Category Archives: Budgets

Plan to address our lack of a commercial tax base

I just responded to a great comment from Nic Scalfarotto, and since my general sense is that such comments and my replies are not likely seem by many, and sense Nic raised a big issue, I thought I would post both his comment and my reply here so more can see them.

Nic, I added a little more on as well.

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Nic Scalfarotto

User Info

Accepting that developing differential tax rates would not provide benefit to home owners because there is a small industrial base, a plan to address the lack of such a base needs to be developed and communicated to residents.

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Plan to address our lack of a commercial tax base

As a new selectman, my first search was for businesses that wanted to locate in town, and when that did not seem a likely result, I have turned to having a town policy of building housing that is revenue positive to the town.

We know that people want to live in town, but mainly not build businesses here. The can make tax money and reduce our current residents’ taxes by building the kind of housing that is more profitable, such as Old Village Square (42 units paying over $600K/year in taxes, with one school child the last time I heard) or the two Larkin brothers projects (Glover Place off North Street and Chapel Hill on Hospital Road, again, both with few school children).

See the analysis that Kathy McCabe, the consultant to the Medfield State Hospital Master Planning Committee, did of the potential taxes to the town from leasing the lot 3 land the town owns on Ice House Road to build 42 units of senior housing versus leasing to a commercial facility, and the town netted either more than double or more that triple the taxes from the residential use over the sports complex, depending on whether the  housing was either 100% or 25% affordable, respectively.  Those results were summarized in Steve Nolan’s 1/2/2018 memo to the Board of Selectmen available here –20180102-SN-Memo to MSHMPC re HinkleyIce House Road v2 – final sent to BoS and inserted below as well.

I think that many of the friendly 40B projects that we are currently allowing in order to be in safe harbor, will be revenue positive. Statistically, we are told that we will likely average about 1.5 school children per in single family houses, while we will likely average 0.15 school children per unit in multifamily housing. So multifamily housing may well be revenue positive for the town, even if not age restricted.

Additionally, the town is already mainly single family homes, so we really do not need any more single family homes options, while we do not have a sufficient variety of other housing opportunities for residents, especially for seniors. Current proposals in the pipeline will assist at filling in that gap:
8 units on North Street (two developments)
36 units on Dale Street
16 units on Adams Street, age restricted
42 units at the Rosebay, age restricted
56 units (from memory) at The Legion site

However, such diversification of the tax base can only accomplish so much with respect to reducing our individual tax bills. The other issue with which we need to deal is the town’s willing to spend, witness our vote at the last annual town meeting (ATM) to increase our tax bills by about 10%, over the objections of the Board of Selectmen and the Warrant Committee.

