BOARD OF SELECTMEN
Natick Town Hall
November 24, 2003
6:00 p.m.
The meeting was called to order by the Chairman Jeffrey A. Stern at 6:00 p.m.
PRESENT: Jeffrey A. Stern, John Ciccariello, Jay H. Ball, Charles M. Hughes, Paul R. McKinley
ALSO PRESENT: Philip E. Lemnios, Town Administrator; Donna Challis, Secretary
WARRANTS: Payroll warrants were signed by the Board of Selectmen on November 24, 2003 in the amount of $1,503,013.75. This figure was included in total warrants signed by the Board of Selectmen of $3,793,180.20.
EXECUTIVE SESSION
Mr. McKinley, seconded by Mr. Hughes, moved to enter into executive session for the purpose of discussing matters pertaining to real property, collective bargaining, and approval of executive session minutes. A roll call vote was unanimous and the Board so retired at 6:00 p.m. after announcing that the meeting would return to open session.
The open session was called to order at 7:10 p.m.
STATE LEGISLATORS
Joining the Board was Senator David Magnani, Representative David Linsky, Representative Alice Peisch, and Betsy Boggia on behalf of Senator Cheryl Jacques.
Representative Linsky began the discussion by noting that the Commonwealth was still facing a rather dire fiscal situation and was looking at somewhere between $1.5 billion and $2 billion structural deficit for Fiscal 2005. In this current fiscal year the State closed a $3B deficit by a combination of cuts and using reserve funds. The reserve funds really weren’t there any more. The previous fiscal year, FY03, had a $3B fiscal deficit and the legislature raised taxes, did a billion dollars of cuts, and used reserve funds, but the options right now were somewhat limited. The legislature was still dealing with annual increases in health care and Medicaid costs which were driving the state budget in a 10-15% increase in both of those sectors. Something had to give.
For the first time in history in FY04 the Commonwealth had to cut local aid – both in local aid and lottery and in Chapter 70, and he would not be doing his job if he didn’t’ tell the Board that that may happen for
the second time in history. The best-case scenario would be level funding, but he thought that would be overly optimistic and the Town should plan for a 10% cut for FY05. He assured the Board that he would put every ounce of his energy into getting as much local aid as possible to wring out every single dime. He was sure each of the other three legislators representing Natick would do the same, but he couldn’t emphasise too much that until the economy turned around in Massachusetts no matter what it was doing on a national scale, the state would be facing that type of deficit.
Representative Peisch thought that Representative Linsky had pretty much covered the current situation, but she wanted to make the Board aware that in the supplemental budget, money to the School Building Assistance budget was restored for this fiscal year. She was sure the Board was aware that there was a discrepancy in the special education circuit breaker between what was thought was needed and what the DOE was projecting for the reimbursements. They were now up to 35% and both the House and the Senate were very concerned that they continued
STATE LEGISLATORS contd)
to be much lower than what the legislature thought it was funding and committed to funding at a much higher level. The sentiment was pretty strong in both chambers that if additional funding was necessary, there was a high probability that there would be more funding for it once they knew what the actual numbers would be.
Regarding the special ed circuit breaker, Senator Magnani told the Board that he received a memo on the circuit breaker outlining the Department of Education’s plans. The reason it ended up in such silly circumstances was that this was the first year Education Department did the calculation for in and out of district placements. The legislature was essentially funding at 50/50 for out of district placements, but a change was made to do two things that municipalities had asked the legislators to do. One was to do the least restrictive, fitting language to the federal standard for special needs children. Several versions of the circuit breaker were passed over the last several years and this year the legislature did a version that instead of only funding out of district placements that were residential at
50/50, all placements were funded at 75% as long as it was three times the foundation budget for the cost of the child. Some kids that were in district were costing more than residential placements and the new bill would help that. He thought the right thing was done legislatively, he was just disappointed to hear the calculations were so dramatically under funded. His hope was that it was a mistake that everybody would acknowledge and correct despite what was thought to be a $1.93B budget deficit for FY05.
Senator Magnani continued that he thought all the legislators were prepared to do as well as they could for local assistance and in lifting mandates. State revenues this year were well below what was projected and getting worse. He was reading that the economy was picking up, but it hadn’t shown it in terms of state revenues. It wouldn’t track well until there was a reduction in unemployment in Massachusetts and that seemed to be slower than the general economy.
Relief may not been seen until the second or third month of next year in terms of the slowing of the reduction of revenues below projections. They only solved about l/2 of last year’s budget deficit, and there was about another 1-1-l/2 Billion to fix. There was as much pain as last year. They were probably only l/2 to 60% there in solving structural deficit problems.
Representative Linsky explained the structural deficit term. More people were unemployed than one year ago in Massachusetts and the people employed in reality were making less money and that translates to less income tax dollars and less sales tax. With fewer dollars going into the state coffers, it can only translate into cuts in every account. Until more money flowed into the revenue side of things, there was nothing the legislature could do.
Mr. Stern inquired as to what a 10% cut in local aid would do to Natick, and Mr. Lemnios responded that an across-the-board cut of 10% would be about $1.1 million. For Fiscal 2005 his preliminary projections were level fund. Mr. Stern pointed out that the Town might have a $1.1 million hole before even beginning.
Mr. McKinley questioned if it was being optimistic to think the deficit would fix itself next year and maybe take two more years to dig out of the hole. Representative Linsky responded that the only answer was when the economy turned around. Senator Magnani was of the opinion that to think it would be fixed entirely in this one year was optimistic but it was crystal ball gazing. The legislature had gotten four changes in projections in the last five months and it was extremely difficult to come up with a number in terms of revenue. There was even less ability to predict demand because unemployment had translated into Medicaid eligibility applications. When the revenues go down, the demand for services goes up. It was difficult to predict which was why the legislators were trying to bring the most
realistic picture they could tonight.
STATE LEGISLATORS (contd)
Noting that the Town did its budget in April, Mr. Hughes asked if there was a sense that the state would get its budget done on time as opposed to going past July 1. Senator Magnani noted that for the first time in 11 years, the state got it done on time, but it didn’t help cities and towns because cities and towns had to be in a position to make decisions before that. Some towns would like an early resolution with a recognition that it may not be accurate and it could result in making cuts they didn’t have to make because the budget was based on a conservative estimate. On the flip side, if the town didn’t get an early number, their budget had to be based on the unknown. It was a tough call and he would like to know what Natick would like to see. He was not sure how relevant since the
Speaker had always refused to do an early resolution.
Representative Peisch commented that she only had one year’s experience, but this year the Governor’s budget would be earlier. That didn’t necessarily dictate when the House budget came out, but she
detected the same commitment from the leadership to getting the budget done and maybe get some indication of local aid numbers slightly earlier. As soon as she had a sense, she would communicate it to the Town.
As the burden kept coming back to the municipalities, Mr. Ciccariello noted that there had been a discussion about municipalities collecting a lot of past due amounts, but the general laws prevent the Town from doing that. One option was for municipalities to withhold permits and licenses, but under the statutes the Board had to wait a year and by the time a year rolled around that was a significant amount of tax dollars that may be lost. What’s the possibility of filing legislation that would change that that would allow the Town to recoup some money quicker?
