City Council - Regular Meeting

Thank you everyone and welcome to tonight's work session on the FY27 budget for Thursday May 28th I'm going to pass it over to Karen who's going to pass it over to Nathan and we're going to go through some slides answering some of the questions that we had as a council and I know that some have come in from the public so Karen thank you your honor

we are here tonight to review where we've taken you all and to address the questions we've heard along the way and what is will be different tonight if it's helpful to the council is we could take questions as we approach and hit each topic rather than hold them to the end and we may find that that yields a more comprehensive set of follow-up questions should there be any So without further ado, I will just point out that this is where we have been, and we've had several opportunities to discuss the budget. Tonight is the budget review, and coming up June 8th is the next regular council meeting, at which time we will contemplate the adoption of the budget. From here, Nathan will walk you all through a very brief summary of the budget highlights, and then he will hit one by one the questions by topic.

Good evening, mayor, counselors, members of the public. If I remind you just quickly, the budget that is proposed for you for FY27 is $157,971,390. It's a change of 5.11%. If I haven't said it three or six or eight or a hundred times, the health has been the biggest driver. It's 2.21% of that total 5.11. Leaves 2.9% increase across the board for all other costs. And would result in an estimated tax rate of $12.07, which is an increase of $0.56 per thousand, estimated. Clearly, we're a long way from that becoming the tax rate. And the estimated rate of tax change, in that case, 4.88%. And we'll talk in a few more minutes about the FTEs, but that general fund budget is reduced by a total of 9.06 full-time equivalents. And when we net out all changes, that comes back up, if you will, a reduction of 6.32 overall, including all funds. the next slide I provided for you a summary that clumps if you will or compiles into some smaller categories bigger categories but a smaller list elements of the budget so that I could walk down through as we prepared to answer some of the questions that have been asked it started to feel like tonight might be a little bit of whack-a-mole because the there were a variety of questions all across the board and so instead i'm going to walk through the budget essentially from the beginning to end compartmentalized or broken down into components and try to pause for just a moment and answer maybe unasked questions especially with regard to a couple of areas that we don't normally get a chance to talk about so i hope that it will be educational while at the same time trying to address the questions and i'll do my best to call out the questions as we as we move through so here is the proposed summary the next slide then we'll speak to Salaries and benefits as the first component. And so for those that are following along and looking at your notes, salaries and benefits as a total, just over $107 million. It represents an increase overall of $5.835 million, which is 5.73%. The category of salaries is the first of those, so let's talk about salaries. There's been a lot of conversation through the course of your meetings about salaries, and we'll talk over the next two or three slides about some of those details. It's important to note that in the aggregate, all salaries, all departments across the board, Salaries are rising by $1.5 million, a total increase of 2.33%. We're going to talk about some examples where folks picked out and we're looking at increases of 11 plus percent. The reality is that all salaries, all in, 2.33%, year over year, $1.5 million. And that already reflects a 3.03% COLA, a COLA being the 10-year rolling average of the Consumer Price Index. The November release is what we use. That number came out at just 2.8, essentially, the CPI was. Added that into the 10-year rolling average, 3.03 is the COLA then. And that's a definition that's in our collective bargaining agreements. We'll talk about that in a minute. So all of that is built in. Additionally, these budgeted salaries reflect the 9.06 FTEs that have been reduced. It's worth noting that across the board, our salaries are driven by 15 collective bargaining agreements that we have with our union groups. The COLA is built in as an escalating factor in each of those contracts, or there's some version of that. And we have five of the 15 that are unsettled right now or are expiring at the end of June. And we're going to talk about that in a second as well. So, sir.

Just a question on salaries and benefits. was looking back over the last four years um and thanks for having all the data accessible there it looks like we're between 1.7 percent and 4.4 percent in terms of over budgeting because of vacancies have we considered taking maybe a vacancy factor and putting it more conservative than the least, you know, or the most conservative year, like a 1.25%, and carried that through the entire salaries and benefits to see what we would save.

No, but that's an exercise we could absolutely do. What you're suggesting is that we are budgeting, and yet we experience vacancies throughout the course of the year, so not all salary dollars are expended.

Right.

And if you could project some of that some of that annual savings you could reduce it from the budget and and the clarification i would just want to throw out is that means that you will reduce on an annual basis the fund balance that you have left over and that means you will struggle to meet changing needs and we may risk that your triple a rating could be something and i've i've heard that thrown out every time even before i came to this role and i don't think you want to live in fear that the aaa will be changed but right now we've we've managed to settle pretty steadily at the 13.6 level for your fund balance and if in fact we if in fact we gamble that we won't fill and find that as a statistical reality and then cut that that's so it falls to the fund balance on an annual basis so

right yeah i mean i i'm not saying like a gamble if it's a gamble then you know not looking to to push that but in terms of you know like where it's been on the high side of four and the low side of you know 1.7 if we could take below all of those and say hey what would this look like in terms of a budget going forward for the next year to see you know what that would look like that would be helpful to see if there's something that we can we can save

It would not be small money, obviously, on $67 million, even 1% is real money.

just to follow up on that have we ever looked at the reserve amount for vacation time that we accrue and have we over accrued for that so let me defer that question for just another couple of moments we're going to talk about leave a term we haven't had a lot of we haven't had any of that conversation in time i've been with you so i thought we'd talk about that for a minute and we can address it then

Counselor, any other counselor bag?

Thank you. Nathan. So just looking at this, I see, you know, total of all salary and wages goes up 2.33%. However, COLA, which the vast majority of our employees gets, goes up by a bigger number. I'm assuming the difference is because one, there's a reduction of FTEs, but two, you might have high income earners retire who are replaced by lower income number earners. And that's why there might be like a, They look like they don't match up.

Absolutely. I think what you're seeing is the result of that compiled. So you certainly have some savings because of your hiring. And then you have the FTE change. We're going to talk about retirement in a moment. But if you skip down the slide a couple of numbers, you'll note that retirement, which is not changing and based upon wages, isn't really falling because in the mix some of the positions that are departing were not eligible for retirement and that wasn't a factor. So it's, there are moving parts in all of these and absolutely I think that's the explanation for why you're at 2.3 as opposed to 3.03. Thank you.

Anything else in the area of salaries?

Okay, then let's move to the next slide and talk about the head count. Just wanted to make sure that we talked about the 9.06 and folks were reminded so that we could dig if you wanted to or needed to. four departments, essentially, that are involved in the changing headcount. In the inspection department, we saw an increase of 0.6 FTE. We had an existing employee who was allocated 40% of the time as an electrical inspector to the inspection department. The other 60%, they were actually doing electrician's work. I'm going to steal all of Shanti's thunder, but if you were to bring the director up, the director would tell you that in 2020, we fielded 683 inspection requests. In 2025, that number is just shy of 3,000. and we had brought on the part-timer to try to address some of that growing need and ultimately shanti came to us at the beginning of this cycle the beginning of fiscal 26 actually and said i gotta have i gotta have extra help or we're gonna go back to the days of yesterday which had long lists or long lines of weights for permitting for inspections and so uh he made that move and would tell you that even today the inspection the inspection count at the end of third quarter had climbed beyond 2100 this year so so there's the first that's a that's not even to speak to the revenues because obviously those inspections generate revenues and so to the extent that this was a position that funded itself that was how we treated it at the beginning of the year and at this point we hope to carry that forward although certainly the director is the first he'll be the first of our of our team to stand up and say if the numbers are changing he'd be he'd be willing to let go of staffing that are not directed by the need the second position that's being added this year in the net nine reduction is uh deputy fire chief training that i know council has had some conversation with the fire chief about So I'll let that be for now. And then I'll tell you that in the area of the public works, the Department of Public Works, there were a net reduction of 3.1 FTEs in his area, in highway. One of those is the actual reduction of a custodian. The other 2.1 of reduction are reallocations. uh half a half a position and a half an fte moving to parking and 0.8 to each water and sewer i'm sure when the director has a chance to speak to you he'd tell you that that the work that they do in water and sewer is regulatory in nature and that those decisions and this these reallocations are to try to best connect the work being done by our staff to the source of funding that should pay for the work being done and then in the school department there were a net reduction of seven and a half ftes two that two that i would address first would be to remind you that in the central office a clerical position related to personnel work has been reduced in the next budget as has the assistant business administrator position those are positions that the city will support human resources will pick up some of the work that was being done by that personnel focused individual and the finance office will work to support the superintendent and the new business administrator with the accounting support that was being rendered by the assistant business administrator there were uh there's also there's the increase or the addition please of the assistant special ed director that again you've had conversation with the superintendent about There were a handful of moves in the area of teaching The net of that is a reduction of one teaching position But included in that is an increase of one if you will the P the middle school rise position that I know some of you asked about and commented on Additionally, there was a net reduction of two and a half pair educators to tutors and a net reduction of one high school clerical position So when it's all said and done, it's 9.06, just over nine full-time equivalents. And I take the opportunity to remind you that we reduced in the general fund 10.7 positions last year. Add the nine that we're talking about this year, and we're at just shy of 20 reduced position in the general fund over these two years. And if you reach to all funds, that looks like almost 21.5 positions reduced. Before we go any farther, questions that you might have about the FDE headcount. Thank you.

Does this include the director of pupil services?

The assistant special ed director. Yes, I'm sorry. Wow. I may not have shown this to the superintendent because my language was different from his. That's regrettable on my part. Yes, that's the same position. Okay, thank you.

Nathan and just to clarify that as you have the assistant special education director I mean this is an effort to mitigate and manage a little bit the because the high cost of the special ed kids and supporting that program this is an effort to try to mitigate a little bit of that yeah

Is he saying yes back there? Then I'll take it. If you have a deeper question, I can certainly invite the superintendent to join us.

Nathan, what's the loaded cost of the Deputy Fire Chief salary plus benefits?

hundred and I think the number I was carrying was one hundred and seventy seven thousand and some change and that does not I don't know that that includes health and dental I don't know that includes health I think in all of my numbers I didn't we're behind in health so I'm not cutting I would I would recommend we not we not try to subtract from the health category when we're behind and going to use the reserve funds as it is so I think one hundred seventy seven thousand something is what I got okay and the same Nathan for the the new position in the schools in the schools loaded cost yep I don't have that off the top okay I think probably close to 200 again with the net reduction of net reduction of seven and a half I think we would in this case be looking at salary tax retirement so it's probably shy of 200 but

I'm not carrying that, are you? Yeah, I'm not carrying that, but I think your testimony is public.

So close to. You want to pull that up? We'll keep talking and we're going to have it.

So just to maybe just put more, let's get through the presentation. If there's specific questions on departmental, we'll get back to the departmental. So is that all right?

Yeah, my hope was that we not lose, we not have to spend your time redefining.

No, it's great to be able to ask questions on this. There's a lot that's in this presentation that is just going to be questions of the council. But as it gets into, let's just make a note, if it's specific to a department, we'll just save that to the end so we can have department level questions.

Okay. Next slide. Again, I wasn't sure that the council all were familiar and the public would be in the same category for a number of folks. So I thought we would take a minute and just walk through Our salary and wage scales, generally speaking, are a matrix of grade and step. Sometimes that grade reflects the position or the level of the position, and the step generally reflects experience, time in grade. Each year that salary schedule gets advanced, generally, according to the terms of the collective bargaining agreement by a calculated COLA, what we just talked about a minute ago, the 10-year rolling average. I would shout out that if you haven't heard me speak yet about the 10-year rolling COLA, the 10-year rolling COLA what I would argue is for the taxpayers been a good solution. We run behind the CPI on a 10-year rolling average because of the We run behind, oh, I'm trying to see that spreadsheet in my head. We run behind the Social Security Index by a measurable number, half a percent, I think. We stay behind over the last 10 years of the COLA that we've used. And so it works, and we can dive into that another time if you'd like. In the slide, there's actually an excerpt from one of our collective bargaining agreement salary scales. And in that, you can see the grade down the left-hand side, and you can see the steps running across the top. In scales that look like this, generally speaking, you're hired in the early steps based upon your amassed experience when you come to us. On an annual basis, employees advance a step if one's available to them, and schedules obviously start at lower amounts, and we have, at least in this example, but in most of the general government contracts, you have a 5% escalator in early years. 5% certainly feels like a big percentage, but it's against a smaller amount, and it ends effectively when you hit the fourth or fifth year that you're with the city. And then you wait until you've had a service of seven and a half years. And at that point, you get another step, which is worth 1%. Then you wait until you've been here 10 years, and there's another step. But then you wait until you've been here 15 years. So at the higher end of the scale, where you are making a higher salary or higher wage, the increases are smaller, reflecting that they still represent larger dollars. So I wanted to share that as a backgrounder so that you could appreciate when we talk about, we've had folks talk about looking at a salary in the FY26 book and seeing a number and then looking at a salary in the FY27 book and seeing a number and coming up with a calculated increase of a number like 11 plus percent. So I would share with you that at the same time we're using these scales we're negotiating some of them and on a slide just coming up i'll remind you about the collective bargaining contingency that we have in the budget for unsettled contracts that are expiring this year june 30th we'll need dollars to settle those accounts and fund the increases the cost items included next year in the budget today for an unsettled contract, somebody whose contract is expiring, you would not see a COLA because a COLA can't be awarded, it hasn't been negotiated yet. In FY26, we had multiple, we had eight of our contracts that were expiring and being negotiated. And so our reserve, our contingency last year was $1.99 million. As those all settled, coming to the council and being voted, the dollars from the contingency were transferred into departmental lines to cover those increases in their salary lines. And so in the budget book for FY26 when we put it together, you had somebody who didn't have a COLA. So if I were to pick the cheat that I left in my book, Excuse me, so I don't get this wrong. If I were to just pick a number that we could work with easily and say $50,000, if we had an employee making $50,000, that's what was listed in the book for FY26, but when the negotiation was over and the contract had been approved by the council, we would have increased that salary line by 2.84%, almost three, right? Remember, almost 3%. So the book said 50, but in fact, that person was gonna make 51,420. because there's a 2.84% increase that gets transferred in after the book was published. After the fiscal year starts, it gets transferred when you approve that collective bargaining agreement. Now into the FY27 book. We add a 5% step because in this case, this employee happens to be a relatively new employee and is still early in the scale and sees a 5% step increase. That 5% now moves that number to almost 54,000. And then we apply, because that's what the collective bargaining directs, 3.03% COLA this year for FY27. And so the end result is that the FY27 book shows 55,600. versus what it showed last year, which was 50. So now you see a $5,600 increase. And just for rough math, if you said almost three plus five is eight plus another three is 11, over those two years, it was in fact 11. It's not an 11% raise in a given year, but it reflects from book to book. by the same token but a slightly different scenario you have cases today where you have one of the unions that's negotiating right now is 1386a it's the it's the dpw workers the public public works folks there will be experienced people at the top of the scale who are not entitled they're not eligible for a step increase this year so their 50 000 position in the fy 26 budget book still looks like $50,000 maybe in this book because they weren't negotiating last year. Their $50,000 already had the COLA baked in. This year, they're not entitled to a step and there's no COLA because we're still negotiating that. So their position is still $50,000. It doesn't mean that it's going to stay 50,000, because once they settle their 1386 successor agreement and you ratify it, we'll move money, presumably for 3.03, although I'm not involved in the negotiations, don't know where that's at. But whatever the rate of increase is, we'll move that into the line, and then you'll see it. But so if you take last year's book and this year's book and you pick accounts, you pick lines and see that, or pick individuals, you may see that folks don't have an increase or do, and the devil's in the details because depending on which category they're in, negotiating, not negotiating, have their dollars in contingency or not, that would give you a different result. That is not to suggest that there weren't some changes, individuals were hired, people left, there were position changes that got made. There may be examples where you can find that there are exceptions to that, but as a rule, fitting within $1.5 million and 2.33 increase overall, some of what has been described at the microphone is explained because we're in the middle of negotiations, even as we're in the middle of budgeting each year. I thought about two or three different slides to try to do that visual math, and probably we should have, but how did we do? Did that make sense, folks, generally? Questions about that before we, you know, questions about that concept, I guess, before we walk away?

think it would be helpful maybe just to see like how much of in terms of salary benefits represented is represented by COLA and how much of it is represented by step increases that could be a simple way to show that so that you know we could without having to have you come to dinner um every time and explain all of that um just explain you know what's the percentage there and i think that you know it's it's under it's helpful to understand all the steps that we have really um you know um in terms of trying to keep employees incentivize them to stay and then as they as they become smaller but more meaningful step increases as the longevity piles up so maybe that's just one thing I don't necessarily need that for this budget but a way to be able to kind of show this going forward would be would be helpful it'd be an excellent addition to the budget highlights for instance to do a or to the personnel summary that section we could dig there

Okay, thank you.

