Council Hears Presentation On Property Tax Classification For FY2024

Report On The Meeting Of The Amherst Town Council October 17,2022. Part

This is a report on what transpired at the Town Council meeting of October 17, 2022, prior to the truncation of that meeting due to Mandi Jo Hanneke’s invocation of Section 2.10(c) of the Amherst Home Rule Charter, to end discussion of a motion and the subsequent adjournment of the meeting in protest of her actions. 

The meeting was held in-person and over Zoom and was recorded. The recording can be viewed here. 

Present 
In Town Hall: President Lynn Griesemer (District 2) and Ana Devlin Gauthier (District 5)

On Zoom: Mandi Jo Hanneke, Andy Steinberg, and Ellisha Walker (at large), Michele Miller (District 1), Pat DeAngelis (District 2), Dorothy Pam and Jennifer Taub (District 3), Anika Lopes and Pam Rooney (District 4), Shalini Bahl-Milne (District 5). Absent: Cathy Schoen (District 1)

Staff: Paul Bockelman (Town Manager), Sean Mangano (Finance Director), Sonia Aldrich (Comptroller), Kim Mew (Principal Assessor), Athena O’Keeffe (Council Clerk)

Although the public has been allowed to attend council meetings in person since August, no one has yet to attend. Twelve people were present on Zoom.

Introduction To Tax Classification And Recommendations
Assessor Kim Mew and Finance Director Sean Mangano introduced the options for assessing property tax values for FY 2024. A public hearing and vote on the tax classification will occur at the November 7 town council meeting.

The town must decide whether to have a single property tax rate or a split rate that offers different rates for residential, commercial, industrial, and personal properties. Mew said that 239 of communities in Massachusetts use a single tax rate and 108 have a split rate. In general, municipalities with less than 30% commercial properties use a single rate, which is what the Board of Assessors recommends for Amherst. In Amherst, 88% of property is residential, while only 6.5% is considered commercial. Most investment properties are not considered commercial in this system. Personal property, which is mostly owned by utilities, is 4.5%. 

Using the maximal allowed reduction in the residential tax rate would result in an average of $590 decrease in annual property tax for residential properties, she said, and an average increase of $5,100 for “commercial” properties. Apartment houses and mixed-use buildings are considered “residential”, not “commercial” . Mew said that a split tax rate would have an adverse impact on Amherst’s limited number of “businesses”, and the Board of Assessors recommended against implementing it next year, keeping with its long tradition of a single tax rate.

The other decision that needs to be made about the tax classification is whether to offer a residential exemption that would shift some of the tax burden from some owner-occupied properties to non-owner occupied ones. Mew explained that non-owner occupied residential properties include apartment buildings, nursing homes, group homes, assisted living facilities, second homes, non-owner occupied rentals, including non-owner occupied units in duplexes and triplexes, residential property  held in trusts, and properties whose residents include family members who are not on the deed as owners.

According to Mew, 66% of properties in Amherst are considered owner-occupied. Because of the number of new properties built in 2022, she expects the FY 24 property tax rate (which is not the same as actual property taxes) to decrease. With a residential exemption, 10% of owner-occupied homes and all non-owner occupied properties would see an increase in taxes, she said. Typically, the increases would be less than $1,000, but large properties could pay over $10,000 more. Instituting and administering a residential exemption would involve more work for the Assessors’ Department, which  currently employs 2.5 full-time equivalents. The Board of Assessors recommends against adopting a residential exemption.

In response to some councilors who wanted to hear about the advantages of a residential exemption, Mangano said that the residential exemption probably would not benefit lower income residents, who are often renters, because landlords could just pass additional costs down to the renters and could increase rents , especially in the apartment complexes. Michele Miller (District 1) said she had contacted a few communities with the residential exemption, and that most assessors she spoke with expressed were concerned about the amount of work needed to set up and monitor it. Mandi Jo Hanneke (at large) agreed that landlords would pass all of their increase in property taxes to their tenants.

Chair of the Board of Assessors Richard Morse stressed that  the board tries to provide tax relief to seniors and residents with disabilities and knows how hard it is for some people to pay their property taxes. He said he worries that a residential exemption does not shift the burden to those who are able to pay, but to low-income renters instead.

Council Workshop On Rental Registration Bylaw Yields Few Suggestions
The Community Resources Committee (CRC) of the council has been working on revising the rental registration bylaw since March, and held a listening session for the public in July, with  another planned for October 23. CRC Chair Hanneke presented the current working draft of the bylaw to obtain feedback from fellow councilors.

Most controversial was the current provision limiting the number of unrelated occupants in any one unit to four. Some councilors thought that larger apartments and houses should be allowed to have more occupants, but others argued that increasing the allowed number would put more stress on neighborhoods that have a large number of rentals. Jennifer Taub (District 3) noted that each occupant of the rental units in her area usually has a separate lease, and increasing the number of tenants in a unit would be more likely to simply increase the total rent collected by the landlord than to decrease the rent each tenant pays. She also explained that the habits and impact of families/graduate students generally differ from those of youthful undergraduate students, in response to statements that they are the same.

Hanneke said that the CRC would continue to work on the draft of the bylaw.

Public Forum On Special Appropriations Draws Little Comment
At the October 3 council meeting, Mangano had presented a set of recommended financial orders to utilize excess free cash from FY 2022. Free cash would be used to fund road and sidewalk repairs ($1 million), the track and field upgrade at the high school ($900,000), the reparations fund for Black residents ($134,000), and creation of a capital stabilization fund ($1.6 million). The capital stabilization fund is also slated to receive $7.8 million from the general stabilization fund, while still maintaining the general fund at 10% of the budget.

He also proposed increasing the operating budgets of the town, the schools, and the library by 0.05% to counteract the impacts of inflation and fund new initiatives, such as the four firefighters hired with American Recovery Act (ARPA funds), the elementary school arts and technology teachers, and the mental health initiatives at the regional schools. This would be funded through state aid. 

All of the above proposed allocations passed on the council’s consent agenda with the exception of the funds for the high school track and field. Dorothy Pam (District 3) expressed concern about the artificial turf called for in the plans for the field. Because of the abrupt adjournment of the council meeting after Hanneke truncated discussion of the July 5 incident between a group of largely BIPOC youths and two police officers, the track and field project was discussed at the October 18 Joint Finance Committee and Town Council meeting. It was decided to defer a vote on the allocation of funds for this project until November 21, after feedback was obtained from the Board of Health.

The council also approved the letter Griesemer drafted to UMass regarding the university’s search for a new chancellor. The warrant for the November 8 election was also passed on the consent agenda.

Comptroller Sonia Aldrich Plans To Retire

Town Manager Paul Bockelman announced that long-term comptroller Sonia Aldrich is planning to retire in 2023. Aldrich began working as the parking clerk on January 20, 1987 and held several positions in the Finance Department before becoming the comptroller.

Upcoming Meetings

October 23 from 1 to 3 p.m.: District 4 meeting at the Amherst History Museum

October 24 at 7 p.m: Second community forum on rental registration bylaw https://amherstma.zoom.us/j/83677757019#success 

November 1 at 6:30: Joint meeting between the Town Council and the Community Safety and Social Justice Committee

November 3 at 4:30 p.m.: Public hearing on amendments to the Zoning Bylaw regarding food and drink establishments

November 7 beginning at 5 p.m: Town Council reading period on Town Manager evaluation. Discussion of Budget indicators. Public Forum and vote on tax classification. Regular Town Council meeting

November 21 at 6:30 p.m: First public forum on the FY 2024 budget.