Council faced with opportunities – and costs

LACONIA — With the tax cap putting a tight squeeze on the 2016-17 city budget, the City Council could seize a handful of opportunities that would have a significant impact on the city for years to come.
The effort to renovate and reopen the Colonial Theatre is well underway. The council has just begun exploring the repair and rehabilitation of the downtown parking garage. Plans are on the table to reconstruct Lakeside Avenue, replace a water main, upgrade a sewer line, improve the drainage system and perhaps bury the utility lines at The Weirs in time for the running of Motorcycle Week in 2017. And the city will have a chance to renew its bid to purchase the former Laconia State School property on North Main Street.
Meanwhile, this year, for the first time since the tax cap was introduced, the rate of inflation is projected to be at or near zero. In other words, the only increase in the amount to be raised by property taxes will be that represented by the value of new construction. Between April 1 and Sept. 30, the value of new construction was $24.9 million, and City Manager Scott Myers expects that by March 31 it will reach the $29 million value recorded in the last tax year. At the 2015 tax rate of $22.20 per $1,000 of assessed value, new construction would represent an increase of $643,800 in the amount to be raised by property — less than half the increase of a year ago — shared between the city, school district and county.
Consequently, as preparation of the 2016-17 budget begins, Myers has directed department heads not to increase operating expenses in anticipation that rising personnel costs will exhaust the increase in the amount to be raised by property taxes permitted by the tax cap.
Nevertheless, Myers said this week that it is conceivable that the city could fund each of the four projects without breaching the limits of the tax cap. However, he added the caveat that one or more of the projects, particularly the purchase of the Laconia State School property, may need to be undertaken over the next two fiscal years.

Colonial Theatre
With a loan of $1.4 million from the city, the Belknap Economic Development Council has acquired the Colonial Theatre. The city drew on its undesignated fund balance to fund the loan, which is secured by the property.The BEDC is paying only interest for the 18-month term of the loan.
The remainder of the financial package, a mix of proceeds from the sale of tax credits, federal and state grants and private contributions altogether approaching $15 million, will be assembled in the new year. New market tax credits and historical preservation tax credits against federal taxes, which will be sold to investors through national capital markets, will return approximately $7 million. A mix of federal and state grants will add some $3 million. Local funding will consist primarily of between $1 million and $2 million in contributions raised from private corporations, organizations and individuals.
When the financial package closes, the BEDC will repay its $1.4 million loan from the city, which in turn will lend BEDC between $2 million and $3 million, again drawing from the undesignated fund balance, with payments of interest only for a term of seven years to secure the financing for the renovation and restoration of the property. Once the renovation is complete, the city will lease the theater as its sole tenant for seven years, operating the property as a civic auditorium. After seven years, the city can call the principal on its loan or take ownership of the theater.
Since the city will fund its loans from the undesignated fund balance, the transaction will have no direct impact on the municipal budget. However, the cost of leasing the property for seven years will require an annual budget appropriation.

Parking garage
Dubois & King Inc. estimates the cost of repairs required to ensure long-term use of the downtown parking garage at $1.5 million. Genesis Behavioral Health has entered a purchase-and-sales agreement to purchase the privately owned portion of the facility, which includes about 36 of the 228 parking spaces and the commercial space on the ground floor. The agency intends to house its administrative and clinical services in the 26,000 square feet currently leased to the Grace Capital Church and two vacant units while renting units to four other businesses. The transaction in contingent on the city repairing its share of the garage.
When the City Council addressed the issue earlier this month downtown property and business owners voiced considerable support for not only repairing but also improving the parking garage. In particular, they urged the city not to jeopardize the relocation of Genesis, which they stressed would stimulate commerce by bringing nearly 100 professional employees downtown five days a weeks.
Myers said that improvements to the garage, like the installation of an elevator and exterior staircase, could raise the cost of the project to $2 million or more, which over a term of 20 years would represent annual debt service of about $140,000.

