AI-generated transcript of Medford City Council Committee Of The Whole 08-10-22

[Nicole Morell]: Committee of the Whole, 22295 and 222417, Wednesday, August 10th, 2022 at 6 p.m. is called to order. Mr. Clerk, please call the roll.

[Adam Hurtubise]: Vice President Bears. Present. Councilor Caraviello. I don't see him yet. Councilor Collins. Present. Councilor Knight is gonna be absent. Councilor Scarpelli mentioned that he would be late. Councilor Tseng. Present. President Morell.

[Nicole Morell]: present, five present, I'm sorry, yes, no, sorry, four present, math, four present, three absent, the meeting is called to order. There will be a meeting of the Medford City Council Committee of the Whole on Wednesday, August 10th, 2022 at 6 p.m. via Zoom. The purpose of the meeting is to discuss residential and senior exemptions 22-295 and 22-417 available to municipalities through MGM, Massachusetts General Law, Chapter 59, Section 5C, and Massachusetts General Law, Chapter 59, Section 5, Clause 41C and a half. The City Council has invited Interim Chief Assessor Ellen Rideau to attend. For further aids, information, and accommodations, contact the City Clerk at 781-393-2425. Sincerely yours, Nicole Morell, Council President. Interim Assessor Rideau is here, and she has kindly sent us a presentation in advance last night to the Council that I believe she's going to share tonight. So before she gets into that, are there any questions from the Council before we hand it over to Interim Assessor Rideau? Seeing none, Ellen, if you could take it away. You should be able to share. Let me double check. Yep, you're co-host, so you should be able to share. OK.

[Ellen Brideau]: So, all righty. Good evening, President Morell and City Council members. Thank you for inviting me. I apologize that this is a couple months after, but COVID got in the way of me doing it earlier. So here we go. Can everyone see this screen currently? Yes. So what I'm going to do tonight is do an overview of what the residential exemption is, and then certainly take your questions. excuse me um as president morel indicated this is the residential exemption falls under mass general law chapter 59 section 5c this law was enacted in 1979 and what it does it shifts the tax burden within the residential class from owners of moderately valued homes to the property owners of higher valued homes, as well as residential properties that are not owner occupied, including apartments and vacant land. So adopting a residential exemption increases the residential tax rate only. It does not impact your commercial, industrial or personal property tax rate. So again, it's residential property only, which is what is classified. As you know, assessors are required to classify property according to use. So this files under the class one. category of residential property. The exemption is up to 35% of the average assessed residential value of property. And it only applies to principal residents only. So you have to live in the property to receive this exemption. The exemption is on the value. Your tax levy remains the same so what city council approves in a budget on an annual basis that tax levy. As we know Medford is a split tax rate community. So, what is attributed to the residential class by the percentage share this exemption. just redistributes that tax burden among the residential class. And the shortfall that it redistributes is made up in the tax rate change or basically a shift within the residential class. So I'll take you through a couple examples of that. Um, properties that it includes it's your single family, your condominiums, your two or three family homes and mixed use properties. What it does exclude are non owner occupied second homes are rented. Properties held in trust, and this is it's in mass general law it's it's Medford versus Kirby. It was a court case for many years ago. And when I say properties held in a trust. There are some trusts that establish that the. the owner who set up the trust maintains a beneficial interest in the property. So we are required to review those trusts. If they have a beneficial interest in the property, they have a life estate, or they're the actual trustees, and they occupy the property, they would be included. It's those trusts that are established to basically transfer ownership out of their name to avoid other, for whatever personal reason that is. And then apartment buildings, sometimes I wanna just point out an apartment building within the city, if a owner lives in one of the nine, they have a nine unit apartment building and they live in one of them, that building would qualify. It's those large apartment buildings that are owned by big corporations does not qualify. And then your other properties are your nursing homes, group homes, assisted living facilities. So we know, and we've discussed this annually at the classification hearing, that there are 15 municipalities in Massachusetts that have this exemption. Two of them that joined later were Everett and Barnstable. So, you know, these are our neighbors. Many of them have it. It's Boston, Brookline, Cambridge, Chelsea, Everett, Malden, Somerville, Watertown. I apologize. And then the resort communities were Barnstable, Turo, Nantucket, Tisbury, Wellfleet, and Provincetown. Of those property or neighboring communities or resort communities, 10 of those also have the CIP shift, which as we know Medford has as well. And we'll It does, the negative effect of a tax rate, it has an impact on renters. It absolutely shifts the burden from, you know, when a large corporation owns a rental property, they're in it for the profit. So it does, it typically increase rents, includes those, excludes trust-owned properties that didn't include that beneficial interest. And it's typically not adopted by municipalities with a high percentage of owner occupants. The other negative, and I've discussed it before, and so I feel like I'm on a little bit of a soapbox, it definitely impacts staffing levels in the assessing office. To call through all that number of applications is pretty significant. And it can impact finances if we are over or under on our estimates and have an impact on overlay. Okay, so this is the basic formula of a regular residential tax rate. I'm using our fiscal 22, the tax levy on residential class, divided by the total valuation is how we got to that $9 and one cent. As we go through. The next step for me to calculate what the impact on a residential exemption would be. This was last year's fiscal 22 and the breakdown of parcels. And again, that total assessed value tax levy, and it again just shows the differences by the different classes. So the first step was for me to do an estimate of owner-occupied versus non-owner-occupied. And the best resource I have is the assessor's database and who has a tax bill sent to their residence in Medford versus something that's sent out of state, out of Medford. Through that review, I have 95% of the single families in Medford are owner-occupied. 84% of your condominiums, 71% of multifamilies. There were a handful of apartment buildings, those 111s through the 125s that had, they were being mailed to a person that owned the property that also lived at that location. And then miscellaneous residential, those are your 109s or multi houses on one lot. So that's where that class of properties comes from. And then this is the calculation that goes into it. If we were to use a 10% exemption, that exemption amount, so you took the total taxable value and average residential value, we're looking at a residential exemption about 68,000. It would have increased the tax rate to $10.18. And this is where I did a breakdown of 10%, 20% and 35%. Quite honestly, I think if the city council has an appetite for doing this exemption, you would probably jump in with both feet, but that's certainly your purview and your call. Owner occupied break even point for a 10% reduction is 595,000. And that would give a, that property valued at that amount would not see an increase or decrease in taxes. They would pay about the same amount. Properties less than that would see a decrease, properties over that would see an increase. And this is the impact of that. Again, all using fiscal 22 data, since we do not have fiscal 22 information, fiscal 23 yet. And again, I'm going to do the same thing with a calculation at 20%, which brought us to $11 and six 17 cents as a tax rate. And the break even point on this is 707,000 360. pretty substantial decrease and increase. I want to just point out to everyone that even if they say somebody had brought their tax bill down to $35 and 90 cents, they can't pay less than 10% of what they paid the year prior. And if they have qualified say a disabled veteran lived in a $340,000 property and received the $1,000 exemption, he would still have to pay 10% of last year's taxes. So it doesn't negate a tax bill, but there is that caveat to that. And then we did it again at 35%, which brought us to a tax rate of 1308 on residential class. And the break even on that is 769,294. So as we go through, I just wanted to see if I had any other notes on that. So those are the impacts as we brought through the three different scenarios. And again, the this residential exemption is a redistribution of the tax levy among residential property owners. It's really I like to point out, it's not an exemption because it's just a shift. It's called an exemption because it changes the way things are calculated, but the upper portion of the community, even if you lived in that million dollar home in Medford, you still receive the exemption, but you actually will have a higher tax bill. And it penalizes low income renters because apartment buildings wouldn't wouldn't qualify and they would be on the upper half and pass that increase on to their tenants. So, you know, it is a increase in the tax burden for all non residents of the community. If they own a property here, it impacts your renters and It will decrease the taxes on residents up to a certain level as you saw in those three different scenarios. So, I hope I didn't go through that too too fast. If, if this is the, the boards or the councils. Interested in adopting some of this, I would strongly suggest you had a public hearing process to educate taxpayers on how they would apply for residential exemption, what's qualified, and what kind of documentation they needed. In addition, you would want to do a preliminary vote to adopt it. And again, I'm not trying to jump on my soapbox, but for the assessing department, regardless of who is employed there, you would need additional staff. Any of the communities that have it today, when I talked to them, it's residential exemption takes up, is a very burdensome process to implement. And we do have to notify the Department of Revenue early in the year to let them know that this is coming on. It's, you know, we need to process those applications. You would typically send them out right when the first quarter tax bills are going out so that you have them reviewed and qualified and ready by October so that you can include it in your calculation for the next fiscal year. And there we go.

