MINUTES
BOARD OF ASSESSORS
EXECUTIVE CHAMBERS - CITY HALL
SEPTEMBER 22, 2010
Present: Jonathan Edwards, Chairperson of Board of Assessors
Robert E Pelchat, Member of Board of Assessors
Paul E Croteau, Member of Board of Assessors
Susan C. Warren, Assessors Office Coordinator/Deputy City Clerk
Also Present: Patrick MacQueen, City Manager, City Councilors: Lucie Remillard, Ryan Landry and Robert Danderson and Barbara Tetreault, reporter for the Berlin Daily Sun
1) CALL TO ORDER
The meeting was called to order at 6:35 PM. Chair Edwards explained to all present that this was an informal meeting to openly discuss the 2010 valuations. He asked that the individuals wait to be acknowledged by the Chair before speaking. The Board wanted to conduct this meeting with everyone being respectful of each other’s opinions and views.
2) DISCUSSION OF 2010 AVITAR VALUATIONS
Councilor Landry expressed support for the Board and wanted to thank them for what they do. He still has concern over some of the values but stated that the Board members are the experts.
Next to speak was Councilor Robert Danderson. He also stated that he appreciated the Board’s service. He spoke regarding his own property and others on his street. He noticed several multi-families in fantastic condition that he felt were being undervalued. Multi-family dwellings cost the City more especially if they have children with special needs. Avitar did drop his assessment but it is still $20,000. higher than is presently being asked on the open market. Councilor Danderson questions Avitar’s criteria for setting values on multi-families. He cited the sale of 250 Church Street which has the same assessment as him and is four times larger and the building is a lot bigger.
Chair Edwards was familiar with the sale and said it sold for $55,000. Chair Edwards explained that there were 72 sales in the multi-family category from 2008 and more than half of them were bank sales. Even though they are not included in the sales study they do have an indirect effect on the market. The first 35 sold under $25,000. and had an assessed valuation of 2.5 to 3 times higher. There are probably only 30% of the multi family sales since 1998 that are considered arms length transactions. Most sold for no more than $10,000. per unit. It would be nice to take into consideration the additional cost that the multi-family dwellings may create but that has nothing to do with assessed value. Assessed value has to do with market value. Avitar had to take a range and look where the property
has been, where it is, and where it is going. Multi-family sales do not have an impact on the single family as far as value is concerned. What has an impact is the number of single family dwellings on the market at this time that are bank owned properties. A buyer is going to look for the best deal he can. He will look at the bank owned properties because he can probably purchase it for a good price. Bank owned multi-family are bringing down the other multi-family sales. Therefore even though the values seem low when you compare the assessed value to the sale price they are not.
Councilor Danderson then questioned why the income from the multi-family dwellings is not taken into consideration. Chair Edwards stated that there were also expenses – high water, sewer, heat and insurance costs and add to that the monthly mortgage payment – there is not much left over. The rental fees are low and do not necessarily cover the majority of the costs associated with the multi-family. Results from the income approach really is not much better than the sales approach.
City Manager Pat MacQueen stated that there were 234 municipalities in the State of New Hampshire and that when discussing the tax rate Berlin is dead last. Our tax rate is way too high. The Council kept the budget flat this year but if the assessments drop by 7% then the tax rate will go up by 7%.
Chair Edwards stated that prices on utilities are volatile at this time and the City has taken the low range when calculating the utility value. He explained that Mr. Sancoucy, who assesses the utilities in the City, recommended that it is best to use the low range. Councilor Danderson, who is employed by PSNH, sated that their sales are down 20%.
Councilor Danderson expressed concern as he had been told at his meeting with Avitar that someone would be going to see his home on Tuesday or Wednesday of that week. No one ever came. He questioned the rating for quality that they used on his property and others. There are not many in the same category as he is. How do they get that rating? It would be nice to have an understanding of what the card is showing. Another complaint is regarding mother-in-law apartments. He believes they should not be listed as multi-families and because Avitar treats them as a two family the assessments are lower than he believes they should be.
