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Finance Committee - 3/21/2018 Page 3

Mayor Donchess

Questions or discussion?
Alderman Caron

Thank you | think this is a great addition to the Health Department, any additional help that we can get for
nothing to do some outreach is excellent so | think that is wonderful that you were able to reach out to and get
them onboard.

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Broad Street Parkway Property Appraisals (Value: $10,000)

MOTION BY ALDERMAN KELLY TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
CAPITAL APPRAISAL ASSOCIATION, INC. IN THE AMOUNT OF $10,000. SOURCE

OF FUNDING IS DEPARTMENT 160, ADMINISTRATION/ENGINEERING; BROAD STREET PARKWAY
BOND

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Change Order #4 to Contact with Northeast Earth Mechanics to Expand Construction of the
Residential Setback Barrier Wall in the Phase II Landfill (Value: $199,763)

MOTION BY ALDERMAN KELLY TO ACCEPT, PLACE ON FILE AND AUTHORIZE CHANGE ORDER #4
TO THE CONTRACT WITH NORTHEAST EARTH MECHANICS IN THE AMOUNT

OF $199,763. FUNDS ARE AVAILABLE IN DEPARTMENT 168, SOLID WASTE BOND

MOTION CARRIED

From: Dan Kooken, Purchasing Manager
Re: Nashua Transit System — Token Transit (Value $0)

MOTION BY ALDERMAN KELLY TO ACCEPT, PLACE ON FILE AND AWARD THE CONTRACT TO
TOKEN TRANSIT, INC. FOR A ZERO VALUE

ON THE QUESTION

Mayor Donchess

Director Marchant is here to explain this so would she come forward.
Sarah Marchant

Thank you very much. Good evening. The idea of Token Transit is it is a zero dollar out from the City and it
would be an app on your phone that would allow you to purchase bus passes, individual and monthly. It would
also allow us to offer some additional kinds of passes for the system. This is the first time that we would be
offering other ways of purchasing bus tickets. We are constrained and we get a lot of complaints about the fact
that the only way you can purchase bus passes is through the transit center, which is open very limited hours —
9 to noon and 1 to 5, weekdays only. So this allows it to be a little more mobile and it’s very easy to download
an app to your phone and make that work. It does have a reduction in revenue which we are anticipating with
this between $4,000.00 and $8,000.00 a year but we think that the service to our constituents is worth it and
that it would certainly cost us a lot more to buy this software and provide the customer service and all of that
with it ourselves. We would very much like to move forward with something this.

Finance Committee - 3/21/2018 Page 4

Alderwoman Kelly

Yes thank you for explaining that, it sounds like it’s a move in the right direction. | do have a question about
the reduction of revenue, do you know, can you pinpoint what that is coming from?

Sarah Marchant

Yes, great question. So that the actual providers of the app make some money and so that they can pay their
customer service people, they will charge us 10% of fares over $2.00 and they will charge us $.15 cents on
fares under $2.00. So that is an estimate based on the fares that we use and Token Transit has done this at a
bunch of communities around the country and we did call the people who have used them and they have great

things to say about them. But on average, only about 10% of users will use this system and so we were
looking at about 10% of ridership using this system so that’s an estimate and that’s why it is kind of broad.

Alderwoman Kelly

So that 10% is what you think will shift to the app?

Sarah Marchant

Correct.

Alderwoman Kelly

Do you think it will increase ridership among people?

Sarah Marchant

| think there is potential that it certainly could especially if we can offer a family pass which we have been trying
to do. It’s very hard for say a mom to get on to go the grocery store and she has 2 or 3 kids and they have to
pay all individually. It makes it much more affordable if we can offer a family pass and | think it will make it
more user friendly. So we do think that should help.

Alderman Klee

| think this a great idea. My only question is we are not going to lose any personnel or staffing?

Sarah Marchant

No we would not be losing anybody.

Alderwoman Klee

That would mean that it’s almost like having more additional personnel because we can do ticket sales
virtually?

Sarah Marchant
Correct, yes.
Alderwoman Klee

So in some respects it’s saving money.

Finance Committee - 3/21/2018 Page 5
Sarah Marchant

We certainly could not do it for this dollar value if we tried to do this in-house ourselves, it would cost us a lot
more.

