Finance Committee

REPORT OF THE FINANCE COMMITTEE FEBRUARY 4, 2015 A meeting of the Finance Committee was held on Wednesday, February 4, 2015, at 7:04 p.m. in the Aldermanic Chamber. Mayor Donnalee Lozeau, Chair, presided. Members of the Committee present: Alderman-at-Large Daniel T. Moriarty, Vice Chair Alderman-at-Large David W. Deane Alderman Ken Siegel Alderman Paul M. Chasse, Jr. Alderman-at-Large Jim Donchess Members not in Attendance: Alderwoman Pamela T. Brown Also in Attendance: John L. Griffin, Chief Financial Officer PUBLIC COMMENT Ms. Lisa Huffkalvetch, 7 Kessler Farm Drive I have three short points that I would like to make. First of all, I would like to thank Mayor Donnalee Lozeau regarding her commitment with energy efficiency. Two of my points relate to that. The first is that during the snowstorm I feel it would be proper to have a commitment to plowing the sidewalks and especially the bus stops for those who need to take public transportation. The solution that I would propose is that a relationship should be built with one of the local contractor’s that do ground maintenance/private maintenance and that they would be hired only during a snow emergency such that they would be asked to provide more labor to clear those sidewalks when a city snow emergency has been announced. It is a safety issue for pedestrians and the citizens that need to use public transportation, especially the children walking along the sidewalks. Amherst Street and further out of the city was very dangerous because you had to walk on the street to make it to the bus stop. There was no way around it. The last part would marry the two first points and that would be with regard to the people who have to take the bus. There should be lighting in the evening for each bus stop for the safety of that person who is waiting for the bus and also so the bus driver can see them better to stop for them. That could be achieved in an energy efficient manner using a small solar panel that would be attached to a small battery that would be triggered or go on when it went dark. The example I would use is if the State of New Hampshire’s Department of Transportation uses a large solar panel attached to a sign for letting vehicle drivers know what their speed is; you may have seen those around. On the major highways it’s used to alert vehicles when they to merge. That is the total of my comments. Mayor Lozeau Thank you, we appreciate you being here tonight. If you wouldn’t mind, Mr. Griffin would be willing to take down your phone number as I would be happy to call you to talk about some of those ideas and what we might be able to do or not do. Finance - 02/04/15 Page 2 COMMUNICATIONS From: John L. Griffin, Chief Financial Officer Re: Amherst Street Fire Station Emergency Shower Repairs Requested by Nashua Fire Rescue (Value: $18,700) Department: 152 Fire; Fund: General Fund Operating Budget, Accounting Classification: 81 Capital Improvements – Deferred Maintenance MOTION BYALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE THE PURCHASE FROM SCHROEDER CONSTRUCTION MANAGEMENT, INC., IN THE AMOUNT OF $18,700. FUNDS ARE AVAILABLE IN DEPARTMENT 152, FIRE; GENERAL FUND OPERATING BUDGET ON THE QUESTION Mayor Lozeau You will notice that there is a difference between the motion and the memo that you have. Mr. Griffin sent out the backup document for the price increase but I am not sure if everyone would have received it. We have copies here tonight if folks need them. Basically what happened is that they had a water leak in the Amherst Street Fire Station. That building, as many of you know, is more than 100 years old. When they got into it they thought that they were going to find something not so difficult but that wasn’t the case. Back in 1998 when they first did the work and put the showers in, it really wasn’t done to a commercial or industrial standard is the best way to explain it. When they got in there they figured out that it was more of a problem than they thought it was. When Mr. Schroeder gave them the quote, he hadn’t yet pulled everything out. The quote that you received late and the one that Mr. Griffin handed out shows an increase of $2,392 based on what they found when they got in there. They started doing the work but they haven’t done the work that they asking to do tonight other than opening it up and taking a look which they have already done. Alderman Deane There has been a lot of work done to that building after 1998, right? Mayor Lozeau I believe you. Alderman Deane I’m just looking at the product they