Sunday, May 14, 2017

Audit Management letter - page five of 31

De minimis property tax assessments

The Town annually assesses property taxes for each tax entity for which the Town has reported taxable personal property. A large number of these personal property tax accounts have valuations of less than $10,000.00. At the current  enacted personal property tax rates, these personal property tax accounts have minimal annual assessments.

In many instances, the cost to assess, collect and follow-up on these de minimis accounts can exceed the actual property tax assessment.

"We recommend that the Town consider including an article at the next Town Meeting asking voters to exempt property up to $10,000.00 from being taxed. There are over 100 communities currently employing this practice. It is important to note that the elimination of these assessments would not reduce the amount of total property tax assessments in any given tax year; the remaining property tax accounts would absorb these de minimis accounts, which will likely amount to an insignificant additional amount (pennies) to these tax payers, but will greatly increase efficiency within the collector's office.

My take on the above is the Town writes off some small personal property accounts and those dollars (pennies) are picked up by the rest of the taxpayers. - Jeff Bennett

Which is the reason I believe for the following;

The Town administrator reports that the Board of Assessors has requested a warrant article for the 2017 Annual Town Meeting to exempt from taxation personal property with an assessed fair cash value of less than $5,000.00. This amount was chosen by the Board as that which was politically feasible on the Town Meeting floor given the exempted amounts are shifted to the real estate levy. This exemption, if successful, would apply beginning with the FY '18 tax year.

So, to write off the personal property tax accounts, all of the real estate tax bills increase to cover those lost dollars (pennies) hence the "politically feasible" comment.

While the auditors did recommend the adoption of the mentioned MGL that allows for the personal property exemption and not the $5,000.00 dollar amount, the fact that the decision of the Board of Assessors was included in the management letter, shows the decision was already made and hence the comment by the presenter of the audit report. I believe what is more troubling is that Town Meeting voted to accept a Town spending plan of $8,277,318.00 with nary a question.

posted by Jeff Bennett
Statewide Expansion of Enterprise Funds
Melinda Ordway - Technical Assistance Bureau Senior Project Manager

from the Divison of Local Services website - under cities & Towns

you can go to this page and "sign up" to have things such as DLS alerts and other things such as cities & Towns updates emailed to you, if you are interested in such things.

A growing number of communities in Massachusetts have been establishing enterprise funds as the means to account for the finances of particular types of operations. Within the statutory provisions that define the services that may be operated as enterprise funds (M.G.L. c. 44, § 53F½), it is a local management decision whether to implement this option, but it has certain benefits that may account for its general popularity. A city or town that operates a utility or other business-type service must account for its revenues within the general fund unless there is an applicable statute or special act that permits special revenue fund treatment (i.e., receipts reserved for appropriation or revolving fund). As an alternative for certain services, the community may accept M.G.L. c. 44, § 53F½ to create an enterprise fund, which establishes a mechanism for the separate accounting and financial reporting of a service for which a fee is charged in exchange for providing goods or services. An enterprise fund segregates all the service’s revenues and expenditures from the general fund, which has the advantage of allowing the community to identify the service’s true costs— direct, indirect, and capital. The city or town can thereby determine the sufficiency of the rates or fees being charged. Although many communities operate wholly selfsupporting enterprise funds, this is not a requirement. An enterprise fund may be subsidized by the general fund through shared services, debt exclusions, or appropriations of other available funds. The number of communities managing enterprise funds for various operations (e.g., water, sewer, solid waste, recreation, airport, ambulance services, etc.) has been increasing over the past decade, as illustrated by the two charts below. In FY2006, 199 communities had such funds, and by FY2016 (year-end results for June 30, 2015), the number had expanded to 244, an increase of almost 23 percent. Thus, by June 30, 2016, 70 percent of the 351 municipalities statewide had at least one enterprise fund. This trend continues, with six more communities—Billerica, Cheshire, East Longmeadow, Holliston, Milton and Newbury—having adopted and budgeted their first 53F½ enterprise funds in FY2016.

posted by Jeff Bennett

DLS estimates record-low 15% state match for Community Preservation Act in FY18

This is part of an article on the Massachusetts Municipal Association website where the entire article can be read.

Cities and towns that have adopted the Community Preservation Act can expect a first-round state match in November of 15 percent of the local surcharge levied, the Division of Local Services has announced.
This level of distributions from the Community Preservation Trust Fund would be the lowest in the program’s history.
The DLS reports that its estimates are subject to change depending on collections at registries of deeds through October.
There will be equity and surplus distributions for those cities and towns that have adopted the maximum 3 percent surcharge, according to the DLS. With these additional distributions, the total state reimbursement for qualifying cities and towns will increase, depending on their decile and total surcharge amount.
During 2017, 162 cities and towns collected a local CPA surcharge and are eligible for state matching grants in fiscal 2018, according to the DLS.
Boston, Springfield, Holyoke, Pittsfield and seven other cities and towns that recently adopted the CPA won't receive their first match until the fall of 2018. Without legislative action to support the CPA Trust Fund, the match can be expected to drop again next year, as trust fund proceeds are divided among a larger number of communities.

