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Laconia’s tax base shrinks, imbalance seen in types of property

By MICHAEL KITCH, LACONIA DAILY SUN

LACONIA — During the past decade, the city's property tax base has shrunk by more than 10 percent while the value of commercial property has diminished as a share of the total.

Although the total assessed value of taxable property in the city has risen for the past four years to reach $1,920,228,000, it remains 11.6 percent below the peak of $2,174,536 recorded in 2007.

The assessed value of residential property peaked at $1,816,321,000 in 2008 with the advent of the recession then dropped 17.6 percent to $1,495,744,000 in 2013 before climbing 7.3 percent to $1,605,415,000 in 2016.

The assessed value of commercial property reached its peak of $348,509,000 in 2007 then fell steadily for the next seven years before increasing to $291,464,000 in 2015 only to tumble to $282,976,000, its lowest point in a decade, the next year. Between 2007 and 2016 the assessed value of commercial real estate has fallen 18.8 percent.

In 2016, commercial property represented 14.7 percent of the total assessed valuation while residential property accounted for 83.7 percent, the largest share among the 13 cities in the state. Only in Berlin and Franklin does commercial property account for a smaller portion of the tax base.

The imbalance between residential and commercial property has a direct effect on the property tax rate, which is illustrated by a simple hypothetical example Mayor Ed Engler offered to the City Council.

Assume two municipalities, each with 5,000 households, which approximates the population of Laconia, where the average home price is $300,000 and the residential tax base is $1.5 billion. In one municipality, "A," the value of commercial property amounts to $78,947,358, or 5 percent of the total tax base of $1,578,947. The town raises $35 million in property taxes with a tax rate of $22.17. By contrast, in municipality "B" the value of commercial property amounts to $807,692,308, or 35 percent of the total tax base of $2,307,692,308. Since "B" has more property than "A," it has greater expenses and raises $40,000,000 in taxes, but with a larger tax base, its tax rate is $17.33. Homeowners in "A" pay $6,651 in annual property taxes compared to their counterparts in "B" who pay $5,199, a difference of $1,452, while raising $5 million more revenue.

The mayor has proposed rezoning the Commercial Resort District, which encompasses The Weirs, to set aside land for commercial development in an effort to redress the imbalance, which by lowering the property tax rate would encourage more competitively priced residential development.

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Auditors impressed with Laconia’s financial picture yearly report

By MICHAEL KITCH, LACONIA DAILY SUN

LACONIA — The Comprehensive Annual Financial Report for the fiscal year ending in June 2016, presented to the City Council this week by Melanson Health, an independent auditor, pictures the city in sound financial condition.

Scott McIntire of the Melanson Health drew a distinction between the long-term and short-term perspectives of the city's financial condition and operations. For a long-term perspective he highlighted the net position, noting that total assets exceeded total liabilities by $62.2 million, which represents an increase an increase of $2.3 million over the prior fiscal year.

From the short-term perspective, McIntire said that the $57.7 million in revenues collected in the previous fiscal year topped the $57.1 million in revenues projected by $561,103. On the other hand, actual expenditures of $57.8 million were $249,504 less than budgeted, leaving an excess of revenues over expenditures of $810,607. With transfers from other accounts of $175,131, the positive balance came to $985,738. Less the $935,000 drawn from the unassigned fund balance and applied to the municipal budget, the city closed the year with an excess of revenues over expenditures of $50,738.

In other words, the excess revenues and operational savings were sufficient not only to offset the withdrawal from the fund balance but to add $50,738 to it. At year end the unassigned fund balance stood at $4,681,450, or 8.1 percent of total general fund expenses while the total fund balance, which includes $1.7 million in capital reserves, was 12.4 percent of general fund expenditures. McIntire said that the Governmental Accounting Standards Board recommends that unassigned fund balance represent between 5 and 10 percent of general fund expenditures.

City Manager Scott Myers said that the city's financial condition and performance reflects realistic projections of revenues and sound management of expenditures and credited department heads and their employees for closely controlling expenses. He described the unassigned fund balance as "a good number," explaining that a robust balance by easing the management of cash flow spares the cost of borrowing when the pace of obligatory expenses outruns the pace of tax collections. Together with the strength of the balance sheet, he said, that the healthy fund balance enhances the city's credit, especially with banks.

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Meredith broker, businessman named for FBLA award

 

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Chris Kelly of Meredith has been nominated for Business Person of the Year through the Future Business Leaders of America. (David Carkhuff/The Laconia Daily Sun)

 

By DAVID CARKHUFF, THE LACONIA DAILY SUN

MEREDITH — Chris Kelly of RE/MAX Bayside has been nominated for Business Person of the Year award from the Future Business Leaders of America.
Kelly owns the local RE/MAX Bayside, he is managing partner in Bayside Rentals and he is an operator of Bayside Property Support.
FBLA adviser Billie Jo Sweeney nominated Kelly, noting in a nomination letter his efforts to support local students.
"Chris is a local small business owner and community leader," Sweeney wrote. "I first became aware of Chris when I volunteered on a committee to help organize a pep rally for the Cross Country team. The students wanted him to come in to school and MC the rally. Was he a father of one of the runners? No. Then why would he do this? The students assured committee members he would, but, we ultimately decided students should do it because it was unlikely for a community member who did not have a student on the team to show up to a pep rally during the school day. However, Chris was there that day and the students were motivated by his presence as he cheered the team on."
Kelly also helped one of his son's classmates attend the FBLA Spring Leadership Conference by underwriting the expenses, she wrote.
Other examples she cited included:
• Taking pictures at games and sending them to the yearbook team.
• Buying a full-page ad to help the yearbook meet its financial obligations.
• Volunteering at the Internship and Employment 101 workshops given to help students prepare for interviews.
• Hosting job shadows at his company.
• Providing internship positions to FBLA members and other students.
"He demonstrates not only to the members of our club but to every stakeholder in the wider community of Meredith what being a truly proactive, socially responsible, community business leader really means," Sweeney wrote.
"I am truly thankful for this nomination and that our local FBLA chapter and Billie Jo Sweeney thinks of me as a great contributor," Kelly said. "I believe it's important to give back to our community. Having said all that, if I did not have incredible people around me, my wife Doreen, our kids Taylor and Ryan, my business partner Rob Wichland and all the rest that help me on a daily basis, I would not be able to help where I do. I am humbled and honored with this nomination."
Kelly said he plans to attend the 2017 New Hampshire FBLA State Leadership Conference, which will be held on March 23 and 24 at the Center of New Hampshire – Radisson Hotel in Manchester.
RE/MAX Bayside donates to the Children's Miracle Network to benefit the Boston Children's Hospital, the company recently established "Bayside Believes" within the company to generate funds for local and regional charities and RE/MAX Bayside and Bayside Rentals have delivered turkeys to the Society of St. Vincent de Paul in Laconia. RE/MAX Bayside also has continued to be a local collection center for Toys for Tots.

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