Representative Linsky responded that he would be happy to draft and file that legislation if he could be given some specifics about how many permits, how much money was outstanding, and for how long. Senator Magnani added that he looked into it to see the industry standard and insurance and telephone companies would shut someone off in 60 days. To him it was a reasonable idea and he would support it and would ask the Board to get him some good numbers. Mr. Stern requested Mr. Lemnios to work with the legislative delegation on that.
When asked for their thoughts on employee contribution rates, Senator Magnani responded that he understood the Board of Selectmen in Framingham voted to petition to file legislation that would reduce the 90% limit to 75%. He knew that the Framingham Board of Selectmen had communicated with other boards around the state to see if they could get their legislators to support that legislation so it wouldn’t be a local petition. It would be a statewide legislation. He didn’t know what chance that legislation had to make it through. There had been several attempts during the past budget cycle to do it, but he saw no reason to think the legislature wouldn’t support a local petition.
Mr. McKinley pointed out that if the state didn’t set the example no town would succeed, and Senator Magnani responded that there had been a reduction by statute of the amount of money the state put in for state employees health care. There was an income exemption of $35,000 and for below that the contribution stayed the same. It then went up to 35% for those over $75,000 (paid by employee). There was a scale. It saved the state money, but it was done by statute which transcended the collective bargaining system at the state level and it wasn’t easy.
Mr. McKinley asked if Senator Magnani was suggesting that a local community might be better served if through Town Meeting a by-law was passed. Senator Magnani noted that currently towns weren’t allowed to go below 90% unless an alternative plan was offered. Mr. Lemnios advised that currently Natick was at 75/25 for a full indemnity. The value of the indemnity plan was applied to an alternate choice so if someone chose an HMO, the Town may be contributing a higher percentage than the indemnity plan.
STATE LEGISLATORS (contd)
Mr. Stern inquired as to the status of the Baby Safe legislation, Special Ed, and club license home rule petition.
Representative Linsky advised that the need for the Baby Safe home rule petition would probably be obviated. The House was slated to vote on a statewide bill the second week in January. That actually passed the House in the last legislative session. The Senate didn’t get to take it up, but he knew there was good support in the Senate. He would, however, file the home rule petition, but it may get pre-empted with a statewide vote.
With respect to the club license home rule petition, Representative Linsky said he received the official paperwork four days ago and had a preliminary discussion with the chairman of the committee that would handle the bill. He (Representative Linsky) started drafting a bill and was going to ask for a speedy hearing and would be looking for the Town’s assistance once it was scheduled. He would need a good spokesman to explain why this needed to be done and would be looking for representatives from various veterans and fraternal organizations to explain why it was important.
Representative Peisch explained that the special ed reimbursement was the circuit breaker language talked about earlier in the meeting. She told the Board that the legislature was committed to getting as close to the 75% as possible. She didn’t think it would hit that, but would be surprised if it were not higher than the 35%.
School Superintendent James Connolly advised that within the Natick public schools with the 35% reimbursement it resulted in a reduction of $100,000. His hope over time was that if the percentage increased, that loss would be reduced. Many more students have been claimed than anticipated and that caused the reimbursement to drop. In the past 50/50 dealt with the most expensive placements and he thought if those costs were going to be borne more by local communities, there needed to be an increase in appropriation to cover some day placements and in-house costs. One option was to have a save harmless provision for a couple of years and calculated under the 50/50 and circuit breaker and the district would get the higher amount for a two year basis.
Regarding SBA, Mr. Connolly said he knew the state was looking at that. The Governor had put a five-year moratorium, but the needs for the schools don’t go away. In Natick there was the need for a high school renovation in the next few years. As with the circuit breaker many had been surprised by the volume, and whoever was handling that study may want to do some studies in the district. That could be done throughout the state and that was something you could plan – over 10-20 years where the projects would be. In his opinion the SBA program needed to be taken off its hiatus and there needed to be an understanding of what projects would be required. That data was out there.
On the issue of fees, Mr. Connolly noted that the School Committee instituted fee based transportation, which was very contentious. It
was his (Mr. Connolly’s) belief that the legislature needed to look at changing some local option taxes. Kiddingly it had been said that with a local option sales tax with the Natick Mall, you wouldn’t hear from the Town again. The vast majority of states had local option, but the local communities in Massachusetts only had a 2-l/2 override.
Having been on two of the building committees, Mr. Ciccariello noted that one of things talked about was doing a full construction or full renovation project. If the moratorium were going to be kept, he would like the state to look at funding small projects in existing programs such as replacement of a 75-year-old boiler plant. That would allow the towns to take care of some of their needs.
Senator Magnani stated that he liked holding a community harmless on special ed funding. The state was one of the worst nationally in terms of state contribution to special education. The national standard was closer to 50-55% and the legislature was trying to fix that. On the other hand very few states contribute the kind of money Massachusetts
STATE LEGISLATORS (contd)
did to school building assistance. Many states had no funding and Massachusetts was now somewhere in the vicinity of $14 billion. For comparison the state’s obligation under the big dig was $8 billion. The fact of the matter was that it was a huge obligation. Should the state be funding renovations and repairs as opposed to new construction, Senator Magnani noted that he had seen the ball bounced at least three times in the last few years. Now SBA didn’t want to fund maintenance that could have been anticipated because the concern was that maintenance would be deferred and the state would have to pickup the cost. On the flip side, the state had been mandating design criteria that made schools more expensive than they had to be and he thought more could be done to limit the number of
mandates in terms of cost of construction and labor. Perhaps give more incentive to renovation. The Superintendent indicated that there was not a big difference in cost and he would like the state to look at that more closely.
Senator Magnani continued that the state had been mandating design criteria that made the schools more expensive, and he thought more could be done to limit the number of mandates on the cost of construction. On fees for transportation, he was paying $180 in Framingham for one child added to the tax bill. If the transportation mandate was eliminated and schools were allowed to charge fees for all school parents, it may be more equitable, but it may be another example of cutting taxes and adding more fees. There was no free lunch. If the income tax was cut at the state level only to be raised through property taxes and fees, that was a more regressive tax and something over which an individual had less control.
Regarding SBA, Mr. Connolly noted that when it gets 50 years out on a building and replacing a major system and finding a place for students to go while doing the renovations, the cost was similar and it should be looked at. The reimbursement rates were high in the state compared to other states. Natick was in the 50-55% range, which was not
extremely high, but other communities were in the 90%. The issue of whether to reduce or how much to reduce and how to reduce was something to look at. As a superintendent of schools the last thing he did was to sit there and say what do I do today – do I want to build a school. If it got to a point where the Town was going for an override to take on this construction, there was a need there. The superintendents and school committees were expressing the need and the need was there. A lot of the buildings in this state were built right after World War II and if they were going to be kept, they needed complete replacement of systems or replacement of the buildings. The schools that were not built in the late 1970’s or 1980’s were now coming home to roost. He thought for another
5-10 years the state would be looking at major construction of schools and then drop off dramatically after that for the next 10-20 years.