are taking out which wasn’t on the market back in 1998. It was called DUROCK which is what they put down for tile; it’s like a cement board. The one thing I did read in the memo from Assistant Chief Gallipeau, if you look at the second paragraph, the last sentence should read shut-off valves. Mayor Lozeau Yes, it’s “shut-off” valves and not “shot-off” valves. I told the chief that you would be happy to know that they were putting in more shut-offs because when they shut things off it actually impacted things downstairs that shouldn’t be shut off that are off right now. Finance - 02/04/15 Page 3 Alderman Deane Absolutely, that was the problem that the police department had. The heating system would go down and they would have to drain the entire system down to work on one component. The more shut-off valves, the merrier. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Purchase of Storage Area Network Switch Upgrades Requested by Information Technology (Value: $28,000) Department: 122 Information Technology Fund: General Fund – Prior Year Escrows; Accounting Classification: 71 Equipment MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE THE PURCHASE FROM ADVIZEX TECHNOLOGIES IN THE AMOUNT OF $28,000. SOURCE OF FUNDING IS DEPARTMENT 122, INFORMATION TECHNOLOGY; GENERAL FUND – PRIOR YEAR ESCROWS ON THE QUESTION Alderman Siegel I sent an e-mail to Director Codagnone regarding the pricing of this and I thought I would share some of what I found out. If you look on-line you will see that this is a fairly vanilla Cisco switch and it actually can be purchased on-line cheaper but because of our purchasing requirements, we have to go via state contract or RFP. He was sort of forced into getting the best price available on the state contract and I think he did a fine job with that but I’ve put in a request to legal for legislation to allow us to simplify things a little bit for these types of vanilla, off the shelf purchases so that we can save some money. This is basically $2,200 that we could have saved but we couldn’t because it’s just the way we are constrained by our own rules. Hopefully that will change in the future. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Purchase of Street Light Poles for Main Street - Change Order #4 Requested by Engineering Department (Value: $78,548) Department: 161 Street; Fund: Capital Improvements - Street Activity Description: Main Street Project MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE CHANGE ORDER #4 TO THE PURCHASE ORDER WITH UNION METAL CORPORATION FOR A NET CHANGE IN THE AMOUNT OF $78,548. FUNDS ARE AVAILABLE IN DEPARTMENT 161, STREET; CAPITAL IMPROVEMENTS FUND ON THE QUESTION Alderman Deane This doesn’t include the bulbs, right? Mayor Lozeau Right, it doesn’t include the fixtures. The first one tonight that we are taking up is the actual poles themselves and the second one is for the fixtures. By the way, this will complete the purchase of Finance - 02/04/15 Page 4 streetlights and fixtures for Main Street from the top of Library Hill where Concord Street is down to West and East Hollis Streets. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Purchase of Led Light Fixtures for Main Street - Change Order #3 Requested by Engineering Department (Value: $37,758) Department: 161 Street; Fund: Capital Improvements - Street Activity Description: Main Street Project MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE CHANGE ORDER #3 TO THE PURCHASE ORDER WITH KING LUMINAIRE FOR A NET CHANGE IN THE AMOUNT OF $37,758. SOURCE OF FUNDING IS DEPARTMENT 161, STREET; CAPITAL IMPROVEMENTS FUND ON THE QUESTION Mayor Lozeau You will notice on the first one we are buying 14 poles and on this one we are buying 28 lights because there are two lights on each pole, a pedestrian height light and a street light height light. Alderman Deane The rationale between the 200 and the 60 watt is what, the height of the fixture? Mayor Lozeau It is the height of the fixture. One is meant for the sidewalk at a lower height for pedestrians and the other is for the street. