Speaker 1: Good evening everyone. This is the November 19th meeting of the Natick Select Board. We are going to open the session at 6 0 1 and we have an echo. Yep. Yep. Think we got it. Thank you. Thank you Todd. Okay. All right. So 6 0 1 let's everyone in the room who's able to stand, please stand for the Pledge of Allegiance in a moment of silence. Pledge allegiance
Speaker 2: To flag flag of the United States of America. Of America. And to Republic. To Republic stands nation, one nation under God, invisible liberty and justice for all. Speaker 3: Thank Speaker 4: You. Speaker 1: All right. First off, we have announcements. And Mr. Erickson, do you have the MB M-R-M-W-R-T-A public comment information? Lemme pull that. Okay. Speaker 5: Sorry about that. Yes. So basically it's just to announce, so the M-W-R-T-A, which is the Metro West Regional Transit Authority, it's the transit authority
that provides public transportation centered out of and for Metro West, including Natick where the second largest community in the network next to Framingham. So there are quite a few bus routes that go through town and they also help us with some of our ride share programs in town, especially for seniors. But they're seeking a redesign of its entire fixed route bus network and they have a lot of desire for community engagement. So we encourage everybody, you can go to the town's website. There's actually a news flash on there with links
to, to information as well as a list of the public outreach events. They've been ongoing this September and October, but they're doing a lot more as well in the coming months. So encourage everybody in town who may be impacted or even just want to get more active with MWRT and public transit to, to be engaged. Speaker 1: Thank you Mr. Erickson. Next up is public speak. Any individual may raise an issue not included on tonight's agenda and it will be taken under advisement by the board. There's no opportunity for debate during this portion due
to the requirements of open meeting law that this section of the agenda is limited to 10 minutes and any one individual addressing the board has a maximum of three minutes. Is there anyone in the room who wishes to speak? Is there anyone online that you can see Speaker 5: You should raise their hand. Speaker 1: Yeah, please raise your hand if you'd like to speak. I do not see any, so let's move along. First up is under discussion and decision is a continued hearing on Gatsby's Chop House
LLCs, S 12 volt alcohol license, license, not in use. Do of anyone here who wishes to speak on that? Okay. All right. I don't see anyone representing Gatsby's here. So here's what we're going to do. This hearing has been continued for several months now. And so given that we have not received an application for this license, we're going to close that public hearing And should Gatsby's
want or open a business, they can reapply in the coming year. So I'll take a motion to close the public hearing. Speaker 6: Mr. Chairman, I think it's more accurate to say that if they open the business before the end of the year and they can complete their application, they'll have the license. But I think that's unlikely. But I think it's okay to close the public hearing, close the hearing. If we want to actually revoke the license, we'll need a separate public hearing with, you know, 14 days or whatever number of days notice is necessary. I don't think that's necessary either.
Speaker 7: The license Speaker 1: Expires. My understanding is the license. Go ahead Catherine. You probably Speaker 7: License expires at the end of this year, right? Right There is inadequate. Speaker 5: There's no reason to do anything. Speaker 1: There's no need to. Speaker 7: But we should close the public hearing and allow the license to lapse. Yeah, Speaker 6: Close the hearing. It's not a public hearing. Close Speaker 7: The hearing. Speaker 6: So I'll move to close the hearing. Speaker 1: Okay. Do I have a second? Second. Thank you. All in favor, please say aye. Speaker 6: Aye. Aye. Speaker 1: All. Let's move on. Public hearing Townline Liquors Inc. S 15, all alcohol change of officers, directors, LLC Managers Change of ownership.
Interest LLC members, LLP Partners, trustees issuance, transfer of stock, new stockholder application. I assume you gentlemen are here for that one. Could you please go to the podium and introduce yourself? We Speaker 8: Need to read the public hearing in Speaker 1: Open. Yes, thank you. I knew I was the Speaker 9: Public. We'll Speaker 8: Keep you on track. Speaker 1: Thank you. Speaker 9: The select board will hold a public hearing on Wednesday, November 19th, 2025 at 6:00 PM upon the application of Town Line Liquors, Inc. Carl Owen Berg, manager of record for a change of officers,
directors LLC Managers Change of ownership Interest LLC Managers LLL Partners, LLP Partners, trustees Issuance, transfer of stock, new stockholder for their S 15 all alcohol off premise license. The hearing will be held in the Edward lot meeting room Natick Town Hall 13 East Central Street, Natick MA as well as remotely. Anyone wishing to be heard in this matter can participate in person or through Zoom. Login instructions will be published on November 19th, 2025
on the select board agenda. All persons interested in this application may appear and be heard at the time and place mentioned above or may submit written comments to the select board at 13 East Central Street, Natick, MA 0 1 7 6 0 select board@ma.org by November 19th, 2025. And I move to open the public hearing. Speaker 8: Second. Speaker 1: Okay, thank you Ms. Pope and Mr. Sidney. So gentlemen, Speaker 9: You wanna vote me to vote? Vote Speaker 1: To vote. God I'm in a slump today. All in favor, please say aye. Aye. 5 0 0. Now we
Speaker 8: And gentlemen, can you make sure the green light is on, please? Speaker 10: There should be a push button. Speaker 8: There's a little button in front of it. Ah, there it's on. Can you hear me? Yes. Hello. My, my name is Daniel Burke. I'm an attorney representing Townline Liquors and essentially the previous owner of Townline Liquors passed away Anthony France and his will left everything including his ownership of the business to his son. And now we are just applying to amend the license to reflect
the change in ownership and the fact that his son, Jonathan Frances, who's here tonight as well, is going to be assuming the role of the various officers in the company. Speaker 1: Thank you very much. Jonathan, do you want to send up for, first of all, condolences on your father? Yes, very sorry Father. I'm sorry. Speaker 9: Father passing Speaker 1: And I sentence, Speaker 11: I honestly have nothing to to share you. Speaker 5: It's more for the folks watching from home. All tens of them. Speaker 12: Yeah, Speaker 1: The hoards.
Speaker 12: Thank you for your time board. I really appreciate all the work that everyone's done to, to help me with this. But it was a very challenging situation. I have a older disabled brother, so I've made it kind of a delay, but we're kind of, I think we're here and there's really no change other than, you know, my father passed away and ready to kind of move on. Take that next step. Speaker 1: Any questions from the board? No, I can't answer. I just have one, one very minor one, which is, there'll be no changes to the opening hours, et cetera.
Speaker 12: Nothing is changing. It's all the same. Speaker 1: Okay. Thank you. Okay, any other questions from the board? Speaker 12: The question, Speaker 7: Will the manager of record change? Speaker 8: No, the manager of record will remain Carl. Speaker 7: Okay. Speaker 1: Great question. Okay. Anything else? Yeah. Do I have a mo motion? Speaker 6: Actually, you have to ask for public comment. Thank you. Speaker 1: I'll get one of these, right? I'm sure. Speaker 6: What are we gonna do without you, rich? What? Speaker 1: Yeah, I know, I know. I'm gonna have to go back and watch the tapes of these anyway. So is there any, are there any public people in the public want to comment on this?
I see no hands raised. Thank you. Moved by Mr. Sidney. Seconded by Ms. Slager. All in favor, please say aye. Aye. Aye. And thank you again for coming in and condolences. Thank you. Speaker 6: Move to close the public hearing. Second. Second. Speaker 1: I'm gonna give that to Kristen 'cause it was so close by Mr. Sidney. Seconded by Ms. Pope. All in favor, please say aye. Aye. Aye. Aye. Okay. On to monthly Johnson speak. Thank you very much. Speaker 6: Good luck. Thank you. And sorry for your loss.
Speaker 7: Yeah, best of Speaker 1: Luck. Anybody have any? You don't have to stay, you don't have to stay. We, we don't take, we don't take it personally. Believe me, if we could leave, we'd probably do it. But people would notice though, I think although Rich could cover my job for me, he is done an admirable job. Okay. Speaker 6: I'd screw it. I'd screw it up if I had to do it under pressure. Oh, maybe I doubt it. Speaker 1: I don't think so. Anyway. So onto monthly Johnson speak, is there anything that anyone wants to raise on Johnson? Jamie?
Speaker 5: I do. Mr. Ericks And it's, it's, it's more of an update following the last meeting. So on 10 29, just for the folks watching from home or anybody, just as a reminder, the select board at that meeting had a healthy conversation about next steps and, and asked the, the administration and really decided to broaden the discussion about Johnson to tie it in with a couple other things. One of which was the recreation center, the coal center, parks and Rec. 'cause it came up a lot during the dialogue as well as just looking at the fields and parks needs of the community.
So what we're preparing, and we're gonna be bringing it forward in a December, early January meeting, hopefully December is, is sort of a, an outline of, of, of those basically three inter-related components, which is the Jonathan School, the Cole Center slash Rec Center, and Parks and Fields sort of updates. The big thing about the parks and field updates is really looking at the 2016 parks and field master plan, which is still extremely relevant and actually has had quite a bit of work done to it. It's just a matter of refreshing that and what do we do next.
And so we're gonna be not doing that work yet, but we're gonna show how we're gonna do that work in the coming time, months, a year ahead, as well as the intended approach for the Johnson future use and the coal recreation center. We don't have for you tonight. We just want you to be aware of that and the public will be aware of that. In addition, this goes time for the board, because this was, was also a request of the board to hear back from the boards and committees for which you're seeking feedback on needs and potential needs that could be accommodated at Johnson. That can also be broadened at that time. But we are, we're that, that's due by the end of December.
So this afford us the time to be able to receive those and bring those into account as well as the, the needs assessment that was done for that human services study. So it, it's, it's all a work in progress. As we mentioned, this is an iterative process. So we're, we're trying to be, you know, shift when we get direction to shift and this is one of those slight shifts. So we'll have more to report to the board in December. We just wanna use tonight and the Johnson speak tonight just to inform the board as well as those either in the room or home watching. Speaker 1: Thank you Mr. Erickson. It's great summary. Yep. Speaker 5: There is, just for folks from home, that headline update,
we did post on the Johnson project page, what I just talked through in written form, and it's attached to the agenda as well tonight. We didn't get that up until just recently, so you might need to hit refresh. And we, we did provide a blast out to those who have signed up for Johnson updates that they're aware of this as well. Speaker 1: Great. Speaker 5: Thank you. Thanks. A Jay and John to my right who helped Speaker 1: Sort of Speaker 5: Is working on some of this reshuffling. Speaker 1: Right. Thank you. Any comments? Any comments online? Just everything. Want to say anything?
Please raise your hand in Zoom. Okay. And now everybody's, everybody's quiet. So let's move on to the main event of the evening or the two main events of the evening, which are the public hearing on the fiscal year 2026 tax classification hearing. So Mr. Henderson, the podium is yours. Open the read and open the public hearing. I did say public hearing right there, Madam Clerk. Do you need to, do we need to, we need to read that. Yes.
Speaker 9: I don't have that. Speaker 1: Bring it up, Speaker 9: But I, it wasn't printed out, but I can, I'll pull it up. Okay. Okay. In accordance with the requirements of Massachusetts General Law chapter 40, section 56, the Natick Select Board will hold a fiscal 2026 property tax classification hearing on Wednesday, November 19th, 2025 at 6:00 PM in the Edward h Delo meeting room, Natick Town Hall, located at 13 East Central Street, Natick, Massachusetts. The purpose of the public hearing is to consider the percentages of the FY 2026 tax levy
to be born by each class of taxable real and personal property. All persons interested in this determination may appear and be heard at the time and place. Mention above anyone who would like to submit written comments to submit those comments to the Natick Select board. 13 Central Street Natick, MA 0 1 7 6 0 5 0 8 6 4 7 6 4 1 0. Sounds like lottery numbers or select board@natickma.org no later than 5:00 PM on November 18th, 2025.
