HomeMy WebLinkAbout2016-08-09 Board Of Selectmen HandoutDRAFT MOTIONS
BOARD OF SELETMEN MEETING
AUGUST 9, 2016
Halsey, Sexton, Berman, Arena, Ensmin2er Lelacheur
3a) Move that the sale of the $211,000 Sewer Bond of the Town dated
August 22, 2016, to the Massachusetts Water Resources Authority (the
"Authority ") is hereby approved and the Town Manager is authorized
to execute on behalf of the Town a Loan Agreement and a Financial
Assistance Agreement with the Authority with respect to the bond. The
bond shall be payable without interest on August 15 of the years and in
the principal amounts as follows:
Year
Installment
Year
Installment
2017
$21,100
2022
$21,100
2018
21,100
2023
21,100
2019
21,100
2024
21,100
2020
21,100
2025
21,100
2021
21,100
2026
21,100
Further move that each member of the Board of Selectmen, the Town
Manager, the Town Clerk and the Town Treasurer be and hereby are,
authorized to take any and all such actions, and execute and deliver
such certificates, receipts or other documents as may be determined by
them, or any of them, to be necessary or convenient to carry into effect
the provisions of the foregoing vote.
3b) Move that the Board of Selectmen approve the proposed Senior Tax
Relief Home Rule Petition as discussed, and request that the final
language allow local flexibility in setting annual financial terms.
Move that the Board of Selectmen adopt a residential factor of for
Fiscal Year 2017, with the tax rate to be set at a Tax Classification
Hearing during the fall of 2016.
3d) Move that the Board of Selectmen call for a Special Town Meeting to be
held at the Reading Memorial High School Performing Arts Center on
Monday September 12th beginning at 7:30pm and that the Warrant for
the Special Town Meeting be closed on August 16th at the next
Selectmen's meeting.
Move that the Board of Selectmen indicate to the community their
intention to call for a Special Election to be held on Tuesday October
18th at the Reading Memorial High School Fieldhouse between 7:OOam
and 8:OOpm for the purpose of requesting an Override of Proposition 2-
1/2. The exact terms and language of the Override will be voted by the
Board on or before September 12th as required by state law.
Move to adjourn the meeting at p.m.
OF RFgO�y
Office of the Town Manager
J6�9`�NCORQ��P�
16 Lowell Street
Reading, MA 01867
To:
Board of Selectmen
781 - 942 -9043
townmanager @ci.reading.ma.us
www.readingma.gov /town - manager
From: Robert W. LeLacheur, Jr. CFA
Date: August 5, 2016
RE: Tax Classification
This memo seeks to present Tax Classification to the Board in a different light than has been seen
previously. In particular, I will dive more deeply into actual data than is typical during a time - constrained
formal Tax Classification Hearing, where a higher level conceptual discussion usually ensues. At the end
of this memo I will show impacts of Senior Tax Relief on this sector using this amount of detail. I hope
the Board finds this approach helpful.
Overview
Broadly, the town has two classes of taxable property — Residential and CIP (Commercial, Industrial, and
Personal Property). The Tax Classification discussion always simplifies these into Single Family
Residential and Commercial, as each of these represent about 80% to 85% of their respective classes. I
have attached the full set of data (see Exhibit 1.) that we send to and are then certified by the state from
FY16, FY11 and FY06 as some background. In terms of the data and consistency, please note that over
this period we have had four different Assessors.
Some trends and highlights include:
Residential: Flat parcel growth ( +0.1% annualized) in Single Family homes but a +1.1% increase in
average assessed value. Since the parcel growth is so low, that average assessed value is a fair
approximation for parcels in the sector. Note that in the past five years, after a slowdown in the housing
market nationwide, average assessed values have climbed 2.4% annually. The subsector has declined
from 80% of the town's assessed value to 76% recently.
Strong parcel growth ( +5.9 %) in condo units, with the average value increase of 0.7 %. Because the unit
growth is strong, one cannot apply this average change to individual parcels. The subsector has
increased from 5.5% to 8.9% of the town's assessed value, driven by Johnson Woods and Reading
Woods.
Apartments parcel growth has been slow ( +0.3 %) but the assessed values are up sharply ( +9.6 %) due in
part to the sale of Reading Commons. Persistently low interest rates have inflated asset values that
produce predictable cash flows, such as apartment rents. The subsector has increased from 1.2% to
2.6% of the town's assessed value
In total the Residential sector slowed in the middle of this period but ended with assessed values
annually 1.1% higher, and a 0.5% annual increase in parcel counts. The share of the assessed value in
town declined from 92.9% to 91.7 %.
jz-�
\ °�°
a°
o \° o\f 3° 0\°
O)� m
LD v f\
.ti
a �--� M N
n
LD
tO
O N ut a s
a
3
c
'1 O 00 O O 0) O n
H
N - N 00
N
V
q
'i LD V 00
N
N
M C
Y1
N '-I 'i
rl
L
V
N 0) 1-1 1\ N V1 lD LD
00
0) O O M
at
O
O
N o) M O O
N
f\
M 0) 1\ M Ln Ln (n 00
00
LO O O 0)
N
O
O
m O N fV 0
N
N
lO
f\ lD M N r-1 -1 M Lo
N
N N M I\
Ln
LD
tO
O lr C Ill 01
P'
N
0
00 LO V1 00 L!1 n 1\ V
N
n 1\ O n
O
00
Co
V 00 N V1 O
M
00'
>.
LL
V 00 N V) 00 N V 0)
V N N V V M V
N
!►
n N 00
-4 M V
O
e 4
LD
O
tO
O
r-1 V Ln m
.-1 00 V
M
N
V
-1 11
1-1
N
1-1
N
N
V) V) V) V) V) V) V) V)
N
V) VF VT V)
V!
V)
Vf
V) V) V) V). V)
V!
V)
Ln oo 00 tD 00 N N Vl
t0
M M O m
v
00
00
0) N m fn 0
Ln
O
V) 1\ M Ill V) V) M Ln
Ln
V1 O O N
LO
M
M
0) n M M Ln
Co
V)
Ln
OJ ~
'i
LD ID 111 L•-1 N o1 Ln N
N Vl N O l0 VI O 00
0)
p1
V) N N Q
.� N 01
r1t
N
lD
M
t0
M
N N O oc N
00 O O .-i Ol
n
O1
n
v
y
v 00 11 O .•-I O Ln V
'i
N 00 00
M
O
O
N Vl 11 1, LD
N
M
1b0
` LL
V N Ln V [i 'IT Ln
v
Ln V V)
-e
lD
lD
LD N Ln
N
N
r 1
'-0
r-
Q
VT N V1 tR iA V) VT V)
Vf
V) V) V) V)
V!
V?
V!
N in V} VT Vr N
iA
Vl•
In LD M N N e-1 N Lf)
N
0) O Ln O
t0
O
O
LD LO n O m
y
to
1\ Vl 00 0) LD N o) n
V t` C C 00 N N Lo
O
Ln
0) 1` N m
C ti O o)
to
00
O
N
O
N
r O V O O 00
n lD O .•-1 V) Cl)
t0
00
N
00
H
M 00 e-1 0) N M of 00
O
m V O)
tO
O
O
V V LD .-t V1 00
N
01
o) O N V) 0) .-1 M
1\
0) O LD
M
n
n
m V1 m 1` tD r-1
N
n
LL
:T :T M Vl V V M O
C
V V O
LO
t0
O V) 0) N
N
V
M -4
.--I
N
V M
VT V? VT V! N V) V) V)
V}
V) Ur V) V)
VT
VT
V1.
V) VT N V) u} VT
N
Vf
O
O Ln O Vl O N O O
0)
O
O
00 O O O C)
O
0 0
O O O O O O O
V
LL
W Ln .�
O
Ln
tG
O
C
L%f
Cn
e \° \ OR o
o
N
n LD O 'Cr o O O O
O
O
O
M 0 0 0 O
Ln
O
M
O O O N O O O
N
d>
r, LD N
O
O
m
W
O
N
LL
01
H to
o o a o
*
o
o
o a° off° off°
,y
LD 01 O M O tD O O
1\
O
O
00 O O O O
N
O
N
O O O O O O O
ON
>.
r, 0, N
N
O
LD
n
O
O
O1
V, o \° o \ o
\
o
y
N n tD M LO 0) a
l0
V M M 0)
a
n
P\
N O ut lD a
Ln
n
7
CN
LO Q1 r•1 rq o) V m
N
m 00 N M
M
f`
P\
00 O Lo m 00
01
H
C
N
S c
u e0
O o 0 0 o O O 0
0
0 0 O O
o
0
0
O O 0 0 0
0
0
0 0 0 0 0 0 0
0
0 0 0 0
0
00
V n n o 0
Co
00
N O N O 'i N V LD
Ln
N N ' o) o)
N
LD
LO
V) N C LD 01
N
Ln
M 01 V1 n Ol LO LD V1
N
m V O tD
Ln
O
0
O 00 tD n O
m
O
to
O
i, 00 Ln 0 0) 0) V N
N lD .•i V) O r 0) 01
O)
M
'-I 'i tD N
r 0) M
C
V
a
C 11 V N-
pp
OQ
n
LL
N O 1\ V M m LD Lo
Ln
O n
m
N
N
N m Lo V
Lf
N
'i O e-1 tD .--1 V r-1
f\
'-i
'.I
N
N
N
M
0) N '-I
M
N
N
t0
N
M
M
in V) V} Vt• V} VT u? V}
V}
VT
V*
VT V). N in V)
V1
VT
in
V) to V) V) V) V)
14
in
O O O O O ri
N
O O LD
0
O
O
O O O O O O
O
1`
4!
O O O O O O O n
1`
' O ILD
n
O
O
0) 0) O O Ln
M
1,
IS
V1 m LD LD 0) VI LD .-/
lD M Ln 11 O I 0) V
N
tO
00 LD lD M
LD Lo N
M
tD
N
00
N
00
M t\ " ti Ln N
V r 00 O Ln o)
N
Ln
Co
Ln
> N
0) 00 LD Ln O 00 N I`
00
0) V 1D
O
Ln
Ln
00 V C' M .-I LD
0)
V
N
t\ LD lD V o) V1 m LO
O
M -Z LD
Ln
LD
LO
Ln 00 0) O0 Ln Ln
N
Ln
(D }
O Ln LD N N -Y N n
M
O 'i r-
(3)
0)
01
V 00 n N
Ln
N
LL
00 IT M N N N
f\
-1
'.I
It
y
00 N -4
M
m
M
n
n
N
Q
N
VT VT VT V) VT VT V) VT
M
N
v?
Vf
V} VT V) uT VT
N
V)
N
VT t/T tf), t/) VT V) V)
N
M
VT
O O O O O O O 0)
M
O N lD .-i
00
0
0
O O O O O O
O
1\
0 0 0 0 0 0 0 D,
o)
o .-1 n 0
00
0
o
V Ln a o 0 M
LO
et
V 01 C V1 rl N O n
N
Ln Ln ' C m
M
0
0
C V N M Ln m
M
O
V1 0) M :T 00 LD V 00
O
O N 0)
N
M
L'1
00 11 00 M V1 to
N'
00
to
LD M V1 Ln n V V
O
V '-1 0)
Ln
Ln
V)
m O O LD n
O
O
N
O N N N N lD °0 LD
N
.--1 N LD
O
O
O
r. Vi M V
M
r1
LO N tD V Vl N O w
Rr
V '"� O
t0
O
O
Vl m N O
LT
0)
LL
LD Co L•-I N L-I N
Ln
O) r-1
O
1•1
N
N N
M
O
r,t m N .--1
0)
N
M
M
m
M
a
N V) V) N N VT V) V)
N
V)
N
in VT VT V) V}
Vf
N
Vf
Vf V) VT V) VT V)
in
Vt•
^
0 0 oe o o 0
10
.-4 0) V) m V M 00 M
Ln
O N O O
P
M
M
n N O O O
Q)
M
C C
O Ln e i . . 4 O O 'i
O
11 V O V
o
m
M
V O Ln O
N
O
R C
i1
L �
O O O) n M Co C
Ln
0) N m Ln
cn
N
'i
Co V m Ln N
N
l0
m O .-I Ln N m Ln rI
01
f` .--I
M
N
N
ID O)
1\
00
O
V 1\ M M
0)
r1
N
N .--1
a
t0
Y
n LL
lD
f\
00
C
7
00 O m -4 H r-1 V V
N
V M m m
M
LD
tD
N tD M M N V
m
O
0 N0
LD N m M m It .--1
M
Ln 00 M N
O
N
N
N N
M
t0
Y
d LL
lD
00
00
u
a
0) oo N v -1 IT O LD
-Cr
1, M m O
M
Ln
Ln
Ln v m m v
0
N
„
m M N .--1 M m N rI
O
o) rl
N
N
'.I
lD f\
Ln
00
e-1
Y
Ln N m N
Tr
'"I
N
'i ''1
M
01
00
LL
tD N
00
_
C
00 N
T
E
O
N
0)
_ C
?
u 3 'n
CL
O
E T •>
E 'c o E
c
c
f0
c c v u
f0
.r
Yl H c C `
'° v �° °6 a
a`
c c= -°
2 O E LL OJ J C
LL
;-°-
C
IC0
m m m O
01
m
ro •°- > •°-
? 7
16
i..
E
N E
y 01
C
i
O •C C= d 01
'D N .-
C
d
_N ° 0) LL a) U c -pp
C
C
c c c
E C C C E
E
z,
7
N
3
n p p d
C `p m a a s L1 V
Q
lYl C L 7 O v m f0 U C X zi
r.
OJ
W
E X_ E
E
i
F
°
a
c o° 0 3 L o o° o v
iif V 2 L.- J Q m> N m
ar
z
a
O
s
O
p o. o. a 0
v 0 0 0 V
0
u
-
a 0 a o a d o a a 0-
a a V d o V o o 0-10-1
a/
O
H
Commercial: Parcel growth was stronger in the strictly commercial subsector than that of Single Family
Homes at +1.0% annually and a +2.4% average assessed value. The next section of this memo will
describe why looking at averages in this subsector are tricky, however. For the overall sector, parcel
growth was up +0.7% and average values +23%, for a combined +3.4% increase in sector assessed
values (from $219 million to $306 million).
Note that there are subsectors called Mixed Use — in Reading that would be property split between
commercial and residential, such as 30 Haven (formerly the Atlantic grocery store). We report total
parcels to the state, and divide assessed value into the two components. For simplicity I have divided up
the parcel count pro -rata with the ratio of assessed values. This property class has grown by +9.1%
annually in Residential assessed values and +3.9% in Commercial assessed values.
Industrial: This sector has declined as property has been closed and redeveloped, for example the old
organ factory on Pierce Street.
Personal Property: This seldom discussed sector has been the source of strong tax growth in some
communities. That growth has been driven by technology equipment in the commercial sector, and by
pipeline and telecommunications infrastructure.
The parcel count drop of -2.9% annually is deceiving: Shortly after I arrived, as is allowed by state law we
eliminated parcels for which the cost of collection exceeded the tax collected. Note this in the line 'PP
Individuals non - incorporated' where parcels dropped from 268 in FY06 to 162 in FY11. The assessed
value of the sector however increased at a strong +9.5% annually, and the share is now about 1% of all
property taxes collected.
Note that the town (and many, many other MA communities) is involved in long- standing litigation with
the telecomm industry. Once this litigation has concluded, the Board of Assessors will give the
Selectmen a full report. At present they have adequate reserves set aside in their Overlay account for
this situation.
Commercial Property — Behind the Averages
For this analysis I will use only our most recent property data, which includes 206 commercial parcels.
Here is a look at how those properties segment by assessed value ranges:
Commercial
# prop % prop
Avg Val
% C tax
Taxes
Avg Tax
$100k - $500k
84
41%
$
311,010
8.6%
$ 379,092
$
4,513
$500k - $1mi1
61
30%
$
719,956
14.4%
$ 637,267
$
10,447
$1mil - $2mil
35
17%
$
1,373,140
15.8%
$ 697,340
$
19,924
$2mil - $3mil
8
4%
$
2,287,475
6.0%
$ 265,528
$
33,191
$3mil - $10mil
12
6%
$
4,407,367
17.4%
$ 767,412
$
63,951
$10mil +
6
3%
$
19,120,333
37.7%
$1,664,616
$
277,436
206
$
1,475,788
$4,411,255
$
21,414
As the table above shows, 71% of our commercial parcels are assessed at value below $1 million.
Broadly speaking these are your typical retail stand -alone stores and a variety of other small parcels.
