State: Chester must reappraise, future ed tax hikes likely

By Shawn Cunningham
© 2016 Telegraph Publishing LLC

Lister Wanda Purdy explains the process of reappraisal to the Chester Select Board Photos by Shawn Cunningham

Lister Wanda Purdy explains the process of reappraisal to the Chester Select Board Photos by Shawn Cunningham

Perhaps one of the driest items on the Chester Select Board agenda last Wednesday could have the greatest impact in the future, while the town officer who understands the system it is a part of will be leaving before the work will begin.

Lister Wanda Purdy told the board that the town had received notice that it must conduct a reappraisal of real properties. According to Purdy, the order was triggered by the town’s “coefficient of dispersion.”  A Vermont Tax Department publication defines the coefficient of dispersion as a measure of how fairly distributed the property taxes are within a town. A high COD (above 20 percent) means that many taxpayers are paying more than their fair share and many are paying less than their fair share. Chester’s COD is 21.43 percent.

Purdy told the board that the town has 30 days to respond to the state’s notice. This would come in the form of a state form RA308 which is a compliance plan.  The listers have already created a Request for Proposals that will be sent out to a number of firms that do reappraisals. According to Purdy, those companies are extremely busy and may not be able to get started for a while. Once a firm is picked, it’s likely to be doing the work over the course of two years. Preparing to retire when her current term expires in 2018 , Purdy said she would help with selecting a firm, but would not be around for the appraisal.

The deadline for getting the work done is 2019, but Purdy was confident that if the town could not find a firm that could get it done in time, “the state will work with us.” As to the cost, Purdy estimates that to be about $100 per property or between $186,000 to $190,000 and there is more than $200,000 in the reappraisal fund.

The town had its last reappraisal in 2008 when real estate values were at a high. Since then, the market has cooled and taxpayers have benefited since a calculation that compares the assessed value to each year’s sale prices is used to equalize tax rates across the state. For several years, Common Level of Appraisal for Chester has been above 1, which means that properties are selling for less than assessed. The higher the CLA, the lower the education property tax (see explainer).

But after a reappraisal, – in which comparable sales will have an influence, the CLA will come closer to 1 and could even drop below that, thus sending property taxes higher. For example, a recent equalized tax rate for Chester was $1.4612 per $100 of assessed value. But dividing that by Chester’s CLA of 1.1587  pushed the actual homestead education rate down to $1.2611. If the CLA was at 1.0 the rate would have been 20 cents per $100 higher. If sales prices pick up and the CLA were to drop to .90, the rate would go even higher.

Town waiting on Act 250 permit for water project

Town Manager David Pisha said he met with Stephanie Gile, the Act 250 coordinator for District 2, and asked when the permit for building the new water tank and transmission line on the former O’Neil Sand & Gravel pit site could be expected.

He said she told him she did not know when the District 2 Commission would meet to deliberate on it. As of Dec. 27, the commission had not yet adjourned the hearing to begin deliberations.  Once the commission adjourns, it has 20 days to issue a decision.

Pisha said that he told Gile that time was running out for a decision and told the board that he was at a loss for an explanation, noting that the town had reached an agreement with state Fish & Wildlife regarding protection of deer wintering area. “They liked what we were doing,” said Pisha. “Now it’s stopped.”

In a number of select board meetings and public hearings in the run-up to voting on the water project in 2015, both Pisha and Dufresne Group engineer Naomi Johnson told the board and the public that the standard for approval of municipal projects was less onerous than a developer would encounter.

Board chair John DeBenedetti asked Pisha what were the next steps.

“I don’t know how we motivate Act 250 to meet and issue a permit,” said Pisha.

“Is there anything any of the legislators can get involved in,” asked DeBenedetti.

Pisha said that he had called Sen. Alice Nitka and that she was going out of town and did not have a lot of time to put into the situation. Pisha said he would try “the rest of them” tomorrow. DeBenedetti suggested that newly elected state Rep. Tom Bock be contacted as well.

On Tuesday Dec. 27, Nitka told The Telegraph that she had gotten a call from Pisha late on Wednesday afternoon, just before the Select Board meeting. She then called Diane Snelling, chair of the Natural Resources Board that oversees Act 250. Snelling, Nitka said, told her she would check on the status then update Pisha.  Nitka said that she had not heard anything since.

Later in Wednesday’s meeting, Derek Suursoo asked if there was money budgeted to go through the Act 250 process to extract gravel on the property purchased for the new water tank.

“No,” said Pisha. “We have some ideas where we can get the money, but until we investigate that a little further, that’s as far as I want to go.”

Barre Pinske, left and Michael Alon, right asked the select board to add language to the zoning regulations that would make it possible for Town Manager David Pisha to make exceptions that would bypass town zoning.

At the podium Barre Pinske, left and Michael Alon, right asked the select board to add language to the zoning regulations that would allow Town Manager David Pisha to make exceptions  – like permitting temporary signs on the green – to  bypass town zoning.

Temporary signs on The Green, eliminating local auditors and furture of Yosemite Engine House

Discussions continued about temporary signs put up on The Green by a group of local merchants. Questions revolved around businesses looking for support in the form of flexibility about signs. Michael Alon, owner of DaVallia Art & Accents, asked if the new Unified Development Bylaws addressed temporary signs on town property. The board told him that they did not know, since they just received the 114-page document that day.

Barre Pinske, owner of Barre Pinkse studios, advocated for more flexible rules under which planning and zoning changes could be made quickly by the Town Manager. Pinske likened the process of making and adopting zoning regulations to a game of hot potato.

“Let’s give David the potato,” said Alon.