All right, next slide then, I guess.

Among the things that have been discussed was a request to talk about and see the vacancies as they're listed. So the vacancies were broken down into spoken down into ultimately three different slides so here's the first which is general fund on the municipal side and I won't list them all describe them all but the list is in your is in your is in your slides the administrative assistant in the city clerk's office is position that has been advertised and we are at a conditional offer status right now working with a final candidate in the finance office we have an accountant three position that is posted this position was not going to be filled for at least the first half of the year because it was going to fund the assistant business administrator position that is being reduced from the city's from the school budget but we needed that person to be there to close the year and help us through to the transition to going live in the new accounting software first of January But with that position coming vacant at the end of June, we've now posted to make sure that we fill so that we can continue to support all of the tasks that we have, including now the work that we'll do to support the superintendent and the school department. The human resources generalist position is driven by a retirement in human resources, and they're on the final steps now with a candidate for a retirement that has been planned and is imminent now. And then I want to call your attention in in the vacancies here that essentially are part of the highway department of public works and and offer something that we're going to see if i can't do better and make simpler next year in the in the subsequent slide that is enterprise water sewer parking you're going to see these two equipment mechanics that are here you're going to see them show up over and over and over again and ultimately it's going to look like there might be eight people uh being hired when in fact there's two because these two positions are funded a third from general fund highway a third from water a third from sewer and a third and a tenth from parking so they show up on this list and much like we do in the cip we have projects and then we have the combined projects at the end of the of the end of the slide deck or the element sheets i i propose we do something like that so that as we look at vacancies it doesn't look so overstated because in this case there's these two positions that are split in their funding uh in addition to the list that we have here i wanted to just tell you that the fire department has no posted vacancies as i understand it right now the police chief was with you recently and updated you on what i think was seven new recruits headed the academy that he reported out on and uh and so his vacancy list looks different than it has uh of late and right now there was a conversation just yesterday i think or the day before that we have lost a dispatcher and so there are I believe four vacant positions in dispatch but there are also multiple applicants that are in the background check process right now and so I human resources human resources didn't have evidence of a posted position right now that she could report on but but they're working they're working right now to use those candidates against the vacancies that exist so that's the first piece I guess we should go ahead yeah go ahead thank you very much the second then is schools some of which is most of which is general fund but in the case of food service that's a special revenue of its own but in the case of schools we're in the we're in the peak season of hiring or maybe the superintendent would suggest we're at the coming to the tail end of the of the heavy hiring season it's important that you identify vacancies that you have for the fall and fill them If you wait until July or August, the pool of candidates generally, and I say this cavalierly, but with some history or some experience, the pool of candidates is largely made up of those that didn't get hired anywhere else. So your hiring for professionals is well on its way of not wrapping up. But we do, I think, in the schools routinely have some turnover, even through the course of the school year, in the custodial ranks. where you'll see right now six positions that they're looking to cover they're looking to fill a handful of paraeducators in this case at two of our schools and then a list there of six more cafeteria workers the administrative support position that's listed is a clerical position in the central office it is not the position that's been reduced from the from the proposed budget it's a it's another clerical position it is essentially administrative assistant to everybody up there in the schools including the assistant superintendent the business administrator the facilities department and the food service department as well so that's an important position they're advertising for now And then there's a professional position left right now, which is the ELO, Extended Learning Opportunities Coordinator, for the high school and the Career and Tech Center. And that is a teaching position that is waiting right now for the new CTE director to be named so that that individual can take part in the hiring process.

That director has been named.

That director has been named. And now we're working on that. Tuesday night, we confirm that. Tuesday night, we can. So Tuesday night, we've got a new director, and now we'll move forward. Questions there? Okay. Now let's talk about benefits. For what it's worth, we've talked about benefits a lot in the last four, five, six months, so I thought maybe I would just hit the highlights and remind you that Unless I've missed something, there are no optional, not optional, there are no voluntary benefits, there are no extra benefits. These are all contractually driven. In the case of health insurance, we've talked about the fact that school care is up 26.2% and the Anthem plans are up, health plans are up 11.4%. We talked some about the stabilization reserve. The stabilization reserve for health was created in 2001. And that's going to lead me to the leave of term in a moment, but I want to not miss the opportunity to restate the fact that the school care assessment, the $1.57 million bill that we are facing, is not part of the budget. We've not budgeted for that FY27. So if, for instance, we found a pathway to not paying that, that certainly would be a savings of $1.57 million that you might otherwise spend, but it's not budgeted for in FY27. The intent is that those dollars will be found in savings in this current budget. salary there salary variances because of vacancies things that we will hold back on end-of-year encumbrances that we might otherwise have executed on that we won't because we'll use all of those dollars to make payment against the 1.57 I appreciated the council of calling that out last time because I hadn't addressed it so I want to make sure I said that again and thank you leave a termination So, again, in case there are those of you that haven't been a part of that conversation in the past, leave of termination was a stabilization reserve that was established in 1999 to manage the impact of accumulated unused leave in the 90s that was identified in the city that we had a growing liability that was more than significant because we had no governance on no limits on leave time that could be accumulated when unused and so leading up to and through 1996 the city did a lot of work in establishing in language in our collective bargain agreements limitations on that and grandfathered folks who were employed as of a date in 1996 retaining for themselves the eligibility to be paid out for a share of that accumulated unused leave that continues to represent the liability and went back and double-checked and updated the data we are down now to 29 employees two of those in water sewer one of those each in police and fire and 18 on the school side, leaving five others in general government. And did I do that right? Five, seven, yep. So, and it's in your slide. But we, so we've identified that and right now that the balance in that leave it term is right about a million dollars at the end of FY20, FY25. And if you used as a round number $100,000 for every one of those 29, they should all not be most of them won't exceed that so that's a high number some of them are in categories that are not professional so their numbers are measurably lower but in the range of two and a half to three million dollars we'll revisit over the course of this next year what we need to do because as you contemplate in a very nonspecific way, the relative age of folks that have now been with us since 1996, we have to be in the handful of years, the last handful of years in which we'll see most of those folks retire and exercise on this privilege.

Nathan, is there, I guess in terms of those conversations, you said there's 29 employees, and the fund is at what level right now? A million. A million. I guess is there... has there been any thought so somebody will get this and it will be a it will be a a check on their w-2 and it will be taxable right in most in most cases they take that check over multiple years but yes sir it's taxable regardless Is there any, I guess, is there like the present value of money? Have we considered like the present value of money for these employees and looking at to see if there's any way that would make sense for them financially and make sense for us since they have better opportunities to invest income or money than we do as a city? Is there a way to... pay them that money faster through some vehicle that would have a better tax benefit for them that would allow them to potentially earn more money on that money than otherwise that they would have? And is that something that would create a delta for us in terms of savings? I know that's a big question.

No, it's a great question. I would say in nearly all cases those would be negotiated conversations, right? And so it's worth looking at. I think one of the other, well, I don't want to give bargaining tips to the other side of that conversation. So there are some reasonable arguments that I would make if I were among that group. that would make me want to do this one way or another, because I think it would look different on their end. But certainly, I think it's worth looking at and analyzing if there could be some resolution or settlement that would see them take the dollars and do with it what they like. To be fair, I think it's worth saying out loud, the best value for an employee that has that contractual um opportunity to benefit from their longevity and their uh and and their their lack of consumption of leave time that was theirs the biggest hit is that they're in their highest paid years if they take this payout and avoid some of the limitations in the retirement systems calculation of your pension. If they take it late, then those become their best years, and those best years look even better, and that leaves them with a greater pension payout than they would otherwise have seen. And so if you had five years left of service and you took that cash now, it would be a very interesting analysis to know if your pension impact of waiting would be offset by your ability to earn with that money if you put it in the market right now, for instance. So...

And then how much we're contributing to the retirement system versus how much New Hampshire would be contributing to that retirement system. So, I mean, I'm happy for the state to pick up more of that.

It's a great, I mean, but we can definitely do that analysis. I think that's, I mean, I thought that the number was a little bit larger, but over the course of this fiscal year, as most fiscal years, we have retired some number of them. So that number had fallen greater than I thought, or lower than I thought. Councillor Cook?

I guess to follow on to that the higher your pay at the end of your employment the more you pay for your Medicare as well and as some of those calculations are changing it might be worthwhile to look at this with some employees because the differential may not benefit them in the long run for their increased Medicare premiums

So before I leave leave of term I just should answer Councillor Tabor's question and tell you that leave of term in some of the literature some of the work that the documentation I worked with when I first started we referred to it or it was referred to as the sick leave at termination account and it's fair for me to say that right now leave of term is the language that I now more fully understand and I can tell you that there are we continue to budget for and will need to continue to budget for some smaller amount in departments even after the 29 have been retired because the the liability of the reserve now is managing the annual flow of contractually contractually supported payouts for unused leave on an annual basis that we have in some of our smaller contracts, some of our contracts, so that reserve ought to dwindle measurably as we move the 29 out, but annual leave I guess is really the category that I'm talking about because nobody's getting paid out for any sick leave now, but annual leave that you're able to accumulate and then is payable at your departure, your termination, those will continue to be impacts liabilities that I think we'll want to carry in that but just won't have a great liability as great a liability so we be able to manage that

Yeah, we just found at our corporation that we had accrued as if every employee might leave the next month and need all their vacation pay. And we built a substantial amount of money on the balance sheet. And we were passed off to private equity owners who instantly looked at that and said,

I would not imagine that any reserve we'd want to keep after the 1996 commitments are resolved that would not be a substantial reserve it would simply be a budget smoothing against multiple employees that were carrying some measurable balance but I think it'll it'll be worth doing the analysis and seeing what that is because it may be something that going back to the notion of vacancies salary unspent salary dollars every year it may be something that we can reasonably cover statistically in that in that area so New Hampshire retirement system is next the New Hampshire retirement system is showing an increase of $394,000. That is tied to salary change year over year. The rates are unchanged in New Hampshire retirement. I can tell you that the New Hampshire retirement is described in the budget book first on page 15, page 15 in the budget highlight. And so there's not a lot of news with regard to FY27 because the rates are unchanged year over year. But I did want to tell you, only because I was surprised to see it on the Retirement Systems website, that middle of April they've already announced what the next biennial rates will be. For FY28 and 29, the news is very good for us. There's a substantial rate reduction coming that will generate savings in our budgeting process for FY28. It will then stay level for FY29. The retirement system does this in two-year cycles. employee contributions are unchanged but the employer contributions are falling and quick calculation says that it will be measurable and helpful certainly in that budget cycle next year any questions about retirement and then in the next slide if I take you there a counselor asked a question in the in one of our sessions about about the loss of the state's contribution against teachers, police, and fire employees. And so I put together a quick slide or I resurrected and updated a quick slide that gives you or illustrates for you the year-over-year impact that that loss has inflicted, if you will, on local taxpayers. I did give the state credit for the one-time payment of $624,000 in FY23, but otherwise this graph leads to just shy of $40 million, $39.2 million over the course of those years from FY10 to this coming FY27 projected. So other benefits, just to round out the conversation about salary and benefits, other benefits include all the payroll-related expenditures, your Social Security and Medicare. Those are actually increasing by 1.74%, about $126,000 of new money overall in benefits, and the expenses, the payroll expenses are about $87,000. Dental insurance, walking through these other benefits, I thought I would try to address the request for some background or some information on rate change and the why. And so I can remind you that our municipal coverage with Health Trust and Delta Dental is up 4.4%. With Cigna Dental on the school side, it's up 4%. Total dental increase is about $12,800 citywide. So those dollars didn't add up to huge increases. The rate change is driven primarily in both of those pooled programs by cost increases in actual dental care, inflationary based, as well as our claims rate. Our medical rate setting is far more complicated with pharmacy trends and medical trends and the like. But dental insurance, at least with our risk pools, is fairly straightforward. But it's also important to note that in FY27 the rates are adding a measure for their risk pool reserves. And that's true in all of our risk pools. So we'll talk about that again. In the area of life insurance and disability insurance, eligible employees are provided these and rates are unchanged, but rates are also driven or the coverage is driven by salary levels. So there is some increase. In this case, life is up $5,000 and long-term disability citywide is up $8,000, and those are related to the changing rates of salaries rather than the coverage itself. Our municipal employees are covered by Health Trust through Madison National Life, school employees through Moss & Moss with Sun Life Financial, and those rates are driven by our workforce demographics, so ages, obviously, rates, salaries, and our claims history, as well as economics across the board. And then there's a small amount, $14,000, that is tied up in contractual items for continuing education, the fees to support flex spending programs, et cetera. So that's the majority of other benefits, although if we can go to the next slide, workers' compensation is the last of those. But I thought I'd talk about property liability at the same time because they're both provided to us by Primex, the New Hampshire Public Risk Management Exchange, which is another risk pool in addition to school care and health trust that serves the city. We participate in these two programs and in both cases they would, they have told us and would explain to you that that are exposures, so in the area of property liability, it's property, property value, the nature of that which is being covered. In the area of workers' comp, it would be payroll dollars and those increases, as well as claims experience, are significant drivers. Today, they are suffering the rising costs of reinsurance, which are somewhat inflationary and somewhat driven by geopolitical realities and losses that they've experienced. but they point in both cases to increased contingency reserves for the pool. What really seemed to coincide here was the reduction or the elimination of the CAP program. And for those of you that have been around a day or two with us on the council, you have approved in the past a CAP, which is a contribution assurance program, which is a multi-year commitment that we would stay with the pool, and the pool would then put a limit on our rate increase. And they have eliminated the CAPs, discontinued them across the board, And it sure appears that what has happened is that they have been, we have been shielded from some reasonable rate increases that should have happened. Sounds familiar in the pool concept, and they now have to make back and replenish the reserves. And so you see in the analysis that across the board, general government, police, and schools are up measurably, and those are not driven by dramatic increases in claims experience. They're driven more by the needs of the reserve. needs of the pool and I would remind you that the change the workers comp change in fire was a reassessment of the risk statewide for volunteer and call-in officers as opposed to full-time professional officers like we have recognizing that that we actually represent a lesser risk and the volunteer call-ins are now being assessed a greater a greater amount of risk and thus a greater amount of cost for the coverage In the area of property liability, the city saw a 33% increase and the schools looking at 7.5%. What I also wanted to call out from one of the questions that was asked was there are discounts that have already been in place for us for CALEA accreditation in both workers' comp and in property liability. And it was noted for me that in the area of property liability, they're continuing this primex is actually looking now at state accreditation to see if it would indicate appropriately you know a discount in liability as well that doesn't exist yet but it may sir

Have we looked at, and is Primex the only game down? Have we looked at others?

