Special Board of Alderman Meeting: Capital Project Planning (Jan 13, 2026)

This special meeting of the Board of Alderman, held on January 13, 2026, convened to initiate a conversation regarding the City of Nashua's capital improvement planning, debt service management, and the Fiscal Year 2027 Capital Improvements Program (CIP). Administrative Services Director Tim Cummings, CFO Don Enright, and Planning Manager Sam Durfee presented on financing mechanisms, project prioritization criteria, and the city's debt strategy. The discussion focused on aligning over $700 million in identified capital needs with a constrained debt service budget of approximately $23.7 million (15% of the general fund), with a goal of maintaining an average annual debt sale authorization of $25 million.

Consent Calendar

• The Board received and approved communications from Tim Cummings and Don Enright regarding the request for a special meeting and the fiscal year 2027 CIP report.
• A motion to approve the communications and recommendations regarding the CIP report was made and carried; Alderman O'Brien recorded a "Nay" (opposed) vote.

Public Comments & Testimony

• No formal public testimony was recorded during this segment of the transcript; the discussion remained between Board members and administrative staff.

Discussion Items

• Bonding Mechanics and Advantages (CFO Enright):

  • CFO Enright explained that bonding allows the city to manage cash flow for large projects by securing loans at favorable rates rather than paying cash upfront, noting the city's stable budget management is reflected in its Triple-A bond rating. She clarified that using surplus funds to pay cash for some projects helps keep the bonded amount lower.
  • Alderman Tebow asked how bonding benefits a city and expressed concern regarding proposed state legislation that would restrict bonding to only "dire emergency" situations. Enright argued that such legislation would negatively impact the city's ability to plan capital projects and would cause debt service to "ebb and fro," likely lowering the city's credit rating.
  • Alderman Tebow further asked for an explanation of the benefits of maintaining a bond rating for future borrowing capability.

• Fee Structures and Cost Transparency (CFO Enright & Director Cummings):

  • Alderman Johnson requested a detailed breakdown of additional costs associated with bonding, such as attorney fees and interest, comparable to a mortgage closing statement. He asked staff to provide a future breakdown of these overhead costs for the Board's review.
  • Alderman Lopez asked for a comparison of the costs when tax collection funds are used versus bonding, specifically to understand the overhead costs incurred by the city's internal staff for managing bonded funds. Enright agreed to provide a full expense breakdown.

• Capital Improvements Program (CIP) and Project Scoring (Planner Durfee):

  • Sam Durfee presented the CIP as a six-year planning effort developed by the Capital Improvements Committee (CIC), which ranks 125 project requests based on seven criteria including urgency, readiness, and economic impact.
  • Alderman Cleese expressed concern that the Lock Street and Whitney Street project scored only 3.56/5 despite an 80-20 state match potentially being lost. Durfee explained that while the economic impact is high, the project's low "urgency" and "readiness" scores (due to the 10-year timeline and lack of immediacy) lower its overall ranking, even if it has a match deadline.
  • Alderman Senate questioned why some projects with lower scores are requested for funding sooner (FY27) while higher-ranked projects are scheduled for later years. Durfee noted that department heads identify their top three priorities, and these requests reflect articulated needs that may outweigh raw scores for immediate funding.
  • Alderman McKelly inquired about the scoring consensus process, confirming that the committee uses individual scoring averaged out to minimize subjectivity.

• Debt Service Strategy and Fiscal Constraints:

  • Director Cummings reiterated the goal of maintaining a debt service budget around $23.7 million (approx. 15% of the general fund) and a five-year average of $25 million in new debt sales. He noted a previous preference to use cash surplus over bonding, highlighted by the Lock Street project, but acknowledged the need to balance strategic cash usage with project pacing.
  • Cummings outlined a list of previously authorized projects (garage/fleet maintenance, stadium repairs, Mohawk Tannery bridge, hydro improvements, parking garage, transportation signals, police training facility, roofs, school projects) and proposed future spending growth targets for the operational budget.

• Procedural and Process Questions:

  • Alderman O'Brien requested clarification on the inclusion of fire department roof repairs, which Cummings confirmed are included in the authorization.
  • Alderman Cleese verified that the Board previously chose a $25 million debt limit over a recommended $30 million to maintain a safety buffer and confirmed the policy of using cash for projects under $1.5 million, though noting some exceptions occurred for strategic design authorizations.
  • Alderman Sullivan questioned the procedural choice to authorize design costs before final bond approval for the DPW garage. Cummings explained this two-step process (design then construction) mitigates the risk of construction cost inflation (approx. 10% annually) and ensures more accurate bond amounts, preventing the need for re-authorizations due to slippage.
  • Alderman Johnson discussed the school construction process, noting that final costs are determined only after construction drawings are priced, justifying the initial design funding phase.
  • Alderman Johnson asked if the CIP scoring considers the strategic use of bonds to increase future tax bases. Durfee clarified that while most projects are maintenance-focused, a few economic development projects (e.g., Riverfront) are weighted for potential future tax revenue expansion.
  • Alderman Lopez asked if this weighting disadvantages essential but non-revenue-generating projects like the DPW truck washing station. Cummings responded that the city balances strategic investments (TIF) with core service funding, often ensuring core services are carved out or funded directly even within TIF districts.
  • Alderman Kelly raised the issue of construction cost inflation due to planning delays and asked if construction teams are involved in the planning phase. Cummings confirmed that involving construction teams early is standard practice to keep costs within target budgets.

• Ad Hoc Committee Reconstitution:

  • Director Cummings proposed reinstituting the ad hoc committee to finalize the FY27 CIP and prepare bond resolutions for the upcoming budget season.
  • Alderman Johnson questioned whether an ad hoc committee is the appropriate vehicle compared to a direct budget committee conversation.
  • Alderman Cleese moved to adjourn the meeting.

Key Outcomes

• Motion to Adjourn: Made by Alderman Cleese; carried with all voting "Aye" at 7:52 p.m.
• Strategic Direction Established: The Board was briefed on the recommendation to maintain a debt service budget at approximately 15% of the general fund and limit annual debt sales to an average of $25 million over five years.
• Next Steps: Staff will email the presentation deck to the Board and provide requested fee breakdowns. The Board is asked to consider reconstituting the ad hoc committee to refine the Capital Improvements Program and prepare bond resolutions for the Spring budget season.
• Clarification on Priorities: The Board confirmed the inclusion of specific deferred maintenance items (fire department roofs, HVAC) in the FY27 debt service figure.