Sometimes a business may consist of two or three of these small parcels. The $1 million to $3 million
range is generally commercial buildings with two or more tenants. Above $3 million are large
commercial businesses or multi- tenant properties. These two largest categories comprise only 9% of the
commercial parcels but pay 55% of the commercial taxes. All of the parcels above $10 million are in the
Walker's Brook area, and 5 of the 12 parcels between $3million and $10 million are in this same area of
town. Though evident from the prior table, here is a graph that depicts the inverse relationship between
parcel count and taxes paid in the Commercial sector in town:
Commercial Property— Desired Sector Expansion
On several occasions the Board has described a desire to grow the Commercial sector in Reading. Let's
assume the objective is to grow the sector by an additional 50 %, and look at two ways that could be
accomplished. First is simply to grow each of the six segments by 50% as follows:
Commercial
# prop %
prop
Avg Val
Avg Val
% C tax
Taxes
Avg Tax
Avg Tax
$100k - $500k
126
41%
$
311,010
8.6%
$ 568,638
$
41513
$500k - $1mil
92
30%
$
719,956
14.4%
$ 955,901
$
10,447
$1mil - $2mil
53
17%
$
1,373,140
15.8%
$1,046,010
$
19,924
$2mil - $3mil
12
4%
$
2,287,475
6.0%
$ 398,292
$
33,191
$3mil - $10mil
18
6%
$
4,407,367
17.4%
$1,151,118
$
63,951
$10mil +
9
3%
$
19,120, 333
37.7%
$2,496,924
$
277,436
218
309
$
$
1,475,788
$6,459,577
$ 6,616,883
$
21,414
Cleary there is not enough undeveloped land to support this type of expansion in the sector, even if at
the margin some commercial sectors are expanded into residential areas. Instead, a 50% expansion is
only possible in the largest segments as follows, where the second largest segment increase by 50% and
the largest segment doubles. This would be equivalent to adding a "Walkers Brook II" development:
Commercial
# prop % prop
Avg Val
% C tax
Taxes
Avg Tax
$100k - $500k
84
39%
$
311,010
5.9%
$ 379,092
$
4,513
$500k - $1mil
61
28%
$
719,956
9.9%
$ 637,267
$
10,447
$1mil - $2mil
35
16%
$
1,373,140
10.8%
$ 697,340
$
19,924
$2mil - $3mil
8
4%
$
2,287,475
4.1%
$ 265,528
$
33,191
$3mil - $10mil
18
8%
$
4,407,367
17.8%
$1,151,118
$
63,951
$10mil +
12
6%
$
19,120, 333
51.5%
$3,329,232
$
277,436
218
$
2,042,103
$6,459,577
$
29,631
Senior Tax Relief
To conclude this memo, I'd like to tie all of the previous analysis into a detailed look at the Senior Tax
Relief issue, and consequences of splitting the tax rate in some way to 'share' that tax relief as was
discussed at your last meeting. For shifting $1 million of property taxes away from low income seniors,
here are some parameters in the Table below. A factor of 1.0 means the Residential class bears the full
cost of the $1 million tax shift; a 1.19 factor means the Commercial, Industrial, and Personal Property
classes bear that full cost. Figures in between 1.0 and 1.19 show how that tax relief is shared between
the two classes of property:
Res
100%
92%
76%
50%
0%
CIP
0%
8%
24%
50%
100%
Factor
1.00
1.02
1.05
1.10
1.19
Here is a look at the impact on the Commercial sector by these various shifts, as measured by the
average tax bill within the segments of property previously discussed:
Commercial
% prop
1.00
1.02
1.05
1.10
1.19
$100k -$500k
41%
$
- $
90
$ 224
$ 451
$ 855
$500k - $1m i I
30%
$
- $
209
$ 518
$ 1,044
$ 1,980
$1mil - $2mil
17%
$
- $
398
$ 989
$ 1,991
$ 3,776
$2mil - $3mil
4%
$
- $
663
$-1,647
$ 3,317
$ 6,291
$3mil - $10mil
6%
$
- $
1,278
$ 3,173
$ 6,391
$12,120
$10m i l +
3%
$
- $
5,545
$13,767
$27,724
$ 52, 581
At your last meeting the three middle factors were discussed. The two smallest commercial segments
would pay an annual increase of $90 to $200 (1.02); $225 to $500 (1.05) or $450 to $1,000 (1.10) in
order to share in the Senior Tax Relief in proportions outlined in the previous table. Generally speaking,
tenants would share in the increases in the next two middle segments between $1 million and $3
million, and large businesses or developments would pay increases shown in the top two segments.
Some in the community have stated that the amount of commercial property in town would need to
increase in order for the economics of a split rate to be 'worthwhile'. In so saying they are considering
the leverage between saving $1 for homeowners at a cost of $10+ to business. That is true only in the
sense of 'average' and not true at the actual parcel level.
Consider the example where by adding 12 new properties in the Walker's Brook II example an additional
50% growth in the commercial sector could be envisioned as the most likely way this expansion
happens. Splitting the rate now at 8% CIP or then at closer to 12% CIP has the exact same impact on all
of the other 206 commercial properties in town.
I hope this deeper look into the Commercial sector has been helpful.
0� OF I?
�c
Office of the Town Manager 781 - 942 -9043
�e 16 Lowell Street townmanaRer @ci.reading.ma.us
�a o
J6�9'lNCORQ�pP� Reading, MA 01867 www.readingma.Rov /town - manager
To: Board of Selectmen
From: Robert W. LeLacheur, Jr. CFA
Date: August 7, 2016
RE: Tax Classification addendum
This memo adds some information that will be presented on Tuesday, so you may review it in advance.
Senior Tax Relief
As previously mentioned, factors in between 1.0 and 1.19 show how that tax relief is shared between
the two classes of property. Note that all the tax change information presented below ONLY relates to a
$1 million Senior Tax Relief package.
Res
100%
92%
76%
50%
0%
CIP
0%
8%
24%
50%
100%
Factor
1.00
1.02
1.05
1.10
1.19
Here is a look at the impact on the Commercial sector by these various shifts, as measured by the
average tax bill within the segments of property previously discussed:
Commercial
% prop
1.00
1.02
1.02
1.05
1.05
1.10
1.19
$100k -$500k
41%
$ - $
90
$
224
$
451
$ 855
$500k -$1mi1
30%
$ - $
209
$
518
$
1,044
$ 1,980
$1mil - $2mil
17%
$ - $
398
$
989
$
1,991
$ 3,776
$2mil - $3mil
4%
$ - $
663
$
1,647
$
3,317
$ 6,291
$3mil - $10mil
6%
$ - $
1,278
$
3,173
$
6,391
$12,120
$10mil +
3%
$ - $
5,545
$ 13,767
$ 27,724
$ 52,581
Here is a look at the impact on the Residential sector by these various shifts, as measured by the
average tax bill on the property value listed. Victor will provide some information on the relative
distribution around the average SF home value of $499,500:
Residential
1.00
1.02
1.05
1.10
1.19
$ 700,000
$
175
$
161
$
133
$
84
$ -
$ 600,000
$
150
$
138
$
114
$
72
$ -
$ 500,000
$
125
$
115
$
95
$
60
$ -
$ 400,000
$
100
$
92
$
76
$
48
$ -
$ 300,000
$
75
$
69
$
57
$
36
$ -
�L/14
TOWN OF READING
SPECIAL ACT FOR SENIOR TAX RELIEF (OUTLINE)
After close examination of both Home Rule petitions for Sudbury and Wayland, conversations
with program administrators in both communities, and, spirited discussions with the Board of
Selectmen and Town Manager, I offer you the following outline of what senior tax relief could
look like.
Oualifyina Criteria:
Must have received a Massachusetts Income Tax Circuit Breaker Credit. (last calendar year
The CB credit is income based so that some will qualify for the max credit of $1070
while it will be less for others.
By using the CB as a qualifier, we are removing a great deal of subjectivity from the
application process along with uncertainty as to how much one might receive. It also provides
for an outside source of verification from state approved sources.
Domiciled in Reading for the past 10 years.
10 years is about the longest period of time that you could go while maintaining
consistency with other statutory exemptions. Anything more may pose an unintended burden.
Also, domiciled allows for folks who may have downsized over the past few years to
apply for the exemption.
This type of qualifying criteria would also serve to significantly reduce the assessing department
staff workload and we would not foresee the need for permanent help; just maybe some
occasional help if necessary.
Exemption Amount:
Cap the shift within the residential class to $1,000,000
Tax relief should be a multiple of the taxpayers CB income tax credit. My
recommendation for the first year or 2 would be 1.5. So, someone that receives a max CB credit
of $1070 could receive an exemption of $1605. With a 1.5 credit amount, we are not exposing
recipients to drastic tax swings should the state develop its own program.
(If 400 people qualified at the max of $1070, at 1.5 the shift amount would be $642,000)
Also, 1.5 gives us an ability to move to 2.0 should an override be enacted. By that time,
we at least will have some applicant data to review.
The DOR was most helpful facilitating responses to the technical questions I raised.
Other Points:
I envision an application process in August, that way by the second week of September the
assessors will have the amount that we would need to shift.
A 1.5 benefit for the first go- around is both meaningful to the senior taxpayer while manageable
to the rest of the residential tax base funding it.
I believe this represents a great blend of the 2 HR Senior Exemptions out there. From Wayland
we use the CB income tax credit qualifier that is already income based and provides for
independent verification of qualifying criteria. And from Sudbury we make it a shift in the
residential class which pays for the benefit.
SENIOR CIRCUIT BREAKER CREDIT
What is it?
Senior citizens in MA may be able to claim a refundable income tax
credit for real estate taxes paid on residential property occupied as their
principal residence.
Eligible taxpayers may claim a credit equal to the amount by which their
property tax payments in the current year (excluding any exemptions or
abatements) and including water and sewer debt charges, exceed 10% of
their total income for the same current tax year.
For the purposes of the tax credit, a taxpayer's total income includes
taxable income as well as exempt income such as social security,
treasury bills and public pensions.
Who is eligible for the credit?
Taxpayer must be 65 years of age or older before January 1St of the
calendar year. For joint filers, only one taxpayer must be eligible.
Property must be owned and occupied as principal residence.
Your total income does not exceed:
Single: $579000
Married: $859000
Head of Household: $719000
Your Assessed Real Estate Valuation does not exceed: $6939000
Taxpayers who are eligible for the tax credit can claim it by submitting a
completed Schedule CB, Circuit Breaker Credit, with their state income
tax return.
C -®
r Iliillll IIIIIIilllllllllllllllllllll IIIIIIIIIIIIIIilllllllll �
You, or your spouse if married filing jointly, must beat least 65 years of age before January 1, 2016 to qualify for this credit. Also, you must file
as single, married tiling jointly or head of household to quality for this credit. If married filing separately, you d0 not quality for this credit.
Schedule CB Circuit Breaker Credit. Enclose with Form 1 or Form 1- NR /PY. Do not cut or separate these schedules.
2015
1
Living quarters status during 2015: ► Homeowner. Multi -use or mufti- family property (see instructions) Yes No
Noe: If you moved during the year, see reverse Renter ('d you received any federal and /or state rent subsidy, or you rent from
a tax- exempt entity, you do not quality for the Circuit Breaker Credit; see instructions)
2
Homeowners only, enter assessed value of principal residence as of January 1, 2015. If over $693,000,
U U
you do not qualify for this credit. See instructions ............... ............................... 1-2
INCOME CALCULATION
3
Massachusetts adjusted gross income (from line 20 of Schedule CB, line 3 worksheet on reverse)............ 3
U 0
4
Total Social Security benefits (see instructions) ..................... ............................... 4
U U
5
Pensions /annuities /IRA /Keogh distributions not taxed on your Massachusetts tax return ................... 5
U U
6
Miscellaneous income, including cash public assistance .............. ............................... 6
U 0
7
Massachusetts total income. Add lines 3 through 6 ................ ............................... ► 7
U 0
8
Exemptions from income (from Form 1, lines 2b through 2d or Form 1- NR/PY, lines 4b through 4d) .......... 8
U U
9
Oualifying income. Subtract line 8 from line 7 ..................... ............................... ► 9
You do not quality for the Circuit Breaker Credit if you are filing as "Single," and line 9 is greater than $57,000; or you are filing as
"Head of
household," and line 9 is greater than $71,000; or you are filing as "Married filing jointly," and line 9 is greater than $85,000.
CREDIT CALCULATION. If you tilled in "Homeowner" in line 1. complete lines 10 -17: it "Renter, skip la line 18.
10
Real estate taxes paid in calendar year 2015 for your principal residence (see instructions) ................. 10
U o
11
Adjustments to real estate taxes (from line 4 of Schedule CB, line 11 worksheet on reverse) ................ 11
0 U
12
Subtract line 11 from line 10 ................................... ............................... 12
0 U
13
Enter 50% (.50) of water and sewer use charges paid in 2015 ......... ............................... 13
U U
14
Add lines 12 and 13 ............................................ .............................14
U U
15
Income threshold. Multiply line 9 by 10% (.10) .................. ............................... ... 15
U U
16
Subtract line 15 from line 14. If line 15 is equal to or greater than line 14, you do not quality for this credit .... 16
0 U
17
Enter the lesser of line 16 or $1,070 here and on Form 1, line 41 or Form 1- NR/PY, line 46 ........ ... ..... ► 17
O 0
U U
18
Enter total amount of rent paid for your principal residence in 2015 : a. .4= 18
Landlord's name and address
19
Income threshold. Multiply line 9 by 10% (.10) ....................... ............................... 19
0 0
20
Subtract line 19 from line 18. If line 19 is equal to or greater than line 18, you do not quality for this credit .... 20
U 0
21
Enter the lesser of line 20 or $1,070 here and on Form 1, line 41 or Form 1- NR/PY, line 46 .................. ► 21
L
J
1
Schedule CB Worksheets
Schedule CB, Line 3 - Massachusetts Income Worksheet
Part 1. Complete only if you only have 5.15 1,o income reported on Form 1,
line 10 or Form 1 -NRiPY line 12 or partnership, trust or S corporation
income not reported on Form 1 or Form 1- NR,PY. Otherwise, enter "0"
on line 6 and go to Part 2.
1. Enter your total 5.15% income from Form 1, line 10 or Form 1- NR/PY,
line 12. Not less than "0" .......................... .
2. Enter the total of Schedule Y. lines 1 through 10....... .
3. Subtract line 2 from line 1. Not less than "0' .......... .
4. Enter total Massachusetts bank interest or the interest exemption amount,
whichever is smaller, from Form 1, line 5a or line 5b or Form 1- NR/PY, line 7a
orline 7b ......... ............................... -
5. Enter any income from a partnership, trust or S corporation not reported
on Form 1 or Form 1- NR/PY ......................... _
Note: If Form 1, line 10 or Form 1- NRIPY. line 12 is a loss, do not complete
line 4 above. Instead, combine Form 1, line 10 or Form 1- NR/PY, line 12 with
the smaller amount of total Massachusetts bank interest or the interest exemp-
tion amount. Enter the result in line 4 above, unless the result is a loss. If the
result is a loss, enter "0.:
6. Add lines 3 through 5
Part 3. Complete only it you have long-term capital gains or capital gain
distributions. Otherwise, enter "0" on line 18 and go to Part 4.
12. Enter any gains (not including any losses) included in U.S. Schedule D,
lines 8a and 8b, col. h .............................. __ ..........
.
13. Enter any gains (not including any losses) included in U.S. Schedule D,
line9, col. h ....... ............................... ___ _.._ ... ......
14. Enter any gains (not including any losses) included in U.S. Schedule D,
line 10, col. h ...... ............................... _
15. Enter any gains (not including any losses) included in U.S. Schedule D.
line 11, col. h ..... ............................... .
16. Enter any gains (not including any losses) included in U.S. Schedule D,
line 12, col. h ...... ...............................
17. Enter any gains included in U.S. Schedule D, line 13, col. h. If U.S.
Schedule D not filed, enter the amount from U.S. Form 1040, line 13 or
1040A, line 10 ........ ...............................
18. Add lines 12 through 17 ......................... _
Part 4. Massachusetts adjusted gross income.
19. Part-year residents, enter any income earned while a nonresident not
included in lines 1 through 18 above. Not less than "0 ...... _ ..... ___ ............. ..
20. Add lines 6, 11, 18 and 19. Enter the result here and on Schedule CB,
line............ ...............................
Add back any Abandoned Building Renovation deduction claimed on
Schedule(s) C and /or E.
Part 2. Complete only if you have interest income (including tax- exempt Schedule CB, Line 11- Adjustments to Real Estate Taxes
interest) other than from Massachusetts banks, dividend income, short- Paid Worksheet
term capital gains, long -term gains on collectibles and installment sales. 1. Enter the amount of any real estate tax abatement, including senior work
Otherwise, enter "0" on line 11 and go to Part 3.
program, or exemption received in 2015. Do not exclude amounts it they were
7. Enter the amount from Schedule B, line 9. It there is no entry
already reflected on your tax bill and you did not pay them
in Schedule B, line 9, enter the amount from Form 1, line 20
2. Enter any interest amount paid due to late real estate tax
or Form l- NRI PY, line 24 ............................
payments in 2015.. ...............................
8. Enter the amount from Schedule B, line 6 .............
S. Enter the amount of any betterment or special assessment
9. Add lines 7 and 8 . ...............................
paid in 2015..................... _ _ ............ -
10. Enter the amount from Schedule B, line 15...........
4. Add lines 1 through 3. Enter result here and on Schedule CB,
11. Add lines 9 and 10 ..............................
line 11 ........... ............................... -- - - --
Note: If you moved during the year you may have to complete separate computations for each residence that would quality for the credit. On Schedule CB you
should complete separate computations for each residence for lines 10 through 14 and /or line 18. The income threshold (line 15 or 19) should be subtracted
from the total of these computations to determine if you quality for the credit.
