Town Council - Ways & Means Committee

Braintree Town Council MEMBERS Joseph Reynolds, Chairman Committee of Ways & Means Julia Flaherty, Vice-Chairwoman One JFK Memorial Drive Elizabeth Maglio, Member Braintree, Massachusetts 02184 MINUTES Thursday, December 1, 2022 A meeting of the Committee of Ways & Means was held Remote via Zoom, on Thursday, December 1, 2022 at 12:00p.m. Councilor Reynolds was in the Chair. Clerk of the Council, Susan Cimino conducted the roll call. Present: Joseph Reynolds, Chairman Julia Flaherty, Vice-Chairwoman Elizabeth Maglio, Member Meredith Boericke, Council President (ex-officio) Also Present: Nicole Taub, Chief of Staff/Town Solicitor Ed Spellman, Finance Director Bob Cole, temporary Deputy Assessor Bob Cusack, Chairman of the Board of Assessors Susan O’Brien, Board of Assessors Robert Connelly, Board of Assessors Dennis Gallagher, Retirement Director Shawn McGoldrick, Town Auditor December 1, 2022 Ways & Means Committee 1 of 7 Approval of Minutes • May 9, 2022 MOTION: to approve the Minutes of May 9, 2022. Motion: by Councilor Flaherty to approve Minutes of May 9, 2022 Second: by Councilor Maglio Roll Call Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) Old Business • None New Business • 22 065 Mayor: Tax Rate Classification or take up any action relative thereto Chairman Reynolds asked if anyone would like to speak on this item. Nicole Taub, Chief of Staff explained the Tax Rate Classifications: The Tax Classification "Shift" Each municipality has the option of "shifting" an excess portion of the tax burden onto the commercial properties in town to alleviate some of the residential burden pursuant to M.G.L. Chapter 40, Section 56. The majority of municipalities in Massachusetts have a single unified tax rate for both residential and commercial properties. Braintree first adopted a shift in 19 86. A mean average value is derived by dividing the total value of each class by the number of parcels in each class. Adoption of the shift will result in an estimated tax rate of $9.77 per thousand dollars of residential value which is .18 less then the prior Fiscal Year of 2022. It is important to note that values are set annually based on market conditions as of January 1st using the prior calendar year's data (2021). As a result, these values are set based on sales and market data during the course of the pandemic and resulting economic conditions. For FY23, the mean average residential property value (derived by taking the total value of all residential property and dividing by the number of residential parcels) is $593,028.06 (up from $563,445.44 last year). By adopting a 175% shift, the average residential parcel valued at $593,028.06 would pay a bill of $5,793.88.Without the shift, the same property would pay a bill of$ 7,157.85 As a result, adopting the 175% shift reduces the average FY23 single family residential tax bill by over $110.00 per month, or $1,300 in total. Compared the last year's average residential tax bill ($5,606.28), the projected annual adjustment for FY23 is $187.60. The Board of Assessors has recommended that the Town maintain the current residential shift and I support their recommendation. Mindful of the economic times in our state, it remains prudent to continue to provide a measure of property tax relief through tax classification when possible. December 1, 2022 Ways & Means Committee 2 of 7 Residential and Commercial Values There has been an overall market increase of 5.26% for residential values this year in comparison with FY22. As noted above, the mean average residential value has increased from $563,445.44 to $593,028.06. This includes all types of residential property with the average single-family home increasing in value from $583,055.51 to 613,913.32. We saw value increases in the commercial property class of 3.47%. However, the industrial property class increased by 6.94%, even more that the residential class. Overall, the commercial and industrial classes increased by 4.05%. The projected commercial and industrial tax rate is expected to go down slightly from $21.64 per thousand to $21.20 per thousand. The residential value increase (5.26%) being higher than the commercial and industrial increase (4.05%) results in a modest increase in the levy share to the residential class from 64.31% to 64.49%. Small Business Exemption The Board of Assessors requests that you renew the adoption of the small business exemption. This exemption reduces the property tax burden for commercial properties employing fewer than ten people and whose assessed value is less than $1 million. Small businesses play an important role in our community and our economy as a