[Nicole Morell]: So do we have any questions? Thank you, Ellen. Councilor Caraviello. You're muted, Rick. I think, can we make him, I just asked you, I mean- Oh, here we go, here we go.

[Richard Caraviello]: Thank you, Madam President. So, Ellen, if I, I didn't get a copy of this. If you could email me that, I'd be appreciated. Certainly. I didn't see it in my mailbox, so- Councilor Caraviello, I emailed it earlier. If I understand you're right, we will now make MedFed less affordable now than we already are. Am I correct? Because as you say, the renters are probably gonna be the ones that are punished the most.

[Ellen Brideau]: It definitely has an impact on your renters. It also, as I've mentioned before, it impacts your seniors. They could be very low income, but live in a home above that break even.

[Richard Caraviello]: And the problem with our community is, you know, many of us in the community are all, we're all house rich and with nowhere to go. And again, I say, you know, and you know, we've had this discussion many times. And, um, as I say, uh, I, I think the, uh, the hurt is, is more than, than the, the small amount of gain. that we gain by this. I mean, you have a good proportion of people's taxes go up a decent amount of money. And like you said, you have the seniors that live in homes that are paid for, but living on fixed incomes are going to suffer. Renters are going to suffer. So I appreciate your help in doing this. And again, you've done this before for us. And it doesn't change my mind where I'm going to stand on this issue.

[Ellen Brideau]: Thank you, Councilor.

[Nicole Morell]: Any further questions from Councilors? Vice President Bears.

[Zac Bears]: Thank you, Madam President. Ellen, something we talked about last time we were discussing this is if we could get the number of households that would fall above the breakeven versus below the breakeven. Do you have that for the 35%? Could you give us that information?

[Ellen Brideau]: So I started, you know, it's always, I feel like I'm late in the game a little bit, but I started doing that data and the breakevens I had, you know, out of the residential class, I'm going to go back to that, to that screen really quick. I'm sorry, I hope I'm not making anybody dizzy here. We had 7,862 single families. On the 35%, I came up with approximately, and I would have, again, my math, this was doing it on these little laptops. I had about 6,300 that were under and about 1,500 plus that were over. You know, right around that 16. Yeah, so I'm very close to the 7862 I'd have to break it all the way down. But that was the single family on your condos, of course, you know, those are not the higher value properties at that 35% so you're 3200 under 150 or so over. your multifamilies are the ones that start getting punished. And I had on the 104 class, I had 1300 that were under and 25 or close to 2600 that are over. And your 105s were basically split. I don't have good numbers written down for those, but it seemed like it was Yeah, there was only 24 that were under, so it's really not split. It was a high percentage of the 105s. And then certainly your apartment buildings were all over, and your 109s, those multi houses on one lot, five were under and 16 were over. Does that help? I apologize that that wasn't in the presentation, but I was working on this late last night to get it out to get it so that you would have it.

