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Pension plan before BOA

By Staff | May 24, 2016

NASHUA – Aldermen tonight are expected to take up a revised plan to pay for the city’s rising pension costs by tapping savings it has set aside for year in anticipation of those cost increases.

The bill would create an expendable trust fund to manage hikes in employer contributions to the New Hampshire Retirement System and transfer $350,000 into it. That amount reflects the increase the city must pay the state in pension costs in fiscal 2017.

"We are not spending it on frivolous things. We have no control over what the state is demanding that we pay. We have to find a way to pay," Ward 9 Alderman Ken Siegel said Monday.

"The money has been set aside and, therefore, has no effect on the money that taxpayers pay. But, if we don’t do something like this, we are either going to encourage shortfalls in our capital equipment reserve fund or we will pay for it in some other way," he added.

Siegel co-sponsored the bill that initially sought to tap into roughly $2.23 million that the city has set aside for years specifically for rising pension costs for public employees who work for the police, fire and school departments, and at City Hall.

The bill faced resistance when presented to the full Board of Aldermen last month and did not appear to have the 10-vote supermajority needed to approve what technically would be a spending cap override.

Aldermen who opposed the move said they were concerned the $2.2 million increase would expand the amount of money that could be raised under the spending cap in fiscal 2017.

Aldermen noted also that Chief Financial Officer John Griffin projected pension hikes in 2017 to be about $350,000 more than the current fiscal year, which ends June 30.

"I think I’ve addressed the major concerns people have," Siegel said.

The budget review committee voted 5-2 on May 19 to recommend the full board pass the measure. Ward 1 Alderman Sean McGuinness and Ward 3 Alderman David Schoneman voted against it.

The New Hampshire Retirement Systems sets rates municipalities must pay in employer pension contributions every two years. Nashua – like other communities – currently is operating in the second-year of the rate hike.

Siegel said Nashua anticipates new rates will be set later this year that will result in the city having to pay an additional $2 million in pension costs in fiscal years 2018 and 2019.

In other matters, the board is expected to act on a $1.4 million contract with Siemens Industry Inc. Intelligent Traffic Systems of Austin, Texas, to carry out the LED street light conversion project.

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