Anyone wishing to be heard on this matter can participate in person or through Zoom. Login instructions will be published on the November 19th, 2025 select board agenda. Speaker 1: Thank you Madam Clerk Speaker 9: And this so move to open up the public hearing. Thank you, Speaker 1: Ms. Pope and seconded by Ms. Slager, please. All in favor, please say aye. A Aye. Aye, aye. All right. We're now open. Ms I already wrote down closed public hearing, so to remind myself All right, Mr. Henderson, please. Your, Speaker 13: Are we ready for me? Well, thank you much. If you wanna share,
we'll get our presentation up, but good evening everyone. For those at home that don't know me, my name is Eric Henderson. I'm the director of assessing here for the town of Natick. I'm here tonight, at least in the Zoom sphere is a few of our staff. Anne Hansberry, our assistant director Al Ferrara, our new residential assessor who we're very happy to have, and our board, which consists of Wendy Olai, Paul Greer, and Wind and, and Molly Reed are trickling in Zoom and in person. We, we posted our meeting a little bit before you guys, so, okay.
We are up and running. Speaker 14: You see that? Okay. I, Speaker 13: I don't need to see it. We're good. Thank you. Okay, so we're gonna, we're gonna look at, let's see, why is this very delayed reaction? Oh, there we go. It's Speaker 10: Not you, it's John. I think it's trying. Speaker 15: Eric, I pulled it up for Speaker 13: You. You got it. Okay, perfect, perfect, perfect. So let's go. I just wanna follow, we're gonna roll off of that. So thank you for your time this evening. It's my, our annual show to discuss where we're at with our taxation process and, and basically we're gonna select our minimum
residential factor. The next slide just shows our agenda of what we're going over tonight. And then the next slide we're gonna dig right into what we're doing. So tonight I am gonna ask the board to vote a residential factor, which is essentially determining whether the town of Natick is going to continue with a single tax rate or choose to split the tax rate by choosing an option less than one. We're also gonna discuss some other taxation options before you as, as the policy board of the town. And I'm gonna try to provide you some relevant information to help you make this decision.
We're gonna talk about our levy capacity maximum levy, and I think it's a little bit more, I think there's gonna be a little bit more information. We're gonna see how the override applied this year. That was a really big conversation this last year and I think now you can kinda see where it's all coming together. We're gonna talk about our tax base and new growth, and then we're gonna just kind of talk about the impact of some of the decisions before you. So if you could sum up prop two and a half in one page, this is it again, prop two and a half is a is a Massachusetts law that essentially limits how much cities and towns can spend
or, or, or levy. So this chart, again, we're on slide four, we're looking at last year's levy limit. We add two point a half percent to that. We then add our certified new growth. And then, you know, the difference here this year is we've added that $7 million override into our allowable available levy to spend. That gives us our levy limit. On top of that, we add the debt from previously voted debt exclusion votes, the things like the fire station, the Kennedy Middle School. As we pay down that debt, that's part of it
where we have a maximum allowable levy of a little over $157 million. So next, one of the things that I am required to inform you of this evening is our excess levy capacity. We always have some access levy capacity. And really the, the, the number really varies just by the amount of rounding involved. We talked about how there's a maximum level we can't go over, we need to tax on a round dollar number, so thus we have to round down. If we round it up, we would be over that level and we couldn't do it.
So essentially our excess levy capacity is 112,000 $126 and one penny. So our tax rate would've been 12 17,865. Again, we're rounding down to a projected tax rate if, if we maintain a single tax rate of $12 and 17 cents. Property valuation mass general laws chapter 59, section 38. One of the big premises of prop two and half is that we have to value the property at market value. What it would actually sell for, and again, I'll go into this a little bit, we used
to do this more on three year cycles as required by the Department of Revenue. That got shifted a number of years ago to five year cycles. But essentially those middle years, which we call interim years, became a little bit more intense. And essentially, if we had a perfectly flat market, I could not really change our values for a year. We're not there yet. So we did make some valuation changes. This chart just shows some of the big picture value changes. We always go with our average single family value tax bill, median single family tax bill,
because that's our biggest property class. And that's kind of the conceptual property that we can all wrap our heads around. Our total taxable value is almost $13 billion, which is a, which is over twice what it was 12 years ago, which is pretty remarkable. You know, what's happened with the valuation? As someone who's been doing this for about 25 years, I'm still fascinated where we're at here. Our new growth number was a little over $171 million in value, which equated to an additional $2,045,950 in,
in additional allowable levy that the town could then levy as part of the tax bills. The next slide, I always like to throw an outside source or two in here because I always try to say, it's not us valuing these properties, it's really we're following the market. We're reading the market. There is no assessor's dartboard down in my office. Again, we read the market and we adjust our values and if we didn't adjust our values, the Department of Revenue is not going to allow us to set a tax rate. Simple as that. This is the
pie, our tax base. So as our residential values have skyrocketed here and most everywhere, our 80 20 split has shifted a little bit more towards residential. And I, I try to say that that's not necessarily from a commercial valuation drop, it's really just more of the fact that our, our residential values have appreciated it at such amazing rates. Now you will notice this year we actually had a little bit of shift onto commercial. And when I say commercial, I mean C-I-P-C-I-P,
meaning your commercial, your industrial, and your personal property classes, which are, are two big pieces to this pie also. So this year we've had a slight shift onto the CIP class, which we haven't seen in a little while. And again, that was a result of some pretty good growth. Avy Lab three Fosse Sports N Star with the personal property. Kula bio was a good personal property account that that helped that. And again, as I talked about those intramural adjustments, we did a pretty thorough review of our values this year as CIP and commercial sales come through.
We look at rents, we're still coming out of C-O-V-I-D-A bit and so we're still trying to read the tea leaves of where the market is going with what limited evidence we may have of the market. But we did make some commercial income model cost model land table changes this year that I do believe are well supported with sales and rents and, and supported and defendable. Now we're gonna move on to the meat of our presentation tonight and our taxation options. So the board's taxation options tonight include the
residential factor, AKA, the split tax rate, the residential exemption, and the small commercial exemption. You know, I will also note we don't really discuss it at this hearing probably 'cause it was invented after the laws were passed on this, there is also a means tested exemption. And at the end of this presentation, I'm also just gonna give you, as I always do when you hear me speak, go over some of the options that we already have in place in a general overview with these taxation options. One of the things I like to say is that, you know, none of these options allow us to increase our levy.
We can't tax more. And then all of these options do have, whether you call it winners or losers or whatever it may be, it is a shift from one property class to another. So we're gonna look at a couple of those. So the one tonight we're really gonna focus on, and I'm gonna ask you to vote on at the end of the evening, is the minimum residential factor. This again, factor is what allows us to split the tax rate again, shift more of our tax burden onto that CIP class. A residential factor of one will maintain a single tax rate
of $12 and 17 cents. A residential factor below one will split the rate. And again, we're gonna vote that this night tonight, this is the chart again, it looks similar as in the past. The numbers change a little bit every year, but again, it it, it ties into that pie, that 2080 split and the fact that in the grand scheme of things, a 2% reduction in residential taxes equates to a 10% increase on commercial taxes. And that can get taken out the further along
that split moves. This is mathematical equation. I will say another tax option is the residential exemption, residential exemption benefits owner occupied properties. But to a certain extent it really benefits lower valued owner occupied properties. So the, the people that end up paying more on this are your apartments, you know, they are not owner occupied. So the apartment property owners pay higher taxes if this option is chosen. And then higher valued properties you will see on the,
well we'll get that on the next slide. Similar set of municipalities here from year to year that have chosen this option. We haven't seen too, too many add it or subtract it. Again, most of these communities are Cape Cod. You've got a lot of seasonal residents and then Boston Metro area where you have a lot of college kids and apartments and things of that nature. Again, this benefit is to owner occupy properties, but again, is based on property value, not the ability to pay. It's one of the things why i, I threw that means test and exemption in there, just for the sake, the name of it,
it is means tested. There is an income test as opposed to being based on property value. This chart again shows our estimated what we think, you know, what would transpire if we did this residential exemption. Year one is a little bit of a dark throw. Year two of this program, you actually ha you know, the people that would qualify and have applied. The big thing with this is that I tried to highlight what we call the break even point. So a person with a property assessed at 1,000,020 $5,000,
you know, value can be owner occupied, will get this exemption and tax bill will essentially remain the same or it might even go up because again, you're, you're paying for that exemption, you know, that are, that is benefiting the lower valued properties. Another taxation option that requires no vote is the small commercial exemption. This sounds better in title than it does in application unfortunately. And in all honesty are 40 properties that may be eligible is from last year
because we have not required received this list from the state yet. It was well intended. But essentially the way it works is really the only people that qualify these are single tenant owner occupied buildings because the, the, the tax rate really doesn't go to the small business, which I think was the intent. It really goes to the property owner. Sometimes those are the one in the same, not all the time. Alright, all right. Tax rate. This is one of our common questions really is where does these numbers come from? And, and in,
in theory it is simplistic in reality these are pretty big numbers and a lot of work goes into getting us all here. But it's essentially what's the levy? What do we need to spend divided by our taxable assessed values Gives us our tax rate. So breaking it down with our big numbers here. One more slide. Basically this is the math that gets us to that $12 and 17 tax rate. And then this year I definitely wanted to kind of call out the override impact. This was a big discussion this year, I think it brought out,
we're gonna discuss a little bit later. This drove a lot of traffic to my office and I think we were able to discuss and work with things and, and points some people to some of our exemption programs. But essentially this is the impact of the override. Just looking at, okay, just the pure override $7 million divided by our assessed values gives us that 54 cents basically of this $12 and 17 tax rate. Is that override? So let's talk taxes. I've put up a couple of our average single family value this year to last year.
Our median single family this year to that last year. So our average single family homes going from 877, 900 $13 to $937,795 with a tax increase of about $913. The median single family, which is a little bit more applicable as we tear down a $650,000 house and add a $2.1 million house. It tends to skew our average up. Our median is more of our typical taxpayer. We generally do everything by average single family value
because that's the data the state provides us when we want to compare other towns. Our median single family, more of our typical home has been reassessed from $780,400 to $838,600 and is looking at a tax increase of $872. And again, at the bottom of this, we're doing the same thing with that average and median single family that essentially shows, you know, the override impact is roughly 450 to $500 on your typical house, which is
what we predicted back in a year ago when we started having these conversations. So at the end of the day, this is where we're at. You know, at this point, this next slide looks at our top 10 taxpayers. Again, they pay a little over 10% of our levy. The top has remained similar, but one of the things we have seen is more apartment complexes have added at the bottom as our office values have stagnated a little bit and we've, you know, we've not only added some apartment units, the apartment rent growth over the last
decade has been remarkable. So as apartment rents go up, our values go up, their net income goes up, our values go up on those. This slide just shows how we compare with our other communities. As in appraiser, you're always looking at comparables, comparable sales, comparable rentals. If I am a potential buyer looking in this metro west area because this is where my job is, this is our competitive market. And again, this highlights our competitiveness, I think in the market as, as far as taxation is concerned,
the, you know, the dots are the, our last year's average single family value. 'cause we don't know this year's yet for everyone else. And the bars are the tax bill. So a new thing for this year, we want to talk a little bit about how we bill and how a quarterly billing works. This happens to be one of our most common questions also, which is one of the reasons I wanted to add it. So we run through a fiscal year that runs from July 1st to June 30th. And after 10 years, I finally got this figured out. Our first two bills, July
and October are what we consider preliminary bills. We don't know what the values are gonna be, we don't know what the budget's gonna be, we don't know what the tax rate's gonna be. So those are the first two bills and then our next two bills is when we figure it all out. So that's why when you get the January bill, there's now a value on that bill. There's now a tax rate on that bill that didn't exist on the first two bills. So by law the, the preliminary bills are essentially half of last year's taxes. Many communities choose including us, we add the two point a half percent
to those preliminary bills because we know it's gonna happen. And then this year we also added that estimated override amount in that bill also. This next slide shows that. So the purpose of that is to kind of level out your four quarterly bills so you really don't have large shocks and impacts. A north of Boston community just voted an overrided two weeks ago, a big one looking at like a thousand dollars tax bill increase on top of the normal increase and they just voted it and it's just gonna hit the next two bills.
