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Judge to rule on civil suit brought against Nashua officials for allegedly violating spending cap

Union Leader Correspondent

October 23. 2017 9:22PM
At right, Nashua Mayor Jim Donchess listens to testimony during a court hearing Monday at Hillsborough County Superior Court. (Kimberly Houghton/Correspondent)

NASHUA — After listening to arguments from both sides on Monday, a local judge will now decide the merits of a civil lawsuit brought forward against the city claiming officials violated the provisions of the spending cap.

Two separate lawsuits were previously filed against the city and eventually consolidated by the court alleging aldermen violated the city charter when they approved an ordinance earlier this year that removed $9 million in wastewater funds from the general fund budget.

“This ordinance needs to be revised — it has to conform with the charter,” said former Alderman Fred Teeboom, stressing the only items exempt from the spending cap are bonds and capital expenditures.

Teeboom, along with Alderman-at-Large Dan Moriarty, took legal action against the city claiming that the $301 million fiscal year 2018 budget adopted by aldermen in June does not adhere to the city’s spending cap provisions since the wastewater funds were removed from the combined annual municipal budget without an aldermanic vote to override the spending cap.

However, Attorney Steve Bolton, corporation counsel for the city, said Monday that Teeboom, in his capacity as an alderman in 2007, endorsed a very similar ordinance that ultimately excluded capital expenses from the wastewater fund — nearly the same action that was taken by aldermen earlier this year to transfer the remaining wastewater funds out of the budget.

“That was a big mistake. I should have never done it,” Teeboom said.

Bolton went on to say that there was considerable confusion when the spending cap was originally adopted and eventually implemented in 1994, adding the charter does not make it clear what is excluded and not excluded from the cap.

Prior to Monday’s court hearing, Mayor Jim Donchess said this is not the first time city officials have removed funds from outside of the cap, noting former Mayor Donnalee Lozeau took a similar approach three years ago.

In 2014 city aldermen established a Road and Highway Special Revenue Fund that included $700,000 in annual revenue from motor vehicle permit fees, coupled with state highway fund block grants. At the time, some people argued her proposal was also a way to avoid the city’s spending cap.

“This has been done before,” said Donchess. “What the plaintiffs here, Teeboom and Moriarty, are fighting to do and suing to do is to cut the city’s workforce by about 100 employees, which is what it would take.”

If the court rules in favor of Teeboom and Moriarty and the city is forced to make up the $9 million difference, Donchess said the cuts would have to take place outside of the school system, meaning they would likely come from the fire department and police department.

“We would need to lay off many, many people. That is what, really, they are fighting to do, and that would be devastating at any time,” he said, adding especially in the midst of an opioid crisis.

Moriarty argued that the layoffs would not be necessary.

“The complaints of how much he has to cut are not based on what is needed to run the city. If you want to know how much is needed to run the city, look at fiscal year 2017 ­— we under-spent by $4 million. That is proof that we can actually operate this city with $4 million less than last year’s budget, and on top of last year’s budget we are allowed to grow by $5 million,” said Moriarty, explaining that would enable the city to reach the $9 million difference. “Claims of the sky are falling are simply not true.”

Teeboom said he is concerned the city’s spending cap was overridden by administrative means rather than legal means, stressing city ordinances must comply with the charter, which he said specifically states that 10 votes are necessary to override the spending cap — a vote that never took place.

“Mayor Donchess, I’m not sure he likes the spending cap,” Teeboom told the court.

The charter provision limits spending, not taxes, according to Attorney Seth Hipple, legal counsel for Moriarty. He said earlier that it is irrelevant whether the wastewater funds will or will not raise taxes because the city still exempted the funds, and without an actual vote on whether to override the cap.

If this action is permitted, Hipple argued that in the future, any line item can be removed from the combined annual municipal budget and therefore be exempt from the spending cap, which he said is not the intent of the charter.

Judge Charles Temple of Hillsborough County Superior Court is still reviewing the matter.

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