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MEMORANDUM TO: Medfield State Hospital Master Planning Committee FROM: Stephen M. Nolan, Chair Medfield State Hospital Master Planning Committee RE: Hinkley Property and Lot 3, Ice House Road DATE: January 2, 2018 The original charge from the Board of Selectmen to the Medfield State Hospital Master Planning Committee (the "Committee") included Lot 3 on Ice House Road (“Lot 3”) and the adjacent Hinkley property (the “Hinkley Property”). It was our understanding that we were to take a fresh look at Lot 3 and the Hinkley Property in order to decide the most appropriate use for each parcel and how they might best be coordinated with the re-use plan for the Medfield State Hospital (“MSH”) core campus. It has since become clear that at least one of member of the Board of Selectmen believes that the best use for Lot 3 is an indoor sports facility, so that preference should be accommodated if possible in our final plan. A. Possible Uses of Lot 3 and the Hinkley Property. The consensus that has emerged from our public sessions, our meetings with the Council on Aging and the Senior Housing Study Committee and Committee deliberations is that the most desirable use for Lot 3 and the Hinkley Property is senior housing. The principal reasons for this are twofold: access to The Center and the possibility that a senior housing development could happen on a more expedited basis than the re-development of the MSH core campus because infrastructure is more readily available and the properties could be disposed of on an expedited track. The Council on Aging has expressed potential willingness to cede a small portion of the land at the corner of The Center adjacent to the Hinkley Property for purposes of enhancing the development potential of the Hinkley Property. The possible use of Lot 3 as an indoor sports facility on the other hand would respect a past Town Meeting vote to devote Lot 3 to an indoor sports facility and would increase the commercial tax base of the Town. On the latter point, our consultant, Kathy McCabe, did some research on the likely tax revenue from such a facility. Since the developable area of Lot 3 is only approximately 4.8 acres, the lot cannot support a large facility. Based on a survey of indoor sports facilities in MetroWest, it appears that a site of approximately 5 acres can likely support a facility of 100,000 square feet or less. The Forekicks facility in Norfolk is approximately 83,000 square feet and has a tax valuation of $5,000,000. Using that valuation as a basis for comparison, a 100,000 square foot facility would have a valuation of approximately $6,000,000, which would produce annual tax revenue of approximately $100,000. Kathy McCabe estimates that a 100% affordable senior rental housing project with 42 units would produce annual tax revenue of approximately $240,000 and the same project with only 25% of the units affordable (which would still qualify as 42 affordable units on DHCD’s Subsidized Housing Inventory) would produce annual tax revenue of approximately $320,000. So the revenue to the Town from a senior housing project would likely be significantly greater than the tax revenue of an indoor sports complex. This revenue must be off-set, however, by municipal expenses, which for 42 units of housing would be approximately $108,000 (assuming no school children). We have not been able to quantify the additional municipal services (traffic control, emergency services, road maintenance, snow-plowing) from a sports facility, but they should be factored into the cost-benefit analysis at some point. Even ignoring those costs, the net impact of a 100% affordable senior rental project would be at least $30,000 greater than an indoor sports facility while a 25% affordable senior rental project would be at least $110,000 more favorable to the Town budget than an indoor sports complex. Other possible impacts to be considered include traffic. Our consultant has advised that a sports facility on Lot 3 would create considerably greater traffic and possible over-flow parking than a 42-unit senior rental housing project, which could negatively impact The Center and a possible senior-appropriate homeownership development at the Hinkley Property. For example, parking at Forekicks in Norfolk requires about 1.7 acres, roughly equivalent to the size of the facility itself. Ingress and egress to and from the Norfolk Forekicks parking lots is a very serious problem during change-over times when cars are both entering and exiting the facility. In inclement weather conditions with snow and ice the traffic impacts are even worse. One other factor to be considered in deciding the possible use of Lot 3 is the Town’s disposition process. The difficulty in disposing of Lot 3 for a sports facility is that the Kingsbury Club has a provision in its lease that prohibits the Town from