So you're, that assessor's gonna have a fund January. But again, one of the key things and why I am bringing this up is that there is not gonna be a huge sledgehammer hit when these bills hit January 1st because some of that hit was already taken in July. Okay? Now one thing to note about this is by law, any revaluation, which is me, or taxation options, which is you, all those changes can't be in those preliminary bills. So they are the ones that hit on the, on the January bill.
For those of us that remember the old days in assessing, you could get away with not changing your values for a couple years and then there was a big shift. Many states are on five year cycles where then when you're in that fifth year, it's a pretty intense process and you have big shifts onto maybe multi-family. You know, two and three families are selling for more in that period. And then you gotta kinda live with it for the next five years regardless of what the market does. Again, the point of this is if this board were to choose a split tax rate tonight, I think the next couple
of slides are gonna show the impact. So again, we figure out a tax bill can almost be thought of as an annual bill, but we happen to break it out over four quarters for convenience, for taxpayers and also for cash flow purposes for the communities. So you're gonna see here this, this slide shows an example of a commercial property assessed at $500,000 and another one assessed at $5 million. The impact on the January bill, if the board were to choose that full 150% shift and then what you see is going into FY 20 sevens preliminary
bills, it then levels out again to a certain extent, but it's rather obvious that that doing the shift on two bills would be cause some cash flow issues for, for a lot of businesses. So it's just something to keep in mind that if this board or future boards thinks that this is a good option, it's likely something that should be done, not just overnight and in a phased or gradual process. Again, similar tax bill. Now we're gonna look at that median property valued house. Okay? So you can see our first two quarters were at
$2,570. Last year's taxes plus two and a half percent reduced down to about $2,005. Again though we're looking at in July, again starting FY 27, that number is gonna jump back up again. So while we're here a, a public service announcement for all taxpayers out there, January is the month that we consider in the assessing world abatement season. You get that bill and that is your one time of year to contest your abatement. If you file that abatement on February 4th, I apologize
and say legally I can't even accept this. I do not have the legal authority to act on this. So it's generally on February 1st, depending if February 1st falls on a holiday and you know, the right to appeal is every taxpayer's right. And theoretically the appeal should be based on value. The appeal can't really just be my taxes are too high. That's a good number of appeals we get and that's where we look at it as an opportunity to sit down with someone, maybe go look at their house, figure out if our value is accurate, and then also talk to 'em about maybe this program works
for you, does this work for you? And try to put 'em in contact with some of the other avenues and programs we have to help. We also tell people that I would much rather if we have an issue, we have you down as three bathrooms and you have two and a half. I'd rather fix that before tonight because what happens is in the abatement is then we are granting money out of the overlay fund. So the overlay fund is really the assessor's fund that we utilize to pay for like the exemptions. Okay? The other thing we get to utilize it for is to pay for
revaluations and appeals. So if we, if we, you got two and a half bathrooms, we, we, we have it as three, we're gonna grant you an abatement and refund that money. If we have an appeal or a court case, that's where that money and we lose, that's where that money comes from. It is my goal as the assessor at every assessor's goal. We, we protect that overlay account. Like it's our own, our own. We guard it to the death. And that is our goal is to really, 'cause we would rather fix it earlier
or really be able to return that money back to be used for general fund. You, I'll always talk about it every time you see me speak. We do a really good job here with our tax assistants, both through assessors legal programs, but also the Council on Aging. The Service council. We've done a really good job, I think revamping our website and some of our charts to make this information a little bit digestible. When you talk to assessors, we kind of have our own codes of 17 ds and 41 Cs and LA threes
and your head starts spinning. I think we've done a good, good job of trying to simplify things and we are always available by phone and by email. But again, so we have statutory exemptions though. Those are the ones that are set under Massachusetts state law. So low income and asset senior citizens, surviving spouses, minor children, disabled veterans, blind individuals. These are the programs that springtown meeting 2023, I believe we voted, where we now double the state amount. We have now gone to the maximum amount allowable under the
law to be able to grant to someone to help them with their taxes. There's also a deferral program for moderate income seniors. I'm, I'm happy to report that we've added six new deferrals this year, which considering we have 20 to 25 a year percentage-wise, that's a really big increase. And again, deferral program is a, it's a program that essentially as a senior, I'm not gonna pay taxes. Eventually when I pass whatnot, the taxes will get paid back so the town doesn't lose any money.
We've set the interest rate to 2% interest. So it's a good estate planning and financial planning tool. The seniors that we talk to, real estate taxes are their biggest bill. So we try to talk about this program and it, and it's an option to build a little bit of savings. So when you need a new roof or when you need a new boiler, you don't have to take a home equity line to pay for that. You don't have to get a reverse mortgage, which are not good, good options at that point. So it's a good program. We've seen more highlighted interest
in it, especially as the override conversation has come up. And I, and I'm happy to say natick's done a really good job of, of adapting these programs at town meeting to make 'em work. 95% of the state, the deferral program, you have to make less than $20,000 and the taxes are deferred at 8% interest. Who's signing up for that deal? In our deferral program, you have to make less than $72,000, which is indexed every year to the circuit breaker and the interest rate's at 2%. That, for some people is a, is a good and a reasonable option. We have a senior veteran tax work off program, an elderly
and disabled fund, which again is taxpayer donations. I've had a number of communities reach out to me to ask about how do we set this program up and how do you do for funding? And I'm happy to say I'm always surprised. We always get really, really good funding. And again, that's from Natick, taxpayers pockets to help out others. That's really great. And then, you know, between the Council on Aging Human Services Veteran Service, there is a lot of programs out there. Again, in conclusion, I just wanna say a quick thank you to not only the assessor staff, the whole finance team and administration. 'cause really I stand up here
and talk in front of you tonight, but there's a lot more work that that gets us to this point. I, I thank you to a very supportive board of assessors for those that knew my previous life. I, you know, ran around doing property values for cities, towns and counties up and down the east coast and worked with a lot of local boards of assessors. We have a board of assessors that has two certified Massachusetts assessors on it and a general certified general appraiser with, you know, real estate finance and litigation experience. We've got a great board and part of the reason I mention this is for this board for future boards.
As we continue this conversation and study this issue, please be aware that we're always here to help. We have experience kind of in this field and, and, and we're more than happy to help with any questions, research, et cetera that we can do. So finally, I'm gonna ask you the board, if you have any questions, I'd be more than happy to answer them, but I'm gonna ask you to vote a residential factor tonight after this vote tomorrow morning or Andrew, our wonderful clerk will sign off on this flow and we will start pressing the buttons to get Department
of revenue acceptance, set our tax rate, be able to issue tax bills. So at this point I can turn it over here for any questions. Speaker 1: Thank you very much Mr. Henderson, the usual thorough analysis and thank you to the board of assessors who supported that as well as Mr. Henderson's staff. So thank you for all that questions from the board. Speaker 9: I do have a question. Thank you Mr. Henderson, for this presentation. And if this is stated or demonstrated, and I'm missing it, pardon me, does the board of assessors at any point provide a recommendation
after they do their work? Is that, is that within their scope or within their jurisdiction to do Speaker 13: So? The, I i, I can turn it over and have someone from the board answer from my take generally on things. The assessor's charge is really fair and equitable taxation and valuation. And that is where our, our blinders are on to this. Because again, this tax rate is at what we consider a policy decision. The board of assessors is not necessarily a policy board. That doesn't mean individual board members might not have
opinions on this subject, but generally here in Natick, the board has never really provided a recommendation to the select board of whether to do this, you know, whether to split the rate or not. Speaker 9: Thank you. You're welcome. Speaker 1: Other questions? Er, Speaker 16: Thank you once again Mr. Henderson. You provide all the information that anyone would wanna know about, about, you know, what, what we need to consider. But there's, there was one thing and, and I just wanna address this. So as people watching me know, we've had a number of hearings starting in September
talking about the split tax rate. We're we're not quite there yet. We've heard from some of the people that were not in favor of that. Some of our, our local businesses, we haven't really heard from anyone who is in favor of, of the split. So maybe we will, maybe we'll find some people to come before us or maybe not. But one of the things that I heard from some of the proponents of the split tax rate and I if you have any data or if you would like to comment on it, is that because our residential values have gone up so dramatically and the, and the split has increased,
well the differential has increased so that there's more residential than than commercial that our tax, the actual tax dollar value has gone down for some of our businesses since the pandemic. So that while our residential, our residents are paying more in taxes than some of our businesses are actually paying less dollar amount, not percentage wise but you know, dollar amount does. Is that accurate in, in your estimation? Speaker 13: Good question. So that is definitely possible, especially as we val raise these values all these years
and our tax rate has gone down. Yes, if a commercial properties tax, you know, assessment stayed level, which again commercial appraisals are more likely to stay level, the market is not as rapidly moving as a residential market. So yes that could be the case. I will say this COVID hit hotels, 30% drop in assessed value and still were appealing statewide and I don't blame them. I would've also, so that is a property class that yes we needed to adjust or we would've went to court
and we would've lost and paid refunds at 14% interest office space, you know, and again coming through COVID, this has really as an appraiser been one of the more fascinating periods I think of doing this job. Office space is another one of those unique situations. We are lucky to have. Our big office buildings are owner occupied. Really good stuff. Class A I think one of the things amongst multiple property classes in commercial since COVID is that the really good stuff, the class A property has held strong. That's good stuff, good assets and investors have flocked to it a certain extent.
The B and C stuff less good. So your class A office is still holding up to a certain extent. Your 1980s tired office, you're struggling to find tenants office is gonna be unique because most of these office tenants have five year leases and those leases are still coming up. Industrial warehouse shipping type stuff in commercial. The has has absolutely skyrocketed. There are, you know, in, we don't have a lot of it unfortunately, but their tax increases are similar
to the residential tax increases. Those small 1960s building in the Oak Street Industrial Park, especially at the small ones, we've doubled their values over the last four or five years. And again, not us doing it, the market, lot of demand unfortunately we don't have a lot of that stuff and we don't have a lot of land. That's where a lot of communities, especially 4 95 loop, some of these places that have gotten an Amazon distribution warehouse, I mean huge impacts on their tax base. And then again, retail retail's held up very
well in my opinion. Retail generally vacancy has remained low. It's shifted and adapted though, right? We're we're selling services and not products anymore. It's fascinating to watch it. Again, I will say this, when it comes to retail, your class A, your good stuff is held up very well. Your B and C stuff, not so much. So we try to keep on top of these trends moving forward to see where it kinda all lays out. So I hope that answered your question. Speaker 16: It does and and very well. Thank you so much. One final question. About how many abatements do you get a year
and how many of those are from residents and how many of those are Speaker 13: CIP? Yeah, that's an excellent question. So we've done knock on wood very well in abatements where we've generally got 35 to 40 a year for the last couple of years, which is remarkably low. Of those, probably over 50% are commercial. Even though, you know, our parcel counts on commercial are much lower. You know the, to be honest with you on residential, the prime, the majority of our appeals residentially the last couple years have been the new construction. You know, the people that have just paid 1.5 million
for a condo and we're assessing it at 1.4 and they, you know, it's the wake up call and yikes, that was really most of our, our residential abatements this year. One of the interesting things this year is in my budget meeting with Ari, our new finance director, Ari Sky and Gloria I, the last budget we have from the online is 2010, 2000 8, 9 10. I was here as your consultant. We were getting 200, 250 abatements a year. 'cause again, recession hit never good when a recession hits for anybody.