whole and the exemption remains an essential part of their continued operations. Open Space Discount Municipalities are allowed to discount the value of properties classified as open space by twenty five percent (25%) of their value. The Town of Braintree has no property that falls under the open space classification, so the question of whether or not to adopt a discount is moot. However, as a formality it is requested that the Town Council formally vote to decline to adopt an open space discount. Residential Exemption The Town may adopt a residential exemption for all residential properties that are the principal residence of the taxpayer. The exempted value may not exceed twenty percent (20%) of the average assessed value of all residential properties. Adopting the residential exemption increases the residential tax rate. The amount of the tax levy paid on residential properties remains the same, but because of the exempted valuation, it is distributed over less assessed value. This would result in a reduction in the taxes paid by residents in low and moderate value homes and increase bills for owners of high value homes, rental properties or vacation homes. The Assessors recommend not adopting this exemption. The residential exemption requires careful study prior to implementation. The impact of the increased residential rate, the appropriate percentage of value to be exempted and amount of relief it would actually provide to the average resident need to be clearly identified. The majority of communities that have adopted this exemption have high value vacation or rental properties that bear the additional tax burden. Such properties are not found in Braintree. December 1, 2022 Ways & Means Committee 3 of 7 Members asked what the guidance that is followed to understand when the maximum tax shift is appropriate or to choose a different shift or not. Bob Cole stated your commercial properties are basically split into two categories like your personal property small businesses plus you have large scale commercial real estate properties. You have a commercial base and a personal base for smaller businesses. When you see the threshold of the small businesses go down then you start to consider if you want to adjust the personal property base for the smaller businesses. Commercial properties are still assessed for $8 and $9 million and selling for $16 and $17 million. The value of the properties is still high. That is a good indication that businesses are going to continue to move into Braintree. We are seeing a lot of big commercial land sales which is good for the town. There is no indication right now that the 1.75 is a bad number. Moving forward if we see massive losses in commercial of over 10-15% then you might want to look at that 1.75 shift and look at a 1.6 or 1.7 which would raise your taxes on the residential but would relieve some pressure off the commercial property. If you shift away from commercial then residents pay more. Bob Cole stated the small business exemption is giving the small businesses who find it hard to stay in business an exemption. Members did not vote on Order 22 065 items 1 through 4. See below for Motion to Table to a future meeting. 1. To apply the tax rate classification shift. MOTION: Be it ordained that the Town of Braintree, through the Braintree Town Council, adopt the recommendation of the Mayor and the Board of Assessors to approve the Classification Tax Rate Shift of 175% to be applied to commercial, industrial, and personal property. 2. Re: The small business exemption. MOTION: To approve the "Small Business Exemption" as recommended by the Mayor and the Board of Assessors in a memorandum to the Town Council dated November 28, 2022, and as filed with the Office of the Town Clerk. 3. Re: The open space discount. MOTION: To continue to adopt the recommendation of the Mayor and the Board of Assessors, as outlined in a memorandum to the Town Council dated November 28, 2022, and as filed with the Office of the Town Clerk to decline the "Open Space" discount. December 1, 2022 Ways & Means Committee 4 of 7 4. Re: The residential exemption. MOTION: To continue to adopt the recommendation of the Mayor and the Board of Assessors, as outlined in a memorandum dated November 28, 2022, and as filed with the Office of the Town Clerk to decline the adoption of the "Residential Exemption." Chairman Reynolds asked for a Motion to Table Order 22 065 item 1 through 4 to a future meeting of this committee. Councilor Flaherty stated a Motion to Table Order 22 065 item 1 through 4 to an upcoming Ways & Means meeting. Motion: by Councilor Flaherty to Table Order 22 065 item 1 through 4 to an upcoming