Finance Committee - 3/21/2018 Page 17
work with KRT we work together on the contract and we are comfortable with the contract. But we will get into
that a little bit later | suppose. Thank you.
Mayor Donchess
On the two points that Mr. Griffin made, the first one being that the market for large properties is greater than
Nashua. For a 600 unit apartment complex it might be all of New England. So as he said, you can look to
Maine or Vermont or somewhere else in New England to try and to determine the fair market value of a big
commercial property which may be unique to Nashua. There might have been only one sale in five years. The
equalization ratio though is set because it does serve a function which is that when a new property is built, let’s
say a new house is built today and comes on the market today. How do you assess it? Do you assess it at
the sale price? Well at least according to the DRA, in some states that’s what happens, the assessment goes
to whenever there is a sale it ratcheted up to the sale price and it stays that way forever until a new sale takes
place. But here they want everything assessed the same or kind of on an equal basis. So if a new house, not
on the market yet, was built and sold for $200,000.00 the equalization ratio of .8 would be used so it would be
assessed at $160,000.00 not at $200,000.00. And if a commercial property within a category that had a .93
equalization ratio sold for $1 million dollars, a new one, it would be assessed at $930,000.00, not at $1 million
dollars. The point of that equalization ratio would be to equalize these new properties with the properties are
existing and not tax them at an effectively higher rate.
Now again, this is not something that Mr. Griffin or | make up, this is how State law works. We are explaining
to you what we’ve learned over time about how this assessment process worked. But that’s the function of the
equalization ratio. When you bring properties in, it tells you how to assess them for the fair market value.
Alderman Klee
| just want to make sure that it’s clear. The disqualification is of sales not of properties. We are not saying we
are not going to take that property into evaluation we are just saying the sale of that property or like property is
not going to be taken into this process.
Mayor Donchess
The disqualification only means that with respect to the calculation of the equalization ratio, that was not
considered as part of that calculation. It’s still on the tax rolls, it still pays taxes and once we do revaluation a
disqualified sale will most likely still be relevant to determining what the fair market value for a certain category
of properties would be.
Any other questions or comments? | hate to talk on and on about this but it is kind of a complicated subject.
Alderman Laws
| just wanted to thank everyone for being so patient and walking us through this. It is a lot of information to
take in and | echo what Alderman O’Brien said, | believe this really is just what has to happen right now. But
for the casual observer at home, who just saw a bunch of people get elected to the Board of Alderman and
they have been saying that they think we are going to spend all of their money and suddenly “Well look at what
we are doing!”. | feel like we owe it to explore every option possible to see if we can taxes as low.
Mayor Donchess
Definitely.
Alderman Laws
| appreciate your patience, thank you.
