sharon planning board 1 sharon economics discussion presentation to sharon board of selectmen e....

1Sharon Planning Board

Sharon Economics Discussion

Presentation to Sharon Board of Selectmen

E. Hauser, Vice-ChairSharon Planning Board

1 April 2006


Agenda

• Review Sharon Tax Revenue– Average Tax v. State Averages– Sharon Business Valuation Discussion

• Review Sharon 10 Year OpEx Budget History– Budget Composition and Growth Rates– Massachusetts State School Budget Growth Rates Comparison

• Next Step Recommendations– Summary of Findings– Best-in-Class Comparisons– Revenue Enhancement Programs


Sharon Tax Factoids

• Average tax per household = $6,828– Places us nicely into top 10% of MA Average Tax– Residential sources accounts for 94% of Sharon tax revenue– 10 year tax growth rate = 6.83% v. 5.81% average for MA

• Current commercial properties generate $1.72M in taxes– 87 parcels, 150 acres, are developed– 15 parcels, 38 acres available to be developed– 36 parcels, 138 acres, appear on paper to be undevelopable

Propose a “6% solution” in new tax revenue

Goal: $3 - $5M in new tax sources


History of Passed by Commercial Developments

• S. Main Street Annual – $1,500,000 – $2,000,000– Spring 2004 138 acres

• Cobbs Corner Annual – $130,000 - $170,000– Spring 2004 6.1 acres

• Cannon Forge/Sharon Woods Annual – $3,000,000– Spring 1988 250 – 280 acres

• Sacred Heart Dormitory building One-time – $1,000,000

• Saw Mill land on Canton St. incl. Temple Sinai & Box Co. $100,000– 1966 6 acres

Annual $4.7M – 5.3M


Massachusetts Average Tax v. % Residential

y = 5320x - 440.53R2 = 0.1824

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%

Avg. Single Family Tax Bill Sharon Linear (Avg. Single Family Tax Bill)

Tow ns > $1B in valuation2003 massachusetts tax valuations and reports

Massachusetts Department of RevenueDivision of Local ServicesMunicipal Databank/Local Aid Section

$ 6,828 $ 4,884

SharonAverage

Sharon


-5%

0%

5%

10%

15%

20%

1993 1995 1997 1999 2001 2003 2005

Sharon 10 Years of Y/Y Tax Growth Rate v. State

Sharon

25th percentile

Median

Average

75th percentile

90th percentile

6.83% CAG 5.68% CAG

SharonAverage

Massachusetts Department of RevenueDivision of Local Services

Municipal Databank/Local Aid Section

> 90% Residential Tax, > $1B in assets


Sharon Commercial Inventory

• Current commercial properties generate $1.72M in taxes– 87 parcels, 150 acres, are developed– 15 parcels, 38 acres available to be developed– 36 parcels, 138 acres, appear on paper to be undevelopable

• Buildings < 10 years old generate 2x Building-Tax / Acre– Buildings < 10 years generate $12.5k / acre in Building-Tax revenue– Buildings > 10 years generate $6.5k / acre in Building-Tax revenue

• New developments can be estimated at $12.5k Tax / Acre– e.g. 20 acres might yield ~$250k in building tax revenue


Parcels by Age

0

10

20

30

40

Not built or no agegiven

< 5 Years < 10 Years < 20 Years < 50 Years < 100 Years < 250 Years

0%

25%

50%

75%

100%

Majority of Commercial Facilities > 20 years

Developable Age No. Parcels Total Acres Total Tax Total Land Tax Total Building Tax

Yes Not built or no age given 10 13.3 78,154$ 43,580$ 34,574$

< 5 Years 1 10.0 157,303$ 27,019$ 130,285$

< 10 Years 5 4.9 86,139$ 24,126$ 62,013$

< 20 Years 4 16.6 179,048$ 60,125$ 118,924$

< 50 Years 35 88.6 853,432$ 315,443$ 537,989$

< 100 Years 12 10.5 127,184$ 57,184$ 70,000$

< 250 Years 20 7.5 105,125$ 56,616$ 48,509$

Y Total 87 151.5 1,586,386$ 584,093$ 1,002,292$

No Not built or no age given 36 138.5 101,460$ 101,460$ -$

N Total 36 138.5 101,460$ 101,460$ -$

Maybe Not built or no age given 5 24.4 34,720$ 34,720$ -$

M Total 5 24.4 34,720$ 34,720$ -$

Grand Total 128 314.4 1,722,566$ 720,273$ 1,002,292$


Newer Facilities Generate $6k more / Acre

Developable Age No. Parcels Total Acres Total Tax Total Building Tax Building Tax per Acre

