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Note 9 — Income Taxes

The components of the federal and state income tax provision (benefit) as of December 31,
2015 and 2014 were as follows:

(in thousands) 2015 2014
Federal $ (79) $ 343
State 420 24]
Amortization of investment tax credits G3} (33)
Total $ 308 $ 551
Current $ (1) $ (33)
Deferred 309 584
Total $ 308 $ 551

The following is a reconciliation between the statutory federal income tax rate and the
effective income tax rate for 2015 and 2014:

2015 2014
Statutory federal rate 34.0% 34.0%
State tax rate, net of federal benefits 5.6% 5.6%
Permanent differences 56.8% -87.3%
Amortization of investment tax credits 1.7% 2.7%
Effective tax rate -15.5% 45.0%

The temporary items that give rise to the net deferred tax liability as of December 31, 2015
and 2014 were as follows:

{in thousands) 2015 2014
Liabilities:
Property-related, net $ 26,890 $ 25,626
Pension deferred asset - 2,641
Other 443 1,061
Total liabilities 27,333 29,328
Assets:
Pension accrued liability 1,426 3,176
Net operating loss carry forward 3,884 2,399
Altemative minimum tax credit 476 476
NH Business Enterprise Tax credits 369 369
Other 905 2,574
7,060 8,994
Less valuation allowance (369) -
Total assets 6,691 8,994
Net non-current deferred income tax liability $ 20,642 $ 20,334

27

Special Bd. of Aldermen — 03/26/2019 Page 6

Alderwoman Melizzi-Golja

If | may, that’s why the larger area in the lower level.
Alderman O’Brien

But | do appreciate the mobile beers.

Alderman Jette

So what is the total seated capacity. | think you said 500 for the telescopic seats and then the balcony how many?

Mr. Cummings

225, 250, so all in, depending on how you lay out is 750.
Alderman Dowd

| Know that we’ve looked into the preliminary matter and | know it could be a big expense if it was part of the
Performing Arts Center. But the wires on Pearl Street that are going to have to be at least shut down during
construction and the reasoning behind not moving them, to me, seems kind of weak. Actually | would prefer that
they were buried but going on the other side of the street. You know what I’ve heard is it doesn’t pass the goofy
test, it’s like they don’t want to do it.

Mr. Cummings

Your points are well taken and so a couple comments on that. It is fair to say that the utility providers have sent us
a very clear message that they would prefer us not to disturb the utility lines and in particular not bury them
underground. But if that was to come to be, then they would be willing to have that conversation with us but it
would be at our cost. And so something that this body would need to understand is that is not in the scope or the
budget currently for this project. If we were to entertain something like that, it would also delay delivering this
project in the timelines | have been preciously articulating. So if this body wanted to even remotely entertain that
type of project, | would suggest it’s a second project. And it would have to come you know in relatively quick
timeline and separate appropriation. And then you’d have to delay this project by a year.

Alderman Klee

Director Cummings, tell me if I’m correct here, if | remember also when we were talking about the wires and the
power and having to shut things off while maybe they said they would do a re-route so that the businesses and so
on would have limited to no disruption in their power and so on. So they would create work-arounds so that we did
not affect the businesses right there, is that correct.

Mr. Cummings

That’s correct. They would maintain service as much as possible and have very limited disruption if we were to just
turn off the utility lines and the power as necessary to do the construction although optimal, that is what the utility
company is recommending. So that is the current thought process right now. It is also the most cost-effective. If
you were to even not bury the lines and just move the lines across the street, we would need easements potentially
from private property owners. We would need to bear the cost of it and both of those tasks would take time and
money.

Special Bd. of Aldermen — 03/26/2019 Page 7

Alderman Lopez

I’m not sure if they are still the property owners but | think some of the property owners might have been involved
with Vivian’s Dream so they may not be excited about a big cluster of wires in front. Also if we did really start
moving in the direction of adding the buried lines, I’m not personally | don’t care because |’m blind so power lines
don’t ruin things for me. But if we did do it, we should do it during the project and before it, not when it is like a little
fawn trying to get off the ground. The last thing they need is to turn the lights on, get the business going and then
we tell, Ok we are digging up your sidewalk. So if we do this we should do it during the construction phase.