TJ
G!P /�es�c�enfi� -1 �dl�
Totals by Year
Fiscal Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
�1
c'
Open Space Value
Commercial Value
Personal Property
CIP as
Total Assessed
Personal Property
DOR Cicipality
Value
Fiscal Year
Residential Value
Open Space Value
Commercial Value
Industrial Value
Value
246
ing
2003
2,642,978,900
0
156,623,500
23,350,600
14,966,090
246
ing
2004
2,923,687,400
0
155,560,000
23,166,300
17,556,310
246
ding
2005
3,139,161,400
0
186,339,900
23,298,000
13,434,520
246
ding
2006
3,375,391,500
0
219,005,200
22,440,600
15,883,280
246
ding
2007
3,509,857,100
0
236,516,816
21,073,300
17,712,220
246
ding
2008
3,468,910,553
0
256,582,400
17,381,100
22,236,690
246
ding
lReadi
2009
3,401,468,484
0
262,919,463
21,161,400
34,298,590
246
ding
2010
3,308,115,508
0
270,816,033
21,050,500
45,778,760
246
ding
2011
3,373,086,171
0
319,506,376
9,658,200
45,295,130
246
ding
2012
3,389,725,591
0
320,481,055
9,648,700
44,158,260
246
ding
2013
3,313,536,178
0
317,324,930
9,653,300
46,123,120
246
ding
2014
3,479,069,293
0
296,451,622
9,709,800
44,082,060
246
ding
2015
3,657,108,918
0
295,682,305
9,711,300
37,135,230
246
di
2016
3,954,100,299
0
306,052,388
10,053,000
39,502,360
For data prior
to 2002, please follow this
link: http: //www. mass .gov /dorAocal- officials /municipal-
data - and - financial - management/data - bank
- reports /property- tax - information.html
Totals by Year
Fiscal Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
�1
c'
Residential Value
Open Space Value
Commercial Value
Personal Property
CIP as
Total Assessed
R/O as % of
of Total
Value
Total Value
Value
2,837,919,090
93.13
6.87
3,119,970,010
93.71
6.29
3,362,233,820
93.37
6.63
3,632,720,580
92.92
7.08
3,785,159,436
92.73
7.27
3,765,110,743
92.13
7.87
3,719,847,937
91.44
8.56
3,645,760,801
90.74
9.26
3,747,545,877
90.01
9.99
3,764,013,606
90.06
9.94
3,686,637,528
89.88
10.12
3,829,312,775
90.85
9.15
3,999,637,753
91.44
8.56
4,309,708,047
91.75
8.25
Residential Value
Open Space Value
Commercial Value
Personal Property
R/O as % of Total
CIP as % of Total
Total
Total
Total
Industrial Value Total
Value Total
Total
Value
Value
517,893,410,805
125,448,501
77,329,145,248
24,890,433,217
17,802,950,620
638,041,388,391
81.20
18.80
607,015,151,578
123,056,209
79,362,995,643
26,368,084,042
20,046,945,870
732,916,233,342
82.80
17.20
697,882,438,199
120,490,087
84,984,249,541
27,722,123,687
19,817,758,736
830,527,060,250
84.00
16.00
773,922,556,584
126,815,310
90,992,470,357
29,158,852,608
20,861,613,488
915,062,308,347
84.60
15.40
831,729,249,923
117,665,655
98,900,538,205
30,620,836,848
21,350,299,560
982,718,590,191
84.60
15.40
831,839,798,036
110,210,060
105,820,062,939
32,263,768,454
21,684,509,701
991,718,349,190
83.90
16.10
810,188,772,287
101,182,675
109,700,879,445
32,263,384,050
24,052,280,862
976,306,499,319
83.00
17.00
772,663,838,843
68,967,275
105,559,344,032
31,359,347,150
25,067,088,452
934,718,585,752
82.70
17.30
748,315,705,615
53,940,029
103,011,667,750
30,044,694,077
26,286,257,757
907,712,265,228
82.40
17.60
744,435,160,899
48,988,214
103,424,786,731
29,760,445,709
27,123,765,820
904,793,147,373
82.30
17.70
742,025,367,536
49,626,995
104,700,863,011
29,733,507,204
27,571,847,331
904,081,212,077
82.10
17.90
752,178,838,155
38,324,486
109,160,086,219
30,039,756,332
28,335,018,057
919,752,023,249
81.80
18.20
792,974,374,279
38,063,427
115,225,508,986
30,905,750,785
29,329,106,059
968,472,803,536
81.90
18.10
841,879,650,431
38,349,841
124,306,114,318
32,515,300,811
30,891,471,525
1,029,630,886,926
81.80
18.20
OF Rego'
�c
Office of the Town Manager
J639`INCORQ0
16 Lowell Street
Reading, MA 01867
To:
Board of Selectmen
From: Robert W. LeLacheur, Jr. CFA
Date: August 5, 2016
RE: Financial Overview
781 - 942 -9043
townmanager @ci.reading.ma.us
www.readingma.gov /town - manager
This memo will review the approach, assumptions and conclusions of financial modelling conducted
about our current financial condition, in preparation for a discussion about an Override.
The first question to answer was if the Town and Schools were satisfied with the current budget model
that has been in place for about ten years. A set of Accommodated Costs are subtracted from Revenues,
and the remainder are divided up in a pro -rata share between the town and schools. Due to the shift of
the Facilities department last year, that ratio is now approximately 64% Schools and 36% Town. After a
discussion between senior management and elected officials, both the Town and School agreed the
budget model has worked well, and has enough built -in flexibility to handle unforeseen circumstances.
The first assumption that was discussed by Superintendent John Doherty, Town Accountant Sharon
Angstrom and the Town Manager was what is the right Target for an annual operating budget increase
for the town and schools? We know since the last Override that figure has been about 3.25 %, but we
also know in recent years that increases of 3.6% have required staffing reductions. We settled on 3.5%
as a reasonable long -term target. Prudent annual financial management should allow the town and
schools to add new services occasionally within that framework, and minimize reductions.
Note that an assumption of how long an Override would need to last is a decision made later in this
process.
The next set of assumptions involved our expected Revenues and Accommodated Costs. All estimates
were done line -by -line by the Town Accountant and Town Manager in a bottom -up fashion, though only
the summary results are described below.
Revenues:
Property taxes ($61 million) are straightforward at +2.5% annually plus New Growth. The latter is
conservatively estimated at $500,000 /year from FY18 through FY21, below the recent $830,000 three -
year average. This figure is then increased to $1,000,000 /year gradually by FY24 given work being done
in the commercial development sector.
Local Revenues ($6.6 million) were estimated at about +2.5% annually.
State Aid ($14 million) was estimated to grow at 3% annually. This will be a future discussion with
FINCOM, who previously has allowed a 2.5% estimated growth and then supplemented any shortfall
with Free Cash. The higher 3% figure is plausible because future budgets will plan to use no or low
amounts of Free Cash to balance.
Operating Transfers and Available funds are projected to increase at less than 2% annually, driven by the
RMLD dividend calculation that is CPI - based. All measures of inflation are significantly lower than when
that arrangement was decided many years ago.
In general, Revenues are projected to increase by between 3.2% and 3.5% using this approach for the
foreseeable future.
Accommodated Costs:
Health Insurance as a driver of Benefits was the first hurdle. National models of +8% annually declining
over time to +5% annually are typically used in the actuarial community. The predicted reduction is
generally stated as 'because the nation cannot afford to continue these increases and needs to figure
out something'. While we have historically managed our rate of growth reasonably well below national
averages, we believed it was important to use +8% annually throughout in this model. If someone
figures out something — so much the better! Combined with other benefit costs this area is forecast to
climb at about 6.7% annually. Note that the Town Accountant and Town Manager strongly believe that
future costs should include a stepped -up pension contribution of about $350,000 /year in order to fully
fund this obligation faster, allowing for an earlier shift of funding towards OPEB. That pension increase is
within that +6.7% annual forecast above.
For now, continuing the FINCOM Policy of 5% towards capital and debt is continued by this model —
more on this topic later. Energy costs were forecast at 5% annually, in line with national forecasts. Out
of District Special Education costs are also forecast at +5% annually, in line with recent trends. Other
accommodated costs were forecast at below +3% annually.
In general, Accommodated Costs are forecast to increase at about 5.5% annually, after a first year
increase closer to 7% to allow for that increase in Pension contributions.
Funding Gap
As you can readily see, the squeeze will be on the Operating Budgets for the foreseeable future as
Revenue growth is not expected to keep pace with Accommodated Costs. The Funding Gap is about
2.2% annually, on a baseline set of costs currently at $30 million. This translates to an annual $660,000
budget shortfall — and the effect is cumulative.
Table 1. Accommodated Costs Gap
Annual Gap Annual Gap
FY18 $ 660,000 FY22 $ 3,300,000
FY19 $ 1,320,000 FY23 $ 3,960,000
FY20 $ 1,980,000 FY24 $ 4,620,000
FY21 $ 2,640,000 FY25 $ 5,280,000
By contrast, the Funding Gap is much smaller on the $57 million Operating Budgets growing at +3.5%
annually. These differences should easily be made up by conservative assumptions, such as estimated
New Growth revenues:
Table 2. Operating Budgets Gap
Annual Gap
Annual Gap
FY18
$
85,000
FY22
$ 425,000
FY19
$
170,000
FY23
$ 510,000
FY20
$
255,000
FY24
$ 595,000
FY21
$
340,000
FY25
$ 680,000
These Funding Gaps cause a fundamental structural deficit in the budget, which in recent years has
caused an increasing amount of Free Cash to be used in order to balance and not significantly reduce
services. Every year that structural deficit is expected to grow — although the town has worked hard on
many of the Accommodated Costs during the past several years to keep the Gap smaller. For FY18, given
the assumptions above, a structural deficit of $3 million exists ($1.925 million Schools and $1.075 million
Town), in order to fund +3.5% Operating budgets. Broadly, this figure consists of the recent $2 million
use of Free Cash plus another year of Funding Gap that is worse than in recent years.
Baseline Override
At this point we can begin to discuss the 'for how long ?' part of an Override. Each year because of that
Funding Gap will add to the $3 million baseline figure. Models looked at the period until FY25 and until
FY30 as two objectives. The shorter 8 -year period coincides with when the RMHS and Library excluded
debt is fully repaid, theoretically opening up some space in the taxpayer's pockets to consider another
Override. The longer 13 -year period is where we are now. Anything shorter or longer seemed
unrealistic.
Here are the somewhat astonishing results, hinted at by Table 1. above:
Table 3. Projected Structural Deficit ($ millions)
Now FY25 FY30
Strucural Deficit $ 3.0 $ 6.0 $ 13.0
It is this type of analysis that causes actuaries to shrug and say that 'somebody will need to do
something'! We revisited the model several times, loosening up a bit on the conservatism — for example
the +3% assumption in State Aid. Finally enough was enough, and we chose to focus on the shorter 8-
year period and stand behind all financial assumptions, understanding that they still lean a bit to the
conservative side. Therefore a $6 million Override is needed to sustain +3.5% Operating; budgets
through FY25.
The financial model therefore tells us to request $6 million in the first year and use $3 million to fill the
current gap, and to save $3 million for the future. That situation seems unrealistic and almost
unbelievable to any rational person not deep into the town's budget situation. That approach would
also create a $4 million structural deficit in FY25 for the next Override to leap over.
So the next step was to find a set of costs that could act to mitigate that funding gap — something that
could be lowered each year. The best solution I found was to change our policy on spending 5% annually
on capital plus debt. Instead, we spend more than 5% in early years, and less than 5% in the later years.
At the end of this 8 -year period we are left with a smaller structural deficit, although we are also left
with a lower than 5% level of capital spending. I'm not concerned with the latter — we've done such a
good job on capital that our equipment and infrastructure is in good enough shape to permanently cut
below 5% - as long as bigger projects are considered outside the tax levy. Plus we always have the ability
to use Free Cash in November to supplement planned annual capital spending.
RMHS construction litigation
We do not know either the final amount or even the final timing of when we will know the final amount.
In my view, we must plan to take care of this issue within our normal budget process and model shown
above, which means we need some creativity and we need to build in some flexibility.
The Town Accountant and I agree that some amount of Free Cash should be used as part of any
settlement, and the rest needs to be paid by the overall annual budget over as short a period of time as
is possible in to minimize borrowing costs.
This approach to increased capital spending in early years fits perfectly with this legal liability. If we do
not have figures in time for the FY18 budget in April 2017, we could direct funds to a capital stabilization
fund set aside for this purpose.
Thus a baseline $6 million Override could look this way in FY18:
$3.0 million structural deficit
$2.0 million additional capital (or a capital stabilization fund)
$0.7 million to the general stabilization fund (to help fund budgets in year 8)
$0.3 million in additional Pension funding
Each year thereafter will see an increase in the portion of additional funds devoted to the structural
deficit, and reductions to both the additional capital and contributions to a stabilization fund.
Override — Additions above a baseline amount
The cost of $ 1 million in additions to the FY18 budget is found by solving for $1 million x (1.035)A$or
$1.3 million. However, given the generally conservative nature of the financial model, and the almost
unbounded creativity of budget participants, I would be comfortable in projecting that every additional
Override dollar spent in FY18 simply be added to the $6 million baseline Override.
Town department heads and I have discussed both budget cuts in FY18 that may be needed and
additions we would like to see. I will describe each briefly in this memo so the Board has a flavor, though
as you might expect I want to be a bit general about any reductions needed at this time. Employee
morale on both the town and school sides is why we thought a vote in the fall would be best — it avoids
the need to prepare and present two budgets during the winter and spring. Last year the one position
proposed by the Town Manager to be eliminated without planned attrition quickly saw a resignation in
early spring, before FINCOM was finished reviewing budgets. Yet at the same time the community does
need to understand what it will gain or lose in an Override vote.
For FY18 budget additions, we would want to approach it two ways — add permanent costs that we
would expect to keep in the future, and add one -time costs in FY18 that would give us flexibility in FY19
and beyond to do something different. That is a hallmark of the town's budgeting style, and why we are
able to adapt to budget cuts more easily than if we did not have this approach.
We have established five prioritized sets of budget additions (A through E) to the town budget, to
correlate with the following Override amounts. Note the largest Override (in $millions) shown correlates
to the School Committee's indicated need for additional funds. The Town's requests for permanent staff
additions are shown in full -time equivalents:
v114
Table 4. Override and Budget additions
Table S. FTEs added
OVERRIDE
Town
Schools
FTEs
A 7.0
360,000
640,000
A
2.0
B 7.5
540,000
960,000
B
1.0
C 8.0
715,000
1,271,111
C
2.0
D 8.5
890,000
1,582,222
D
1.1
E 9.0
1,080,000
1,920,000
E
3.0
A: a $1 million additional Override to the baseline amount, with the following Town additions:
$200,000 funding for both union and non -union employee attraction & retention
$ 85,000 School Resource Officer (1 FTE)
$ 75,000 Firefighter /Paramedic (1 FTE)
B: another $0.5mil of Override, above Town additions plus
$70,000* technology hardware & software (one -time, for one year)
$60,000 Library staffing (1 FTE)
$50,000* Finance department temp staffing for Senior Tax Relief program (for two years)
C: another $0.5mil of Override, above Town additions plus
$75,000 Police Officer #2 (1 FTE)
$75,000 Firefighter /Paramedic #2 (1 FTE)
$25,000* Support for Volunteer Boards and Committees (vary each year)
D: another $0.5mil of Override, above Town additions plus
$50,000* Support for Volunteer Boards and Committees (vary each year)
$40,000 Library Hours
$40,000 DPW Highway Laborer (1 FTE)
$20,000* Human Resources training (one time, one or two years)
$15,000 Facilities OT
$10,000 Spare Crossing Guard (0.1 FTE)
E: another $0.5mil of Override, above Town additions plus
$75,000 Police Officer #3 (1 FTE)
$75,000 Firefighter /Paramedic #3 (1 FTE)
$40,000 clerical support for Administrative Services (1 FTE)
Following the Town's flexible approach, after the first year the $70,000 spent on one -time technology
(mostly Microsoft license upgrades) could be redirected to hire a technology employee — or to any other
Town department with a greater 'need'. Note the Support for Volunteer Boards could start as a one-
time cost, such as a Master Plan, and similarly evolve to additional hours or FTEs. It is clear at present
that we do not have the staffing resources to support our large amount of appointed Boards and
Committees.
Recall the statement that 'Prudent annual financial management should allow the town and schools to
add new services occasionally within that framework, and minimize reductions'. While this 'A through E
list' are all valuable additions to the Town budget, it is good to leave incentive behind for both current
and future financial staff on the town and schools to creatively attack the structural deficit issue
continuously and earn some of these additions. The Town side certainly does not expect to receive full
funding to this list, and will provide the best level of services to the community under any future
scenario.
The one concern that I have is the nation's current situation in Public Safety. Obviously we are
monitoring that area carefully in order to ensure as safe a community as is possible, but it is a difficult
area to forecast at this time.
Lack of Override — Budget Reductions
As mentioned, the town has built in one -time costs in the operating budget, and has been very wary of
adding staffing for a few years. The Town Manager and all Department Heads have examined budgets
together, with the following conclusions:
For the first year of a lack of an Override these expenses could be trimmed and bear more than
the typical share of reductions — meaning less cuts to the personnel side. While employee
morale is important, the Town is prepared in the first year to eliminate one Police Officer,
eliminate one Firefighter, cut staffing in Town Hall (which will result in the elimination of some
services and /or a decline in service levels to the public) and likely reduced Library hours.
In the second year, staffing would take a disproportionally larger hit and include all Town
departments: Police, Fire, Dispatch, Public Works, Facilities, Town Hall and a certain reduction in
Library hours. Again the bulk of Town Hall reductions would be in the form of reduced or
eliminate services. Expenses would again be trimmed as is possible to continue providing
services that remain.
I have spoken to Department Heads individually about specific staffing options, but prefer not to make
that discussion public until absolutely necessary during a formal budget process in the winter. The Town
also wants to assure the general public that reductions explicitly listed here are absolute — there will be
no 'crying wolf' after the fact.