Templeton uses CPA funds for many projects.

posted by Jeff Bennett

An important item missing from the printed 2016 Annual Town report. It was submitted for inclusion but for some unknown reason, it was omitted from the report. This shows how the Templeton Town reserve fund was used in fiscal 2016. Another example of sloppy "accounting" of Town money, not from the past, from the present, by the current board of selectmen. Many transfers in fiscal 2016, shortfalls in fiscal year 2017 and more in fiscal 2018, right out of the box. More problems anticipated in fiscal 2019, in part, due to some $2.00 per hour increases called for in the labor contract for the highway department (not raging but highlighting a public document) located on Templeton Town website, under boards & Committees, board of selectmen, contracts & agreements. The happy times are over -  appointed and sworn in to another term on the Advisory Committee

posted by Jeff Bennett

Table 2   Emergency Reserve Summary MGL CHAP 40 SECTION 6

Reason for Amount
Requested Amount
Approved Amount
Annual Town Meeting

Town Administrator/ Accountant
Payment to Abrams for accounting work to correct FY13 accounts




Advisory   Committee
For Payment to the Gardner News for 2 unbudgeted pre-town meeting notices





Advisory Committee

Balance returned to general fund


Part of an article of interest to all residents. The whole article can be found on the Massachusetts Municipal Association website.

The Honorable James J. O’Day, House Chair
The Honorable Michael O. Moore, Senate Chair
Joint Committee on Municipal and Regional Government
State House, Boston
Dear Chairman O’Day, Chairman Moore, and Members of the Committee,
On behalf of cities and towns across the Commonwealth, the Massachusetts Municipal Association is writing to express our significant concerns with H. 2420, An Act Building for the Future of the Commonwealth. The MMA’s Municipal and Regional Policy Committee has completed a careful and extensive evaluation of the language of this bill, and we must express serious reservations regarding the bill.
We believe that any reform to state zoning laws must contain strong protection of local decision-making authority, and we strongly oppose “by-right” language that would override zoning bylaws that have been established by citizens and their elected and appointed leaders. There are a number of concerning issues contained within the bill, and we have detailed the most significant of these below.
H. 2420 would mandate every city and town to establish "by-right" zoning districts for multi-family housing, removing any special permit or local approval process except normal site plan review, with no provisions that these housing units meet the affordability needs of the community. The MMA is greatly concerned that this would increase the cost of housing in cities and towns and make it harder to meet affordable housing targets, because developers almost always pursue projects for luxury and higher-end developments that yield the highest profits. Even more troubling, subsection (3) of Section 6 could be interpreted as opening the door to frivolous lawsuits against cities and towns if certain conditions are not met, further straining already limited municipal resources and potentially over burdening the court system.

posted by Jeff Bennett

Watching the audit report on the tv again, I noticed the audit presenter Tony Roselli stating that the General laws of MA allows up to $10,000.00 for personal property tax exemptions. During the presentation, Mr. Roselli commented on this law and that the Templeton Board of Assessors have looked at it and are on board and the Board of Assessors have recommended the $5,000.00 amount and that he, Mr. Roselli thinks that is a good plan. So, perhaps it was selective hearing or hearing what you wanted to hear, but it seems pretty clear, if you watch and listen to the audit presentation more than once, that the Town, through its elected Board of Assessors, came up with the dollar figure and the auditors feel it is a good idea and plan. seems like this is not a case of getting advice, paying for said advice and then not following it. It is in fact, the opposite, a suggestion was given and it was followed and it may in the long run, be financially beneficial to Templeton.

On the borrowing of the five million dollars, again, the audit presenter, Mr. Roselli stated that with regards to the five million, use a portion to pay the 1.4 million dollar deficit with regards to the school project and then the state, not the audit firm, the state, said do not go spend it. Seems the video shows Mr. Roselli was the messenger with regards to a few things so it is not actually a case of paying for advice then not following it. I will be watching the audit report again and again.

With regards to the treasurer / collector, I was told that the Town has a treasurer/collector in the form of Carol Lee Eaton, who has been certified for both positions previously and is now in charge while a new Town Treasurer/collector is looked for. That is probably a question for the selectmen at one of its meetings open to the public. The selectmen are scheduled to go over the audit management letter this coming Monday, May 15, 2017.

posted by Jeff Bennett