Alderman Laws

| also think it’s a great idea. Who is responsible for marketing this to potential bus riders?

Sarah Marchant

Excellent Question. Token Transit has a marketing team that they deploy with it and they will work with our
staff to make sure that we continue to be Title 6 and ADA compliant with our advertising and to make sure that

we are hitting everything we can. So they will be working with several members of our staff to spread it far and
wide.

Alderwoman Kelly

Yes, so actually | wanted to follow on what Alderman Laws was talking about. Do you also get a support
system so if you have tech issues, that kind of thing, does it come from Token Transit?

Sarah Marchant

It does and even better if somebody has a complaint or an issue they call Token Transit, they don’t call us.
And they have staff who are ready and can react and literally go into the back end of the system and fix things
on the fly. So there isn’t a triangle and we are not sending people around, “Oh sorry, you have to call this
number’. Everything on the app will direct them directly to the Token Transit Staff. In addition, they will share
all their background data and analytics with us of who is buying, what are the buying. That | think is valuable
data for us that will help inform future tickets sales. So that will be good.

MOITON CARRIED

Mayor Donchess

Now are you here also on R-18-012?
Sarah Marchant

Yes | am.

Mayor Donchess

In addition to the change in the order that | already mentioned, | think we should also take the new business
resolutions, because we have people waiting on those and those probably won't take very long. So we do
have Mr. Mansfield who is here on R-18-010. Maybe introduce yourself and then explain what the resolution
would do

Finance Committee - 3/21/2018 Page 6

There being no objection, Mayor Donchess went out of order to New Business Resolution R-18-010
NEW BUSINESS — RESOLUTIONS

R-18-010
Endorsers: Alderman-at-Large Brian S. McCarthy
Alderman-at-Large Lori Wilshire
Alderman Richard A. Dowd
Alderman June M. Caron
Alderwoman-at-Large Shoshanna Kelly
Alderwoman Mary Ann Melizzi-Golja
Alderman-at-Large David C. Tencza
Alderman-at-Large Michael B. O’Brien, Sr.
Alderman Linda Harriott-Gathright
AUTHORIZING THE CITY TO ENTER INTO A MEMORANDUM OF UNDERSTANDING WITH THE
CITY OF MANCHESTER, NEW HAMPSHIRE REGARDING A REMOTE DISPATCH CENTER

Bill Mansfield

| am the radio systems manager for the City of Nashua. The resolution is for a memorandum of understanding
between the City of Nashua and the City of Manchester. Several months ago Manchester and Nashua applied
for a grant through Homeland Security to build a Communication Center that basically is a redundant
Communication Center so that if we had a major catastrophe down here in Nashua with either Police or Fire
Dispatch or Radio Communications we could go up to a facility up in Manchester and basically dispatch from
that location there. Manchester has the same grant that we received, $300,000.00 and Nashua also received
$300,000.00 and it’s basically to build this Communication Center.

Because of the contracts and the size of the contracts that we are going to be dealing with, especially with
Motorola who is going to be a vendor for this it would be very difficult for us to get two separate contracts for
each of the cities. So what basically the grant did is that it gave Nashua $300,000.00 and it gave Manchester
$300,000.00 instead of making two separate contracts with Motorola for one thing. This memorandum and
understanding is basically to allow Manchester to cut us a purchase order for their $300,000.00 and then when
invoices come in to us, because I'll be managing the grant for both Manchester and Nashua, when the invoices
come in to us, we would take the invoice, cut the price in half, invoice Manchester for their half of the invoice
and then they would submit their payment back to us here in the city and then we would pay the invoice. So
that’s pretty much, in short, what the memorandum of understanding is about.

Mayor Donchess
Any questions or comments? Is there a motion regarding R-18-010?