[Zac Bears]: No, that's helpful. And if you could share that after the fact, that would be helpful too, because it just sounds to me like we're talking about, you know, 80 to 90% of single-family and condominiums would benefit in some way from this. I understand that this is a question about trade-offs, but the break-even is still pretty high for for who we're talking about here. So I mean, yes, it's a shift. And I think the question of that balance is, is this a shift that we want to make, you know, it's essentially the only way that you can make the, well, right now we have a flat property tax rate, right? It doesn't matter how much value your property has, you pay the same rate. If we were to implement this exemption, it would say that if your value is lower, you would pay a lower rate, essentially, and if your value is higher, you would pay a higher rate. Now, it doesn't do that by implementing different rates for everybody. It does it by exempting a certain amount of money from the total rate. and the value of that exemption goes down, the higher the value of your property is, because the exemption's a smaller percentage of their total value, right? So, you know, fundamentally, it's essentially creating a graduated tax. Instead of having a flat tax rate, you're having a graduated tax. Now, the question is balancing that with, you know, you know, the impact of the people who fall over the breakeven point. Now, I think that's a discussion that we need to have, but when we talk about, you know, we've had a lot of discussions about the city budget over the past few months and revenue and budget deficits and, you know, the shortfalls and structural deficits that we have right now, nevermind the needs deficits that we have in the longterm, And a big concern that's come up is impact on property owners who are more vulnerable. And it seems to me that one of the main ways that we could mitigate the impact of any potential, for example, debt exclusion or override on people who own property, This is one of the ways that we can do that, at least on the people who it seems on average need help the most. Another thing that would be helpful, Ellen, to see is maybe like an example, you know, take a building, an apartment building, give us an example of what that impact might be. Because I think you're right, you know, in the aggregate, right? You know, you're going from a nine 901 to something like, I think you said it was a 1313 per thousand 35%. Yeah, 1308 1308. Yeah. So I go ahead. Go ahead. Just I was trying to know I just did. If you took one apartment building, say its value is $20 million, what would the change in their tax be? But then the thing we have to think about is that's also being spread out over multiple units in that building. So if we assume that 100% of that tax is passed on to the renters, it may not be as impactful as we may think, given that that burden would be spread out across all those units. So I just wanted to put that out there as well.

[Ellen Brideau]: I would just, if I could just make a couple of points. When you talk about debt exclusion or overrides, this does not change what you have to levy on the residential class. Medford has a split tax rate today. You levy a large portion onto the commercial class, and then within that residential class, that levy stays the same. You also need to be cognizant of just because somebody's house is worth over that break even doesn't this has no bearing on their ability to pay, and I always go back to the senior, who's, you know, a widow who her and her husband bought that property and they're in Medford I spoke with these people. Her and her husband bought the property after World War II. They had a reasonably priced home. Now this home is worth a lot of money, and you're going to force her out of her home. And because she's living on his postal service pension and her limited other funds, and she's, yes, house rich, doesn't have any bearing on somebody's ability to pay. And then I go to the lower valued homes, and typically, You know, that is a modest home, but you, you also have people living in that modest home that also have a home out on the Cape, or they have a home in another up in Maine. And so they made those personal choices to have a modest home near where they work to enjoy something somewhere else, and you're giving them a break and a benefit. And I'm not saying that you shouldn't, I'm just saying you need to need to be cognizant of that. falling above and below doesn't mean you have a house that now you can pay more is all I would put out there. And I personally always, I tell people that too, love that my house value has gone up all that much. Pray to God that my tax, the tax bill that my community is prudent like the city council has always been and understands that high value doesn't mean big pockets.

[Zac Bears]: Yeah, and I understand that. And if we were talking, you know, half the homes fall below the break-even and half the homes fall above it, then it truly would be a one-to-one case, right? But in this case, there'd be a significant number falling below and, you know, at least at this point, a relatively small number falling above. You know, you're just as likely to have a senior who's on a fixed income with a pension in a $500,000 home who needs a $1,000 break, right, to stay here. And they might be forced out because the value's gone up. And you may have someone with a million dollar home who has also that second home on the Cape. I mean, you know, you can take those people and flip, put them on the other end of the break even. and the, you know, the story flips. So, so, yeah, I mean, again, I think you're right. It's balancing. We have to consider every perspective. But, you know, when you're saying we have seven thousand and change single families and about six thousand would be under and fifteen hundred would be over, you know, that's that's another thing to think about is is just that, you know, yeah. And that, you know, that that question of of Yeah, equity and also just that, you know, it seems like on balance, if the goal that we're trying to shoot for is, you know, helping people who live here stay in their homes, that this could be a tool that could help us. So I just wanted to put those two pieces out there as well, because I think they're really important in how we move forward and make this decision. But I wanna thank you in this presentation, and I definitely agree with you on the timeline and that the department would need more resources, significantly more resources to make this possible if we were to go this route. So thank you very much, Ellen.

[Nicole Morell]: Thank you, Vice President Bears. Councilor Tseng.

[Justin Tseng]: Thank you. I just wanted to thank you for preparing this presentation for us first. It was helpful to read through it before the meeting and going through it with us today, I think makes it even clearer for me, at least. And this is especially helpful, I think, as I think a lot of us are still learning about this, forming our opinions about it. I think Councilor Bears asked the main question that I had about how many how many households fall above and below the breaking point. You had written, I think on slide six, on the slide about the negative effects of the tax shift, that it's not been adopted by any municipality with a high percentage of owner occupants. Being new to this, what do you consider high percentage of owner-occupants. And whereas, I saw the slide with the percentages for single families and two and three families and stuff like that. But I guess as a total in the city, as an overall in the city, what percentage are we at in terms of owner-occupants?