School Committee member Diane Packer told the legislators that on behalf of the School Committee she was happy to hear them on special education. There was a concern that the DOE didn’t understand the size of the special ed number given there had been a push to less restrictive environments to keep them out of residential environments. It was important to understand that these were kids that need lots of services and it could be very expensive. It was important to understand the cost of these kids and how hard the School Committees were working to keep these kids mainstream. No matter how you cut it paying to get your child to school was an increase in taxes whether it was a fee or a tax and there was a push to look at local revenue options outside the property tax.
Representative Linsky recognized the importance of the circuit breaker to the Town and stated that he would be shocked if once the final analysis was done that Natick would not get more money through the special education circuit breaker than under the 50/50 account. A lot more money had been put into special ed this year, but the executive branch through the DOE had been very slow to release those funds back into the school districts. He didn’t think the Town would be facing a $100,000 shortfall, but actually getting more.
STATE LEGISLATORS (contd)
Changing gears, Representative Linsky announced that the Marion Street bridge would open on Wednesday.
Senator Magnani thanked everyone for the way in which they related to the legislative delegation. This has been an extraordinary and responsible board and Mr. Lemnios had done a terrific job keeping the legislators in touch. It was a terrific privilege to represent this town.
HOLIDAY PARKING
Natick Center Associates Director Steven Greenberg requested the Board’s approval of free on street and off street public parking during the holiday season. The free parking would be limited to two hours and people parked longer than two hours would still be ticketed. This had been a longstanding policy of the Board and Mr. Greenberg hoped the
Board would maintain it. It had worked very well and helped shopping in the downtown.
To Mr. Stern’s inquiry as to the boundaries, Mr. Greenberg explained that it would apply wherever there were meters.
Mr. Hughes moved approval of the two-hour free parking in the downtown for the period of November 28, 2003-January 2, 2004. Seconded by Mr. McKinley. Mr. Hughes, with Mr. McKinley’s concurrence, then amended the motion to December 1, 2003-January 2, 2004 since Town Hall was closed on November 28th and Mr. Lemnios was uncertain if the hoods could get on the meters in time.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION
On a motion by Mr. Hughes, seconded by Mr. Ball, the Board unanimously voted to open the public hearing.
Director of Assessment William Chenard told the Board that the revaluation was required under MGL and it required assessment at market value. All classes and subclasses must be assessed at the same percentage. This year again for the second consecutive year there was a shift from commercial and industrial to residential. The overall valuation change was about 25%.
Mr. Chenard explained that when he looked at the sales market, he looked at all of 2002 and six months of 2003. The increase in assessments tend to be slightly below market value because it was looking at sales that were slightly old. He looked at the actual sales and statistics and the market value of single-family homes increased 45% in the last three years, but the Town assessment only increased 38% in the past three years. He noted that within the single-family property there was a distinct range. The lowest end increased the most or about 39% and the high end or top l/4 only increased about 20%. There was an intra-class shift from high to low value residential property. The $1 million home’s assessment went up $200,000 or 20% but their taxes will go down or stay flat. The low end of the
market will see a sharp increase.
Mr. Chenard continued that the condo’s were the sharpest increase across-the-board going up 43.7%. It was simply market conditions. For instance the condos in West Natick three years ago were selling at $125,000 and were now selling at $225,000. Two and three family homes were going up 35%. Four and above multi family homes were going up only 5%. The Assessors’ Office jumped the gun and last year adjusted the multi-family much more, but their (multi family) three-year projection was somewhat similar to the rest of residential. Vacant land was up 38%. Commercial properties were increasing 13.6% and that was not keeping pace over a three-year period of residential. Industrial was 26.6% in value, but he was seeing many changes in use; i.e. Wonder Bread was classified as industrial
but it was no longer
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
industrial. Many places in Oak Street and West Natick were converting to office space or still industrial but office in conjunction.
Mr. Chenard advised that in FY04 the residential share was up to 79% and he had seen that trend before. The commercial properties have had steady increases but as a general rule they have stayed steady and not had the dramatic increases as seen in the residential. What he hadn’t seen that much was the shift from the high end residential to the low. He had seen it once before just not as consistent. In 1992 it was the exact opposite. The $300,000 home last year was now $385,000.
Mr. Chenard noted that a number of people had asked why the assessment was going up when the sales market was going down, but the Assessors’ Office wasn’t seeing that trend. Looking at the last five years for Fiscal 2000 there was a 12% change, in FY01 a 12%, FY02 18%, FY03 15%, and FY04 12%. On commercial an increase was seen, but the high-end commercial was not going to see a 15% increase.
To Mr. Ball’s suggestion that Mr. Chenard review the different basis for valuing residential and commercial properties, Mr. Chenard responded that the DOR guidelines and State statute required the Town to do two approaches. Residential properties relied predominantly on a market adjusted cost approach. You look at actual sales and build a model to arrive at what a home would sell for. Commercial relied predominantly on income. They were income producing properties and if the income stream changed the market value changed.
Mr. Stern inquired as to how income information was gathered, and Mr. Chenard replied that it came from the property owners. An information request was sent and the owner was required to provide the information. If they didn’t, they lost all their appeal rights.
In follow-up Mr. Stern asked if the income number was a high level of quality. Were they audited or was it just the numbers the property owners gave off their books. Mr. Chenard advised that in many cases they were audited, but in some cases they weren’t. If they were not audited, the Assessors’ Office tried to verify them and if the numbers met the same trend, they used them. If they couldn’t verify the numbers and it was way out, they wouldn’t use them. Asked what he would do in that case, Mr. Chenard responded that there was a market value for each type and class. There may be 30-40 returns so the range was known.
Going back to the difference between the way commercial and residential was assessed, Mr. Ball noted that this year residential climbed and the rise in value was because people were willing to pay higher prices for those homes. That was the rationale for the increase in values, but on the commercial side the properties were valued on a gross profit or net profit basis. Mr. Chenard advised that it was gross minus allowable expenses. Mr. Ball continued that commercial was based on how good business was as opposed to how much someone was willing to pay to buy
it. Mr. Chenard pointed out that how good business was translated to how much someone was willing to pay. If you looked at two properties, the commercial property that outperformed the other would sell for more. Mr. Ball interrupted that to mean that the reason for the shift to residential was that people were willing to pay more for residential properties than they were willing to pay for commercial properties to operate a business in Natick. Mr. Chenard confirmed that as being correct – that was in essence what was causing the shift.
Mr. Ball recalled that this (shift to residential) happened last year and he thought it happened in the year preceding. Mr. Chenard advised that that was true and added that a three-year trend had been seen in the past in both directions. According to Bankers & Tradesman the number of sales in 2002 was 694 and through August 2003 there were already 508, and he was not seeing a decrease in sales price numbers. He had talked to many residential and commercial property owners and was surprised at the number of commercial properties he heard from. He probably had 15-20 phone calls today on commercial.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
As to why the shift in residential was so key, Mr. Chenard noted that there were roughly 6,900 single family homes assessed at less than $500,000 and those were seeing the sharpest increase. In 1995 only three homes were assessed for $1 million and no $1 million sales. There were now 71 single family homes assessed for more than $1 million and as a residential class as a whole that included condos, 119 properties were assessed at $1 million. In the last l-l/2 years there were 22 sales for $1M. The greatest block of sales was between $300,000-500,000 with 504 sales.