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Independent Appraisal for PSNH Abatement Appeal Requested by Assessing Department (Value: $37,000) Department: 132 Assessing; Fund: Overlay MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AWARD THE CONTRACT TO MR VALUATION CONSULTING, LLC IN AN AMOUNT NOT-TO-EXCEED $37,000. FUNDS ARE AVAILABLE IN DEPARTMENT 132, ASSESSING; OVERLAY FUND ON THE QUESTION Alderman Donchess I have a few questions on the next three items which are all appraisal issues. First, why are we hiring two different firms? Number two, how much is at issue with respect to each of these abatement requests where we are contesting an abatement request? Number three, at what stage are we in these proceedings? Are we before the Board of Land and Tax Appeals or has it not reached that point? Finance - 02/04/15 Page 5 Mayor Lozeau The reason that we are hiring two different company’s is that the company that we are hiring for the public service ones is a company that specializes in utility work and I think that’s one of the reasons why you see such a price differential in the three bids. All of them can either opt to go to the BTLA or to the Superior Court. PSNH is going to the BTLA and the other two are going to Superior Court. The company that we have hired for the other two is a company that we have worked with pretty frequently and have had good results from them. The difference in some of these costs, you’ll see on the memo that there is an amount that tells you kind of what is at stake. PSNH is rather large - we have appraised and it’s all of their facilities; we have appraised them at $95 million and they think we should be at $48 million so that’s certainly a significant difference and worth the effort to look at that. Based on if they were found to be correct at $48 million versus ours then there is about $1 million at risk of collection of tax dollars. The other two are as I said, in Superior Court; for the first one, the Flatley property, we have it at about $68 million and their thinking $55 million so what is at stake is approximately $300,000. The last one for Law Realty – we are at $25 million and they are at $13 million and so what is at stake there for tax dollars is just under $300,000. We believe we have a good case and we think we will likely be successful but you never know and sometimes we settle as well. Alderman Donchess With respect to the utility line, they are contesting the value of the utility lines or the rights of way? Mayor Lozeau Three years ago the legislature changed and allowed us to tax poles. Poles are part of the equation but they are not the only part of that equation. They are also looking at their substations, their office space, everything. Alderman Donchess So they are contesting everything. Mayor Lozeau Everything. Alderman Donchess And they have been at $95 million up until now? Mayor Lozeau Or pretty close with the exception of the poles. Alderman Donchess Do you recall how much the inclusion of the poles adds to their assessed value? Mayor Lozeau I think it was pretty small. I think we are under $60,000. It wasn’t a huge assessment. We were actually pretty reasonable. We have poles that are owned by Fairpoint and poles that are owned by PSNH. I was surprised that the number was so low. Finance - 02/04/15 Page 6 Alderman Donchess Who is representing the city with respect to these cases? Is it our Legal Department or do we have outside counsel? Mayor Lozeau We do a mix of things. Right now we are working with legal in-house based on the appraisal services that we want. We will then make a decision on which way we go after that. MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Independent Appraisals for Law & State Street Realty Abatement Appeals Requested by Assessing Department (Value: $49,100) Department: 132 Assessing; Fund: Overlay MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE THE PURCHASE OF APPRAISALS FROM PROPERTY VALUATION ADVISORS IN AN AMOUNT NOT-TO-EXCEED $49,600. SOURCE OF FUNDING IS DEPARTMENT 132, ASSESSING; OVERLAY FUND MOTION CARRIED From: John L. Griffin, Chief Financial Officer Re: Independent Appraisals for Flatley Abatement Appeals Requested by Assessing Department (Value: $20,400) Department: 132 Assessing; Fund: Overlay MOTION BY ALDERMAN SIEGEL TO ACCEPT, PLACE ON FILE, AND AUTHORIZE THE PURCHASE OF APPRAISALS FROM PROPERTY VALUATION ADVISORS IN AN AMOUNT NOT-TO-EXCEED $20,400. FUNDING IS AVAILABLE IN DEPARTMENT 132, ASSESSING; OVERLAY FUND MOTION CARRIED UNFINISHED BUSINESS – None NEW BUSINESS – None DISCUSSION Alderman Chasse On #2, the $2,200, is there any way to order them on-line to save that $2,200 or is it too late now? Alderman Siegel We cannot do that according to our rules, according to Director Codagnone it’s too late for this purchase. Alderman Chasse And we can’t break that rule? The Finance Committee doesn’t have the authority to sidestep that rule? Mayor Lozeau I don’t believe that we do. I think it would have to be a vote of the full Board of Aldermen. Let’s hope