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Special Bd. of Aldermen — 11/26/2018 Page 15

together until you’ve put out the bids. And there is just a little bit of a difference in the process working from the
public side. | think all of us have felt that oh | want to do this but oh no | can’t because this is a public process

So | think that there has been a little bit of that that feels very different for many of us who have been involved
on both sides, non-profit as well as public. But no we are not putting 2,000 people in there at one time.

Alderman O’Brien

Having some 35 years expertise in such matters, the State RSA says you can’t build a building that is not
going to be fire safe. It is going to be heavily sprinkled, it is a place of public assembly. Those that do go into
any establishment in our City, you will notice that a Certificate of Occupancy has to be proudly displayed so
that every person can see to make sure that they are not themselves getting themselves into an overcrowded
situation.

The discussion of the movable or floating plans, such as movable tables and seats and everything it sounds
like there will be several certificates of occupancy met with that. The Fire Marshalls will work with that and
come up with that particular amount, because every table and chair takes up a Space, and those are guarded
in exiting the building. So | am quite confident in that, that it will be done appropriately and to our level of
expertise and safety that we in Nashua demand.

Ms. Bell It sounded like a high number when | was doing the math so | was glad you were here and other
members of the Board of Aldermen to answer and thank you so much for your clarification on things. |
appreciate that and | would like to say just as a reader of the Telegraph on a daily basis, that it would be nice if
there were maybe some updates on the funds that have flowed into this project because | think that most
people are in the dark. They were maybe led to believe that there were some initial donors who were stepping
up, they were on deck, they were at the plate with some large funds to donate and | think that people don’t
know, | Know that people don’t know and they would like to be kept a little bit more abreast about what is going
on and even the dollar figure. Because it is people who are considering donating, like to know that there is
something in the pot so thank you again very much.

Dick lannacone , 35 Swart Terrace, there ought to be a group that talk for and against so that is what | would
like to present tonight after listening to the speakers it is very important. First of all for those who think we are
against, our group has probably raised more than $400,000.00 to $500,000.00 for the Performing Arts since
we’ve been in town. We have been very active in supporting the arts. I’m not sure the people who supported
what used to be the Nashua Symphony which is Symphony NH is that for years we looked for support. When |
first came into town | worked with the Symphony and was on their Board, Chairman for part of the time and
during the time we looked for support and could not get the support.

We actually went to the City of Manchester because there was what, the New Hampshire Symphony. Most
people believe if you said the name New Hampshire Symphony that they were the Symphony for the State of
New Hampshire. In very private negotiations a few of us would get together and meet and try and geta
merger of the two organizations, that’s how much trouble we were in. We finally came to the end of the
discussions with New Hampshire Symphony saying we don’t need you. We all know what happened, the
people like Nancy who was the head and Eric who worked for very little in a timeless fashion we survived and
they did not.

| would caution on a couple things here. We have many committees looking for the Performing Arts trust me.
You think the Performing Arts Center we have where the symphony performs is a good place? |’m sorry, even
for a period of time we tried to get some air conditioning in there approved, couldn’t even get the money at first.
It is not an ideal situation. We'd love to have a place in Nashua but | think it’s important what Barbara Pressly
said for the second part. That part is that | don’t have the exact numbers but a vote was taken, how many
votes were actually voted for if they wanted a performing arts center or not, it was very little right, how many
votes? How many total votes?

Special Bd. of Aldermen — 11/26/2018 Page 16

Unidentified Speaker
8,000 or 9,000.

Mr. lannacone And what was the vote count? It’s a simple majority right? What Barbara Pressly said is very
important here. The people want an arts center, we want a performing center. But they voted because they
were told also in all these discussions that this was going to be done with private money. That’s a very
important distinction here. And how we’ve been giving all these great assurances by these professionals,
believe me we’ve doing professionals for a number of years, raising money for churches, raising money for
other things. It is not that easy and they have given us these assurances or guarantees as we’ve heard these
words, boy this is going to be an easy one to do.

| think the people need to and | think Barbara Pressly is correct here, need to know what they asked the City to
do and where we are now. | have been watching all along waiting and asking questions, when is this going to
happen, when is this going to happen and we had nothing planned ahead of time. We are shooting from the
hip again and that has now caused us a problem. | think that is the problem that people have with government
at this point is that you throw something out, they’ve given us a direction and it is tough to do, it’s not easy, you
don’t have an easy job. But it would be so much easier with communication if we said this is what our intent is
going to be, if that is the route we are going to go down. These tax credits, | agree the tax credits, that’s not
private contributions sorry, that’s not at all private contributions.

