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Special Bd. of Aldermen — 02/27/2017 Page 14

Alderman Jette

Just to reassure property owners, the fact that someone’s house may have increased in value doesn’t
necessarily mean that their taxes would go up as a result of that. Am | not correct about that?

Mayor Donchess

That’s generally correct because everybody’s have gone up in value. The difficulty that | tried to explain at the
beginning is again in generally at least these preliminary equalization ratios based upon smaller number of
sales suggest that commercial will not go up as much as residential and therefore there will be some impact.

In other words to translate oh my house is up 25 percent therefore my taxes are going to up 25 percent, that is
not the case. Everybody’s property is going up as well. If all properties went up the same amount, there would
be no change in the distribution of the tax burden.

President McCarthy

| think we can say is if a property has not appreciated in value more than the commercial properties, your taxes
will actually go down because the taxes are going to go down. There’s a number somewhere just above that
that’s the breakeven point. If your property values have gone up approximately the same as the other
residential properties, then taxes will go up because of the way equalization works.

Mayor Donchess

Again by working with KRT by trying to capture all commercial values, we hope to mitigate the shift from
residential to commercial as a result of the rapid escalation of residential house home values.

President McCarthy

Other questions? Thank you very much.

Mayor Donchess

So we will be bringing a contract to finance at some point in the very near future. CERF money is already
appropriated so we'll come to finance with the contract. We're going to go to finance on the 21%.

Alderman Jette

I’m sorry | didn’t think of this before. So have other companies that do this same type of work have we sought
bids from other companies?

Mr. Griffin

On the commercial and industrial side, we had some discussions with an individual that specializes in
commercial/industrial. He was just overloaded. He could not perform the work. With regard to, and the Mayor
alluded to this, we use a Patriot AssessPro system that’s used by five communities in the State of New
Hampshire. So we're limited on the amount of folks that know the Patriot System and that’s KRT. Most of the
cities and towns use Vision Software. There’s probably many more but as far as my knowledge is there’s two
major camera systems to collect the data so we were limited to these folks.

One final point Mayor which is important, the company that creates the AssessPro software is not certified to
perform mass appraisal work in New Hampshire. They are predominately Massachusetts and Connecticut.

Special Bd. of Aldermen — 02/27/2017 Page 15

Mayor Donchess

So we really only had two entities that could do it and the gentleman who did work with Portsmouth we asked
him if he was available and his answer is no basically he’s not available. In talking with the DRA, another
benefit we tried to hold out to them was that we would convert to this vision to conform more with the rest of
the State and again do what you want but you have to have your appraisal done this year period.

Alderwoman Melizzi-Golja

This is to Alderman Dowd’s earlier comment about CERF. Mayor Donchess and Mr. Griffin just indicated the
monies has already been appropriated and that contract is coming to finance. So you're looking for a vote to
move forward with the $5 million out of the CERF funding. Do you have any ideas to when you might be able
to do something so people on finance understand what CERF is and what this means for the CERF budgets so
they have a sense of the bigger picture? Obviously it’s not going to happen. This is happening before budget
and explanation of CERF as requested by Alderman Dowd.

Mr. Griffin

The forecast for the number of items at the Finance Committee on the 21* is modest. What we could do is |
could basically take that opportunity at the Finance Committee as a workshop or some type of better
explanation for everybody so they know the beginning balance of CERF, the expectations going forward.
CERF is a multi-year plan that includes every vehicle in the city that the city purchases whether it’s grants or
other funds. We could explain that. What would happen in the budget is Mr. Fredette and | with the Mayor
would explain how much we recommend putting in the budget for CERF. Money goes in, it’s appropriated and
then used by the approved vehicles. That’s really how it’s been used.

Alderwoman Melizzi-Golja

| just think it’s important that this is not a typical request and you’ve indicated this has been done in the past.
I’m not questioning that | just think with so many new members it’s important for them to understand what it is
they're being asked to vote on and what these funds are so someone doesn’t come up to them and say why

did you support that and they don’t know. | think we owe it to the new members on the Finance Committee
and on this Board to understand what CERF is and what this means.

President McCarthy

When you say the money has been appropriate, this was not in the submission to CERF for the current fiscal
year, correct?

Mr. Griffin
That’s correct.

President McCarthy

As we’ve discussed, CERF is basically funded pay as you go at the moment and not as an actual reserve fund.
What was in the budget that we’re not getting that was $500,000 that went into CERF?

Mr. Griffin
Very good question and it would be part of the presentation. If you may recall two years ago, we had excess of

appropriations not spent and we brought subject to check about $717,000 of funds into CERF to boost that
value. Alderman McCarthy is asking were there any vehicles attached to that money and no there hasn’t been.

Special Bd. of Aldermen — 02/27/2017 Page 16

When | refer to the $1.7 million as unrestricted, it hasn’t been tied yet or ask the Board of Aldermen to approve
these sets of vehicles.

President McCarthy

So we’ve basically been carrying a $750,000 unexpended fund balance plus the yearly supplement to pay for
the yearly expenses?