MOTION BY ALDERMAN CARON TO RECOMMEND FINAL APPROVAL R-18-010
MOTION CARRIED

Finance Committee - 3/21/2018 Page 7

R-18-012
Endorsers: Mayor Jim Donchess
Alderwoman Mary Ann Melizzi-Golja
Alderman-at-Large Lori Wilshire
Alderman Richard A. Dowd
Alderman Patricia Klee
Alderman-at-Large Brandon Michael Laws
Alderman Linda Harriott-Gathright
Alderman June M. Caron
Alderwoman-at-Large Shoshanna Kelly
Alderman-at-Large David C. Tencza
Alderman-at-Large Michael B. O’Brien, Sr.
AUTHORIZING THE CITY OF NASHUA TO ENTER INTO CONTRACTS WITH NASHUA COMMUNITY
COLLEGE, RIVIER UNIVERSITY, TOWN OF HUDSON, TOWN OF MERRIMACK, AND THE PLUS
COMPANY FOR TRANSIT SERVICES

Mayor Donchess

Could you please explain this one.
Sarah Marchant

| am the Community Development Director. This is a contract that we renew annually with the entities listed for
them. They give us an amount that’s a discounted rate of rides per year for their students. Their students can
ride the whole system for free. We enter into contracts based on an average of the last several year’s ridership
with them and we charge them $1.00 a ride instead of $1.25. Their students can ride the whole system for free
anywhere, anytime. It’s also a huge benefit to the transit system because we cannot use fare box revenue as
matching funds to our FTA dollars but we can use contracted services like this as matching dollars to FTA
funds. So it’s very valuable to us to have contracts like this.

Mayor Donchess

Please have the record show that Alderman O’Brien has arrived from Concord. Any discussion or questions
regarding R-18-012. Is there a motion?

MOTION BY ALDERMAN CARON FOR FINAL PASSAGE OF R-18-012.
MOTION CARIES

PRESENTATION

Capital Equipment Reserve Fund Presentation

Mayor Donchess

Just to review a little bit, when we met a week ago Monday or was it two weeks regarding the State ordered
revaluation we suggested that the funds that would be necessary to contract for this service would be able to
come from the CERF account in which there is a significant balance. At the time it was suggested the Finance
Committee, the committee that is authorized to make the contract, to authorize funds such as this, give a
presentation regarding the CERF account, how it works and discuss any other issues you’d like to discuss
concerning the proposed contract. So Mr. Griffin has a presentation that he’d like to make. | am going to talk
through the first couple of slides, which will be very brief and then we will go on from there.

Finance Committee - 3/21/2018 Page 8

This just reviews a little bit of wnat we talked about the other night. Now David Fredette, the City Treasurer,
has joined our discussion, so thank you Mr. Fredette. The first slide just discusses very briefly, in review, this
and the next slide will show you the reason we are very concerned about the State ordered revaluation and
why we want to be particularly careful about proceeding and making sure we get all evaluations correctly. This
first one on the left shows the current valuation of the City which is approximately $8.5 billion dollars, the
assessed value of all the property in the City. We are talking about the left half of the slide. The light blue
column shows you the total value of the residential assessments in the City, which is approximately in total
$5.3 billion dollars. The dark blue column shows you the commercial assessments, everything that is not
residential, single family or small residence properties and that totals $3.2 billion. So we have currently 62.4%
of the City’s valuation is residential and about 37.6% is commercial, approximately 2 to 1 but a little bit less.
The equalization ratio on the residential property as you see below is .8 which means that on average
residential properties are assessed at 80% of their true value based upon the fact that residential home values
have increased very significantly over the last five years. The last time, we had to undergo a State ordered re-
evaluation.

On the right, you see that some sales imply that the commercial equalization ratio might be .93, meaning that
commercial properties, based upon a limited number of sales, are valued at 93% of real value. In other words,
residential homes have gone up more quickly during the last five years than commercial values have. The
good news of course is that people’s homes are worth a lot more than they used to be. On the other hand, it
has an implication in a state-ordered re-evaluation that could have some unfortunate consequences.

If you look to the right of this slide, that once the values we showed on the left are adjusted to 100%, in other
words, residential goes from 80% assessment to 100% and commercial, based on this limited number of sales
goes from 93% to 100%, we now move up to about a $10 billion dollar evaluation. Except that now $6.6 billion
dollars or 66% is residential and commercial is now $3.4 billion dollars or 34%. So you see the share of
residential has climbed from 62.4% to 66% and the share of the total represented by commercial has fallen
from 37.6% to 34%.