But specifically for the assessor, one of the reasons here is we're always assessing in arrears. So back then there was a period of time when the explanation is yes, I recognize everyone's property values have dropped, but we're actually assessing back here. Not an easy conversation to have. But again, the assessor's primary goal isn't just market value, it's equity. So we try to explain the fact that everybody is being assessed on this certain time period. And I also then tend to remind people that when we lower your values,
and I hope it doesn't happen, but it may, the tax rate's gonna go up to compensate for that. Again, at the end of the day, the levy kind of drives the taxes. Unfortunately Speaker 7: All Thank you very much. Welcome. Speaker 1: Further questions Coughlin, Speaker 7: I just wanted to emphasize a point with regard to the tax deferral program. You talked about income, the tax deferral application does not include assets. Correct. So for people who, for seniors whose income matches or is lower than the state, excuse me, circuit breaker tax credit, there isn't an investigation into their
401k or other assets. Correct? Speaker 13: Yep. Speaker 7: I think that's been commonly misunderstood the last couple of years. Yeah, Speaker 13: Agreed. I'm gonna, I'll go in a little bit more of the deferral program here 'cause I do, it's a good, good program. I think for some people, not for everyone that we have a really good article on our website from the Boston Globe for a number of years ago. That's called something like the Best Program Tax Deal that no one knows about. Right? And no one does. I've worked in other communities where we had one or zero and we didn't promote 'em, we didn't tell anyone Town through town meeting, we've done a lot with this program.
We've lowered the interest rates a number of times. Again, it's down to 2% pretty good interest rate, especially in today's market. We've indexed that income amount to the circuit breaker. So one of the frustrations with some of our other programs is they were set at levels based many, many years ago. We've now really done everything we can to index this stuff. So as inflation increases, you know, these days especially that number keeps going up. So that number goes up every year. The only real, you know, the trick, the, the, the, the sticking point occasionally
with the deferral program is if you have a mortgage, even if it's a home equity line, we need the bank to sign off on that. And subrogate banks do not like to subrogate. Basically that means town and Icks getting paid back first and the banks getting paid back. Second, I will say this 15, 20 years ago, many of these, especially the big national banks would even refuse these days. We have a form letter that goes out to the bank with some business cards and we found a lot of cooperation with the banks. Especially if you just have a home equity line or,
and again, as I explain this program, anyone who bought a house around here even five years ago has got a lot of equity in their home that's not helping them pay their monthly bills. But yes, and, and again, I acknowledge that some of our programs have a lot of letters and numbers and are confusing and that's why we just try to get the word out and drive traffic. You know, phone call Anne Hansberry, our assistant director who most everyone here knows is marvelous and wonderful and amazing and does a great job. And we will bring people in and sit down in a private area.
We don't wanna talk about your financials in a public setting. And we're gonna look at any option we can to help people. It's one of the nice things we get to do with I job. So thank you. Thank Speaker 9: You. Speaker 1: Lemme just quickly follow up on one of those points, Eric, which is one of the things with the, and, and correct me if I'm misstating this, my understanding on the tax deferral program, you can enter that program and then opt out of that program. So that's, it's important your example of, you know,
say you have a roof repair that you need, that you can, it's, it's almost like a suspend and resume function. Yeah. Right. Speaker 13: Yeah, no, excellent point. And I'm gonna, I'm gonna go a little deeper on it. Deferral year one's a little tricky 'cause we have to record a lien. That's a scary word for a lot of people. And I get it. When you put solar on your roof, if you're leasing it, you got a lien. So not a big deal. All that lien is, is that when your house sells someday and the lawyers are looking at the registry ease, they go, oh, town in Natick has an interest in this property.
We gotta make sure we reach out to them. Beauty of the deferral program is once we get you in this program, you can defer a dollar if you want. We, we would prefer you not, it just makes our life a little more difficult. But it gives you some flexibility. Our deferral, everyone defer, defers the full amount. Why not? But then, yes, if you win mega bucks, if you have a good year, whatever it may be, you can still be in the program and choose not to defer that year. So it does give you a little bit of flexibility, no doubt about it.
Speaker 1: Okay, thank you. Eric, any Speaker 9: Other? Yes, I wanted to thank you Chairman Enve. I wanted to just share with you a senior I spoke to recently who was in the, she's in the senior veteran tax work off program. And you know, we've, we've heard from, I know I've heard from a number of seniors over the years who are, as Ms. Coughlin said, you know, unfamiliar and not clear on the deferral program, but this particular program she was raving about and she was raving about the way she felt like
Natick treated their seniors as a result of this program. She works in one of our town offices and she has a condominium that is completely paid off, but she uses this as an opportunity to pay her tax bill and she feels great about it. She loves it. And she said she had told her friends, but she said she felt like it was a feature that really made her feel good about the way that Natick treats their seniors. So I just wanted to share that, share her story in her account because I found it refreshing, but I also found it as another perspective considering
what people have information about and don't have information about and the impact that it may be having on our seniors and those who are participating. Yeah. Speaker 6: Mr. Chairman, Speaker 1: Mr. Speaker 6: I'd like to follow up on Ms. Pope's comments. Sure. Seniors can sign up for that volunteer program even if they're unable to work because there are volunteer hours that volunteers can donate to the seniors that can't work. So even if you're a senior who is disabled and unable to do anything, it's possible
that you could apply for this program, get accepted, and then have all of the hours that you need to meet donated to you from other seniors. So that's just a another way the community steps up and there are people donating hours. So, you know, it's not a oh my, oh my, I've gotta go work. It's people are actually donating their volunteer hours. So Speaker 1: Thank you very much Mr. Sidney. Other comments?
Speaker 5: Can I just provide a quick PSA since you've talked about it so much to learn about that program, please contact the native senior center, senior community, senior center staff there can help you through that program. There's actually an individual that just collects all of the interested people as well as connecting those people with the departments in town that can use that program. Speaker 13: Yeah, not to interrupt Jamie Bebe to it. They do a great job down there. They really, we work very well with them together. They do a great job down there. Speaker 1: Thank you. I've got a couple questions slash comment. First of all, February 1st is on a Sunday,
so you get an extra day. Yep. Second, I wanted to thank the efforts of the assessor's office as well as the finance department for the tax title collections. They did a fine job getting those back taxes collected and, and helping us get those into the budget sooner rather than later. We were concerned about the speed with which we could do that, and this was an unexpectedly, an unexpected good surprise, which is always, always great
to have a good surprise and not a bad surprise. I also wanted to thank Angela Snell and Eric for putting together a, and I think Jay was involved in this also, which was a mailer, I believe that was sent to all senior households about these programs. And it also has website information again to Mr. Erickson's point. People here are ready, willing, and able to help people with tax assistance from the
community senior center to the assessor's office. You can get your questions answered. They do translate from assessor to English very well, so that, that's all a good thing. So thank you for all you do. So we have members of the public, members of the public. Do we have anyone who wants to speak, please? Let's go with the room first. Mr. Jacobs. Speaker 17: Good evening, Cody Jacobs. I just have a few questions to ask. The first one is just following up on something that Ms. Slager brought up, I just wanted to confirm that the board,
you know, when when the override passed, there was a number of commitments made to the voters about financial matters, including one to take a strong look at the, at this exact issue at the tax classification issue. And as, as Ms. Wilger mentioned, you guys held a really informative hearing with business owners where, you know, this, this issue was talked about from that perspective. And I just wanted to make sure that there was still a plan to continue, you know, beyond tonight, obviously that conversation with further hearing. You know, and I, I don't even so much think of it as from like the pro and the con perspective, but just hearing other perspectives like
what other towns have done, what residents, you know, things, things like that. So I just wanted to make sure that that was still in the, in the pipeline if it were, even if, you know, we're, we're making this decision for this fiscal year, you know, going into the future, I could, I could ask the other three questions. I don't know if, should I Speaker 1: Ask that? Well, well let me address that one with great question. Our work is not done on that. Our work is just beginning. We, as I think Ms. Slager pointed out, we've heard a lot from we businesses,
both small and large who are negatively affected by the tax rate. And it is, lemme go back to my notes, which I was jotting down. You know, one of the things Mr. Henderson said was, it shifts the burden from residence to commercial enterprises and that affects large businesses as well as small businesses that lease buildings. He also talked about the A buildings versus the B and C buildings.
We have quite a number of B and C buildings that we'd like to attract people to come to Natick and invest in those buildings. And one of the things we heard was it's a buyer's market. See if I get this backwards, it is a buyer's market in the sense that having a predictable, relatively low tax rate and being consistent about it is a key factor in the decision of where they locate their business.
So we need to be very careful about how and when we do this. Having said all that, our intent is to hear from other entities, other residents, as well as look at what other communities are doing. I, I think one of the things that I have read is when you have such a percentage of residential versus commercial, it's very difficult to implement a split tax rate.
Usually sort of the crossover point is around 70, 30, maybe even lower. I could be overestimating that. But, you know, everything we, we haven't closed the door on a split tax rate. We will follow through on our promise to look into it in depth. So we going to, Speaker 6: Well, just to follow up on that, if I remember correctly, some of the feedback we got during that he hearing from residents was they would rather us hold the line this year and do a deep study during next year
and come into next year's tax classification with, you know, a lot deeper understanding of. So I, I, I think we're still committed, you know, at least in my case, I think we're still committed to doing that study. Speaker 1: Thank you Mr. Sidney, Mr. Jacobs, to continue. Speaker 17: Thank, thank you. Thank you. That was, that was very helpful. And then my other questions are kind of more specific to the presentation. One was just about the, the small business exemption. If I, I just wanted to understand one thing that, that Mr. Henderson said the, that he mentioned that
it, it, it could only, it, it would only, it could only apply to an owner-occupied business. And I was wondering if that comment was from a legal perspective that it only applies to an owner-occupied business or if it was more from a practical perspective that like, well, the tax break obviously goes to the owner 'cause they're the, they're the one paying the taxes. And so the owner's not gonna, you know, necessarily pass that along. I, I, that, that's my question is sort of, is it, is it a, was that a legal comment or was that a practical comment? And then I have one more question which I could also ask and then sit down if that's easier or I could wait for the answer, whatever's better.
Speaker 13: Okay. No, don't go too far. Okay. We're all good. All right. All right. Excellent question. Little bit of legal and practical. Legally, you, if there were 40 businesses in a building, you know, like some of our downtown, every, all of those 40 businesses would have to qualify according to the, the, the, yeah. So again, it sounds excellent, it really does in, but pr practicality, the way the law was written really limits you. Speaker 17: Thank you. That's helpful. And then my final question, which is sort of a two part question depending on the answer, but I was wondering, in, in the, in the packet
of information that's on Novus on page seven, this is page seven of the PDF, the pages are all numbered differently 'cause they come from different documents, but there's a document that shows the growth in the different, I'm sorry, not growth, but the change in valuation in the different, the different, it's, it says LA four comparison report and then it's got a change in, in, in each asset class. So like total residential, total open space, total commercial, total industrial. I was wondering if that the, the, the change in valuation, the assessed value difference, that's, that's reflected in
that chart, if that includes new growth or if that doesn't include new growth. And then the second part to that question is, you know, obviously what sticks out a lot is gigantic growth in the value of industrial property, which, which was mentioned in the presentation. And I'm wondering if, if that is, is just driven by just the values of just in shot up by that much, or again, going back to my, the first part of my question of whether that includes new growth or not. So thank you Speaker 18: Two excellent questions. Sorry. That's okay. Sorry, habit.
Speaker 13: All good. Two excellent questions. And the second one's one, the DOR asked, so no, step one, yes, the LA four change does include growth. So to look at what you used to call a revaluation change, you kind of have to back out that new growth. Revaluation change was something that used to be on our DOR forms, the way you used to submit your new growth to the state. They had a little bit of a wacky process that made no sense and they finally updated that. So that number's kind of gone away. But yes, it does include new growth and the industrial a little bit more of a simple answer.
