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Manchester mayor points to pensions on police hires in grant debate

New Hampshire Union Leader

September 18. 2012 12:05AM

MANCHESTER - Aldermen are expected to again consider whether to finalize federal grants to hire additional police and firefighters at a special meeting this evening.

Mayor Ted Gatsas says new pension cost projections may prove sobering to the aldermen, who overrode the mayor's veto of the grants earlier this summer.

Under consideration are a $1.13 million grant under the SAFER program administered by the Federal Emergency Management Agency to hire eight firefighters, and a $625,000 COPS grant from the U.S. Department of Homeland Security to hire five officers.

Both grants will cover the salaries and benefits for the new employees for two years, while requiring the departments to maintain the positions for a third year. Gatsas has argued that this provision will saddle the city with unsustainable costs when the funding runs out.

The full board already approved the grants in July, narrowly overriding the mayor's veto, but since then the measures have been referred back to committee or been tabled.

The latest vote comes as new estimates show a 21 to 28 percent increase in pension costs for police, firefighters and teachers for the 2014 fiscal year, starting next July.

The city will have to pay $1.7 million more next year for its share of pension costs to the New Hampshire Retirement System, according to a letter from city Finance Director Bill Sanders. The school district will face an additional $2 million in costs, according to a letter from district Business Administrator Karen DeFrancis.

The added pension costs already place the city on track to exceed the tax cap, the voter-passed measure that limits increases in the budget to the increase in the Consumer Price Index. The allowable increase for 2014 is estimated at 2.17 percent, while the pension costs represent a 3.6 percent increase over last year's budget, according to Sanders.

Gatsas said the rising pension costs make the decision to accept the federal grants all the more unsound.

In addition to requiring that the city fund the new positions for a third year, they also obligate the city to maintain staffing levels throughout the grant period. The departments would have to fill any vacancies during that period.

A majority of the aldermen voted to override the mayor in July, arguing that given public safety needs, it would be worth accepting the federal grants even if the city could only maintain the additional personnel for a few years.

The override vote, however, only narrowly surpassed the necessary two-thirds margin. One of the aldermen who voted to override the mayor, Russell Ouellette, has since resigned.

The city solicitor recently issued an opinion that the same number of aldermen, 10, will be necessary to override the mayor, despite the resignation.

Gatsas said he was hopeful that some aldermen might shift their perspective on the police and firefighter grants in light of the new pension cost projections.

'I'll leave it up to the finance officer's projections. If they read his letter, it's pretty specific,' he said. 'I would hope that we'll be able to come to a common understanding about what's before us.'

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