It's the only pool after the elimination of PLT, which was another risk pool. Primex right now is the only other pool of its type in the state. There's been a couple of attempts. I have in the past looked at commercial insurance, and there are some entities that have made that move. I will tell you though it's a cultural shift because the risk pool lives by statute and covers everything that we need to have covered. The commercial insurance comes in with a 15 page inventory and talks to you about everything that will not be covered and they walk through exclusions. it's a totally different it's a different kind of coverage certainly it prices differently and and we could certainly if as well especially if the pools are all going to start to see this kind of concern expressed in their rates we could certainly take a swing and look at some of the commercial opportunities that are out there is it is it are we able to know what will be excluded from that oh yeah i mean yeah i mean that's the the one time that i did it that's what the whole it was a three-hour visit to walk through the to walk through everything that represents an exposure to identify what would be limited what would be excluded and it was uh and it was it was it was an exercise for me personally because it asked me to go and learn about what my legal limits were and what my legal obligations were under statute in a way that with the pools when I never had to because they cover everything the statutory so I guess you know it would be it would be helpful to know obviously it's a more exhaustive exercise certainly than for this year but given the

It's hard to imagine that, well now I'm editorializing, but if it's the risk pool for the entire state and they only recently figured out that we should be treating firefighters that are professional and trained different than volunteer firefighters, there might be some other areas in which we're carrying risk for smaller communities that are not as professionally run so to understand what the thing like where there could be synergies with our departmental staff and understanding that and if we can be commercially insured versus the risk pool is something that certainly would want to see for FY 28 because this is probably something that is you know

going to continue if this has been a trend and they had the cap before yeah absolutely thank you your honor so i have a question about um these two different types between workers comp and property and liability can these be split out but with different insurers or is this a one package

No, no, you could take workers' comp and go in one direction and P&L and go in another for sure. And within P&L, I think you could even break down because within our property liability, we not only cover, we not only see property liability, but we also have our professional errors and omissions, bonding of treasurer, bonding of, you know, those, all of that is in P&L as well. And I think that was one of the things I learned as well going through the commercial exercise was not everything that I had traditionally seen as P&L had to be in that same bucket. So absolutely, you could break this in two, maybe three or four pieces.

Very good. Thank you.

Thank you. Then the next slide is really for your reference. It was in deference to the conversation about multiple insurances, just providing by insurance, by general government and charter where we're seeing increases of what percentages and what dollars. So I won't spend a lot of time there other than to say it's in your file now for reference. contingency collective bargaining contingency with budgeting as I said for five of the 15 city unions there's four hundred and sixty thousand dollars and that'll live in your budget on the contingency line and then as you see the resolution and approve contracts over the course of the year those dollars will be transferred into departmental lines where those salaries and taxes have impact Next up, other operating. So I'm moving to another category now. So I dealt with salary benefits first, and that's good. That was 76% of the whole budget. If you think that means that we'll speed up now and be quick, then I don't know. Maybe I'm lying to you. But I hope that it's educational and worth the investment of time. In the category of other operating, we're a total of $1 million of new money. It's 5%, but it's 13.6% of the overall budget, and it's 13% of the increase as well. I wanted to draw your attention to energy. This is a catch-all for electricity as well as natural gas and gasoline and say to you that multiple departments had expressed concern about the Strait of Hormuz and the geopolitical realities right now and the price of the pump and where things could be going. And they all were asking for some contingency to be added to the budget to help with this. The challenge with that is if you add 50 or 60,000 or more of contingency to get to where we're trying to get to, you'd have to cut 50 or 60,000 or something else. And so as it stands, we have left the budget without a contingency in this regard and anticipate the department heads impacted by the price of gas will have to make concessions or adjustments over the course of the year as we identify how bad the situation is. Now, having said that, there's also citywide contingency that we carry in non-operating and so that exists as an opportunity to resolve challenges that arise as they do I should have said at the outset we are locked down with contracts for our electricity and our natural gas across the city any adjustment that you see in those lines is due to consumption, changes in consumption that have allowed us to save some dollars. And the reason I drew your attention to this is that categorically, all of it is down 10 grand as opposed to being up by 50 or 60 like department heads might have liked. The next item I talk to you about is welfare and just remind you that direct assistance grew in the FY26 budget, anticipating because of changes administratively in DC and how that trickle down might affect support programs that would impact our residents. Working with Jody Carnes, our director, we increased, we made increases in the FY26 budget. She has thankfully not seen the need expressed in cost the way that we might have anticipated. And so moving into 27, she's made reductions essentially in shelter and emergency shelter, totaling just over $40,000. And if she would have come to the microphone, I think she would lay responsibility for much of that on the greater level of case management work that we've done, the impact of social workers in the conversation. and our ability to work effectively with PHA as well as with our shelters and supportive agencies in the region such that we're providing services with less expensive solutions, greater management, greater foresight. So those are the first two if you look at the screen before we leave it pupil transportation Special education services are next as well as other non salary So go to the next slide Just jumping back to the energy fuels.

Yes, sir. I presume that's primarily gasoline or diesel for the vehicles that the city has the concern the concern is for diesel or and in my industry it's import export business uh quotes that went out two months ago all have like a fuel surcharge if it's going west coast port or east course port so that's a real tangible added expense that wasn't anticipated when this budget was put together right at least for me it would be helpful to have is that number 50 000 the appropriate number and if we were to create a a contingency fund

one is that the right size and two what would have that adding that to the budget have on the overall effect i don't need that right now just we've got it i think i think that that's a number that that's the number that was offered to me and i refused it that what i just said you know we'll have to figure that out as we roll uh but yeah we can get that

Nathan, what's in the other non-salary? We're going there, yep.

Let me hit these next couple of slides, and then I'll be at non-salary. I'll be at the other.

So the other non-salary we're going to come back to?

Yep, we're going to come back to. So I didn't want to miss, before we leave energy all the way behind, there was a question asked from the podium. about an increase in electricity immeasurable in recreation. In fact, we've zeroed out the recreation division that was called summer camps. Those salaries have moved to his special revenue where those salaries are funded by program revenues. and all that was left behind were an electricity and a rentals account and we've moved those up into the administration division so that we can carry them there you'll see that we've spliced pages 373 and 374 pulled those out you can see that we moved them out of summer camp and into admin didn't want to miss the opportunity to answer that question Next up is pupil transportation. The superintendent is here if you had questions, but I would tell you that $441,000 of increase is nearly 20%, but over just shy of half of that is related to our out of district transportation costs. moving to our out-of-district sites, and another 40% of that is tied to our in-district routes, moving students with either the big buses or the specialized transportation, moving them home to school and back home again each day. A smaller amount, just under 10%, is about forty five thousand dollars and that's related to our contracted rates tied to field trips and athletics and the like those are all still covered under the contracts that we have with sta for our big big bus regular routes uh and um oh and sta's got our

STA's got them both now.

Also has our routes. STA's got all of our route traffic now. Questions? Councillor Coot.

Thank you. That $213,000 for out-of-district, how many pupils is that for? Are we estimating that to be four next year?

So maybe the superintendent can come in. I will tell you that the way those are priced, they're individually tagged. If you look in the school budget, you'll see every one of them has a separate cost called out. I think last I saw them, they're numbered so that there's nothing identifiable about them, but they're each in there. So I would say, yeah, that cost is for that number of students, however many that is. did we used to keep this in transportation was this previously in out of district so that 213 whatever the costs were for transportation out of district that's always been in the out of district cost center well i say always for six years seven years so um there's a cost center that deals without a district cost center 165 and then all regular transportation meaning daily routes as well as field trips and the like that all lives in 195. so but i'm just trying to so the but

The other cost center, 195, has increased 441,000? No, this is combined. Oh, it's combined.

Yes. This is transportation culled out of the budget. As a matter of fact, the athletics, the athletic transportation is actually in 115, the athletic budget.

Okay, so this is represented in the increase in out-of-district, and this is just to pull together for us to be able to visualize transportation. Yep. Got it.

okay um a couple of things uh mayor if i could uh the answer for the estimated uh fuel contingency is 56 000 for the general fund and overall citywide 66.2 66 200. um if we could pause here i know superintendent mclaughlin has to get to the high school to be part of the clipper awards so before we lose him if if i could pause just for this opportunity to ask him any questions before he takes off

And I apologize to the council, the Clipper award signing is our biggest award signing of the year, and I have one part of the show, which is to close out with the Haven medals, which have been being awarded for 163 years, and the superintendent always gives out the Haven medals. So we're going to time it just right where I think I'm going to be running in from the back, down to the front, grab the microphone, give out the Haven medals, and the award winners are here, sealed.

um so i'm happy to take any questions though before i uh have to scoot uh counselor thank you thank you superintendent i remember going to the clipper awards i got a couple of those back in the day i know we have a couple of alarms i don't have any haven award medal winners student athlete award there we go um but um i just want to ask about the director of people services um so the intent on funding that position and cutting two current tutors um is that it'll lower the cost of this outer district? Is that the intent of this new Director of Pupil Services?

Yes, and I know we keep having this conversation, and yes, that is the answer. I mean, a year ago, if we think about where we were, you know over the course of the last two years last cycle to this cycle the schools will be down i think it is 14 over 14 and a half ftes between those two cycles uh if the this budget goes through uh last year the i mean when we were having this conversation it was almost completely driven by by special education costs uh and so this is a direct while we're making other reductions and we're down seven and a half positions net we still are trying to make a strategic investment to respond to what we saw as that big need last year. Because our concern is if we don't make those corrections over time, that we're going to continue to gobble up the rest of our budget to deal with this issue. And so we need to find a more cost-effective way. So the two positions. While we're reducing nine, we're adding back in two this year, and one is that position, but the other is a teacher who is in charge of a special education program at the middle school specifically designed to better serve kids and simultaneously target kids that might be ones that without that programming might be going off campus.

All right, thank you. Yeah, I've been reached out by some neighbors and actually some students, and they're worried that they're losing their tutor. So just as a former student at Portsmouth High and Portsmouth Middle School, I'd be upset if I was losing my tutor over funding a new position. It's just a little concerning to hear that. Councilor Tabor.

yeah on the same topic we talked about this last time there's 77 positions in the school budget dedicated to special education and i guess my question is to adding this new position knowing that we have that substantial workforce 20 of our head count And 20% of our student body, too, is affected. But my question has always been, why can't we do this within existing headcount? Particularly when I look at the school budget and we have directors of special education at the elementary level, at the middle school level, at the high school level.

So let me clarify. There are no directors at the middle school level, the high school level. There are people who are coordinators. Now, what that is is a teacher. who receives just short of a $5,000 stipend to do some paperwork while simultaneously carrying an entire caseload, a full-time caseload of full-time work, where they are delivering services to kids. They are then doing some administrative tasks in relation to organizing meetings and some scheduling a pair of educators, but those folks are not sitting around with a bunch of free time on their hands to do these other tasks, which are program development. uh and so that's what we're moving to do i think when people hear coordinator they hear case manager they think this is a person who the bulk of their day is sitting in an office doing administrative tasks and that's not what these folks are so in some ways we do them a disservice by using the terminology coordinator because all it is is a it's a it's a teacher who we're asking to do extra stuff on the side

Okay well I was looking under the special education portion of the table of positions and just What are the goals and the plan for this position? What are the outcomes you want to see a year down the road, two years down?

Yeah, I think it's a conversation that we've had, we've been having, which is our goal is to create more in-house programs, create the maximum amount of efficiency that we can to to for i mean i think the first goal is to put families in a position where they don't feel like um where we're not in a spot where they need to leave the district in order to get the services that they feel are appropriate second even better would be students who are already out of the district bringing those students back into the district uh now this position i think we talked about this before too is not a full-time addition there was we already had an out of district case manager who was a half-time position that we were paying for out of the um out of special education funds federal education special education funds so this person will be coming in assuming that role which already existed and they're really just adding this extra half capacity to do additional coordination and program development

thank you thank you superintendent I feel like we've talked about this position at least five or six times now in work sessions I guess it's confusing one the rise coordinator at the middle school that effectively is replacing the position that was eliminated in last year's budget and it's for the person at the middle school that helps kind of keep things on course when kids are having difficulties in between classes or during classes and

kind of puts a wrench in the works yeah it's it's actually it's actually a couple years ago uh it's been time goes fast uh and so a few years ago uh and it might have been i'm trying to remember from my first year here that position still existed under a different name or not or if it just left when i was walking in but it hasn't been present and and basically the it's a special ed special ed connected position for students specifically with um behavioral uh and emotional disabilities and it does you know there one is for those students to making sure that we have an op we have a specific way to help regulate those kids in this in the school environment uh it also is and i think we've talked about this too there's a ripple effect out into students who are not in those situations when we don't have the services to um to address those those students needs and that can be disruptive to classes throughout throughout the building So what we're trying to do is is to do two things at the same time one make sure those students have the services they need So then we don't our answer isn't while this is so disruptive. We're gonna send you on a bus to Massachusetts But instead we're going to have you in the school with the services you need in order to put you in a position To then put you back in the class and serve your needs and simultaneously Not have a bigger ripple negative impact on the rest of student body at the same time. I

Thank you. And part of the reason I asked is I think this is an essential position. I think we get a lot of value for dollar for it. And I had inquired with some educators, you know, if there was a way to get money back into the budget, would, you know, do we hire for it? And universally, they all said that, you know, there's a time period when you can hire these educators. And if you don't hire during that time period, you're not going to get good ones. Just kind of further reinforce the need to act when the window is open. Like the transfer window in sports or something.