Board of health has certified the BSL levels of some of our biotech properties. And after receiving that data and working with them, we've shifted in a really, a small handful of properties that we consider totally biotech from a 300 commercial class to a 400 industrial class. Again, the state class codes, whether you call it a 300 commercial or a 400 industrial, doesn't really mean anything. But that, that was that giant shift along with Abey Lab three. So you had a big growth number in there too.
That also buffered that number up. Thanks, Speaker 1: Mr. Agrees. Me Speaker 6: Before, just I want to let the public know that we did receive an email this afternoon from a small businessman. It's in, I don't know if it's in peak yet, I'm sure it will be by tomorrow if it isn't, but it was a request to keep the single tax rate, so I just wanted to put that into the record. Speaker 1: Thank you, Mr. Sidney. Mr. Gr, Speaker 19: Doesn't matter. Speaker 20: So thank you. My name is Paul Greaser, I'm truly a member of the board of assessors and when you started talking about split tax
rate in the spring, we started talking about it and part of the reason you're seeing the quarterly billing effect is a result of those conversations. So I just wanna kind of pivot back to that. So, and also to ans address your question, the board actually talked about whether or not it would make a recommendation to you on a, on a, a split tax rate or a residential factor. But just say that's, it's really your, it's a policy call, it's yours. What we can do is give you data and information. And so I actually want to share, reinforce one of the points Eric made and share some additional data that you should be aware
of not only tonight, but going forward as you take a further look at this. So that quarterly impact that, that Eric was showing you effectively doubles the quarterly tax rate for, for businesses. And that different businesses have different seasons and that's gonna hit in like February and May. And some businesses, that's a good season. Some it's the real soft season and it's just something to, you know, to be aware of. And some businesses might not be able to like to pay it, but that, that doubling effect is something to be alert to.
The other thing is the reverse on the residential, they're gonna get a nice dip. If you went to the one 50, they're get a nice decline in the Q3 and Q4 bills the third quarter and the fourth quarter bills. But then they're gonna get a pop in the preliminary bill and it's gonna be, it's on the order of like 15%. And so you're gonna have people saying, why did my taxes go up 15%? So there's a lot of mess if you go to this. There's a lot of messaging that you need to, in communication you need around this. But there's some other things I wanna talk about. So the, if you were to shift, let's say, let's just talk, you know, theoretically the max shift of 150, 150%
that hits commercial, industrial and, and, and personal, right? It hits the sip, right? So the personal property can't appeal really because it's not really income based, but the commercial can, right? So when you started talking about this, I asked Eric for data back in July, got it in August, which is basically a data dump of 500 plus commercial property parcel records and all the data on them for fiscal 25, you know, what their income was, et you know, et cetera, what their values are, et cetera.
The concentration of commercial value in this town should be something that you take, do note of roughly. So 22 parcels, probably 20 properties 'cause some or thereabouts, because some commercial properties are more than one assessed parcel, but figure 20 properties represent 50% of the commercial value. If they appeal, you hit them with a big TA tax increase bill and they appeal. That's the way that they get to lower their taxes. They file an appeal, right? Let's just for illustration, say
that they file appeals on average of 20%. Some might be file more, less, some might not file at all. I'm not predicting it. Just, just illustrate hypothetical numbers to illustrate the point. If they were to file appeals on average of 20%, that's 50% of your commercial base filing appeal of 20%, that's 10% of your commercial levy, right? That's about three and a half million dollars off of 2020 five's numbers, it's a little bit different this year. If they file an abatement and the board of assessors deny it
and they file an a TB case, we have to put hold all of that money in overlay. So in addition to the million dollars of overlay that you put, we put aside every year just to cover exemptions. And you know, you know, it's kind of the two and a half bathroom, three bathroom, you know, two car garage, one car garage type of abatements, and all of the exemptions you have to cover all the a TB cases that are open. So you have to cover all of the exemptions and all the abatements, the a TB cases and all of the back taxes that are not in tax title.
So if we put a million dollars in, like this year, we put a set aside a million dollars for the overlay, the overlay, you have to put an extra three and a half in, you'd be putting in four and a half million bucks. Well, that's equal to your new growth plus your 2.5% on the entire levy percent. This is gonna have a, this can this, there are dominoes, there are, there are consequences that unfold of, of, of doing this. And some of them are gonna show up in budget season and front of the fin com in front of the select board. And you know, in a town meeting 50 per the top 50 commercial properties are 70%
of the commercial value. So if you had the top 50 properties file an appeal of let's say just 20% on average, now you're talking about 15%, 14, 15%. And that's, then you're gonna be up in an extra five, $5.2 million into overlay. I mean, these are rough numbers and I just, so you're, you're talking about putting six, 6.2, 6.6 and a half million dollars into overlay. This is money that the town can't spend on operations, right? And it's just something, it's something to something to be very mindful, very mindful about.
Someone mentioned earlier valuation shifts, they do occur. And the simple rule is if your property value goes up more than the average value goes up in town, like the average value goes up 5% and yours goes up 10%, you're gonna get a valuation shift tax increase. If the average value goes up 5%, yours goes up too, you're actually gonna, your taxes are actually gonna go down. That's just the, the last time it was studied in depth was 2000. And I was actually on the committee that looked at it and we pulled a lot of, of data
valuation shift does happen. It also happens within commercial properties. The other thing to be careful about is, and mindful about is new growth. It's been said for years that the split tax rate doesn't raise any new money. That's, that depends, right? What happens when you split the rate, the commercial growth and the, and the residential growth don't come in at the average rate, they come in at the class rate. So some years you might get a little bit extra money, some years you might get less if you got all of the commercial growth. But there's a big caution note on whether
or not you would get it, regardless of whether there's a valuation shift, developers build new properties, renovate properties, which is what creates the new commercial growth because they want to create value in excess of cost, right? If they can't create value in excess of cost, they're not gonna do it. So looking across all 500 and plus, you know, commercial, you know, parcels, the tax rate, the, the tax amounts vary, right? Depending upon the type of property, et cetera. But on average, if you were
to hold everything else constant hold rents, constant hold valuation rates constant. If you were to go to the max shift, you're probably gonna lower commercial values by 10%. So that, that'll show up in the assessed values as of January 1st, 26 that'll come around to this class, be part of this classification hearing a year from now. But what that does is if you lower values, that puts the squeeze on the rate on the difference between cost to create new value and what that new value is,
and you can put some of that new commercial growth potentially in jeopardy. So I'm not telling you what those numbers would be, I'm just saying that there, there are other things to consider and I wanna get them on your, you know, on your agenda, think about the overlay, think about, you know, the, you know, the effect on new growth and eventually you can find a situation where you run out of room on the shift takes a couple of years. But why did the city of Boston want to be able to raise its shift to two times for instead of a 150%
or 175%, which what they had, they had special permission for that. That's because there was no more room to push taxes to the commercial side and the whole thing, you know, you know, backs up onto, onto residential. So this, this is a complicated problem. It's got lots of ramifications and it's, it's not a one and done. There are, they're like dominoes that fall. And just be careful about those. And I didn't, before you take a step, I hope that you take an in-depth look. Thank you, thank you, Speaker 1: Thank you. I just wanted to thank Mr. Greer for
explaining all the details of the dominoes falling. It's very important to keep, to keep those in mind. And that's part of the reason we wanted to do a deep dive on this and not make a hasty decision on whether to split the rate this year or not. We, we want to consider the complete picture and we needed time to do that. So Ms. Cuff, Speaker 7: I just wanted to thank Mr. Greaser and also emphasize a point that he made about valuations going down. So when valuations go down, that means that the money has
to come from somewhere, the residents are gonna be paying the difference. So while in theory the, the tax rate on residences starts out smaller, we have to make that up somewhere. When businesses appeal, they don't always go to the A TB or the, the no, not a TB, tax court, tax court, a TB, they don't always do that. Sometimes there's a negotiation. So when there is a negotiation, that still means that whatever's negotiated out gets picked up by the residents, Speaker 20: Picked up by the overlay, Speaker 7: Picked up by the picked up by the overlay. But the next year over, which is also from the residents which we're taking out of the funds that we can't use
for capital projects and being put in the overlay. So it it's more complicated. I I really appreciate Mr. Greenburg complicating the problem for us. So that, and I mean that in a good way. I mean, showing all the different facets of making a very difficult and complex decision. So it's not just a matter of saying if we raise taxes on businesses 20% or 30%, I think what I wrote down, that means that residents would get a discount of 6.25%, but that means commercial properties, CIP will go up 30%
and what percentage of that is not going to be collected? It's gonna be disputed or the valuations go down. So it's not just as simple as picking a, a shift differential. And I did wanna emphasize that when we talked about the split rate earlier this year, we made a commitment during this calendar year until next November, to have a number of hearings to invite select board members from other towns that have used a split rate and try to go back and they can't, small businesses that, so the LA the last meeting was with large businesses,
the mall, MathWorks, Sherwood Plaza, Abey Labs, Abey Lab, yeah. Abey Labs and, and some others. So yes, this is something that will be, this is not like somebody said I one and done. We're not done with this subject. We've got a year ahead of us. And I believe one resident suggested we hire a consultant, but we decided that we don't know what we don't know to ask the consultant to give us advice on until we know more about what we don't know. So I wanna thank Mr. Henderson and the finance department. I wanna thank the assessor's office for putting all this information and Mr.
Grr for sharing his wisdom on the subject. That's all I have. Speaker 1: Thank you Ms. Kama. Okay. Any further questions from the board? Speaker 6: Move to set the residential rate at one. Speaker 1: Let's go to the public. No, see, I got you on that one. Rich. Speaker 6: No, I thought the public was done, but that's my read. Speaker 1: I'm just kidding. I don't see, please raise your hand in Zoom if you'd like to make a comment. I am not seeing any hands Mr. Sidney Speaker 6: Move to set the residential rate at one second. Speaker 1: Okay. Any discussion Speaker 6: If I may?
I think that right now there are a lot of factors. Mr. Gmer talked about a lot of them. Mr. Henderson raised a bunch of others. But the fact that we have plans to do this deep dive in the next year as a board, I think just the, the problem of making a decision now, it's hard to reverse. So we want to, you know, keep the status quo until we finish our deep dive. Speaker 1: Nothing. Yeah. One, one of the things just to pick up on Mr. Sidney's point is one of the things that we've heard from
both small businesses and larger businesses is once you make the change to a split rate, it's not something that you can go back and forth with. 'cause there are consequences to that and they're not good consequences. So that's why we're, we're, we're taking a long view and a long look at this to make sure that if we opt to do a split tax rate, we're doing it for the right reasons and we understand the implications. So any other comments from the board? Let's vote.
All in favor, please say aye. Aye. Aye. Aye. Aye. So that's 5 0 0. Speaker 7: Who was the second? Sorry? Who was? Linda? Linda, thank Speaker 1: You. Move Speaker 21: To close the public hearing. Speaker 1: Second. Second. Oh, I didn't even get that out yet. Okay. All in favor, please say aye. Aye. Aye, aye. All right. Thank you very much Mr. Henderson. Appreciate all the work that you did and all the great answers. Speaker 7: Mr. Chair? Yes. Can I suggest a five minute recess? Speaker 1: You have five minutes. Let's do that. All right, we're back. And let's move on
to the FY 27 outlook and free cash overview. And Mr. Sky will take us through that. So welcome Ari. Thank you. Board members. Speaker 18: I'll try to fill the large shoes that preceded me. Oh no, see, Speaker 21: How are you messed up once. There we go. Okay. Thank you. Board members, I'll try to fill the large shoes that preceded me and give you the best overview I can give you. We've been working through this for a little while now. This is a two part presentation. We're giving you a one hand overview of FY 26 free cash,
kind of looking back and then looking forward an early sense of the FY 20 of an outlook. As you know, the state certified free cash on October 29th and the development of the CIP and operating budgets are underway. We'll be go over the calendar on that a little bit just to give you a sense of what's coming. And I'm gonna start my presentation with free cash and feel free to ask questions as we go along. Okay, We good? Yeah. Okay. So Goose is what's in free cash. This year's number was a bit of an eyebrow raise. I understand that it's 13.9 million, which is a historically high number for Natick.
