ORDER-2015-63 : Request to set a public hearing on Classification of Property for December 1, 2014 at 8:00 P.M. and Subsequently Determine The Classification Of Property.

Transcript (~10 min @ 23:15)

Speakers identified by voice; unnamed voices are numbered within this recording. Auto-caption text — verify against the video.

▶ 22:41 Speaker 7: convene the public hearing relative to tax classification of property in the city of melrose for the upcoming fiscal year the motion is seconded by alderman Boisselle on the motion to conduct the public hearing all those in favor anyone opposed motion passes at this time we will conduct a public hearing on this order any member of the public who is interested in speaking relative to the order is welcome to come forward i think we will kick it off by having mr wilcox and mr phelan come forward from the assessing department and make a presentation please and

▶ 23:28 Speaker 7: just for the edification of the committee of the board before we go forward this order is going to be referred to the committee on appropriations which we'll consider it a week from tonight on december 8th gentlemen fire away all right thank you i hope uh everyone got

▶ 23:43 Speaker 5: the latest final draft of the documentations for tonight and if you haven't I have extra copies this classification hearing will provide the information needed for the Board of Aldermen to select a residential factor that will be used to set the tax rate in Melrose for fiscal 2015 property values for fiscal year 2015 are based on sales from calendar year 2013 the average single family assessed value increased $22,776 from last year. An average single family value this year is at $428,146. Condos and multifamily dwellings have also seen an increase in valuations based off of Calendia 2013 sales. Historically, Melrose has chosen to shift a portion of its taxes from the residential sector to the commercial sector in personal property and so-called CIP. This is done by selecting a residential factor that corresponds to a specific percentage that will be shifted from one sector to the other. A percentage shift of one would effectively mean that everyone would be taxed at one rate. That rate for this year would be $13.31 per thousand. The formula for determining how much of the tax burden can be shifted from residential to commercial in any given year can be found in Chapter 200 of the tax laws. That formula is shown in Exhibit H in your memo, and for fiscal 2015 indicates the maximum shift possible is 150%, or 1.5. It has been the factor for almost every year since the law was enacted in Melrose. Traditionally, the Board of Aldermen has selected a residential factor that leads to the closest possible percent in increase in taxes for both sectors. Exhibit B cites the impact of every possible tax shift from 100% to 150%. while Exhibit H narrows the percentage of possibilities from 139% to 143%, the range in which the closest percentage occurs to both classes. This chart also shows the average residential and commercial tax bills that would be resulted from each shift, as well as both the dollar and percentage increases. This year, the 1.42 shift, residential factor of 0.973516, that results in the closest percentage increase for both sectors. The residential sector would increase on average of 3.07%, where the commercial would increase by 3.16%. It must be noted, however, that the tax rates given in the charter estimates and could change by a penny in order to adjust anything to keep the levy under the limit of $51,504,781, as shown on Exhibit G. Should the Board of Aldermen select a residential factor of $97,3516 and a shift of $142, the residential tax rate would be $12.96 per thousand, an increase of $165 over last year, or 3.07%. For this year, the average dwelling is assessed at $428,146. The commercial tax rate on this shift would be an increase of $319 or 3.16% for the average commercial property, which is valued at $552,018 this year. the next item that we have to vote on is an open space discount since Melrose does not have any land classified as open space a no vote is recommended residential exemptions and commercial small commercial exemptions the next vote is whether whether or whether not to grant a residential exemption to those assessments below the median assessed value the final vote is for a commercial exemption to property owners with 10 or less employees and a property value under a million dollars To date the city of Melrose has never granted either of these exemptions More details about this these exemptions can be fine found in your handout And with this I'd like to close the presentation and open the floor to any questions from the aldermen

▶ 28:21 Speaker 7: Okay, and these numbers are based on us going to a full two and a half levy limit. Is that correct? Yes, that is correct

▶ 28:30 Speaker 7: Any questions for Mr. Wilcox? Alderman Wright.