Mr. Cummings

So whatever the pleasure of this body may be on that subject | just want to be clear that it is beyond the scope of
this current project and it will be costly. | don’t know exactly how much, we are actually waiting to get cost
estimates on both, you know, re-working the utility poles to the other side or burying them underground. Once we
have that data and we should have that within the next couple of weeks, you could have a more informed
discussion on it. But you are looking at a half a million dollar type project in either way | would say safely. And |
would love to see the utilities buried underground; from a street-scaping standpoint, from an urban planning
standpoint. | think it would really help improve Pearl Street, no question especially because you know there will be
limited access on Pearl Street while you are doing the construction so you might as well do it once, the point you
were making a few moments ago.

But this City has a lot of priorities and has some real Fiscal constraints and when you think about this infrastructure
project versus some of the other ones you need to make, | understand that may not necessarily be the project that
rises to the top.

President Wilshire

Any further questions for Director Cummings? Seeing none, thank you very much. Appreciate that. The Mayor
has also joined us. Alderman O’Brien do we have a motion?

NON-PUBLIC SESSION

MOTION BY ALDERMAN O’BRIEN THAT THE BOARD OF ALDERMEN GO INTO NON-PUBLIC SESSION
BY ROLL CALL PURSUANT TO RSA 91-A:3,II(d) FOR THE CONSIDERATION OF THE ACQUISITION,
SALE, OR LEASE OF REAL OR PERSONAL PROPERTY, WHICH, IF DISCUSSED IN PUBLIC, WOULD
LIKELY BENEFIT A PARTY OR PARTIES WHOSE INTERESTS ARE ADVERSE TO THOSE OF THE
GENERAL COMMUNITY

SECONDED BY ALDERMAN DOWD
A Viva Voce Roll Call was taken, which resulted as follows:
Yea: Alderman O’Brien, Alderman Harriott-Gathright, Alderman Dowd

Alderman Klee, Alderman Laws, Alderman Lopez, Alderman Caron,

Alderwoman Kelly, Alderman Jette, Alderwoman Melizzi-Golja

Alderman Tencza, Alderman Schmidt, Alderman Clemons

Alderman Wilshire 14
Nay: 0
MOTION CARRIED

The Board of Aldermen went into non-public session at 7:02 p.m.

Special Bd. of Aldermen — 03/26/2019 Page 8

MOTION BY ALDERMAN O’BRIEN TO COME OUT OF THE NON-PUBLIC SESSION AND RETURN TO
THE SPECIAL BOARD OF ALDERMEN MEETING
MOTION CARRIED

MOTION BY ALDERMAN O’BRIEN THAT THE BOARD OF ALDERMEN SEAL THE MINUTES OF THE
NON-PUBLIC SESSION BY ROLL CALL UNTIL SUCH TIME AS THE MAJORITY OF THE BOARD VOTES
THAT THE PURPOSE OF THE CONFIDENTIALITY WOULD NO LONGER BE SERVED
A Viva Voce Roll Call was taken, which resulted as follows:
Yea: Alderman O’Brien, Alderman Harriott-Gathright, Alderman Dowd
Alderman Klee, Alderman Laws, Alderman Lopez, Alderman Caron,
Alderwoman Kelly, Alderman Jette, Alderwoman Melizzi-Golja
Alderman Tencza, Alderman Schmidt, Alderman Clemons
Alderman Wilshire 14
Nay: 0
MOTION CARRIED

ADJOURNMENT

MOTION BY ALDERMAN O’BRIEN TO ADJOURN
MOTION CARRIED

The meeting was declared adjourned at 8:43 p.m.

Attest: Patricia Piecuch, City Clerk

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