It was driven by a number of unique circumstances. Non-recurring revenue was unusually high. We made some efforts to clean up all accounts on capital. That wielded a a chunk of money as well, about 1.5 million. Also, cost containment was executed ahead of the override in case that didn't go forward, that that boosted up the turnback number a little bit. And local receipts were unusually high, mainly due to construction activity. Math work specifically. Gimme a closer look at the non-recurring revenue piece. The biggest chunk of that single number is the tax title project. As you're all aware, staff when went through
the delinquent taxes and properties that were in tax title, which, you know, always when you do that the first time yields quite a bump. That's something that won't recur. There will continue to be, as long as we keep putting out tax title notices, which we will, there'll continue to be no, you know, revenue, but it won't be at that level because you, you, you've caught up to a great degree. Large building projects, mainly math works also led to increased hotel motel, excise tax, mainly through the contracts that they had for hotel space. We received a FEMA reimbursement late in the year, about $800,000 for COID.
It is five years delayed. We had no idea when it was coming in, but that, that's given sometime in June I believe. And then other miscellaneous non-recurring, which is revenue that you can't, DOR doesn't, doesn't allow you to budget in your, in your local receipts is one time premiums bonus, things like that. One thing that's important to keep in mind as we talk about free cash is that the town's financial structure is dependent on free cash. The structure that you, you have, we have here in Natick depends on three and a half million dollars every year to offset structural deficit in terms of revenue. And that's, that comes from free cash. So you need to have some free cash to make the machine work.
In addition to that, we typically put our money into capital stabilization outta free cash as well as fund our liability. Again, to make the system work, we need to have some free cash to do that. And in fact, the FY 26 budget relies on about $7.4 million in free cash. This chart here gives a sense one, one of the things that, that's that I've, that I've heard and people ask me about is the si the, the, the amount of the free cash terms is size. That's probably the wrong way to look at it because keep in mind the fact that the, the Nick's budget has grown over time. So it was a $10 million free cash number back in,
or $11 million back in FY back in 2017 was something different than 13 million means in 2026. The reason for that is that the budget is markedly larger. Back then the budget was in the mid hundreds range over a hundred, 6,000 $70 million. Now it's over 200, now it's about $200 million. So as a percentage of the total it it goes down there is a standard that we can look to the DOR has in place regarding to maintain some financial policies. DOR recommends the community maintain about five to 7% free cash number, a number, sorry, free cash number.
That's about five to equivalent to about five to 7% of its annual, of the annual general fund budget. So that shaded band you see there is five to 7%. And you'll see that generally we've actually fallen below that. We were above it in 2017. We hit it right in the middle in 2018. We fallen below 2026 is just in the upper range of that. So give some context This, sorry, this, this chart deals with, so the use of free cash and what and how it consists of, and you can see the colors there. One portion, you know, capital's a big chunk of that historically stabilization funds operations, as well as just various miscellaneous costs.
We try to, we try to hit that target range of five to 7%. And one thing to bear in mind that's very important is that free cash is not a reliable source of revenue. It's, it, it comes from either the case, it comes from either windfalls from policy actions such as tax title, revenue above budget, or expenditures below budget. Like anybody maintaining their household budget. You don't want to spend all of your money and have no savings at the end of the year. You want to, you know, manage yourself in a way that you have some cushion in case of for, for, for rainy day things that will come along.
And that's basically what free cash does. It's the structure in, in most, in most states outside Massachusetts. It's basically what we call unal unencumbered fund balance and free cash is just the process that Massachusetts has for calculating that out. And it's, it's, it could be excess revenue, it could be exponential surplus, or it could be something else. So that's my free cash portion. Just to get some context there. I keep going into our budget process and give you sense first on the calendar where we are right now, we are in that, that process near the top here. The at the top line where we're meeting with department heads, talking about their goals and so on
and where and, and where the process and, and where they are in terms of their submissions. Submissions for the departments will be coming in right before Thanksgiving. So they're finishing, we're finishing up our department meetings this week and the submissions will be in by next week. We'll be meeting with the town with the town administrator in December to put to with the department heads to, to, to go through their budget requests. And then the, the, the, the budget document, the first major document coming to you will be the CIP that'll be, that's due on January 2nd. And then the, this, the town administrator's preliminary budget is due on February 2nd. So that we're, we're,
the train is well underway at this point. We have a couple of forecast scenarios here. Speaker 5: Alright, before, before forecast, can I just finish a couple things in the free cash please. A couple, couple of the takeaways from the presentation just for, for rounding out that conversation. And it's, I, I appreciate already for putting all of this together. I just reiterating like the, the one time components of free cash, if we were to remove those from the free cash number, right, we really would've been much more in line and actually below those target levels from DOR with historic levels for Natick. The, the, the about $6 million
of the free cash number were one time items. Many of which actually we weren't even aware of until after, or we didn't, we weren't aware of the the scale to which we were gonna have it until after the budgeting season, until after April. Like for example, the COVID funding didn't come in until June, may or June timeframe. The extent to which the tax title was going to have an impact, we didn't know really until close to the end of the fiscal year. The MathWorks permit is just, it's a onetime permit. You, you can't predict when that's gonna happen. So a lot of what was driving this year's free cash number in
particular were really truly those onetime funds. And then we did have our historic typical free cash items, which is why the number then got close to that $14 million number. Speaker 21: And that's a very relevant point. I would note, as we noted in our, our memo to the town meeting, the taking away those non-recurring items, those one-time items were actually 12%. We'd actually be 12% below the historic average. So while mally it seems like a larger than any than usual number and it was, it was really driven, it was, it was purely episodic. Speaker 5: Yeah, just windfall.
You just want to make sure that that's very clearly understood. 'cause it's, it's a pretty un somewhat unpredictable to have it to be that number. Speaker 21: Okay, thanks. Shall I continue? Okay, so we have a couple of forecast scenarios that I want to go through with you just to give a sense of what we're looking at. We've updated the, the forward looking forecast a bit from what Mr. Townsend presented back in September I believe it was, which gave a rough idea of what we were looking at. So the first one, which we're calling average historical growth takes the,
in general takes the average growth with some exceptions. Over the past from 20 to 25, we didn't take 25 to 26 because that was a big bump up 'cause of the override. So schools, for example, had a disproportionate increase, you know, that kind of thing. So the exceptions to that, to what I'm saying about forward looking forecast going into historical numbers would be retirement. Because in 2030 to 31, hopefully we, we, we, we've been our obligation and that number goes down health insurance in 27,
we're getting every indication now that the health insurance numbers are gonna be substantial. We're looking at somewhere in the neighborhood of a 10% increase for FY 27 at this point, that is a placeholder, but, but it is in line with the guidance we've been received. And then we also have health insurance going up by 7% a year from 28 to 31, which is higher than we typically have done as well. Again, you know, you just have to look at the news to see what's going on in health insurance right now. Other caveats would be state aid. We limited the, the state aid forecast in FY 27, knowing the news that's coming out that we're seeing about
sort of the forecast on state revenue and so on. I don't feel particularly comfortable anticipating any kind of major increase or significant increase in state aid until the, until the, a joint revenue committee has their, does their this of their process and the governor proposes her budget. So what we've done is we've kept, we kept chapter 70 at historical trends on the, on the assumption that if anything's gonna go up, it's gonna be chapter 70. And it would, for us would just be minimum minimal aid increase. And we've kept unrestricted aid. The UGA flat hopefully won't be that bad,
but, we'll, you know, we'd rather be more conservative than not. In this case. Local receipts show modest growth recently, the experience of local receipts has been a 15 to 20% increase per year over the past several years. So we're still showing like about three point half percent, 3.7. Just to keep that, just to, just to keep that, that, that constrain. I think, you know, in general we're seeing some softening in the economy in a number of respects and we're just trying to re respond to that. New growth is at one point a half million, that's a little bit higher. That also is in line with what we've been seeing. So we feel that that's, that's, that's, that's appropriate
that free cash, we continue using three and a half million in free cash every year for the operating through FY 29. We that reduce that with, with the, with us moving toward the, the, the, the, the funding of retirement, bring that down to 2 million in FY 30 and go to zero in FY 31. Okay, I'm going to continue now. Let's see. This gives you a sense of the expense gives you a, a, a visual look at the expense trend and you can see schools at the top there that you know, it is, it's just math. If you're going up by 5% a year on average in one category,
three and a half, 3.1% in another, you're gonna see a divergence in those slopes. So schools, and you'll see this even more clearly in the next chart just takes up, we, we, we'll take proportionately a larger portion of the budget as as this goes along and that continues recent trends to wit my next chart, I'm going to, I'll do the left side in second, I'm gonna do the right side first because I just made that point. Those pie charts show the relative share of the budget for the, for schools town shared in capital. And you'll see schools go from 42% in FY 21
to 45% in FY 26 to 49% by FY 31, while the town share goes from 29 down to 24 by FY 31. So it's just, that's, that's just that slope talking On the left side we have capital. So the, the the, the, the, the, the line slope is the most recent C'S expectation in terms of overall funding for capital. And then the, the, the, the bar chart is what we felt we could manage to commit. At this point it is lower.
Of course, the reason that 26 is higher is because of mainly deferred capital that has that, that was in the queue. So when data issu, when data issu happens it to catch up, that would be, that would be a little bit higher than the 17 million. But in the future years, we're looking at somewhere between, you know, eight, 10 or $12 million a year in capital depending on where we stand as far as free cash and so on. Just for illustrative purposes, we're showing you a second one. The super called an NPS local level service. The superintendent was kind enough to show us to, to,
to share with us a presentation she made to the school committee recently that that indicated, as you'll see, that level service scenario was about 5.4%. So show what the impact of that would be. The best thing to do there is just to compare sort of the bottom line for that forecast with forecast one, which I'll go back to in a moment. You'll see the bottom line forecast one in FY 27 was 377 to the good and then we have a smaller, a moderate deficit in 28 and it gets larger until we get to, until we get through to 31. When we start to go down well on forecast two.
That's just exacerbated and we very basically balanced very slight deficit in FY 27. Again, I would caution anyone from taking too much outta this because this is all, this is not based on the school's actual budget, it's not based on the town's actual budget. It's not based on an on a, a completed CIP, none of that. This is all just, this is all informed speculation as to where we think the trends are heading right now. And it's more informative of the challenges that we have as staff to put together a balance and sustainable plan going forward.
I'm happy to answer any questions. Speaker 1: Thank you very much Ms. Slager. Speaker 16: Of course I have questions. Speaker 1: Cannot, Speaker 16: So I, I'm, I'm certainly not gonna hold you to what was done by Mr. Townsend I think in, in September, but I do have a question about what did change and, and I'm looking at the FY 27 forecast. Speaker 21: We go down to that hold on a moment. Speaker 16: And in the, a big significant change was in the below the line items, which was about $6.5 million in the forecast
that we received in September. And, and now it's up to like 11 five. So just roughly what is, what's the difference there? What are those items? Speaker 21: So some of the, a lot of that is capital. The intention is to, as, as we indicated, to utilize free cash and capital to help, you know, address our capital needs. So there's a bit of a bump in that in, in FY 27. That, that, that's a, that's a big chunk of that, that in addition to that we were looking at other below the line items, you know, that, that, that,
that fit in that line stabilization and so on and just balancing those out so that, that that's, that's the number we came out with. Speaker 16: Alright, so the difference is primarily because of the high free cash number that we have that we can, that we can fund those items, we fund those items. Yep. Right. I just wanna make sure that that's, that Speaker 21: That's clear. That's Speaker 5: A good read. Speaker 21: I'd be happy to break that down for you afterward. I can give you a, a Speaker 16: Breakdown. Yeah. That, that would be helpful. Speaker 5: Obviously in September we didn't have the free cash numbers. No, we Speaker 16: Did not. And, and that Speaker 5: We do, we can make a more informed forecast with those numbers. Speaker 16: Right. I just want Speaker 21: The September forecast assumed and I should have been more specific. September forecast assumed didn't make any assumptions
regarding cap ability to fund capital in 27. Speaker 16: Alright, lemme just, Speaker 1: That's good follow up on Sure. One item because looking out at the out years of, for 2030 and 2031, you, we kind of go back 2028 and 2029, back to the 6.5, it's at 6.9 level, but then it increases again in 2030 and 2031 can is is that deferred capital? What is, what is Speaker 21: 28 through 27 through 29?