[Nicole Morell]: Councilor Tseng, I think we, yeah, we lost Ellen. I apologize. She's coming back in right now.

[Justin Tseng]: Okay.

[Nicole Morell]: I realized halfway through. I apologize. Hi, nice to have you back.

[Justin Tseng]: I think we'll probably have to give you, let you.

[Ellen Brideau]: Okay, I apologize, I lost the internet.

[Justin Tseng]: No worries, technology, it happens. I guess my question for you was, I guess we have an idea from that slide about what percentage of single families are owner-occupied and two families and stuff like that. I think it'd be helpful for us to understand overall in Medford, what percentage, around what percentage is owner-occupant? Because you've written in this slide about negative effects, that an exemption like this hasn't been adopted by a community with a high percentage of owner-occupants. So I guess, are you saying that we fall into that category of having a very high percentage of owner-occupants? And what exactly, like how do you define behind prison.

[Ellen Brideau]: So under the single family, and I did have that slide, I can try to bring my PowerPoint back up, but I'm afraid I might blow out our world here. So let me just, I do have it on another screen. The single family certainly had a higher percentage of owner occupied. And I believe, I've learned as an assessor never to quote numbers off the top of your head because it always gets me in trouble. But then I get nervous and realize I'm, holding everybody up here. I believe that there was a slide and it was 95% for the single family, and then it trends down. It was around 80% for condos. And then it, like I said, so, you know, single family being the predominant residential class, 95% of those are owner-occupied.

[Justin Tseng]: So I mean, that sounds very high, I guess. Um, when we consider the picture as a whole for members, of course, we have different, you know, different types of property. Um, are we considered as a whole very high, a very high percentage of our occupied?

[Ellen Brideau]: Um, that is a very good question, because I would like to, that would be, you know, I'm truly focused on number of properties in the city we would want to maybe recruit in another department to determine how many you know population wise how many live in an apartment versus in a so I think that that's what your question is population as a whole are they living in their own home or are they renting in in one of those and as the these large complexes go up across from Wegmans, you have some new apartment buildings in the city as well. So I can take that and find out if there's a department that can assist me in determining the breakdown by residency.

[Justin Tseng]: That would be helpful, especially since it seems like usually municipalities with high percentage of owner occupied units, you know, don't necessarily take this exemption. It'd be helpful for us to know, you know, where do we fall relative to the different municipalities as well.

[Ellen Brideau]: Fair enough.

[Justin Tseng]: Thank you.

[Nicole Morell]: Thank you, Councilor Tseng. Councilor Collins and then back to Councilor Kariviello.

[Kit Collins]: Thank you, President Morell, and thank you so much, Assessor Brito, for being here. This presentation is a really great overview. I really appreciate it as a way to enter into this discussion. A lot of interesting points here. I wanted to circle back to the issue of the impact on renters. As a renter myself, I know a lot of renters in the community are concerned about how a residential exemption would affect them, their household. Kind of circling back to a point that Vice President Bears made a few minutes ago, I'm curious. I guess I'm interested to see if it's possible to get a comparison of, you know, here in Medford, we have smaller apartment buildings, like the one that I'm currently sitting in, and then we have some big ones, like the ones across from Wegmans, by River's Edge, some are big, some are small, some sort of cater to more luxury type units, some don't, some have a mix of both within the building. Do you think it's possible, I don't know if you have this ready or if it's sort of a future project to see a comparison of, you know, sort of taking two different examples, comparing valuation, comparing change in tax burden. I guess what I'd love to say, I don't expect this to be available right in the moment is sort of at a building wide basis for these two contrasting examples, the change in tax burden kind of spread over per capita. I'm also aware from what I've heard from other sources that it's, especially as you get into bigger apartment buildings, that's not necessarily one-to-one, like the way that rents are calculated has to do, not solely, but it has to do more with market forces as opposed to purely an accounting of costs. But something I'm interested to investigate is trying to get a clearer picture of what type of renters will be most impacted by how much.

[Ellen Brideau]: Okay, so, you know, certainly, when we value apartment buildings on an annual basis. That is utilizing, you know, The breakdown and yes we definitely have very varying classes of apartment buildings in the city. And we look at number of units but within that that type of luxury building but what is a three bedroom versus a two bedroom bus of one bedroom going for rent wise. And, you know, all of those are typically you know passed on, even though the rent is a fixed amount, when those owners build that rate, they're gonna include what their costs are. So we review that. So my data that I would have is, we have how many units are in the building, how many, the breakdown of the bedroom count of the units, And then, you know, what class we consider them as far as grading them, basically, you know, luxury versus a modest apartment building. So I can certainly bring those into that analysis and take a look at it. And just, again, for comparison purposes, it's certainly not gonna be the exact science, but it'll give you a feel for what that does.

[Nicole Morell]: Thank you, I appreciate that. You're welcome. Thank you, Councilor Collins. Councilor Caraviello.

[Richard Caraviello]: Thank you, Madam President. So Ellen, I think if I did the math quickly, between the single families and multi-family, I think we're about around 4,000-ish homes would be impacted altogether. Give or take.

[Ellen Brideau]: We're going back to those numbers of the ones that were above the break-even?

[Richard Caraviello]: Yeah, the ones that are going to be penalized the most.

[Ellen Brideau]: Yeah.

[Richard Caraviello]: That's about 4000 ish.

[Ellen Brideau]: Yeah, little bit. Yeah, right around there.