allowing a sports facility at Lot 3 without the consent of the Kingsbury Club. The Kingsbury Club has announced its interest in developing a sports facility on Lot 3, which suggests that the Kingsbury Club might use its consent right to thwart other possible developers interested in developing Lot 3 for a recreational facility. This needs to be factored into any possible disposition strategy for Lot 3. B. Rezoning. Lot 3 is already zoned to permit an indoor sports facility. The proposed overlay zoning being considered by the Committee would allow the development of both parcels for housing. The disposition process, described below, would need to control the use of each parcel. By using an overlay district, the underlying zoning of Lot 3 can be left intact, thus allowing for either housing or an indoor sports facility on Lot 3, depending on the Town’s preferences. If Lot 3 and the Hinkley Property are zoned for as-of-right housing under the Committee’s overlay zoning, a developer could start the development process as soon as disposition were completed, avoiding the process for obtaining a comprehensive permit from the Zoning Board of Appeals, a process that can be time-consuming and expensive. We should consider whether to exempt the houses on the Hinkley Property from the Town’s inclusionary housing bylaw in order to allow more flexibility in providing as many dwellings as possible at a moderate (although not 40B compliant) price-point. We should also consider including duplexes, at least for the moderately-priced units, in order to further reduce prices. C. Potential Disposition Process and Timing. The disposition process for Lot 3 and the Hinkley Property should be handled by either the Affordable Housing Trust or the Affordable Housing Committee if they are to be developed as housing or, in the case of Lot 3, by another committee, such as the Economic Development Committee, if it is to be developed as an indoor sports facility. The Selectmen should decide on the appropriate body to handle the dispositions so that they can be placed on the market as soon as possible to address the desire for senior housing. The Selectmen and the Affordable Housing Trust will also need to decide on whether to provide a subsidy to developers in order to encourage moderate sales prices on the homeownership units to be constructed at the Hinkley Property. That decision is a complicated one because the seniors who would likely purchase the units are not likely to qualify under any governmental program providing subsidies for affordable housing creation and the units would not qualify for the Subsidized Housing Inventory. Anecdotal evidence suggests that the price of new single-family homes, even those of smaller size and senior-appropriate design are likely to exceed $750,000. The Senior Study Committee has requested that homes be priced in the area of $400,000. Such a price-point would likely require a subsidy even beyond free land, so the Selectmen or the Affordable Housing Trust would need to decide to whether to provide an additional cash subsidy or allow developers to compete based on the number of units to be made available at the $400,000 price point. In other words, developers would bid not based on price, but rather on the number of units to be sold to seniors at $400,000. This would be a complicated disposition because some minimum specifications for the moderately-priced units would need to be incorporated, as would a local preference for those units. In addition, this decision must consider the equity and fairness in providing implicit or direct subsidies (through low or zero land values or cash subsidies) for one selected group -- such as senior citizens -- and not other worthy groups such as returning veterans or persons with physical or developmental disabilities. The selection of potential buyers of moderately-priced homes is also a matter that must be decided. Given that the Town would be providing a subsidy in the form of free land, questions will arise as to whether purchasers should be means tested or otherwise selected based on need. That is another issue that the Selectmen will need to resolve. Because Lot 3 and the Hinkley Property are not located at the MSH core campus and will have separate infrastructure needs, there appears to be no reason why the Town should not proceed to prepare a disposition RFP that would allow for selection of a preferred developer promptly after Special Town Meeting approval of the re-zoning. The 42-unit rental project on Lot 3, if initiated promptly, could help provide the Town with a two-year extension of the 40B safe harbor that is currently in effect.20180102-SN-Memo to MSHMPC re HinkleyIce House Road v2 - final sent to BoS_Page_220180102-SN-Memo to MSHMPC re HinkleyIce House Road v2 - final sent to BoS_Page_320180102-SN-Memo to MSHMPC re HinkleyIce House Road v2 - final sent to BoS_Page_4

