A Special Meeting of the City Council and Public Hearing Tax Classification was held in the Council Chamber on Thursday, December 2, 2004 at 6:00 P.M. on the issue of allocating and taking action on matters relating to setting the tax rate among the five (5) property classes for the fiscal year 2005, and the residential, open space, and small commercial exemption options. Notice of this meeting was posted on November 24, 2004 at 7:53 A.M. and advertised in the Salem News on November 24th and December 1, 2004.
Councillor Furey arrived late at 6:15 P.M.
Council President Leonard F. O’Leary presided.
Councillor O’Keefe requested that everyone rise to recite the Pledge of Allegiance.
President O’Leary then turned the Public Hearing over to Frank Kulik, Director of Assessing to make a presentation.
Mr. Kulik stated that if the tax burden was shifted to the commercial side it reduces the residential property and it increases the commercial rate. The burden gets pushed to one side or the other.
Mr. Kulik explained the terms.
CIP – Commercial Industrial Percentage
RF – Residential Factor
Levy dollars raised by 2005 $108,333,345.00 other revenue $51,494,016.00
Mr. Kulik stated that there were $19,000 sales in residential property, condo’s make up 27.2%. The residential tax rate is 11.38 and the Commercial tax rate is 21.83.
Councillor O’Keefe had a question regarding the slide presentation regarding property in south Salem.
Mr. Kulik responded that the property highlighted in South Salem showed different sale transactions in the last year.
Councillor Furey commended the work done by the Assessors Department in preparation for this presentation and asked that the staff of the Assessors office be introduced.
Mr. Kulik introduced the staff – Chris Wilcox, Debbie Jackson, and the Board of Assessors – Richard Jagolta, Donald Bates, and absent was Joseph Murphy.
Mr. Kulik stated that the Assessors office sends out 13,000 bill four times a year.
Councillor Veno asked about the Commercial properties and if more information on what makes up those properties and have a slide showing the graph like the single family homes. He stated he would like more data in regards to commercial property.
Councillor Bencal stated that average commercial is $19,000 this is a decrease this year.
Debbie Jackson stated that the industrial and Power plant show this as a drop.
Councillor O’Keefe asked about single family and condos. We need a lesser figure for home owners and condo owners.
Mr. Kulik stated that this is all available by law.
Councillor O’Keefe stated he can’t support 1.65
Councillor O’Leary asked if two or three family homes become condos does it become separate?
Mr. Kulik responsed yes. If a three family is sold and then changed legal status as condos they are taxed separately.
Councillor Furey stated that the burden on the commercial side is large.
Councillor Sosnowski asked if multi family homes are taxed as residential or can they be taxed as a business?
Mr. Kulik stated no that would have to be a legislative change. They can not be taxed as a business.
Councillor Corchado asked if on the trend for conversion to condos could we get a chart for this trend.
Debbie Jackson stated that they are taxed close to the sale price.
Councillor Veno asked on the average with different rates what is average commercial tax bill if 11,795 is average tax bill values haven’t changed, 4% this year.
Councillor O’Keefe asked about the new construction on Highland Avenue when do they go on the tax rolls?
Mr. Kulik stated the 30th of June land on tax rolls and whatever was complete on June 30th was taxed. (New Law certificate of occupancy can be taxed all year)
Councillor O’Leary recognized previous Councillors in the chamber James Flemming and Donald Bates.
Resident of 27 Boston Street asked if there was any exemption at age 56?
Mr. Robert Blenkhorn resident of Loring Avenue stated that home owners need help that they can’t survive with the increasing bills. You need more input don’t rush into setting this rate.
Pat Murphy resident of Boston Street stated that her husband is disabled and they are not rich and trying to keep up with the increases. She stated the way things are going she doesn’t know if they can afford to stay in Salem.
Owner of 15 Williams Street stated she purchased a 2 family house and fixed it up but now can’t even save for her childrens college, we’re border line. Consider lowering the rate.
Christine Sullivan director of the Business center stated the number one issue is housing but tax rate drives businesses out. Consider keeping tax rate the same.
Jeff Worthey director of the Salem Chamber of Commerce stated he represents the business community and he is against tax classification other communities don’t have separate tax rates.
Mike Allen resident of 15 Pope Street and business owner of the Red Lion Smoke Shop stated very un-proportioned when it comes to rate of commercial and residential tax rate. Businesses do contribute to the community and asked they be fair to the businesses.
Jim Crosby owner of Crosby’s Market stated his taxes were $61,000.00 in Salem, if this was the only place he was doing business he would be out of business. Consider maintaining current rate.
Jim Fleming stated that Mr. Blenkhorn made a good point.The Budget is passed in June and it should be looked at in June regarding the rate the formula needs to be changed. The city needs a new way of setting the rate. Families are leaving the city and so are businesses.
David Bilodeau owner of a single-family condo stated he was moved by Mr. Blenkhorn, what kind of community are we to drive people like seniors out.
Councillor Sargent stated he wished there was a bill to limit how much your bill could go up. He asked how the P.I.L.O.T. program is coming along. There are some non profits that could help out.
Councillor Bencal stated since 2002 it’s gone up 32% each year. Budget sets the tone for the tax rate. The School spending, consultants drive rate up. We need to look at alternative side of revenue.
Councillor Harvey stated this is the History of the Budget. How do we get creative. Two – Three members retire, Finance Director of Schools retired we have one Chief Financial officer to oversee the City and School Budget. There were 11 votes of the Council to make this permanent and short 1 vote of the School Committee and the Mayor shot it down. Then he requests an appropriation out of the stabilization fund. This fund is dwindling he wants half to balance the budget. There is $600,000.00 left for emergencies. Twenty two million came in. One million saved for rainy day. The extra money in Free Cash should be used to give tax relief or keep with administration it will get spent. Reduction on commercial side is shrinking we’re loosing businesses. We need to look at every dollar. This body has
thought hard to conserve. We have to start thinking creatively.
Special Meeting not held due to late file of needed appropriations.
On the motion of Councillor Bencal the Hearing was closed at 7:35 P.M.
Councillor O’Leary moved that a Special Meeting be held on Monday, December 6th at 6:00 P.M. It was so voted.
ATTEST: CHERYL A. LAPOINTE
CITY CLERK
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