G\w$0
2.75% TARGET 3.5% 3.41% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%
Town of Reading
18,101
18,169
695
2,074
13,039
6,179
3,556
2,189
Budget Summary
Requested
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
81811612:29 PM
FY16
58,995,742
FY16
11%
FY17
60,970,635
FY17
3.3%
FY18
62,994,901
FY18
3.3%
FY19
65,069,774
FY19
3.3%
FY20
67,196,518
FY20
3.3%
FY21
69,376,431
FY21
3.2%
FY22
71,860,842
FY22
3.6%
FY23
74,407,363
FY23
3.5%
FY24
77,267,547
FY24
3.8%
FY25
80,199,236
FY25
3.8%
Revenues
Property Taxes - gen'lfund
Total Other Local Revenues
6,362,500
4.0%
6,615,000
4.0%
6,900,000
4.3%
7,080,000
2.6%
7,260,000
2.5%
7,440,000
2.5%
7,620,000
2.4%
7,810,500
2.5%
8,005,763
2.5%
8,205,907
2.5%
Total lntergov4Revenues
13,612,031
2.5%
13,865,000
1.9%
14,280,950
3.0%
14,709,379
3.0%
15,150,660
3.0%
15,605,180
3.0%
16,073,335
3.0%
16,555,535
3.0%
17,052,201
3.0%
17,563,767
3.0%
Total Transfers BAvailable
3,779,131
0.6%
3,868,490
2.4%
3,889,569
0.5%
3,962,420
1.9%
4,037,095
1.9%
4,113,646
1.9%
4,192,129
1.9%
4,272,599
1.9%
4,355,115
1.9%
4,439,737
1.9%
Gen'I Fund Revs inside le
$ 82,749,404
$ 85,319,125
3.11%
$88,065,420
3.22%
$ 90,821,572
3.13%
$ 93,644,273
3.11%
$ 96,535,257
3.09%
$ 99,746,306
3.33%
$103,045,997
3.31%
$106,680,626
3.53%
$110,408,646
3.49%
Property Taxes - exclusion
(2,934,523)
3,013,632
- 202.7%
2,983,582
-1.0%
2,944,282
-1.3%
2,902,482
-1.4%
2,848,182
-1.9%
2,793,052
-1.9%
2,733,932
-2.1%
2,687,432
-1.7%
1,281,260
-52.3%
Free Cash
2,199,765
29.4%
2,000,000
-9.1%
3,300,000
65.0%
4,375,000
32.6%
5,525,000
26.3%
6,775,000
22.6%
8,000,000
18.1%
9,300,000
16.3%
10,500,000
12.9%
11,850,000
12.9%
Total Revenues
$82,014,646
0.6%
$ 90,332,757
10.1%
$94,349,002
4.4%
$98,140,854
4.0%
$102,071,755
4.0%
$ 106,158,439
4.0%
$110,539,358
4.1%
$115,079,929
4.1%
$119,868,058
4.2%
$123,539,906
3.1%
Accommodated Costs
Benefits
14,965,743
6.0%
15,988,500
6.8%
17,224,340
7.7%
18,377,487
6.7%
19,614,336
6.7%
20,941,201
6.8%
22,364,882
6.8%
23,892,707
6.8%
25,532,565
6.9%
27,292,960
6.9%
Capital
2,889,250
25.2%
2,070,000
-28.4%
2,100,000
1.4%
1,575,000
-25.0%
1,800,000
14.3%
2,000,000
11.1%
2,375,000
18.8%
3,250,000
36.8%
3,500,000
7.7%
4,175,000
19.3%
Debt- general fund
1,577,018
-51.1%
1,886,368
19.6%
2,277,733
20.7%
2,962,201
30.1%
2,881,282
-2.7%
2,790,026
-3.2%
2,605,794
-6.6%
1,899,551
-27.1%
1,829,594
-3.7%
1,349,188
-26.3%
Energy
1,860,044
-2.0%
1,948,725
4.8%
2,039,411
4.7%
2,139,282
4.9%
2,243,542
4.9%
2,352,907
4.9%
2,467,628
4.9%
2,587,967
4.9%
2,714,202
4.9%
2,846,623
4.9%
Financial
960,000
23.9%
831,000
-13.4%
825,000
-0.7%
852,000
3.3%
880,080
3.3%
909,283
3.3%
939,655
3.3%
971,241
3.4%
1,004,090
3.4%
1,038,254
3.4%
Education - Out of district
4,004,269
18%
4,127,314
3.1%
4,333,680
5.0%
4,550,364
5.0%
4,777,882
5.0%
5,016,776
5.0%
5,267,615
5.0%
5,530,995
5.0%
5,807,545
5.0%
6,097,923
5.0%
Education - Vocational
490,350
5.0%
384,350
-21.6%
403,568
5.0%
423,746
5.0%
444,933
5.0%
467,180
5.0%
490,539
5.0%
515,066
5.0%
540,819
5.0%
567,860
5.0%
Miscellaneous
2,951,184
0.6%
2,943,150
-0.3%
3,149,069
7.0%
3,238,997
2.9%
3,331,509
2.9%
3,426,680
2.9%
3,524,587
2.9%
3,625,309
2.9%
3,728,927
2.9%
3,835,525
2.9%
Community Priorities
0
0
0
0
0
0
0
0
0
0
GF Accommodated Costs
$29,697,858
0.4%
$ 30,179,407
1.62%
$32,352,800
720%
$34,119,076
5.46%
$ 35,973,564
5.44%
$ 37,904,053
5.37%
$ 40,035,699
5.62%
$ 42,272,836
5.59%
$ 44,657,743
5.64%
$ 47,203,332
5.70%
Debt - excluded
2,934,523
3,013,632
2,983,582
-1.0%
2,944,282
-1.3%
2,902,482
-1.4%
2,848,182
-1.9%
2,793,052
-1.9%
2,733,932
-2.1%
2,687,432
-13%
1,281,260
-52.3%
Total Accommodated Costs
$32,632,381
10.3%
$ 33,193,039
1.7%
$35,336,382
6.5%
$37,063,358
4.9%
$ 38,876,046
4.9%
$ 40,752,235
4.8%
$ 42,828,751
5.1%
$ 45,006,768
5.1%
$ 47,345,175
5.2%
$ 48,484,592
2.4%
18,274,368
10.64%
19,420,362
3.41%
20,100,074
3.50%
20,803,577
3.50%
21,531,702
3.50%
22,285,312
3.50%
23,065,298
3.50%
23,872,583
3.50%
24,708,123
3.50%
25,572,908
3.50%
operating Costs
Municipal Go'vtOperating
adjustments (comm. priority)
506,000
adjustments(EF -RF)
874,611
2.75%
1,008,822
15.35%
1,044,131
3.50%
1,080,675
3.50%
1,118,499
3.50%
1,157,646
3.50%
1,198,164
3.50%
1,240,100
3.50%
1,283,503
3.50%
1,328,426
3.50%
TOTAL Muni Government
19,654,979
13.16%
20,429,184
3.94%
21,144,205
3.50%
21,884,252
3.50%
22,650,201
3.50%
23,442,958
3.50%
24,263,462
3.50%
25,112,683
3.50%
25,991,627
3.50%
26,901,334
3.50%
School BBldgsOperating
35,365,184
0.08%
36,570,352
3.41%
37,850,314
3.50%
39,175,075
3.50%
40,546,203
3.50%
41,965,320
3.50%
43,434,106
3.50%
44,954,300
3.50%
46,527,700
3.50%
48,156,170
3.50%
adjustments (comm. priority)
TOTAL School BBldgs
35,365,184
0.08%
36,570,352
3.41%
37,850,314
3.50%
39,175,075
3.50%
40,546,203
3.50%
41,965,320
3.50%
43,434,106
3.50%
44,954,300
3.50%
46,527,700
3.50%
48,156,170
3.50%
Town Bldgs Operating Target
adjustments (comm. priority)
TOTAL Town Bld s
0 eratin Bud ets
1 $55,020,163
3.56%1
$ 56,999,535
3.6%1
$58,994,519
3.5%
$61,059,327
3.5%
$ 63,196,404
3.5%
$ 65,408,278
3.5%
$ 67,697,567
3.5%
$ 70,066,982
3.5%
$ 72,519,327
3.5%
$ 75,057,503
3.5%
Municipal Go'vt Operating
35.72%
35.84%
35.84%
35.84%
35.84%
35.84%
35.84%
35.84%
35.84%
35.84%
School BBldgsOperating
64.28%
64.16%
64.16%
64.16%
64.16%
64.16%
64.16%
64.16%
64.16%
1
64.16%
Town Bld sOperating Target
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
TOTAL SPENDING
$87,652,543
5.98%
$ 90,192,574
2.9%
$94,330,901
4.6%
$98,122,685
4.0%
$102,072,450
4.0%
$ 106,160,513
4.0%
$110,526,319
4.1%
$115,073,750
4.1%
$119,864,502
4.2%
$123,542,095
3.1%
140,183
18,101
18,169
(695)
(2,074)
13,039
6,179
3,556
(2,189)
Town of Reading
One Yr
One Yr
One Yr
One Yr
One Yr
One Yr
One Yr
One Yr
One Yr
One Yr
Revenues - Details
FY16
Changes
FY -2016
FY17
Changes
FY17
FY18
Changes
FY18
Projected
FY19
Changes
FY19
Projected
FY20
Changes
FY20
Projected
FY21
Changes
FY21
Projected
FY22
Changes
FY22
Projected
FY23
Changes
FY23
Projected
FY24
Changes
FY24
Projected
FY25
Changes
FY25
81811612:29 PM
Property Taxes
Tax levy (within levy Inn)
58,745,545
4.0%
61,149,480
4.1%
63,190,717
33%
65,282,985
3.3%
67,427,560
3.3%
69,625,749
3.3%
71,878,893
3.2%
74,444,615
3.6%
77,074,480
3.5%
80,026,342
3.8%
New Growth
912,485
81%
500,000
-45.2%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
750,000
50.09/6
750,000
0.0%
1,000,000
33.3%
1,000,000
0.0%
Abatements and exemptions
662,286
2.5%
678,845
25%
695,816
2.5 %
713,211
2.5%
731,042
2.5%
749,318
2.5%
768,051
2.5%
787,252
2.5%
806,933
2.5%
827,107
2.5%
Pro .Taxes- en'lfund
58,995,742
60,970,635
3.3%
62,994,901
3.3%
65,069,774
3.3%
67,196,518
3.3%
69,376,431
3.2%
71,860,842
3.6%1
74,407,363
3.5%1
77,267,547
3.8%j
80,199,236
3.8%
Prop tax - exclusion
2,934,523
3,013,632
- 202.7%
2,983,582
-1.0%
2,944,282
-1.3%
2,902,482
-1.4%
2,848,182
-1.9%
2,793,052
-1.9%
2,733,932
-2.1%
2,687,432
-1.7%
1,281,260
-52.3%
Property Taxes Total
56,061,219
63,984,267
65,978,483
68,014,056
70,099,000
72,224,613
74,653,894
77,141,295
79,954,979
81,480,496
Other Local Revenues
Motor Vehicle Excise
3,250,000
3.3%
3,385,000
4.2%
3,500,000
3.4%
3,600,000
2.9%
3,700,000
2.8%
3,800,000
2.7%
3,900,000
2.6%
3,997,500
2.5%
4,097,438
2.5%
4,199,873
2.5%
Meals Tax
350,000
0.0%
350,000
0.0%
370,000
5.7%
375,000
1.4%
380,000
1.3%
385,000
1.3%
390,000
1.3%
399,750
2.5%
409,744
2.5%
419,987
2.5%
Penaltieslinterest on taxes
200,000
111%
225,000
12.5%
230,000
2.2%
235,000
2.2%
240,000
2.1%
245,000
2.1%
250,000
2.0%
256,250
2.5%
262,656
2.5%
269,223
2.5%
Payments in lieu of taxes
335,000
1.5%
340,000
1.5%
345,000
1.5%
350,000
1.4%
355,000
1.4%
360,000
1.4%
365,000
1.4%
374,125
2.5%
383,478
2.5%
393,065
2.5%
Charges for services
1,700,000
2.0%
1,775,000
4.4%
1,850,000
4.2%
1,900,000
2.7%
1,950,000
2.6%
2,000,000
2.6%
2,050,000
2.5%
2,101,250
2.5%
2,153,781
2.5%
2,207,626
2 -5%
Licenses 8 permits
150,000
3.4%
160,000
6.7%
165,000
3.1 %
170,000
3.0%
175,000
2.9%
180,000
2.9%
185,000
2.8%
189,625
2.5%
194,366
2.5%
199,225
2.5%
Fines
102,500
2.5%
105,000
2.4%
110,000
4.8%
115,000
4.5%
120,000
4.3%
125,000
4.2%
130,000
4.0%
133,250
2.5%
136,581
2.5%
139,996
2.5%
Interest Earnings
175,000
75.0%
175,000
0.0%
180,000
2.9%
185,000
2.8%
190,000
2.7%
195,000
2.6%
200,000
2.6%
205,000
2.5%
210,125
2.5%
215,378
2.5%
Medicaid Reimbursement
100,000
0.0%
100,000
0.0%
150,000
50.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
153,750
2.5%
157,594
2.5%
161,534
2.5%
Total Other Local Revenues
6,362,500
4.0%
6,615,000
4.0%
6,900,000
4.3%
1,080,000
2.6%
7,260,000
2.5%
7,440,000
2.5%
7,620,000
2.4%
7,810,500
2.5%j
8,005,763
2.5%1
8,205,907
2.5%
Intergovernmental Revenue
Free Cash to pay shortfalls
from 3% increase
State Aid
13,612,031
2.5%
13,865,000
1.9%
14,280,950
3.0%
14,709,379
3.0%
15,150,660
3.0%
15,605,180
3.0%
16,073,335
3.0%
16,555,535
3.0%
17,052,201
3.0%
17,563,767
3.0%
Total I ter ov'tRevenues
13,612,031
2.5%
13,865,000
1.9%
14,280,950
3.0%j
14,709,379
3.0%
15,150,660
3.0%
15,605,180
3.0%
16,073,335
3.0%1
16,555,535
3.0%1
17,052,201
3.0%1
17,563,767
3.0%
Operating Transfers and Available
Funds
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
Cemetery sale of lots
Sale of real estate funds
100,000
-33.3%
50,000
-50.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
0
0.0%
RMLD payment
2,379,520
2.0%
2,384,668
0.2%
2,420,438
1.5%
2,456,745
1.5%
2,493,596
1.5%
2,531,000
1.5%
2,568,965
1.5%
2,607,499
1.5%
2,646,612
1.5%
2,686,311
1.5%
Enterprise Fund Support
874,611
2.8%
1,008,822
15.3%
1,044,131
3.5%
1,080,675
3.5%
1,118,499
3.5%
1,157,646
3.5%
1,198,164
3.5%
1,240,100
3.5%
1,283,503
3.5%
1,328,426
3.5%
School Revolving Funds
100,000
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
100,000
0.0%
Overlay surplus
300,000
-14.3%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
300,000
0.0%
Total Transfers & Available
3,779,131
1.9%1
3,868,490
2.4%1
3,889,569
0.5%1
3,962,420
1.9%
4,037,095
1.9%
4,113,646
1.9%
4,192,129
1.9%
4,272,599
1.9%
4,355,115
1.9%
4,439,737
1.9%
OPERATING REVENUES
82,749,404
1.60%1
85,319,125
3.11%1
88,065,420
3.2'2%1
90,821,572
3.13%
93,644,273
3.11%
96,535,257
3.09%
99,746,306
3.33%
103,045,997
3.31%
106,680,626
3.53%
110,408,646
3.49%
Free Cash 8 Savings
I 2,199,765
2,000,000
3,300,000
4,375,000
5,525,000
6,775,000
8,000,000
9,300,000
10,500,000
11,850,000
TOTAL REVENUES
$84,949,169
2.17%
87,319,125
2.79%
91,365,420
4.63%
95,196,572
4.19%
99,169,273
4.17%
103,310,257
4.18%
107,746,306
4.29%
112,345,997
4.27%
117,180,626
4.30%
122,258,646
4.33%
18,101 3.50% 18,169 3.50% (695) 3.50% (2,074) 3.SU% 13,039 3.5uro 6,119 3.ouro 3,000 3.ouro (z,ltsa) s.auro
�1
Z
Tnvm of Reading
ACCOm Costs - Summa
One Yr
Changes
One Yr
Changes
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
81811612:29 PM
FY16
FY -2016
FY17
FY17
FY18
FY18
FY19
FY19
FY20
FY20
FY21
FY21
FY22
FY22
FY23
FY23
FY24
FY24
FY25
FY25
Benefits
14,965,743
6.0%
15,988,500
6.8%
17,224,340
73%
18,377,487
6.7%
19,614,336
6.7%
20,941,201
6.8%
22,364,882
6.8%
23,892,707
6.8%
25,532,565
6.9%
27,292,960
6.9%
Capital
2,889,250
25.2%
2,070,000
-28.4%
2,100,000
1.4%
1,575,000
-25.0%
1,800,000
14.3%
2,000,000
11.1%
2,375,000
18.8%
3,250,000
36.8%
3,500,000
7.7%
4,175,000
19.3%
Debt - general fund
1,577,018
-51.1%
1,886,368
19.6%
2,277,733
20.7%
2,962,201
30.1%
2,881,282
-2.7%
2,790,026
-3.2%
2,605,794
-6.6%
1,899,551
-27.1%
1,829,594
-3.7%
1,349,188
-26.3%
Energy
1,860,044
-2.0%
1,948,725
4.8%
2,039,411
4.7%
2,139,282
4.9%
2,243,542
4.9%
2,352,907
4.9%
2,467,628
4.9%
2,587,967
4.9%
2,714,202
4.9%
2,846,623
4.9%
Financial
960,000
23.9%
831,000
-13.4%
825,000
-0.7%
852,000
3.3%
880,080
3.3%
909,283
3.3%
939,655
3.3%
971,241
3.4%
1,004,090
3.4%
1,038,254
3.4%
Education - Out of district
4,004,269
3.8%
4,127,314
3.1%
4,333,680
5.01/6
4,550,364
5.0%
4,777,882
5.0%
5,016,776
5.0%
5,267,615
5.0%
5,530,995
5.0%
5,807,545
5.0%
6,097,923
5.0%
Education - Vocational
490,350
5.0%
384,350
-21.6%
403,568
5.0%
423,746
5.0%
444,933
5.0%
467,180
5.0%
490,539
5.0%
515,066
5.0%
540,819
5.0%
567,860
5.0%
Miscellaneous
2,951,184
0.6%
2,943,150
-0.3%
3,149,069
7.0%
3,238,997
2.9%
3,331,509
2.9%
3,426,680
2.9%
3,524,587
2.9%
3,625,309
2.9%
3,728,927
2.9%
3,835,525
2.9%
Community Priorities
GF Accommodated Costs
$ 29,697,858
0.4%
$ 30,179,407
1.6%
$32,352,800
7.2%
$ 34,119,076
5.5%
$ 35,973,564
5.4%
$ 37,904,053
5.4%
$ 40,035,699
5.6%
$ 42,272,836
5.6%
$ 44,657,743
5.6%
$ 47,203,332
5.7%
Debt - excluded
2,934,523
32,632,381
3,517,154
3.0%
3,013,632
2,983,582 -1.0%
2,944,282
-1.3%
2,902,482
-1.4%
2,848,182
-1.9%
2,793,052
-1.9%
2,733,932
-2.1%
2,687,432
-1.7%
1,281,260
-52.3%
Total Accommodated Costs
33,193,039
35,336,382 6.5%
37,063,358 4.9%
38,876,046 4.9%
40,752,235 4.8%
42,828,751 5.1%
45,006,768 5.1%
47,345,175 5.2%
48,484,592
2.4%
3,673,000 4.4%
up $350k in first year
4,200,000 14.3%
4,410,000 5.0%
4,630,500 5.0%
4,862,025 5.0%
5,105,126 5.0%
5,360,383 5.0%
5,628,402 5.0%
5,909,822
5.0%
Accom Costs - Detail
Accommodated Costs - Benefits
Contributory Retirement
OBRA fees & OPEB study
20,000
-50.0%
25,000
25.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
25,000
0.0%
OPEBcontibutian
500,000
5.3%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
500,000
0.0%
Workers Compensation
262,500
45%
280,000
6.7%
300,000
7.1%
309,000
3.0%
318,270
3.0%
327,818
3.0%
337,653
3.0%
347,782
3.0%
358,216
3.0%
368,962
3.0%
Unemployment Benefits
100,000
0.0%
100,000
0.0%
100,000
0.0%
102,000
2.0%
104,040
2.0%
106,121
2.0%
108,243
2.0%
110,408
2.0%
112,616
2.0%
114,869
2.011.
Group Health l Life Ins.