It's always challenging. Where we are, and I think we talked about this in relation to the fact that we had already hired the other role, the other role, not the one we're talking about right now. we're not trying to be disrespectful the council it's just just if we if we if we don't hire Nathan talked about being in the in the middle but maybe the end of the hiring season we're really at the nadir of the hiring season right now we've already We've gone past the crest, and now we're on the backside of that hiring season. And every day that we wait, the pool shrinks and shrinks and shrinks in terms of who's available, especially for highly specialized positions like people that do behavioral work, because there's a special breed of folk who want to do that work on a day-to-day basis. Great. Thank you.

thank you zach we'll uh let you get on to the haven uh awards one just one quick question uh would you be um since we don't control any of the budget uh or the line items of the budget just the bottom line would you be um willing to entertain a vacancy factor if that was applied citywide

So it's a good question. The vacancy, I will just say this. On food service, Nathan did a good job talking about food service. What's happening both in food service and custodial is that those are positions that are difficult to fill and rotate a lot in terms of turnover. Food service is paid for through the revenue generated through the food service program with some limited offset if we're in the rears because students haven't paid for meals. But otherwise, that's kind of self-contained. On the custodial side, well, on both the food service and custodial, what those people will both tell you is we are not fully providing the services in those areas. So, for example, on food service, because we've had such a struggle hiring those folks, we don't run the salad bars, which we intend to run in each of our buildings. It doesn't happen. on on ken lynch's side when ken talks about facilities he knows at this point he'll tell you straight out that we are we are well in all those both sides food and um and uh custodial what we're doing is we're trying to compensate with overtime for a bunch of people wearing people out and we're also triaging the service so ken will tell you that if you go into our buildings right now um he's concerned he knows that we are not up to the standard that we typically would have uh and that the public would expect us to have and i just had some feedback um just the other night about some of our bathrooms at the high school for a particular for a public-facing event and it's and it's this is where we're down several folks so we will we will always do what

you you give us what you give us and we will do the best we can with it okay just in terms of looking at the data over the last 10 years maybe not outside we're outside of food service just generally not I guess the question wasn't specific to the vacancies that you listed for this presentation but just generally we any any vacancies across the city department you know that are between one and a half and four and a half percent in any given year if we looked at a conservative number below that is that something you'd consider and and it sounds like you would consider looking at what we present

Yeah, you tell us what we got, we make it work. Thank you, Dr. McLaughlin. Thank you.

Good luck.

While Dr. McLaughlin's still walking out, I want to take Councillor Tabor off the hook that he's not crazy. what you saw in the school budget breakdown is that the director an existing position is broken out a third and third a third across the elementary middle and high school components of special ed rather than being in the central office so that's not a building based it's not a building based expense the way it's configured but it is spread out so that when you were looking at the elementary you see a piece of that position and I think the way the budget is presented right now online you also see a third a third a third of the new position so thanks he answered the question that it's not building based it's not the coordinator but it's in the budget i know what you saw so yeah fractions yes The mayor asked earlier about other non-salary, so this is the final catch-all of the other operating. We've thrown them into a grid trying to help make some of this make sense, and if I just skim down through, I would say to you, in the category of training and education and conferences, There's an increase here of 35,000, and two-thirds of that is related to state mandated training in the police department. And so of that 35, there's 23, 620 or something. It's on a later slide because we call this out as a required element. so that that is the lion's share of that change in outside social services we have added eleven thousand five hundred dollars bringing that that area to 262 262 thousand contracted services throughout the city are up 2.41 our contractors are asking us the same way to help cover inflationary costs those increases are looking at three four and five percent but we've been able to contain that and that really is across the city those contracted service accounts some of them smaller some of them larger the area of software and computer maintenance there's an increase here of $99,000 so city side the majority of costs are born in IT we have a department for that there are divisions within the charter departments and these costs really are in the IT components of the police and the school department although there's also a small piece here that is city IT and And this is outside of devices, which you'll talk about when we get to the CIP IT equipment replacement category, and Subita, the subscription-based software that we're picking up there. These are other elements that contribute to the software and computer support in the departments. Road maintenance and striping is up $11,000 as part of highway, as is recycling, which is flat, and solid waste, which is down $20,000. The superintendent just left us, but there's a very small account, a very small catch-all, these categories of breakdown that the city has used for some number of years. And there's one category called student books and materials. That's increasing by 40,000. This is all part of the school budget, and I'll tell you that more than two-thirds of that is related to curriculum materials being purchased by the middle school. I believe it's math, but I'm not the expert to tell you what particular program of study is affected. And then in the catch-all of the catch-all, the other operating within other on salary, this includes across the city all of our repair and maintenance, supplies, equipment, printing, rentals. Generally speaking, these are driven by vendor pricing or inflationary pressures. um and there are some notable new elements that we'll talk about in uh in the breakdown later in the presentation about new idea new items being added to the budget but this 354 000 of new money breaks down essentially between schools public works and fire and i'll tell you because it's a smaller category in the fire department there's a 35 000 increase related to vehicle repairs and a 4 000 increase related to ambulance equipment repairs

which adds up to all but the last two hundred and twenty dollars of that of that increase in fire so that's the other the other non-salary component broken down counselor burger thank you this might actually be a question for the fire chief with the vehicle maintenance and repairs it occurs to me that we used to have a that was kind of handled in-house but that person may have retired is that why

seeing the bump because we're outsourcing it or is it just the equipment's older and more expensive and cost more to repair these days uh thanks for the question counselor no the uh the answer is because the equipment's getting older we still have the retired folks they're still working in-house trying to reduce the shop labor this is a case where the fleet is aging and we haven't been able to to keep up with it and so showing what we've actually spent in previous years and trying to rectify those budget line items

All right, and why I have you here, it's still, you know, to get a new ambulance or truck or whatever, it's a pretty lengthy process.

Correct, right, and then, you know, previous councils, right, we've skipped replacements, we've delayed, and as a result, that delay that perhaps was a year or two previously that you could overcome now has turned into a five-year wait, right, by the time we place the order and go through the budget process. Great, thank you. Thank you.

do we have a similar breakdown for the school and public works in terms of vendor pricing

so I'm working on it I'm working on a narrative for that that includes line item detail and I'm sure that I'm sure that I've got folks here who could help describe some of those for sure and I think a couple of them a couple of them get called out in a later slide and we could double back okay and then if there's greater detail that we want to pull we can keep working

And then on the software computer maintenance, the superintendent's gone, but what about the police? What is that software related to?

So what's on the spot? There's about 60,000, I think, in PD where their IT department is independent in some ways, doing their own thing.

Would you mind repeating the question? Sorry, there's a other non-salary software computer maintenance item on there. You're lumped in with the school, but Nathan said it was around $60,000. Just curious what that is.

So it's the difference between new software computer programs that are coming online and the cost between that and the previous system.

Okay. When was that procured, I guess?

It's a number of different computer programs and softwares that have been procured. I don't have exact dates for all of them. They're over a period of time that we've added that technology within the last 18 months to two years for most of it.

Okay. I guess it would just be helpful to know, not tonight, but in the future before June 8th, what the actual new software is and the functionality that it's coming with to the police department.

Sure. I can give you one example now that I think about. It's called a FARO system, or it's a crime scene mapping software, which is a new tool for our investigative division to use to map a crime scene. And the investment in this technology cuts down the amount of time and man hours it takes to physically process a crime scene. where we have this faro device which we can put in the middle of the room and it will map everything in the room or everything in the crime scene uh in terms you know in an hour and a half as opposed to four investigators doing that over the course of four hours so the investment in that technology uh however it's expensive it reduces the overall time to complete that task in the future sure um and i think that

technology is the way that you reduce overall costs by investing in things like that futuristic RoboCop thing that you just talked about there. But if we can, the better that we understand that and the better that we can point out those things that you are investing in is gonna be easier for us to justify those expenses versus just having it be an 11% increase in software computer maintenance. there so just have a little bit more background on that would be would be helpful just before sure the uh the budget's adopted awesome thanks deputy chief a couple more i can help with a couple more things i've collected some data as i was looping around one is uh

You've been through the slides, you've seen that there's a breakout on Subita. The IT Subita that I present to you tonight does not include anything from the police department. So license changes and growth of some of the core software elements are included here in this category for the PD as opposed to Subita, and that's something we need to work on for future cycles. where it would all be you know all be listed in the same space the other thing i will tell you is we'll talk later in non-operating about costs related to their new cad rms system we've pulled them out of pd and that's sitting and non-operating as a standalone that we will talk about in a few minutes but you would see less of this here if if we listed them with us in subita and you could see them broken out that way so that'll be the target for another cycle for sure Okay, so we dealt with salaries and benefits. We dealt with other operating. Now we're moving into the third and final section, which is non-operating. Everybody's taking a deep breath. They're like, is he done yet? I want to talk first about debt service. It's the first element of non-operating on a big one, although as an increase, it's only $15,000. The non-operating category overall is almost 18% of the total budget, but it's only 10% of the increase. Our debt service at this $15,000 is essentially flat at 0.11% year over year. I've done a breakout off to the left in the slide so that you can see the lines that make up the total debt service category. I want to draw your attention to $1.9 million that was mentioned at the microphone. That is the total budgeted impact of new bonding. in this case we did that new bonding in april we did it early so we could accommodate refunding you'll notice that the 1.9 is in projected new bond payment but in the principal debt in the ban the bond anticipation note is a ban and the interest you see they're all in the negative because we did two things as part of the bonding in april we refunded 8.1 million dollars We did so successfully at a total interest cost, an average interest cost of less than 3.5% and saved over the course of the remaining eight years of the life of those bonds, $417,000 in interest cost. So you see us retiring principal and interest for refunding and then adding them back at lower interest cost in the $1.9 million. At the same time, we retired the bond anticipation of the ban that we had pulled for the community campus purchase, and we bonded for the remaining $6.9 million, I think, of that. so again you see the you see the band going away and you see a new bonding hitting but all in all we worked within essentially our debt service budget we only made a change of fifteen thousand dollars and uh i want to remind you that we did that because we're carrying a triple a bond rating with standard and poor is the best that we could manage with them and uh and we're proud of the work that we did in that regard so that's debt service

uh not so much a question but a comment but correct me if i'm wrong but because you mentioned the community campus ban and originally i think we had anticipated we would use coveted funds for community campus but those funds may or may not have had restrictions that would have prevented things we could do with the property in the future that's why we use the code funds for something else and the ban and bonding to pay for community campus

excellent that's true and and we have made principal payments each of the years since that purchase uh through the band so the band is uh it's not a band-aid in the the way it was structured and used we made principal payment each cycle um uh having not found any additional or new funding streams to direct to that to reduce what we'd have to bond we bonded the balance of it moving forward counselor

Are there any updates on the Rockingham County tax and what we're anticipating?

So I literally left a slide out, but I'll come back to that before the night's out. How's that? And we can talk more about the impact that could have. uh all right so that's that service before we leave debt service completely though i wanted to take the opportunity and mention you the next slide is fine thank you i wanted to just not miss the opportunity to call your attention to marine one the fire boat it's been a topic of conversation for the council and i certainly respect that but i want to make sure that i clarified for you and the public There's no impact in FY27, the budget that we're proposing and presenting, or talking about, there's no impact of the fire boat. It is a capital item that was included in the FY27 column of your CIP, and if purchased would be bonded if purchased if we decided to go forward with the boat we would do so by coming to you first in what's probably going to be july when we bring you bond authorizations based on what's in the approved budget and that would be another opportunity to talk about the boat because and and having done that the debt service would not start until the fy28 budget doesn't mean you shouldn't be talking about it today it just means that it's there's no change to the 27 budget regardless of what you do with the board the boat I will tell you and he's right here behind has spoken to me spoken to you already that right now the chief is talking about a different boat at a price tag of six hundred thousand not nine hundred so it's two-thirds the cost and for your information I would tell you that the debt service on that over five years of borrowing would be estimated about 132 six And that would have a tax impact right now in today's numbers of about a penny and a third each year. And so the calculated impact is $10.10 on the median single-family home of $777,000. It would be a $10.10 impact each of five years. and so i commend that to you just for information obviously if you have questions about the fire boat the chief is here and we can we do that right now or we can do that later but i wanted to clarify for everybody that like the school care assessment this is this is not an fy27 budget impact

council book thank you and thank you for just yet but yeah i'll um i'd love to hear from the fire chief just about the price of the boat the it's gonna entail more training um and just why we need it now i guess or why happy happy to to explain uh good evening again um so the uh the the reason that the uh that the

cost on the boat has shifted is merely because we found a different vendor who can do it for two-thirds of the cost. The original scope of the project and the original vendor that we had hoped to use to be able to mirror a boat that the Coast Guard uses, back in December, the latest numbers we had on it had it in excess of the $900,000 number, to be frank, was at $1.2 million. We've since found other vendors that are in the same ballpark. However, looking around, we found this other vendor that can do it for $600,000. So the question as to why now is a pretty simple one, in that this boat was bought in 2018, and this ties in with your other question, Counselor, with respect to payment. The boat that we're currently operating we purchased in 2018 that replaced a larger boat and the goal at the time was to get around the contract clause in the firefighters union contract where boat operators were being paid and they were being given an additional stipend. This boat was bought six inches below that threshold and it's quite frankly the boat that we have for the mission that we use it for with respect to being out on the river, being able to protect and do some basic firefighting while at the same time being able to pick people up out of the water from either accidents or from bridge jumpers, that type of thing. It doesn't do the job in that it doesn't keep our crews protected. So as a for example, we typically, I've spoken about this before, we typically take the boat out of the water in the month of December, keep it out for January, February, and March, and put it back in in April. While the boat can still be used while it's in storage, the boat's out of the water and it gives us time to be able to say, hey, is this really something we need to be doing and putting our crews at risk where they're exposed on an open boat? And back at the end of March, the town of Newington, who also has a similar vessel, they had to take their boat out of the river for maintenance. It broke. And they needed to make sure that they had a boat in the water for the bridge project that's going on for General Sullivan as a safety vessel. So they called up and they said, would you be willing to put your boat in a few weeks early? We said yes. So at the end of March, at 3 in the morning, there was a subject that went missing, as luck would have it, off of the bridge in Newington. So at 3 in the morning, our crews are out there in their survival suits with the Coast Guard searching for this person. And that particular night at the end of March was the night where we had some snow squalls move through. We picked up an inch of snow. So while it was okay, our crews came out of it fine. They were prepared for it. That's the type of situation that I'm simply looking to avoid and to get a better vehicle that puts not only firefighters, the men and women who are doing the work, but also the patients that we pick up, put them under cover as well and keep them protected. that's sort of the Two-minute spiel shall we say?

Yeah.

Thank you chief Thank you just to follow up with the After the incident you just described I recall thinking first year of the council I had inquired with the city manager about the high-level bridge and the whether or not we should put nets underneath it or something like that and I think she put me in touch with you and the police chief and And as it turned out, there was every time that there's an incident like this, it seems like it goes to one of four or five organizations on either side of the river. So there wasn't really an all-encompassing network of what calls have actually happened or not happened because it might have been the Maine State Police or the New Hampshire State Police or your team. And can you speak a little bit to what's occurred since then?

