 So, I'm seeing a presence of a quorum of the community resources committee of the town council. I am calling this January 12th regular meeting of the CRC to order at 433 p.m. This meeting is being recorded and pursuant to chapter 20 of the acts of 2021 and extended by chapters 22 and 107 of the acts of 2022. This meeting will be conducted by remote means members of the public who wish to access the meeting may do so via zoom or telephone. No in person attendance of members of the public will be permitted, but every effort will be made to ensure that the public can adequately access the proceedings in real time by a technological means. At this time, I'm going to call the role of the community resources committee to make sure we can hear everyone and everyone can hear us. So I'm going to start with Pat Present Amanda is present, Pam. Present And Jennifer. Present And Shalini Balmilne will be absent today. As far as I know. And so, just a few announcements before we go right into our agenda. This meeting is noticed as a joint meeting, but that joint meeting will begin at 530 p.m. with The finance committee special meeting and the town council special meeting before we, the only thing that will be on the agenda beginning at 530 is a discussion regarding assessment of residential rental properties. With the principal assessor, the finance director and the town manager. So they will all join us and we will open two other meetings at 530 p.m. Before that, though, we're going to do the rest of our agenda and get through the rest of our agenda and including general public comment. I intend to take general public comment as close to 530 as I can. In case there are counselors and all that have joined us, they may be able to hear it too. But so, well, I plan on moving to that around 520 or so, depending on how many people are in the audience at that time. Before that, we'll, we'll do minutes and then for right now, we're going to go right into the review of the draft, bylaw draft, fee schedule draft regulations. We're focusing on the fee sample, fee schedule samples that are in the packet and the bylaw today. We got through a number of the regulations two weeks ago. I, we're not going to touch them today. We're just going to do the other things with that. I would like to start with The bylaw and see if there were a lot of changes. We got through many of the sort of accompanying or accompanying changes last week in the regulations. Many of the changes from the last draft we reviewed to this one were because we moved stuff to the regulations or we moved stuff back from the regulations into the draft. I don't have any particular desire to go through each section individually, but if anyone has any questions or comments regarding any of the first let's start with ABC and D and E through the exemptions of the changes. Most of the changes there were related to definitions, tying them directly to zoning bylaw definitions by referencing the zoning bylaw if they existed. And then splitting out the state while not preempted at the during at the town attorney's sort of suggestion was one of those changes. Any thoughts on those three sections and we're only going to spend a very short time on this before we get to fees will be within fees within the next 10 minutes or so. Pam. I have a question that maybe John could help me with in be under definitions. There's the group home. And I don't know Essentially, what is what is the difference between a group home who constitutes a group home. Like some of the are they are these some of the satellite fraternities for instance and and what would mercy house be considered which is right, essentially at the south south edge of the campus run by mercy church. Before you answer that john can I ask Athena to grant me screen share power so I can put what we're talking about on the screen for people watching. Now you may go john. So no, none of those things that you asked about would be group homes group homes would be things like that's you know houses that service net has around town. They're residential facilities they're licensed with the state. Mercy house is just Reno registered as a rental they rent they rent rooms to us to a special group of people but still it's it's just a rental. Okay, but so they're, I'm guessing that there are more than six or seven people in the house because they're always that many cars. Is, is that a different scenario than any other rental property. I don't remember. I've been in that place before I don't remember that they had much more than four rooms that they let out. Good question no I mean it's I think it's not a single family home but yes it's it's a slightly different scenario. I'm just thinking ahead we may want to better understand that category of building and so how is How is the fraternity on, I think it must be sunset near the Gillins is that registered as a fraternity or And so that falls under different rules. Yeah fraternities they predate zoning so they're they're a grandfathered use. Thank you. Seeing no other questions there. One thing, Shalini emailed me saying that she couldn't be to the meeting but she wanted a couple things mentioned and one of them was related to the exemptions here. As well as mostly with fees but but with this one Shalini mentioned that were noted that some towns exempt all owner occupied rentals from Either the fees or from even the rental registration program. And we do not. We've talked about when we get to the samples in fee schedules of treating them differently with fees, but we don't necessarily exempt them from applying for a rental permit. And she just wanted to bring up that that might be something we want to think about with the thought being that owner owner occupied residences particularly those up to five or six units are likely to be better kept than others, including meeting code because they live there was one of her comments. Jennifer. Yeah, I