| think if nothing else we need to go to the people and say here’s what has happened, | mean look at how
many people we have here tonight, it’s not very many people and coming a week after a holiday week, we
need to go to the people and say this is the direction we are going to goin. In simple plain English, explain
what the tax credits are, what they are all about, and the private contributions and what we need to do. And
then if you get that occurrence of the people like Barbara Pressly speaking, then we are on solid ground. It’s
not going to be 3, or 4 years from now or 5 years from now we are still trying to build this arts center that is
downtown. From my understanding, | don’t think this complex can hold the full orchestra, is that correct Tim?

Mr. Cummings

Yes that’s correct.

Mr. lannacone In this facility, it would be nice if we had a nice facility to do that, we can’t do that. Tough
decision, Barbara Pressly said some great comments, people need to know, if you want the center, but we
should know exactly who has the liability and who is going to have the liability. And | will tell you for example
for the Symphony New Hampshire we are trying to raise money to keep things going, it is very, very tough,
believe me. Thank you.

Mr. Cummings

| just have a quick question, it sounded like there was a group being represented in the comments there. |
would like to Know which group it was?

(inaudible dialogue)

Debora McLaughlin 19 Salmon Brook Drive, Nashua, New Hampshire. In hearing all of this tonight, | am
thinking to myself, you know, | am your demographic who would attend these things and pay this ticket price
and enjoy these festivities and looking over the last 10 years | have probably gone to 100 different venues. |
travel across the country having gone to even 12 last year, however | did vote no because my main concern
was one, not being aware if we really were going to be able to support this and sustainable funds without

Special Bd. of Aldermen — 11/26/2018 Page 17

affecting our community and second also being concerned as to what philanthropy was going to be going
towards it when we have children that don’t have meals outside of the school program and other issues.

The other concern that came out was in regard to integrity and the one thing that | want to leave you with as
each one of you is representing the people in your communities, as | recall, right before the voting occurred, all
the headlines of the Telegraph talked about our large donor our pending large donor. And | don’t know about
you but if | am paying, a lot of people will get in my car and go somewhere. So my question would be did the
community really vote this in because they thought the funding was taking place and this would be a place of
enjoyment without worry or concern as to how we are going to be funding this, if it was going to affect the
philanthropy that was going to other non-profits whether it was eventually hit our tax dollars. So whether we
are looking at a $10 million dollar bond or a $15 as you are looking at the design and every effort, have that
question in the back of your mind. Was this voted in in integrity with full awareness of our community? Thank
you.

Barbara Pressly Thank you, Barbara Pressly again, 11 Orchard Avenue. | don’t know if this is true or not but
at least in my memory if you do vote for this tonight you will basically be overriding the citizens’ vote. And
please think about that, because what that means in the future anytime the citizens vote an issue up or down,
people can say oh don’t worry about that we can change that later if we want to. So please consider, my
concern is the truthfulness and the integrity and the perception of can we trust our Board of Aldermen. So
please think about it. See if you can’t find another way to work on this project and take advantage of all that
you have learned, but not violate the vote that was taken. Thank you.

ADJOURNMENT

MOTION BY ALDERMAN WILSHIRE TO ADJOURN
MOTION CARRIED

The meeting was declared adjourned at 8:24 p.m.

Attest: Patricia D. Piecuch, City Clerk

S\\ THE CITY OF NASHUA

Economic Development Division

"The Gate City”

Memo: Lori Wilshire, President

Ce: Board of Aldermen

From: Tim Cummings, Economic Development Director
Date: November/2018

RE: Amendment to R-18-001

Purpose

We have worked diligently and methodically over the last nine (9) months since the bond was
first authorized and during that time we have learned a great deal. The purpose of the amendment
is to bring the current resolution up to date.

Amendment

The amendment allows for the designing of the Performing Arts Center (“PAC”) to occur prior
to the $4M in private funds being raised. The amendment further goes on to make explicit that
“New Market Tax Credits” will be one of the sources of private funds and provides greater
flexibility on how the funds can be used, i.e. endowment fund, capital costs or reduce the bond.