Sure. So last summer, after a spate of high-profile bridge jumper calls, the New Hampshire Homeland Security Department, they put together a meeting between the state of New Hampshire and the state of Maine. They put the departments of transportation, the state police agencies, the local police agencies on both sides of the river, the Marine Patrol, Coast Guard, the Naval Security Forces, anybody who had a presence in the river, into a room and we started having discussions, one, on who was capable of doing what, secondly, interoperability, being able to communicate, and then trying to standardize some sets of protocols with respect to responses to these types of emergencies. From that, I can tell you that the other portion of this is to your point where who took the original call and where it went. One of the challenges that we're having even here in Portsmouth is giving it an address and a title and being able to track them consistently. So one of the ideas that came out of this is that we would give it a standardized address regardless of whether our crews were responding to underneath the Piscataqua, you know, to the high-level bridge or we're going over to Pierce Island, right? That we'd give it a standard address and then we could call through those boat responses to be able to refine them a little bit better but to make it easier for us to respond because Some of those calls were assist other agency. Looked relatively benign, but it was actually a boat mission. So out of these meetings that we've been having every three months with all these different partner agencies, we developed a comprehensive plan called the Piscataqua Emergency Response Group Plan. And out of that, right, again, all those agencies I mentioned, they talked about, we talk about common terminology, we talk about how we're going to communicate, who's responsible for what and where we go, predetermined response routes, rallying points, that type of thing. And then at what point, too, do we decline missions and say, look, this might be more of a recovery mission. Maybe this isn't what we need to do and how to extricate the different agencies from a response that's been spun up. So we made an awful lot of progress regionally with our partners. I'm happy to share with you what agency is capable of doing what. You know, the Coast Guard, the Marine Patrol, they're certainly, they're our partners, but the reality is that they too are facing budget pressures. Coast Guard, you know, as you all know, they all used to be able to see the cutters that were stationed here and were over at the Navy Yard. Cutters aren't here anymore. They've gone to smaller boats. They used to be able to deploy two boats out of their facility. They have enough staffing now for one boat, and typically what they're doing is calling us to let us know, one, that they're deploying and they're moving, and that, secondly, they're probably looking for us to help because they'll need a safety, a backup boat. Their jurisdiction runs from Kennebunkport all the way down to the state line, essentially. Same thing, the Marine Patrol, they've got a presence in the river. They're not 24-7, but they do respond in from home. There's a response delay. Even things like where we're going to meet in a secure facility to be able to coordinate and do these types of responses and be able to talk uh you know face to face have these uh radio conversations in in in facilities where we can all share the data and the information and make sure that we're doing things properly so we've made a lot of progress counselor so thank you for the question thank you chief chief does the state pier have a boat so they do the the harbor they do have different boats for uh to you know utility boats to be able to do different things

Okay, but no life safety? Correct.

And the other thing I should mention, too, is that we're the only agency that provides any paramedic-level care in the river. None of the other agencies that have boats, whether they be state and or federal, they don't have any folks that are trained or any EMTs or paramedics to be able to go out and initiate patient care.

I've known that or I've heard that there's been a lot of conversation on the on the bridges versus signage then net or maybe increased height of railings nets it would be interesting to know whether or not the state is in a position or has any interest in terms of having sharing some of the costs for the the operation of this boat going forward, given that they would be consolidating a number of different agencies in response in that regard.

I'm not sure where to begin with that question and where that query to the state, which agency. I'm happy to have a conversation.

I think you would start with Councilor Stevens, Executive Councilor Stevens. to understand where some of this cost could be shared across the different types of departments, the state peer being one of them. Thank you, Chief. Thank you.

so we talked about debt service we haven't talked about county the contingency stays flat year over year the next three items are elements of our capital budget so they're included in the cip i we don't spend a lot of time on rolling stock that's an inventory that is documented in the budget book The IT equipment replacement is a significant tech program in the CIP. There are element sheets that speak to that. And capital outlay is our pay as you go. The slide speaks to and it's important to note that these elements are not contractual. And generally, these three are all new money. So to the extent that you look at whether you have to do them or not, these dollars in rolling stock and IT equipment and capital outlay are essential and fundamental to the rolling of inventory and to the continuation of programs that you want, new initiatives as well as continuing things. But none of these are paying for something we've already done. These are all new initiatives. So in rolling stock, they're new vehicles. Do you want to do without all your new vehicles? No, because it dramatically impacts your inventory turn. But you certainly don't have to do anything this year necessarily. Same is true with IT. I would let the content experts talk about what the impacts could be with reductions. but in capital outlay, it's the same. What I can tell you is that from the request that we started with, approved by the council and the CIP, in the case of rolling stock, we've reduced $345,000. In the case of the IT equipment, we were able to shave $160,000 from what was approved, and in capital outlay, we dropped $390,000 worth of programming. All of those things are identified in your budget book, in those particular... sections of the budget but but they still represent cumulatively about three and a half million dollars and so to the extent that you wanted to cure a budget question or or need those dollars right now represent an increase of 153 thousand dollars but they represent $3.5 million that are not contractual obligations and really are, even in the process we've already been through, balanced in a conversation of need versus affordability. So I commend those three to you as areas that we can continue to talk about.

nathan on those um we talk about kind of uh providing the same amount of services but as previous years but this is all kind of net new stuff how do we get to the how does this number increase if we look at that that 2.9 increase where does the increase come from Is it inflation? Is it, like, what is the, what's driving the cost of the increase if we look at, you know, the, we're growing that from years previous?

Does that question make sense? I think so, but let me start by saying, for instance, capital outlay was approved in the CIP at 1.95 million. We've reduced 390,000 of items that were eliminated or items that were reduced, and we landed at 1.56. We landed at that number because that was a zero budget impact year over year. But all of that $1.56 million that's proposed is new initiatives. So included in that are the solar array conversation, $50,000 to do exploratory and planning, $65,000 artists live work that we discussed at length there one night. electrification of the fleet planning and analysis, on top of things that you have seen in other years, like every year, like $25,000 for the public art fund, dollars for artifact trees, trees and greenery. So for our part, I think the deliberation and the work that was done was... to get to flat year over year because everything that was in there was stuff we wanted to do. The 390,000 we cut doesn't make anybody happy if they're connected to them. The same is true with the other two categories. If I brought Ryan Babcock up, our CIO, and he talked about the investment that we make every year in the equipment replacement, that's devices. I mean, it's servers and switches. It's also laptops in every police cruiser. It's everything but school technology. And by that I mean it's even some of the switches and network infrastructure. It's just not student Chromebooks and teacher laptops. The schools budget for that separately. But it's fundamentally everything that we do, and to short ourselves on that is of impact. And so we were very careful in exercising the $160,000 or cutting the $160,000 out of that. But again, we appreciate that everything that remains, the $1.2 million essentially, is all new purchases. So the increase in this case of $153,000, um... it is it in my mind is dwarfed by the fact that it's three point five million dollars of new money that we generally include in the budget every year not necessarily for a bunch of new initiatives but to replace the things that we need so others might argue that it's continuing and that you need it and that it's you know it's it's an obligation not contractual but it's something you really need to be operational and functional but i'd commend it to you as

fairly placed it's not obligation and and it doesn't need to go up by 150 000 if you want it to go up by 5 000 or go down by 200 000 we can definitely do that okay and i'm just thanks for that i hope if that was i hope that answer helped it was helpful um i think the i'm trying to figure back out to the previous slide where there was um so like I'm not going to find it, but my printing class was listed. So does that sit in, like, do printers sit within IT replacement costs, or is that not a part of IT?

I would say generally right now it's IT's running with it and responsible for it, but the funding, there's some funding for the consumption in general admin. You're not carrying capital costs right now, are you? So printing I mean in this I'm guessing they're printers like actual printers Yeah, the printing that I referred to in other salary other other non salary that printing is like cost per copy It's ink and everything to keep the toner to keep that going service contracts on the copiers that we've got So most I don't know that any of that is in IT equipment replacement

Okay.

Is it... Because we don't buy that stuff and own it generally. It's on, you know, five-year lease.

Where could we get the information in terms of, like, what's being, like, the IT equipment replacement?

It's in your CIP.

Is it in the CIP? Yeah, it's in the CIP. Like the four pages. Okay. So it lists out everything there. Okay.

And it listed out department by department, police and fire and the school element and et cetera. And again, it's every device. It's laptops, what's sitting on my desk. I mean, they're all the refresh of those things over time. That's what's in IT, along with the switches and network gear and you name it. OK.

Okay, Councillor Bagley. Just a comment, because somebody actually asked me about this two months ago, the printing. I guess on either the GovBid or the city website, there's a contract that goes out for all of the city's printing needs, and it wouldn't be capital equipment because, as I understood it through the contract, they come in and handle everything, and then they mark it up or whatever, but it's...

it's not really it's like we're leasing the service which includes the paper and the printer toner and things like that yeah take out the paper and sometimes they pay for staples and sometimes sometimes they make us pay for them but it's uh generally the agreements that we enter into bring equipment in there's a capital leasing cost and then a consumption cost uh there are there are vendors that propose to blend that all together into a fixed cost there's different models but there right now we are separate in the schools and in the city city is consolidated with a couple of vendors and we've been working right now to try to find our find our way to a unified solution that would that would find some economies of scale give us one one throat to grab a hand around when we need to and and start you know moving moving us more into the consolidation that we've been talking about so okay thank you my pleasure in the interest of time I'll try to speed up a little bit although I've been trying to do a lot of information dump and I hope it's been worth it property liability insurance is another part of other non-operating and we talked about that previously there are some relatively small dollars compared to the rest of the budget assigned to landfill monitoring Coakley and Jones Ave those costs are there and Professional services for reval, we have a line in the budget that we budget every year and set aside encumbered for revaluation, which we do periodically, so that the costs, which are growing, by the way, so that the costs don't catch up to us in any given year. So we flatten that out and budget some of it every year. Hydrance, I didn't know that we had over 800 hydrants in the city, but we pay water and sewer a fee that is part of the fee schedule, and there's a budget here for that payment. And then Subita, our subscription-based IT agreements, we'll talk about those on the next slide. separate from Civita but part of that category we've called out in the budget last year the police body camera and taser subscription we added that and talked about it it's in its second year now it continues to have a $65,000 grant offset so it's under 300,000 285 29 something like that now Port Edge, our new ERP solution that we're in the early stages of implementation, we're going to graduate the cost of Port Edge in over three years using the capital dollars that we've been provided. So we've paid for the first year already and in 27 we'll pay for the second year of the subscription and 120,000 of that, $386,000 cost will be borne, 120 will end up in the budget as proposed. That solution, when we go live, will replace roughly $200,000 of legacy systems that we are holding onto right now, which is why we didn't ask the budget to pick up all of it, because we're already paying for the legacy stuff. But we'll be able to take those off the books. The fact that PortEdge is cloud-based makes a significant savings as well in the IT side. We're moving ever closer to being able to eliminate the the sheer enormity of the data center that we maintain, largely in this case to support that solution. And because one of the questions that was asked was about the plan or the expectation for the impact on staffing from the efficiencies that come out of the ERP, for instance, I would say to you the two positions already reduced in this 27 budget are related to the ERP. Those are the two in the school central office. So the personnel person, in replacing them, we will lean on the systems and HR, and then the assistant business administrator, largely accounting, we'll find efficiency and let that go because we'll use the new system where we're all on the same platform to find efficiencies to do that work in the finance staff. And then the other new piece is the police CAD RMS, the computer-aided dispatch and records management system, upgrading better than 20, I think the deputy chief said 27 years, the core system that patrolmen use, that our officers use, finally being repaired. That is added as a line of its own in the budget so that we can watch it, $210,400. So let me go to the next page. I won't list them all, but I'll tell you that the first three are new items. AI-assisted valuation platform that assessing will bring on to replace the Power BI tool that we introduced during the reval. There's a co-council product that I know that the city attorney has spoken about in past meetings, which is research and analysis and drafting tool that they'll use, and then new network platform support, Versa Networks. Those add up to $76,000, and those are new items being added in Subita. The rest of them, if you were to walk down through them, are cost increases that are described in the table. And this list covers $250,000 of the $262,000 of new cost in Subita. The other $11,000 or $12,000 just being yearly price increases, inflationary. If there's no question there, I'll take you to the next slide. Yep, please go back.

Quick question maybe for Ryan. Have we looked at – I know that VMware is kind of a forced upgrade or, you know, move to the cloud. Have we looked at alternatives like Proxmox that, you know, and have we bid those out and found that this is the best to go for?

Go ahead.

We took you away from T-Ball for this, so you should, you know –

Thank you, Your Honor and Council of Ryan Babcock, Chief Information Officer. To speak to VMware, they got bought by Broadcom. They've been crushing everybody with price increases. We avoided it one year by resizing the data center, and we were able to juggle licenses and avoid the cost one year. And then we had to license it. We couldn't avoid the cost again. We've resized the data center to try to limit our exposure as much as possible. Alternatives, there's Nutanix, there's Proxmox, there's other things. But our thing has been to go cloud. We're trying to get to SaaS solutions, modern solutions. We're trying not to host things in the data center. As part of IT replacement, there is an allowance in there for $60,000 to start accumulating money for equipment for replacing, if we need to, something on-prem. And it would probably be a Nutanix or a Proxmox, something small, much smaller than our current data center, self-hosted once the finance system is gone. And the data center is getting a little long in the tooth at five or six years old, so it's due for replacement. So the goal is to not have to replace it if we can.

Okay. Thank you.

Thank you, Ryan. So one of the overriding questions that was asked was put by the Mayor, talk to us about contractual obligations, legal obligations versus, and this is how I'm translating it, versus continuing services items, meaning things that we have to do that are coming back year over year with increased costs because of inflationary pressures, and then call out, identify the new initiatives, the new things that are new cost hunters that we need to address if we agree to. So again, I can skim through them, but I will say, as I've said before, salaries and wages, benefits, those things are driven by our contractual obligations. Obviously, that's all predicated against the notion that you want to continue to do a program. And if you don't want that program, then we don't necessarily have to have the staffing that goes with that program. But if we have the staffing, then the salaries and benefits that they receive are contractual. In the area of elections, we've got part-time wages that are increasing because next year we've got two elections versus the one, and we saw overages in the prior year, so we're bumping to reflect that. I mentioned the police training, state-mandated, with a new cost there. I picked up another one, police clothing, related to contractual obligations in our bargaining units, and those costs are climbing by a little over $8,000. There are others in that category, obviously, but this is an illustration of some. In the area of continuing services, some new costs or some increasing costs, the audit is budgeted up $5,000. I wrote this down, I put it in the slide, and then I thought about it later. It's $5,000 a year, but a piece of that gets charged off to the enterprise to pay for the fact that they're part of the audit. I think that's really only $3,750 of new money in the finance budget for audit. Director Wolf would tell you in inspection that he's got life safety code books that get published every three years, so this year we have to bump his budget up to reflect the fact that he's about a $9,000 cost. budget his budgets not up by that 9,000 but it's everything else takes a backseat and this year he bumps it up so he can use all of his dollars for that purpose IT operating costs. Ryan could come up and talk to you about some of the core elements that are increasing in IT. Chamber tourism, we have for a number of years contributed $40,000 to the Chamber of Commerce in the relationship that we've had to promote tourism, and that number is being requested to increase by $10,000 to 50. Let's see if I can do it justice.