Assessors tax classification hearing

The Board of Selectmen received the report below today from the Assessors for the tax classification hearing that will occur this evening as part of the select board meeting.  Towns in Massachusetts are permitted to charge the commercial and industrial taxpayers property taxes at a rate up to 50% higher than the residential rate (called a split tax rate), but Medfield never has.

Medfield’s reality is that because so little of our tax base is other than residential, even if we were to opt for the 50% higher tax rate on commercial and industrial properties, while the commercial and industrial properties taxes would go up by a lot (50%), the home owner would see little change – scant benefit to homeowners, while strong fiscal policy discouragement for any commercial/industrial uses.  For that reason Medfield has always kept a single tax rate.  See a PDF of the analysis here – 20181127-Assessors-tax classification hearing analysis

BOARD OF ASSESSORS Fiscal 2019 Classification Hearing Purpose The purpose of the classification hearing is for the Board of Selectmen to determine the allocation of the local property tax to be borne by the four classes of real property and personal property for Fiscal Year 2019. It is the responsibility of the Selectmen to adopt a residential factor. The residential factor is used to determine the percentage of the tax levy that is applied to each class of real and personal property. The Board of Assessors than applies these percentages to each property class (M.G.L. Chapter 40, section 56). It is the responsibility of the Assessors to provide the Selectmen with relevant information and to discuss the fiscal effects of possible alternatives. Tax Rate The tax rate is the tax levy divided by the town's taxable valuation. This is known as the Uniform Tax Rate. Under this rate each class of property pays a share of the tax levy equal to its share of the total town value. A. Residential Factor Adopting a residential factor of "1" will result in the taxation of all property at the same rate. However, the law allows the Commercial/Industrial/Personal Property, tax rate for the Town to be as high as 50% above the uniform ratei and the Residential/Open Space, R/O, to be as low as 65% of the uniform rate. B. Analysis of surrounding cities' and towns' FY18 tax rates: Town Res. Rate CIP Rate Residential% Dover 12.84 12.84 97.0783 Norfolk 18.62 18.62 92.2049 Millis 18.02 18.02 89.988 Sherborn 19.30 19.30 95.4188 Walpole 15.27 20.33 83.0286 Westwood 15.09 29.30 74.3145 Medfield 17.03 17.03 94.3434 C. History of differential tax rates in Medfield Historically Medfield has always maintained a single tax rate. Shifting the tax onto the Commercial, Industrial and Personal properties would create a tax burden for those properties, while the Residential properties would only benefit from a small savings. E. F. D. Tax Rate Scenarios Overall Scenario Commercial/Industrial/Personal Properties projected share of the tax levy: $2,621A38 Last Year's CIP share= $2,487,906 With a 10% shift With a 25% shift With a 50% shift $2,883,582 $3,276,798 $3,932,157 tax dollars would be paid by CIP tax dollars would be paid by CIP tax dollars would be paid by CIP Individual Scenario For a $600,000 home & commercial property based on an estimated tax rate of $17.87, Residential Commercial $600,000 $600,000 Single rate $10,722 $10,722 10% shift $10,660 $11,794 Difference ($62) +$1,072 25% shift $10,567 $13,403 Difference ($155) +$2,681 50% shift $10,412 $16,083 Difference ($310) +$5,361 Historical Commercial/ Industrial/ Personal Data: Year CIP% Tax Dollars Tax Le~ Tax Rate 2014 5.6966 $2,099,404 36,853,583 16.12 2015 5.4819 $2,100,312 38,320,353 16.04 2016 5.4950 $2,287,440 41,627,344 16.75 2017 5.4753 $2,339,247 42,723,595 16.89 2018 5.6566 $2,487,906 43,982,483 17.03 2019 5.4694 $2,621,438 47,928,863 17.87 Residential Category Single Family Averages Year SPA Value Tax$ 2014 569,600 9,182 2015 595,600 9,553 2016 615,600 10,311 2017 623,400 10,530 2018 634,700 10,809 2019 658,400 11,766 Please note: For purposes of this hearing the tax rate is an example only. The final rate will be determined after the Department of Revenue has approved the Tax Recap. I ~ ! ri I r20181127-Assessors-tax classification hearing analysis_Page_220181127-Assessors-tax classification hearing analysis_Page_3

FY20 Budget Meeting

budget-3

Attached are the materials shared at the budget meeting last night, which meeting starts the work to get to a recommended budget to present to the annual town meeting (ATM) at the end of April.

The first pages are from Mike Sullivan (with his first draft of how the budget numbers will likely play out, given the variables we know today).  I believe the last two pages (FY16-FY19 actual budget figure comparisons) were shared by the Warrant Committee.