[Richard Caraviello]: Okay, so, so, so here we go. We have we have a plan that's that's kind of penalized 4000 people in this community, we and we don't know who these 4000 people are in, what does this do for future for future building in the community. So, when a new developer comes in. they're gonna be charging right off the bat, they're gonna be charging more rent, correct? That typically, I mean, I've always- And if anyone thinks that these people that are in two families or three families or in apartment buildings are not gonna pass the increase on to their tenants, they're sadly mistaken. Because this is how they, a lot of these people are in these bulky families that are using the rents to pay the mortgage that they have. So it's going to be passed on. And until we find an equitable plan for these other 4,000 people who are going to be penalized, especially in this day and age where inflation and everything is running sky high, we have a tone-deaf administration in Washington who doesn't care about the people. And here we are. We're going to raise everyone's taxes, all these other people's taxes, $4 a thousand. Shame on us, shame on us. The job of us is to not hurt people, and this has got to hurt people in the community to do that.

[Nicole Morell]: Thank you, Councilor Caraviello. I just want to make clear for anyone watching that this is just a discussion at this point. Nothing's being voted on. There's no proposal to have this be voted on as such. This does come before us every December when the tax rate is set, but this is just purely discussion purposes at this point. Councilor Collins. Or is your hand still up from before?

[Unidentified]: Thank you.

[Nicole Morell]: You're coming in and out, Councilor Collins. I think we'll get back to Councilor Collins and, okay, she's dropped off. Are there any questions from the public at this time? Seeing no more hands from the council, I don't have any specific questions related to the residential tax exemption as we're covering it now. Mr. Castagnetti, name and address for the record, please.

[Andrew Castagnetti]: Thank you. Is Mr. Cassidy world for everyone else. Mr. Kasich.

[Nicole Morell]: I believe his question is, how did you land on the break even? Is that the question? Certainly.

[Andrew Castagnetti]: So I couldn't read the question. Okay. The question is, how certain are you, Ellen, above the 169,000 break even, could it be a different moon? Because there was a mistake a few years back, and it was an error.

[Ellen Brideau]: So he's asked, am I correct? Mr. Castagnetti, you're asking how certain I am of these numbers. I did not do my own calculations. I utilize the state.

[Andrew Castagnetti]: Time out.

[Nicole Morell]: Mr. Castagnetti, your connection is a little rough. It looks like you're outside. Are you able to go somewhere closer to your router to get a little bit better connection or dial it on the phone?

[Andrew Castagnetti]: He's frozen now.

[Nicole Morell]: OK, I'll give you a beat. We'll come back to you.

[Andrew Castagnetti]: I'm sorry, Mr. We're breaking up. All right.

[Nicole Morell]: Looks like you're inside. Do you want to try? Oops. Okay. I just need to ask you to unmute again. Sorry, Mr. Castagnetti. Do you want to try again now that you're inside?

[Andrew Castagnetti]: For the third time, how confident are you? Hello?

[Nicole Morell]: We can hear you a little bit better now.

[Andrew Castagnetti]: Thank you. How confident are you, Ellen, that the $769,000 breakeven amount is correct?

[Ellen Brideau]: Again, I utilize the state's data. I did not do my own calculation. So I am as confident as, and I do have faith, that they have fine-tuned those calculations. And again, that was using fiscal 22 data.

[Andrew Castagnetti]: Does that address your question? Yeah, but in the past, we've had an error that I pointed out to you is off by $70,000. I'm not sure if you corrected it two years ago. So I'm not sure how accurate this is number B.

[Nicole Morell]: Okay. Thank you, Mr. Castagnetti. Do you have another question? I'll, we'll make sure we address that, but do you have another question?

[Andrew Castagnetti]: Uh, yeah. Uh, I'm sure we're that Boston, Everett, Somerville, Malden, Chelsea, and in this program, and they've been in years and they're still doing it. So I would think if you agree with me, let's work pretty good for them. Agree.

[Nicole Morell]: I mean, you don't have to, Ellen is agnostic in this situation. You don't have to engage in a debate over this. It's really, it's just information finding and Ellen is, she's agnostic.

[Andrew Castagnetti]: Okay. I guess she isn't answering. She's not answering. So if it's worked for all these years and they're still in the program, it tells me personally that I must work pretty good. So, and the way would be sick with 95% of single family on this. And I'm sure you 5% would say totally all residentials. I think it's a it's a good thing and would help a lot of scenes who own houses, five, six, 7000 to get a district. to probably have them be able to submit the support they need for over 100 years of real estate. I think it would be a great benefit to those citizens. I guess that's the point. And I just know I'm going to increase But although I might try to stay, the break-even is 7 and 69. Thank you.

[Nicole Morell]: Thank you, Mr. Casagnetti. Will Navarre, name and address for the record, please. I will unmute you.

[William Navarre]: Hello. William Navarre, 108 Medford Street, apartment 1B. Thank you, Madam President, for recognizing me. My question is, since if you have an apartment building and you were to convert that to condos, each one of the individual condos in the same building that had been a department building would be entitled, each individual owner would be entitled to claim the residential exemption on that. So I'm curious if there's any data or theory on if whether or not the residential exemption could encourage condo conversions because of that discount available when you have a building of owner-occupied condos as opposed to a building full of renters renting from an apartment owner. Thanks.

[Ellen Brideau]: So, excellent question. I would have no data. I've never worked in a community that had a residential exemption. So there's, and I would not be able to offer an opinion on that, I don't know.

[Nicole Morell]: Does that cover all your questions, Mr. Navarre?

[William Navarre]: Yes, thank you.

[Nicole Morell]: Thank you. Going back to Councilor Collins. Thank you.

[Kit Collins]: President, I apologize about earlier. It has nothing to do with building, though. That's why I'm off video. Anyway, to ask a clarification, Councilor Caraviello's comment reminded me about. So I just want to say there's a three-family and bottom floor is owner-occupied, there are renters on the second and third. Does the residential exemption apply to entire building in that case or split up among units that are owner-occupied versus rented?