Yes Not built or no age given 10 13.3 78,154$ 34,574$ 2,597$

< 5 Years 1 10.0 157,303$ 130,285$ 12,983$

< 10 Years 5 4.9 86,139$ 62,013$ 12,563$

< 20 Years 4 16.6 179,048$ 118,924$ 7,161$

< 50 Years 35 88.6 853,432$ 537,989$ 6,069$

< 100 Years 12 10.5 127,184$ 70,000$ 6,638$

< 250 Years 20 7.5 105,125$ 48,509$ 6,497$

Y Total 87 151.5 1,586,386$ 1,002,292$ 6,614$

No Not built or no age given 36 138.5 101,460$ -$

N Total 36 138.5 101,460$ -$

Maybe Not built or no age given 5 24.4 34,720$ -$

M Total 5 24.4 34,720$ -$

Grand Total 128 314.4 1,722,566$ 1,002,292$ 3,188$

Building Tax per Acre by Age

$-

$2,000

$4,000

$6,000$8,000

$10,000

$12,000

$14,000

Not built or no agegiven

< 5 Years < 10 Years < 20 Years < 50 Years < 100 Years < 250 Years


Implication for Aging Buildings

• Create economic redevelopment package– > 10 Years age

• Target participation range between 25% and 45%– Expected valuation - $200k - $300k in new tax revenue

Participation percentage

15% 25% 35% 45% 100%

< 5 Years -$ -$ -$ -$

< 10 Years -$ -$ -$ -$

< 20 Years 13,982$ 23,304$ 32,625$ 41,946$ 93,214$

< 50 Years 89,138$ 148,564$ 207,989$ 267,415$ 594,256$

< 100 Years 9,706$ 16,177$ 22,647$ 29,118$ 64,706$

< 250 Years 7,028$ 11,714$ 16,400$ 21,085$ 46,856$

Total 119,855$ 199,758$ 279,661$ 359,564$ 799,032$

Goal 3,500,000$ 3,500,000$ 3,500,000$ 3,500,000$ 3,500,000$

% of Goal 3% 6% 8% 10% 23%


• Redevelopment of Existing Facilities– $200k - $300k in new tax revenue expected value

• Development of Zoned Parcels– $450k in new tax revenue – 15 parcels, 38 acres x $12.5k building-tax/acre incremental– 100% participation

• Potential Rezoning of S. Main Street Parcels– $250k to $500k based on 20 to 40 acres

Development Tax Revenue Opportunity

$900k to $1,250k


Agenda





Sharon Operating Budget by Year (1994-2005)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fin Com Budget

School Department Budget

Selectmen's Budget

T.Above Above T.Type Operating T.Group (All)

Sum of Budget

Year

T.Group.2

Sharon OpEx Budget 1994 - 2005



$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fin Com Budget


Selectmen's Budget


Sum of Budget

Year

T.Group.2

Sharon OpEx Budget 1994 - 2005

School2005

$29.3M

Selectmen2005

$8.3M

School1995

$14.5M

Selectmen1995

$5.0M

Budget

1995 2000 2005

School Budget 14,466,856$ 71% 22,114,993$ 73% 29,325,682$ 75%

Selectmen Budget 5,047,789$ 25% 6,989,371$ 23% 8,261,120$ 21%

Fin Com Budget 871,360$ 4% 1,183,532$ 4% 1,440,540$ 4%

OpEx Total 20,386,005$ 30,287,896$ 39,027,342$


Annualized Growth Rates


$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Fin Com Budget


Selectmen's Budget


Sum of Budget

Year

T.Group.2

School10 year

7.3%

Selectmen10 year

5.0%

Budget Average Growth

1995 2000 2005 10 Year 5 Year

School Budget 14,466,856$ 71% 22,114,993$ 73% 29,325,682$ 75% 7.3% 5.8%

Selectmen Budget 5,047,789$ 25% 6,989,371$ 23% 8,261,120$ 21% 5.0% 3.4%

Fin Com Budget 871,360$ 4% 1,183,532$ 4% 1,440,540$ 4% 5.2% 4.0%

OpEx Total 20,386,005$ 30,287,896$ 39,027,342$ 6.7% 5.2%


Budget Composition Shift 1995 - 2005

1995

Selectmen Budget

25%School Budget

71%

Voc Ed0%

Fin Com Budget

4%

2005

Selectmen Budget

21%School Budget

75%

Voc Ed0%

Fin Com Budget

4%

School accounts for 75% of 2005 OpEx BudgetSchool accounts for 80% of $18.6M increase since 1995