The Weirs
With encouragement from some city councilors, Paul Moynihan, director of Public Works, included improvements at The Weirs in his submission to the Capital Improvement Program Committee and Seth Nuttelman, superintendent of the Laconia Water Works placed the water main along Lakeside Avenue between U.S. Route 3 and Tower Street atop the list of capital improvements for 2016-17.
Myers projected the cost of reconstructing Lakeside Avenue and improving the drainage at approximately $1.2 million, which could be funded by the sale of general obligation bonds with a term of 20 years bearing annual principal and interest payments of about $90,000.The upgrade to the sewer, estimated to cost $90,000, would be borne by ratepayers. The cost of replacing the water main, estimated at $500,000, would be funded through the enterprise fund of the Laconia Water Works.
Myers said he has approached Eversource about the cost of burying the utility lines, but has yet to receive a firm estimate. He said the city is authorized to borrow to finance the project and suggested drawing on the general fund to defray the debt service then applying revenue from the Weirs Tax Increment Financing District to replenish the general fund.
Myers noted that replacing about 360 feet of wooden decking at the north end of the boardwalk at The Weirs at a cost $495,000 and adding pavement and drainage to Margin Way, the last of the "cat alleys" at The Weirs, might also be incorporated into the project.

Laconia State School
Several years ago, the 200 acres that housed the Laconia State School was appraised for $2.16 million, while the current state budget includes $2 million in revenue from the anticipated sale of the property. However, Michael Connor, deputy commissioner of the Department of Administrative Services, recently advised city officials that his agency will hire a broker and put the property on the open market for six months to determine its market value.
While the property is on the market, the city would be entitled to present an offer. The highest and best offer for the property would be taken as its market value and it would be offered to the city at that price. The city would have at least 30 days to match the offer.
Anticipating that the price of the property would fall between $2 million and $3 million, Myers suggested a transaction could be be funded by the sale of general obligation bonds with a term of 30 years, which would carry annual debt service of about $100,000.

The total
Altogether, Myers estimated that repairing the parking garage, making improvements at The Weirs and acquiring the Laconia State School property would increase the city's annual debt service by more than $300,000. He acknowledged that it may be too much to expect in the next fiscal year, but suggested if a transaction to purchase the Laconia State School property were closed in the following fiscal year, 2017-18, all four projects could be undertaken while continuing to budget within the limits of the tax cap.

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Back and forth - Timber Hill Farm question goes back to Planning Board

GILFORD – The tennis-match-like back and forth over whether agritourism is considered part of agriculture in the Gilford town ordinances raged on Monday night when the Zoning Board of Adjustment voted unanimously that it is a commercial activity allowed under the town land ordinances.

The decision will send Andy and Martina Howe back to the Planning Board for a site plan review for their proposal for farm-to table events and weddings to be held on their property on Gunstock Hill Road.

"Agriculture and agritourism are one and the same," said ZBA member Ann Montminy.

The decision was made after listening to the Howes' attorney, Pat Wood, challenging abutter Monique Twomey's attorney, Joseph Driscoll, and members of the audience speak for 90 minutes on the issue. Most of those who spoke for the Howes were not from Gilford but represented agricultural interests in other parts of the the state.

One man who lives on Gunstock Hill Road said he is opposed to the Howes' proposal because of traffic concerns. Another said he is worried the Planning Board is trying to put the Howes other business, Beans and Greens Farm Stand, out of business, but Timber Hill Farm is a separate entity.

"I don't think the Planning Board should be interpreting zoning," said Chairman Scott Davis before calling for a vote. "We've spoken twice on this issue ... and I haven't heard anything (tonight) that would change my decision."

The struggle between the Howes and their supporters and Twomey and her supporters is one that could potentially change the nature of the rights of farmers and the rights of single-family homeowners in Gilford.

Right now, the definition of agriculture in Gilford is found under ordinance 4.7.1 titled Open Spaces and allows for "orchard, vegetable, garden, nursery, daily farm, commercial animals, poultry, livestock or other commercial activity. Home farming is allowed in all zones."

The Howes, with the support of the Zoning Board, have said the clause "or other activities" includes agritourism. Twomey, along with the Planning Board and in keeping with a recent New Hampshire Supreme Court decision, has said it doesn't.