9,761,089
8.0%
10,560,500
8.2%
11,189,340
6.0%
12,084,487
8.0%
13,051,246
8.0%
14,095,346
8.0%
15,222,974
8.0%
16,440,811
8.0%
17,756,076
8.0%
19,176,562
8.0%
Medicare l Social Security
725,000
3.6%
750,000
3.4%
800,000
61%
832,000
4.0%
865,280
4.0%
899,891
4.0%
935,887
4.0%
973,322
4.0%
1,012,255
4.0%
1,052,745
4.0%
Police I Fire Indemnification
80,000
61%
100,000
25.0%
110,000
10.0%
115,000
4.5%
120,000
4.3%
125,000
4.2%
130,000
4.0%
135,000
3.8%
140,000
33%
145,000
3.6%
Total Benefits
$14,965,743
6.0%
$ 15,988,500
6.8%
$17,224,340
7.7%
$18,377,487
6.7%
$ 19,614,336
6.7%
$ 20,941,201
6.8%
$ 22,364,882
6.8%
$ 23,892,707
6.8%
$ 25,532,565
6.9%
$ 27,292,960
6.9%
5% of Gen7 Fund revs
4,247,458
4,667,319
4,403,271
4,541,079
4,681,214
4,826,763
4,987,315
5,151,300
5,334,031
5,520,432
less debt (net, inside levy)
(1,577,018)
(1,886,368)
(2,177,733)
(2,962,201)
(2,881,281)
(2,790,026)
(1,605,794)
(1,899,551)
(1,819,594)
(1,349,188)
Available for cash capital
2,670,440
2,780,951
1,125,538
1,578,878
1,800,932
2,036,737
2,381,521
3,252,749
3,504,437
4,171,244
Temp shift to OPERATING
212,373
233,366
Total C ital
$2,889 250
252%
$ 2 070000
-28.4%
$ $100 000
1 A%
$ 1575,000
•25.0%
$ 1800,000
14.3%
$ 000 000
11.1%
$ 375 000
18.6%
$ 3 50,000
36.8%
$ 3,500000
7.7%
$ 4,11 000
19.3%
Accommodated Costs - Debt
3,150,000
47.5%
3,745,000
18.9%
4,110,000
9.7%
4,635,000
12.8%
4,685,000
1.1%
4,715,000
0.6%
4,650,000
-1.4%
4,139,000
-11.0%
4,180,000
1.0%
2,465,000
-01.0%
DebtService - Principal
DebtService - Interest
11361,541
25.2%
1,155,000
-15.2%
1,151,315
-0.3%
1,271,483
10.4%
1,098,764
-13.6%
923,208
-16.0%
748,846
-18.9%
494,483
-34.0%
337,026
-31.8%
165,448
-50.9%
Debt - excluded
2,934,523
3,013,632
2.7%
2,983,582
-1.0%
2,944,282
-1.3%
2,902,482
-1.4%
2,848,182
-1.9%
2,793,052
-1.9%
2,733,932
-2.1%
2,687,432
-1.7%
1,281,260
-52.3%
Debt - included
$ 1,577,018
1.6%
$ 1,886,368
19.6%
$ 2,277,733
20.7%
$ 2,962,201
30.1%
$ 2,881,282
-2.7%
$ 2,790,026
-3.2%
$ 2,605,794
-6.6%
$ 1,899,551
-27.1%
$ 1,829,594
-3.7%
$ 1,349,188
-26.3%
Total Debt
$ 4,511,541
40.0%1
$ 4,900,000
8.6%
$ 5,261,315
7.4%
$ 5,906,483
12.3%
$ 5,783,764
-2.1%1
$ 5,638,208
.2.5%1
$ 5,398,846
-42%1
$ 4,633,483
.141%1
$ 4,517,026
.2.5%1
$ 2,630,448
41.8%
Town of Reading
4,317,733
4.75%
4,537,201
4.77%
4,681,282
4.72%
4,790,026
4.63%
4,980,794
4.61%
5,149,551
4.55%
5,329,594
4.52%
5,524,188
4.52%
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
Projected
One Yr
Changes
ACCOItI Costs - Detail
One Yr
Changes
One Yr
Changes
81811612:29 PM
FY -2016
FY17
FY17
FY1$
FY18
FY19
FY19
FY20
FY20
FY21
FY21
FY22
FY22
FY23
FY23
FY24
FY24
FY25
FY25
Accommodated Costs - Energy
175,000
-12.5%
180,000
2.9%
190,000
5.6%
200,000
5.3%
210,000
5.0%
220,500
5.0%
231,525
5.01/6
243,101
5.0%
255,256
5.0%
268,019
5.0%
Street Lighting
Heating of Buildings -Town
145,915
53.8%
145,175
-0.5%
152,434
5.0%
160,055
5.0%
168,058
5.0%
176,461
5.0%
185,284
5.0%
194,548
5.0%
204,276
5.0%
214,490
5.0%
Heating of Buildings - Schools
440,981
11.1 %
449,250
1.9%
471,713
5.0%
495,298
5.0%
520,063
5.0%
546,066
5.0%
573,369
5.0%
602,038
5.0%
632,140
5.0%
663,747
5.0%
Utilities -Town
183,664
-5.4%
213.700
16.4%
224,385
5.0%
235,604
5.0%
247,384
5.0%
259,754
5.046
272,741
5.0%
286,378
5.0%
300,697
5.0%
315,732
5.0%
Utilities - Schools
664,484
-8.5%
705,600
6.2%
740,880
5.0%
777,924
5.0°�
816,820
5.0%
857,661
5.0%
900,544
5.0%
945,571
5.0%
992,850
5.0%
1,042,493
5.0%
Fuel - vehicles DPW
250,000
-12.6%
255,000
2.0%
260,000
2.0%
270,400
4.0%
281,216
4.0%
292,465
4.0%
304,163
4.0%
316,330
4.0%
328,983
4.01A
342,142
4.0%
Total Energy
$ 1,860,044
-2.0%1
$ 1,948,725
4.8%1
$ 2,039,411
4.7%1
$ 2,139,282
4.9%1
$ 2,243,542
4.9%1
$ 2,352,907
4.9%1
$ 2,467,628
4.9%1
$ 2,587,967
4.9%1
$ 2,714,202
4.9%
$ 2,846,623
4.9%
Accommodated Costs - Financial
435,000
8.7%
445,000
23%
435,000
-2.2%
452,400
4.0%
470,496
4.0%
489,316
4.0%
508,888
4.0%
529,244
4.0%
550,414
4.0%
572,430
4.0%
Casualtylnsurance
Veteran's Assistance
225,000
0,0%
236,000
49%
240,000
1.7%
249,600
40%
259,584
4.0%
269,967
4.0%
280,766
4.0%
291,997
4.0%
303,677
4.0%
315,824
4,0%
FINCOM Reserve Fund
300,000
100.0%
150,000
-50.0 %
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
150,000
0.0%
Total Financial
$ 960,000
23.9%
$ 831,000
-13.4%
$ 825,000
-0.7%
$ 852,000
3.3%
$ 880,080
3.3%
$ 909,283
3.3%
$ 939,655
3.3%
$ 971,241
3.4%
$ 1,004,090
3.4%
$ 1,038,254
3.4%
Accommodated Costs - Education
Out of district
949,441
-10.4%
996,913
5.0%
1,046,759
5.0%
1,099,097
5.0%
1,154,051
5.0%
1,211,754
5.0%
1,272,342
5.0%
1,335,959
5.0%
1,402,757
5.0%
1,472,895
5.0%
Out of district SPEDtransporta'
Out of district SPED tuition
1 4,007,665
0.6%
4,173,978
4.1%
4,382,677
5.0%
4,601,811
5.0%
4,831,901
5.0%
5,073,496
5.0%
5,327,171
5.0%
5,593,530
5.0%
5,873,206
5.0%
6,166,867
5.0%
Out of district SPED rev. offsets
952,837
-19.7%
1,043,577
9.5%
1,095,756
5.0%
1,150,544
5.0%
1,208,071
5.0%
1,268,474
5.0%
1,331,898
5.0%
1,398,493
5.0%
1,468,418
5.0%
1,541,839
5.0%
Total Education- Out ofdistr.
$ 4,004,269
3.8%
$ 4,127,314
3.1%
$4,333,680
5.0%
$ 4,550,364
5.07/
$ 4,777,882
5.09%
$ 5,016,776
5.0%
$ 5,267,615
5.0%
$ 5,530,995
5.0%
$ 5,807,545
5.0%
$ 6,097,923
5.0%
Accommodated Costs - Education
Vocational School
257,100
6.5%
269,955
5.0%
283,453
5.0%
297,625
5.0%
312,507
5.0%
328,132
5.0%
344,539
5.0%
361,766
5.0%
379,854
5.0%
VocSchool - NERMVS
241,500 5.0%
VocSchool - Minute Man
143,850
5.0%
83,750
-41.8%
87,938
5.0%
92,334
5.0%
96,951
5.0%
101,799
5.0%
106,889
5.0%
112,233
5.0%
117,845
5.0%
123,737
5.0%
Voc School - Essex North
105,000
5,0%
43.500
586%
45,675
5.0%
47,959
501/6
50,357
5.0%
52,875
5.0%
55,518
5.0%
58,294
5.0%
61,209
5.0%
64,269
5.0%
Total Education - Voke
$ 490,350
5.0 %
$ 384,350
-21.6 %
$ 403,566
5.0 %
$ 423,746
5.0 %
$ 444,933
5.0 %
$ 467,180
5.0 %
$ 490,539
5.0 %
$ 515,066
5.0 %
$ 540,819
5.0 %
$ 567,860
5.0%
Accommodated Costs - Miscellaneous
1,488,000
-0.1%
1,450,000
-2.6%
1,570,750
8.3%
1,617,873
3.0%
1,666,409
3.0%
1,716,401
3.0%
1,767,893
3.0%
1,820,930
3.0%
1,875,558
3.0%
1,931,824
32%
Rubbish Collection lDisposal
Snow and Ice Control
625,000
0.0%
625,000
00%
669,500
7.1%
689,585
3.0%
710,273
3.0%
731,581
3.0%
753,528
3.0%
776,134
3.0%
799,418
3.0%
823,401
3.0%
State Assessments
628,284
2.4%
642,750
23%
658,819
2.5%
675,289
2.5%
692,171
2.5%
709,476
2.5%
727,213
2.5%
745,393
2.5%
764,028
2.5%
783,128
2.5%
Cemetery
209,900
2.2%
225,400
7.4%
250,000
10.9%
256,250
2.5%
262,656
2.5%
269,223
2.5%
275,953
2.5%
282,852
2.5%
289,923
2.5%
297,171
2.5%
Total Miscellaneous
$ 2,951,184
0.6%
$ 2,943,150
.0.3%
$ 3,149,069
7.0%
$ 3,238,997
2.9%
$ 3,331,509
2.9%
$ 3,426,660
2.9%
$ 3,524,587
2.9%
$ 3,625,309
2.9%
$ 3,728,927
2.9%
$ 3,835,525
2.9%
sd
O� OF F?FgO'
Tax Levy
tic
Office of the Town Manager
'63g'lNCoA4�AP�
16 Lowell Street
$161
Reading, MA 01867
To:
Board of Selectmen
From: Robert W. LeLacheur, Jr. CFA
Date: August 7, 2016
RE: Override Impact
781 - 942 -9043
townmanager@ci.reading.ma.us
www.readingma.gov /town - manager
This memo will review the impact of an Override of various amounts for different property classes and
assessed value segments.
Today, the $499,500 average Single Family Home pays a tax bill of $499,500 x $14.51/$1.000 or
$7,247.75 — let's call it $7,250. Here are the components of that tax bill:
Tax Bill
Tax Levy
RMHS
Library
$7,250
$6,905
$161
$184
The RMHS amount remains about $160 until being fully repaid in FY24; the Library amount declines to
about $160 and is fully repaid in FY25. Any Override would be added only to the Tax Levy portion.
Therefore over the next ten years, the table below shows the average Single Family Home (SFH) Tax Bill
and annual change assuming no Override, no more Excluded debt or capital, no Senior Tax Relief, the
full tax levy is assessed, current tax property classification ratios (92% residential; 8% CIP) are
maintained, and the town has a Uniform tax rate.
Note the impact in FY25 and FY26 when the RMHS and Library are fully repaid. Over this ten -year
period, the average tax bill will have increased at an average rate of +2.0% annually.
Override Impact
For the Residential class, here is the impact in FY18 on Single Family Homes at the various assessed
value segments. This analysis makes the same assumption as that ten year forecast above did. The
figures shown are increase in taxes over and above the figures shown above. Future years after FY18
would increase by about 2.3% through FY24 as shown above:
Residential
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
SFH
$7,418
$7,590
$7,767
$7,947
$8,132
$8,321
$8,516
$8,563
$8,625
$8,840
Rate
+2.31%
+2.33%
+2.33%
+2.32%
+2.32%
+2.32%
+2.35%
+0.55%
+0.72%
+2.50%
Note the impact in FY25 and FY26 when the RMHS and Library are fully repaid. Over this ten -year
period, the average tax bill will have increased at an average rate of +2.0% annually.
Override Impact
For the Residential class, here is the impact in FY18 on Single Family Homes at the various assessed
value segments. This analysis makes the same assumption as that ten year forecast above did. The
figures shown are increase in taxes over and above the figures shown above. Future years after FY18
would increase by about 2.3% through FY24 as shown above:
Residential
$6 mil
$7 mil
$7.5 mil
$8 mil
$8.5 mil
$9 mil
$
$
300,000
400,000
$
$
398
531
$
$
464
619
$
$
497
663
$
$
530
707
$
$
563
751
$
$
596
795
$
500,000
$
664
$
774
$
829
$
884
$
939
$
994
$
$
600,000
700,000
$
$
797
930
$
$
929
1,084
$
$
995
1,161
$
$
1,061
1,238
$
$
1,127
1,315
$
$
1,193
1,392
®/1
For the same ten -year period, the average tax bill will have increased at an average rate of +2.9%
annually with a $6 million Override, with this pattern:
and at +3.4% annually with a $9 million Override.
For the Commercial class here is the impact in FY18 at the various assessed value segments:
Commerical
FY18
FY19
FY20
FY21
FY22
FY23
FY24
FY25
FY26
FY27
Rate
1 +11.67%
+2.33%
+2.33%
+2.32%
+2.32%
+2.32%
+2.35%
+0.72%
+0.88%
+2.50%
and at +3.4% annually with a $9 million Override.
For the Commercial class here is the impact in FY18 at the various assessed value segments:
Commerical
1.00
$6 mil
$7 mil
$7.5 mil
$8 mil
$8.5 mil
$9 mil
$100k -$500k
$
413
$ 481
$
516
$
550
$
584
$ 618
$500k -$1mil
$
955
$ 1,113
$
1,192
$
1,271
$
1,350
$ 1,429
$1mil - $2mil
$
1,823
$ 2,125
$
2,276
$
2,427
$
2,578
$ 2,730
$2mil - $3mil
$
3,037
$ 3,540
$
3,792
$
4,043
$
4,295
$ 4,547
$3mil - $10mil
$
5,852
$ 6,822
$
7,307
$
7,792
$
8,276
$ 8,761
$10mil +
$
25,391
$ 29,598
$ 31,701
$ 33,804
$ 35,907
$ 38,011
Override + Senior Tax Relief
These calculations are very complex to make accurately. Below I estimate the impact of an $8 million
Override with a 1.05 factor on the Residential and Commercial segments:
Residential
1.00
1.05
$
300,000
$
587
$
400,000
$
783
$
500,000
$
979
$
600,000
$
1,175
$
700,000
$
1,371
Commercial
1.00
1.05
$100k - $500k
$
774
$500k - $1mil
$
1,789
$1mil - $2mil
$
3,416
$2mil - $3mil
$
6,590
$3mil - $10mil
$
10,965
$10miI +
$ 47,571
To simplify, the $100k -$1 mil Commercial Sector is a pretty good approximation for the 'small business'
in town and consists of 71% of the commercial parcels, with an average assessed value just below
$500,000. Here's how Residential versus this segment of Commercial looks, again as an approximation
for an $8 million Override:
One can rapidly get lost in the myriad of figures! Perhaps the key is to step back for perspective and
recall the two main objectives: a) to help Seniors 'age -in- place' and b) to provide Town and School
Services to as many residents and businesses as is financially sustainable.
by
1.00
1.05
1.10
Res $
1,009
$ 979
$
944
Sm Comm $
855
$ 1,203
$
1,556
One can rapidly get lost in the myriad of figures! Perhaps the key is to step back for perspective and
recall the two main objectives: a) to help Seniors 'age -in- place' and b) to provide Town and School
Services to as many residents and businesses as is financially sustainable.
by
a'� of Regoi
tic
..; a Office of the Town Manager
16 Lowell Street
6J9 INC�R?0 Reading, MA 01867
To: Board of Selectmen
From: Robert W. LeLacheur, Jr. CFA
Date: August 5, 2016
RE: Financial Calendar
781 - 942 -9043
townmanager @ci.reading.ma.us
www.readingma.gov /town - manager
In response to a previous question by a resident I checked my notes. About one year ago I verified with
the state that we could not add a Question to the ballot for the September election, but we could call
for a Special Election on that same day with a separate ballot. The Town Clerk determined that would
save about $2,000 to $3,000 compared to holding a separate Special Election, but she was concerned
that she could find the election workers to staff a 'double election'.
At that time I did not check the Presidential election in November, as that was late into the FY18 budget
cycle that the Towns and Schools use.
In late October last year, in response to a question by a resident at that time, I did verify the first
assumption about the September election but also that we could add a local Question to the November
ballot, and at that time there was the possibility of several state -wide ballot questions. Such a decision,
as the resident correctly noted recently, needed to be made earlier than our proposed financial calendar
plans had allowed.
Thus my statements about September were accurate, but I did not give a complete answer for the
November election and apologize for that.
The remainder of this memo will review the upcoming Financial Calendar, and reflect suggestions
developed between the Town Manager and Chairman Halsey.
August 9th — Selectmen discuss and determine a Senior Tax Relief Policy, as well as a factor for the next
Tax Classification process. Selectmen vote to hold a Special Town Meeting on September 12th and a
Special Election on October 181H
August 16th — Selectmen close a Warrant for September 12 Special Town Meeting, consisting of 8
Articles as has been reviewed previously. Selectmen meet jointly with the School Committee and Library
Trustees to discuss the amount of an Override. It is preferable if the Selectmen can determine the size of
the Override and format of ballot question(s).
