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Special Bd. of Aldermen — 02/27/2017 Page 10

Alderman O’Brien

Thank you Mr. President. I’m looking at page 12 and one of the things is conduct informal hearings after you
get done with your evaluation. Can you touch base and just expand on that what the average taxpayer if he’s
in conflict with what you came up with with the evaluation. Can you just go over so that the public could know
what the process is, what is the hearing type of about so that they can understand what we're trying to do here
please?

Ken Rodgers

Sure. They can come in. We'll go through their property record card to make sure that there is no
discrepancies with the data. We can explain how the values is arrived. If they have comparable sales or what
they feel are comparable, they can bring those in and show them to us or comparable assessments. If there
are neighbors that have very similar houses and their values are very different. It’s those things that we can
look at. We do put together to a taxpayer a little mini manual and explains the whole process and how we
develop the values. How the neighborhoods were delineated. It gets into pretty good detail.

Alderman Dowd

There have been instances on trying to equate home values if you’re looking at a particular type of house in a
development and they all look alike to give them all the same valuation would be wrong because some of them
may have a finished basement or other amenities that are all on the inside that make the value of the house
higher. Does that normally cause conflict or do you have ways around that?

Ken Rodgers

Well we’re using the existing city’s data as far as the interior information. So if there is a finished basement
and it’s on the property record card, it will get valued. That’s probably the biggest difference of doing a full
revaluation where we’re inspecting every property versus doing a statistical where we're really just looking at
sales and then using the existing data.

Mayor Donchess

And that’s one reason why we had requested the DRA that we be allowed to take more time and do the
physical inspection because if there is somebody who had done work without a permit or something, we don’t
know that and that’s not reflected in the property description and therefore not reflected in the value. DRA
wants us to do this now. They don’t want to wait to get a more complete job. They’re willing to go to litigation
to try to force us to do this immediately.

Alderman Jette

So if doing this complete re-evaluation — | forget what you called it...

Ken Rodgers

We're doing a statistical revaluation but there’s a full revaluation which is measuring and listing every property.
Alderman Jette

Okay so if measuring and listing every property is a better way of determining what the value of property is and

what we're really looking at is how do properties compare in value to each other so that as the money we raise
for taxes is spread among all of these properties it’s done fairly. If that’s the better way of doing it even though

Special Bd. of Aldermen — 02/27/2017 Page 11

the law requires that we complete this by 2018 and this type of study would require more time, why can’t we
meet our statutory obligation but start the process to do the complete re-evaluation if that’s what we should be
doing. Then we will have met the next five-year requirement and we will have done it property.

Mayor Donchess

Well | can let KRT answer. Well first of all, it costs a lot more money like $1.5 million instead of something like
a half a million. Let’s say we completed this now and then next year we did full measure and list, they’d still
want it to be done again. Then they’d want another one in four more years. Maybe in five years it would be
worth doing the full measure and list, prepare a couple in advance and go for it then. We tried to persuade
them to look it would be better if we took another year or two and do the full measure and list. Then we have a
complete inspection of everything but they don’t want to listen to that. We kind of suggested we’re not going to
submit a half a million this year and another million and a half next year to do it again. So | think the decision
would be the next time we’re required to do this maybe we would want to do the more expensive more time
intensive approach. Does that kind of square of what you think?

Ken Rodgers

Exactly.

President McCarthy

My experience with it over the time I’ve been on the Board is that as far as | can see our property cards are
actually fairly accurate. What we'd do is spend a large amount of money to get a new set of data most of
which we already have. What’s more important is to figure out the statistical relationships between the
property classes for which you still have to do the kind of analysis that KRT is talking about.

Mayor Donchess

Now GIS, Angelo Marino formerly the Assessor and now GIS the map function is very creative about taking
over head photographs and trying to locate property that has been expanded without knowledge of the Building
Department and as on anumber occasions located property that’s been expanded and then that assessment
has been changed. There may not be that much extra out there that we don’t know about.

Alderman Jette

But thinking especially of commercial buildings, what changes have been done inside the building? We have
no way of knowing about that unless they applied for a building permit.

Attorney Bolton

If you know of any who haven't, let me know.

Mayor Donchess

Most commercial owners | mean they do it right. If somebody owns a 100,000 square foot building is not
generally doing internal changes without building permits and inspections. It’s usually the mom and pop put in
an extra apartment kind of thing where that happens. At Gateway Hills, they’re not building without a permit.
That’s just one example. A strip mall, they’re getting permits. Most commercial owners are consistent with the
law.

Special Bd. of Aldermen — 02/27/2017 Page 12
Alderman Jette

So doing the income approach on commercial property, how do you obtain the information that you’re going to
basing this on? Are the owners compelled by law to provide that to you?

Ken Rodgers

Unfortunately they're not. We sent out income and expense requests and we do get a pretty decent return.
We're probably not going to get all of them but we can fill in the holes. | think NH is one of the only States in
New England that doesn’t require it to be sent back.

Attorney Bolton

There is data available commercially. Manuals that you can look up what things are renting for, what is the
cost of maintenance per acre and those sorts of things. What they’re doing is they’re not actually doing an
individual appraisal on every piece of commercial property. They build a model and then say okay for
manufacturing type buildings, the model is so much per square foot and that takes into consideration the
income approach that they’ve modeled based upon the sales they’ve looked at and based upon the information
they’ve gotten from those who respond to the questionnaires or from other sources. Is that correct?

Ken Rodgers
Yes.
Alderman Dowd

Reading ahead to your summary slide, | see that the cost of this project is approximately half a million dollars
and the source will be CERF. Do we have provisions in the CERF account to do it for this type of activity?