[Ellen Brideau]: In that case, the exemption goes to the property. So the owner of that property where it's owner occupied, the value is in that property. So he would receive that exemption even though he's renting the other two units.

[Kit Collins]: Okay, great, thank you. That was my understanding. I just wanted to check it to sort of, I'm sort of trying to target my items for future research to check my understanding that the, you know, relations to to watch out for and think about the implications for renters obviously prominent among them. And in the event of renters who live in a family building that is also unoccupied, they would not be as affected as the buildings regardless of their size. Thank you for clarifying.

[Nicole Morell]: You're welcome. Thank you, Councilor Collins. Vice President Bears.

[Zac Bears]: Thank you, Madam President. I have one comment about the residential exemption, and then I do have a couple questions about the senior exemption, but I don't wanna close off any more discussion on the residential. Just wanted to note that I do have a question or two about that. On the residential exemption, I just took data from the assessor's database and then took the information from this presentation and just ran a quick comparison. Apologies in advance, Kit, but I used your apartment building and I looked at 61 Locust Street across from Wegmans. And it looks like on average, if the increases were split between the six units in your building evenly, that it would increase the rents in your building by about $100 a month. That's a six unit apartment building valued at about $1.6 million. And then at 61 Locust Street, that was 350 units. The average rent increase, if it was evenly distributed, you know, if the change in the property tax was evenly distributed across all 350 units would be about $138 a month. So those are just two examples, and Locust Street was valued at, I think, about 146 million, at least as the assessor's database says. So that was kind of just a quick back of the napkin impact. And I'll leave it there, but I do have questions about the senior exemption after this is done.

[Nicole Morell]: Thank you, Vice Mayor Bears. Is there any further discussion or questions regarding the residential exemption? Going back to Mr. Castagnetti. You should see, I'm just asking you to unmute now.

[Andrew Castagnetti]: Thank you. Can you hear me clearly, please? Sort of.

[Nicole Morell]: It's in and out. We can hear you a little bit.

[Andrew Castagnetti]: Really? I want to commend and thank Councilor Bears for bringing up some really good points. Very good points. And Councilor Caraviello brought up one good point also. My question for Ellen is, what is the average savings per year at the full 35% exemption per residential owner occupied home with the average per year, please.

[Ellen Brideau]: One minute, I just have to go back to the, I had that on one of the slides, Mr. Cascanetti, one minute, please. For the 35.

[Andrew Castagnetti]: Thank you.

[Ellen Brideau]: Yeah, so it scales.

[Andrew Castagnetti]: No, no, the average.

[Ellen Brideau]: So the average, I know I'm trying to bring up my screen here. So the average home, I believe comes in around 600,000. So if that's the average value of a property in Medford, and again, I'm gonna have to go back to those, but I'm looking at that chart. And so the average property might save about $360 for the year. That's I'm using, I'm sorry.

[Andrew Castagnetti]: I think it's more like one or 2000. No, it's more than like one or 2000 from years past. You told me again, that's why I'm very confused.

[Ellen Brideau]: Well, I mean, and those, those are what the numbers are.

[Nicole Morell]: Thank you. Um, Ellen would, um, I can, Mr. Castagnetti, I can share the presentation with you. Um, I can make sure if there's, if you want to, um, Send an email to the clerk, we can get that presentation out. We can also put it in the drive folder just so people have it.

[Ellen Brideau]: I certainly can have it posted to the assessor's website tomorrow.

[Nicole Morell]: Great. Thank you, Ellen. Thank you, Mr. Casagnani.

[Andrew Castagnetti]: So the answer is $360, average person would say, on record. Is that it?

[Ellen Brideau]: I'm saying if they're assessed. So the average assessed value for a single family home is around $600,000.

[Nicole Morell]: Mr. Casagnani, please let her finish. Otherwise, we're going to have to stop. Sorry, please continue on.

[Ellen Brideau]: Yeah, no, the average single family home is around 600,000. The change in tax bill for that is $360 would be the lower, for a property valued at that price.

[Nicole Morell]: Okay. Thank you, Ellen. Thank you, Mr. Castagnari. So going, Going back to vice-president Bears, we have some questions from another resolution regarding potential senior tax exemptions. I know you had a bit shorter time, Ellen, about this. I'm not even sure if the communications made it to you yet from that past meeting, but I will, if you'll humor vice-president Bears, see if we can get some answers. Otherwise we can always continue offline or have another meeting. So vice-president Bears.

[Zac Bears]: Thank you, President Morell. Thank you, Ellen. So I just had a couple of questions on the senior exemption. So I know we use Chapter 41C, and it's $1,000 exemption, and I have to, you know, I'm trying to follow your rule about numbers off the top of my head. But okay, and so the income is, must not be over 25,000 for a single person or 37,000 for married persons. This looks like it may be a couple of years old, so that may be, those may be a little bit low, but does that sound about right?

[Ellen Brideau]: That sounds about right, and I'm actually pulling that up, because it is on the website, or it was on the website, tax exemption and deferral programs for, yeah. So the, For a 41C, and again, it's not correct. I will find out what happened to those as well. But 27,000 or 40,000 was for fiscal 22. So I need to see what the fiscal 23 are. And their whole estate can't exceed 40,000. That means money in the bank basically for a single person and 55,000 for a married couple.

[Zac Bears]: Right, I noticed that. So that's pretty, pretty restrictive. I would say this day and age. You know, I can't I mean, I kind of can't imagine how you could have a home in Medford and not have your estate be more than 55,000 unless you have a lot of debt, right? Or, or does that not include the home?

[Ellen Brideau]: It never includes the home or any exemption program. No, it's not your domicile. It's if you have money in the bank, stocks, bonds, or a second property.

