Town of SuttonQuarterly Billing

Proposal

Quarterly BillingTown currently on Semi-Annual Property tax billing- tax bills due in two equal installments

• On or about November 1 and May 1 of each fiscal year

For Fiscal year 2010, Town would issue 2 preliminary bills due On or about August 1 and November 1 of each fiscal year and

2 Actual bills due February 1 and May 1 of each fiscal year

Why Quarterly Billing

Improve Cash Flow

Currently no property tax revenue until November

Town operates for 1st 4 months of fiscal year with no Property tax revenue

Eliminate need to Borrow in anticipation of revenue

Borrowing in anticipation of revenue costs money and rating agencies look negatively upon RANs

Why Quarterly billing continued

Early payment of Retirement and Property and Casualty insurance at Discount

• Early payment of Town’s Property and casualty insurance premium saved 2% on premium or $3560. Early payment of County Retirement in FY 2010 will save the Town $12,550.

Increase in investment income

• Not a major reason to switch, but some increase in investment income will be realized

BackgroundTown currently on Semi-Annual Property tax billing- tax bills due in two equal installments

• On or about November 1 and May 1 of each fiscal year

• In FY 2007 226 communities of 351 were Quarterly

• In FY 2009 241 communities of 351 are Quarterly

Surrounding Communities

DOR recommendation

• 12 years ago DOR recommended Town of Sutton implement Quarterly billing:

– DOR recommends that the Town consider implementing quarterly tax billing, “By adopting Chapter 59 Section 57C, the quarterly tax billing provision, the town will improve its cash management…reducing the need to borrow in anticipation of tax revenue while improving investment income.”• Town of Sutton Financial Management Review 1996, DOR

How it Works

• Still 2 mailings per year with each mailing having 2 bill coupons and 2 envelopes. – 1st mailing mailed by June 30, would be 2

preliminary bills due August 1st and November 1st with each bill equaling 25% of the amount billed in the previous year.

– 2nd mailing mailed by December 31st, would be 2 actual bills due February 1st and May 1st and they would reflect changes in valuation and tax increases.

Additional Impacts

• Need to evaluate impacts particularly upon Treasurer/Collector’s office, but also to a lesser extent-Assessors.

• Changes to exemptions and abatements schedule will take some education

• Adjustment to Rate setting and Recap

Time Table for Implementation

• Begin in Fiscal Year 2010. First Preliminary bill issued by July 1st 2009

• Education and outreach throughout– Cable, Tax bill inserts, Town census insertSenior Center Presentations