Wastewater ordinance passes

Spending cap gets needed space for upcoming budget

NASHUA – The city’s spending cap crisis is on hold for the coming budget year, but there are hints at trouble ahead for the way the city dodged the crisis.

On Tuesday night, aldermen finally approved an ordinance to change the way the wastewater budget is accounted, creating more than $9 million of room under the cap. The move came after months of back-and-forth between aldermen and Mayor Jim Donchess, including a couple of failed attempts to change the ordinance so that it wouldn’t create any budget space.

Before the vote, Nashua was facing the prospects of serious cuts in the budget, according to Donchess. The city had about $3 million in spending cap space. With a $2 million jump in retirement costs, as well as rising electric rates and other expenses, Nashua would have had to cut positions in critical services such as police and fire to stay under the cap, Donchess said.

Under normal circumstances, the city could try to override the spending cap, but that requires 10 votes from the Board of Aldermen, a tall order given the makeup of the board.

Instead, Donchess proposed an ordinance that changes the way the wastewater enterprise fund is handled by the budget. Ordinances require a majority vote, and not the full 10 votes that overriding the spending cap requires.

“Necessity is the mother of invention,” Alderman Michael O’Brien said.

The wastewater fund is split in the city accounts, with about half of the fund being outside the general budget and half inside. By removing all of the wastewater fund from the general budget, the city would create more room under the spending cap for fiscal 2018, which starts July 1. It also clears up what Donchess said is a legally indefensible situation with the account.

Wastewater isn’t funded by taxpayers, but instead get revenue from people who pay wastewater bills. Donchess said splitting the wastewater fund is irrational.

“There’s no justification for that,” Donchess said.

The move to create spending cap space was fought by Aldermen Daniel Moriarty and David Schoenman and former Alderman Fred Teeboom. Teeboom, who authored the spending cap, expressed his displeasure with the ordinance.

“It is an end run around the cap, and it is illegal and improper,” Teeboom said.

Moriarty said the looming budget crisis was foreseen years ago and should have been dealt with properly. He hinted Tuesday night that the city opens itself up to legal action by getting around the cap with the wastewater vote.

“I don’t think that would be successful,” Donchess said.

The wastewater ordinance passed by a 9-6 margin, with Moriarty, Schoneman, Donald LeBrun, Sean McGuinness, David Deane and Mark Cookson voting against it.