we can make it up on another purchase. Finance - 02/04/15 Page 7 Alderman Deane I wanted to state my position on that. If you go to deviate from your rules it is done at a procedural level than it is with an ordinance that’s in place. Contrary to what some people may think that we set the rules so we can break them when we want. The Finance Committee is different than the rest of the committee’s that are set up under the Charter. If we were at the full Board it would be a different story. That’s my understanding. Mayor Lozeau I would agree. RECORD OF EXPENDITURES MOTION BY ALDERMAN SIEGEL THAT THE FINANCE COMMITTEE HAS COMPLIED WITH THE CITY CHARTER AND ORDINANCES PERTAINING TO THE RECORD OF EXPENDITURES FOR THE PERIOD JANUARY 16, 2015, THROUGH JANUARY 29, 2015 ON THE QUESTION Alderman Deane I would like to thank Mr. Griffin for correcting me that there was a small error that was made under the Board of Aldermen’s budget. Alderman Donchess I wanted to ask about several of the payments made in the Record of Expenditures. I had some communication with Mr. Griffin about these and narrowed it down a little bit. There are three groups of payments that are related to the settlement of property tax abatement cases. Sam Realty which relates to the Crown Plaza, The Nash Family which relates to 103 Temple Street, and Ross Common which relates to Tulley BMW, apparently a parking lot. My question with respect to each of those is because the payments are significant – Sam Realty is close to $100,000; Nash is $40,000 or $50,000; and Ross Common is around $40,000. At what stage were these settled? Were they in litigation or was this settled with the Assessing Department? Mayor Lozeau I believe that they were settled with the Assessing Department. They came to an agreement on – that’s two years’ worth of taxes; 2013 and 2014 for all three of them I believe. Alderman Donchess Were there independent appraisals prepared regarding each of these abatement settlements? Mayor Lozeau I don’t know the answer to that. It depends on whether or not they felt that they were necessary. There are often times when they work together. Sometimes there is information that is incorrect. I know for residential ones we have had times where people pulled a building permit for let’s say a garage and then they never built the garage but assessing doesn’t know that they didn’t build it. Sometimes in commercial properties they are similar in nature. I can certainly find out for you what stage they were settled at. Finance - 02/04/15 Page 8 Alderman Donchess Are there actual written agreements here or is this just given that they are not in litigation, do they enter a written agreement or is it simply an okay kind of a handshake type of thing? Mayor Lozeau It’s not a handshake. What happens is the assessment done on the property is changed and the new tax is calculated and then the difference is refunded because they have already paid those taxes. Alderman Donchess Are these agreements binding on the city at this point? Mayor Lozeau Yes. Alderman Donchess The additional information I would like is was there an appraisal done on each of the three and if there was, can I please get a copy and number two, could there be some explanation as to the grounds for each of the three abatement settlements. Mayor Lozeau Sure. I don’t think I saw the figures quite as high as you mentioned. I will get you that information but I think it was like $40,000 for one and another and closer to $60,000 for one. Alderman Donchess There are several payments listed. Ross Common is $24,000 plus $50,000 plus $5,000 and that’s Tulley. Sam Hospitality is $18,000 plus $22,000 plus a smaller one of $2,000. Mayor Lozeau That’s because of the interest. Alderman Donchess These are probably different years. Mayor Lozeau Right. Alderman Donchess Nash is $18,000 plus $18,000 plus a small amount for interest. Finance - 02/04/15 Page 9 Mayor Lozeau It’s the abatement year so I think for Crown Plaza it was $22,000 for the first year, $22,000 for the second year and then the interest. They should be the same. Then it was $18,000 for the two years for the next one plus the interest and then $26,000 and $24,000 for the last one. I’ll be sure to get you that information. Alderman Siegel I want to thank Mr. Griffin for getting back to me on some of my questions. MOTION CARRIED PUBLIC COMMENT - None POSSIBLE NON-PUBLIC SESSION ADJOURNMENT MOTION BY ALDERMAN CHASSE TO ADJOURN MOTION CARRIED The Finance Committee meeting was adjourned at 7:31 p.m. Alderman Ken Siegel Committee Clerk