Mr. Ciccariello inquired as to the parameters when doing a reval of single-family homes. If Mr. Chenard went into a neighborhood and did a comparative analysis, how far out would he go? Mr. Chenard responded that he would look at the Town as a whole and would also set neighborhood parameters. It was bigger than the l/2 mile range. The Wethersfield area was a residential neighborhood, South Natick was divided into 2 or 3, the downtown, and West Natick. To Mr. Ciccariello’s query about East Natick, Mr. Chenard responded that it depended on where Mr. Ciccariello was talking about but Mr. Ciccariello’s neighborhood was probably in the 39% range. There was an influence of lake front property that increased the value dramatically.
If there was not one sale of a house in a neighborhood, Mr. Ciccariello questioned how the valuation was determined. Mr. Chenard advised that there was no neighborhood that didn’t have any sales, but if there were he would look within the market model at similar neighborhoods and properties.
If someone wanted to look at his value with respect to others in the neighborhood, Mr. Ball asked if that could be done. Mr. Chenard explained that someone could go to the web site and get that information. It was a wonderful tool and helped the workload in the
office. He encouraged everybody to do that and understand the process – why the Town did the reval and the statutes. Mr. Chenard gave the example of an e-mail he received from a gentleman with a small lot questioning why the land value was raised by $100,000. A similar lot on the same street sold for significantly more than that, but he said another lot was valued at a lot less. He was told to file an abatement. Mr. Chenard stated that the Assessors’ Office was happy to talk to people about their assessments and would even go to their home to talk about it.
Mr. Ciccariello asked if each property was physically looked at and accessed. Mr. Chenard advised that until this year they were on a six-year cycle and inspected all properties every six years. Now it was 10 years except if the home sells. They also have good coordination with the Building Department and look at building permits.
Mr. Ciccariello noted that it was possible that the inside of one home was much less than the one next door and yet still have the same value. Mr. Chenard agreed that that was possible.
With regard to the tax classification, Mr. Chenard reviewed the decisions the Board could make. He explained that the Board must adopt a residential factor. The minimum residential factor was 85.8002%. A low residential factor lowered the proportional share of the tax levy paid by residential taxpayers. A residential factor of “1” would result in a single tax rate. Adoption of a residential factor of less than one would be a shift from residential to commercial. All residential properties including the large apartment complexes would benefit from a split tax rate. All commercial, industrial, mixed use, and personal property accounts would pay higher taxes.
The Board could approve a residential exemption up to 20% of the average assessed value of all class one property. This exemption shifts the tax burden from owner occupied residential property to non-owner occupied property and from lower value properties to higher value properties. This did not change the residential tax levy.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
The Board could also approve a small business exemption up to 10% for businesses that employ less than 10 employees annually. The property must be assessed for less than one million dollars. All tenants must meet the eligibility requirements. Only 70 properties would qualify for the exemption this year.
As to reasons to opt for a dual tax rate, Mr. Chenard noted that many cities and towns, facing this shift in value, obviously opt not to adopt a dual rate. Those towns that do opt for a dual rate, most often believe that maintaining a historic commercial/residential ratio of tax burden in the environment of decreasing commercial values was an important consideration and outweighs the impact on commercial values and the potential for decreased commercial growth.
Classifying taxes reduces the residential share of the tax burden. It did not increase the levy or amount of taxes collected. Because this option had appeal to residential voters, a dual rate had added appeal in politically charged environments. Classifying the taxes was a political decision.
As to reasons to opt for a single rate, Mr. Chenard noted that the relative savings for residential vs cost impact on commercial. The effect for each municipality differed depending on residential vs commercial contribution to total value. The greatest positive impact for residential and the minimal to commercial occurred when commercial comprised a greater share of the entire town’s assessed value. In Natick, the commercial sector would experience a disproportionately negative impact relative to the residential benefit.
The partial offset of the actual savings by a reduction in commercial value. Commercial values decrease, due to the added tax expenses for income producing properties.
Increasing the potential for greater number of commercial abatements and appeals.
Mr. Chenard told the Board that he would not make a recommendation on whether or not to split the rate as he thought that was a political decision.
Mr. Chenard reviewed what would happen if there was a 50% split. The apartments in West Natick would save about $26,000. A single family home assessed at $250,000 would pay $2,543 under a single rate and with a 50% split would pay $2,183. A residential single family home assessed at $750,000 would pay $7,628 with a single rate and with a 50% split would pay $6,548. A single family home assessed at $1 million would pay $10,170 with a single rate and $8,730 with a 50% split. A small retail assessed at $1M would pay $10,170 with a single rate and $15,260 with a 50% split. An office building assessed at $40M would pay $406,800 under a single rate and $462,000 with a 50% split. A retail mall assessed at $220M would pay $2,237,400 under a single rate and $4,065,600 with a 50% split.
Mr. Hughes pointed out that a house valued between $300,000-500,000 increased in value close to 40% and if there was a single rate the tax bill would go up about 9%. The home assessed at $400,000 last year was now assessed at $491,000 and with a single rate the tax bill would go up $71. The $600,000 home last year was now assessed at $715,000 and if the rate was split or there was a single rate, the taxes would decrease. The $1M home last year was now $1.2M and would see a tax decrease. The break point was the $500,000 and the majority of homes were assessed at or below that number. The higher homes would see a tax break and would see that regardless of whether the rate was split or not.
Mr. Chenard concurred that the residences at the high end would see a decrease and the residences at the low end would see a significant increase.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
Looking at the examples, to Mr. McKinley it seemed that this was a reverse of the trend that had been seen for the last few years. Then low and medium homes weren’t going up as much as the expensive homes and now it was the $300,000-400,000 homes that were going up significantly. Mr. Chenard agreed that the opposite trend was seen three years ago when the low end actually saw some decrease.
Mr. Ciccariello stated that it appeared that the low-end market house in the $225,000 range was now $325,000-375,000 and those homes and taxpayers were getting hit the hardest – between $600-700. Mr. Chenard confirmed that as being correct and added that he was getting calls from people assessed at $1.3M whose taxes were going down. He (Mr. Chenard) also clarified that the majority of the 6,900 assessed at $500,000 or below would see an increase in the $20-250 range.
Following up on a question from Mr. Ciccariello, Mr. Hughes noted that some of the full split shift would get shifted back onto the residential because of the decrease in the commercial property. Mr. Chenard responded that in the first year there would be a rapid increase in abatement applications, but the true impact would be the second year when calculating tax rates. Once a town classified, it continued to classify over time. A community that classified when 2-l/2 was adopted was now at the maximum classification and looking to go higher. There was legislation to increase the maximum to 200%. The only true way to mitigate the shift was to have the residential properties stop increasing the way they were.
Noting that the tax rate last year was $12.32 and the estimated tax rate for this year was $10.20, Mr. Ciccariello asked Mr. Chenard to explain the process for going from $12.32 to $10.20 and was that expected to change. Mr. Chenard advised that the actual rate would be $10.17 and that was driven by Prop 2-l/2. The Town couldn’t levy more than 2-l/2 plus new growth or override, and therefore the tax rate must drop.