tourism Okay It's a place or a place or a which I would characterize as a Tourism well, it's visitor tracking We don't love the word tracking but it's a way to locate where visitors are going when they're in the city and the cost would be shared among the chamber the city of Portsmouth the Hampton Chamber of Commerce and the Peace Development Authority Standing so there's a $10,000 ad there

city hall postage i you know i was reviewing this with somebody the other day and i said i can't believe that i plugged out as the number but we bumped up postage because we've been in the deficit in the postage account for some number of periods and uh wanted to right size that the reality is with the new system coming on uh the fact that we will probably cease sending accounts payable checks out with postage on them we'll do it all electronically i think in a subsequent period you'll see us next year be able to make some great reductions there but right now we've been running behind and so we're trying to cover that You mentioned the fire vehicle repairs of 35,000. We just got done talking about Subita. 185.9 of that was the increases that were not of new items. If you go to the next column, which is new initiatives, and I start at the bottom, you see the $76,000 for those three new items that we talked about. You see the outside social services, if I move from the bottom up, outside social services, adding that 11.5 we talked about. The training officer for fire, the 60% inspector. And then, for instance, we're adding off-site storage costs for assessing records that's five thousand dollars we started covering this cost and doing this with an off-site entity with the legal department a year ago or two and assessing is moving some some documents out for permanent record keeping as well so that's not um exhaustive that's just an illustration of some of the items that pop like i said earlier i'm working on you know providing you a spreadsheet that kind of calls these things out to department by department so that you can take a closer look and get that out to your ASAP. And then with that, if we move to the next slide and talk about the question of reducing what is now a $0.56, 4.88% tax increase, percent tax impact that we are estimating. what would it take to make that three and a half and i think the the question was asked maybe not just conceptually but more specifically what would it take uh but in in deference to not show not being sure how do i say i want to say in deference to not wanting to create controversy chaos and anxiety where it's unnecessary we've done a lot of work and identified some places some of those could be things that we could maybe move on over the course of the next year to make sure we can make cuts in or reductions in for next cycle But the impact that would need to be felt would be 1.675 million, 1,675,000, to get us down to 3.5% tax impact year over year. You can do that by reducing your budget some, and we've talked about some of the areas where you could do that, and you probably have ideas as well, or you could increase your estimated revenues. And so I guess what I would call out or have called out on the slide is, that some budget reduction could be made uh in talking to the public works director we identified that there would be savings for instance in not recycling in the city any longer certainly not something i'm recommending but you could not recycle you'd still collect the same tonnage but you wouldn't separate it and you'd pay less to send it to the landfill than you do now to send it to the recycler so same function would but same function would happen you just would put things in the same stream and you'd save dollars We've talked to the library director, made sure she understood that we might say out loud, the library has a wealth of programming and we could curtail some of that programming and see a reduction in staff as a result. The recreation director, talk to me about arm wrestling because I told him we were going to suggest that that may be his oversight staff so we have staff in the general fund with the director that include folks who are responsible for the facilities spinnaker kind of being the community campus You could move some or all of those folks you probably can't move all but you could move some one of those folks for instance Like he has moved his part-time staff related to programs over into the special revenue and fund them by Increasing your fees five six eight ten bucks of registration for whatever the programs So that we could generate the revenue to carry that folks those folks so that would not be a reduction of service necessarily But it would be an increase in the fees similar to that on the revenue side you could simply introduce new fees for things that have traditionally been free or you could increase fees on things that have been set and you can generate additional revenues there and we generally explore that but uh folks folks have found their way to steady state and so an increase in fees beyond what we normally increase feels like an additional step and that's something that you could direct us and we could do To that extent, the public works suggested, he didn't really suggest it, I did, the public works could, the solid waste could move to a pay to throw, pay as you throw, and we could buy bags at the grocery store and we would really not change our expenses because we would still collect, but we would generate new revenues that would be offsetting and that would reduce the tax rate. And as an overall statement, I would suggest I'm in no hurry to beat over and overestimate the property value increase that we might realize, nor to overestimate the revenues that we might generate. But I will tell you that we are very conservative in our revenue projections, and every year revenues contribute more to our fund balance at the end of the year than our appropriations, our spending does. you could change that, and we could be less conservative, and you could try to find impact to reduce the debt.

Yeah, I don't think we should characterize it as abandoning a conservative approach. I think we'd be less conservative.

Sorry, it's a little editorial here, clearly.

um so for building permits um we're proposed uh 1.9 um fy 26 as of and you released april's uh today yep it looked like we're running 129 of the estimate uh thus far um is there a way like could we Could we go to $2.5 million on that for an estimate for FY27? Now, I understand the boom is not always going to last here, but the idea that we're pulling it all back to fund balance, could we increase that by $600,000? Okay. I mean, I, that's one, I guess in terms of like, um, uh, we cut the amount of, uh, investment interest that we're getting. Why is that? Why did we cut that by seven or 7.3% this year?

The market is not returning to us the same as we have seen, and so we were again trying to be conservative. And we also found in this last cycle that we drained money market accounts. We have found the tax bills driving later and later into the year. And so we don't generate as much interest because we spend down our available balances as we wait for tax revenues to come in January. We've got to correct that. We've got to change our cycle so that we can get the bills out back in the early part of November and see those payments made in December. That means taxpayers part with their money sooner than they might right now. But as a result, we go back to keeping our money markets with dollars and continuing to earn. But the combination of the reduced amount of carrying cash and the reduced rates that we're earning drove a projection that was lower. Okay. It was the same in the area of inspection. The suggestion there was that we should lower this year in 27 and in 28 because we were going to start to see slowdown. We stayed flat in inspection at 1.9 as opposed to going up. But the suggestion that came from the department was that we should go lower. But they're, you know, they're trained to be conservative with us.

Sure, but we're at 129%. So the idea that, I guess I want to, like, thus far this year from our past, you know, our last, so, like, appreciate that, but taking money out of taxpayers' hands, just taking a fund balance to give back potentially in the future is not something that, like, that should not be a practice that we're doing if we're overshooting it, even conservatively, you know, and we're, And we are, again, we were conservative by a fair amount last year as well. Miscellaneous revenue, we've kind of kept that flat forever. Could we look at that a little bit more closely and see if we can improve that? And then the last one would be in terms of motor vehicle permits you know i know that's kind of economy based but it's also you know we're pushing a lot of resident you know parking programs that will have you know potentially more people registering uh their car with the city would love to be able to see what would be a less conservative but still conservative uh approach to those revenues

So for those not looking at it, motor vehicle is up 350,000, but that's a small increase when you consider that last year we brought in over 6 million, and this year we're targeting to come over 6 million as well. But that's an increase from 5.6 to just shy of 6 million. The one thing that I would call out is that to the extent that we find savings by – I mean, totally – happy to do as directed and it's pleasure the council but as we as we as we raise less for this purpose and less for this purpose and we and We anticipate more revenue in this category in this category There will be less fund balance available for the budgeted use of fund balance which this year as projected will be 3.5 million dollars that will take from those reserves to offset taxes when we set tax rates so we stay conservative We stay conservative in our estimates and generate surpluses that we then return in the next cycle and leave ourselves the flexibility to be able to deal with challenges when they arise without an unanticipated tax impact. So we just monitor that. That's part of the exercise that we'll go through is say, can we be less conservative or more aggressive in this category by some small measure and recognize that we may find that we have less if we want to keep the reserve in the ballpark of 10 to 17 there's another thing we stay within this 10 to 17 we actually stayed at 13 6 13 6 5 i think for the last three or four years running we could be at 12. we could be at 11. we'd still be within our policy the risk is how will they judge us and will that make a difference so but that's a conversation we can certainly have council cook

um thank you your honor this is a less impact question but um you suggested uh recreation increasing uh fees um and we did receive a request from a resident asking for us to increase non-resident fees at spinnaker in particular because of kind of overpopulation of non-residents at this stage and some surrounding towns sending people to Portsmouth to do things like play pickleball is that something that we could consider doing whether or not we move supervisory staff to increase some revenues there in the rec department at least and at least offset some some of those costs

can stand and nod my head and say yes if I can speak to that well Todd may be wanting to add to what I have to say the the fee committee we did increase all non-resident fees proposed for FY 27 at Spinnaker and I'm looking for the number of non-resident members which is 461 to compared to the number of resident members at Spinnaker which is 929 for a total of 1390 and And we have a rough cap of, we have, we have a cap of 2000 members. I don't know if there's anything Todd could add that might help rough out your thought.

Can I just follow up? Is that increase in fees considered in this budget already, or is it for those changes in fees too new to be part of this consideration?

No, the fees are all outlined on page 35 of the fee schedule.

Is it 35? But I think from a taxpayer perspective, those fees are probably by 19. I can't tell you off the top of my head what impact it was on the fees for Spinnaker in the projection I believe it was roughly 10% year over year as an increase 20 is I think what we all parked but it was kind of on the fly in the fee committee meeting that we made the motion and I

tried to do the math in my head at 20%, but that is one of the things after we got that email. We haven't adopted those fees as a council yet.

They get adopted as a resolution in the budget.

Right, so we can modify it. Correct. It's just what the three of us as counselors are proposing to the council as a whole, and I think that one and maybe a couple others might get looked at in light of the discussion.

Right, and we changed our ordinance so that the council can at any point adjust fees.

if there's an adjustment there that could lead to a revenue impact then that's part of the part of the impact we can have on the tax impact lots of impact and it would be counselor hopkins um i was just i would like to investigate the solid waste pay as you throw a model with retail bags um just out of my own personal habit you know you have to pay for five or ten cents for a bag at the kittery outlets i don't take a bag So I think nominal fees like that can help change behavior, make people think about their waste, think more about like their consumer, the consumption, um, which are all things that, you know, we, we would support our, our climate action plan and whatnot. So if at a future meeting or point, or I don't know if we could get a summary report or something on what that would actually look like for implementation fees and, and all of that, I would be interested to learn more.

I would anecdotally tell you that in my home with two teenagers, the bags that I had to pay for in my community, which were six bucks a bag for a basic waste paper bag in your kitchen, $5.75 or six bucks, it drove a whole lot of recycling, which was a good habit for the kids to get into. Councilor Cook?

as a follow-on to that too can we get some analysis on how that would impact the new arm lift program that we're planning to implement for trash pickup and staffing if we had to go to a bag model i know if you go to a bag model that the bags get picked up individually yeah counselor thanks two comments um first you said we have to do a better job getting the tax bills out um

I would point out that we are at the mercy of the state who sets the tax rate and it seems the new trend is they're waiting to the very last minute because I think they're pretty understaffed in the the at the state house who sets the tax rate so we're it's not that we're not getting them out it's

can't legally send them out until it's set and i appreciate you saying that but i will say that we we'll work hard to have the quickest turnaround we can have from the moment that the rate is set to the bills actually hitting the doorsteps we were faster getting it to elect you know getting it out electronically uh but we want to we want to minimize the impact of the or the timeline between when we have a number and when we actually start to see dollars come in and then the the second thing is a little bit to the mayor's point like there's

I mean, the city really works on an accrual basis. We get two big lump sums of money, and then the rest of the time we're in between. And there's two ways you can budget for that. You can budget really lean and go into debt when the numbers don't come in like you hope they come in. Or you can budget conservatively and then you don't have to dip in or make as many supplemental appropriations if there is an issue like the 1.57 comes to top of mind. Because we've done this conservative budget year over year, not only can we return to the tax rate, we also have the capability to address financial issues that we wouldn't expect otherwise kind of rainy day fund so why i totally appreciate the idea that we don't want to be taking more money from the residents than we need to in my opinion it's better to protect that triple a bond rating and protect that rainy day fund than try to get the number as as sharp as possible i'd rather have a little bit of a margin for error towards us being conservative myself personally because i think it leads to long-term cost savings uh when you're not looking at it year over year and i would say the same thing about the rolling stock um you know if i think during covid that we paused some rolling stock things because that made a lot of sense because nobody knew what was happening um but we're now seeing the net effect of that in the 35 000 increase in maintenance on say fire trucks and anytime you defer maintenance or you do you go to a different methodology where you replace the stuff that you don't have to replace this year you could stretch it another year eventually you're going to have to pay that cost so i don't think there's a right or wrong answer because you don't know which way would be better you know if you want six years instead of five or vice versa but

think in my personal opinion i'd rather stay as more on the conservative side than the aggressive and lean side thank you councillor taber um did we budget the parking revenue for street meters at the existing two dollars because we've had discussions about whether that should come up to be in parity with the garage rates at three dollars

I want to ask this question of my colleagues. Did we budget for new fees and new rates in the estimates that are in the budget book?

Was the question about on-street parking? Yeah. Which is in the ordinance? Correct.

We did not budget for on-street parking increases. We only budgeted for the garage increases. Thank you.

Because I was looking at our 669 on-street parking spaces. If they went up a buck, that's about $1.7 million in revenue.

Councillor I can tell you we have a report back from legal coming June 8th in regards to the process with the fee committee and the parking rates that might help answer your question

i guess it's the deeper dive into parking revenue would be if the garage rates go up and the street rates go up um you know what would be our estimated revenue do we think that those increases would reduce volume in any way i happen to think somebody's not going to decide i'm not going to visit portsmouth this weekend because the parking's three dollars instead of two but And, you know, if our parking revenue went from $11 million to say $13 million or $13.5 million, what are the uses for those sources?

If I could answer the what are the estimated revenues and skip the what are the uses for the moment? The estimated increase in revenue for foundry given the increase in garage rate and foundry would be 1.13 million at Hanover it would be 1.3 million and if the preview of coming attractions if we were to increase on street parking as will be recommended or suggested in the report back on June 8th and that would raise another bringing rates from two dollars for the first three hours and five thereafter to three dollars for the first three hours and six thereafter that would raise another two point six million so two point four five three and two point six before you blend those we've included but the first two you mentioned which are the garage rates we've included that in the budget now we have but we did not include the projected two point six were you to increase on on Street

So just to follow on, I know that we need to be, I know that we're drawing down our parking fund balance. I think you had a slide on that.

Yeah, I've got slides to show, yep.

And I think we got a couple slides on parking.

Okay, well then we'll just wait.

Just to jump right into the parking discussion, the initial discussion is that we would continue to increase the resident discount. It's to be voted on and determined if there will be a change at all, but one of the changes that we could do is keep residential prices more or less the same and non-residential prices would go up.

Before we go off this and then it's more I guess and we can have this as a broader conversation in June 8th, but the I know that we've always looked at the our triple-a bond rating as you know looking at having a healthy fund balance you know I think that structurally would be interested to hear you know any opinion you know yours otherwise if it's better to you know use what we have in terms of over collect and then kind of use the fund balance to kind of you know pay into this or if we just are better estimating our actuals in terms of you know our you know our actual especially in the salaries and if we could have a vacancy factor whether or not that's a you know a better look to any um adjusters if we're not you know doing it kind of opposite you know one is using fund balance at the end a lower tax rate versus the other is collecting less but knowing that it's not going to you know give me that back out to the taxpayer at the end you know I could certainly hear the argument that one has you know structurally is is good for AAA bond rating but I could see an argument being made that you know if we're better able to predict our actual revenue or our actual expenditures and we're a healthier stronger financially sound organization that's you know better prediction of what we're actually going to spend and thus you know worthy of the triple a bond rating as well but look forward to that you know future conversation absolutely thank you

Two slides I'll just breeze through. This slide is simply because we're doing analysis in the general fund, wanted to provide you a simplified peek at the enterprise and special revenue funds, simplifying in the area of DPW some of the movement. And in this case, you have red bracketed reductions of positions. in a reallocation to reflect where they're actually being funded or what the work that they're doing and where it should be funded so the very first line is a position called operations manager and in this case you see a reduction of 25 or a quarter of a position in both water and sewer and and those are those are shifted reallocated over to general fund highway and special revenue in the parking fund and so you can work you can walk through that and consider uh in dpw the 3.1 the 3.1 fte reductions that we saw in general fund but a net overall reduction of one and that being the custodian position that wasn't reallocated it was eliminated so in like in like manner the next slide is the is the vacancies slide in the area of special revenues and enterprise again you'll find those positions i talked about that show up multiple times because they are split but certainly can when you're when you've had a chance to review that we can take questions and and dig down into any particular questions you have about any of the three slides of vacancies but if we move beyond that we're we're into parking and after smiling at a couple of pictures I take you to a graphic that's in the budget book for the last several years which is a an illustration of support of the general fund that comes from parking from the parking fund from parking revenues so in uh in the very first line you'll see over the course of six years the dollars that are retained as revenues from the revenue stream from parking right now revenues flow through the general fund and are transferred into the parking fund and at the end of the year we keep in this case in 26 and 7 for instance we keep 2.5 million dollars in the general fund But beyond that piece of revenue, parking out of their special revenue spend dollars on multiple programs and multiple cost centers throughout the city. And the idea in the illustration was to draw attention to and arrive at some assessment some metric of how much support is rendered to the taxpayer through the general fund from the from the work of parking and that which they use parking revenues to pay for outside of purely just revenues and so this is on page yep i eliminated my page number This is on a particular page in the parking section. It's in the highlights. So it's in the first 30 pages of the book. And I think it's a three-year or four-year analysis there. We've added a couple of years, although having added it and then had more conversation amongst us, what I would tell you is that this illustration was largely an illustration being done at the department level, the division level. until 25 and in 25 there's some growth in the numbers but it was partly because the finance department stepped in to help make sure that we chewed up numbers and the numbers were actualized and things like health insurance and taxes and workers comp costs were all uh not estimated they were actual so i think for any decision making if you look at this you know this matrix uh this illustration if you concentrate yourself on 25 6 and 7 those are apples to apples i think a fairer assessment the the the last couple of years it certainly it certainly shows in the numbers that that the parking is growing its contribution overall by by roughly four percent on average each year page 32 for your notes page 32 in the budget book so i just updated that for you to give you a sense that even as the 2.5 million is staying flat year over year the support that actually comes from parking is not flat it's been growing Councillor Boyle. Thank you.

