Delayed state approval for 2012 property assessments will force the town of Chilmark to operate on borrowed money for the early part of the fiscal year, the selectmen learned this week. Without certified assessments from the Massachusetts Department of Revenue, the town cannot set a tax rate, and without a tax rate it cannot send out property tax bills for the second half of the year. Preliminary tax bills for the first half of the year went out in October.
Both the assistant assessor and town treasurer attended the selectmen’s meeting Tuesday to discuss the problem. Assistant assessor Pamela Bunker said her back-and-forth communications with the DOR over the past nine months have included numerous requests for additional analysis and paperwork. “We have complied with all of their requests and they have continuously asked us in detail about some analysis that they are unsure of, particularly when it comes to Seven Gates, Squibnocket and beach rights,” Ms. Bunker said. “They keep asking for different backup documents, which we continuously resubmit.”
In April the selectmen approved a $2.1 million short-term revenue anticipation note to cover town expenses through June 29.
Town treasurer Melanie Becker told the selectmen that more borrowing will be needed, both to pay back the first note and also to carry the town into the new fiscal year which begins July 1. She said the town will need special permission from the DOR for the second round of borrowing.
“We’ll have to cover the note we borrowed plus the money we’ll need through the beginning of July until we can start seeing some of the tax money coming in,” Ms. Becker said.
Ms. Bunker said on Tuesday the Bureau of Local Assessment, the board within the Department of Revenue responsible for overseeing the valuation and tax classification process, had granted the town pending preliminary certification. This triggered a public disclosure period which began yesterday for taxpayers to review their assessments, and will continue for two weeks. Letters went out to taxpayers, and preliminary assessments also can be viewed at the town hall and library.
In light of all that, Ms. Bunker told the selectmen the earliest tax bills can go out will be late June.
Selectmen were not happy with the news.
“The town has been put in a position where they can’t pay bills and have to borrow money because of some paperwork snafu or disagreement about beach rights, which only represent a small amount of land value in Chilmark,” said selectman Warren Doty. “We could have resolved this months ago instead of dragging it on. It’s frustrating to a lot of us and it’s financially damaging.”
At their annual town meeting in April, Chilmark voters approved a $7.65 million annual town operating budget for the coming year. Nearly all the money to cover the budget will come from property taxes.
Ms. Bunker said total town valuations for 2012 are now pegged at $3.2 billion, up from $3 billion last year. Total valuations as of the last triennial townwide revaluation in 2009 were $3.1 billion.
Assessments are up 14 per cent for properties with beach access, Ms. Bunker said. She said most other properties will see an increase in assessed value of about 2.4 per cent.
The public disclosure period for property assessments runs through May 31; following that a tax classification hearing will be advertised during the first two weeks of June. The selectmen will then hold a tax rate hearing to determine whether to have a single or split tax rate (the town historically has chosen a single tax rate). After that the tax rate will be sent to the state for certification; once it is certified the tax collector will be able to send out tax bills. Abatement applications may be filed as soon as taxpayers receive their letters, called impact notice letters, or within 30 days after tax bills are sent out.
This is a property revaluation year for all Vineyard towns. Tisbury, Oak Bluffs and West Tisbury have set their tax rates, while Edgartown, Chilmark and Aquinnah are all in various stages of process with the DOR to have their assessments certified.
The day after the meeting, Ms. Bunker told the Gazette she anticipates a tax rate of $2.07 per $1,000, down from $2.13 per $1,000 last year. She said the DOR authorized the pending preliminary certification of the assessments in Chilmark because “they knew we were in a financial crunch.”
“They’ve made that extension of, okay, let them move forward so they can get some cash flow,” she said by telephone from her office on Wednesday.
She said some of the questioning from the DOR involved unusual sales in town last year, including a $14 million and a $15 million sale in Squibnocket alongside neighboring property sales of $2 million and $3 million. She said the $22 million sale of Blue Heron Farm also caught the attention of the state.
“It comes down to the Island has so many unique properties to it and the sales reflect that,” Ms. Bunker said.
At the meeting Tuesday, assessor Clarissa Allen said Chilmark had simply been pushed to the back of the line of the 350 other cities and towns in the state who are undergoing the triennial revaluation process, including the five other Vineyard towns. Ms. Allen said the DOR “would never with any clarity say it was their mismanagement, it was always that we didn’t send in something.” Fellow assessor Leonard Jason Jr. said with more frequent appeals from taxpayers, “the state is starting to look very carefully” at the Vineyard.
Mr. Doty expressed frustration with the process.
“What strikes me is we’re the same town we’ve been for many years, and the disparities existed for years and years and this delay puts us in a situation where we had to go borrow $2 million to pay our bills,” he said. “We’re a solvent town with a strong financial record and yet we have to go out and borrow more money. Why are they doing that? It hurts.”
He continued: “We need to do something. From the front desk people are calling asking, where’s my tax bill? There are people who want to pay us and we’re saying no, not yet, and we’re going out and borrowing money.”
Ms. Becker replied: “We are going to have to borrow again, we don’t have a choice.”