20181106-Budget Hearing materials

Transfers made at Tuesday BoS meeting

BoS

The Board of Selectmen was asked to and did make the following transfers Tuesday, as part of the fiscal year end details that need to get addressed:

TOWN OF MEDFIELD
Transfers Requested Under The Provisions Of
Section 77of the Acts of 2006
amends M.G.L. Chapter 44 section 33B
Fiscal Year 2018
ORG TRF FROM: TRANSFERRED TO: TRANSFER AMT
01-123-1 01-134-1 Town Administrator’s salaries to Town Accntnt salaries                    3,447.31
01-433-2 01-433-1 DPW Solid Waste Equip Repr+Svc to Solid Waste Salaries                  15,000.00
01-123-1 01-195 Town Administrator’s salaries to Town Report warrant prntng                    2,941.41
01-912-2 01-914-2 Worker’s Comp Ins to Health Ins                  34,297.00
01-945-2 01-914-2 Property+Liability to Health Ins                    5,508.00
01-945-2 01-914-2 Indemnification Ins to Health Ins                    7,757.00
01-210-4-2 01-210-1-2 Traffic Markings to Public Safety Building Op Expenses                  12,000.00
01-210-4-2 01-210-2-1 Traffic Markings to Police Salaries                  43,000.00
01-292-2 01-210-1-2 Animal Control Op Exp to Public Safety Building Op Expense                    3,000.00
01-292-2 01-292-1 Animal Control Operating to Animal Control Salaries                    1,576.00
01-220-6-1 01-220-7-1 Fire+Resc Admin salaries to Fire+Rescue Op salaries                  30,900.00
01-220-7-2 01-220-7-1 Fire+Resc Op-Contract Svc to Fire+Rescue Op salaries                    2,500.00
01-220-7-2 01-220-7-1 Fire+Resc Op-Gasoline Exp to Fire+Rescue Op salaries                    5,000.00
01-220-6-2 01-220-7-1 Fire+Resc Admin Dues+Membershps to Fire+Rescue Op salaries                       500.00
01-220-6-2 01-220-7-1 Fire+Resc Admin Training to Fire+Rescue Op salaries                    1,800.00
15
               169,226.72

Election results

All questions passed, but margins vary.  Taxes will go up about 10% to pay for budget increases and the overrides.

20180611-Spec Elec June 11 2018_1_Page_1

Election today

Election banner

 