We're kind of catching up on deferred deferred projects or projects that have been approved but not sold. You know, debt has been, hasn't been issued yet and so on. By the time you get to 2030, you're looking at closer compliance to the policy as far as, you know, the balance between debt issuance and cash and so on. Speaker 5: So, so that may correct me if I'm wrong. No. Oh, sorry. That might be in the other part of the budget. The other thing that this forecast does try to factor into is the policy around shifting some of the, the money that's going towards the retirement obligations to ope obligations
Speaker 21: As well. Thank you. Yes, yes, Speaker 5: That's correct. That does, that is also reflected in this forecast. You'll see Speaker 21: That that's below the line. Thank you. Yeah, this is below Speaker 1: 31 sheriff that explains a great deal. Speaker 5: Yeah. Which is also those, those shifts in those numbers in 30 and 31. Yeah. Yeah. Speaker 1: Thank you. I should have known from the date. Yeah. Speaker 16: Okay. Speaker 1: I've heard 2030 for a long time. Speaker 16: Another, another question is on slide nine, which is the expense trend by category and for NPS it says it includes school bus subsidy. Well, I thought we weren't gonna be doing that anymore. So is that just for prior years
or, I'm just a little confused about that. Speaker 5: The, the subsidy is not gonna be a separate item. We just wanted to be clear and consistent because this is our first year where it's, it's embedded in the, the, it Speaker 21: Was in the prior year. So apples to Speaker 5: Apples. Yeah. It's now part of the school department budget process. We're not gonna have it as a separate town meeting article. It's just more for clarity. We'll remove that going forward for future slides for Speaker 16: Purposes of what you noted. But yeah, I don't want anyone to think that we're still having that school bus subsidy, which is implied Yeah.
By looking at that. Okay. And then the next page, slide 10, I'm a little confused by that chart on the left. If you could just give a little further explanation on what that is. So pego is the cash is cash. Yeah. And then there's borrowing, but I, now what's that on is, is that line on top? The, the total dollar amount in, that's in the capital plan, the five year capital plan. And is that per year? I just didn't really quite understand what was that? That's
Speaker 21: The existing capital plan, not the new one. That's the existing Speaker 5: Capital plan. So it's the existing requests request for general request fund budgeted items in the existing 26 to 2030 capital plan. Speaker 16: Right. So is but that isn't necessarily what we've, that's Speaker 5: Funded, Speaker 16: Recommend funded. Correct. Okay. Those are requests. Speaker 5: Okay. So we're getting 20 plus million dollars of requests annually. All right. Yeah. Sorry. Yeah. Speaker 16: That, that's why I was confused 'cause I thought, well, our capital plan doesn't have Speaker 5: No, I mean the reality of all those projects, even, even if we had $20 million of being funded is still fairly slim. But we have those worth that, that number worth of requests.
Obviously when we go into further into the year, we, through John's hard work with the department heads and, and all the departments working together, we, we help to prioritize them and then that's what we bring forward to town meeting for requests. But, but the reality is that we are getting $20 million of requests and, and still very much under, under able to fund those requests. Right. Speaker 17: Just, just one, one of the things we're gonna do with the capital plan this year and working with the finance team, kind of now knowing a little bit of obviously historically
where we've been able to fund, which is, and this is just general fund, we're not talking about the enterprise funds with the golf course of the water and sewer enterprise. This is strictly in our general buckets. We've historically funded within the $12 million range between cash and borrowing. You'll see in 2026 the number was really high. That was actually a bond execution that the board did kind of, Speaker 5: That was back in July. Speaker 17: Back in July, right. Capturing all of that, banning that was happening for a period of time and, and doing that. But what we're gonna do this year is we're gonna have
to tier projects, like in moving forward with the next plan, we're gonna show you for 27 what That money will fund in projects in a tier one. And then there will be a tier two that we have not identified additional funding that will have to be deferred or not brought forward. In the past, what we would do is show everything up front and then kind of work to get to those numbers. But we're gonna show that a little bit differently in the capital plan specifically for 27. We're still gonna show you those out years in terms
of these are kind of aspirational of what's coming down the road, but it's not realistic for us to complete $23 million worth of projects. At the same time, our vehicles make up about $8 million our vehicles and equipment of that number. So there will be tough decisions, and we've been having those conversations over the last year plus last year I think it was $5 million that we funded between spring and fall, looking at what we did for cash and also new borrowing that we took on, which doesn't always hit in the year it comes up
because for instance, a fire truck, you know, we're not seeing that for 36 months. We're not borrowing for that next year. We're waiting until we get closer to that period of time to borrow it for and through the work of Ari and Gloria, we've done a good job of trying to plot those out, what hasn't been borrowed yet and where that will come in the future. And then we'll look at Speaker 21: One thing we've tried to do this year, we went, Gloria, John and I went through the, the, the process of sort of identifying what deferred projects, what need,
what debt needs to be sold, have to be sold, what our debt service under that scenario looks like going forward and what kind of gap, what kind, what kind of, what kind of room we have available to be able to, to, to handle, you know, with it knowing, you know, looking realistically at what, not so much the principles, they have a big part of that, but looking realistically at what, you know, cash flow would possibly accommodate. And so yeah, there's, there's, I think the town could easily, it was, it was just a purely needs based CIP come up with, you know, have 8,000 million dollars CIP over five years and,
and those would all be legitimate projects. So that, that's gonna be the real challenge here. Speaker 16: All right. Final, final thing. It's not really a question that's more of a comment for any of them, anyone who might be still listening and that's that the numbers that you're presenting and the forecasts, that's not the budget numbers. No. And and I don't want anyone to look at these and think, okay, this is the same numbers that we're gonna see in February. They Speaker 21: Absolutely not. Yep. Speaker 16: Just wanted, Speaker 21: Wanna make Speaker 16: That clear? Yes, Speaker 21: Thank you. Thank you for making that Speaker 22: Evident.
Speaker 21: Okay. Right, Speaker 9: Ms. Pope, thank you. Thank you Mr. Evans. Speaker 16: Excuse me. Speaker 9: Thank you. And thank you Mr. Skye for this presentation. I wanted to address slide number four. The, the title says the town's financial structural is dependent on free cash. Yep. Can you just explain what that means? Speaker 21: Certainly. So every year the budget that's been, that's adopted in the town for, since, since I dunno how long has, has incorporated in the operating budget some trach of free cash to make up the de difference between anticipated revenue and budgeted expenditures.
That is what's technically known as a structural deficit. The override did not eliminate that structural deficit. What, what the, the, the, it reduced it, it believed alleviated somewhat, I believe, and I believe that the version of the budget non override had a larger commitment of free cash than the current one has. I don't remember the exact number. I'm sure Jamie will be able to weigh in on that. Yeah. Yeah. But, but I don't remember still, I'm trying to not remember those things, but there, there's still structural deficit and the, and that's just the operating side. We also, you know, one of the things that allows us to have, you know, based on the conversation we just had,
call it robust, but you know, have a, a a, a implementable capital program is the fact that we have cash available to be able to put towards those projects and then we're able, and we're able to use that cash to maintain our stabilization funds per policy and so on. If we didn't have free cash, we wouldn't be able to do that. We wouldn't be able to do that. We'd have to find a way to carve that out of the budget or frankly, you know, we, we'd be in danger of losing our, our bond rating. Yeah. So Speaker 9: I think it's important to, to just spell this out because there is so much, I think there's so much conversation around free cash
and I think as much clarity as we can have around the topic is important. And then separately, you know, the statement that it's dependent on free cash, I think is interesting because we still wouldn't use all of our free cash to patch up gaps. Right. Speaker 21: You, you shouldn't, right? Yeah, I mean the, the, the, as I, as we mentioned previously, there is a standard out there and, and our, and our kind of judicious use of free cash has elevated our, our, our, our, our standing
with the rating agencies as well. But there's a standard out there in terms of the, the amount of free cash that you should have, the amount of fund balance you should have, and free cash is a component of that. So if you were to, for example, to decide, you know, gonna take all this $14 million and put it towards the operating budget or something like that, other than, yeah. Aside from what it would that would do to our capital program and what it would do to our, to, to our ability to fund our stabilization fund and so on. And therefore, you know, and directly due to our rating over time, you know, it would be a very, it would be a very negative development
for the towns of financial strength. Speaker 9: Thank you. Speaker 5: If I can add, if you were to do that as well, there's no guarantee that you're gonna get that same free cash number in the next year, right? Yeah. And if you rely on free cash for operations and the next year you don't get those same numbers, you are cutting Speaker 21: Significantly be pretty unsustainable situation. Yeah. This is sustainable. Even though we're using three and a half million a year in free cash, it's basically sustainable. Sustainable because we, we, we were able to continue to, to kind of feed that tank. But if, if we've stopped, if we had no free cash, then we'd have a, a very significant problem. Yeah.
Speaker 1: All set, all set. Mr. Kauflin? Speaker 7: Thank you, Mr. Chair. I would've sent these questions in earlier, but I realize them sometime around five o'clock. So my question is, in the forecast scenario, on page eight, average historic growth shows natick public schools with increase of 5%. And then if we go to slide 11 for level service for Natick public schools, it's 5.4%. When we discussed the budget and the override in January and February, we talked about 4% for the schools.
So do we know what the expense drivers are that's pushing that up to 5.4% for level service? Speaker 21: I gonna let, do you wanna weigh in on that? Speaker 5: I, I mean obviously I don't wanna speak for the schools, and I do see the chair of the school committee here tonight, but my understanding is it's largely employment. You know, 80, 90% of their budget is, is staff. So it's staffing commitments, contract commitments, CBAs, other contracts, collective bargaining agreements with teachers and such. That's my understanding. It's primarily, it's primarily those commitments Speaker 7: To not put the chair on the, excuse me, to not put the chair on, on the spot here
or to ask for specifics. I, I'll, I'll write a series of questions and send them on to the school committee to be sent back to the chair to be discussed later. If, Speaker 6: If, if I may, at our presentation, Sydney, I was just gonna say at our presentation, Mr. Townsend pointed out historically the increase school increase was in the 5% range, even though they were producing a 4% number. Yes. And we did ask them, ask him to get more realistic with that. Speaker 7: But there was a commitment during the override for 4%. That's what we relied on. And the, and the towns were 3.3, including both sides making significant cuts. Speaker 5: Yeah. The 4% was what we had in the forecast when we did
the forecast modeling during the override. That's correct. Speaker 7: And the CBAs were negotiated after the override, Speaker 5: I think just before. Speaker 7: Just before. So that's something that should have been taken into account. Okay. And then my follow up, my last question is what percentage of, it's my understanding that native public schools does not do turnbacks. We had over 3 million in turnbacks on the townside. So I'm wondering at the end of the budget year, if there's unattached funds, but we might call free cash. Where does that go and how much is it? So those are questions I'll put in writing the schools. Speaker 21: You mean Speaker 7: On the school side? Yes. Speaker 21: Schools are part of the general fund schools are,
are technically capable of providing turnbacks unless they decide they can't. Speaker 7: Right. But it's my understanding historically they haven't. Yeah. So at the end of the year, if there's extra money, where does it go and how much is it for the, on average for the last five years? But I'm not, those are questions. I don't, I don't like gotcha questions and I don't tend them this way. Yeah. I didn't look at the increases on the scenarios until after five o'clock. So to be fair to everyone, I'll just put them in writing and send them to school superintendent and the chair of the school committee and just ask them to be sent to the chair of the, of our select board for a future discussion.
