Public Hearing - 7:30 pm - Classification of Property

Transcript (~9 min @ 1:12)

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▶ 1:08 Jennifer L. Lemmerman: The first item on our agenda is a public hearing scheduled for 7.30 p.m. on classification of property regarding order number 2019-19. Request to set a public hearing on classification of property for November 26, 2018 at 7.30 p.m. and subsequently determine the classification of property.

▶ 1:25 Peter D. Mortimer: Motion to open the floor for the public hearing, Madam Chair.

▶ 1:29 Speaker 1: Second.

▶ 1:29 Jennifer L. Lemmerman: We have a motion to open the public hearing made by Alderman Mortimer, seconded by Alderman Medeiros. All in favor? aye opposed the public hearing is now open motion to suspend the rules that we may hear from our

▶ 1:46 Peter D. Mortimer: chief assessor mr wilcox and mr phelan from the board of assessors we have a motion to suspend

▶ 1:49 Jennifer L. Lemmerman: the rules so we can hear from the relevant city officials made by alderman mortimer is there a second second second by alderman Boisselle all in favor aye any opposed good evening would you please come and join us mr phelan mr wilcox thank you for joining us this evening thank

▶ 2:15 Speaker 2: Thank you, come together today for this meeting for a classification hearing to do four different items. The first one is to set a minimum residential factor. The second one is to a selection of an open space discount. The third one would be granting of a residential exemption. And the fourth one would be a commercial exemption.

▶ 2:40 Speaker 2: The way that we actually get to the tax rate is the levy is actually divided by the value of the city. If we were not to select a factor, the factor would be one, and there would be one tax rate for commercial and the same rate for residential. The meeting that we have tonight is to decide whether or not to shift the burden of taxes from the residential to the commercial. If there was no shift adopted based on the assessed values for this year, the tax rate would be $11.20 for everyone. This year was an unbelievable year in the market also. We're nationally ranked again for home values. So I think this is three years in a row that we've seen unbelievable home values, not only in Massachusetts, but across the country. The levy this year has increased from $57 million up to $59 million, which is the maximum

▶ 3:44 Speaker 2: allowed by proposition two and a half um as far as the sales uh activity uh this year we saw a little less as far as sales activity but uh we had a 209 sales compared to 268 for single families but the days on the market significantly dropped last year we were looking at about 37 days on the market this year it's 29. so not only are properties selling at a higher rate they're selling faster the average sales price in 2017 this is all the sales and MLS was six hundred and fifty thousand dollars so that's a substantial increase from 573 of the year before as far as the growth in all classes pretty much every residential class this year had seen an increase we're looking at about an eight percent increase on average with all the classes so that would include apartments and condominiums and two families and three families but on average it's about an 8% increase the slide that I'd like everyone to look at is in your packet it's page 10 what I tried to do this year is take this meeting and put it on one slide so what I wanted to do is show the impact of the shift if you look at this slide a 1.0 is no shift and the max allowed this year year by law is a 1.75 shift so the top part of this slide in green is the impact of an average single family so if we decided not to shift taxes the increase would be four hundred and thirty three dollars which would be a six point six one increase if we went to the max allowable shift which means we would shift residential taxes on to commercial properties the increase for year would be 153 so that's the max allowed by law on the bottom of this slide you'll see the average commercial tax bill and the impacts of the shift by adopting no shift there will be a reduction of 40% of their taxes by going to the max shift it would be an increase of six hundred and forty dollars so and the percentages are there also so this this slide pretty much sums up what the meeting is and how we shift the properties in this meeting plus classification hearing the next slide I'd like you to look at is slide 11 this is the tax shifts of the surrounding communities as of 2018 every community around us is at 1.75 we last year adopted 1.65 so everyone else is shifting to the max that includes Malden Saugus Stoneham and Wakefield the next

▶ 6:26 Speaker 2: Next slide would have the tax shift options. If we selected the same shift as last year, taxes for a commercial on average would go down 178. The problem is the residential properties are appreciating or going up in value a lot higher than the commercial. So the impact of the shift is getting less and less each year. So by adopting the same shift that we had last year, because the pie is smaller on the commercial, it would actually be a decrease in taxes. this kind of shows that and the highlighted line in yellow is the 2018

▶ 7:10 Speaker 2: shift some of the other slides just go over the history of average values tax rates go about ten years back please feel free to look at them I'm not going to go into each year but you can see the values are going up and as values go up the tax rate goes down that's that's one important thing that we have to know is through proposition two and a half we're limited to how much money we can take in when the property values go up eight percent it doesn't mean we take in eight percent more the tax rate actually has to come down for us to back into that two and a half percent increase so we do not benefit from having higher values we still have to reduce the amount to back into the maximum allowed levy the other three items the open space discount Melrose does not have any open space to find land so that's one that we wouldn't vote on since we don't have anything classified as that the residential exemption i have four different scenarios there i'd be open to answer any questions on that and a small commercial exemption is for businesses that meet certain qualifications the board of assessors every year looks at all the information provided and we do not know um any business that would qualify um for that exemption at this point but there's um there's a lot of criteria that they have to meet it's not just being a small business and and the exemption actually goes to the property owner not to the business so if there's three businesses all three of them in that building would have to qualify and the actual break would go to the property owner the landlord and not to those businesses so that's just one thing i want to put out there um with that i'll take any questions and uh we do we are in the

▶ 8:53 Jennifer L. Lemmerman: public hearing portion um so we do i'm not sure whether we have any members of the public mission to come forward but if you wouldn't mind just stepping back to see if we do and then we will likely be calling you back up to answer questions from the committee thank you very much for that

▶ 9:11 Jennifer L. Lemmerman: information are there any members of the public here this evening wishing to speak on this order regarding classification of property you see none do we have a motion to close the public hearings

▶ 9:23 Peter D. Mortimer: So moved, Madam Chair.

▶ 9:24 Speaker 3: Second.

▶ 9:24 Jennifer L. Lemmerman: The motion to close the public hearing made by Alderman Mortimer, seconded by Alderman Boisselle. All in favor? Aye.

▶ 9:29 Speaker 1: Any opposed?

▶ 9:31 Jennifer L. Lemmerman: Public hearing portion is now closed on this order, and it is before the committee.

▶ 9:38 Peter D. Mortimer: Alderman Mortimer. May we have the city officials return?

▶ 9:43 Jennifer L. Lemmerman: Thank you for that.