Could you just explain the difference between transportation programs and transportation services?

There's one coast, there's one... Transportation programs is coast. Okay, thank you. And transportation services, whatever they were in 22 and 3 are gone now, so there's a zero today.

If nothing... Oh, I was just going to say, yeah, it was the shuttle, I think, to the parking lot. Oh, thank you.

that's right i i think it's always worth highlighting the um the transportation programs that the the subsidy to coast is paid for by parking revenue so not by the taxpayers not by the taxpayers and it did go up substantially in fiscal year 25 but it's two things and i think they're both coast and then there's also the christmas shuttle in there but that's a small number the senior transport which i think is about 250 000 is that coast that runs that Or is that somebody else?

Yeah, it's Coast.

Okay, so there's the Coast, the bus that we all see, and then there's Coast if you need to get to a doctor's appointment. And they're two separate services run by the same nonprofit, and our contribution, I think, is about $950,000 right now to that.

yeah you matter of fact you you're calling it out those that's the total amount but that's actually two lines in the parking budget that you will see in the budget book uh because it does separate and i think that the remainder is like the christmas trolley or something like that yeah in the downtown yeah maybe it's three lines okay so if no other questions there just a couple um

on the um the salaries and benefits that's outside of parking or is that those in parking those are

if you go to the parking tab if you go to the special revenue parking in the book you'll see a document there of the salaries the salary sheet that includes everybody that parking pays for everybody generally that you see with a split where it's allocated across multiple those are the folks that are totaled here so ben fletcher is 100 paid for by parking and i don't believe yeah i don't believe he's a split he's not in this number but the piece of The director of public works.

Okay, that's that's what's here along with a real prorated share of taxes and retirement the like Okay, and then I guess the other question We have continued to pay on the EV charging stations. It's in the CIP That's state and federal match. That's not there's no state and federal match, but we continue to spend the 50,000 on the charging stations each year I'm just wondering in terms of the it's like a nine-year or it's like six-year plan in the CIP or something like that I'm just wondering how much is left over from that have we exhausted that is this 50 like what is this 50 000 doing initially this year right and do we have a cash are there some funds available right now from last year uh we'll find that out parking uh the the parking uh lot paving that's a thing that we started last year carried over into this year um what is that what what parking lot and i'm sure i should have remembered this but what parking lot did we pay i believe it's the masonic lot but i would need peter to correct me stepped him away from the microphone a long time good evening mr mayor city council um all the parking lots that we paved so worth lot um

the City Hall lot, any of the parking lots. So those monies contribute to that. It doesn't cover all the cost. but that's the intent behind that money and we have tried to fund that annually but a number of years we have not funded it fully because parking revenues haven't been keeping up with the expenditures if you've noticed the last couple years since covid we have been deficit spending and fortunately we had fund balance to pay for that deficit but that's in the next slide i'll move it out

One of the other requests was what's the status of the parking fund balance over the last decade? We've provided that here as well as an estimate. I'm regretting the estimate now because as I've spent some time and put out the financials for April and looked at it, the estimate for 26 is just an all-in. It's a projection from the beginning of the year. it anticipates fully fully realizing revenues fully realizing expenditures and any encumbered dollars from the prior year being spent and in fact revenues stream right now is headed for I would imagine low 80% for parking revenues and the expenditures will probably not crest 75% so we we anticipate that we will have a negative impact if you will on the fund balance at the end of the year but it will not be as great as the one that is projected here in the

So maybe Ben could help on this, but as of April numbers, we're at 75% of revenue to date. Typically, I wrote this down, on average we're at 83% or should be at that point in time. Right. We'll make up some. So our estimate is that we're going to only get another 5%, or do we think that we're going to get – where do we think we're going to end up? Is it 80? Is it 85? Is it 90?

Where do we think we're going to end up? Ben is on Zoom, and Ben, if you can unmute and raise your hand. Ben did say we're having a very strong May, so those numbers are through April.

Okay.

Ben, if you're there, go ahead and chime in. Maybe muted.

not that uh it's all right maybe it just could be you know uh an addendum to this where we update with may's or april's numbers um and then um recalculate what the expenditures are uh through this year would be helpful to see what the fund balance truly is going to be and then instead of this raw instead of that raw projection let us do an informed projection because like i said it's a it assumes it assumes we do everything it doesn't assume it doesn't take into account anything that we know from literally 10 months of a year so

we can by the time by the time you get this we may be able to even have a decent projection on on May to include for both revenue and expense I was trying to get in under two and a half hours.

We did this once before it took 50 minutes It is two and a half hours. So I I was looking at that clock I'm like, you know, I thought we started at seven at some point Peter had to go get me more water Any questions of the council council cook I

Thank you, Your Honor. I have a clarifying question for a resident who asked specifically on health insurance costs, whether it's health trust or school care. We don't get to determine what is covered and not covered in these plans. It's not like a traditional private health insurance product where you go out to bid and you say, as an entity, we don't want to cover certain things. These plans have specific coverage that's already outlined in them in advance. So as a city, we don't get to change what coverage is offered. Is that accurate?

I think I, if somebody in the room has a better answer, please speak up. But I would say that as a member organization, we have representation on a large board of members, and the boards make decisions about some of those things. I guess I don't have to I won't quote them but there are things that come up every year or two that are controversial and potentially have cost and the board weighs in and makes decisions we can have a voice in that but I don't believe we have mechanism or opportunity to individually select differently the pool says this plan will do these things we could choose alternative plans but even then it's from a from a menu of plans that are being used or implemented throughout the pool so there's a limit to the influence we can have if I can echo and add to what Nathan is saying the respective boards make the decisions

And we only have a representative or two representatives total on a board that is represented by all the members. Right. So we are a very small portion of the voting pool when it comes to making those decisions.

Correct. following up on that i was just curious uh whether the school care player school care plan covers glp-1 drugs because it's now emerging that a lot of these health trusts uh one of the major drivers are glp-1 drugs at you know 350 a month cost so i what i recall is that the year that health trust

the year that Health Trust allowed the GLP-1s, at the member annual membership meeting of school care the board did not put the question to the members and this has to have been the year the november of 23 maybe did not put it to the membership because they wanted to wait and see the data from the rest of the world for another year and see more of the science behind it and uh and they were planning to come to the subsequent year and ask the membership council what they thought about it and then take that under advisement to decide whether to add them or not. My sense is that school care did not permit GLP-1s in the formulary, so I think that's where they are. We can confirm that.

They did not. They did not. They did not. Thank you.

Other questions for the council? Thank you, Nathan. Thank you. we'll open it up to public comment your honor we have one hand on zoom okay oh features there all right picture we'll get to you if there's some folks walking hope you're feeling better

Esther Kennedy, 41 Pickering Ave. Um, and I'm glad you saw Peter's hand. She wanted to make sure that, you know, she was there. Um, first of all, I want to thank everyone tonight. This was the best dialogue I've seen in a long time among the council asking questions. The one way we all know that we can keep people able to live here and make it affordable is keeping our budgets down. Um, when you're a landlord, the budget goes up, you're going to raise a rent. I so I'd like to thank you all for that conversation and asking those tough questions I'd also like to thank the police for adding the social worker in I've said for a number of years now that we need to have social workers on our police force and that was added to this budget one of the questions I have Is giving your information tonight. We heard from Nathan that 5% is our step increase potential and 3.3% is our cost of living. Which is a total of 8.3%. I would ask the Council. Why do we have people? Earning are getting a 16% increase. 18% increase. I would encourage you to look at the employees. I would encourage you to look at those increases in percentage because they're way above the 8.3%. And a lot of those major increases are in middle management. They're not boots on the ground employees. So you have to ask yourself why. We know the cost of living is huge budget. We know that insurance is big in the budget and we know the employees are the biggest percentages of our budget. Again, I shouldn't see when I'm looking at that list any more than 8.3% increase on an employee for year over year. And yet we have larger. The fire vote. I've been saying all along, I was criticized online by one of the counselors for going after the fire department. And I want to remind everyone, I sat on the board to look at station two and create it. I was the deciding vote for the fire department during one of our council situations. to get the increase. It became very public over overtime in particular. I have been endorsed by the fire department over my career of 10 years as a counselor. However, the fire boat should not be needed. When I'm out on the water, and again, as someone who's on the water a lot, I'm not going to call the fire department for help. That will not be my first call. That will not be my radio call. Um, it'll be the coast guard. It'll be probably six second. It would be fishing game, the state police. What we heard tonight is that the fire chief is saying that we need it for when we have people that make poor choices or choices of need for mental health crisis is on a bridge. That's what we've heard all along that we need for it. Then my question is, can you imagine what $600,000 would do to support making sure people can't get off a bridge? Making sure that we're dealing with mental health? The fire boat, Mr. Bagley last council meeting said he didn't want just someone getting on a boat when i brought up this the what happened on appledore and the town of kittery when someone needed to be some emergency services on an apple door it was not just any boat it was the main fish and game boat they went to the pier picked up the emts and the medical professionals and took them out and dealt with a crisis It was a good way to handle it. We need to think about those good ways. I am fortunate to have dignitaries that are at my marina. When they come and need security, I can tell you how many people are in our river that can provide it. We have the state police boat. We have Fish and Game. We have Coast Guard. And then we also have sometimes the harbor. There we need to think about what we're spending things on. Now it was said that this is going to have come back again and talk. You're right. The boat is going to come back. However, in this budget is educational services to keep that boat going. And this budget is over time for people to go down to, uh, the South or I can't remember. I'm sorry. I apologize, but I can't think of where they're going to get training. That's in this budget. So I support the fire department. but I also have to support our citizens that are trying to do whatever they can to live in this community. And I would ask you, to think about where that $600,000 is really needed. Are we needed for a fire boat that might go out a couple times to support someone that might have jumped off a bridge, which we heard? Those are the only suggestions we ever hear. Or would it be better to take that $600,000 and look at how we can make sure that person doesn't jump off the bridge? I have been very vocal about this school. I have been vocal that we do not need to add middle management there either. As we know, special ed is very dear to my heart. I am doing my 30th year in special needs. However, there is nothing in this budget for funding for programming. There is nothing in this budget to show how we can expand to make it more appropriate for students to stay in district. We need to remember that our out-of-district monies are only Portsmouth kids. Other sending districts, Newington, Rye, Greenland, they pay for their own out-of-district placements. So that $5 million is only a small portion of our whole student body. We have directors in every one of those districts that are making their own choices at meetings. They're called LEAs. And those directors decide where their students from their district go. So what we need to think about is what do we want for our Portsmouth residents? And I'm really sorry to see that we're adding middle management and yet we're taking away those people that need to be in a classroom. Those people that are having direct contact with our students. You talk about the employees. The majority of this council added 42.4 employees at one point. Last year you got down to 34.4 employees. majority of this council still has added 24 employees to the budget again i thank you for asking the city tonight first time i've heard it to live within its means to make an appropriate budget that doesn't take extra funds from its citizens But I think we all know the employment cost is our biggest. There's a lot of openings that have not been filled. And I would ask you as a council, if we can live without those employees at this point, then maybe we should think about why we're filling it. If we can run our programs without these people, Then maybe we need to think about how we can get down those 24 employees that you folks have added or the majority of you folks. Again, thank you for the conversation tonight. I'm really was really impressed. However, we need to go a little farther. Because you all ran on making sure that Portsmouth's affordable. And the only way you really can do it is control the budget. Thank you.

Thank you, Esther.