Background

This amendment is before the Board of Aldermen in an effort to keep the bond authorization
germane and accurate since its passing. Over the last year further planning on the Performing Arts
Center has brought about a few major new developments.

First, we are currently working with a private sector 3™ party operator to manage and run the
Performing Arts Center. This development makes the idea of setting aside $4M dollars into an
endowment unnecessary. Setting aside some money as an operating reserve (endowment) makes
sense and is recommended, but is not a prudent use of the limited funds at this time. It will be a
goal to have an endowment fund capitalized, but less than $4M.

Second, we brought on our New Market Tax Credit (“NMTC”) Consultant (and our General
Fundraiser) well after the bond authorization occurred and it was only after we received their
counsel that it became apparent that we would need access to bond proceeds in advance of
construction to design the project, which in turn assist us in bringing in the private sector funds.

>» To Be Explicitly Clear: As originally outlined there will be at least $4M of private funds
brought to this project and we have a goal of $6.5M of private funds to be raised for the
project in its entirety.

Timeline

We are working on a very aggressive timeline and every delay that occurs pushes the goal of
getting under construction further away. It is my hope to have the building under construction in
some fashion by the fall of 2019.

As of right now we would be looking to be under construction in the fall of 2019 and operational
by fall of 2020.

Recommendation

it is my recommendation that this amendment be adopted. To achieve the goal of bringing in the
approximately $6.5M in private funds for the Performing Arts Center this amendment is necessary.
Conclusion

If you want to advance the Performing Arts Center project then this is an essential next step,
because it will allow us to design the Performing Arts Center and flexibility in how the private
funds are used.

Thank you.

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a

Chapter 1

Basics of Tax Credit Finance

‘Tax credits are a form of investment by federal, state, or local governments, and provide
important incentives to eligible businesses, nonprofit organizations, and developers to
develop projects. The goal of this Guide is to introduce readers to tax credit financing, types
of tax credits available, and strategies and techniques for enhancing the value of tax credits.
Finally, and importantly, this Guide also provides examples and case studies where creative

tax credit financing structures and techniques were used to develop communities across the
United States.

What is a Tax Credit?

A tax credit is a dollar for dollar reduction of a taxpayer's tax liability. It is different from a deduction, which is a reduction
of a taxpayer's income subject to tax, on which the taxpayer's ultimate tax liability will be determined. Tax credits can be
used to reduce both federal taxes and state taxes (if authorized by state legislatures).

Example

Ifa cn has $100,000 of taxable income at the 35% income tax bracket (i.e., the highest rate for individuals), a
$1,000 deduction is equivalent to a tax savings of $350 (i.e., $1,000 x 35% or, more explicitly: $100,000 x 35% =
$35,000 of tax vs. $99,000 x 35% = $34,650. $35,000 - $34,650 = $350). However, a $1,000 tax credit results in a
$1,000 tax savings ~ regardless of tax bracket.

‘Thus, a key condition that must exist in order for tax credits to be valuable is that the taxpayer must have taxable income.
However, certain types of tax credits are “refundable,” which means that a taxpayer can receive a payment from the taxing
authority to the extent that the taxpayer's tax liability becomes “negative” after factoring in a tax credit.

Example
If a taxpayer's income tax liability before application of a $1,000 refundable tax credit is $800, the taxpayer will be
eligible for a $200 refund after application of the tax credit (i.e., $800 - $1,000 = negative $200).

Viewed differently, both tax deductions and tax credits are different forms of government subsidies used to reward or
encourage certain activities (e.g., home mortgage interest, child care expenses),

Example
Ifa taxpayer in the 35% bracket has a choice between leasing a home for $1,000/month vs. purchasing the home for
interest-only payments of $1,500/month, the taxpayer may choose to purchase because the taxpayer's after-tax cost to

purchase is $975/month because of the home mortgage interest deduction ($1,500 x 35% = $525 and $1,500 - $525 =
$975).

Example
Ifa taxpayer pays $5,000 for child care and receives a $1,000 tax credit, the taxpayer's after-tax cost is reduced to $4,000.