20180611-specimen ballot

2018 Override Information Town of Medfield, Massachusetts The Medfield Board of Selectmen have prepared this information sheet to provide information regarding the five (5) Override questions on the June 11, 2018 Election Ballot. What is Proposition 2 ½? Limits the annual increase in the amount of revenue a city or town may raise from local property taxes. This is known as the annual levy limit. The actual tax rate, up to the levy limit, depends on the amount of spending approved by the Annual Town Meeting and other sources of revenue like state aid and excise tax revenue. The law allows the city or town to increase the levy limit with approval of voters at an election like the one we are having on June 11th . Also restricts amounts a town can borrow without specific authorization, but this is not applicable for the items on the June 11th ballot. Operating Override—permanently increases Medfield’s levy limit and becomes part of the base for calculating future years’ allowable 2 ½ % increases in levy limits. Capital Exclusion— increases the amount of property tax revenue a community may raise for only one year in order to fund a specific project. It does not increase the community’s levy limit used to determine allowable taxes in future years. Stabilization Fund Override—permanent override that is earmarked for a stabilization fund voted by Town Meeting. After the first year, the Selectmen decide the amount to be appropriated each year into the stabilization fund up to the amount approved by voters plus an annual 2 1/2 % increase. The amount is decreased if the Selectmen vote to appropriate a lower amount than what was originally authorized when the override was approved, with the decreased amount then becoming the new base against which the 2 1/2 % increase is calculated in each future year. PROPOSITION 2 ½ BALLOT QUESTIONS Question #1: Shall the town be allowed to assess an additional One‐Million Dollars ($1,000,000) in real estate and personal property taxes for the purpose of funding the Municipal Buildings Stabilization Fund created pursuant to GL Chapter 40, Section 5B for the fiscal year beginning July first, two‐thousand and eighteen? Type: Stabilization Fund Override Yes Vote: If you vote YES you are agreeing with the Annual Town Meeting Vote to increase the levy limit by One Million Dollars and create a stabilization fund. For FY19 the One Million Dollars would fund the Dale Street Feasibility Study. In the following year the Board of Selectmen may appropriate an amount up to the One Million Dollars plus 2 ½ percent for the Municipal Buildings Capital Stabilization Fund to maintain, upgrade, or construct municipal/school buildings, with subsequent year limits rising by 2 ½ % each year. No Vote: If you vote NO, the Dale Street Feasibility study will not be funded and the Municipal Buildings Capital Stabilization Fund will not be funded. June 11, 2018 Special Election CENTER at Medfield One Ice House Road Polls Open 6AM to 8PM Question #2: Shall the Town of Medfield be allowed to assess an additional One‐Million Six‐Hundred and Sixty Three Thousand One‐Hundred Three Dollars ($1,663,103) in real estate and personal property taxes for the purpose of increasing school and town departmental operating budgets for the fiscal year beginning July first, two‐thousand and eighteen? Type: Operating Override Yes Vote: If you vote YES you are agreeing with the budget adopted by the Annual Town Meeting, which requires an increase in the levy limit of $1,663,103. This reflects a 3.88% increase to the Town’s operating budget (including a 9% increase in health and pension benefits for Town and School employees) and a 6.16% increase to the School Department budget. This increase in the tax levy will be a permanent increase in the base used to determine future year’s levy limits. No Vote: If you vote NO, the town will not increase the levy limit and will instead adopt the balanced budget as voted at Town Meeting. A balanced budget reflects a 3.37% increase to the Town’s operating budget (including a 9% increase in health and pension benefits for Town and School employees) and a 3% increase to the School Department Budget. Question #3: Shall the Town of Medfield be allowed to assess an additional Two‐Hundred Fifty Thousand Dollars ($250,000) in real estate and personal property taxes for the purpose of providing Advanced Life Support (ALS) services for the fiscal year beginning July first, two‐thousand and eighteen? Type: Operating Override Yes Vote: If you vote YES, you are agreeing with the Annual Town Meeting vote to provide ALS services within the Fire Department by hiring additional Paramedic personnel and/or training existing FF/EMT’s as Paramedics. No Vote: If you vote NO, the Town of Medfield will not provide an ALS level of service and will remain at a basic life support level (BLS) Question #4: Shall the Town of Medfield be allowed to assess an additional One‐Hundred Fifty Thousand Dollars ($150,000) in real estate and personal property taxes for the purpose of preparing a Feasibility Study for a new park and recreational facility for the fiscal year beginning July first, two‐thousand and eighteen? Type: Capital Exclusion Yes Vote: If you vote YES, you are agreeing with the Annual Town Meeting vote to temporarily increase the tax levy for one year to conduct a feasibility study to evaluate potential sites for a new Parks and Recreation facility. This increase in the levy limit will only be in effect for FY19. No Vote: If you vote NO, the feasibility study for a new Park and Recreation facility will not be completed. Question #5: Shall the Town of Medfield be allowed to assess an additional One‐Hundred and Fifty Thousand Dollars ($150,000) in real estate and personal property taxes for the purpose of preparing a Town‐wide master plan for the fiscal year beginning July first, two‐thousand and eighteen? Type: Capital Exclusion Yes Vote: If you vote YES, you are agreeing with the Annual Town Meeting vote to temporarily increase the tax levy for one year to fund an update to the last comprehensive Master Plan which was completed in 1964. This increase in the levy limit will only be in effect for FY19. No Vote: If you vote NO, completion of an update to the current Master Plan will not be accomplished in FY19.

Snow deficit was $122,664.58

Per email today forwarded by Mike Sullivan –

snow plow

From: Joy Ricciuto
Date: Thu, Jun 7, 2018 at 12:37 PM
Subject: Final snow deficit

$122,664.58