[Zac Bears]: OK, gotcha. Even that would be pretty restrictive, I would imagine, people with retirement accounts and whatnot. Basically, my question here is I know that there's 41A, 41B, C is what we're using, and then there's also 41C and a half. That one looks like it may be a little bit less restrictive. If we were to move into using 41C and a half, would that be moving from 41C to 41C and a half, or would it be adding 41C and a half as another option?

[Ellen Brideau]: you would do one or the other. You move to the next one that it's less restrictive and has more qualified applicants on it when you get into those programs that expand the income thresholds and the estate, whole estate thresholds. So it replaces what you have today because you're opening it up to more residents.

[Zac Bears]: Okay. And one of the reasons I asked is because I was looking at 41 C and a half and it looked to me like the asset limit, there was no asset limit under 41 C and a half. So that addresses that, you know, if you have a retirement account or something like that. And the income limit, it looked like we could go much, much higher. We could go all the way up to the state circuit breaker, which I think was, you know, maybe 90,000 for a married couple in terms of income every year. I'd have to go back and double check that as well, but, you know, pretty significantly higher. And then the other thing that it looks is that the exemption itself could actually be potentially a little bit higher. So I guess my question is, would it be possible for you to let us know what this kind of exemption shift would cost if we went to 41 C and a half. Both if we like if we did the full income limit and then the maximum exemption amount.

[Ellen Brideau]: So I did had run those numbers and so I certainly can send this data to the the council. I because I never know how to channel this information through, but I did see this was back on July 18th was when I had first seen that information. And so I immediately, and I apologize if I'm a little too candid sometimes, but it caused me pause because when you open up some of these programs, it's a direct impact on everybody's tax bill. So I went to, my first resource was how many, residents in Medford qualified for Circuit Breaker last year. And that number was 1,041. And those, again, using the Department of Revenue website. So if you do that increase, you potentially, with 1,041 more people qualifying for an exemption, you could be going to the maximum. You're almost at a million two. and additional exemptions that the city would be funding out of the overlay. So when you do these exemptions, you just need to be cognizant that this isn't free money, it has an impact on your budget. And when you're already levying to the max, or you've already hit your prop two and a half wall, you don't have a lot of wiggle room to put these programs in place that are wonderful, but at the same time, they have to be paid for. So I'm just putting it out there. And I'm happy to share these numbers with you and I'll put it in the other report. So historically, we do about 350,000 in exemption programs that are funded out of that overlay account. And it has a direct impact on the tax rate. So adding that 1.2, now you're up to almost a million five and just exemption programs that have to be paid for. just putting it out there, okay? So, and again, I'm happy to, but that's not to say you don't do something, you could do a modified. So I guess that would be the impact if you went also full throttle and had it open all the way up. And you also have to remember that that 1,041 filers, they received close to $1,000 back, I think it might even be a little over 1,000 back from the state. Yeah, so they are getting that money. It's just not coming out of the city of Medford's tax bills.

[Zac Bears]: Okay, so if we did the exemption as well, then it would just be us giving them the money instead of the state or they may actually get double.

[Ellen Brideau]: Oh, they would get double.

[Zac Bears]: Oh, okay. All right. I just didn't know if it was replacing just if we're just replacing what the state's doing then that's obviously not worth it.

[Ellen Brideau]: No. So what but what it can do and what I so what and this is going back on my, as you know I worked in other communities I work in the, in the town of Wayland, who had a circuit breaker match program, little bits different than. This, this program and the way that program worked, that was by local option. And for any senior that received the circuit breaker. We just the town of Wayland matched it. So, but what happened so you know Wayland also has very deep pockets and I'm not picking on Wayland but they're a little bit different. community. But what that did, I had seniors that wouldn't get the circuit breaker every year because we lowered their tax bill so significantly in one year that then the state didn't didn't give them a circuit breaker, and then the following year they would get it again. So it's like a, it's a cycle, you know, there is that threshold of you have to the rule of thumb used to be for circuit breaker on the state side if your tax bill exceeded 10 percent of your income then you would receive that that circuit breaker credit on your on your income tax um you know so it it's it's again great program those senior means tested programs account for that um there's some great programs out there i just don't know i you almost want to really not just look at one but look at many of the different programs out there and compare them and then find the one that fits Medford best. And I, I'm going to, again, I try not to offer too much of an opinion about a Councilor bears I can't agree with you more, these income limits. When somebody, when a senior comes into my, or when I was at the counter in Medford, they'd come in and they would miss it by $2,000. My goodness, what are they eating? I mean, because you're certainly not heating your home, paying your electric bill and living off of $28,000. So I definitely understand the need to look at something. I just think that you might wanna look at all the different options instead of going to the very big extreme the other way.

[Zac Bears]: Right, yeah, and that's incredibly helpful. I mean, I think for me, as it's kind of the exercise of saying, well, let's look at the law. What's the most we can do under the law? And then if that impact is too great, is there somewhere in the middle that we can meet that helps people but is still sustainable? And so that's just, I kind of want to know that. I don't want to call it a worst case scenario, because for some people, it'd be the best case scenario, right? For those 1,000 people, that's a big chunk of money. But that full limit of what we can do. So that's just why it's helpful. And so that's why that million two figure is helpful. Just so I understand it, basically, that would work in a similar way where that would come off of the $105 million residential levy. And then we would have that, or no.

[Ellen Brideau]: It depends on how you, so yes, it doesn't come off the levy, it just redistributes the levy. So it increases the tax rate for everybody else who doesn't qualify.

[Zac Bears]: Right, that's, sorry, that's what I meant. It just, for the purposes of calculating the tax rate, you'd calculate it based on, it would just be a high, right, it'd be a higher rate.

[Ellen Brideau]: Correct.