A tax credit is a government vehicle designed to encourage investment in certain socially or economically favored
industries or activities. They accomplish important public policy objectives by encouraging the private sector to provide
social benefits through projects that probably would not be developed but for the tax credits. Accordingly, tax credit
programs are intended to promote “public-private” partnerships in order to accomplish the goals of Congress. As
illustrated above, although tax credits are available to both individuals and businesses, these important public policy
goals with tax credits are achieved by developing tax credit programs designed for businesses to utilize. Unless otherwise
indicated, this Guide deals with non-refundable business federal tax credits.

‘Tax credits, while they come in many forms, are authorized incentives under the Internal Revenue Code (and some state
tax codes) to implement public policy. Congress, in an effort to encourage the private sector to provide a public benefit,
allows a participating taxpayer a dollar for dollar reduction of their tax liability for investments in projects that probably
would not occur but for the credits,

Tax Credit Finance Reference Guide
Council of Development Finance Agencies

Examples of Nashua Projects that Used Tax Credits as Part of Their Project Financing?

Makeit Labs

Girls Inc.

YMCA

Boys & Girls Club of Nashua

Nashua Soup Kitchen

Cotton Mill Apartments

Neighborhood Housing Services of Greater Nashua

*Partial List

SPECIAL BOARD OF ALDERMEN

NOVEMBER 26, 2018

7:00 PM Aldermanic Chamber

PRESIDENT LORI WILSHIRE CALLS ASSEMBLY TO ORDER PRAYER

OFFERED BY CITY CLERK PATRICIA D. PIECUCH

PLEDGE TO THE FLAG LED BY ALDERMAN-AT-LARGE MICHAEL B. O’BRIEN, SR.
ROLL CALL

PUBLIC HEARING
R-18-092

AMENDING R-18-001 “AUTHORIZING THE MAYOR AND CITY TREASURER TO
ISSUE BONDS NOT TO EXCEED THE AMOUNT OF FIFTEEN MILLION FIVE HUNDRED
THOUSAND DOLLARS ($15,500,000) FOR THE PERFORMING ARTS CENTER LOCATED
AT 201 MAIN STREET”

Testimony in Favor
Testimony in Opposition
Testimony in Favor

Testimony in Opposition

ADJOURNMENT

A regular meeting of the Board of Aldermen was held Tuesday, November 13, 2018, at 7:30 p.m. in the
Aldermanic Chamber.

Vice President Lori Wilshire presided; City Clerk Patricia D. Piecuch recorded.

Vice President Wilshire

The City lost a great man this past week, Brian McCarthy, the President of this wonderful board.
Brian’s accomplishments were many, his love for his community unrivaled; my deepest sympathies to

his wife Gloria, his daughter Kim, and his son John and John’s wife Alicia. Rest in peace my friend.

Vice President Wilshire called for a Moment of Silence in remembrance of Alderman-at-Large Brian S.
McCarthy.

Prayer was offered by City Clerk Patricia D. Piecuch; Alderman-at-Large Brandon Laws led in the
Pledge to the Flag.

The roll call was taken with 14 members of the Board of Aldermen present.
Mayor James W. Donchess and Corporation Counsel Steven A. Bolton were also in attendance.

ELECTION OF PRESIDENT AND VICE PRESIDENT OF THE BOARD OF ALDERMEN FOR THE
REMAINING 2018-2019 TERM

Vice President Wilshire entertained nominations for President of the Board of Aldermen to fill the
remainder of the 2018-2019 term.

ALDERMAN DOWD NOMINATED ALDERMAN-AT-LARGE LORI WILSHIRE TO THE OFFICE OF
PRESIDENT OF THE BOARD OF ALDERMEN FOR THE REMAINING 2018-2019 TERM

MOTION BY ALDERMAN O’BRIEN TO CLOSE THE NOMINATIONS
MOTION CARRIED

VOTE ON ELECTION OF ALDERMAN-AT-LARGE LORI WILSHIRE TO THE OFFICE OF
PRESIDENT OF THE BOARD OF ALDERMEN TO FILL THE REMAINDER OF THE 2018-2019
TERM BY VOICE VOTE

MOTION CARRIED

City Clerk Piecuch declared Alderman-at-Large Lori Wilshire duly elected President of the Board of
Aldermen for the remaining 2018-2019 term.

Oath of Office administered by Corporation Counsel.

President Wilshire called for nominations for Vice President of the Board of Aldermen to fill the
remainder of the 2018-2019 term.