Mr. Griffin

Correct.

Alderwoman Melizzi-Golja

And that’s fine. | just think people need to know and if there are vehicles we anticipate purchasing or if there is
anything in the future we think we’re going to use this money for what this means. We have had discussions in
the past about bonding for vehicles, and using CERF money, and | just think the new members of the Finance
Committee should understand the history of this including whether or not there was anything in last year’s
budget. | was just kind of being global in terms of them understanding what this means.

Alderman Dowd

We can also get an overview of the request from the various departments for anything that would be coming
out of CERF in this year’s budget.

President McCarthy

| also don’t think the Board should overlook the fact that doing this is going to make it a rocky year for the
budget in order to equalize the tax rate and not give sticker shock to most of the residents. We're going to
have to be fairly conservative about budgeting and offset some of it with the surplus and contribution to fund
balance. Any other questions, comments? Is there a motion?

ADJOURNMENT

MOTION BY ALDERWOMAN MELIZZI-GOLJA TO ADJOURN
MOTION CARRIED

The meeting was declared adjourned at 8:15 p.m.

Susan Lovering
Legislative Affairs Manager

City of Nashua, NH
2018 Full Statistical Revaluation
Informational Meeting

Legal Requirements

Constitutional Duty of the City:

Art. 6. [Valuation and Taxation. ]

The public charges of government, or any part thereof, may be raised by
taxation upon polls, estates, and other classes of property, including
franchises and property when passing by will or inheritance; and there
shall be a valuation of the estates within the state taken anew once in
every five years, at least, and as much oftener as the general court shall
order.

Statutory Duty of the City:

“RSA 75:8-a Five-Year Valuation:

The assessors and/or selectmen shall reappraise all real estate within
the municipality so that the assessments are at full and true market
value at least as often as every fifth year...”

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State of New Hampshire

Department of Revenue Administration
109 Pleasant Street
PO Box 487, Concord, NH 03302-0487
Telephone (603) 230-5000
www. revenue.nh.gav

MUNICIPAL AND PROPERTY

BIVISION
Lindsey M. Stepp Stephan W. Hamilton
Assistant Commissioner Director
February 26, 2018
John L. Griffin, Chief Financial Officer
City of Nashua
P.O. Box 2019

Nashua, NH 03061
Re: 2018 Reappraisal of Property Pursuant to RSA 75:8-a
Dear Mr. Griffin:

It was a pleasure for Charles Reese and | to meet with you, Mayor Donchess and staff, regarding the
above referenced duty of the City of Nashua (City) to, “... reappraise all real estate within the
municipality so that the assessments are at full and true value at least as often as every fifth year. . .”
(See RSA 75:8-a). This requirement in statute echo’s the duty in the New Hampshire Constitution, ”...
there shall be a valuation of the estates within the state taken anew once in every five years...” (See NH
Const, Pt. Il, Art. 6). The last year that the City made such a reappraisal was 2013, having an effective
date of value of April 1, 2013.

| understand that it is the long-term goal of the City to re-inspect all of the taxable property, as no such
widespread collection of data has occurred in a number of years. The City has been maintaining the
records of property description in other ways, including regular inspections of property for which
building permits are issued, as well as relying on other technology to detect and catalog changes. While
the records of the City describing properties may not be perfect, they have been found to meet
standards adopted by the NH Assessing Standards Board.

As | indicated at the meeting, there is no requirement that the City undertake a full measure and list
reassessment In order to meet the reappraisal requirement. An update of values relying on the current
property descriptions is an acceptable process of reappraisal, and will allow the City to meet its
statutory duty. If the City desires, additional inspections or a full measure and list revaluation could be
scheduled ina future year, but that future activity cannot be a substitute for the reappraisal that is
required for Tax Year 2018.

I thank you for your courtesy, and | stand ready to answer any additional questions that you might have.

Stephan W. Hamilton, Director

Cc: File

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TOD Access: Relay NH 1-800-735-2964
Individuals who need auxiliary aids for effective communication in programs and services of the Department
of Revenue Administration are invited fo make their needs and preferences known ta the Depariment,

Equalization Ratio

“Equalization is the process by which the
New Hampshire Department of Revenue
Administration makes adjustments to
each municipality’s locally assessed
values to calculate the estimated 100%
value of the municipality”

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Assessed Value

Current Assessed Value Preliminary Future
Tax Year 2017 Assessed Value
Tax Year 2018
$6.6
$5.3
$3.2 $3.4

Residential C&I Residential C&I
ER = .80 ER = .93 ER = 1.00 ER = 1.00

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*Dollar amounts in Billions

Property Taxes

Assumed Property Assumed Property
Taxes - $200 Million Taxes - $200 Million
Tax Year 2017 Tax Year 2018

$132
$124.8

$75.2
$68

Residential C&l Residential C&I

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*Dollar amounts in Millions

Appraisal Company

KRT Appraisal, Haverhill Massachusetts
Ken Rodgers, CMA, President
Rob Tozier, CMA, Vice President

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