CONCORD — An evidentiary hearing looking at whether abatements granted by the Berlin Board of Assessors to board members were “illegal and improper” was continued Tuesday after more than five hours of testimony.
The issue stems from the city’s decision to hire KRT Appraisers in September 2018 to do a statistical update of residential property valuations. Testimony Tuesday revealed valuations increased and over 160 property owners filed for abatements.
Two-thirds of the abatement applications were denied.
The N.H. Board of Tax and Land Appeals received complaints from two Berlin residents that while their requests for abatements from a 2018 statistical property valuation update had been denied, all three members of the Berlin Board of Assessors plus a family member had been granted abatements.
Board Chair Robert Goddard, and members Mark Eastman and Kem Rozek approved abatements for each other as well as one for Rozek’s son, Tom Rozek.
An investigation by the N.H. Department of Revenue Administration concluded the abatements did not appear to be “fair, equitable, or proportional.”
In a written report submitted during the hearing, James Gerry, director of the Municipal and Property Division at DRA, said the four abatements granted showed a lack of transparency and accountability expected of public officials and suggested self-dealing and collusion on the part of the board.
“At a minimum they have the appearance of impropriety which is nearly as corrosive of the public trust as actual impropriety and for several reasons was completely avoidable,” Gerry wrote.
The DRA recommended the abatements be reversed and the Berlin assessors required to repay the reduction in taxes they received as a result.
Represented by the legal firm of Gallagher, Callahan & Gartrell, the board of assessors initially argued the BTLA should reject jurisdiction of the matter because the 2020 revaluation had taken place and closed the docket on the prior revaluation. But the BTLA said it felt the issue required further examination and ordered the hearing, which was conducted virtually.
The first board member to testify, Eastman said as he reviewed the update, he realized the valuation of his home was out of step with valuations of comparable properties he was seeing. He said he decided to file for an abatement.
“As a taxpayer, I felt I was at least entitled to go through the process,” he said.
Eastman said the board members did not discuss their individual applications in advance and recused themselves from voting and discussing the application when they came before the board. Asked why the board did not have KRT rule on their individual applications, Eastman said they had used up their $15,000 contract and the board took over the abatements because the city’s financial situation was dire. Problems with the update had delayed getting tax bills out and the city was exploring taking out a tax anticipation note because it was running out of money.
Questioned about the fact that the members’ applications were spread out over separate meetings, Eastman said there was no effort to hide the abatements. He said abatements were taken up in chronological order and it was a coincidence that the board members were at taken up at three different meetings.
Eastman testified that board members are volunteers and said the three worked extremely hard and spent hours on the update, which he said needed a lot of work. At the same time, he said the board was getting pressure to approve it so the city could get tax bills out. As it was, tax bills went out a month late.
“We take this very serious. This is our reputation on the line,” he said.
Board member Kem Rozek delivered a forceful defense, telling the BTLA she never discussed her application with her fellow board members and there was no collusion or self-dealing.
Like Eastman, she said the board worked hard and tried to be fair to property owners.
Rozek said she found the proceeding “highly insulting,” adding that the members did not seek to give themselves a tax break.
“I’m a taxpayer and if I feel my taxes are too high I have a right to fight them,” she said.
Under cross examination, the board members were questioned about the reductions on the board member’s valuations.
Eastman was questioned about the Rozek properties seeing a reduction in value for an electrical transmission line that runs through part of both properties.
Eastman said concerns of the health effects of electromagnetic field can have an impact on property value.
DRA Attorney Derek Kline said he could find no other property in Berlin that had its property valuation reduced for a transmission line.
The hearing recessed with Goddard being questioned.
A date for the hearing to resume has not be announced yet.