[Zac Bears]: okay and so so a million yeah that you know again if it's not too difficult a calculation i think that would be helpful helpful for me to know too right if we're at 901 we've been at 950 or 10 um because because i think that's that too right you know It's goes back to this balancing question if we're you know the cost of living is going up so so much, you know, we have the needs of the city. And is there a way to try to balance all of that by helping the people who may be in most need, you know, and obviously the, the senior on the fixed income comes up a lot. That's my other question. I know you said that, you know, for folks under the residential exemption break even, you know, they probably couldn't take both the senior exemption and the residential exemption or the Veterans exemption and the residential exemption, maybe not in every case, but it may just lower their bill too much, you were saying.

[Ellen Brideau]: I'm sorry, they get to take it. They get to take it, but the law is their bill cannot be less than 10% of what it was the year prior. So, I mean, minimal impact on them. I just want to, you know, it's not a net gain, basically. If they had a $4,000 tax bill, we put the residential exemption in, now they have a $3,500 tax bill. Say they qualify for 2,000 on something, they still have to pay 10% of what they paid the year prior. So they might end up with a $400 tax bill instead of a $3,500 tax bill. of that.

[Zac Bears]: Okay. Oh, okay. Sorry, I was getting it. I thought it was back. I was. I thought you were saying they'd have to pay 90%. You know, you can only have dropped by 10. You're saying if it's a $4,000 bill, the next year, it has to be at least 400. Correct.

[Ellen Brideau]: Okay. They have to, they're still responsible for 10% is my understanding. And as I couldn't be wrong, though, I've been wrong before. But that's my understanding.

[Zac Bears]: No, okay, that's helpful. And because I think to that, it goes to that story, right? That we're talking about there's a senior widow in a house that's over the break even, right? But let's say we suddenly were able to use a higher income limit with 41 C and a half. It's possible that, you know, between a senior exemption and a residential exemption, they may still be at a zero or still could be if we changed them both at the same time, right? There would be a, those wouldn't, there's a possibility that we could still help that person.

[Ellen Brideau]: That person, correct. But you're shifting everything. Now you're doing two shifts. You're shifting more of the residential and within the residential levy and you're shifting a senior means test within that levy.

[Zac Bears]: Yes, I would not envy the assessor who would be asked to do this job all at once. But yeah, it definitely would be complicated. But I think that, you know, trying to look at it in a systemic way, right?

[Justin Tseng]: Right.

[Zac Bears]: You know, if you can make a few different changes, is it possible that you can meet your goals in a way that you couldn't otherwise by only making one change or no change? So that's helpful. And then actually one last follow up, just it says under the clause 41 C and a half exemption. It could be increased up to 20% of the average assessed valuation of class one residential property in your town. Would that be a single family average single family home.

[Ellen Brideau]: I would have to go back and reread the law Councilor. I think it works like this one. It was the average residential class is what it said. So it wouldn't be done. It would do is that same calculation that the residential it's all the properties within that class.

[Zac Bears]: Okay. Yeah.

[Ellen Brideau]: Yeah.

[Zac Bears]: Cause I just would be interested to know if that 20% of the average assessed valuation, if that would be, more than 1,000 or less than 1,000, because that's another way. Maybe you increase the income limits a little bit less, but you can really target the, you know, if that 20% number under 41 C and a half is 1,500, maybe it's a way to target more aid towards, you know, specific situations like the ones we've talked about.

[Ellen Brideau]: Again, I apologize, I'd have to reread the law. I haven't worked in a community that had that one, so I'm not as versed.

[Zac Bears]: Yeah, no, absolutely. And it seemed to be the most confusing one, so I appreciate your help on that. Those are all my questions. Thank you, Madam President.

[Nicole Morell]: Thank you, Vice President Bears. Any other questions on the senior exemptions we just discussed or residential exemptions? Seeing none, do I have a motion for this paper?

[Zac Bears]: Just motion to request that the interim chief assessors submit written responses to our questions and submit a copy of the presentation and any additional documents to the city council and receive the papers in place on file.

[Nicole Morell]: Second that motion. Mr. Clerk, do you have that language?

[Adam Hurtubise]: Hang on, hang on, hang on. Hang on, here's what I've got. Vice President Bears has moved to request that the Interim Chief Assessor submit written responses to the questions the council asked and to submit the presentation given to the council and further move to receive in place on file. And I have a second from Councilor Caraviello.

[Nicole Morell]: That's right. Thank you, Claire Kernabees. If you could please call the roll.

[Unidentified]: Okay, hang on.

[Adam Hurtubise]: Vice president bears. Yes. Councilor Carrie yellow. Yes. Councilor Collins. Yes. Councilor Knight is absent. Councilor Scarpelli is absent. Councilor Tseng yes. President Morell.

[Nicole Morell]: Yes. If I've been the affirmative to absent zero on the negative, the motion passes. Um, before we adjourn LA, I just want to thank you so much for your time. Um, and your expertise on this topic. This is, I think no matter where anyone stands on the issue, this is just really, really helpful. So it's much appreciated.

[Richard Caraviello]: Very well.

[Nicole Morell]: Thank you. Do I have a motion to adjourn?

[Richard Caraviello]: Motion to adjourn, Madam President.

[Nicole Morell]: On the motion of Councilor Caraviello to adjourn, seconded by- Second. Councilor Collins, Mr. Clerk, please call the roll.

[Adam Hurtubise]: Vice President Bears. Yes. Councilor Caraviello. Yes. Councilor Collins. Yes. Councilor Knight is absent. Councilor Scarpelli is absent. Councilor Tseng. President Morell.

[Nicole Morell]: Yes, five in the affirmative, two absent, zero in the negative. The meeting is adjourned. Thank you, everyone.