meeting Second: by Councilor Maglio Roll Call Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) • 22 067 Mayor: Re-Appointment – Braintree Contributory Retirement Board, Edward J. Spellman, Jr. or take up any action relative thereto Mr. Spellman has served on the Retirement Board since 2009. This is a request for his re-appointment for a three-year term. We are very fortunate to have Ed as a voice on this board. Chairman Reynolds asked for a Motion to be read. Councilor Flaherty read the following Motion for favorable recommendation to the full Council Order 22 067: MOTION: Upon the request of his honor, the Mayor, the Town of Braintree, through the Braintree Town Council, and in accordance with Sections 3-3 of the Charter of the Town of Braintree and Massachusetts General Laws, Chapter 32, Section 20(4)(C), to approve the re-appointment of Edward J. Spellman, Jr. to the Braintree Contributory Retirement Board for a three-year term. Motion: by Councilor Flaherty to approve Order 22 067 Second: by Councilor Maglio Roll Call Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) December 1, 2022 Ways & Means Committee 5 of 7 • 22 068 Mayor: Re-Appointment – Braintree Contributory Retirement Board, Joseph R. Driscoll, Jr. or take up any action relative thereto Mr. Driscoll has served on the Retirement Board since 2019. This is a request for his re-appointment for a three-year term. Chairman Reynolds asked for a Motion to be read. Councilor Flaherty read the following Motion for favorable recommendation to the full Council Order 22 068: MOTION: Upon the request of his honor, the Mayor, the Town of Braintree, through the Braintree Town Council, and in accordance with Sections 3-3 of the Charter of the Town of Braintree and Massachusetts General Laws, Chapter 32, Section 20(4)(C), to approve the re-appointment of Joseph R. Driscoll, Jr. to the Braintree Contributory Retirement Board for a three-year term. Motion: by Councilor Flaherty to approve Order 22 068 Second: by Councilor Maglio Roll Call Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) • 22 069 Mayor: Acceptance of Donations or take up any action relative thereto Nicole Taub explained the Maria Dy Dillon Memorial Scholarship has been established by her network of friends to honor Maria, who passed away after a year-long battle with cancer. Maria was an integral member of the corporate finance teams at the consulting firms of BRG, FTI Consulting and PWC for close to three decades. Maria had a special relationship with Braintree High School and highly valued the strength of its academic program. Her goddaughter, Maeve Hanrahan, was a graduate of the Class of 2022 and one of her closest colleagues of over 20 years, Robert Duffy, was a graduate of the Class of 1980. While working in corporate finance, Maria was a mentor and trusted advisor to countless young associates at the start of their careers. She was especially impressed by the consultants who joined her teams after graduating from the Isenberg School of Management at the University of Massachusetts. In her memory, the Maria Dy Dillon Memorial Scholarship will be awarded annually to a graduating senior from Braintree High School that is planning to attend the Isenberg School of Management at the University of Massachusetts at Amherst. The current fund balance is $10,200.00. Chairman Reynolds asked for a Motion to be read. December 1, 2022 Ways & Means Committee 6 of 7 Councilor Flaherty read the following Motion for favorable recommendation to the full Council Order 22 069: MOTION: MOTION: That the Town of Braintree be and hereby is authorized, in accordance with Section 53A of Chapter 44 of the Massachusetts General Laws to accept the following gifts upon the conditions attached and herein set forth: DONOR GIFT PURPOSE Maria Dy Dillon Memorial Scholarship $10,200 Maria Dy Dillon Memorial Scholarship Motion: by Councilor Flaherty to approve Order 22 069 Second: by Councilor Maglio Roll Call Vote: For (3–Flaherty, Maglio, Reynolds), Against (0), Absent (0), Abstain (0) It was unanimously voted to adjourn the meeting at 1:11p.m. Respectfully submitted, Susan M. Cimino Clerk of the Council Documents provided for Meeting • May 9, 2022 Minutes • 22 065 Mayor: Tax Rate Classification or take up any action relative thereto • 22 067 Mayor: Re-Appointment – Braintree Contributory Retirement Board, Edward J. Spellman, Jr. or take up any action relative thereto • 22 068 Mayor: Re-Appointment – Braintree Contributory Retirement Board, Joseph R. Driscoll, Jr. or take up any action relative thereto • 22 069 Mayor: Acceptance of Donations or take up any action relative thereto December 1, 2022 Ways & Means Committee 7 of 7