The next slide shows you what the consequences of that could be. On the left, again, we have current
valuations and based upon the idea that we are collecting about $200 million dollars in taxes, which is
approximately the number — ballpark, we are now collecting 62.4% of the total from residential or $124 million
dollars. We are collecting 37.6% from commercial or about $75 million dollars from commercial and industrial.
If we adjust the appraisals, using those equalization ratios of 80% for residential and 93% for commercial, we
see that the relative tax burden would shift to wnat you see on the right. 66% of the collections of $200 million
dollars would now be paid by residential property tax payers and 34% of the total of $200 million dollars would
be paid by commercial so that the share of the pie paid by residential could climb from $125 million dollars to
$132 million dollars, whereas the share of the pie based on $200 million dollars paid by commercial and
industrial could fall from $75 million dollars to $68 million dollars, meaning a shift of $7 million dollars from
commercial and industrial on to residential. This would result in property tax increase to virtually all residential
property owners which is of course something we would prefer not to see.

We know that this commercial equalization ratio of 93% is based upon a limited number of sales and we know
that the income approach towards commercial property which values commercial properties based upon the
income which is being generated as opposed to a very limited number of sales or as opposed to a cost
approach, may result in a fair apportionment between residential and commercial. This may result in closer to
real fair market values for commercial, which could bring that 93% equalization down meaning commercial
properties would increase potentially more if we really assess their real values based on the income approach.
That is why we are proposing that we get KRT, they are experts, and you met them the other night, to help us
work through this entire process. Send out the new assessments to all property owners to conduct meetings
with anybody who disagrees with their property owners, that we have independent experts who are telling us
what these properties are worth based upon the most advanced expertise in the field. That is the contract we
are proposing.

Where we have gotten to now is that you’ve got the contract as part of the agenda but we are proposing that
the funds be taken from the CERF or the Capital Equipment Reserve Fund. John Griffin, CFO will talk you

Finance Committee - 3/21/2018 Page 9

through, or is David Fredette going to do it? David Fredette City Treasurer is going to brief us on the CERT
account, the Capital Equipment Reserve Account, how it works, what the balances are and what is proposed in
the budget that you received the other night.

Alderman Klee

| just have one quick question. The CNI, that includes all businesses like a restaurant as well as all multi-units
greater than five?

Mayor Donchess

| think it’s great than four. So any condos, any single family homes, any multi-unit buildings, smaller multi-
building units, four or less, would be in the residential category. But anything residential greater than four
units, apartment complexes, larger buildings, nursing homes, other things like that, those are all in the
commercial and industrial category.

Alderman Klee

So large single unit buildings that they created different apartments, if they are over four?

Mayor Donchess

Right, so a six unit building is within the commercial and industrial. One sale that we talked about the other
night was the sale of the apartments up Somerset Parkway — 600 units were sold at $65 million dollars against
the $36 million dollar assessment. Now that was a disqualified sale so it is not included in the equalization
calculation but would have great relevance in terms of evaluating that category of properties by KRT. If there
are no other questions now, why doesn’t Mr. Fredette proceed.

Dave Fredette

| am the City Treasurer, Tax Collector. A brief overview of the Capital Equipment Reserve Fund, otherwise
known as CERF, on the second page in simple terms, just think of it as a savings account that the City has.
We have many of them, but this is one. It is strictly for funding equipment in this City. The CERF account has
been around in the City since the last 70’s. It was changed drastically in fiscal year 2010. Prior to that, what
used to happen was when a Department needed a new vehicle, like a fire ladder truck, about 40% came right
out of the Department’s budget and about 60% came out of the CERF account. What we try to do is fund this
more aggressively so the departments aren’t hit with those costs every year. Fire, Police and Public Works
always have vehicles, every year, that have to be replaced.

