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Nashua alderman files lawsuit against mayor, city over spending cap

Union Leader Correspondent

May 17. 2017 9:44PM


NASHUA — Alderman-at-Large Dan Moriarty is the second individual to file a civil lawsuit against the city, claiming it is violating spending cap limitations set forth by the city charter.

Moriarty filed the litigation against Mayor Jim Donchess and the city, claiming in court documents that “the mayor’s scheme to violate (the) charter” stems from an ordinance recently enacted that removes $9.1 million of the city’s wastewater costs from the general fund.

Earlier this year, aldermen voted 9-6 to approve an ordinance that transfers the $9.1 million of the city’s remaining wastewater costs out of the general fund; half of the funds were removed many years ago. The ordinance enables the wastewater system fund to be a separate and distinct fund that is not commingled with city tax revenues, therefore is no longer deemed part of the city’s general fund accumulated surplus.

“It is the only choice I had at this point. If it is a matter of opinion and I am outvoted, that I can accept, but this is black and white — they are not following the law,” Moriarty said on Wednesday.

Moriarty said he was reluctant to comment on the pending litigation, but said he has publicly voiced his concerns about the matter to fellow aldermen.

“I am a longtime fiscal conservative,” added Moriarty, a previous mayoral candidate.

In court records, he argues the mayor is “attempting to illegally increase the money available for him to spend, in violation of the letter and spirit of the spending cap limitation contained in the city’s charter.

“The mayor’s scheme would allow him to increase the 2018 budget by approximately $9.1 million above what the charter allows,” states Moriarty’s lawsuit. “These illegal expenditures would translate to higher taxes for Nashua taxpayers, including approximately $200 in additional taxes for (him) every year in perpetuity.”

“This is highly unusual. We are supposed to be on the same team and we have a member of our management suing the city,” Donchess said on Wednesday. While Donchess said Moriarty’s action is legal, the mayor described it as inappropriate.

Donchess said he has heard feedback from other aldermen who believe the situation is “outrageous,” especially since Moriarty is asking for his legal fees to be covered by city taxpayers.

“We have submitted a budget that is in compliance with the spending cap,” stressed Donchess, adding Moriarty’s theory has no merit.

Moriarty’s legal action comes just weeks after Fred Teeboom, a former alderman, filed a nearly identical lawsuit against the city claiming the Board of Aldermen violated the city charter when it enacted the ordinance transferring wastewater funds, which Teeboom argues will permit the annual budget to exceed the spending cap without requiring at least 10 affirmative votes by aldermen.

Donchess explained that aldermen passed the ordinance 9-6, adding the city’s legal department has advised city officials that its action adheres to the city charter.

Mayor Jim Donchess said the wastewater system fund, or sewer fund, does not impact the tax rate, meaning the special revenue fund should not be included in the charter limitation on budget increases. He said it makes sense to remove the fund from the municipal budget because it is funded by user fees.

If Teeboom and Moriarty believe that the action taken by aldermen was inappropriate, Donchess said they should take up the issue during the election season rather than suing the city and seeking legal fees.

Moriarty is asking the court, through his attorney, Seth Hipple of Concord, to invalidate the ordinance, order the mayor to propose a new budget that complies with the spending cap and order the city to comply with the spending cap limitations in passing the 2018 budget.

A structuring hearing has been scheduled for Thursday in Moriarty’s case. In Teeboom’s case, a hearing is set to take place on Monday in Hillsborough County Superior Court.

In court documents, Steve Bolton, corporation counsel for the city, describes the allegations filed in Teeboom’s lawsuit as “extraneous,” adding city officials deny any wrongdoing and are asking the court to dismiss the litigation.

Both lawsuits, according to Donchess, would result in substantial cuts in city services if agreed by the court.

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