Selectboard Meeting Minutes
Otis Town Hall
Conference Room
Tuesday, December 07, 2021, at 7:00 PM
This meeting is being conducted remotely through Zoom. You must check back within 24 hours of the start time for a link to join.
Pursuant to the Governor’s March 12, 2020 order suspending certain provisions of the Open Meeting Law, G.L. c. 30A, Sec 18, this meeting is being held via remote participation to the greatest extent possible. Every effort is being made to ensure that any member of the public may access the meeting in real time, via technological means. Agendas will be amended to show the link and participation code to access the meeting no sooner than 48 hours before. Recordings and/or draft proceedings of the meeting will be available on our website as soon as possible.
Topic: Selectboard, Tax Classification Hearing
Time: Dec 7, 2021 07:00 PM Eastern Time (US and Canada)
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Attendance: Chair Larry Southard, Gary Thomas, Terry Gould, Brandi Page & Harald Scheid.
Call to Order:
7:00 PM
Tax Classification Hearing:
Harald presented the information on our FY22 tax rate process. Presentation attached. Terry had some questions on valuation. Brandi confirmed the numbers in Gateway that were submitted to the Department of Revenue. Motion was made and seconded to vote in accordance with M.G.L. Ch. 40 Sec 56, as amended, the percentage of local tax levy which will be borne by each class of real estate and perosnal property, relative to setting the FY22 tax rates and set the Residential Factor at 1.0, with a corresponding CIP shift of 1.0, pending approval of the town’s annual tax recap by the Mass DOR. Motion passed.
Adjournment:
7:18 PM
Fiscal Year 2022
Tax Classification Hearing
December 7, 2021
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Introduction
Prior to the mailing of 3rd quarter tax billings, the Select Board holds a public hearing to determine the percentage of the Town’s property tax levy to be borne by each major property class. This responsibility and procedure are described in Chapter 40, Section 56 of the Massachusetts General Laws.
The steps in completing the Classification Hearing are outlined below. Also provided is information about the levy, property assessments, and recommendations made by the Board of Assessors.
Steps in Setting Tax Rates
Pre-classification Hearing Steps
Step 1: Determination of the property tax levy (Budget Process)
Step 2: Determine assessed valuations (Assessors)
Step 3: Tabulate assessed valuations by class (Assessors)
Classification Hearing Steps
Step 4: Classification hearing presentation (Assessors & Select Board)
Step 5: Voting a tax shift factor (Select Board)
Post Classification Hearing Steps
Step 6: Sign the LA-5 Classification Form (Select Board)
Step 7: Send annual recap to DOR for tax rate approval (Assessors)
Step 8: Obtain DOR approval of tax rates (DOR)
Terminology
The following are definitions of the terms frequently used in the discussion of tax rates.
Levy: The tax levy (or levy) is the amount of property taxes to be raised. The levy amount is determined by the budget. The total amount of the approved budget less revenues from other sources like motor vehicle excise, municipal fees, and state aid is the amount to be raised from property taxation. The town will be raising $5,417,397 in property tax revenues. The tax levy has increased $120,534 (5.3%) over last year’s levy of $5,396,863.
Levy Ceiling: The levy ceiling is 2.5 percent of the full value of the Town. Based on the Otis’s aggregate valuation of $699,019,001, the town cannot levy taxes in excess of $17,475,475.
New Growth Revenue: Property taxes derived from newly taxable properties like new construction, additions, subdivisions, and personal property. The assessors have tabulated new growth revenues of $62,023.
Levy Limit: Also referred to as the “maximum allowable levy”, this is calculated by adding 2.5 percent of the previous year’s levy limit plus new growth revenue for the present fiscal year to last year’s levy limit. Exceeding the levy limit requires an override of Proposition 2 ½. For Fiscal Year 2022 the levy limit is $5,699,460.
Excess Levy Capacity: Excess levy capacity is the difference between the levy and the levy limit.
The Fiscal Year 2022 Levy Limit and Amount to be Raised
The following is a calculation of Otis’s levy limit for fiscal year 2022.
