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HomeMy WebLinkAbout2018-04-13-REPSC-min Residential Exemption Policy Study Committee (Ad Hoc) Meeting Minutes Friday, April 13, 2018 Park Room, Town Office Building Attendance Mark Andersen, Chair; Vicki Blier, Howard Cloth, Katie Cutler,Thomas Whelan,John Zhao; Joe Pato, Selectman Liaison. Guest: Bob Pressman. Mr.Andersen called the meeting to order at 8:33 a.m. Mr. Zhao agreed to be the acting secretary for the meeting. Mr.Andersen's meeting with Robert Lent,the Director of Assessing Mr. Lent offered to meet with the committee on 5/11. He asked that the committee members coordinate requests/questions and limit his effort to the meeting. Ms.Vicki commented that the assessor's office has strict deadlines, so the committee needs to be mindful of the office's workload. Mr. Zhao commented that the committee needs to request 2018 assessment data, Mr. Pato said that we already have. Mr. Whelan's talk about Alternative Tax Mitigation Systems Mr. Whelan met with Sandy @ Assessor office and presented a printed version of FY 2018 Pro. ert .....Fax ,!�g!j . 1. :.'.ra, r�rn�s. Mr. Whelan said there are multiple options, and the most popular choice is 41A- deferred tax for people 65 and older, which had 41 exemption cases in FY17. Mr. Whelan brought up a few difficulties in 41A qualification process. For example,the need to provide documentation every year to verify that gross income does not exceed $70k.This includes social security, and there were a few residents had income just over$70K. There is no flexibility in this calculation. There were 3-4 people whose banks did not give written approvals of the deferrals. Mr. Cloth said that some neighbors were rejected by their banks as they still have mortgage on their properties. It is commented that the interest rate would go up sharply right after the deferring homeowner dies until the deferred amount is repaid. Mr. Whelan indicated there is another choice called Exemption from the Community Preservation Act Surcharge. To apply, one must include income of all owners and all household members,while there is not too much money that one can get from that exemption. 41c also needs to verify incomes. Mr. Pato commented the labor cost for income verification is high. Mr.Whelan said that a full-time staff member would be needed if the residential exemption was in place, in the opinion of the assessor's office, as part-time staff have not worked out in the past.The assessor's office would need 90 days for the process: 30 days to issue the exemptions, 30 days for home owners to file challengers and 30 days the approve/deny the challenges. For which Mr. Pato commented the earliest for RE will be the year of 2020. Ms. Blier indicated the town voted to increase the benefit amount of all personal property tax exemptions by 100%for the next fiscal year(Article 37). Mr.Andersen presented the writing about Lexington Apartments and Residential Exemption 1 Mr. Andersen mentioned that his analysis includes not just apartments but all non-single-family properties. And he suggested Ms. Blier to incorporate some sections of this writings into the final report as appendices. Mr. Andersen went over the classification code of residential properties and presented a table listing breakdowns of Lexington residential properties based on the assessor's database. Mr.Andersen said that child care facility is listed in residential assessment classification codes, and there are 4 child care properties in Lexington. So, may need to notify the businesses of the possibility of RE impact. Mr. Pato commented about the need of verifying the 4 child care properties are indeed be treated as residential properties; and he called out that non-taxable is different from non-profit. Mr.Andersen analyzed the potential of property tax increases, and said that RE creates incentive to convert 2-family homes into condominiums. Mr. Cloth commented that RE would be then calculated per unit base, and mentioned that there was a push for condominium instead of apartment at the town of Somerville. It was commented that converting multi-family homes from apartments into condos makes them more expensive, and if the RE incentivizes condo conversions,that this would remove some of the Town's more affordable housing options. Mr.Andersen proposed that the committee determine whether residency verification can be shared with LIPS for school enrollment purposes, and observed this would not help with school enrollment for students resident at large apartments. Mr.Andersen mentioned RE may discourage home improvement as the tax rate could be higher. Mr. Pato pointed out that only a 50%+value of remodeling will trigger a reassessment. Note the 50%value increase applies to the timing of recognizing growth;the committee is looking into whether a smaller change in valuation is considered new growth. Mr.Andersen said that Lexington needs 40B developments to stay above 10%guidelines; and RE would discourage 40B. Mr. Pato commented that Lexington unlikely has more 40B development; and this is interesting topic, and needs more discussion. Possible dates for public comments meeting Mr. Whelan is not available on 5/25 and Ms. Blier not available on 5/11. Mr. Zhao said evening time would be better for public participation. Mr.Andersen said that let us decide the date for the hearing when we have a write-up suitable for participants at the public hearing Ms. Blier commented that writing is scheduled be done by the end of June, and we need more time. Mr.Andersen said that we could have short paper for the hearing. Ms. Blier commented that the short paper like apartment under RE is not ready for public hearing and needs more discussion; we can have a Q/A list for the hearing. Ms. Cutler commented that we may need to add one more meeting. Mr. Andersen said let us have a meeting on 4/20, and talk about the prep work for the public hearing. Mr. Pato commented that for hearing we should not use potential Lexington RE numbers. And Mr. Zhao said that we could use other towns' RE reports as examples. Mr. Whelan said that RE would have different impact to every individual. 2 Mr. Andersen asked Mr. Zhao and Ms. Culter to prepare for a discussion on the format and communication of the public for the 4/20 meeting. The meeting was adjourned by Mr.Andersen on behalf of the Committee at 10:00 a.m. Respectfully submitted, John Zhao,Acting Secretary 3