In 2015 we adjusted it a little more where now you actually see the list of equipment planned to be purchased
for that next year in the budget. So you get to see that and you get to ask questions on it. That was the
change made in 2015. The goal of CERF is to fully fund capital equipment vehicles. The majority of the
purchases are with cash and some bonds and there a few items through grants and trust funds. The grants
are mostly transit, the busses, a lot of that is through grants from the Federal Government. Trust funds are
usually related to the cemeteries, they also have vehicles. When we started this, Phase |, included the Public
Works Division, Fire and Police since they have most of the vehicles as you can see, they have about 245 line
items in the schedule. Phase II which was started a little later included the smaller groups like school, general
city departments, cemetery, purchasing, they all have much smaller needs and that total is about 16 line items.

What we try to do is a 10 year look at needs for each division and department. We review it annually with each
division, we actually meet with them and sometimes it’s more than once, especially when we deal with Public
Works, Fire & Police because, again, they have a lot on their lists. The amounts that are in there are not exact
they can be a little higher or lower when they go out to purchase. Anything that is over 10% from what is in the
budget that you see and approve, we have to notify the Board of Aldermen, they have to vote on that. Since

Miracle Recreation Equip. Co.
878 E. US Hwy 60

QUOTE: R0071223423

i |
Miracle ‘ns
1-888-458-2752 Project: ROO71_44698585741_01

Prepared For: Project Name & Location: Prepared by:

Bryan PETTINELLI AND ASSOCIATES

City of Nashua

100 Concord ST PO BOX 5814

Nashua, NH 03060 BURLINGTON, VT 05401

603-589-3362 (phone) (800) 775-8154 (phone)

conantb@nashuanh.gov (802) 862-3112 (fax)
PLAYGRDBOB@AOL.COM

Ship To Address: End User:

Bryan

City of Nashua

100 Concord ST

Nashua, NH 03060
603-589-3362 (phone)
conantb@nashuanh.gov

Quote Number: R0071223423
Quote Date: 7/18/2022
Valid For: 30 Days From Quote Date

SOURCEWELL CONTRACT #010521-LTS

7188227J

Product line: TotsChoice
Age group: 5-12

Components

Part Number Description Qty Weight

7185019 (718S227J) 1
TRIANGLE DECK (ATTACHES TO 3 POSTS)

7185029 (7188227J) 1
SQUARE DECK (ATTACHES TO 4 POSTS)

7185039 (7188227J) 4
1/2 HEX FULL DECK (ATTACHES TO 4 POSTS)

7185494 (718S227J) 2
3 1/2" OD X 118" POST (4' DK)

718552 (718$227J) 7
3 1/2" OD X 130" POST (3' TO 5' DKS)

718553 (71882275) 2
3 1/2" OD X 148" POST (5'6" TO 6' 6" DKS)

718572 (718S227J) 6

3 1/2" OD X 138" POST ROOF (3'D0K OR LESS)

7/18/2022
QUOTE: R0071223423

Unit Price

Total

Page 1 of 5

Finance Committee - 3/21/2018 Page 10

we started, we’ve probably had about 5 times that we’ve had to do that. Most items come in under what we
budget, which is good. So that helps out a little. It changes all the time, the CERF schedule, it’s a living
document. This year they may say they need three types of trucks next year, but when next year comes
around they realize they may only need two and another can be put off, but something else gets put forward.
So it changes every year. It’s not exact. We use an estimator for inflation; we have an inflation factor in there
of 5% so that helps a little too. Each year everything gets increased by that inflation factor. The dollar value
does not mean spend that amount exactly, we try to spend less. That’s an overview of how it works.

The next page is a description of the money that’s in the fund. Right now we have just under $3 million dollars,
$2, 998,000.00. There are some items that were deferred which I'll explain a little bit more on the next page of
$1,280,000.00 and that’s listed on the next page. Those are items that were approved in Fiscal Year 18 but
after the budget was approved the Mayor wanted deferred some items given the court case we had going on
for a while. So now that is basically settled, the departments will be starting to look at the deferred list and get
some of those items purchased through the Finance Committee. Almost all of this stuff comes in front of
Finance because of the dollar value. So that would give an ending balance of Fiscal 2018 of $1,717,000.00.
We proposed in the operating budget for Fiscal 2019 a $1 million dollar appropriation. We plan to spend in
cash $2,053,000.00 in Fiscal Year 2019 and other $500,000.00 for the assessment evaluation. That leaves an
ending balance at the end of 2019 $164,661.00.

