Board of Selectmen Meeting Minutes & Agendas

Nov 4, 2017

Board of Selectmen Tax Rate Setting Minutes - 11-06-17

4:00 PM

Present:  Town Manager Andrew Dorsett, Chairman Schuyler Sweet, V. Chairman Franco Ross, Selectman Milton Bratz, Executive Secretary Ceil Stubbings, Attorney Jae Whitelaw, Finance Director Karen Noyes

Others Present:  Chad Fillion (Channel 2), Steve Nilhas (SAU 84 Superintendent), Robert Blechl (The Caledonian) Jason Roshak (The Courier), Rudy Gelsi, Barry Lunderville, Kim Woodson, Ron Bolt

Chairman Sweet called the meeting to order at 4:00 PM.

Sweet said there was no agenda for this meeting.  There will be a couple of presentations from the Finance Director after which we will deliberate and ask for public comment before they vote on a decision. 

Noyes said she reviewed the revenues with the DRA (Department of Revenue Administration) twice.  This is something that is always done just before setting the tax rate.  The estimated revenues for the Town is Five Million Three Hundred Eighty-One Thousand Five Hundred Sixteen Dollars.  Noyes provided the board with three spreadsheets with various options up for discussion.   Another part of the debate is the use of the overlay or the fund balance.  The overlay is money used for the abatement of taxes.  It is also used to clean up and secure properties the Town has taken over.  These funds are used throughout the year and for legal expenses.  At this time we have around $73,000 in expenditures for the overlay.  We know there is roughly $40,000 left.  The Town Manager and Noyes have discussed that $116,000 to about $125,000.  Whatever is not used by the end of the year will fall into the fund balance.  The use of fund balance to set the tax rate, the fund balance is what the auditors come up with which she has to agree with once all of the numbers are in.  She then has to find out how much is left that has not been set aside for expenditures and liabilities.  We came up with a fund balance of $511,789.  Last year at Town Meeting we voted to use $210,000 of those funds to offset the tax rate.

In the first scenario, she presented, is not using any of the fund balance.  The Town's tax rate is less than last year.  The calculation is $8.51 compared to the previous year's rate of $8.57.  That is if we use the $125,000 to offset the tax rate.  She is very comfortable to use as the overlay.  Noyes said the school rate is down from last year.  The school's rate is $13.29 per thousand.  Last year it was $13.32.  The state rate is $2.39 compared to last year's rate of $2.50.  The county rate has gone up from $1.50 to $1.63.  By using no fund balance, the estimated tax rate for this year is $25.81.  Last year's rate was $25.91. There is usually a penny difference due to rounding up and down.  The DRA will adjust the numbers a little bit. 

The second scenario is using $100,000 of the fund balance and keeping the overlay at $125,000.  The savings on the Town rate would be twenty cents over last year's rate.  It would make a difference in the tax rate of twenty-four cents less.  The school, county and state rates would stay the same.  The savings to the taxpayer would be twenty-four cents per thousand.

The third scenario is trying to bring the savings to twenty-five cents.  That will be the case if the selectmen decide to use $110,000 of the fund balance.  That would leave a fund balance of $401,579.  Last year the fund balance was $314.139.  This is less than the recommended amount of the DRA.  The actual amount to be retained by the Town is 5%, but it is only recommended.  There are many Town's that are less than 5%.  Dorsett said 5% would be over one million dollars.  Noyes said it would be quite an accomplishment if were to ever get there.  Dorsett said that by using the $110,000, we are still increasing our fund balance and getting closer to the 1.5%.

Sweet said they are here today with people who were invited because of the large tax rate increase last year.  It was said that there were secret dealings, so on and so forth.  The school was invited in case there are questions directed to them.  It is an effort on our part to be more transparent. 

Karen Noyes thanked the school board, the superintendent and Tom Mangels and anyone else who was involved in not retaining any funds this year to bring the tax rate down.  She knows they could have retained about $250,000

Sweet said we have met with the school three times this year.  Dorsett briefly went over the breakdown of the tax rate.  Dorsett noted that general land values have decreased.  The residential values have been increasing over the last year.  Manufactured housing has had a slight decrease in value.  Commercial and Industrial have done very well this year.  It has made up a lot of value that we lost on the utilities.  The loss in utilities is due to what is called the sales ratio.  The sales ratio is based on sales of property and how they deviated from the last assessment reval.  If we take it across the board, the sales are higher than our value set in 2015.  Sweet said they would now go into public comment.  Rossi wanted to know why each scenario was a penny off.  Noyes said it is a rounding up and down issue.  Noyes said the savings the school saved the taxpayers by using their fund balance was over thirty cents.