When asked how the $10.17 compared to surrounding communities, Mr. Chenard referenced a comparison in the presentation material and noted that the tax bills increased for all of the surrounding communities including those that classify. Natick had some sharp increases, but was in better shape than everybody around us. Natick had the lowest average single tax bill of any other surrounding community.
Mr. Ciccariello requested an overview of the exemptions available to residents, and Mr. Chenard referred to the web site that listed the exemptions. There were exemptions for Veterans, the blind, a surviving spouse, surviving minor child, elderly, disabled veterans and surviving spouse, and hardship. There was also a tax deferral program for those
65 or older. It had an interest rate and a lien, but someone could defer up to 50% of the value of the property.
Mr. Ciccariello inquired if the Assessors ever considered sending a flyer that described the exemptions, and Mr. Chenard responded that for the last three years the tax bill talked about the exemptions. He noted that he had gone to people’s homes to help them with the exemptions and he urged anyone who couldn’t get to the office and thought they qualified to call. In his opinion everyone who was eligible didn’t take advantage of the exemptions available. He added that financial records for exemptions applications were not public record.
Mr. Stern noted that Mr. Chenard had mentioned several times that if he got a telephone call he would go to somebody’s home, and that was the kind of customer service this Town was all about. That was exemplary and should be commended.
Mr. Ball stated that he discovered there was a variety of objections from people even though they qualified as to why they were reluctant to file for an exemption – I don’t take charity, I am afraid of filling out all the information. Mr. Chenard agreed that people were afraid of
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
filling out forms and could be intimidated, but the Office was happy to help them. People should not be afraid to take advantage of something for which they qualify and deserve. The elderly exemption was the least used by people who qualify and if someone applied for a real estate exemption, they got a decrease in their water bill.
To Mr. McKinley’s request for a review of the residential exemption, Mr. Chenard responded that it was designed for communities with large non-resident populations such as Nantucket and communities with a large number of rental properties. It may not and probably didn’t work well in Natick. The Board could exempt up to 20% of the average assessed value of all residential property. The average assessed value of all residential property was $354,847 and the Board could exempt up to $70,969 for all Class I properties. About 9,700 properties would qualify and would receive $70,500 in value, but the tax rate would be higher than a single rate. Mr. Chenard also emphasized that none of what was being talked about changed the amount of taxes collected and adopting a residential exemption would shift the
tax within the residential class only.
Mr. Ciccariello pointed out that a 20% exemption may not mean that the taxes would go down because the tax rate would go up. Mr. Chenard advised that at a single rate the rate would go to $11.26. The people who would save the most were the condos in West Natick.
It was Mr. Hughes’ understanding that the residential exemption shifted from the lower value to the higher value. Mr. Chenard confirmed that as being correct and explained that the non-owner occupant property didn’t get the exemption. You had to certify that that was your legal
residence and you filed a Massachusetts income tax return for 2003. Apartments would not get the benefit nor would condos leased to tenants. Only 11 communities in the state did it and all those communities either had a large number of non-residents or a large number of rental properties.
Letters from Paul Connolly, Bill & Mary Patton, Thomas Blackadar, and Joe Russo in support of a split tax rate were read.
Ted Welte, President of the MetroWest Chamber of Commerce, felt it was important to look at some trends. Many towns had gone back to a single rate such as Ashland and Hopkinton. He was at the Hopkinton hearing this month and they decided to stay with the singe rate even though the average increase in residents’ taxes would be a little over $600. EMC has downsized considerably and because of this policy EMC has moved many of its jobs back to Hopkinton. Nothing could be taken for granted. Framingham went from 147% to 173% last year, and two Genzyme expansions went to other communities. Bose decided to do an expansion that was fully permitted in Stow (moved from Framingham) and he could see the same thing happening in Natick. Competition was increasing dramatically, vacancy rates were up, and
the cost of doing business was up. He urged the Board to continue the single rate to maintain the economic viability of this common factor.
Having been a resident of Natick for 33 years, Paul Power told the Board that he used to speak every year on this and then reminded himself that he was starting to feel like Howard Stasser running for president every four years. Now he only spoke once every 3-4 years. A quarter of a century ago the Legislature put this practice of tax classification into effect to give the citizens of 351 communities the option of having some relief or say in their future. It was very difficult for the Board or anybody to accurately gauge what was going on a year-to-year basis because the shift and the ebb and flow comes and goes so quickly. He knew that for the 25 years this had been in existence, the Board of Selectmen had been 100% remarkably consistent in practice in that the Board never went for classification and he was well
aware that this year would be the same. He had a difficult time understanding that, but the Board was elected and did what it felt was right.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
In his (Mr. Power) opinion some of the reasons given over the years were somewhat spurious. Natick was one of the few communities, if not the only, of its size that did not have classification. Natick had a tremendous amount of malls and businesses which he felt could absorb whatever pluses and minuses went along better than he as a resident taxpayer could. It had been talked about many times over the years how the downtown had been built because of the tremendous economic spurt and tax situation with the mall and the cleverness and tremendous leadership the Town had in the past with the Town Administrator and Board of Selectmen. He heard that that was why the Natick Mall and businesses stayed here and grew with the Town and he thought to some
extent that was true, but he thought location was important and the Mall would be here no matter what the taxes.
Mr. Power continued that he didn’t advocate that Natick should become like Boston with a 75/25 and still want even more on the backs of the businesses, but Natick was the only host community with a mall such as the Natick Mall that did not have a split tax rate and he didn’t think the mall would pick up and leave tomorrow if the Board decided to split the rate. He didn’t anticipate the Board changing anything, but he thought it was important to air it out. It was important for people to understand what was going on and what wasn’t, but he hoped the Board members would do what they felt was the right thing for the people who elected them.
Business owner Benjamin Greenberg pointed out that the Mall was not the only commercial property. Anything that was done to the Mall would affect the businesses in the downtown and the businesses in the downtown contributed a sizable amount of money to support Natick. They brought in $85,000 in parking fees and tickets, paid for the Fourth of July parade, and fireworks. Commercial values were not rising as fast as residential homes for a good reason. Natick had spent a fortune on the schools and improved infrastructure, but he questioned if the Board could honestly say that a lot of effort had been put in to build up the value of commercial property. The downtown has been asking for parking and action on many things and if the Town didn’t put any effort into it, don’t expect the commercial values
to rise. The downtown properties were getting 30% less than properties in Wellesley or Wayland. People don’t come downtown because of the parking and traffic and the Town hadn’t supported the businesses to the extent they would like on parking.
Mr. Greenberg continued that there were two empty stores advertised and they couldn’t get a single national chain or single big store. They were start-ups because the values weren’t there. Natick hasn’t worked real hard to build that part of it. He would be happy to pay more taxes if he could take in more money. The businesses didn’t get most of the services the Town provides. They don’t use the schools, do not have recycling option or trash pickup. They support the community in many ways and he would like that to continue, but the businesses weren’t getting very much for their tax dollars and until the Town put in an effort to improve that, he didn’t think there should be a split tax rate. The Board was looking for deep pockets, but not all businessmen
had deep pockets. If the residents were getting most of the services, he thought it was ridiculous for the Board to ask him to pay for things the Town wants without him getting a benefit. He was looking for equity and encouraged the Board not to split the tax rate and to remember that whatever was done for the Mall would affect the downtown which was not doing as well as Route 9.