Mr. Griffin

Several years ago | believe in 1983 the Board of Aldermen approved the use CERF for this purpose. When
you ask is there any specific line item in CERF right now for this purpose — no. There is $1.7 million I’d say
unrestricted balance that we could use for this purpose.

Alderman Dowd

Just for the new members can you explain what CERF is normally used for?

Mr. Griffin

CERF is the capital equipment reserve fund. It is generally used to fund vehicles for the different departments
within the city.

Alderwoman Melizzi-Golja

Thank you. | just have a follow up question to Alderman O’Brien’s earlier question regarding information
taxpayers can get. Mr. Rodgers you indicated that there will be like a taxpayer mini manual that will be
developed. | guess to Mayor Donchess and Mr. Griffin will that then be made available electronically on line?
If people don’t have access electronically how will that be made available? Have we thought that far out or any
thoughts of that?

Special Bd. of Aldermen — 02/27/2017 Page 13
Mr. Griffin

We haven't thought that far out but we do know that the more and better information that we can get out to the
public the better we’re going to be.

Alderwoman Melizzi-Golja

Okay so | would anticipate like copies of it would be at the library, the senior center, other places, the bus
stations, other places people might go looking for information here at City Hall.

Mr. Griffin

| arrived in 2010 just to put this whole thing in perspective. We lost a billion dollars in value as a city in 2008.
We lost another half a billion in 2013. The results of 08 were that 75 percent of the residential taxpayers got a
tax bill reduction the following year and then 66 percent got a reduction in’13. So this is certainly a market
correction but it’s going the other way as Mayor Donchess has indicated. The more information we get the
better. | think the good news here is that the property values are real. The sales are taking place and there’s
very little vacancy in the apartments. The vacancy in the apartments being low coupled with the rent increases
give us optimism that that strata that includes the five plus apartments we could probably capture value there.
That’s very important to know that folks who owned their home back like Alderman Jette, he saw a reduction or
maybe a modest increase and now the likelihood is an increase. It’s a balancing act and within the strata
within the single family residential which we have 15,600, they’re categorized ranch, gambrel, colonial by
neighborhood. There is all kinds of | think they call “tables”. In here there’s all kinds of tables that’s what
creates the value at the end.

Alderwoman Melizzi-Golja

| just think it’s important that if we’re putting information out there to educate taxpayers we remember that not
everyone is going to access it on line and we think about where else we have that information available so
people know and understand what we’re doing. Thank you.

Alderman Klee

Follow up to the Alderman’s question, when you said you were going to be mailing out the new assessment or
the information to them and they could set up a hearing and so on. At that time how large is this taxpayer
manual going to be? Would it be better to send it with it so that they can see?

Bob Tozier

A few dozen pages if not larger. It would be tricky to send out 15,000 of those.

Alderman Dowd

Sort of an unrelated. We're getting towards the budget season again. We're going to be having a discussion
on CERF. Typically we get into the budget discussion and we talk CERF. This year especially with a lot of
new members who don’t know anything about CERF, could we have in the near term an overview of the CERF
account and how we're intending to look at it going forward. The CERF account looks at vehicles over a

number of years. That’s very difficult to look at with that one night that we have on the budget to look at that
CERF account. | think if we had a prelude to that, it would make it a lot easier for other people to understand.

Mayor Donchess

Yes definitely we can arrange that.

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

24,

25.

26.

27.

28.

29:

30.

31.

Are there any post-top lights?
a. There may be a limited quantity of post-top lights. The City does not have a specific

count of these style lights.

Please provide a breakdown of the fixtures and models of all fixtures listed in the RFP on page
6. Meaning how many are decorative, how many are cobra heads, etc.

a. The City does not have a breakdown of the fixtures and models listed. Please see

“SCHEDULE C, EVERSOURCE STREET LIGHT LEDGER.” This is the mast detailed inventory

the City has regarding specific fixture types.

Please provide a breakdown of the poles types of all fixtures listed in the RFP on page 6
a. The City does not have a breakdown of pole types.

The City said they own the lights but do nat own title to them. Please explain further. Does this
mean the City is leasing the lights and at some point will own them?
a. Forall intents and purposes, the City of Nashua owns the current street lights.

The City said that Eversource is still performing the maintenance. Will Eversource still provide
the maintenance of the existing lights until all are converted to LED?

a. Eversource will provide maintenance on their equipment. They will not provide
maintenance on fixtures that are imminently being converted to LEDs as part of the
project.

b. If faulty Eversource equipment is found during audit and conversion, upon informing
Eversource, Field Maintenance Requests will be generated and Eversource will replace

said equipment.

Who will be responsible for maintenance of the lighting after the LED conversion project? if it is
the contractor, for how long will the maintenance contract last?
a. Eversource is responsible for maintenance of the lights in coordination with the City of
Nashua. In the event of fixture failure, replacement fixtures must be provided to
Eversource. This is part of the fixture warranty; fixtures will be provided to the City free

of charge during the warranty period

What is the labor warranty required after a light is installed? And please confirm if the labor
warranty is “fixture-specific’, or as the system as a whole (meaning it starts after the project is

substantially complete).
a. Typical one year warranty to begin at the substantial completion of the project.

There were questions on the bid form at the pre-bid meeting, as well as a request to provide
two prices (a solution with and without smart controls). Please update and provide a new bid
form.
a. There are multiple tabs within the workbook already created for “Proposal with Smart
Controls” and a “Proposal without Smart Controls.” Additional tabs may be created if
needed. Instructions for creating new tabs are found within the workbook.

RFPO6OS~031116 Addendum 1- City of Nashua LED Street Lighting Conversion Project Page 4 of 6

229 Main Street e Nashua, New Hampshire O3060 « Phone (603) 589-3330 « Fax (603) 589-3344

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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