Board members explained that state statutes govern how the bylaws are changed and adopted and that they were now in that process.

Alon said he was not looking for a change in regulations, he was looking to bypass them.

In response to a question about eliminating the salary line for town auditors, Pisha said that the town would be using an outside auditor in the foreseeable future.  Town Clerk Deb Aldrich said the auditors had met once early in 2016.

Noting that in the past he had not fully appreciated the role of town auditors, Suursoo cautioned against eliminating that role.

“Outside auditors only give you a snapshot and look at your systems,” said Suursoo noting that the elected town auditors looked at every piece of paper having to do with the town’s finances.

“Those are two very different things,” said Suursoo.

Members asked what would happen if an article asking the town to eliminate auditors passed at Town Meeting and at the same time that people would be running and be elected to those posts. At this point, no article doing away with the position has been proposed and no one has taken out a petition to be an auditor.

During old business, board member Dan Cote asked about the status of the Yosemite Fire House. Pisha said that the the town’s attorney had asked for a number of documents from town records that would go along with the complaint that will start the ‘quiet title action’ to decide once and for all who owns the property.

Executive Assistant Julie Hance said she had just received the list and would be working on getting the documents to Attorney Jim Carroll so he could “get it off his desk.”

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  1. Barre Pinske says:

    Ron brings up a good point many small business like mine are put in a very tough position almost hobbled because of Workers Compensation laws and high taxes in Vermont.

    I think we could double the jobs tomorrow if the economy was slightly better and labor laws were more forgiving. Doing business in a rural town like ours that people travel out of to shop is not easy. You have to be unique to survive.

    Businesses like mine work here because we are unique but we also have challenges. First, I need talent, which is hard to find, and I have to manage them, which can be tricky. If I increase my production and exceed my roadside market, I need a wholesale market where my cost of goods stays the same but my value goes down 50 percent. Or I do online sales, which are great except I have heavy items where packing and shipping can be one-third of the cost of goods and or delivery is required. Both add to the cost or reduce profits.

    I had a person on the books last year for roughly eight months. It was important to me at that time to pay a living wage. We agreed on $18 an hour. The hourly rate with insurance, taxes and the payroll company was $24.62 an hour. Add my debt service for new equipment and the horrible winter season, it nearly sunk me. It was way worse than Tropical Storm Irene.

    After working alone this summer and regrouping a bit I have just placed an ad at $10 starting part time. I received a number of applicants and an insulting anonymous email about not paying enough. I will have to add about $2.50 an hour for payroll taxes and insurance.

    I feel my little company with the new milling machine has much growth potential. It may be a bigger learning curve and a slower process than I have hoped, but I am reducing debt and I have some new innovations that are very promising.

    To the greater point: If people are self-sustaining, contributing to the grand list and the culture, is that not good in itself? Without business, we don’t have an economy but who’s responsible for creating jobs and what’s the reward?

    We have a unique asset in people traveling through our town who have money to spend, which could sustain a number of business like mine. I don’t know how anyone could be critical of the value of that and or arts and culture. Arts and culture inspire us, entertain us, make up much of our history and fills our museums.

  2. Ron P. says:

    Hey, Barre, you say we need more “feather factories” unique shops like yours. How may employees do you have?

  3. Barre Pinske says:

    My property taxes amount to around $300 a month. Our Select Board chairman John DeBenedetti stated, “I don’t think tax dollars should be used to promote businesses” and Select Board member handsome Ben (Whalen) said he was concerned about conflict of interest if the town helps businesses.

    Business is the heart of an economy.

    The only way we make money is through business. Secondly the only way we can pay our taxes is by doing business. Nice properties and good jobs produce higher taxes putting more money in our coffers.

    Vermont has the third highest overall tax burden in the United States. Our property values have gone down 37 percent in eight years and close to one-third of the people in the state are on assistance.

    We in Chester, unlike many places, have opportunities to grow because of the money coming through town. The new Jiffy Mart now on Route 103 has become its third-highest producing store! Part of the key in my opinion is in arts and culture, unique small shops and festivals that will make our town more interesting and vibrant, a snow port where people can fuel up their sleds and more freedom through zoning for locals to do what they need to do make a living.

    We need income earning families to want to move here; homes near me have been on the market for nine years! We need to step up our game and realize we as much as any other community has a chance to prosper. If we don’t have the skills to do it, we need to spend money getting the help or elect people who do.

    Lastly we are not solely dependent on the grand list. We are part of a nation, part of a state. We can get help from wealthy residents, hire interns and utilize volunteers. We need better connections.

  4. John Grady says:

    About half of our property tax bill is based on the statewide school tax rate and on per pupil spending which will change if the Ludlow High School is eliminated. Can the elementary schools also be consolidated by closing Cavendish Elementary and sending the children to Ludlow & Chester? The about to be former Black River High School building will be available and could be used as an Elementary School in Ludlow instead of the current Ludlow Elementary building if that would work.

    We would have one high school and two elementary schools if Cavendish Elementary were closed. I don’t have the first clue as far as current enrollment or the capacity of any of the buildings which is why I started off asking a question instead of saying we should close Cavendish.

    High property tax rates hurt the local economy. People don’t want to buy property and empty houses don’t help local businesses. Leadership requires making choices for the greater good that aren’t popular with small special interest groups who should act like adults and accept that change is needed instead of being selfish and having tantrums.

    The 2008 revaluation was a fail. There are countless examples of properties that weren’t appraised at even close to fair market value. Do not hire the same company.

    Why are the valuations so wrong? Could it be because they aren’t based on market value as they use computer programs designed for cookie cutter subdivision houses in the suburbs based on square feet discounted in some cases for poor condition?