Joseph Todisco told the Board that he had been a resident of the Town for 50 years and had come to many of these meetings. To him this
seemed like one of those you can’t win situations. He didn’t think it was a question of whose picking up the burden. The system was the problem. It wasn’t quite fair in the way it was applied. Business was down and maybe that could be attributed to very creative bookkeeping but people couldn’t keep up with the increase in taxes if they didn’t have the money. Everyone had an interest in the Town, but it had to be realized that a 4% increase in taxes couldn’t be supported where 19% of
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
the population was on Social Security. This year the administration announced a 2.1% COLA, but the seniors had to pick up a 4% increase in taxes, rising BC/BS bills, and the possibility of losing prescription coverage when people in his category usually had three or more physical problems.
Mr. Todisco wanted the Board to get creative and work out something where the rates would be reasonable and fair. He noted that he hadn’t done anything on his own home for years and yet somebody else said what it was worth because this was what some other home sold for. He felt that everybody should also sit down and figure what could be done even about saving money. Perhaps cut out sending out an ambulance, a fire truck and a deputy for every 911 call.
Paul Connolly clarified that he was speaking as a resident and not in any other capacity. He noted that the market data before the Board was for calendar 2002 and he thought it illustrated the point that the Selectmen and the Board of Assessors could not control how property was assessed. They (Assessors) were told by law how the properties would be assessed, and there was nothing the Town could do about the method. The only thing the Board could do was see if the taxes being paid were being paid fairly. Not to pick on the Natick Mall, but the Director of Assessment gave a handout of tax comparisons and it showed that not just the Natick Mall was paying significantly less, but the average of all commercial property was less. Their taxes were going down almost 7-8%.
Mr. McKinley pointed out that industrial went up 7%, but Mr. Connolly countered that a significant number of the $1 billion in commercial property would get this 7.8% reduction. The Board got to mitigate the shift, and he (Mr. Connolly) recommended that the Board adopt a residential factor to counteract this shift. The shift between residential and business had occurred every year over the past five years and to him that was not fair and he would ask the Board to consider the fairness issue.
Executive Director of the Natick Center Associates Steven Greenberg stated that he was not a resident, but he had a property interest. He felt that this was a tough issue and it was tough because the split between the commercial properties and residential base was such that in order to provide a benefit to residential, there would need to be a substantial increase to commercial. A 20% increase to commercial would bring the average resident to the same level as now. That was a savings of about $140, but to the businesses it was a lot of money.
Commercial property values have gone down and compared to residential properties, they have stayed down. Increasing the tax rate puts more downward pressure on them.
Mr. Greenberg continued that one thing that made Natick great was that it was one community. There was one tax rate and Natick still had one of the lowest tax rates around. It worked. The problem with creating a split tax rate was that it created division. It was true about the benefit to the Mall, but if the rate were split, the $1 million home would also get a larger tax break. That was not fair either. The question was how to balance fairness. If the Board of Selectmen would like to sit with the Natick Center Associates to discuss how to do that, that would be wonderful, but if the Board took the step of splitting, he thought it was a point from which it was hard to come back and would be detrimental to the unity of the community.
James Elliman, General Manager of the Natick Mall noted that the environment in Natick had given the Mall the ability to make a substantial investment over the next few years. That was one of the issues at stake for them.
As the newest member of the Board of Assessors appointed to fill the vacancy left by the death of Steven Adams, George Potts noted that two years before he spoke at this meeting and the conclusion was that there
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
would be a committee formed to study the issue. He inquired if that had happened and if so, what was the recommendation.
Mr. Ball advised that the committee had given the Board a report, but the committee had not been charged with making a recommendation. Copies of the report were available.
Other than Framingham, Mr. Hughes inquired as to which surrounding Towns had a split rate. Mr. Chenard responded that both Sudbury and Needham had split rates. When Mr. Hughes noted that Hopkinton had gone away from the split rate, Mr. Chenard noted that a number had gone away from the split rate including Acton and Chelmsford.
Mr. Ciccariello recalled that Mr. Chenard had commented that a lot of commercial property was no longer industrial, but business. When the revals were done, Mr. Ciccariello asked if that was taken into account or were they still assumed to be industrial. Mr. Chenard responded that behind the Pine Street Post Office there was an industrial park that had been 10% office and 90% industrial, but now it was 40% office and 60% industrial and that was the trend. Asked if that was taken into account, Mr. Chenard’s reply was, “absolutely”. That was why you see the sharp increase in that group.
In regard to the 7.8% decrease in tax dollars in commercial, Mr. Chenard noted that it had to be understood that the Natick Mall was 22% of the tax base and that 7.8% was driven by probably less than 10 properties. Mr. Chenard stated that he was not a proponent or an
opponent of splitting the rate. He just gave information. He also applauded the Board for taking the time to understand the information.
At Mr. Stern’s request, Mr. Chenard recapped the options. He explained that the Board had to adopt a residential factor with a minimum of 85.8002%. The Board could adopt a residential exemption and could adopt a small business exemption if the business met certain qualifications. There was no excess tax levy.
If the Board were to adopt a split rate, Mr. Lemnios inquired if there was an equilibrium point that could be achieved for all classes. Mr. Chenard responded that the residential could be capped at 75/25 but it didn’t equalize the tax burden in this year because of the makeup of the values. The burden was still at the low end. Mr. Lemnios noted that there was no such thing as a zero sum gain, and Mr. Chenard concurred, adding that if the residential percentage was capped, it would decrease the tax of the high value.
Mr. Lemnios then asked if Mr. Chenard could recollect a time when the residential rate did not increase as much as commercial. Mr. Chenard advised that that happened in the early 1990’s when the residential share of the tax burden was decreasing. In looking at what happened immediately before that, there was a rapid increase in residential over the late 1980’s and then a rapid decrease. It mirrored almost the exact thing that was being seen now.
Mr. Ciccariello inquired if a 20% residential exemption would have any significant impact on how much of a tax savings the average household would see. Mr. Chenard advised that it differed for each household based on the assessment. In follow-up Mr. Ciccariello asked if it would impact the homes that had a substantial increase this year, and was told by Mr. Chenard that the answer was yes for some of those, but those above the threshold could see a tax increase. Mr. Ciccariello noted that a home that went for $225,000 would see a reduction, but a home that was $350,000-400,000 would see an increase. Mr. Chenard confirmed that that was correct.
Mr. Hughes moved to close the public hearing. Seconded by Mr. Ball and unanimously voted.
Following a ten-minute recess, the meeting was again called to order at 10:05 p.m.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
In response to the speaker who spoke about the downtown businesses and Natick doing its part to help, Mr. Ciccariello stated that he thought the Town and especially this Board had taken steps to help the Downtown Associates. The Town helped fund the downtown manager who could get grants at low interest rates, the Board waived parking requirements, and at the request of the businesses worked with them on the parking fees. Snow removal for the downtown was a priority as was cleaning up after snowstorms to make sure there was ample parking and access.