ALDERMAN DOWD NOMINATED ALDERMAN-AT-LARGE MICHAEL B. O’BRIEN, SR. TO THE
OFFICE OF VICE PRESIDENT OF THE BOARD OF ALDERMEN FOR THE REMAINING 2018-2019
TERM

MOTION BY ALDERMAN DOWD TO CLOSE THE NOMINATIONS
MOTION CARRIED

VOTE ON ELECTION OF ALDERMAN-AT-LARGE MICHAEL B. O’BRIEN, SR. TO THE OFFICE OF
VICE PRESIDENT OF THE BOARD OF ALDERMEN TO FILL THE REMAINDER OF THE 2018-2019
BY VOICE VOTE

MOTION CARRIED

Board of Aldermen 11-13-2018 Page 2

President Wilshire declared Alderman-at-Large Michael B. O’Brien, Sr. duly elected Vice President of
the Board of Aldermen for the remaining 2018-2019.

Oath of Office administered by Corporation Counsel.

REMARKS BY THE MAYOR

Mayor Donchess

First | wanted to join you in just extending again my condolences to Brian McCarthy’s family; Gloria, Kim,
John and Alicia. Many of us attended his wake and his funeral over the weekend, these were very sad
events because Brian served the City for 25 years, longer than any member of the Board of Aldermen has in
the City’s history. During that time, he accomplished many things for the City. He was devoted totally to
Nashua, to our schools, to our downtown and | know that | speak for everyone and | am sure you will have
your own words as well, but | speak for everyone when | say we will miss Brian.

Next Madam President, | wanted to mention the revaluation and the assessments, of course the tax bills are
out. The revaluation which was required by the State DRA by State Law is hard for a lot of people because
some people’s taxes went up and some people’s went down. We have to feel empathy for those whose
taxes went up as a result of the revaluation. The revaluation does not bring in any additional money; what it
does is reallocate the tax burden as between the 29,000 properties in the City of Nashua based upon
market conditions based upon the fair market value of each individual property. What the revaluation
means and requires under State Law is that all properties be taken to 100% of fair market value. Because
of the strong housing market that we have seen over the last 5 years, the average home went up around
23% in their assessment, more equity in the house. But on the other hand that can affect the property
owner's taxes as well. For those whose properties went up less than 23%, they did pretty well, some
people’s taxes actually went down. Others, whose assessments went up more than the 23% are seeing
higher taxes as a result. We did work together to pass a 1.6% increase budget to help mitigate the effects
of what we could see coming for at least part of the community, those whose properties went up a lot.

| also wanted to direct your attention to the memo letter from CFO John Griffin which addresses many of the
questions raised on a communication that appears later in the agenda. | did want to point you to an
attachment to CFO Griffin’s memo or letter which is the most recent review done by the DRA, the State
Department of Revenue Administration of the Nashua Assessing Office. The Department of Revenue
Administration oversees everything, they have authority over assessing state-wide, they adopt procedures,
they have a manual, they inspect, they evaluate the performance of the various assessing departments. In
addition, they did evaluate and supervise the work of KRT in doing the revaluation.

If you look at this report, it evaluates 14 different things here; and it gives 14 different numbers, 12 of which
are zeros, one of which is a one and one of which is a two. It says that every number should be below a six,
meaning that had the Assessing Department gotten 14 fives, that would still be good or acceptable. Now
the lower the score the better, it’s not the higher the score the better. So even though a 70, 5 x 14 would
have been acceptable, maybe a good score, the DRA awarded the Assessing Department a total score of 3.
So they got 12 zeroes, 1 one and 1 two, nearly a perfect review.

So certainly everything can always get better and we can always strive to improve which is what we are
doing in the Assessing Office in terms of including building permits, making sure everything is reviewed,
making sure that everybody gets a fair hearing. But, at least according to the DRA which is giving the
Assessing Department just a few months ago, virtually a perfect score, they are doing a pretty good job.
Now again, are there errors somewhere within 29,000 properties? Possibly. But they will continue to work
as hard as they can to make sure that everything is done is properly, that the DRA standards are met and
hopefully next time they are evaluated, they won’t get a 3 against a possible 70, but will get a0. Maybe next
time we will get a 2 or a 1 instead of a 3, but | consider a 3, when 70 is good or acceptable, quite a good
score. And again, we are working to improve things, always. But at least this is an independent verification
that many of the things that they are doing down there are proper and meet DRA standards.