A Public Hearing of the City Council was held in the Council Chamber on Tuesday, December 5, 2006 at 6:00 P.M. for the purpose of discussing the allocation of local property tax levy among the (4) property classes for the fiscal year 2007, and the residential, open space, and small commercial exemption options. Notice of this meeting was posted on November 30, 2006 at 5:37 P.M. and advertised in the Salem Evening News on November 28, and December 4, 2006.
All Councillors were present.
Council President Jean M. Pelletier presided.
In attendance were the following: Assessor Frank Kulik and his staff, Board of Assessors except for Donald Bates, Mayor, Finance Director.
President Pelletier then turned the Public Hearing over to the Director of Assessing Frank Kulik and the Mayor.
Mayor Driscoll stated this is an annual occurrence to set the tax rate, which is contingent on adopting the budget in June. The key parts to setting the tax rate, is new growth. The recommendation is 1.46% a $62.00 increase per single family. We are the lowest except for Beverly. The tax stabilizer is new growth. A lot happened this year to stabilize the Budget, the re-organization, layoffs, and the retirees benefits was changed over to medicare. The Mayor then turned over the meeting to the Assessor Frank Kulik.
Mr. Kulik publicly thanked his staff for this year and the job well done. He stated that as Mayor Driscoll said it’s been a long time since we’ve seen a $62.00 increase. Business is healthier in Salem this year and the commercial side will be going up. Tonight the vote is on the minimum factor. Frank then went over the terms and gave a power point presentation.
CIP – Commercial Industrial factor
C/I/P – Commercial, Industrial, Personal Property Classification
He then showed the 2007 Levy thru a taxe slide presentation.
The Tax Levy Calculation, assuming we don’t change the residential factor, would be the same as last year. The Fiscal Year 2007 Tax Levy is at the max amount or it would be an override.
He went on to explain on the screen a sale of a condo on GIS lights up the whole block as you seen in the North Salem, Willows, and Bridge Street areas. Neighbors watch their neighborhoods, they know the sales.
Residential parcels – condos are creeping up on single families in number. The Residential Rate History as seen on the graph is down. The average bill for a single family increased.
Salem is unique, we are getting 4 million less from the Power Plant. The graph looks like business left town. They have not left actually there are more businesses. There are 3,573 condos in Salem. In FY1998, the 4 million from the Power Plant was part of the rate. The Power Plant bill has been stable for the past 3 years.
Councillor Sargent stated regarding the businesses it looks like the businesses have left but it’s the revenue loss from the power plant.
Mr. Kulik stated that personal property is defined as machinery, desks etc. for businesses.
Councillor O’Keefe asked what are top dollar?
Mr. Kulik stated the sum of all the values.
Mr. Kulik introduced his staff and members of the Board – Joe Murphy, Debbie Jackson, Damien Johnson, Richard Jagolta.
Councillor Pelletier stated that the Council appreciates the Assessors hard work.
Lenny McGrane – 9 Skerry Street, asked about the tax rate.
Mr. Kulik explained how the tax rate worked
Mr. McGrane stated we were never told that the Carlton School was being built with double the amount of kids. Now we have flooding in the cellars.
Councillor Furey asked the Mayor in past symbolic message to commercial side be reduced. What are your thoughts at reducing it?
Mayor Driscoll stated that we did take a look at it. We also have to look at T.I.F’s. Our tax rate is comparable to Beverly and Lynn.
Councillor Sargent stated our average Commercial bill has gone down.
Mr. Kulik stated the average bill is $10,000. Their bills will go up.
Councillor Sargent stated people look at the bill. Where residential bills going up is this due to sales? On the Commercial side there aren’t many sales so business must be good.
Mr. Kulik stated they are valued differently. A businesses worth is what it gives back to the owner, residential is driven by the market. Commercial we do an income capitalization study. (Income and Expense statements)
The businesses that are coming here aren’t complaining about the tax rate. It’s a positive thing. We only had 40 abatements last year.
Councillor Sargent stated maybe we should go lower than 1.65.
Councillor Sosnowski asked Mr. Kulik regarding the CIP chart do you have anything to show the average bill? He stated he would like to see ten years what the average bill would look like.
Councillor Blair stated how much his bill went up since 1988.
Mr. Kulik stated we have all those statistics in the office your welcome to come in and we’ll show you.
Councillor Lovely stated the tax bill with the loss of revenue of the Power Plant that’s what happened to the bills. And Parker Brothers, Vincent Chips converted into Residential. She stated she is glad to see 1.65 and relieved not to see a huge jump. New growth has helped.
Councillor Pelletier stated his daughter has a home in Long Island their taxes are 10-12 grand.
Councillor Prevey asked if there are more positive effects here regarding residential parcels.
Mr. Kulik stated you see it in the building permits. The city looks better. Every time someone does work to their house it shows growth.
Mayor Driscoll stated she was skeptical when you see residential vs. commercial. As an example Salem Laundry was transformed to upscale condos from a derelict property. Valuation becomes a big plus to us even though it pulls on commercial side.
Councillor O’Keefe asked when the old Bell Building on Federal Street will come on line.
Mr. Kulik responded the building permit was for $4 million.
Councillor O’Leary asked what about Sylvania on Boston Street or Flynn Tann.
Mr. Kulik stated Flynn Tann “0” nothing has been done yet.
Councillor Veno stated that he feels good about this and reflecting back at the last 14 months. We made some serious decisions and working with the Mayor and holding the line on the budget. We should feel good about this and we all weathered the storm and now we’re rebuilding our cash reserves.
Council President Pelletier stated that a couple of businesses have not received there bills yet.
Mr. Kulik stated that we don’t do the bills until after the Council passes the tax rate.
Council President Pelletier asked about the building that was torn down and now used for boat storage on Jefferson Avenue.
Mr. Kulik stated that we’re getting money for it. The City Council recently confirmed the appointment of Richard Viscay and that it was a great hire and have enjoyed working with him.
Councillor Sargent stated that two years ago, Mayor Usovicz wanted to raise the tax rate to 1.76 we got a copy of his bill and it was going down.
Mr. Jagolta stated that he just wants to see how we can adjust so that residential doesn’t go up and commercial be leveled with residential CIP.
Councillor Pelletier stated we shifted the residential burden its only 1.88 per thousand.
Mr. Kulik stated that people are getting more knowledgeable about the shift.
Councillor Lovely stated that 17% is business, that’s what is real. We don’t have a perfect situation.
Councillor Sargent stated that he would look at the CIP to adjust the bill so it could be equal.
Mayor Driscoll stated that we were not collecting as much as we should until last year. Balancing is a complex issue. We can only collect 2 ½% over this number. We are becoming more and more reliant on new growth. That’s what’s going to help us with hiring more police and Firefighters.
Councillor O’Keefe moved that the hearing be closed. It was so voted.
On the motion of Councillor O’Leary the meeting adjourned at 7:30 P.M.
ATTEST: CHERYL A. LAPOINTE
CITY CLERK
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