The next page, again, is just a list of the items that were deferred at the beginning of the Fiscal Year of 2018
and now, like | said, some of these are going through. | know the BearCat purchase order will be coming
forward to this committee. That is $1,280,000.00 and this deferred list wasn’t just something that we estimated
at, we met with all the departments and with the Mayor and this is the list that they actually came up with that
they could defer.

The next page is actually in your proposed budget that you have that you received last week. As you can see
it shows you all the items that are planned to be purchased in 2019. The first column that says “Current
Replacement Cost’ would be the total amount needed, funded by cash is $2,053.000.00 so that’s on the
previous page that | just showed you, two pages prior. The items that would be bonded, funding by bond we
use the bond for just very large items like a fire truck or certain vehicles in Public Works. If we had a lot more
funds in that account we wouldn’t be bonding, we would be paying cash for everything. But it is extremely hard
to do that given the amount of vehicles that we have and limitations we have with the budget. We have been
doing this basically since 2010 and it’s worked out pretty good. | know the departments prefer this from the old
method. That’s the overview.

Mayor Donchess

And under the ordinances which govern CERF a re-evaluation is an eligible expense for CERF funds. We don’t
really have $500,000.00 sitting around in any other account that is eligible to fund a re-evaluation since the
numbers work, we propose that the number come from here. Does anybody have questions about CERF or
any of the information that has been presented?

Alderman Laws

Are you concerned about only having $164,000.00 at the end?

David Fredette

| would prefer it be higher. It’s actually been low, this is not the first time, it’s been around that number a few
years in the past. What we don’t know yet is how is the year end going to be for Fiscal Year 2018, we may
decide to escrow some money into the account. We've done that in the past. Sometimes there is unexpected

revenue that comes in, we may be able to put in that account. Those are just things we don’t know yet. But
$164,000.00 is on the low end yes.

Finance Committee - 3/21/2018 Page 11

Mayor Donchess

Now what this escrow refers to is at the end of the year, there will likely be unexpended appropriations, things
that were voted in the budget for Fiscal Year 2018 which weren’t expended in various categories across the
budget. Those funds can be re-allocated. Before the cap was ruled by the Court to be in violation in State
Law, those were all cap eligible funds because they had already been appropriated. In any event, those can
be reassigned into something and given the number you just pointed out, we may wish to direct some of those
unappropriated funds into the CERF account. We did that | think at the end of Fiscal 2017, | think we directed
$700,000.00 into the CERF account or $900,000.00. We are in Fiscal 2018 so it was, oh it was at the end of
2016, we directed $900,000.00?

David Fredette

| think it was $717,000.00.

Mayor Donchess

We were concerned, we wanted to have more money carried forward. Now excess revenue can also be
directed into that account but that often is used to help with the tax rate.

Alderwoman Kelly

Mr. Mayor answered some of my questions, but | just wanted to Know what are the other funding sources in
order to replenish this account when it gets down to that low as Alderman Laws was pointing out?

David Fredette

Other funding sources?

Alderwoman Kelly

How does the money, | mean he’s talked about unappropriated going in there but are there other sources for it
or is that it?

Mayor Donchess

In the budget, money is appropriated into the account every year. If you look at the second to last slide,
entitled “Capital Equipment Reserve Fund “CERF” Balance Analysis, it shows the appropriate that appears in
the budget. So under the budget if passed as proposed, $1 million dollars would go into the CERF account.
Now should it be more than that? Yes it should. But we are thinking we are going to be impacted by this re-
evaluation so we are trying to keep things as tight as we can possibly can. That seemed like the minimum that
we could put in. It should be more, but if we put more in then the tax rate is higher and we are trying to
mitigate the effects of still the pension increases we were hit with as well as the re-evaluation.

Alderman O’Brien

Thank you Mr. Mayor. | have a question for Mr. Fredette. When we purchase a fire truck, we can spend
anywhere from about half a million to three quarters of a million dollars for the purchase of the vehicle.
Currently right now we do have a couple of bonds in purchasing fire trucks. Is that not the better way to go
than looking at the CERF account and maybe we could re-evaluate the CERF account accordingly with that.