Town Council - Ways & Means Committee

Braintree Town Council MEMBERS Meredith Boericke, Chairwoman Committee of Ways & Means Peter Morin, Vice-Chairman One JFK Memorial Drive Joseph Reynolds, Member Braintree, Massachusetts 02184 Julia Flaherty, Member Elizabeth Maglio, Member MINUTES Wednesday, November 20, 2024 A meeting of the Committee of Ways & Means was held in Johnson Chambers on Wednesday, November 20, 2024 at 6:45pm. Councilor Boericke was in the Chair. Clerk of the Council, Susan Cimino conducted the roll call. Present: Meredith Boericke, Chairwoman Julia Flaherty, Member Elizabeth Maglio, Member Joseph Reynolds, Member Not Present: Peter Morin, Vice-Chairman Also Present: Michael Esmond, Director of Municipal Finance John Thompson, Asst DPW Director/Town Engineer Paul Sullivan, Deputy Assessor Approval of Minutes • None Old Business • None November 20, 2024 Ways & Means Committee 1 of 6 New Business • 24 055 Mayor: Transportation Infrastructure Enhancement Trust Fund or take up any action relative thereto Councilor Boericke, Chairwoman asked if anyone from the Mayor’s staff would like to speak. Director Esmond explained annually, the Town receives money from the Commonwealth's Transportation Infrastructure Enhancement Trust Fund (the "Fund") to "address the impact of transportation network services on municipal roads, bridges and other transportation infrastructure or any other public purpose substantially related to the operation of transportation network services in the city or town including, but not limited to, the complete streets program... and other programs that support alternative modes of transportation." The Fund was established in 2016 and is funded through a statutory per ride assessment on trips conducted by Transportation Network Companies (“TNCs") in Massachusetts. For calendar year 2023, the Commonwealth collected approximately $15.7 million from a $0.20 per-ride assessment on each rideshare trip that started in Massachusetts. Fifty percent of the funds are proportionately distributed based on the number of rides that originated in each municipality within the Commonwealth. In 2023, rideshare companies provided about 78 million rides that started in Massachusetts, with Braintree's share, a total of 498,000, representing 0.6% of the annual statewide amount. Based on this data, the total revenue from the Fund that has been allocated to Braintree is $49,795.10. This represents a 31% increase in funding from the $38,024.50 that the Town received for 2022 and is just shy of the 2019 high-water award amount of $50,219.90. The Town is required to submit a report to the Division no later than December 31, 2024, detailing the projects and the amount used or planned to be used for transportation-related projects. Similar to prior fiscal years, these funds will be used to support traffic calming measures throughout the Town, purchase of traffic calming equipment, and contracted services for traffic signal maintenance and repairs. John Thompson explained this will be used for traffic related equipment specifically for traffic calming measures like speed radars and traffic control signs and repairs on existing traffic control systems. Most recently we are looking to use some funding along the guardrails. Councilor Flaherty asked when you receive this money do you divide it into different buckets or use as needed? Mr. Thompson stated it is really use as needed. Chairwoman Boericke asked for a better line of site for roadway repairs and what’s in the plan. Councilor Maglio called remote into the meeting at 6:50pm and stated she is not prepared to vote on this due to just coming into the meeting. Motion by Councilor Flaherty for favorable recommendation to the full Council: MOTION: That the sum of $49,795.10 received from the Commonwealth of Massachusetts Transportation Infrastructure Enhancement Trust Fund be appropriated to Department of Public Works to be spent in accordance with St. 2016, c. 187, s. 8(c)(i). Motion: by Councilor Flaherty to approve Order 24 055 Second: by Councilor Reynolds Roll Call Vote: For (3 – Boericke, Flaherty, Reynolds), Against (0), Absent (1-Morin), Abstain (1-Maglio) November 20, 2024 Ways & Means Committee 2 of 6 • 24 061 Mayor: Tax Rate Classification or take up any action relative thereto Councilor Boericke, Chairwoman asked if anyone from the Mayor’s staff would like to speak. Finance Director Esmond and Deputy Assessor Paul Sullivan explained the Tax Rate Classification. We met last week with the Board of Assessors and went over this. Real estate Research Consultants (RRC) were hired and able to identify quite a bit of new growth in the personal property line. What we’ve seen in the town is residential growing faster than commercial. Parcel growth is also very slow growth, actually down. Just a note we are very far away from our tax ceiling that we are allowed under prop 2 ½. The memo submitted by the mayor states the following information: There are several key factors determining annual tax rates, with key items identified below: • Property Valuations for FY 2025 • Tax Classification Shift • FY2025 Override Property Valuations for FY 2025 Annually the Town’s Assessor’s Office publishes valuations held for each residential and commercial property located in Braintree. The valuations represent the estimated fair market value of the property, which are impacted by market changes annually. Additionally, the Assessor’s Office accounts for the underlying cost estimated for the property, including any improvements made, as well as income considerations associated with the use of a specific property. The levy (or annual property tax) is set as a fixed dollar amount each year and is apportioned to residential and commercial properties (including commercial, industrial and personal property) based on each classification’s share of the total valuation of all taxable properties. Consequently, annual changes in the values of the classifications in total and individual properties will play a key role in determining what amount a property owner owes in taxes. To support its requirement to determine fair market value for all Town properties the Assessor’s Office contracts with independent data and appraiser experts, who provide assistance in updating assessed property values based on market data and transactions. Permits are reviewed and properties are updated annually to reflect changes both positive (additions/improvements/upgrades) and negative (demo’s, fires, etc.) Sales are reviewed, income and expense information is obtained and analyzed to determine values for commercial and industrial parcels. The Assessor continually reviews parcels and updates property record cards to ensure correct data. Finally, updated valuations are reviewed and approved annually by the Massachusetts Department of Revenue, including amounts for new construction and any property reclassifications. The valuations of each property classification for fiscal years 2024 and 2025 are listed in the Table 1- Taxable Property Valuations, FY2024 and FY2025. All Taxable Property values increased by 5.2% in FY25. The most substantial contributor to this growth was from single family homes, which saw in aggregate valuations increase by 5.5%. This grouping makes up the overwhelming amount of the broader Residential (RES) classification, which grew at a comparable 5.4% rate. Overall, valuation growth was positive across all Residential groupings. Growth in the Commercial, Industrial and Personal Property (CIP) classification’s valuation equaled 4.6% in FY25. For tax purposes, personal property includes inventory, furniture, machinery and equipment used while conducting business. In FY25, there is notable growth in the valuation of Personal Property, November 20, 2024 Ways & Means Committee 3 of 6 which recorded a near 15% increase, primarily driven by an increase in recorded new growth. Excluding the growth in Personal Property, growth in the Commercial and Industrial groupings was 3.7% in FY25. Given that both major classifications saw similar growth, the percent share of the taxable valuations only changed slightly with RES growing from 80.81% to 80.93%, or growth of 0.1%, as a percent of taxable valuation. Therefore, the assigned tax burden of the annual levy, based on % of taxable valuations, is largely unchanged from the prior year. The following information was provided from slides at the meeting from Director Esmond: Residential factor shift provides for an 18% reduction in the tax burden that would otherwise be assigned the RES classification. Estimated New Growth at $462,000 above budgeted estimate. $8 million override represents 70% of the increase in annual tax levy to be raised for FY2025. FY25 New Growth Estimated New Growth at $462,000 above budgeted estimate. Small Business Commercial Exemption Tax rates set after implementing residential factor and Small Business Commercial Exemption, which results in a $0.07 increase in Commercial / Industrial to offset cost of Exemption for eligible businesses. Roughly 100 businesses used the Small Business program in FY24, exempting $5 million in property value from taxation saving them $101,000 in taxes. Single Family households represent 72% of taxable property units in FY25 and 63% of taxable value. For single family households the annual growth is determined 50 / 50 by growth in valuation and increase in tax rates. 35% of annual increase for average single-family household attributed to annual Prop 2 and ½ changes with the remaining 65% associated with the $8 million June 15 override. FY25 Tax Bills – Single Family • Under MGL (Chp. 59, Sec. 57C) Preliminary (Q1 and Q2) tax bills are set at prior-year tax plus 2.5% increase. • Q3 and Q4 bills reflect changes from tax classification and updated valuations and rates. • When annual taxes increase by greater than 2.5%, Q3 and Q4 tax bills must “catch up” for Q1 and Q2 bills each being lower than one quarter of the total year’s tax. • FY25 total tax (4 quarters) is 10.82% increase from prior year. • FY25 Q3 and Q4 bills represent: • 16.6% increase from FY25 Q1/Q2 • 16.0% increase from FY24 Q3/Q4 Paul Sullivan explained the bills for Q1 and Q2 are determined by taking the FY23 total yearly payments and divide by 4, add 2 ½ percent and the 1% CPC to get the Q1/Q2 totals. The bills for Q3/Q4 include the additional override payments for FY25. In FY26 all the payment quarterly bills should be the same payment for each quarter. November 20, 2024 Ways & Means Committee 4 of 6 Chairwoman Boericke asked how are home values determined? Paul Sullivan stated we are starting a cyclical re-inspection of property. Over the course of ten years the Department of Revenue wants you to visit those properties. So that is in the works. This is not new. This is a state law. If there is a sale of a house I verify and see there is a new kitchen I can update the field card and when the system does an update the cost will reflect a new kitchen/new bath/finished basements/new decks etc. Motions 1-4 read by Councilor Flaherty for favorable recommendation to the full Council: Motion #1: To Apply the Tax Rate Classification Shift MOTION: Be it ordained that the Town of Braintree 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 for Fiscal Year 2025. Motion: by Councilor Flaherty to approve Order 24 061 (1) Second: by Councilor Reynolds Roll Call Vote: For (4 – Boericke, Flaherty, Maglio, Reynolds), Against (0), Absent (1-Morin), Abstain (0) Motion #2: 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 18, 2024, and as filed with the Office of the Town Clerk for Fiscal Year 2025. Motion: by Councilor Flaherty to approve Order 24 061 (2) Second: by Councilor Reynolds Roll Call Vote: For (4 – Boericke, Flaherty, Maglio, Reynolds), Against (0), Absent (1-Morin), Abstain (0) Motion #3: 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 18, 2024, and as filed with the Office of the Town Clerk to decline the adoption of the Open Space discount for Fiscal Year 2025. Motion: by Councilor Flaherty to approve Order 24 061 (3) Second: by Councilor Reynolds Roll Call Vote: For (4 – Boericke, Flaherty, Maglio, Reynolds), Against (0), Absent (1-Morin), Abstain (0) November 20, 2024 Ways & Means Committee 5 of 6 Motion #4: The Residential Exemption 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 18, 2024, and as filed with the Office of the Town Clerk to decline the adoption of the Residential Exemption for Fiscal Year 2025. Motion: by Councilor Flaherty to approve Order 24 061 (4) Second: by Councilor Reynolds Roll Call Vote: For (4 – Boericke, Flaherty, Maglio, Reynolds), Against (0), Absent (1-Morin), Abstain (0) It was unanimously voted to adjourn the meeting at 8:15p.m. Respectfully submitted, Susan M. Cimino Clerk of the Council Documents provided for Meeting • 24 055 Mayor: Transportation Infrastructure Enhancement Trust Fund • 24 061 Mayor: Tax Rate Classification November 20, 2024 Ways & Means Committee 6 of 6