good evening thank you very much for this opportunity my name is Eric Anderson 38 George's Terrace this was a very comprehensive explanation of this budget and I appreciate that it gives better dimension of the revenues and the expenses I appreciated the mayor with the variety of questions that he asked and the responses that came from Nathan because on each on each question opened up the opportunity or the possibility that this budget could be reduced and i think that's i think i think nathan made that indication that yes it can in certain categories or across the board of a very extensive budget with a lot of categories in it so i appreciated those questions mr mayor and and and i thought they were very qualitative and and the answers were two because it leaves room to it's not impossible it's i want to emphasize it's not impossible to reduce this budget in some way shape the manner um i appreciated the mayor's comments on the fact that the budget sometimes is there's an over projection and these attack in the taxpayer pays for that over projection for it to go into the fund balance and the fund balance is used for a variety of you know for the you know our aaa reading and in in a but how much of the fund balance is available to defer some of the increases that have been projected this year. It would be interesting to find out. You're gonna have to come to some juncture. You always do when the rubber hits the road on the final budget. and so it would be interesting to find you know to to hear what what possibly can be used out of the fund out of the um fund balance because the taxpayers pay for those over projections and um i think they're entitled to them you know in some in some way along the way I was kind of disappointed with the fact of some of the items that were presented for generating new revenue or reducing some of the costs they're always they're always kind of put into a service related discussion that and i i don't think people want to see reduction in services especially the the the ones that were explained in the in the um in the brochure so there's other ways i think that this budget can be put into perspective and brought down um finally i guess i've made previous comments about the fire boat um it was good to hear that the fire chief seems to have it you know it was basically a blank check for nine hundred thousand dollars in the cip which has been brought you know maybe brought down to 600 so that's a step in the right direction and um um i believe it should have been there should have been rfp on it to some extent so that we get a better idea of who's who's capable of um producing the type of vessel that is needed for the cheapest cost to the city one question that wasn't answered that had been i think a question had been raised is what's the full physical impact of this vessel um in regards to labor and overtime that is that it's going to have to be incorporated the boat's the boat what it takes is to man that boat there is a physical impact and that hadn't been really fully explained by the chief but does it need two operators more than likely it does one's off duty they need the boat somebody's going to be there so it's going to take two people to run that you know to be available and the amount of overtime if you have to put a crew on the boat the amount of overtime that's going to have to be placed in the stations to cover that to cover the and you know um cover the vessel cover the people that are on the boat um I'm not sure in all of the discussions about the boat or the vessel how many events have been documented that justify the expense. I'm not saying that it's not justified, but it's very few. I'd like to hear some of the numbers. I don't think that number has ever been presented in this discussion about the vessel. one of the you know what happens to the current boat one vessel is a boat two vessels are a fleet um and i don't know whether there's a capability of recovering some of the cost of what's currently there or if they plan on retaining it they're two different two different vessels with two different capabilities. The current vessel they have could get right to the shore. A $600,000 vessel isn't gonna be able to rescue anybody that's in three feet of water. so um i'm not sure what that dimension is the first the first fire boat they got they they had to give it away it went into surplus they could not sell it and i don't know if that's the circumstances with the boat that they currently have if the funding for it prohibited it to be sold or is it going to go into surplus to be you know to be accessed by another municipality appreciated the fire chief's comments with the fact there's been some regional discussion about any of the um any of the issues on the river that need to be you know attended to from a emergency status and it seems to be that somewhat of the burden is going to be again placed on Portsmouth and you know for their investment in the infrastructure for their investment in the vessel for their investment in employees to run the vessel and there isn't more of a regional discussion about who's going to be or the cost of this i think i expressed to you before in the previous comment portsmouth's exposure on the scatter core is minimal compared to the surrounding towns in this in the state of maine so maybe again i just think that deferring this particular expenditure at this time until there's more of a regional discussion of what's going to what's going to be needed fully vetted so that if it's a regional approach other towns and communities can make that contribution to some piece of you know some vessel for and and it's not all borne by Portsmouth Portsmouth provides a lot a lot of services to the surrounding communities i wouldn't want to i i stated it in in previous comments and it's done a good job in investing in infrastructure or other cities or other other towns haven't just just with regards to the fire boat i mean newcastle has a i i'd put it right in the classification of a robot town of rye they got a skidoo or not a ski do but a sea do um newington probably has a you know a vessel comparable to what portsmouth has now i think but anyway it's but their investment in totality between those three communities is far less than six hundred thousand dollars so i hope you'd at least consider like i said if this is if this is something that's needed for the safe for safety and and and that it's that it's more fully vetted amongst the surrounding communities that have responsibility on the water to see what their contribution is going to be to provide that that that that safety um Thank you very much, I appreciate it. One question is, and i don't expect the answer maybe it's going to be explained but through these iterations of of work sessions when are you going to make when is this council going to make some type of final recommendation of where this budget should be oh sorry those will happen when we uh go to adopt this budget we'll have motions and amendments as we uh as we have the um as we have uh um

as we prepare that i'll ask that we have those in advance so that those would be in the as a agenda items on there and so that um you know abby michael and nathan aren't doing the the math on the on the fly in the back of the room um so that would be in advance of uh the meeting that we would expect to adopt the budget And that's where I really recognize from past but the close you get to the I think it's June 30th June 8th is when we're scheduled to well when we're hoping to have the budget adopted June 30th is the time period of which that's that is required for us to adopt the budget you know if it looks like we're not going to be able to do so by June 8th we will schedule

we'll schedule another meeting the week following on June 15th I think that's I just put some perspective into the process that I think you know clarifies it thank you very much thanks Eric anyone else in the chamber

uh sure 390 green leaf avenue i want to give a brief update such as i can about the county tax situation uh the um i'm taking nathan's fire The problem that developed over the last four or five years is that county commissioners have been dipping into the fund balance on a regular basis to balance the budget. So several years ago the fund balance was around in the mid 30 million area. This year it's around six or seven million. And so the county commissioners decided this year to try and reinvest in the fund balance. And so they have recommended a budget with a 13, which results in a 13% tax increase. which is substantially more than we've budgeted for here in Portsmouth. There is a bipartisan movement afoot among members of the county delegation, including me, to try and smooth out that increase so instead of it being a 13 percent increase this year and lower in subsequent years to make it a nine percent nine percent nine percent increase which will moderate it a little bit it won't bring it down to the i think 3.75 percent that we we've estimated in portsmouth but that's where we are now i don't expect the in the ideal world i think it's possible it will come down to maybe eight percent there's some people trying to do that but i expect at uh it it will likely be nine percent or more so that we come up with our uh we vote the county delegation votes on the final budget sometime in june i can't remember what the date is but but that's where things are thank you boss

And Petra, as soon as the city manager returns. Oh, Kevin. Petra has her hand up. Petra, can you hear us?

I can. Can you hear me? clear yep hope you're feeling better Oh have crutch will travel okay so the first thing I want to say here is this is the best budget workshop I have witnessed by this council or any other council the questions were great the answers were great from Nathan and But I have more, so I just want to say that first off. I think these are the best questions that I have ever heard from a council, honestly, and I've been doing this for a while. So, you know my questions are about salary. I'm going to talk about salary and I'm going to talk about FTEs because I'm still having questions on some of that. And the answers that, Nathan gave still leave me with questions. so um basically i'm i'm looking at the uh talking about the collective bargaining contingency that nathan said you can't use the budget book because there's so many other factors there and the collective bargaining bargaining contingency was in there so last year it was almost 2 million 1.99 and this year when you look at the budget that should have already been rolled in to the salaries so i would not expect that to not be in the budget book that I'm looking at the numbers with. And this year also, as far as asking about increases, if I look at page 15 in the budget book, it tells me that for the general government, we only have one union that's in negotiations here. and that adjustment should be included in that 460. So as far as the not using the numbers in the budget book or not accounting for increases or anything else, I'm struggling to believe that because what else do we have to look at as residents if we can't look at the salary from last year and the salary from this year? So that's the first thing, and like I said at the last meeting, I have completed looking at all of the budget increases in all of the departments, and the standard increase, you state here again that the cost of living is 3.03, and I'm still looking at a standard almost of all, especially middle and upper management of 6%. now there is as esther esther noted there is quite a few that are above that and uh the only way that a person would know that is if they got a promotion and a promotion would generally be a change in title now there are a lot of that and there's a lot of uh movement especially in the public works arena between public works water sewer and storm water and parking but i think we're still looking at i'm still looking at substantial increases in especially i.t in legal and in tax collection on the general side and then i have completed my analysis especially on on parking and and other um the other public works areas and i am totally i guess Confused and this is basically hard to do because I used to do this allocation stuff and I'm looking at page 190 and what you put out for the Position summary now I didn't read the fine print under here and it says includes only new positions and other department transfers and Inter fund now it was mentioned that that especially the master carpenter was decreasing and moving out of public works. Yes, that position is moving, but all of the expense that is decreasing there is moving to water and sewer, which also increases our rates over there, which we already did this year, and we already know. The other thing, the other question I would have on this schedule here, I don't know if it was answered by the title, but on a lot of this, especially parking garage foreman down in the public works area, we've got foreman, we've got managers, and we've got technicians, and it says they're all being eliminated. And then I noticed that the positions they were promoted to are not included in here. So they're not really being eliminated, they're being promoted, which means you're not eliminating any positions as far as this goes. You're promoting, but you're not including that. So this is kind of a trick for me. The other question I would have, and I'm going to, and I'm still comparing FY26 to FY27. and there was something that uh just jumped out at me and i i don't see it anywhere and in uh fy 26 uh and fy 27 the same thing happened this is after water in the uh in the salary area and uh in 27 it's on page 467 and this is called additional personnel And in that additional personnel, which is not included in water or sewer or anything else, we have an operations manager and we have a plant operator in FY26, which totaled like 129,005. And in 27, we've got an operations manager, a foreman five, and a plant operator, and we're up to 204-217. So my question on this is where are these, where is this headcount included in anything? And how does this affect, how is this included in the salaries and the benefits and everything else if it's listed in here as additional? What does that really mean? So those are my questions as far as that goes. And I'm not, I'm not, really happy that you know we're still saying we we haven't added any any positions if i look at i'll just give you an example for parking uh we've changed i don't know if we've changed or we promoted and i should be able to figure this out as a resident We've got a new assistant planning director that looks like a promo. We've got business administrators. We've got something called a communication and digital specialist that's working for the public works arena. The salary is divided four or five different ways. And I guess my question would be, what do we need this for? I'm not getting this, especially when we have communications and all in in City Hall we also have tech wastewater operator manager that looks like new and we have a lot of promotions to regular operators in Foreman and the highest I've seen was a Foreman 7 I'm sorry I have never seen a Foreman 7 so this is just amazing to try to follow how these positions are moving between all of these departments. And to me, it still looks like we're not really saying how many people we're actually hiring. And if I have to go back and check through all of this stuff, it should be more straightforward. So that's one thing. The next thing is I'm gonna also speak on the fire vote. so um i was the first thing i want to say is that um i would thank the chief for getting up and explaining uh and looking to take the price down uh but for me that still doesn't you know explain a lot of things i mean there's there's no public explanation why why this replacement is needed now we have never heard and maybe i missed it but i don't it doesn't sound like eric heard it either how many calls have we had in the last three or four years since we've had this new boat uh you know what i'm looking for is the cost benefit analysis analysis here it's not that i don't think we should be taking these calls but you know i i just want to know how often is portsmouth the primary responder you know and and why existing mutual aid resources are not sufficient here. But I was kind of, I don't know, taken aback when the chief started explaining that they're just now getting into having meetings on who responds and what needs to go out and when a call comes in, what happens. You know, being somebody from the other side, you expect, you know, service quickly. And it was surprising to me that the Coast Guard wasn't the first person or New Hampshire Fisheries or anybody that is on the river all the time. The next thing I would still like to know before I say anything on the fire vote is what are the specs on this vote? Has anything been done on this? Because when I went back to the CIP, The only description we had here, we had a description last year. This was a rib craft. Purchase cost $175. Europe purchase 2019. Sorry, Chief. This is supposed to have a 10-year life. So basically, a lot of this, and it sounded like this was a, this is what was put in there. A different kind of vote is desired. So a desire and a need, to me, having done budgets for a long time, there's a lot of desires. But do we really need this, and do we really need to spend all the money on the training? I mean, the purchase price is one thing, like somebody said. That's only the tip of the iceberg, basically. There are significant long-term maintenance costs, training, fuel, insurance, and specialized marine operations that go with this. So the question for me at this time uh especially after the chief explained that they're still going through um you know it sounded like they're just getting organized on this which is which is a little scary um you know it would be it would i think it would be good to step back and and and wait till all this comes out and then respect this because if we're only going out to support do we need to spend six hundred thousand dollars i mean i i understand uh you know The guys are getting cold and they're out there and all this other stuff, but with four or five agencies out there, is it really cost beneficial for Portsmouth to be carrying all of the cost of this? So that's the first thing on the fire department. The next thing on the fire department that I've noticed and that is really concerning to me And it was said that basically I don't know anything about how a fire department runs. And we know who said that. I don't have to name names. So I took that as a challenge. And I started researching it. And what I found was that it was interesting to look at somebody that had more calls than us, that had more population than us, and I'm talking about NOVR, and that last year they decided to move four of their admin people down into boots on the ground to kind of quell the overtime and have more support on their actual boots in the ground and basically change their whole cost structure. So my question on that is, have we looked into that? Would it be beneficial to our fire department and our budgets especially on the on the overtime recall and on the overtime recall this has been a question that has been asked by numerous city councils and this year we again overspent our 1.6 we were at 1.7 something on our overtime recall and as I promised I asked for the overtime recall so I could understand what was going on here and What kind of calls was making this up? So when I pulled that, I had a lot of questions. And a lot of questions came from, I looked at the overtime recall in FY21. And the overtime recall that was budgeted at that time was $120,000. The overtime recall that was budgeted in FY26 was $553,000. So I wanted to know, what's the big increase? That's an increase of over 350%. So what's making this up? So when I actually requested the overtime recall hours, I found it very interesting that a lot of the stuff was obviously emergencies, but a lot of the calls were made up of meetings that were known or events that were known And the question in my mind became, in my research, is there any other way to do this? And who would do this? Is there some other kind of logistics that we could do to basically save money here? So I looked up special detail versus overtime recall, because that's what basically these are called. And I did some research and first of all, the first thing that came up here was municipal fire departments typically prefer to use special detail for scheduled special events or meetings. This method is favored over relying solely on overtime recall for several reasons. Better planning, resource management, and cost efficiency. So after reviewing the data and looking at some of the reasons that we were calling guys back who already had gone to shift, whether they wanted to come in or not, my questions were numerous because I was looking at not only brush fires and stuff like that that were actual emergencies that you would expect to have recall for, but I was looking at things like checking out the fire engine and school kids right to school and um you know except for substituting for other firefighters who were out which is which is you know except accepted a lot of these were planned meetings or something that could have been scheduled as a detail and not used over time so my question went on and then i went well who schedules this so basically this is management administration so um i would i would like to know personally um after looking at a 360 increase in overtime recall um why we are not looking at something like this to take our numbers down because over the last three or four years the overtime in the in the fire department has gone through the roof so um For me, I'm just looking at ways to try to help and save the taxpayers' money. And when I saw something like this, this brought up a whole bunch of questions, like why are we not doing this? So that would be a big question for the fire department, and maybe we could get an answer on that, and maybe that would help our fire budget. The other thing on the Dover taking four admin positions and moving them down to boots on the ground was a lot of their training. They revamped what they did as far as training and who did it and what rank they were and all this other stuff. Now, I don't know anything about what the union contracts say, but I know you are still negotiating with the fire. So I would put that out there as a possibility. And, you know, Dover had almost 1,000 more calls than Portsmouth did, at least in 25 in reading their presentations. They had 7,115 calls. We had 6,160 from what I could find. So please, from my perspective, it would be great to look for anything that would help the fire department function more efficiently and also save money for the taxpayers. The last thing I would like to ask here on my list is in previous meetings we had a big question on on the School Finance Committee meetings of April 1st, 2026. And in my mind, this goes back to the FTEs, because it was, I don't know that this question ever got answered. And basically it was the financial compliance and cost center 207. And what it said was there's a lack of transparency and there's about 40 plus positions that are often hidden from the main budget book. So my question is, has this been, has this changed? Has this been added into the FTEs? How has anybody dealt with this? And I would, that's another thing that makes me question the accuracy of the FTEs and how many people were adding and how many people were moving because moving partial people and moving them to another, I guess, cost center within the public works realm doesn't help the cost. So those are my questions. I hope they will get answered by next time. The last comment I'd like to make is I think it's a great idea on the solid waste. I was always wondering about this, having lived in, many different municipalities that had many different solid waste collection methods, including, you know, dump your own, we don't care, and we're not going to help you. But we also had, we had the bags, we had, you take all your recycling to the bins and that's it. And for the past couple of years, I remember Peter saying that we're not really sorting, we're not really separating, but we're still asking the residents to do so so um this consolidation would be a great thing and i think it would be uh great to cost it out as soon as we can and that would be uh my comment on that those are my questions and uh i hope to uh see you soon thank you feel better soon um just as a note i did ask uh director of public works peter rice on whether or not we do recycle

we do separate and and recycle we carry it to a different it's carried to a different facility in doing so we pay a lot more for that because as we learned what is this six years ago when China stopped taking our trash or our recycling and cleaning it the cost per tonnage went up quite a bit seeing no other hands on zoom uh long night thank you all uh thank you everybody uh in the audience uh school party and dr mclaughlin's back all right hopefully all right um but uh appreciate everyone um good night portsmouth