▶ 28:35 Francis X. Wright Jr.: Thank you, Mr. President. Good evening, gentlemen. Thanks for being with us. What percentage of, I know we have a high percentage of residential properties compared to commercial, but what percentage of our residential property is owner-occupied? Do you know?

▶ 28:52 Speaker 5: We do not maintain a database of owner-occupied.

▶ 28:55 Francis X. Wright Jr.: And how would that be determined?

▶ 28:57 Speaker 5: We'd have to probably send out either some kind of mailer, but i don't have that easily accessible we could cross-reference voter registrations possibly

▶ 29:07 Francis X. Wright Jr.: but i have not completed that exercise okay and just so that it's clear these large larger apartment and i guess apartment developments they're considered residential

▶ 29:23 Speaker 5: that's correct uh land use code 112 is a residential tax rate okay great okay um all

▶ 29:26 Francis X. Wright Jr.: All right. Thank you, Mr. Boytel.

▶ 29:32 Robert A. Boisselle: Just for clarification here, Exhibit A and Exhibit D. In Exhibit D, 2014, the historical tax rate for residential was 13.28, and the commercial was 18.51. Now, the numbers in Exhibit A that you're giving, any of these 139 to 1.43 the residential tax rate is 12.97 so we're looking for a decrease

▶ 30:09 Speaker 5: in the residential tax rate that is correct um average increase for residential is about six percent this year as the values go up the tax rate comes down so the tax rate will be coming

▶ 30:26 Speaker 7: down for residential residential shift thank you very much anyone else thank

▶ 30:28 Mary Beth McAteer-Margolis: you thank you gentlemen for coming this evening so can you tell us what the average assessment you gave us a dollar amount for the residential and the commercial what was the increase in that percentage wise as far as with a shift

▶ 30:48 Mary Beth McAteer-Margolis: or right well just the average assessment you said on residential was 428 146 based on last

▶ 30:57 Speaker 5: year's sales 2013 sales yeah uh 406 was the last uh last year's assessed value the average assessed

▶ 31:02 Mary Beth McAteer-Margolis: value so 406 okay okay and on the commercial on the commercial last year's um spare with me one

▶ 31:14 Speaker 5: second last year's was 546 and this year is 552 so because the assessed value is

▶ 31:26 Mary Beth McAteer-Margolis: going up the rate is coming down for residential is it also coming down for

▶ 31:38 Speaker 5: the commercial it would depend on what shift you which one we did but really on

▶ 31:41 Mary Beth McAteer-Margolis: all of them the residential is coming down is that right no matter what the

▶ 31:48 Speaker 5: shift is as far as the ones I presented from 1.39 to 1.43 that is correct I have not gone through all of the other shifts but I'm sure there's a possibility where you can let's see and on exhibit B there is a point where it probably does go

▶ 32:10 Speaker 5: down see the break-even point would be a shift of 1.03 that would have increased of the tax rate from 1328 to 1329 anything else from there going forward

▶ 32:25 Speaker 7: would be a decrease in the tax rate okay thank you yeah just so people understand who are watching at home mr. Phelan and mr. Wilcox are prohibited by law from suggesting a shift rate to the board of all them and they present the material but they are not allowed to tell us what they recommend that the board should adopt that is solely within the province of the board of alderman any further discussion questions

▶ 32:55 Peter D. Mortimer: this evening for these gentlemen motion to close the public hearing second saying no seeing no

▶ 33:00 Speaker 7: members of the public here alderman mortimer moves to conclude the public hearing the motion is seconded by alderman Boisselle and and i will note as alderman mortimer did that there are no members of the public uh present in the audience this evening on the motion to conclude the public hearing all those in favor aye aye anyone opposed public hearing relative to this order is concluded and as i indicated at the outset this order is being referred to the committee on appropriations which we'll consider it on next monday at 7 30 p.m thank you gentlemen thank you thank you thank you