Override Provision. Budgetary restrictions described in any part of section 5:03.5
may be over-ridden upon a two-thirds vote of the Laconia City Council. Such an
override expires following adoption of the annual budget. Subsequent budgets or
supplemental appropriations require additional two-thirds override votes, or the
limitations expressed below in section 5:03.5 will apply.

1. In submitting their proposed budgets to the City Council, the Administration and
the School Department shall not propose total expenditures in an amount exceeding the
tax rate established during the prior fiscal year increased by a factor equal to the
change in the National Consumer Price Index - Urban as published by the United
States Department of Labor for the calendar year immediately preceding the year of
the budget adoption.

2. In establishing a combined municipal budget, the City Council shall be allowed to
assume an estimated property tax rate only in an amount not to exceed the tax rate
established during the prior fiscal year increased by a factor equal to the change
in the National Consumer Price Index - Urban as published by the United States
Department of Labor for the calendar year immediately preceding the year of the
budget adoption.

B. Exception to budget increase limitation. Capital expenditures, and the total or
any part of the principal and interest payments of any municipal bond, whether
established for school or municipal purposes, may be excepted from being included
in the expenditures that are subject to the prior limitation upon a two-thirds vote
of the City Council. The exception made under this section shall expire upon
adoption of the budget for the next budget year, unless the council votes by a
two-thirds majority to renew the exception for the next budget year.

C. Budget limitation in a revaluation year. When the City Council accepts an
increase in real estate values as the result of a City wide revaluation, the
City Council shall adhere to a maximum increase in the combined real estate tax
revenues as follows: The combined real estate taxes raised from the prior budget
year shall be increased by a factor no more than the change in the National
Consumer Price Index - Urban as published by the United States Department of
Labor for the calendar year immediately preceding budget adoption, then this
figure shall be used in establishing the new combined municipal budget.

D. Budget limitation with annual changes in assessments. When annual changes in
real estate values occur as a result of State of New Hampshire assessing requirements,
the City Council shall adhere to a maximum increase in the combined real estate tax
revenues as follows:

1. The combined real estate taxes raised from the prior year shall be increased by
a factor of no more than the change in the National Consumer Price Index – Urban as
published by the United States Department of Labor for the calendar year immediately
preceding budget adoption, plus real estate taxes calculated by applying the prior
year real estate tax rate to the net increase in new construction. “Net increase in
new construction” is defined as: the total dollar value of building permits less
total dollar value of demolition permits issued for the period of April 1 – March
31 preceding budget adoption.

E. Total expenditures for any given budget year shall not exceed the amount
of funds reasonably calculated to be derived by the tax rate established
pursuant to Paragraph A. 2. herein, increased by the other revenues generated by
the municipality.