Ron Bolt recalled a few years back the Town established a policy for the fund balance.  He believes it was a goal was to keep at least 5%.  Bratz said they had not followed that policy over the years.  Sweet asked if we have ever been at 5%.  Noyes said the only time was when we were setting money aside for the TransCanada abatement.  Bratz said one of the issues they have discussed over the years, is that this is the people's money.  Providing that we have always given back to reduce the tax rate.  Bratz said that Bolt is right, it is a recommendation from the DRA.

Sweet said he heard that if we chose scenario number three, we would have a fund balance of $400,000 plus.  Noyes said yes.  Sweet asked what those numbers would be for scenarios' one and two.  Noyes said that if you choose #2, using $100,000 the fund balance would be $411,579 which is 1.78%.  If you select no fund balance, you would have $511,579 in the fund balance which is 2.21%.  Rossi asked what the fund balance was for last year.  Noyes said it was $314,139 or 1.41%. 

Ron Bolt would like to recommend you keep the most fund balance.  He knows it is the people's money and so, therefore, it is his money.  Bolt said that having set on the side of the board's table, he realizes that fund balance is the most powerful tool that you have.  It can be used for emergencies, to fund warrant articles, and is available for any rainy day needs.  Although he would like to see some come off the tax rate, he still recommends you keep as much of the fund balance as you can.  Sweet closed the public comment to discuss with the board.  Bratz wanted to ask a question before the board deliberated on this.  Bratz said that Karen sent out an email stating the fund balance was just over $511,000. Noyes stated in the email by using the $110,000 the fund balance would still be higher than last years.  By using the $110,000, the taxpayers would be about 25 cents less.  Bratz said the email stated the amount could be changed.  He would be very concerned with this change.  Bratz said that if he proposed to add another forty thousand to bring the $110,000 up to $150,000, he wanted to know what the $40,000 means to them.  Noyes said it would decrease the amount in the fund balance and we are not growing the fund.  The school will not have a reserve. When it comes time to pay out larger payments, as we get closer to halfway through the year, we may need a TAN (Tax Anticipation Note).  We have been fortunate this year.  The next check run will be exhausting the monies that we have set aside.  Noyes said that even though it is a small amount it is still a cushion.  Noyes says she was trying to give something back to the taxpayers.  Bratz said he was just wondering if the $40,000 was tied to something she was anticipating.  Bratz asked how many contracts will be negotiated in 2018.  Noyes said two contracts were up for negotiations.

Rudy Gelsi said he has been doing some research.  He has been looking at property cards and assessments; it is a very long process.  Right now he is at about one million in taxes that we are supposed to get from the big entities, like Walmart, Walgreen, and the Tannery.   Gelsi asked a few questions about the appraisal values.  He wants to know if the oldest entities have paid the right amount of money.  What he wants to know if the tax rate would have gone down if everybody paid the right amount of tax.  Sweet responded by telling Gelsi the reval was now history, and we are now dealing with this year.  We are going to have a decrease in the tax rate.  In a few minutes, we will know how much of a decrease.  Sweet said if the reval had been higher, yes the taxes would have been lower.

Sweet then moved into the discussion.  Although it is not always the case, he agrees with Mr. Bolt.  He is in favor of scenario number one.  He is in favor of scenario for the reasons Mr. Bolt provided.  Rossi said he was going in the same direction.  Rossi said that if we went for the scenario, it would amount to about $70 per year reduction.  He believes the goal of increasing the fund balance is more important now.  Bratz said he has been on the board for six years.  He would like to go with the $110,000 for the reasons stated.  Sweet stated that now they have expressed our opinions, we can hash them out more if anyone feels it is necessary or we can vote.  Bratz said that Ron Bolt had stated his position for the past five years.  We have never experienced an event where it was necessary, or it was needed.  Rossi said that one comment that Noyes made, that resonated with him was the school used all of theirs.  Part of the reason the tax rate is going down is that they used up all of theirs.  He sees this as an opportunity to build the fund in the event the rolls are reversed next year.  Bratz said that if you had an enormous flood like some Towns' have experience, we did not.  Bratz said he trusted Noye's number and recommendation to reduce the tax rate as much as possible.  Rossi said he wanted to clarify that he is not striving to meet the 5%.  He thinks it would be for Littleton to have one million one hundred thousand dollars in the fund balance.  He does think we do need more than what we have right now.

Sweet said that hearing no new arguments; he would entertain a motion.  Rossi made the motion that we go with scenario number one and that we do not use any of the fund balance.  Sweet seconded the motion.  The motion passed 2-1 with Bratz voting no.   Sweet said the Town portion of the tax rate would decrease by nine cents.  The meeting adjourned at 4:37 PM.