Chief Galipeau give another fine presentation than I am to select light fixtures.

When voting on main street sidewalk concrete I asked about the status of the City Hall Plaza. The update is there is no plan. Proponents would say: we waited to design the plaza after gaining experience from doing the rest of main street. Opponents might say: it's the highlight of Main St. it should be an aspect which sets the direction and tone for the rest of downtown.

NEFie Awards

Show your support of our teachers and consider attending the first annual NEFie awards. Tomorrow, Thursday at 6:00 pm at the Crown Plaza hotel.

http://www.nashua.edu/Events/NEFie-Awards

Leadership Greater Nashua Playground Project

A conceptual design (paid for by the city) for the second playground in Greeley Park was presented at the Special Board of Aldermen yesterday, Monday Oct 13th. The projected cost for the design is about $500,000. Two years ago the Leadership Greater Nashua (LGN) group originated the idea of putting the playground in Greeley Park. The original idea was presented as a free gift to the city of Nashua. We are told that at this point they have raised (or are planning to raise) $250,000.

Clearly there was some miscommunication of the design of the playground if the budget was supposed to be $250,000 while the design, as presented, costs $500,000. Part of this misdirection resulted from the position of the leadership of LGN stating that their contributions are for equipment and hardscape only. An acceptable playground, especially one in Greeley Park, requires site work to make it appealing and to be functional for the kids with special needs.

Had the project been designed to cost $250,000 and if LGN were of the opinion to pay for all the costs of this gift the Board of Aldermen would be finished with this subject and the city could move forward. But we are left with a few questions.

Who is going to pay for the version of the design which is in line with the budget? Will LGN agree to pay for all the costs of this playground - keeping in line with the repeated claims that this is a gift? Will LGN instead choose to put the playground elsewhere in Nashua, at one of the many appropriate sites (Sergeant's Ave, Shady Lane, Atherton Park, etc.)? Will the Board of Aldermen vote to spend city money to match the LGN funds?

Stay tuned.

Budget Cycle Woes

The new budget cycle has begun and the outlook is grim. When I voted against an unsustainable salary contract a year ago and another one a month ago I warned my colleagues of the problems we will face.

In practice we have a spending cap which is intended to limit the growth of our city budget. This year and the next couple years that allowable growth will be around 2% or less. The salary contracts set a baseline growth of about 3%. Since salaries account for 80% of the budget it is not possible to meet the conditions of the spending cap without reducing staff or cutting everything else to absolutely zero.

In principle our spending should be limited to our community's ability to pay. Considering the average household income (in the nation) has gone down every single year since 2008 our ability to pay has gone down despite the steady increase in the budget.

http://www.unionleader.com/article/20141012/NEWS0606/141019709/0/SEARCH