August 31St — Finance Committee Review of proposed Override
September 1St — Community Financial Forum at the RMHS PAC, where the Override is discussed
September 12th — Special Town Meeting
October 18th —Special Election
cis
Given that Town Meeting has no formal role in the Ballot Question for an Override, the previously
mentioned 'courtesy visit' to Town Meeting must be weighed against the need for the overall
community to receive formal advance notice of an election. Stating there will be an election on the night
of August 9th will give over two months advance notice to the community — an amount that is double
what is required under law, and what would be the case if actions are delayed to the night of the Special
Town Meeting.
Here is Town Counsel's draft language for the Override discussion at Town Meeting, which does not
require any vote:
ARTICLE 8 To hear the reports of the Board of Selectmen, School Committee, Board
of Library Trustees and Finance Committee regarding the Town's budgeting for future Fiscal Years, and
to provide any advice or guidance or take any other action with respect thereto.
Board of Selectmen
Certainly if any Board member has any suggested improvements to this Financial Calendar, I would
welcome your comments.
�.V
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss. Officer's Return, Reading:
By virtue of this Warrant, I, on , 2016 notified and warned the inhabitants of the Town of
Reading, qualified to vote in Town elections and Town affairs, to meet at the place and at the time
specified by posting attested copies of this Town Meeting Warrant in the following public places within
the Town of Reading:
Precinct 1 J. Warren Killam School, 333 Charles Street
Precinct 2 Reading Police Station, 15 Union Street
Precinct 3 Reading Municipal Light Department, 230 Ash Street
Precinct 4 Joshua Eaton School, 365 Summer Avenue
Precinct 5 Walter S. Parker Middle School, 45 Temple Street
Precinct 6 Barrows School, 16 Edgemont Avenue
Precinct 7 Birch Meadow School, 27 Arthur B Lord Drive
Precinct 8 Wood End School, 85 Sunset Rock Lane
Town Hall, 16 Lowell Street
The date of posting being not less than fourteen (14) days prior to September 12, 2016, the date set for
Town Meeting in this Warrant.
I also caused a posting of this Warrant to be published on the Town of Reading website on
, 2016.
, Constable
A true copy Attest:
Laura Gemme, Town Clerk
do
TOWN WARRANT
OFRF4�'H
c
`^ a
0 0
6,9 +1NCOR?a-
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss.
To any of the Constables of the Town of Reading, Greetings:
In the name of the Commonwealth of Massachusetts, you are hereby required to notify and warn the
inhabitants of the Town of Reading, qualified to vote in elections and Town affairs, to meet at the
Reading Memorial High School Performing Arts Center, 62 Oakland Road, in said Reading, on
Monday, September 12, 2016, at seven - thirty o'clock in the evening, at which time and place the
following articles are to be acted upon and determined exclusively by Town Meeting Members in
accordance with the provisions of the Reading Home Rule Charter.
ARTICLE 1 To hear and act on the reports of the Board of Selectmen, School Committee,
Library Trustees, Municipal Light Board, Finance Committee, Bylaw Committee, Town Manager, Town
Accountant and any other Town Official. Board or Committee.
Board of Selectmen
ARTICLE 2 To choose all other necessary Town Officers and Boards or Committees and
determine what instructions shall be given Town Officers and Boards or Committees, and to see what
sum the Town will vote to appropriate by borrowing or transfer from available funds, or otherwise, for
the purpose of funding Town Officers and Boards or Committees to carry out the instructions given to
them, or take any other action with respect thereto.
Board of Selectmen
ARTICLE 3 To see if the Town will vote to amend the FY 2017 -27 Capital Improvements
Program as provided for in Section 7 -7 of the Reading Home Rule Charter and as previously amended,
or take any other action with respect thereto.
Board of Selectmen
ARTICLE 4 To see if the Town will vote pursuant to Massachusetts General Laws Chapter
59, Section 5, Clause 41C to adopt a change in the income, asset and age limits of certain elderly tax
exemptions as follows:
To increase the exemption amount from $750.00 to $1,000.00,
or take any other action with respect thereto.
Board of Selectmen
ARTICLE 5 To see if the Town will vote pursuant to Massachusetts General Laws Chapter
59, Section 5, Clauses 17, 17C, 17C1/2 or 17D to adopt an annual Cost Of Living Adjustment (COLA)
as measured by the United States Department of Labor, Bureau of Labor Statistics Consumer Price
VVJ
Index for Urban Consumers, Boston (CPI -U) for the previous calendar year, or take any other action
with respect thereto.
Board of Selectmen
ARTICLE 6 To see if the Town will vote pursuant to Massachusetts General Laws Chapter
59, Section 5, Clause 41A to reduce the interest rate from 8% to 4 %, with such reduced rate to apply to
taxes assessed for any fiscal year beginning on or after July 1, 2017, or take any other action with
respect thereto.
ARTICLE 7 TBA
Board of Assessors /Board of Selectmen
ARTICLE 8 To hear the reports of the Board of Selectmen, School Committee, Board
of Library Trustees and Finance Committee regarding the Town's budgeting for future Fiscal Years, and
to provide any advice or guidance or take any other action with respect thereto.
Board of Selectmen
and you are directed to serve this Warrant by posting an attested copy thereof in at least one (1) public
place in each precinct of the Town not less than fourteen (14) days prior to April 27, 2015, or providing
in a manner such as electronic submission, holding for pickup or mailing, an attested copy of said
Warrant to each Town Meeting Member.
Hereof fail not and make due return of this Warrant with your doings thereon to the Town Clerk
at or before the time appointed for said meeting.
Given under our hands this -th day of 2016.
John Halsey, Chairman
Kevin Sexton, Vice Chairman
Barry Berman, Secretary
John Arena
cv,�
Dan Ensminger
, Constable
SELECTMEN OF READING
N 19
DRAFT - BOARD OF SELECTMEN
2016 AGENDAS 2016
81812016
Staff
Responsibility
Estimated
Start time
August 9, 2016
Senior Center
7:00
MWRA Infiltration and Inflow Local Financial
Assistance Program
LeLacheur
7:20
Senior Tax Relief & Tax Classification
Discussion
LeLacheur &
Santaniello
7:30
Financial Review & Proposition 2 -1/2 Override
discussion
LeLacheur
8:45
Discuss calling for Special Town Meeting on
September 12th followed by a Special Election
on October 18th
LeLacheur
9:45
August 16, 2016
Office Hour
Barry Berman
Certificate of Recognition - Girl Scout Gold
Award
LeLacheur
Amend license for underground storage tank at
83 - 85 Main Street to change one tank from
gasoline to diesel
LeLacheur
7:20
Hearing
Transfer Liquor License from Brooks Brew and
Fine Wines, 676 Main Street, to Anastasi
Brookline, 25 Walkers Brook Drive
LeLacheur
7:30
Hearing
Alteration of Premises for Bistro Concepts Inc.
LeLacheur
7:45
Override discussion - joint meeting with School
Committee and Board of Library Trustees
Halsey
8:00
Close Warrant for September 12th Special
Town Meeting
LeLacheur
9:30
Community Financial Forum 9/1/16 @RMHS
Thursday
7:OOpm
September 6, 2016
Office Hour
Kevin Sexton
Fire Department Badge Pinnings
Burns
7:20
FY17 Goals & Reading 2020 update
LeLacheur
7:45
Preview Warrant for November Subsequent
Town Meeting (begins 11/14/16)
LeLacheur
9:00
State Election September 8, 2016
Thursday'
VQ "v
Special Town Meeting September 12, 2016
Monday
Call for Special Election on October 18, 2016
(formal notification to Town Clerk)
September 20, 2016
Trust Fund Commissioners
7:30
Schoolhouse Commons - 40B project at 172
Woburn St (former St. Agnes school)
8:00
Close Warrant for November Subsequent Town
Meeting (begins 11/14)
LeLacheur
8:45
Town Manager Performance Evaluation
Halsey
9:30
October 4, 2016
Office Hour
Dan Ensminger
Close Warrant for October 18, 2016 Special
Election
LeLacheur
Vote Warrant Articles for Subsequent Town
Meeting 11/14/16
LeLacheur
Special Election October 18, 2016 (TBA)
Tuesday
October 25, 2016
Close Warrant for Presidential and State
Elections 11/8/16
Finacial Forum 10/26/2016
Pleasant St Ctr
7:30
Presidential and State Elections 11/8/16
Tuesday
Town Meeting November 14, 2016
Monday
November 15, 2016
Office Hour
John Halsey
Town Meeting November 17, 2016
Thursday
Town Meeting November 21, 2016
Monday
Town Meeting November 28, 2016
Monday
November 29, 2016
Town Meeting December 1, 2016
Thursday
December 13, 2016
Office Hour
IJohn Arena
VQ "v
p{Q��
Future Agendas
Board of Selectmen Policies: Article 1 General
Operating Procedures
LeLacheur
Board of Selectmen Policies: Article 2 Volunteer
Boards /Committees /Commissions
LeLacheur
Board of Selectmen Policies: Article 3 Licenses
LeLacheur
Recurring Items
Close Warrant: Nov TM by 9/27
Close Warrant: Presidential & State Elections
by 11 /1 (Elections are 11/8)
Review BOS /TM Goals
Mar & Sep
Semi -ann
Appointments of Boards & Committees
June
Annual
Hearing
Approve Classification & Compensation
June
Annual
Hearing
Tax Classification
October
Annual
Approve licenses
December
Annual
Reports to BOS
Town Accountant Report
Qtrly
RCTV members Report
Semi -ann
CAB (RMLD) member Report
Semi -ann
MAPC member Report
Annual
Reading Housing Authority Report
Annual
Reading Ice Arena Report
Annual
BOS Appointed Boards & Committees
Annual
p{Q��
An Act to Modernize Municipal Finance and Government
Section by Section Summary of Final Bill to Be Signed on August 9, 2016
Local Agricultural Commissions (1, 23, 215, 243) — These sections authorize a municipality to
establish a municipal agricultural commission to promote and develop the agricultural resources
of the municipality.
Municipal Procurement 1 (24, 6 -12) — These sections amend the "horizontal" construction
procurement statute, c. 30, § 39M, to increase the dollar threshold for contracts requiring less -
than -full competitive bidding from $I OK to $50K. They also make procurement methods
consistent with other construction and municipal procurement statutes by adding a "middle tier"
of contracts valued at between $1 OK -$50K, for which public entities may either give public
notification of the contract or use OSD statewide contracts or other "blanket" contracts to solicit
a minimum of three bids. Finally, these sections make conforming changes to dollar thresholds
for existing exemptions under c. 30, § 39M, and the municipal procurement statute, c. 30B.
Exemptions from Uniform Procurement (5) — This section removes the existing exemption
I'J from the municipal procurement statute, c. 3013, for contracts for bank services that are subject to
the maintenance of a compensating balance. The exemption for bank services subject to a
compensating balance is removed because municipalities are otherwise subject to c. 30B rules
for other types of banking services. This is also consistent with loosening state oversight of such
agreements, as described in sections 87 -90.
Civil Service Exams for Police Officers and Firefighters (13) — This section allows an
applicant who has reached 19 years of age while serving on active military duty, who was not 19
on or before the date of an original examination, to be eligible for any subsequent make up
examination that is offered. No person is eligible for original appointment to the position of
police officer in a city or town until that person has reached the age of 21.
Retiree Health Cost Sharing (14, 251) — This section repeals the requirement in c. 32B, § 9A%
I ' that a municipality be reimbursed in full, in the event a retired municipal employee or
beneficiary receives healthcare premium contributions under circumstances in which a portion of
the retiree's creditable service is attributable to service in another municipality. This legislation
was enacted in 2010 with municipal support, but has proven to be unworkable in practice.
OPEB Trust Fund (15, 238) — These sections permit governmental units — defined broadly to
include any political subdivision of the Commonwealth and housing authorities, redevelopment
authorities, regional councils of government, regional school districts and educational
collaboratives — to establish an OPEB trust fund that complies with the legal requirements for
trusts and with GASB. This change is necessary to clarify current language, which only
authorizes a reserve /stabilization fund for retiree health insurance purposes. These sections also
a
make clear that any OPEB fund created prior to the effective date of this act will continue unless
the governmental unit re- accepts the provisions of this act.
County Borrowing Tech Correction (16) — This section permits counties to borrow money for
emergency purposes upon approval by the municipal finance oversight board, and not (as is
currently required) a board composed of the attorney general, the state treasurer and the director
of accounts (within the Division of Local Services, or "DLS ").
Supervision of County Government 1 (17) — This section repeals provisions of the county
finance statute that requires DLS to review the accounts of county treasurers and other offices
receiving money payable to the counties, prescribe accounting standards and provide technical
assistance, and submit annual reports on county accounts to the Governor and Legislature. DLS
does not perform these functions for any remaining county governments.
Supervision of County Government 2 (18) — This section repeals the provision of the county
finance statute that requires DLS to submit county employee classification and compensation
plans to county personnel boards, and to advise county commissioners and personnel boards on
employment matters. DLS does not perform these functions for any remaining county
governments.
Rental Revolving Fund (19) — This section allows cities and towns to create a revolving fund
for proceeds from rental of surplus non - school properties, and authorizes expenditures without
appropriation for upkeep of such properties. This is an expansion of current law, which
authorizes a revolving fund only for the rental of surplus school properties.
Joint Powers Agreements (20) — This section allows governmental entities to enter into a joint
powers agreement. In a city, these can be entered into with another governmental unit for the
joint exercise of any of their common powers and duties within a designated region, except for
veterans services, by the council with the approval of the mayor, and in a town, by the board of
selectmen.
City Reserve Funds (21) — This section increases the amount that cities may appropriate, as a
reserve fund for extraordinary or unforeseen expenditures, from 3% to 5% of the tax levy for the
preceding fiscal year. The 5% level conforms to that currently authorized for towns and districts.
Stabilization Funds 1 (22) — This section amends current law, which allows municipalities to
create one or more stabilization funds, by permitting appropriations into the fund by majority
vote and permitting the municipality, without appropriation, to dedicate all or a portion of
particular revenue streams to the fund. This section also eliminates the cap on the amount
reserved (10% of the prior year property tax levy), but retains the requirement to obtain a 2/3
vote to make appropriations from the fund.
2
�c
Special Education Reserve Fund (24) — This section allows a school district to establish a
reserve fund to pay, without further appropriation, for unanticipated or unbudgeted costs of
special education, out -of- district tuition or transportation. The balance in the reserve fund shall
not exceed 2% of the annual net school spending of the school district.
Parking Meter Local Acceptance (25, 28 -29) — These sections allow revenue generated from
parking meters to revert to the city or town's general fund, unless specifically accepted by the
city or town to be accounted for in a separate fund.
Parking Meter Revenue Use (26 -27, 30) — These sections expand the allowable use of parking
meter funds and allow for rates to be set for the purpose of managing the parking supply. They
also allow for the establishment of Parking Benefit Districts, a geographically defined area in
which parking revenue collected therein may be designated in whole or in part for use in that
district through a dedicated fund.
Water Infrastructure Surcharge Exemption (31) — This section changes the exemption
application deadline for the new water infrastructure surcharge to April 1.
Regional Refuse Disposal Planning Committee (32 -34) — This section modifies the statute on
such committees to enable the Board of Selectmen in a town to establish the committee rather
than Town Meeting.
Certification of Local Property Assessments (35 -36, 250) — These sections decrease the
()frequency with which DOR must certify that local property assessments reflect fair cash
® valuation from every three years to every five years. The certification is a condition of
approving the municipality's property classifications for purposes of allocating responsibility for
the local tax levy. This change would take effect for the fiscal years starting on or after July 1,
2017.
Collections Taxpayer Good Standing (37 -38) — These sections permit municipalities to deny
local licenses and permits to any taxpayer who has neglected or refused to pay local taxes and
who has not filed a good faith application for an abatement. Current law permits this collection
method, but only if the taxpayer has been delinquent for at least one year. This change is
intended to allow municipalities to mirror a "good standing" requirement for licensure under
their implementation by -law or ordinance.
Workforce Housing Special Tax Assessment Plan (39, 123) — These sections allow a
municipality to adopt and implement a workforce housing special tax assessment plan, intended
to encourage and facilitate the increased development of middle income housing. Special tax
assessment exemptions from property taxes can be entered into by the municipality and the
developer for a period not to exceed 5 years.
Industrial Development Financing Authority (4041) — These sections amend state law to
allow the Board of Selectmen in a town to establish an Industrial Development Financing
Authority.
Water and Sewer Commissions (42 -43) — These sections make a technical correction to the
methods of local acceptance of statutory provisions creating local water and sewer commissions,
by referencing the methods of local acceptance in c. 4, § 4, and clarifying that a water and sewer
commission is an independent body politic. These sections also permit the commissions that
enter into agreements with municipalities to have liens added to city or town tax bills and
collected by the tax collector, rather than by the commissions.
District Improvement Financing (44 -50) — These sections amend the district improvement
financing statutes so that the "DIF" reserved for debt service and project costs equals the new
property tax revenue generated by new development and added to the community's levy limit as
new growth under Proposition 2'/2. They also clarify that the requirement to reserve tax
increment funds ends when monies are set aside to pay all debt service. The formula in the law
is based on models used in other states that do not have levy limitations or require tax rate
recalculation based on current values, i.e., where valuation increases generate additional
revenue. For this reason, the tax increment is very difficult for local assessors to calculate and
more importantly does not actually reflect the new property tax revenue generated by the project.
Combine Treasurer Collector (51 -52) — These sections allow municipalities to combine their
treasurers and tax collectors into one appointed position without first obtaining a special act.
Appoint/Remove Finance Officers (53, 55 -56) — These sections repeal three sections under
which the Department of Revenue (DOR) may appoint, approve the appointment of or remove
local finance officers (assessors, collectors, deputy collectors and treasurers) for non-
performance. The statutes date back to a different era and are outdated given changes in the
governance and operation of municipal finance offices. Responsibility and accountability for the
performance of these officials belongs with the local appointing authority or the voters. Also,
DOR has no record of exercising these functions in years, if ever.
Joint /Cooperative Assessing, Classification and Valuation of Property (54) — This section
modifies how agreements for joint/cooperative assessing are established by letting Boards of
Selectmen do so in towns.
Approval of Bills/Warrants (57 -58) — These sections allow multi- member boards, committee,
commissions heading departments, including boards of selectmen, to designate one of its
members, to review and approve bills or payment warrants, with a report provided at the next
meeting. Currently, a board or committee heading a department may delegate authority to
approve payrolls to a member and a regional school committee may designate a subcommittee to
approve bills and payrolls with a report to the next meeting of full committee. Absent a charter
4
�R1
or special act, boards and committees must approve bills or payment warrants by majority vote at
a meeting subject to the Open Meeting Law.