Mr. Ball noted that he spent more time thinking about this issue this year than all his other years on the Board. He had always been a staunch supporter of a single tax rate and the arguments that lead to that conclusion had primarily been ones that the businesses don’t use the schools and don’t receive trash service. They do receive more in the way of service from public safety, but on balance, the businesses probably get less bang for the buck for their tax dollar than people who live in Natick. This year he had a different view. This year his view was driven primarily by the inequity of the low-end residents shouldering a larger percentage of the tax burden while the larger businesses were getting a windfall. At a single rate the Mall would be $419,000 to the good. Leonard Morse Hospital
would be $39,000 to the good. Comparing that to the owner of a little Cape having to pay taxes that have gone up by many hundreds, he found that jarring and unreasonable. Remembering that it was the second year in a row when more of a tax burden had fallen on the residential, he was at a point where he had to give serious consideration to splitting. The question was at what point.
Mr. Ball suggested: a) That a split rate was worthy of consideration; b) That the Board task Mr. Chenard with coming up with 3-4 potential balance points of what split in the tax rate would be required for the Mall’s taxes to be the same as last year and what impact that would have on the small businesses and what impact it would have on the $300,000 homeowner and the $1M homeowner. He would also like to see what would be required to keep the 75/25 split. It struck him that if there was ever a year the residents deserved the Board’s consideration of a split, it was this year.
Mr. Ball moved to table the decision until December 8, 2003. Seconded by Mr. Hughes. The motion passed on a 4-1-0 vote. Mr. Stern, Mr. Ciccariello, Mr. Ball, Mr. Hughes voted in favor of the motion. Mr. McKinley was opposed.
In making his motion, Mr. Ball noted that it was his understanding that tabling the decision until December 8 wouldn’t present any difficult. Mr. Chenard responded that in his opinion it did not. When asked for the drop dead date, Mr. Chenard replied that he wouldn’t go beyond December 8.
Mr. McKinley asked about identifying the parameters and models Mr. Chenard was being asked to study, and Mr. Ball responded that he could come up with l/2 dozen now. Mr. Hughes suggested that each member of the Board give Mr. Ball what he (Board member) would like to see and Mr. Ball could get it to Mr. Chenard.
Mr. Ball commented that tax rates and assessments were not what counts. It was people’s tax bills, which was why he would like to look at it from a standpoint of minimizing the impact on the homeowners by splitting the rate in such a way that large businesses don’t get a
windfall at the expense of the homeowners. It was the tax bills that count and he would like to run these scenarios.
Mr. Stern thought it was a discussion worth having, but he had a problem using terms like windfall. It connotes something that was not justly due. If the Mall’s taxes went down, its valuation went down. It went down this year and last year and that didn’t sound like a windfall. There were statutory formulas for valuation and when they were applied it came out with a specific result. It’s the result being questioned, not how it got there.
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
Mr. Ball countered that he would hazard a guess that the discovery that ones taxes had gone down by a substantial amount was viewed as a pleasant surprise more than one that was calculated beforehand and the use of the term windfall was appropriate.
Mr. Ciccariello stated that he too was never a big proponent of a split tax rate. He was a business owner in Framingham. The first thing that came to mind in looking at different options was that it didn’t look like the residential exemption worked whatsoever. It didn’t solve the tax problem. It just transferred it between the residential. He would look to something in the form of a split rate, and would like to know what the small business exemption meant. He would consider a split tax rate and would like to know the impact of the small business exemption and how it worked out. It became obvious tonight that Natick was at a point where the Town had to find ways to minimize the tax bills to the residents, and the Board had to start looking at other avenues to ensure that budgets don’t continue to increase from year-to-year. He saw this becoming more of a problem next year and the year after that as the Town could be facing a $1.2 million hit in state aid next year.
Speaking to the motion, Mr. McKinley said he would agree to an additional period of study, but he was against it. He didn’t think there was any additional information Mr. Chenard could provide. Mr. Chenard had made reference to a couple members of the Board harassing him all day, and he (Mr. McKinley) thought that he (Mr. McKinley) had managed to wear out the Mass DOR website. It was true that Mr. Ball and he had been on the Board for quite some time and just the mere concept of maybe the Board should consider a split rate was almost beyond comprehension. There have been in-depth discussions about this every year, and several years ago the Board had an independent study group look at this. He didn’t think anyone could accuse the Board of not having done their homework. While he understood
the issue, he was concerned with trying to tamper with things beyond the Board’s control. It maybe playing good politics, but it was making bad policy.
Mr. McKinley continued that the trend for about six years was a shift from commercial to residential, but going back 20 years it would appear to be cyclical and based on previous cycles, it would probably end in the next year or two and the increase in residential would peak off. The Board could arbitrarily say keep the 75/25, but it was an
artificial number. The Board could pick a ratio it wanted as a model, but even if it could be rationalized for one year, it may be wrong the next year. The idea of splitting in general ignored a practical reality that it was either going to have a relatively small effect on the average homeowner and a big effect on a small business or a whopping effect on a homeowner and a horrendous effect on a small business. A 10% split on a $200,000 property would result in $75, which probably wouldn’t make a huge difference, but for small retail it would be an increase of $1,000.
Regarding the discussion about what’s fair, Mr. McKinley pointed out that the problem was that what’s fair was always relative to where the speaker was coming from. What’s fair to the resident made sense because he was a homeowner, and what’s fair to the small business owner made sense because he was a small business owner. Once the rate was split, every year there would be the argument of what’s fair as the market shifted back and forth. What struck him most about all the data was that the only thing that really counted was the average tax bill. The tax factor and valuation were interesting parts of the summary, but it was the tax bill that counted. The reason it was particularly painful for some people was that it went up a lot and that would drive him nuts too. For the
last three years his went up a lot, but didn’t go up that much this year. He was complaining 1,2,3 years ago, but those were the market conditions and he couldn’t control it. The important thing was the average tax bill.
Continuing, Mr. McKinley noted that for the 14 towns representing MetroWest, Natick ranked second from the bottom in average single-family tax bills, and when services were considered, Natick was as good
DIRECTOR OF ASSESSMENT WILLIAM CHENARD: REVALUATION PRESENTATION
PUBLIC HEARING: FISCAL 2004 TAX CLASSIFICATION (contd)
or better than every other single town on the list. By far Natick would have the lowest tax bill if Framingham didn’t have an absurdly split rate and Framingham was beginning to pay for that. Several large businesses have chosen not to expand in Framingham. It made a difference. Maybe a 10% split didn’t make a difference but a 50% split did. If the Town was doing so well as a community with so many services, a beautiful downtown, good schools, excellent Police and Fire, and still had one of the lowest average tax bills of surrounding towns, then the policies being practiced have been working. For all these years Natick has had a good policy and if the Board was going to tamper with it, he suggested that it be done very cautiously and he heard no evidence tonight to make him want to do it. The Town experienced some unusual market conditions but that wouldn’t go on forever. He urged the Board to be careful not to do anything it would regret down the road.