Budget Change

1995 2000 2005 10 Year % of Change

School Budget 14,466,856$ 71% 22,114,993$ 73% 29,325,682$ 75% $14,858,826 80%

Selectmen Budget 5,047,789$ 25% 6,989,371$ 23% 8,261,120$ 21% $3,213,331 17%

Fin Com Budget 871,360$ 4% 1,183,532$ 4% 1,440,540$ 4% $569,180 3%

OpEx Total 20,386,005$ 30,287,896$ 39,027,342$ $18,641,337 100%


Year / Year Operating Budget Growth Percentage

-5.0%

0.0%

5.0%

10.0%

15.0%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005


Enrollment

Enrollment Change v. School Increase

Initial correlation apparent; Less correlation in last 4 years


No Relationship between Budget and CPI

School BudgetSchool Department Budget v. CPI

0%

5%

10%

15%

0.0% 1.0% 2.0% 3.0% 4.0%

Selectmen's Budget v. CPI

0%

5%

10%

15%

0.0% 1.0% 2.0% 3.0% 4.0%

Fin Com Budget v. CPI

0%

5%

10%

15%

0.0% 1.0% 2.0% 3.0% 4.0%

Spend per Enrollment v. CPI

0%

5%

10%

15%

0.0% 1.0% 2.0% 3.0% 4.0%


Average 10 Year Growth Rates, 1995 to 2005

• Total OpEx Growth– From $20.5M to $39.2M ~6.7% Growth / Year

• School Budget at $29M ~7.3%

• Selectmen Budget at $8.2M ~5.0%

• FinCom Budget at $1.4M ~5.2%

– School Budget accounts for 80% of Budget increase

• Enrollment– From 2,704 to 3,481 ~2.6% / Year

• Consumer Price Index– No correlation visible between CPI and Sharon Budgets


Agenda





Spend per Pupil

$0

$5,000

$10,000

$15,000

$20,000

$25,000

CA

NT

ON

DE

DH

AM

DO

VE

R

DU

XB

UR

Y

EA

ST

ON

HIN

GH

AM

HO

LLIS

TO

N

MA

NS

FIE

LD

ME

DF

IELD

NO

RF

OLK

NO

RW

OO

D

SH

AR

ON

SH

ER

BO

RN

ST

OU

GH

TO

N

SU

DB

UR

Y

WA

LPO

LE

WE

ST

ON

WE

ST

WO

OD

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

Requested? Requested

Average of Cost per Enroll

Municipality

FY

Sharon


State Per Student Expenditure


$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

Spend per Student


Sharon

Removing > $25,000 and < $0 per Student

Sharon 7,870$ Average 6,258$


0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

10 Year Growth Rate in Spend per Student

Sharon

Removing > 10% and < 0% Growth


Sharon 5.2%Average 4.7%


Compared to State Performance

• Per Student spend at $7,870 – Above State Average– Within range of State Spend

• Growth in per Student spend at 5.2%– Above State Average– Within range of State Spend Growth

• School Budget seems to track to State averages

State Budget data does not match Sharon Budgets, leading to some general discrepancies.


Agenda


• Review Sharon 10 Year OpEx Budget History– Budget Composition and Growth Rates– State School Budget Growth Rates



• Sharon per Household Tax is among top of State– $6,828 per Household– 94% of Tax Revenue is from Residential Household– CAG growth = 6.83%; 1% higher than peer average rate of 5.68%

• Business Tax Revenue– Increased valuation for newer buildings– $12,500 per acre is benchmark for newer buildings– 38 business acres remain to be developed

• School budget– ~7.3% average over last 10 years; $2.2+M per year– Accounts for 75% of OpEx– Growth seems consistent with State averages

Summary of Findings


• Reduce growth of School OpEx $600 – $800k– Target near term 5.5%

– Conduct Best-in-Class studies w/ comparable academic quality

– At 7.2%, we will be at $40M within 5 years, $10M over today

• On-deck developments $750 – $950k

• Increase business tax revenue $950 – $1,500k– Development Funds ($250 - $500k)

• Update buildings > 20 years old w/ low interest redevelopment funds

– New Business ($700 - $1,000k)• Attract development to empty parcels; create new smaller zones

– New Sources ($ yyy)• Wind Turbine; Town WiFi; GreenFuel; Cell Tower

Multi-Tiered Approach: $2.2 to $3.0M

$2.2 to $3.0M


Economic Development and Commercialization Committee

Dev Loans New Business New Revenue

Alan Lurie

Seth Ruskin

Rob Maidman

Ben Pinkowitz

David Spiegel

Keevan Gellor

Jeff Seul

Mike Bossin

Eli Hauser Chair

Bill Heitin Chair

Tam Ly


Pipeline Valuations

• Avalon– 156 2 br apartments $80k per @$15.11 $ 190,000

• Simpson– 198 2 br apartments $80k per @$15.11 $ 240,000

• Brickstone– 100 2 br assisted living $100k per @15.11 $ 150,000

• Lexus– 12.5 Acres $12.5k / Acre $100k to $150k

• Redevelopment– Fund renovate existing facilities (25%-45% participation)$ 200k to $ 300k

• New Business– Attract development to 38 acres of empty parcels (10 yrs) $ 450k– Assess 20-40 acres rezoning on S. Main $ 250k to $ 500k

• New Sources– Wind Turbine; Town WiFi; GreenFuel; Cell Tower $ yyy


Sharon Land Use

• Residential Zoned– Developed 6,200 Acres36%– Undeveloped 2,550 Acres8,75020% 55%

• Business Zoned– Developed 2251.3%– Undeveloped 111336 0.7% 2%

• Conservation– Audubon Land 1,966 Acres12%– Conservation Land 1,805 Acres 11%– State Land 1,173 Acres7%– Open Water 626 Acres4%– Trustees of Reservations 345 Acres5,914 2% 37%

• Town– Town Properties 848 Acres848 5% 5%

• 15,848

sharon planning board 1 sharon economics discussion presentation to sharon board of selectmen e....

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