don't personally I wouldn't. I'd be okay. I mean we could discuss it but it just in terms of how it strikes me that if there wasn't a fee for owner occupants that that would be an option that we might consider I think that anyone who is renting out of property though should have a permit even if it's not there's not a fee associated just so that well two things so the town, you know has a record of how many of just two landlords are and then I would, you know, think there might be some awareness that wants to be paid that those are up to code since people are renting them, but I would be open to, you know, considering waiving the fee, but I think that the town should know who you know who's renting and, and, you know, ensure that they're safe and habitable, which is overwhelmingly the case and owner occupied but it doesn't necessarily have to be. So I think for the town's record and for tenant protection, they should get a permit, but we could wait to consider waiving the fee. Thank you for that comment. Any thoughts beyond exemptions into the issuance denial and everything that went on in some of these changes the application section changed a lot. Because we moved much of it over to the regulations. So there's a lot less listed here. And same with the process I believe the fee section is the same. And then the requirements. This is where we moved a lot of it over to the regulations the requirements the inspection sort of how to do an inspection and stuff like that got moved mostly to the regulations. That's the application. All of this read for inspections got moved to regulations which is why there's a lot different there and the standards got moved to regulations. And then paging down, we haven't gone back and talked about consent. That's one of the things we haven't looked at. And then violations changed a bit. This is one where what got moved was the point system. And we Pam and I have are working on potentially moving that to the nuisance property by law with then nuisance properties being, you know, a rental that is declared a nuisance property is subject to potentially suspension under this bylaw to for their permit was was sort of what happened there. And so you'll see some changes here that now reference nuisance house. And that bylaw was one of the thoughts and I think we'd love to hear from you all your thoughts on that obviously we haven't seen a new draft of the nuisance house. The hope is to have that to this committee by the end of the month at the next meeting. And so. But but the thought is that that is what would govern that and that that could trigger a suspension or a denial of a future permit under this bylaw. You want me to comment. Sure, John. I think that's a good idea, moving a lot of that to the regulations. I think that rolling that point system into the nuisance house bylaw is a good place for it to live that puts all of those noise complaints and and other sort of complaints all together then. And you, you can do a better job of sort of keeping score of addresses that way. This, this rental bylaw needed to be trimmed so. Understatement. Congratulations. Congratulations on finding other homes for for some of us. The gold wasn't it Pam. The gold. And then there's some movement there and all. Are there any other comments before we move on to the fees regarding the changes that that were made to the between drafts for the bylaw since the last time we talked about it anything people would specifically like to discuss the next time. You know, or think about I guess what I would say is think about where you might be concerned given this draft I'll make a clean version there is a clean version. But I think our goal for this, the bylaw language now is to specifically target things individual counselors want to discuss in it or John or Rob, where we need to come back and say hey, is this what we really want and stuff so I think for next time creating that list would be very helpful. I think it would also be good for folks in the audience to take a look at the clean version. And again, through their own lens, look at how it's now structured. The intent is obviously not to punish anyone. It's to. It's to manage expectations and and and results. So I think it would be really good for them to to look at it again. That's a good idea. Okay. So that's our homework as a committee for the bylaw and I'll send out a clean version of the regulations to for the next packet will put them in there we will not probably be discussing either the regulations of the bylaw at the next meeting because we'll be looking at the nuisance house stuff and some other things, but I'll put them all in the packet and the goal will be, we might take 10 minutes to say here's the sections we want to discuss so that everyone knows that those are the sections people want to come back to and other sections they aren't so that they can concentrate on. With that, we're going to move to the fee samples in the packet are. Are the answers Rob provided to the questions I sent him. I want to thank Rob and his office for providing those answers. I used them in hopes of getting better estimates for fee revenue raising. And so they were very helpful and to do things like one of the, the one of the tabs at the very bottom one of the pages in the PDF shows some preliminary guesswork as calculations as to what does an inspection actually cost. Based on how many inspections inspectors can do a year or how long they take and salaries and things like that and what does an application. Processing cost based on the people needed to do that xyz so that we could get an idea of what it's doing beyond Rob zone estimate as to how much the program will cost as the bylaw is written. And so we're going to look at some of the specific costs as we look at the fees to potentially cover those direct costs of processing or of inspecting and all I will put the excel sheet up so