Fiscal year 2021 levy limit $5,506,920
Levy increase allowed under Prop. 2 ½ 137,673
New growth revenue 61,576
Excluded Debt to Pay Bonds -7,156
Fiscal year 2022 levy limit 5,699,013
Levy Ceiling 17,475,475
Levy to be raised $5,417,397
Excess levy capacity $281,616
Valuations by Class Before Tax Shift
Major Property Class Valuation Percent Res vs CIP%
Residential 653,481,095 93.4854 93.4854
Commercial 15,330,205 2.1931
Industrial 3,395,700 0.4858 6.5146
Personal Property 26,812,001 3.8357
TOTAL 699,019,001 100.0000
Shifting the Tax Burden
Municipalities with a large commercial/industrial tax base often see fit to shift the tax burden to help maintain lower residential taxes. Given Otis’s relatively small commercial, industrial, and personal property tax base, it takes a CIP tax rate increase of approximately 24% to yield a 1% residential tax rate reduction.
Tax Rates
The estimated single tax rate for fiscal year 2022 is $20.74 per thousand valuation.
Property Class FY2021 FY2022
Residential $8.47 7.75
Commercial $8.47 7.75
Industrial $8.47 7.75
Personal Property $8.47 7.75
Note that the FY2022 rate is an estimate and may change upon Department of Revenue review.
Tax Rates History
Fiscal Year 2020 $8.34 Fiscal Year 2017 $8.08
Fiscal Year 2019 $8.28 Fiscal Year 2016 $7.85
Fiscal Year 2018 $8.28
Tax Rate Options Average Taxes
| CIP Shift Factor | Res Shift Factor | CIP Rate | Res Rate | Single-family Average Tax | Commercial Average Tax |
| 1.0000 | 1.0000 | 7.75 | 7.75 | $2,838 | $2,838 |
| 1.1000 | 0.9930 | 7.70 | 8.53 | $2,820 | $3,124 |
| 1.2000 | 0.9861 | 7.64 | 9.30 | $2,798 | $3,406 |
| 1.3000 | 0.9791 | 7.59 | 10.08 | $2,779 | $3,691 |
| 1.4000 | 0.9721 | 7.53 | 10.85 | $2,757 | $3,973 |
| 1.5000 | 0.9652 | 7.48 | 11.63 | $2,739 | $4,259 |
Tax Impacts
Examples of Average Residential Single-family Tax Changes
Average Average
Property Class FY21 Value Avg. Tax FY22 Value Avg. Tax Change
Single Family Homes $326,600 $2,766 $366,200 $2,838 $72 (2.6%)
Board of Assessors Recommendation
The Board of Assessors recommends that the Select Board adopt a single tax rate to be applied to all classes of property in Otis.
Voting a Tax Shift Factor (proposed motion)
The Otis Select Board votes in accordance with M.G.L., Ch. 40, Sec. 56, as amended, the percentage of local tax levy which will be borne by each class of real and personal property, relative to setting the Fiscal Year 2022 tax rates and set the Residential Factor at 1.0, with a corresponding CIP shift of 1.0, pending approval of the town’s annual tax recap by the Massachusetts Department of Revenue.
Summary of Assessments (LA4)
Property Type Count Residential Commercial Industrial Personal Property
101-Single Family 1545 565,706,100 -0- -0- -0-
102-Condominiums 0 26,380,800 -0- -0- -0-
103,109-Misc Res 64 1,925,000 -0- -0- -0-
104-Two Family 9 1,925,000 -0- -0- -0-
105-Three Family 1 207,800 -0- -0- -0-
111-125-Apartments 2 741,200 -0- -0- -0-
130’s-Vacant Land 1,099 50,893,500 -0- -0- -0-
012-043-Mixed Use 25 7,626,695 7,314,205 -0- -0-
300-393-Commercial 36 -0- 7,676,300 -0- -0-
400-452-Industrial 9 -0- -0- 3,395,700 -0-
500-508-Pers. Prop. 1,158 -0- -0- -0- 26,812,001
600’s-Forestry 26 -0- 174,700 -0- -0-
700’s-Agricultural 5 -0- 23,900 -0- -0-
800’s-Recreation 9 -0- 141,100 -0- -0-
TOTAL BY CLASS 3,988 653,481,095 15,330,205 3,395,700 26,812,001
TOTAL TAXABLE PROPERTIES 699,019,001
TOTAL TAX EXEMPT PROPERTIES 36,501,700