Compensation of District Assessor (59) — Removes the DOR Commissioner's role as mediator
if a dispute arises about the amount annually appropriated for the salaries and compensations of
assessors and tax collectors in tax levying districts.
Injured on Duty Fund (60) — Allows municipalities to create, appropriate money to and expend
from a special injury leave indemnity fund for payment of police officer and firefighter injury
leave compensation or medical bills, rather than charging them to current departmental
appropriations.
Debt Purposes (61, 63 -64, 178, 180) — These sections modernize and simplify the current laws
that authorize cities, towns and districts to borrow by consolidating, updating and restructuring
the allowable borrowing purposes. Also allows borrowing for a court judgment for more than 1
year if approved by the Municipal Finance Oversight Board.
Grant Anticipation Notes (62) — Broadens current law to allow municipalities to borrow in
advance of any state or federal grant, whether that grant in the form of an advance or is
reimbursable. This updates the statute to add federal grants and reflect changes in state grant
administration, as fewer advance grants that can be spent without appropriation are being made.
Ten Year BANS (65) — Amends current law to allow 10 year bond anticipation notes (BANS)
with the same required principal paydown as current law, to provide treasurers greater flexibility
in structuring debt, particularly for smaller purchases or projects.
Refunding Bonds (66, 68) — Allows final payment (of the original debt schedule) to be made no
later than 6/30 of the fiscal year payment otherwise due, instead of annual anniversary of prior
payments. Also, amends current law to allow with a finding by the mayor /manager /select -board
that refunding is necessary for federal tax compliance purposes. This section also makes a
technical change to the refunding procedures and payment schedule — allowing first principal
payment of refunding bonds to be due no later than 6/30 of the fiscal year the payment would
have otherwise been due, e.g., instead of 11 /1 or 511. The payment still must be in the same
fiscal year and cannot be deferred to another fiscal year.
Bond Premiums and Surplus Proceeds (67) — Amends current law by providing communities
with a choice regarding how to treat bond premiums (net of issuance costs). Communities will
be able to either apply it to the issuance, thereby reducing the amount needed to borrow, or place
it in a separate fund and appropriate it for a capital project. It also amends current law by
increasing the amount of surplus bond proceeds that can be applied to debt service from $1,000
to $50,000.
5
!3
Lease Purchase (69) — Establishes a procedure governing the use of tax - exempt lease - purchase
financing agreements (TELPs) by municipal departments and allows borrowing to pay off a
TELP if it would result in interest savings.
Eliminate Debt Report (70) — Eliminates the requirement that the municipal treasurer notify the
director of accounts when a payment is made. This eliminates the need to notify of duplicative
information, as the annual year -end statement of indebtedness shows changes in debt levels over
the course of the year.
Emergency Spending (71) — Amends current law to provide for automatic approval of payment
for liabilities incurred as a result of emergencies and disasters, when the Governor declares a
state of emergency.
Court Judgments (72 -73) — Amends current law to allow payment without appropriation of
final court judgments and other final adjudicatory claims with municipal counsel certification.
Currently, such payments over $ l OK, require the approval of the director of accounts. Further,
amends the statute to reflect the current operating environment where obligations to make
immediate payments based on various legal claims now are just as likely to result from decisions
of administrative agencies rather than just court judgments.
Snow and Ice Removal (74) — Eliminates prior approval for deficit spending for snow and ice
removal by the council/selectboard; and alternatively, requires only that the chief administrative
office of the municipality authorize deficit spending.
Year End Transfers (75 -76) — These sections eliminate the limits on types and amounts of
appropriation transfers that can be made by the selectmen with finance committee approval at
end of year. This would allow end -of- fiscal -year transfers from health insurance, debt service or
other unclassified /non - departmental line item appropriation and eliminate a cap of 3% on the
amount that may be transferred from any department (school and light department line items
remain exempt from this procedure). Eliminating the cap on transfers will provide for greater
flexibility in avoiding deficits and eliminate the need for additional town meetings by July 15 for
minor transfers.
Director of Accounts Powers (77 -83, 182) — These sections make several updates to statutes
governing municipal audit and accounting systems to reflect the current focus of state oversight
on establishing uniform accounting and reporting standards, ensuring periodic audits and
instituting best practices based on end of year reports, local management reviews and DLS
reviews of cities, towns and special purpose districts. These changes are made through repealing
or amending a number of statutes that have not been updated in years and still reflect the original
mission of the Bureau of Accounts to install accounting systems, conduct financial and forensic
audits and investigations of cities, towns and districts.
ril
W1
Insurance/ Restitution Funds (84) — This section amends the statute that requires all municipal
receipts to be deposited to the general fund and be appropriated. This current statute includes
several exceptions that allow certain receipts to be spent without appropriation for particular
purposes, including insurance and restitution proceeds. This section increases the amount that
may be spent without appropriation to restore or replace the damaged property from $20,000 to
$150,000 and updates the lost or damaged school book and materials restitution exception to
include electronic devices and equipment provided to students.
Grant Available Fund (85) — Makes all reimbursable grants from federal or state government
available for appropriation once approved by the granting agency. The proposed amendment
eliminates the need for the Director of Account's approval in future bond bills for G.L. c. 90
grant funds and broadens the immediate availability of other reimbursable grants for expenditure.
Departmental Revolving Fund (86) — This section amends the revolving funds statute to
provide more flexibility by eliminating the departmental per fund and total fund caps, broadening
the types of departmental receipts which funds can be established, and allowing revolving funds
to be established by bylaw or ordinance.
Compensating Balance (87 -90) — These sections remove DOR's role in prescribing types of
services and in receiving reports on municipal agreements with banking institutions for
"compensating balance" agreements. However, these sections still require that the treasurer or
collector of a municipality produce the report and submit to local officials and the inspector
general.
Refundable Consulting Fees (91) — Current law allows consultant fees imposed by certain
municipal permitting boards to pay the costs of their reviewing applications for permits or
licenses, including zoning special permits, subdivision control, comprehensive permits, board of
health permits, and conservation commission permits. The statute allows the board to spend the
fees for consulting services, and if monies remain after the board makes its determination, to
refund them to the applicant, without appropriation. This amendment would expand the use of
special funds to include consulting fees charged by any municipal officer (for example, building
inspector) or board with permitting authority where the imposition of fees for outside consultants
is established by its own rule- making authority (if any), statute, ordinance or by -law.
Performance Deposits (92) — This section adds a provision that would allow municipalities to
set up escrow accounts for refundable cash performance deposits and set standards for
administration, investment and expenditure upon default.
Special Events Fund / Betterment Reserve (93) — This section amends or adds two special
revenue funds. The first broadens the municipal celebration fund to include any special event
(anniversary celebrations). The second specifically reserves betterment and special assessment
7
revenue for appropriation for the payment of debt service on any bonds issued to finance the
improvements for which the betterments were assessed.
Revenue Cash Investment (94) — Amends current law to permit investment in certificates of
deposit (CDs) for up to 3 years, an increase from the current no longer than 1 year requirement.
This change also addresses an ambiguity in the statute as to whether a 1 year limit applies to
these investments or solely to investments in United States treasury bonds. It would give
treasurers more flexibility in investing short-term for better rates.
Municipal Affordable Housing Trust Fund (95 -97, 246) — Amends language so that
Community Preservation Act (CPA) fund monies appropriated into the local affordable housing
trust fund are separately accounted for within the trust and are subject to the same restrictions as
other CPA fund monies. The trust must also report all expenditures from those funds to the
Community Preservation Committee (CPC) each year.
Penalty Electronic Payments (98 -99) — These sections amend the process for appealing
penalties imposed on individuals who tender a check for local fees with insufficient funds,
requiring the individual to appeal at the local level, rather than with the DOR Commissioner.
They further amend the statute to cover electronic payments that are made with insufficient
funds.
CPA Surcharge Exemptions (100) — This section sets a deadline for taxpayer applications for
exemptions from the statutory surcharge on real property under the Community Preservation Act
(CPA). The deadline is the same as that for other types of applications for local tax exemptions,
and provisions are also made for appeals to the Appellate Tax Board (ATB) and confidentiality
on the same terms as those applicable to such other applications.
Elections (101 -102) — These sections permit municipalities to use "electronic poll books," in lieu
of paper voting lists, at polling stations. The section requires any municipality interested in
using electronic poll books to obtain approval from the Secretary of State and, if approved, to
obtain a vote of the board of selectmen or town council in a town or city council in a city at least
60 days before the first election in which such technology will be used. The Secretary of State
must also promulgate regulations.
Corporations List (103,118, 251) — These sections require that the Department of Revenue
identify those corporations that are classified as research and development corporations, so that
cities and towns can use that classification in their administration of property tax exemptions.
Approval of Forms (104,111,136 -137, 163,169) — These sections eliminate existing
requirements that the Department of Revenue print and distribute various forms, and approve
electronic formats, used in the assessment and collection of local taxes.
0
AA\
Collection Title Foreclosure (105, 164) — These sections eliminate an existing but apparently
never - exercised mechanism under which the Department of Revenue took over collection actions
on behalf of towns.
Affordable Housing & Brownfield Abatements (106 -107, 147 -148) — These sections amend
the property tax laws to allow local implementation of affordable housing abatement agreements
in the same manner as brownfield abatement agreements under G.L. c. 59, § 59A. The
brownfield abatement agreement is an entirely local process with an implementation by -law or
ordinance providing transparency in allowable abatements within the statutory parameters. That
process would be appropriate for affordable housing abatements as well.
State -Owned Land Valuation (108 -109, 252) — These sections eliminate the current procedure
under which the Department of Revenue values state -owned land every four years, replacing that
process with a statutory formula for determining the valuation every two years after the 2017
valuation required by current law. That valuation will be adjusted every two years by the
equalized valuation and the value of acquisitions and dispositions. The acquisitions and
dispositions will be based on a per acre value that will also be adjusted every two years by the
equalized valuation. These sections are proposed to take effect as of January 1, 2018, to govern
the state -owned valuation on January 1, 2019 for distributions made in fiscal year 2021.
Schedule A Compliance (110) — This section improves compliance for municipal reporting by
changing from October 1 to November 30 the annual deadline for cities and towns to submit the
prior year's annual financial report. This would also modify the law to provide the intended
consequence for non - compliance and withhold all future payments (regardless of fiscal year)
until such time as the Schedule A is submitted and accepted.
Supplemental Assessments (112 -115, 251) — Current law provides for supplemental
assessments on new construction, and abatement of regular real estate for damage due to fire or
natural disaster, unless a community rejects this option. These sections change this assessment
by excluding the value of the land from the calculation of the 50% trigger for the supplemental
assessment. They also clarify the applicable tax rate, and establish a one -year time limit in
which a property owner may apply to the assessors for abatement after a fire or other natural
disaster.
Tax Abatements for Veterans (116, 12 1) — Adds a local acceptance provision that extends
veteran exemptions (Clauses 22, 22A -22F) to spouses of veterans when title to the veteran's
domicile is held by the spouse as a trustee or conservator and to allow surviving spouses of
veterans who acquired title as trustee or conservator to retain the exemption on the particular
property after the veteran dies. These spouses and surviving spouses are already eligible for
exemption. Existence as a local option raises the issue of whether they will now only be eligible
if this option is accepted.
0
Q J \-v
Charitable Exemption Technical Correction (117) — This section corrects two references in
the charitable exemption for real property to local adoption of a "paragraph." The local adoption
should be of the "sentence."
Exemption Applications (119, 122, 125 -126, 146, 247) — These sections create a single due date
for personal exemption applications regardless of billing system used. This section would make
April 1 the deadline for personal exemption applications in all communities, creating a uniform
and consistent deadline for taxpayers.
Commercial Fishing Exemption (120, 248) — These sections increase from $10,000 to $50,000
the value of the property tax exemption for boats, nets and gear used in commercial fishing. It
also increases eligibility for the exemption by eliminating the current requirement that the
exempt property be used "exclusively" in commercial fishing, requiring instead that at least half
of the taxpayer's income is from commercial fishing.
Residential Exemption (124, 247) — Increases from 20% to 35% the statutory limit on the
amount of a residential exemption that can be granted, if a municipality grants such an
exemption as one of its property tax classification options. Five of the thirteen municipalities
that have decided to grant such an exemption have asked for, and received approval for,
residential exemption amounts that are higher than the current statutory limit of 20 %.
Senior Citizen Property Tax Work -Off Program (127) — Increases from $1,000 to $1,500 the
maximum abatement a taxpayer over 60 years old may earn each fiscal year.
DOR's Authorization to Assess (128 -130, 251) — These sections eliminate the requirement that
local assessors obtain the Department of Revenue's approval before assessing taxes on real
property to unknown owners or owners of present interests. The Department is unable to
conduct independent title or other analyses to verify these requests. Moreover, local assessors
determine record ownership for assessment purpose for millions of real estate parcels and there is
no regulatory purpose served in having them obtain the Department's approval about the party
assessed in these selected situations. The Department has the power to issue guidelines on
assessment administration and can provide appropriate oversight and guidance on the statutory
standards and best practices.
Single Overlay (131, 133,152, 249) — This section would create a single overlay account and
remove anachronistic references to a repealed cap on cities. Currently, there is a separate
overlay reserve for each fiscal year. A surplus in one year cannot be used to cover a deficit in
another year without the assessors declaring a surplus, the accounting officer transferring the
amount to an overlay surplus account and the legislative body appropriating from the surplus by
year end. This is cumbersome and inefficient. Amendment applies to all existing overlay
balances as well as overlay added in the future.
10
Property Tax Rate Change (132) — This section enables the Division of Local Services to
change a tax rate after it has been approved and returned to the assessors if (1) there was a
material understatement or overstatement in the returned rate due to an unintentional, inadvertent
or other good faith omission or error by city, town or district officials in reporting the rate; and
(2) the tax bills for the year have not been sent.
Central Valuation (134 -135, 251) — These sections change the timelines for company reporting
and DOR certification to conform to the same schedule as pipeline companies, and to be able to
obtain the most current company regulatory reports. These sections also provide for a more
streamlined and expeditious appeal process by allowing one party to file a notice of appeal in
response to another parties' filing.
Interest on Collections (138,140 -141, 248) — These sections standardize the accrual of interest
on delinquent property tax installments, addressing an inequity in the accrual of interest on
overdue installments between communities using semiannual and quarterly billing. Currently,
under semiannual systems, interest accrues from the date the tax bills are mailed, i.e., if the
payment is one day overdue, the taxpayer is charged 31 days interest. Under the quarterly
system, interest does not accrue until the due date. They also permit all communities to make
small bills of $100 or less payable in one installment.
Appellate Tax Board (ATB) Jurisdiction (139, 142 -143, 149) — These sections add a
"postmark" rule to determine when interest is incurred on payments received by local tax
collectors after their due date, but only for appeal purposes. Incurring interest on late property
late payments can bar the ATB from acting on taxpayer appeals of denials of property tax
abatement applications by local assessors.
Mortgagee Abatements (144 -145, 247) — These sections change the timeline for applying for an
abatement, in recognition of the widespread use of quarterly billing systems in cities and towns
of the Commonwealth. Currently, any holder of a mortgage (regardless of the property tax
payment system in use in the city or town) must apply for abatement between September 20 and
October 1. These sections change that requirement so that the application must be filed during
the last ten days of the abatement period, regardless of the city or town's billing system. They
also correct a reference to ensure that Section 59 of Chapter 59 of the General Laws applies to all
persons who may represent a person's estate. These changes are proposed to take effect for the
fiscal year starting on July 1, 2016.
Appeals (150 -151) — These sections clarify that the failure to pay semiannual and quarterly
preliminary tax payments, as well as actual tax payments, is a bar to Appellate Tax Board appeal.
Taxpayers are obligated to pay preliminary taxes based on prior year actual under quarterly and
semiannual systems. Their failure to pay preliminary taxes subjects them to the same interest on
overdue amounts that accrues on overdue actual installment payments.
11
Abatement on Low Value Lands (153, 155) — These sections repeal the Department of
Revenue's authority to authorize assessors to abate taxes on low value lands and under a local
option, let assessors abate these taxes when the collector determines the costs to collect are more
than the amount owed. Treasurers can also foreclose the tax title under the land of low value
rj procedure.
Apportionment Appeal (154) — This section extends from seven to thirty days the time period
within which a taxpayer may appeal an apportionment decision.
Mailing Tax Bills (156) — This section modernizes where tax bills are mailed in absence of
written direction by the taxpayer. Under current law, the tax bill only has to be sent to the
"town" where the person resides. This is anachronistic language. Bills should be mailed to the
taxpayer's address if known, or the property address, unless the taxpayer directs otherwise.
E- Billing Technical Correction (157) — This section corrects an internal cross - reference to the
electronic billing program.
Betterment Suspension (158) — Under current law, the Department is authorized to approve
assessors' suspension of betterments for persons receiving certain exemptions. There is no
institutional record of exercising this authority and if a request was received, it is not clear what
criteria are to be used to determine approval. This section will delete an obsolete provision that
pre -dates the enactment of local option G.L. c. 80, § 13B, which allows for betterment deferrals
for seniors.
Scholarship and Educational Funds (159 -162) — These sections amend the authorization for
cities and towns to form such funds to clarify that each fund is separately accepted and to clarify
the distinct purposes for which such funds can be used.
Electronic Payment Penalties (165) — This section amends the process for appealing penalties
imposed on individuals who tender a check for local taxes with insufficient funds, requiring the
individual to appeal at the local level, rather than with the DOR Commissioner. It further
amends the statute to cover electronic payments that are made with insufficient funds.
Covenant Extension (166) — Under current law, a city or town must apply to the Department of
Revenue to extend (for up to one year) the duration of the municipality's statutory exemption
from the terms of a covenant running with the land. There is no institutional record of receiving
any request to exercise these powers and DOR is not in position to do so. There is no regulatory
purpose served by a DOR role in the local tax title foreclosure process. This section strikes
references to post - foreclosure extensions of such exemptions.
Foreclosure of Abandoned Buildings (167) — These sections eliminate the need for the
involvement of the Department of Revenue in determining whether buildings are abandoned.
Currently, the Commissioner is required to "make an affidavit" confirming that the
12
0
Commissioner agrees with the conclusions of local officials that the building is abandoned.
These sections eliminate references to the involvement of the Department of Revenue, and allow
the affidavits and writings of the local officials involved, including a recitatiop of efforts to
locate the property owner, to be recorded and to be treated as prima facie evidence that the
building is in fact abandoned.