people can see things move but Pam first. Yeah, I was going to say this is not trying to try to be not arbitrary on this. I understand that if we want results, it does take staff time, and we are as a council cautioned to make sure that new initiatives are cost neutral meaning they do kind of cover their costs by the implementation. It's not actually a new program, but it is certainly going to be more broad, broad, widespread, broadly spread, and, and hopefully much, much, much better enforced, because it will be clear cut, everybody will hopefully be playing by the same rules. And we do understand that there is a cost to that. It would be great to keep it as absolutely low as possible so that the, you know, the population of rental units in town is is not harm harmed by it. It's just that we have better better management of it all. Thank you Pam. The one thing I would say is, if this revision of the bylaw passes there is one major change that is new which is that town staff would be undergoing all the inspections, which they don't do now and that is a, I think the major driver of the cost of this change in terms of the cost of the program is the fact that inspections, regular inspections would be undertaken by town staff now. So I'm going to see if I can share this. I think you can, yeah, it's nice that they give you a preview of what people are looking at now. So, I want to caution again, these are just samples. These are to give us an idea. We haven't fully set on a couple of things. One, what the permit fee split would be if there would be splits and fees, things like that based on number of units or anything like that or own our occupancy and we haven't settled on whether an inspection would, whether the required inspection would be included in the permit fee or whether the required inspection plus a follow up or two follow ups would be included in that fee. So I could make many numbers of options here, but I stuck to I believe four. Two that included an inspection in the permit fee, the required inspection, either for renewal or for obtaining the fee, the permit, the first permit, and two that did not include that inspection. And the biggest change you see from that is this line is zero in the two that includes the inspection because that inspection wouldn't that inspection would be covered by the fee for the permit. And so the number I was aiming for down here in any option was somewhere in the 475 range to 500 range based on Rob's estimate. The numbers I was aiming for in the base permit fee, when the inspection was required was something that would cover application processing and inspection, one inspection. And so what I did there was I used these as a guess. If you took a salary of an inspector and divided it by 2000 hours work per year and then timed that by an hour and a half which was Rob's basic guess on how much any one inspection would cost you get about $100. And if you times it by every hour you get about $50 or $55 or so. And so I took one inspection to need about $100 to $120 of fees. Any additional units would need about $50 to $60 in fees for total for each unit per se to cover the inspection costs for application costs. The 120 is based on the management assistant salary and benefits. The number of applications we issued this year, and the cost of legal, the estimated cost of legal and then what I did was divide the salary by the number of applications and the legal by the number of applications and add those two numbers together. And that's about what I got a very rough numbers but that's that gives you an idea of and so when you put the 120 with the 100 together you get at least 220 together, sort of for permit application and inspection. And so that was some sometimes where I started with these was that number and then since an inspection is included that one had additional there. On the other options, you'll see there's no additional because the inspection wasn't included but then you've got inspections with additional fees per unit of inspection up here that sort of does that cost to So that's sort of how I got these numbers. There, all the cells are linked so that you change a number it changes the numbers throughout, which makes it easy to play with Pam and then Jennifer. And just, this is really good thorough thoughtful work. Mani Joe, I have a way back, I have a question in your, I guess it's at the bottom of this, and I frankly didn't realize that they're all these options when I, when I read the first page of that handout, or that attachment I had a mental permit breakdown with the numbers that inspection department had given us I did not frankly realize that there were five more pages of options that you had put together. So I feel a little less than prepared to discuss each one in detail. But that said, at the very end, you're talking about applications process per year. I thought we were going to be well into the 5000 range, because it's not. There would be an annual processing of all permits, whether whether they were, you know, is that not true. So it is. But I, Rob can confirm this we've issued 1166 permits this year for a total of 5000 rental units. Is that correct Rob. That's right. Okay, so you're talking permits, not dwelling units. That's the way the bylaws written right now is that it's a permit per parcel still. Okay, and, and that we have that's the known. Those are the known. These are not the unknown ones. Yeah. Correct. We have a, we have a very small list of properties that we think may be subject to the program that we haven't confirmed yet. We've worked through several hundred properties that fell into that category by researching the assessors data. And our permit counts went from, you know, 900 to 1166. We're, you know, we're down to the last, I think it's 44 Don may know the exact number but it's somewhere around there. Okay, so, so we're still under, we're under roughly 1200 or approximately 