MINUTES
On a motion by Mr. Hughes, seconded by Mr. Ciccariello, the Board unanimously voted to approve the minutes of the September 2, 2003 meeting.
ST. PATRICK’S CHURCH: REQUEST TO DISPLAY CRECHE
The Board unanimously voted to approve St. Patrick Church’s request to display the Creche on the Common from December 8, 2003-January 7, 2004. The vote was taken on a motion by Mr. Hughes, seconded by Mr. Ball.
REFERENDUM QUESTION/PAYT DISCUSSION
Mr. Hughes noted that he had gone back and re-read the decision by Judge King on the Lexington case. Lexington attempted to institute a PAYT program in violation of their by-laws. An extension of that would be that should there be a need for an override and the override were to fail, the last thing that could be cut was trash because of the by-law and the Town would be faced with the prospect of cutting teachers, DPW workers, firefighters.
Mr. Lemnios felt that that was an accurate read and added that Lexington did have to go for an override because of the loss of the PAYT program. That override failed and Lexington laid off teachers and firefighters.
Based on what the Board heard from the legislators with the potential deficit the state was facing and cuts in local aid and adding that on top of the possible consequences of this referendum, Mr. Stern cautioned that the Town could be looking at a potential severe budget issue and that should be kept in mind. The Town could be faced with up to a $3 million structural deficit and looking at taking draconian steps.
Mr. McKinley inquired as to how many employees $3 million represented, and was told by Mr. Lemnios that it was 8-9% of the total employee base. Mr. Hughes noted that a number of employees would also have to be laid off to pay for the unemployment. Mr. Lemnios advised that for every employee laid off typically l/2 an employee had to be cut to cover the unemployment costs.
Mr. Stern commented that if you wanted residential values to fall, start cutting the level of services.
Mr. Hughes pointed out that $2-l/2M in free cash would have to be spent to level fund services (if the referendum were to pass). Money had been set aside in anticipation of continuing fiscal difficulties. The legislators said $1M cut and if the referendum passed that was another $2M, which would mean that the Town would be spending money now that was going to be spent in FY06.
Mr. Lemnios noted that this was a period of financial difficulty and Natick was not alone. The Town tried to manage its way through the difficulty without a large disruption to services. He believed this
REFERENDUM QUESTION/PAYT DISCUSSION (contd)
was a cyclical period and when it changed, if the Town came out of the down cycle with the core services in tact, there wouldn’t be that wild fluctuation. What was attracting people to the community was affordability relative to the average tax bill and the Town had an incredible basket of services compared to surrounding towns. It was a community with a high quality of life that was still affordable
compared to other Eastern Mass communities and that was something of which to be proud.
Mr. Stern announced that the Finance Committee would be holding hearings on the referendum question on December 2 and December 4th.
Town Meeting member Joshua Ostroff stated that he was there to let the Board and the public know that a group of citizens had formed a ballot question committee to oppose the referendum on the ballot for December 16. The purpose of the committee was to get the information out to the voters on what’s at stake in this election. He was concerned with the continued loss of state aid. Natick sent $50-60M in income tax and got maybe $11M back. What concerned him and maybe the other volunteers working on the committee was that PAYT was an example of a government program that worked well. It was developed at the request of the Board of Selectmen, but developed by citizen volunteers and it reduced trash by 30% and increased recycling and helped to protect some of the other Town services. The nature of the
campaign was to provide as much information as possible. If the referendum were to be defeated, it would only be done if the residents came out and knew the facts.
Mr. Ball advised that there would be a forum at the Senior Center on December 8, 2003 and another at the library on December 9. The December 9th forum was being carried live on Natick Pegasus.
RINK STATUS UPDATE
The Board was in receipt of a written report on the status of the West Suburban Arena.
Mr. McKinley, as the Board’s representative to the Rink Oversight Committee, reported that things were moving along nicely and FMC was tackling all the issues that were identified. He toured the facility twice and spoke with some of the parents and to a person they were all very pleased in general in the amount of improvement they had seen in a short period of time.
Mr. Ball felt that this was a terrific report, and Mr. Stern noted that this was an example of good government and what could be done utilizing very little resources and the Town ended up with a first-class amenity.
GOLF COURSE DISCUSSION
The Board agreed to table discussion of the golf course, but Mr. Hughes first asked if an RFP had gone out.
Mr. Lemnios advised that the RFP was in the process of being formulated.
Mr. Ball noted that a suggestion had been made to him that UMass had an agricultural program where students had to do field time and the suggestion was had the Town considered rather than hiring a turf manager, hiring an individual to lead and direct a crew of college students to do the turf management. Mr. Stern questioned how the
course would be maintained when the students went back to college. Mr. Ball didn’t know and explained that he was just raising the possibility.
JEFFREY FRANC: ONE-DAY JUNK COLLECTOR’S LICENSE
The Board was in receipt of an application from Jeffrey Franc for a one day hawker’s & peddler’s license to purchase estate pieces such as jewelry, coins, silver and small art objects at the Crowne Plaza December 9-13, 2003. In a memo to the Board, Police Chief Dennis Mannix recommended that approval of the license be conditioned upon the requirement that anything purchased be held for ten days prior to resale.
JEFFREY FRANC: ONE-DAY JUNK COLLECTOR’S LICENSE (contd)
Mr. Ciccariello questioned how the ten days prior to resale could be enforced. Mr. Lemnios advised that Chief Mannix would have a mechanism.
Mr. Ciccariello then pointed out that in the past the Board had applications from individuals looking for a license to sell, but Mr. Franc was looking to buy and not sell.
Mr. McKinley agreed and noted that he was usually against people coming in and having a one-day sale and for the same reason he would vote against this. If someone had estate jewelry, there were jewelers in Town and he didn’t want to deprive any local businessman of that opportunity.
No motion was made.
GOALS & OBJECTIVES
Mr. McKinley recalled that at the previous meeting he had been asked to update last year’s list, create a new one for 2004, and present it to Mr. Lemnios to look at. Mr. Lemnios advised that he had looked at it a little but not in depth.
The Board agreed to table discussion to December 8.
EVERETT STREET SURPLUS PROPERTY
The Board was in receipt of an appraisal of property located at 56 Everett Street that Town Counsel had determined to be a Furcolo lot. Mr. Lemnios advised that he would provide additional information relative to the assessed value and on December 8, he would be seeking permission to put this lot out to bid.
SELECTMEN’S CONCERNS
a. Town Administrator Performance Appraisal
Mr. Ciccariello reminded the Board that he was doing the Town Administrator’s evaluation and asked that each member get his evaluation back to him as quickly as possible. Copies were mailed to each department head.
Having done the appraisals in the past, Mr. McKinley could appreciate Mr. Ciccariello wanting an early and thorough response in order to compile the data. He encouraged his fellow Board members to get their evaluations to Mr. Ciccariello.
b. Lights at Football Field
Mr. Ciccariello asked that the letter from Ms. Kelly regarding lights at the football field be referred to the School Committee.
ADJOURNMENT
The meeting was adjourned at 11:00 p.m.
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Jay H. Ball, Clerk
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