Taxes in Litigation (168) — This section eliminates a purely ministerial requirement that the
Department of Revenue authorize and allow the transfer of taxes in litigation by an accounting
officer. By law, if the collector cannot perfect the tax lien due to bankruptcy or other litigation,
the lien securing collection continues when the tax collector records a statement of the legal
action. Providing a copy of the recorded statement to the accounting officer should be sufficient
for the transfer of those taxes from the collector's current books.
Prisoners of War Exemption from Motor Vehicle Excise (170) — This section re- organizes
and clarifies the paragraph granting a local option exemption from the motor vehicle excise to
prisoners of war or their surviving spouses.
Motor Vehicle Excise Collection (171) — This eliminates the requirement that notice for
marking at RMV be approved by the Joint Committee on Revenue.
Chapter Land / Cranberry Bogs (172 -174, 237) — These sections allow installation of a
renewable energy system on classified Ch. 61A land without triggering a penalty tax (5 year
rollback or conveyance tax when the change occurs within 10 years of acquisition). The energy
use can also be discontinued at any time without penalty (compare to acquisition by non - profit
organization which are not penalty free from changing the use within 5 years). They also extend
a special exemption from the annual gross sales requirement for cranberry bogs until 2020, i.e.,
the owners do not have to produce and sell a minimum crop to continue receiving the tax
benefits of Chapter 61 A.
Jet Fuel Excise (175 -177) — These sections implement changes to comply with a recent change
in FAA policy that requires use of state and local taxes on aviation fuel for airport purposes.
Under the amended policy, excises imposed after December 30, 1987 are subject to federal
revenue use restrictions, i.e., can be used for just aviation and airport purposes. If any
municipality accepted and imposed the excise after that date, the FAA requires a state action plan
to amend any non - compliant laws. States had until the end of 2015 to come up with any required
action plan. All but 1 Massachusetts community that has adopted the excise is either
grandfathered from complying with the new policy or has adopted/can adopt an enterprise fund
for its municipal airport that will effectuate this policy. The sections also allow a community
whose airport is located in another community to receive and use the taxes for airport purposes.
13
Regional School District Debt (179) — Makes a technical change, inserting the word
"committee ", to clarify that it is the regional district school committee that may require the
approval of any particular authorized issue of indebtedness by referendum.
Regional School District Transportation (181) — Clarifies that any funds to be reimbursed by
the Commonwealth for regional school district transportation are subject to appropriation.
Regional School District Stabilization Fund (183) — Under current law, a regional school
district can have a stabilization fund, not to exceed 5% of the total assessment upon member
communities. These amendments substitute the Commissioner of Elementary and Secondary
Education instead of the Director of Accounts to approve a higher level of stabilization fund
appropriation and expenditures from the fund for other than capital purposes.
Extended School Programs (185 -187) — Under current law, school committees may provide
pre- school and extended school services for certain children and establish a revolving fund for
payments made by parents and other monies received in connection with these programs. These
amendments would remove outdated restrictions on the students who may receive the services
and extend these sections to regional school committees.
Community School Program Fund (188) — Increases the current community school fund's
$3,000 expenditure limit for material and equipment purchases within a fiscal year, to $10,000.
School Revolving Fund (189) — Qualifies revenue received from enrichment and summer
programs authorized by the school committee, and parking fees as monies received in connection
with the "use of school property" for the purposes of the district's revolving fund.
Vocational School Revolving Fund (190) — Removes the $5,000 expenditure limit placed on
vocational schools' revolving funds, used for culinary arts or other related programs.
Betterment Installments (191) — This section amends current law to allow cities, towns, and
districts greater flexibility in setting interest rates that run on betterments or special assessments,
at any level up to 2% above the rate of borrowing the city, town, or district is paying. It also
makes interest accrual/due date run from the mailing of the bill (not the commitment to the tax
collector).
Collection Liens Non - Resident (192, 253) — There is a common statutory scheme that lets
municipalities and districts, by local option, establish liens when customers of municipal utility
services — gas, electricity, steam, water and sewer — do not pay user charges when due. Lighting
plants, water departments and sewer departments often provide utility services to ratepayers
living in neighboring communities. However, only lighting plants may impose liens for
customers located in those municipalities. This section extends that option to municipalities and
districts that provide sewer services to customers outside their borders.
14
Local Speed Limits / Safety Zones (193 -194) — These sections allow a municipality to establish
a speed limit of 25 miles per hour on any roadway inside a thickly settled or business district in
the city or town on any way that is not a state highway. It also allows for the creation of
designated safety zones on, at or near any way in the city or town which is not a state highway,
and with the approval of MassDOT if the same is a state highway. Such safety zones would
have a posted speed limit of 20 miles per hour.
RMV E- Citations (195 -211) — These sections make various changes to c. 90C, regarding motor
vehicle offenses, to implement the new "E- Citations" project jointly administered by EOPSS and
the RMV. The changes amend definitions and other references to paper citations to include
electronically issued citations; give EOPSS authority to promulgate regulations to set standards
for e- citations and associated equipment requirements; and ensure that both paper and electronic
copies of citations are properly delivered by police departments to the RMV and district courts.
Regional Health Districts (212 -214) — This section modifies how regional health districts are
formed in a town by letting Boards of Selectmen establish them.
Housing Authority Appointments (216) — Changes state law to allow a municipality to make
the appointment to a housing authority if the State does not fill the vacancy within 120 days.
Municipal Debt/Urban Renewal (217 -218, 220) — These sections repeal a duplicative
requirement regarding approval of debt issued by cities and towns to support housing and urban
renewal projects, as cities and towns are subject to an overall debt limit under G.L. c. 44, § 10,
which may be exceeded with approval of MFOB. In addition, they correct a reference to the
Emergency Finance Board (EFB) rather than the Municipal Finance Oversight Board (MFOB).
Economic Development and Industrial Corporations (219) — Modifies how Economic
Development and Industrial Corporations are formed in a town by letting Boards of Selectmen
establish them.
Demolition Liens (221) — This section extends the period of time in which a "demolition lien,"
imposed on a property for failure to demolish damaged or dilapidated buildings or structures,
may last. Specifically, this section permits a lien added to real estate tax property in the next
year to extend for the same period of time permitted for the tax lien. If the demolition lien is not
added to a tax until later, it expires on October 1 of the third year after filing of the lien (current
law specifies October 1 of the next year after filing).
Penalties for Unlicensed Electricians (222) — This section increases fines for unlicensed
electricians. The current penalty structure is $10 to $100 for a first offense, and $50 to $500 for
second or subsequent offenses. The new structure would be $1,000 to $1,500 for a first offense,
$1,500 to $2,000 for a second offense, and $2,000 to $2,500 for each subsequent offense.
15
Cadet Program (223) — This section prevents anyone applying to become a cadet from aging
out as long they applied while they were age - eligible.
Municipal Procurement 2 (224 -230) — These sections amend the "vertical" construction
procurement statute, c. 149, § 44A, to increase the dollar threshold for contracts requiring less -
than -full competitive bidding from $25K to $50K. It also makes procurement methods
consistent with other construction and municipal procurement statutes by modifying the method
for "middle tier" contracts, valued at between $ l OK -50K, to permit public entities to either give
public notification of the contract or use OSD statewide contracts or other "blanket" contracts to
solicit a minimum of three bids. These sections increase the dollar thresholds for contracts
requiring competitive bidding (from $100K to $150K for first tier) and for triggering the
requirement to submit "sub- bids" and "sub- trade" bids.
Registers of Probate (231, 252) — Requires registrars of probate to provide assessors with
copies of petitions upon request. Assessors are charged with knowledge of records of registry of
deeds and probate regarding ownership of real estate, but only registrars of deeds are required to
provide them with information on transactions relating to title of real estate within their
municipality. This will allow assessors to access names of deceased so they can check against
their records and set up a mechanism to track and review later for disposition of property.
Small Claims Actions (232 -233) — Amends the jurisdiction of small claims court to hear all
cases to collect locally assessed personal property taxes and to hear other municipal actions that
do not exceed $15,000. This would provide tax collectors with the ability to make more
effective use of lawsuits as a remedy to collect delinquent property taxes where there is personal
liability only, i.e., no lien such as for personal property taxes.
Federal Public Work Borrowing (234 -235) — Eliminates the requirement that the Governor
approve local borrowing for federally funded public works projects and substitutes the municipal
finance oversight board
Woods Hole, Martha's Vineyard and Nantucket Steamship Authority Procurement (236) —
Increases the procurement threshold for the Authority from $25K to $50K.
Double Poles (239) — This section requires all telephone companies and distribution companies
to file a comprehensive annual report for years 2016, 2017 and 2018 to the joint committee on
telecommunications, utilities and energy and the joint committee on municipalities and regional
government that includes (i) the number of double poles at the beginning and end of the
reporting period; (ii) double pole activity, including all attachments transferred during 2016; (iii)
the number of unlicensed commercial and municipal attachments; (iv) the average number of
days between the erection of the second pole and takedown of the original defective pole when
there are no unlicensed attachments on the original pole; and (v) the average number of days
between the erection of the second pole and the takedown of the defective pole when there is at
least 1 unlicensed attachment on the original pole. The companies must also provide a timeline
16
for projected removal of existing double poles as of December 31, 2016. The companies must
also provide a list of communities and municipal electric companies that participate in the
statewide notification system utilized to facilitate the notification process for electronically
alerting attachment owners to transfer and remove equipment attached to double poles. Upon
receipt of the 2016 annual report, and in collaboration with the department of public utilities, the
joint committee on telecommunications, utilities and energy and the joint committee on
municipalities and regional government shall endeavor to propose a fine structure for failure to
remove outstanding double poles.
Review of Regionalization Opportunities (240) — Requires each secretary of an executive
office to evaluate all grant, loan, and technical assistance programs administered under their
office for opportunities to promote, facilitate and implement inter - municipal cooperation,
collaboration, and regional service delivery at the local level, and report the results of that
evaluation to A &F by December 31, 2016.
Prioritizing Grant Funds to Communities who Regionalize (241) — Requires any executive
agency that administers a program through which funding may be provided to municipalities,
where regionalization may be feasible, shall encourage municipal efficiencies by prioritizing
those applications for funds which come from municipalities that have developed a method by
which to jointly and more efficiently utilize such funding.
Contracts with Regional Planning Agencies (242) — Requires the Operational Services
Division (OSD) to review applicable procurement policies and regulations to facilitate the
execution of contracts, where appropriate, between regional planning agencies and any state
agency to provide or receive services, facilities, staff assistance or money payments.
Reduction of the Cost of Textbooks /other Educational Materials (244) — Requires the
Operational Services Division (OSD) to develop procedures allowing for the reduction of the
cost of textbooks and other educational materials through methods including, but not limited to,
bulk purchasing and statewide contracts for bulk purchasing for elementary and secondary public
schools and for public institutions of higher education in accordance with 34 CFR 668.164.
Study of Manufactured Housing / Qualification under Ch. 40B (245) — Requires the
Department of Revenue (DOR) to conduct a study evaluating each manufactured housing
community in the Commonwealth to determine what percentage of resident households at each
manufactured housing community would qualify for low or moderate income housing under
chapter 40B of the General Laws. The results of the study would be required to be reported
within 180 days (i.e., six months) of the effective date of the act, (i.e., nine months from the date
of approval by the Governor).
17
Qtr Rec'd
Tax Receipt
Period Covered
Trailing 12mos
4 x this qtr
1 Dec 10
$
25,930.66
Nov('10)
2 Marl
$
72,158.78
Dec('10)- Jan- Feb('11)
$288,635.12
3 Jun '11
$
74,680.92
Mar - Apr- May('11)
$ 298,723.68
4 Sep 11
$
81,200.12
Jun - Jul- Aug('11)
$324,800.48
5 Dec 11
$
78,060.75
Sep- Oct -Nov (11)
$
306,100.57
$ 312,243.00
6 Mar'12
$
80,014.30
Dec('11)- Jan- Feb('12)
$
313,956.09
$320,057.20
7 Jun '12
$
82,379.42
Mar - Apr- May('12)
$
321,654.59
$ 329,517.68
8 Sep '12
$
84,171.11
Jun - Jul- Aug)'12)
$
324,625.58
$ 336,684.44
9 Jan '13
$
86,922.77
Sep- Oct- Nov('12)
$
333,487.60
$ 347,691.08
10 Marl 3
$
86,014.28
Dec('12) Jan- Feb('13)
$
339,487.58
$ 344,057.12
11 Jun '13
$
85,604.88
Mar - Apr- May('13)
$
342,713.04
$ 342,419.52
12 Sep'13
$
97,316.94
Jun - Jul- Aug('13)
$
355,858.87
$389,267.76
13 Dec'13
$
84,587.26
Sep- Oct- Nov('13)
$
353,523.36
$ 338,349.04
14 Mar'14
$
85,386.60
Dec(13) Jan- Feb('14)
$
352,895.68
$ 341,546.40
15 Jun '14
$
87,459.79
Mar - Apr- May('14)
$
354,750.59
$ 349,839.16
16 Sep'14
$
91,525.40
Jun - Jul- Aug('14)
$
348,959.05
$366,101.60
17 Dec'14
$
86,141.97
Sep- Oct- Nov('14)
$
350,513.76
$ 344,567.88
18 Marl 5
$
93,127.59
Dec('14) Jan- Feb('15)
$
358,254.75
$ 372,510.36
19 Jun '15
$
85,173.49
Mar - Apr- May('15)
$
355,968.45
$ 340,693.96
20 Sep'15
$
90,222.76
Jun - Jul- Aug('15)
$
354,665.81
$360,891.04
21 Dec'15
$
85,040.13
Sep- Oct- Nov('15)
$
353,563.97
$ 340,160.52
22 Mar'16
$
91,305.33
Dec('15)Jan- Feb('16)
$
351,741.71
$365,221.32
23 Jun '16
$
103,721.65
Mar - Apr- May'16
$
370,289.87
$ 414,886.60
2 $ 1,918,146.90 TOTAL`J
FY13
$ 300,000
FY14
$ 350,000
FY15
$ 350,000
FY16
$ 350,000
FY17
$ 350,000
O� OF I?
tiC
Office of the Town Manager
16 Lowell Street
6�9INCORp��P Reading, MA 01867
To: School Committee
Superintendent Dr. John Doherty
From: Robert W. LeLacheur, Jr. CFA
781 - 942 -9043
townmanager @ci.reading.ma.us
www.readingma.gov /town - manager
Date: July 26, 2016
RE: School Committee Agenda for July 27th
In this memo I want to briefly outline two issues, as follow up to a meeting held earlier today with
Superintendent Doherty, School Committee Chair Borawski and Selectmen Chair Halsey.
First is to clarify that the Selectmen are using a macroeconomic policy approach to the issue of an
Override. While there is clearly an impact on both town and school FY18 operating budgets, the Board is
still working at a 'higher level' to solve tax policy issues, and to consider the idea of sustainability and
the reasons for a structural deficit. The work on tax policy has been ongoing for several months along
with the Board of Assessors and their staff, town counsel, and our legislative delegation. In addition the
three Community Listening Sessions helped shape their views of what type of tax policy to debate, and
those discussions will continue through August 91h. On or after that date the Board will be looking more
specifically at the impact of an Override to town staff and services. By contrast, the School Committee
has been examining those specific FY18 budget impacts recently.
I have said for years that two drivers of our annual budgeting challenges are the cost of health
insurance, which is clearly a national problem, and lagging State Aid. On the chart on the next page is
the current forecast for growth of revenues over the next several years, from +3.3% in FY18 to +3.5% in
FY25, compared to the expected +8% annual growth in Health Insurance costs and the recent growth of
+1.2% in State Aid. The gap between revenues and health insurance costs will increase from zero today
to $5.8 million in FY25; similarly the gap between revenues and State Aid will grow from zero today to
$2.8 million in FY25. Taken alone these two impacts create an $8.6 million structural deficit in FY25.
Generally, I expect all other costs to be handled by forecasted revenues.
An Override that would grow to fill the gap shown in that chart annually would be ideal, but that would
require a change to Prop 2 -1/2. Therefore the challenge of a one -time 'lump sum' Override is to solve
these three parts:
1) Structural deficit of approximately $3 million between Revenues and the Town & School
budgets;
2) Restoring prior budget cuts and adding new services for the Town and Schools;
3) Filling that gap as is possible.
Along with the Selectmen I continue to work first on Tax Policy, and then on the gap problem. We need
to have this work wrapped up by August 9th or so, and then will move on to FY18 budgets.
aid
Ai
i
s
The second issue is to clarify the time frame, below are some key dates, note that the proposed meeting
on August 16`h was decided earlier today:
August 9 Selectmen finalize tax policy and discuss Town FY18 budget
August 16 Selectmen and School Committee joint meeting to discuss Override (8pm)
Selectmen to call Special Town Meeting consisting of 8 Warrant Articles:
1— Reports
2 — Instructions
3 — FY17 -26 Capital
4 — Senior Tax Exemption
5 — Accept COLA for Seniors
6 — Lower Interest Rate on Deferrals
7 — Home Rule Petition — Senior Tax Relief
8 — Proposition 2 -1/2 Override Discussion
The last two Articles are the largest issues. Town Meeting must approve the exact wording of a Home
Rule petition in Article 7, and this is the bulk of the Tax Policy work I mentioned that we are engaged in.
Article 8 is meant to hear from Town Meeting only, as the body has no formal role in the Override
process. Reading is very unusual to have such a discussion, but the Selectmen since last winter have
been adamant on this aspect of transparency. Some Town Meeting members object to being involved
since they have no role, others believe they ran for a seat in order to determine an Override. There will
be no vote on this Article, and this is the reason that a specific Override dollar figure does not need to be
decided on August 16th when that Warrant is closed. Strictly speaking, an exact Override figure must be
part of a Ballot question that the Board approves by September 13th in time for an October 18th Special
Election.
I have not yet discussed with the Board if they expect to present one Override figure to the
following meetings:
August 31 FINCOM preview of Community Financial Forum
September 1 Community Financial Forum
or if they prefer to have a range of numbers and a menu approach. Those discussions should be
finalized at your joint meeting on August 16tH
In any event, Town Counsel must have finalized Override language for a Special Election on October 18tH
including a specific dollar amount, to the Board for a formal vote the night of September 12th Special
Town Meeting.
1 hope this overview has been helpful.