Wood has said that the Howes' issue is about one piece of property owned and operated by one family and that any decision rendered by the local land board will not have a "broad-brush effect" on other properties. He noted that the number of events is limited to 15 by the parameters set by the Society of Protection of Forests who hold a conservation easement on the property.

"Each [request] would be reviewed on its own merits," he said.

Those who oppose Timber Hill Farm's proposal fear that granting a variance and a site plan to allow them to hold farm-to-table events, weddings and the like would bring a sea change to the rights of residential property owners in Gilford.

"I don't understand how it can't have an effect," said Driscoll. "I don't know how [the Zoning Board] can say the right to say agriculture in one thing for one property and a different thing for another."

Including agritourism in the definition of agriculture is problematic for the Planning Board as well. In the meeting when Timber Hill Farm was denied a review, member Norm Silber noted that since agriculture is allowed in all zones in Gilford, including agritourism in its definition could open up single-family residences for all kinds of potential commercial uses.

Planning Board Chairman John Morganstern said Wednesday that the earliest the Howes could appear before the Planning Board is Jan. 19. He also said the Planning Board is working on zoning ordinance warrant articles for annual Town Meeting.

As for the petition submitted to rezone all of the Howe family property on Gunstock Hill Road from single-family residential to resort commercial, Morganstern said the Planning Board had nothing to do with it.

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Dick Breton dies

LACONIA — Richard "Dick" Breton, who passed away earlier this week, will be remembered as an effective public servant and avid motorcycle rider, who served as a commissioner at the Laconia Water Works for two decades as well as two stints as a city councilor.

"Dick was a key player," said Seth Nuttelman, superintendent of the Laconia Water Works. "Although the chairmanship of the commission generally rotates, he was a go-to guy throughout his tenure. He brought a lot of financial expertise to the commission and was a very structured man who always thought things through," he continued. "In his 20 years, we did a lot of stuff, including upgrading the treatment plant and replacing water mains."

Breton was a first elected to the City Council in 1971 and served for two terms. Three decades later, following the death of incumbent Fred Toll, he was one of seven candidates — Pat Wood, David Stamps, Scott Vachon, Pat Emanuel, Doris Makely and Diane Hanley were the other five — who applied to complete the unexpired term. At the time, the council was divided over a proposal to construct a new high school and middle school on Parade Road. Breton was the candidate of Councilor Armand Bolduc (Ward 6), who with councilors Judy Krahulec (Ward 1) and Jim Cowan (Ward 4) opposed the project. With the support of the three, Breton was appointed by a three-to-two vote.

Controversy erupted when Breton refused to resign from the Water Commission. Mayor Mark Fraser, after consulting the New Hampshire Attorney General, ruled if Breton could not hold both offices, but was overturned by the council. Wood then sued Breton, who ultimately resigned from the Water Commission.

As a city councilor Breton proposed holding a referendum on whether to build new schools at an estimated cost of $76-million or renovate old schools. Meanwhile, Councilor Rick Judkins (Ward 5), one of the two to oppose Breton's appointment, resigned. He was replaced by Bob Hamel, who has held the seat ever since, which confirmed the unassailable majority of those opposed to the construction of new schools. When his stormy term ended, Breton did not seek election, but instead returned to the Water Commission, where he served until July 2014.

"Dick was a good friend of mine for a long time," said Hamel, who recalled that they met in the early 1980s when his wife joined New Hampshire Savings Bank where Breton was a vice president and branch manager. The two shared an enthusiasm for motorcycles and often rode their Honda Gold Wings in tandem.

"Dick was a fixture at Dunkin' Donuts at 8 a.m. every fine Sunday for pick-up rides," he said. Breton was also a regular at the annual rallies in Daytona and at Lake George (Americade) as well as made several trips to Sturgis, South Dakota. Hamel said Breton also enjoyed parading his antique cars, a 1931 Ford Model A coupe and an old Buick to cruise nights at diners in the Lakes Region.

"Dick was a good friend and a very smart, open-hearted man who was a big part of this community," Hamel said.

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