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A Public Hearing of the City Council was held in the Council Chamber on Monday, December 17, 2007 at 6:00 P.M. for the purpose of discussing the allocating of local property tax levy among the (5) property classes for the fiscal year 2008, and the residential, open space, and small commercial exemption options. Notice of this meeting was posted on December 13, 2007 at 3:18 P.M. and advertised in the Salem News on December 14, 2007.
Councillors O’Leary, Lovely, and Pelletier were recorded as absent.
Councillor Furey arrived late.
Council President Matthew A. Veno presided.
In attendance was Mayor Driscoll, Members of the Board of Assessors, Finance Director Richard Viscay, and the Assessor Frank Kulik and his staff Joe Murphy and Debra Jackson.
President Veno then turned the Public Hearing over to the Board of Assessors.
Mayor Driscoll made some opening remarks – She stated that we are fortunate to have this Board of Assessors and their expertise. There were a lot of twists and turns regarding setting this tax rate. This presentation was hours of work and she commended the Assessor’s staff.
The hearing was then turned over to the Assessor Frank Kulik.
Mr. Kulik for Salem’s Annual Tax Classification Hearing, Salem has two tax rates, commercial and residential. We are here to weigh the tax burden. The extreme weighing process was the C.I.P. 11.45 residential and 23.50 commercial.
He then had a slide presentation to explain the tax rate. Mr. Kulik went over the terms.
CIP – Commercial Industrial Factor
RF – Residential Factor
Levy – dollars to be reused through taxes
RES – Residential Property Classification
Councillor O’Keefe asked what other revenues from page 4.
Mr. Kulik responded local aid, parking meters, and receivables
Mr. Viscay the Finance Director stated that state aid is on the Cherry Sheet.
Mr. Kulik stated 1.65 is the calculation used in the past. The Levy Limit is $64,441.432. How we get our values are from the sales that occurred in 2006. There are examples on page 7. We are always a year behind. Mr. Kulik went on to say that there was quite a shift in the market but it won’t affect this year, it will effect next year. If one condo sells that whole complex is calculated and highlighted. 2006 was a good and very active year.
The example on page 16 the residential single family pie and condo are getting closer together. On page 18 Residential Rate History, a lot of people like to compare tax rates. On page 19 it is based on 1.65 average single family bill. Page 20 is the Average single family bill. Pg. 21 is the Average Condo more below than above. Page 22 the Two family is more below than above. And page 23 the three family is more below than above the purchase price is on three family unless it is converted to condos. A lot are converted. Page 25 is the Commercial rate history. Page 26 is the diminishing business statistics. The Power Plant went from 8 million to 4 million which makes it look like 4 million in business left the city but it’s just the diminishing tax rate of the power plant. Page 30 the CIP has split history.
Classification the smaller of the pie becomes the more the effect on the residents. We are in a state of change, slight decrease in residential values. Page 32 shows surrounding towns in comparison to Salem. Page 33 Information from page 32 some list of communities we are the smallest. Page 34 shows Salem is comparative to Danvers and Lynn. Page 37 is the Tax Levy Calculation. The residential at 11.67.
Mayor Driscoll added relevant to sales, give detail on the power plant Tax Agreement. Glad we have one it adds $250,000 to our tax dollars. This will help the residents. The other unknown was bargaining contracts which expired June 30, 2007, and the School deficit of 1.8 million. The Department of Revenue considers the 1.8 million as deficit and has to be filled and collective bargaining units. We can do this with Free Cash and new growth options like the Power Plant, coal is a taxable item. We left the self insured plan and went into another source and it left us some revenue. She stated she didn’t want you to believe everything is now ok in the School Department. We will still have substantial cuts to make. We have a long road to go. The School Department will have to live within their budget.
Councillor O’Keefe stated that I have written down your words, the School will have to live within their budget.
Mayor Driscoll stated we are looking at this collaboratively and are trying to resolve it.
Councillor Veno asked if there are further comments. He now opened the meeting up to the public.
Mr. Michaud asked to look at the 3rd slide, gradual increase over how many years?
Mr. Kulik stated twenty four (24).
Mr. Oostook- Chamber of Commerce asked what’s going is on the North Shore? After years of taxes values going the other way. Please consider this when setting the tax rate.
Mr. Michaud stated that business people are faced with taxes everyday. There isn’t anyone that is not willing to do their part. He went on to state a list of taxes that businesses pay: Federal Income, State Corporate, Federal Corporate, Excise Tax, Gas Tax, Mass. Meal Tax 5%, Hotel Tax 4%, Sales Tax, Real Estate Tax, Personal Property on equipment, Tax levy on purchases or property, Trash and many more. We don’t have an income problem in Salem we have a spending problem.
Councillor O’Keefe stated you mentioned the trash fee. Where do we cut or how do we cut?
Mr. Michaud stated every town has good employees. I’ve worked since I was 15 years old, I’m 60 years old now. Tell the unions we can’t afford raises. The line has to be drawn in the sand. Everything is out of control. He went on to say he talked with a man who was 82 years old and with tears said I give this country 50 years. There is too much greed, we have forgotten how to be Americans.
Councillor O’Keefe state a lot of programs come from Washington.
Mr. Michaud stated it has to start on a local level. They do a great job in this city. This City isn’t a bottomless pit.
Resident Judy Chal-Venuto stated after hearing about police coverage on Halloween night, there was an accident that night at 8:30 and there wasn’t a cop to be found.
Councillor O’Keefe moved that the hearing be closed. It was so voted.
On the motion of Councillor O’Keefe the meeting adjourned at 6:58 P.M.
ATTEST: CHERYL A. LAPOINTE
CITY CLERK
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