1200. That's right. So that's, if it's still my turn, sorry. You, the, the chart that you gave us was really terrific with the distribution by side so we have, you know, the one rental unit for property per parcel up to the 207 plus so that was very, very helpful. We get a chance to get a download of the addresses that you're dealing with, so that we as a council got a better distribution sense of distribution across town. Once you've got your list, can we get a list of, can we get a copy of that. I'm not sure I understood a list of the breakdown between all of them are the ones that were the small number that we're working on. You know, we're so in this, in this array of, of call it 5000 rental units. What are the addresses where we find these across town. So the, so break down the 1166 by district or something like that. Yeah, we could do that by street would be helpful by street. Okay. Let me ask. Okay. I'm sure it's doable. Jennifer. The first I want to say is, I really appreciate your the four options. I mean, because my head's been spinning when we look at all the different towns and cities that each have a different structure. So, can we start to look at within these four. Then we'll fit in what we think the different fees should be. Yes, I would first off, I would like to know if people have a preference, given given some of this stuff that it takes to get to stuff. Did, did anyone say, Oh, I like, Well, I like better than three and four say including the inspection versus not including the inspection type thing. And then we can further refine stuff as we're looking at stuff or did you like options two and four better because of the non owner, the owner occupied exemption versus one and three like if we can get down to stuff like that. I like the owner occupied exemption, or some owner on occupied exemption. And then, then between. Between two and four. I wouldn't know I would defer to somebody else's, you know, wondering if we could have if they care to john and Rob also weigh in on this because I'd like to hear their opinion to that would be definitely appreciated. Yeah, thank you. I can just mention that. You know, regardless of the fee. You know, I would say that it's not accurate to say that owner occupied properties do not have issues. And, and I'd also know note that there's been strategies by investors to put properties into LLCs assign certificates to occupants and call it owner occupied. You know, there might be some consequence there to totally exempt certain properties from both fees and or the permitting process. I personally don't think anybody should be exempted from the permitting process. And I guess I was just thinking of fees being maybe it's discounted within, you know, under a certain number of units, like five or under. But so I guess what I'm part asking is when do we get to that level of detailed discussion. Well let's finish hearing from people. Yeah. So Jennifer likes options two and four better than one and three john and then Pam and then I'd like to make my comment. But I did want to add when you said discounted I thought you meant discounted fee I don't think they should be discounted from having to get a permit. So that might have been my misreading. So here's my question about this I guess if they're, if you're not going to charge them because it's an owner occupied part of its owner occupied. What pays for the inspection. Do the other properties in town pick pick that cost up or how, how do you manage the money on that. That's one one thought and another is, I've got several properties right now that I'm working on that are being represented as owner occupied and I'm chasing people for proof of that so I want to, you know I want to see your driver's license and your registration I want to see a copy of a utility bill and you know, these are properties that I don't believe owners live in, but they say they do. Thank you john. I'll come and then I'll go and then Pat and then Jennifer. Why doesn't Pat go first I have some thoughts on strategy. Pat. Well, I, my question is, I don't after what john and Rob said it sort of strengthens my beliefs that we should be charging fees to everyone. And, you know, in, in terms of fees that becomes the town's income and rent is an owner's income and they do make income by renting units so even if their owner occupied. I think that there should be fees and I also think that we've just heard two particular problems that may need to be addressed because it doesn't guarantee anything that a, that a property is owner occupied. And we're trying to make this equitable across the board. I'm going to make my comment one thing in doing this and I'll admit since I was doing this, I spent a lot of time with this spreadsheet. But the one thing I noticed in the difference between options one and two and options three and four is that it was a lot harder to get options three and four to raise the $475,000. I actually noticed that option three, three and four do not include an inspection within the permit fee and you'll notice that option three doesn't even reach that on the high end. Depending on how many follow up inspections there are, and it still has, you know, a raise in permit fee as a base fee for nearly every unit, not quite everyone. But when you had the required inspection and it would be a raise for every unit because it would basically be for some units, 350 a year every year, depending on whether they're what inspection schedule they are. And so, I used to be favoring having the permit fee not include the inspection and the inspection separately because it was a way to reward units that don't need an annual inspection, because they would only pay that inspection every three or four years or five years depending on that. But I think that actually makes it harder to plan on income every year from the inspections side, because the revenue is a lot less stable when you