Speaker 1: Thank you Ms. Hoffman. You all set? Speaker 7: All set? Speaker 23: Sure. Speaker 1: Okay. My questions have been asked and answered. Most of them mirrored what Ms. Slager had, and I jumped in on a couple. But I think this is an exceptional baseline and a, I'll call it a, a stellar debut in front of us because I found this presentation extremely informative and very approachable and, and helped me at least under to understand me too,
the causation of, of some of these things and, and where some of the pitfalls are moving forward and challenges. So I appreciate all the work that went into this. Thank Speaker 21: You, Ms. Mr. Chairman. One, one place, one respect in which I am very, very fortunate in this position is to have Gloria h who's, who's, frankly a, a savant when it comes to PowerPoint. And the, her, her, her work far exceeds what I be capable of doing. So Speaker 1: She she, she used Speaker 21: To be amazed. Shout Speaker 1: Out to, she embodies a star.
Speaker 23: She is a treasure. Speaker 1: She is amazing. So, thank you. Any further questions? All right. Speaker 23: Thank you Harry. Speaker 1: Thank you very much. Did you have, thank you. We're gonna close the public hearing. Oh, it's almost, Speaker 23: No, we're all done. That wasn't a public hearing. You want questions? Thank Speaker 1: You. It's not a public hearing. I have my Speaker 23: Call. It's just information. We closed the pre previous one. No, he said close a public hearing. That's all Speaker 1: I said. No, I know. Is there anyone online who'd like to comment? Oh, could you help me with that? 'cause I can't Speaker 23: Just don't see any hands raised. See, okay. Speaker 1: All right Speaker 23: On.
Speaker 1: Now I can just say thank you very much Ari, appreciate all the work that we're done. Thank you. Mr. Kel. Please pass on our kudos to Gloria. Absolutely. Hopefully is not watching this and is doing something more interesting. She Speaker 23: Is watching, she's she Speaker 21: Is watching. She heard, I'm sorry, Gloria. Everything you Speaker 23: Said, so it's t Yes. Speaker 21: The more important everything that I said. So that's good. Speaker 23: You very much so it's, by the way, thank you Mr. Sky and the team. Speaker 1: Yeah, I don't, my laptop died or lost battery restraints, so that's why I'm operating at a even more severe disadvantage right now. So thank you. Thank you. Okay.
Moving on to our favorite part of the agenda, the consent agenda. Speaker 9: Okay. The consent agenda this evening reads as item A approve request for exemption from town bylaws Chapter 41 S four from Annette Ziegler. Item B approve request to occupy a public way. 5K beer run and winch and pulley beer company item C approved meeting minutes for November 12th, 2025.
Does anyone wanna pull anything from the consent agenda? Speaker 7: Item B. Speaker 9: Okay. Are we okay? Or I can make a motion to approve items A and C. I'll second. Speaker 1: Second. Speaker 9: Okay. Speaker 1: I gotta get one in. Rich, Speaker 9: Do you wanna discuss item B? Speaker 16: We should vote say Speaker 9: C Oh, vote first. Okay. Speaker 1: That's, that's purpose. Bruce. That's right. I'm, I'm the one who's supposed to misstep here. No, go ahead. A and C could Speaker 9: I Oh, A and C. Okay. Do you wanna take the Speaker 1: All in favor? Please say aye. Aye. Aye. All.
Speaker 9: Okay. And we can discuss the item Speaker 7: BI just have a motion move to approve the request to occupy a public wave for the 5K beer run and winch and pulley beer company provided that the number of participants is less than 45. If it hits 45 or higher pursuant to the request of the deputy chief, there should be a, an opportunity for the deputy chief to revisit the recommendation. So move approval for up to 45 runners after which time they need to contact the deputy chief for Speaker 1: Thank you for that. Okay. All in favor, please say aye.
Speaker 7: Aye. Aye. Speaker 1: Thank you very much. And we're on to town administrator updates, Speaker 16: Just, just a administrator thing. I know we voted and I do agree with that, but the event is in three days. So if, if for some reason we do find out that it is over 50, would we be having a, a meeting later this week, potentially discuss this? We cannot. Right? You cannot. That's we've run out of time.
So Yeah. Speaker 7: So it's kind of a moot motion. Speaker 16: Well, I'm just wondering, I mean would that mean that we wouldn't have the event? Speaker 5: Well, I think what would happen is that Deputy Chief Luzon would probably have to review with the applicant Yeah. What, what needs to be put in place to accommodate whatever numbers they're thinking. If it's, if it's you know 50 people, that's probably something different than 150 people versus 350 people. And depending on, on really what the numbers are expected to be, we'll determine I think, next steps at that point. And, and I'm sure he would be in contact with the town administrator's office to talk through that. And then if we need to call an emergency meeting we will,
or we'll just work with them on a different route. That would likely not include town roads, town of Natick roads, I mean they're a business based in Framingham. They're coming into Natick for part of the road race and they're gonna go back into, into Framingham. So I suspect they can change the route. So it's all in Framingham. Speaker 16: Thanks. Yeah. Speaker 1: Okay. Thank you for that catch. Appreciate that town administrator updates. Speaker 5: Sure. Now I'll try to be brief 'cause I know we have an executive session tonight and it's getting closer to the 8 15, 8 30 hour. But there is an an excellent alcohol alcohol
training with the alcohol A BCC today led by that we've done annually now for licensed holders in town that Donna Donovan and Billy Walsh put on. Deputy Chief Luon also spoke at it. And the three of them did an excellent job at this. And then we had a, B, C, C people there. We had about 75% of our renewals in attendance, which was great. That is great. I ended up staying there for a good hour of it and I was very, very informative. The A BCC uses this as a model that they want other communities to replicate. So kudos to Donna and Billy for, well Donna really starting this about three
years ago and Billy for really jumping in and, and helping out and, and really taking more of the responsibility as well this year. And I just wanted the board to be aware of that. 'cause you're gonna see these applicants coming forward in the December agenda for their renewals and you'll know that 75% of them went through this process and we definitely, it's definitely recognized by staff and I know you all recognize that as well. Especially if there's any challenges that, or issues that we have down the road. Did they go through this process? It's extremely informative and I just give kudos to the staff for doing that work. And then coming up on the holiday season, November,
the next meeting is gonna be after the small business festivities this week after Thanksgiving here in Natick Center. There's always great small businesses in Natick Center and I believe it's small business Saturday that they do events here in downtown Natick. So I would encourage anybody to come to Natick to shop at the local businesses. This is the last opportunity to really highlight that for, for, for the town and the board. That's also when the meters get bagged. So you'll see those as well just reminding the board of that kind of in the pipeline. So they'll be working on that. And then in the, we're gonna be doing some of the adjustments that you voted on
at a prior meeting I think in October with regards to some of the rate changes and some of the adjustments to our parking in Natick Center. There's some just, that's the time to do it because the meters are bagged and we can adjust technologies and physical stuff during that month. So you might see some folks doing that. In addition, we just had unusual cold, so please keep in mind and work, you can certainly engage with town administration if you have any questions about snow operations or, or ICE operations and things like that. Speaker 6: Mr. Erickson, is there any update on the renovations in this room that will affect our meeting schedule?
Speaker 5: Absolutely. John will give those. Speaker 1: I Speaker 17: Great question. So currently the vendor is over at the Morris Institute Library completing the work over there. We have town hall between the select board meeting room and the school committee room basically booked out for December for that work to be completed if they move on the timeline. And we have a check-in meeting tomorrow to see where they are. They're progressing as they've planned right now. As long as they don't run into any snags in December, they'll be coming over here and starting their work.
So I'll continue to monitor with them. But as we hit December for both the select board, school committee and planning board, planning board and the groups, we've coordinated with Mickey and the team over at the library to accommodate the majority of those meetings. So if they aren't done over there, they won't be working here. So we will be able to access these spaces un until they come over here. Speaker 1: Okay. Speaker 17: We really tried to look at the months that would be least impactful knowing that the holidays at the end of the month of December,
knowing that we needed about four weeks for them to complete the work. That's kind of where we ended up. Speaker 1: Just a question on, on possible use of the library, one of the things that we talked about, and we obviously don't wanna solve it here, but running up against the, the closure at nine o'clock and there's a way to coordinate us off from the rest of the library and we need just need to, if we're going to be over there and make sure that Speaker 5: If we can extend at nine again. Speaker 1: Yep. Look into it. Okay.
Anything else? Administrative? Speaker 5: No, no more, oh, sorry. No, no more time administrative updates. Thank you. Okay, Speaker 1: Thank you. Select board updates. Mr. City. Speaker 6: I'll be at office hours at the community senior center tomorrow at 9:00 AM Speaker 1: Okay. Come see me. Speaker 7: Just a, an update to the board. I asked Mr. Sky earlier today if we could have a breakdown of the local option increases and decreases. So we know we saw an increase in hotels, but a decrease in meals and I just wanna get a sense of what specific categories we saw an increase in or decrease. So he'll get that to us by Friday or Monday
and I ask him to send it to the chair for dissemination. Speaker 1: Excellent. Thank you for that question. That was a great question. Anyone else? I have one small one, which is, it's the fill the police cruiser with food event, which is being held on November 22nd. And I don't have the hours in front of me, but it's at stop and shop. It's usually in the daytime shopping hours until they fill up the cruiser and sometimes they bring two. So please donate food again. We have a lot of people in town with food insecurity and that every bit helps, especially
around the Thanksgiving holidays. So thank you for your continued generosity. Any other items? Ms? Speaker 16: I remembered seeing this on Facebook and I think it's actually at Roach Brothers not at Stop and Shop. Speaker 1: Okay. They seen Speaker 16: Yeah, I, I'm seeing, I'm, yeah, I'm seeing a post from yesterday. Okay. That says the Fill the Cruiser event is at Roach Brothers in Natick from From nine to one. Speaker 1: Nine to one. Thank you. Speaker 16: So we don't wanna send people the wrong place. Yeah, Speaker 1: Thank you for that. And it, it seemed kind of funny to me 'cause it usually is at Roche Brothers,
but somebody had told me, and this, this goes to show, always verify your source. They had said that they for some reason couldn't do it at Roche Brothers. So that's where my error came in. So thank you for correcting that and giving the correct hours. So thank you. Okay. All right. So now we move on to, we still have about seven minutes before eight 30, which is when exec session is scheduled. Do we have to attend to that? Do we have anybody who's,
we can go in, we can just go right into it. Okay. Alright. Very good. Dial in. Yeah, I just wanted to be sure that, okay. This portion of the meeting is not open to the public and we will be adjourning following the executive session. So this, the reason is pursuant to MGL chapter 30 a section 21, A two to conduct strategy sessions in preparation for negotiations with non-union, non-union personnel, or to conduct collective bargaining sessions
or contract negotiations with non-union personnel, police chief and I. So declare, do I have a move? Speaker 16: Second Move. Speaker 1: Moved by Mr. Sidney and seconded by Ms. Walser. There a roll call vote. Ms. Coughlin? Speaker 16: Yes. Speaker 1: Mr. Sydney? Yes. Ms. Walser? Yes. Ms. Pope? Yes. And I'm a yes. So we're now in executive session, so thank you all for tuning in.