Councilor Remillard spoke next. She had briefly reviewed single family dwellings. She felt a few of them were off. She mostly concentrated on the multi-family buildings. She saw that a lot of the multis will be paying less than $1,500. for taxes and yet they cost the City more. The Mayor and Council worked really hard to keep the budget down and there is only so much that can be cut. If we continue to cut the school budget, no one will want to move here. She believes that we need a minimum tax in the City of Berlin. Out of town buyers are purchasing the multi-families at foreclosure, collecting rents, not putting money in the building because they don’t want their taxes to go up. City Manager MacQueen responded that the Board does not have authority to impose a minimum tax that would
require a legislative change. Chair Edwards pointed out that many multi-families are being worked on and not all of them are part of the Grant revitalization program. The Board’s concern is with values and not the tax rate or a minimum tax. Councilor Remillard stated that the values are not that bad. City Manager spoke about the fact that price of multi-family is low and is attracting out of town buyers but once the market starts to rise this will cease and local value will rise. Councilor Danderson recommended that the Council speak with Councilor McCue regarding a change in legislation that would allow the imposition of a minimum tax. Chair Edwards questioned what and who would determine the minimum tax that should be set.
Councilor Landry then brought up the issue of the commercial valuations. He felt that some of the values may not be correct. He had sold a commercial building on Wight Street in December 2009 for $130,000. The Avitar assessed value for 2010 is $86,700. He questions the difference. “What better comp is there than the actual sale of the actual building itself?” To him that is where Avitar is dropping the ball. Chair Edwards felt that would be a good question to ask Avitar. They have to evaluate each sale to determine if it is arms length or if certain factors may be involved that affect the sale price and adjust accordingly. As City Manager MacQueen explained Avitar needs to look at all commercial sales and arrive at value and this may explain why the assessment in this case is
lower than the sale price. Chair Edwards stated that in his experience with Avitar they have specific reasons for what they have done. Councilor Landry said that he felt that Avitar simply sat at the computer and plugged in some numbers and values spit out. He felt that Avitar should have looked at the individual properties and investigated further if something looked out of line. Chair Edwards said that he understands that it is not Councils job to pinpoint the problems but unless the Board hears from the community they cannot address the issues. The Board did not hear of problems from the public. It is not unusual for there to be specific problems. Avitar was updating thousands of properties. It is very difficult for them to correct specific areas if they do not get
the information and questions about those areas. If there are issues, the Board would want to hear about them but Chair Edwards doesn’t believe that there have been that many. It is difficult to arrive at fair value in a decreasing market. There will be discrepancies but the Board counts on taxpayers coming forward.
Councilor Danderson spoke about a possible conflict of interest between an employee of Avitar’s and a local businessman and he stated that he feels that the employee should not be involved in the decision of assessment for that property in any way. In that instance the Chair stated that these types of concerns should be brought forward to the Board and Avitar so they could be addressed. A letter had been sent to Avitar by the City Manager regarding this issue. The response was an apology that the employee did have a relationship with a local businessman and Avitar did not realize that they needed to disclose it. Therefore that person should not be assessing the property involved. The process should be totally transparent.
The hearings are held to disclose the issues that exist when doing mass appraisal. The Council members, who were present, expressed concern that the timeline for calling for an appointment was so short. This was during the summer months and if the taxpayer happened to be away during this time he had no recourse. Any taxpayer who phoned the Assessors Office after the deadline was informed that they could write their concerns in a letter that would be given to Avitar. Avitar took letters until the beginning of September at which they had to finalize the values and present them to the city so we could file the MS-1 form. Councilor Landry stated that he had sent a letter and felt that he had not received a response to his concerns. He did receive a second notice of value with no explanation. He believes
they lack when it comes to communicating with the public. The Board asked that if Council receives complaints or questions about assessments to please refer them to the Board for response. The Board thanked all present for their interest and for expressing their concerns on Avitar’s 2010 valuations.
3) ADJOURNMENT
A motion to adjourn was made by Robert Pelchat and seconded by Paul Croteau. Motion was made and seconded to adjourn. The motion passed. The meeting was adjourned at 8:00 PM. The next meeting of the Board of Assessors will be held in the near future.
Respectfully submitted,
Susan C. Warren __________ Assessors Office Coordinator
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