City Council Work Session
September 28, 2015
Present were: Mayor Grenier, Councilors Otis, Remillard, Gentili, Morgan-Allain, Higbee, Rozek, Nelson and Theberge
Others present included City Manager James Wheeler, Community Development Director Pamela Laflamme, Debbie Goddard, Mike Caron, Assessor Supervisor Sue Warren, Board of Assessors Chair Bob Goddard, Assessing Board Members Bob Pelchat, Kem Rozek; KRT Representatives Ken Rogers, President and Rob Tosier, Vice President; Barbara Tetreault, Berlin Daily Sun
Mayor opened the meeting at 6:35.
KRT Update on Revaluation Process
Mr. Rogers gave a brief power point presentation on the work that KRT has been doing. He explained that KRT was tasked with building a model using existing data that reflects fair market value of Berlin’s properties. At the start of KRT’s work the City’s sales ratio did not meet guidelines set by the Department of Revenue Administration (DRA) or by the International Association of Assessing Officers (IAAO). The average ratio among properties at the onset of the valuation was 1.42 and the overall assessment levels have been adjusted to .99 which is within the range.
The old Coefficient of Dispersion (COD) had reached nearly 30% and the new COD is 8.38%. Mayor Grenier confirmed that the data used was from arm’s length transactions and it did not include foreclosures. Mr. Rogers indicated that the model is based on sales. Mr. Tosier stated that though only arm’s length transactions were used, the foreclosures drag down the prices of the arm’s length sales.
Councilor Remillard questioned values set saying that one of her constituents had a value reduced by half from $100,000 to $50,000. Mr. Rogers noted that they did not do a full measure and list; they did an overview for a baseline to be built on. The data will be verified over the next five years. Commercial values have been sent out and hearings will be held October 5 and 6th. It is expected that the project will be complete October 7.
Mr. Goddard reported that KRT was contracted to use the data on file to bring the City into compliance and now that it’s been done they will begin their value setting. KRT is telling us what we have. Councilor Rozek confirmed that the City was no longer in compliance and we were so skewed that the State took notice.
Bob Goddard commented that when ratios get too far askew, the problem gets bigger. The numbers have to tell the story. The assessed value should not have an effect on sale price. Assessing has to have competence and expertise and from that a credible number is derived.
Councilor Remillard stated that sales are difficult now; a low assessment will only contribute to that. It will make moving properties at a decent price impossible.
Mr. Wheeler said that five years ago our properties values matched the market. The DRA monitors the market against sales and it showed us to be off course meaning that the model no longer represents the market. KRT is rebuilding the model to represent the market.
Councilor Remillard acknowledged that desperate sellers have lowered the market for the others. She surmised that this method of assessing may not work for this location. Mr. Tosier noted that the process is the same anywhere: analyze sales and develop a model that applies to the market.
Councilor Morgan Allain asked if the data now is providing the base rate, will values increase over the next four or five years? Mr. Rogers stated that KRT will be updating the data and making value changes; however those may not have the overall effect of raising values. Councilor Remillard speculated that we will be sitting on these prices for five years. Councilor Rozek said that we have to come to the realistic fact that property values have dropped and that is hard to accept. If we don’t have the values, the budget will need to be reviewed; the burden cannot be on taxpayers
Councilor Remillard determined that buyers view property cards when they have interest in a property and they are reluctant to pay over what the property is assessed at. Mr. Goddard made the point that people trying to alleviate their tax burden will try to lower their assessment and those trying to sell their properties will want their assessments to go up. The job to be done is to be sure that the market and values are within State guidelines. The values have to come out the way the data shows.
Councilor Nelson asked what the taxpayer does if they don’t agree with the value. Mr. Rogers replied that they can go through the abatement process due March 1; but they will have to pay the tax bill. Mayor Grenier thanked KRT for coming. Mr. Goddard stated that the Board of Assessors is happy to answer any questions. The Board of Assessors, Sue Warren and Mike Caron left the meeting at this time.
Request for Engagement of Bond Counsel
Mr. Wheeler referred to a letter that engages Devine Millimet as bond counsel at an estimated cost of $6,000 to $8,000. The new bond will include Route 16 and it will re-purpose funds from the old bond to include funding for demolitions. The resolution will come to the Council for first reading at the next meeting.
Councilor Otis asked about the Hillside Bridge replacement project. Mr. Wheeler noted that the city can drive the schedule. The City’s match for the bridge project is $131,500.
Councilor Rozek moved with a second from Councilor Theberge to authorize the City Manager to enter into an engagement with bond counsel, Devine Millimet. Councilor Higbee asked if the bond will be privately placed or if we will go to the NH Municipal Bond Bank. Mr. Wheeler stated that the resolution is written to allow either. So moved, all voted in favor.
Non Public Session
Councilor Rozek moved with a second from Councilor Morgan-Allain to go into non-public session per RSA 91-A:3 Nonpublic Sessions II (d) 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. So moved, the motion carried unanimously by roll call.
Council discussed a land matter.
Councilor Rozek moved to seal the minutes until the transaction is complete as releasing them would render the proposed action ineffective; Councilor Theberge seconded and the motion carried unanimously by roll call.
Councilor Rozek moved to come out of non-public session; Councilor Theberge seconded and the motion carried unanimously by roll call.
Councilor Rozek moved to adjourn; Councilor Theberge seconded and the motion carried. The meeting ended at 8:47 p.m.
Respectfully Submitted,
Susan Tremblay
Administrative Assistant
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