don't actually know how many renewal inspections you might be doing in any one year. I, in that sense, I began to favor options one and two the options that include the inspection in the fee every year. On that I'm not sure which of the two options I would favor and there's obviously a lot of play with the numbers that can be done. But but that that was something I began in playing with this favoring the options that include an inspection fee within the permit. And it might even be worth potentially including a follow up inspection I did not do that part of this, but given some of these numbers. You might be able to even include a follow up inspection, meaning if that regular inspection doesn't pass on the first turn, they don't have to pay for the second inspection either that comes back to make sure everything's been fixed. We might be able to do that if we include these inspections in the base permit fee to simplify the whole charging of stuff anyway, and then that's the question I have for Rob and John and all. Which system do you think would be easier to administer in terms of fee charging, because that's also a consideration is, is what's an easier way to administer the fees in terms of options that are presented here fees the inspection fee included in the permit or separate from it that it would get built separately. So you can think about that if you don't have an answer right away while I go to Pam and Jennifer. I think I'm actually a question to start out with for Rob in the numbers that were that you gave us the cost basis. I thought I read that there were that each inspector would only do 200 inspections per year yet. Currently, there were like an average of 740 I think I did the math for a year so I'm not sure why there would be so few inspections but per inspector. So it's just something maybe could look back at the numbers that you gave us and see if that's if I'm correct. I think I appreciate the idea of you know what actually earns the money here. But I'm actually have been leaning toward separating a rental fee from a an inspection fee. You could probably address the issue of income flow because the number of rental permits per year is not going to vary significantly. And therefore the number of inspections run each year if it's 25% of the whole or 30% of the whole could be calculated pretty pretty well. So my my feeling about separating a registration permit fee from inspections is that it could be a it could be a reasonable number or for every for everybody to have an emphasis on the single family duplex triplex. Owners and owner occupants as opposed to a property that has a lot a lot of units such as say puffed village where it could perhaps be the same base rate with an added formula for the number of units or the number of units on the parcel. So again separating a fee from inspection. As for the inspection fees. If it's a well managed unit, no complaints. We've talked about that happening, inspecting every three years. Long term tenancy tenants and tenancies again are three to five years for a turnover. The complaint houses. The problem houses the nuisance houses would get probably inspect with every year. So, so it's clear it would be very hard to build inspection fees into permit fees. And to separate out, you know, I'll say good behavior from bad behavior without having to pass on a lot of cost to a lot of people. I did the math a little differently. I came out roughly about the same target of approximately 50 to $55 an hour as cost for a staff person averaged down across over the year. And then my only other question was in terms of complaint inspections is a complaint inspection. And should it be treated differently than a standard inspection. I think, I think the information from the town came at, I'm trying to scroll through. There was health code, and then complaint. And if maybe Robert John could differentiate to me if there's a difference in actual cost between a health code. Inspection. I mean, a health inspection, a code inspection or a complaint inspection. Thanks. I can speak to that. I'll answer that now. So, when we go to one of these properties where we're enforcing multiple codes building codes zoning and health and when, when I come back and you know, keep the records on on what the complaints were, they, they get categorized that way it was a health complaint, this one had a health complaint to zoning complaints, and a building code complaint. And then we sort them that way, we keep them sorted that way and at the end of the year that's those are numbers that that Rob uses when he, you know, goes for with a budget proposal. So, there's no difference in, you know, looking at those things there's no difference in the inspection there's no difference in the enforcement. It's just which bucket does it end up in. Thank you. Rob, and then Jennifer. Just to back up a little bit because I think this needs a little bit more clarification on the inspection numbers that were provided in the memo. So there's complaint response inspections that I noted an average of 291 that's, that's the call that comes into john or gets directed to john that requires him to go out and conduct some sort of a response and start a start a record for a property. And include the hundreds of things that john might deal with throughout the year that are, you know, a text message to a property manager to say hey move that car off the grass, or, you know, bring your, your trash container back inside you know those those little quick easy enforcement actions do not get a record generated just because it takes too much time to do that. That you know just so that that's been the complaint response piece. In number two, the large number of inspections, the question was non rental related question inspections that's what the question was about so that's a, you know, a building permit being issued for a roof replacement or a kitchen remodel or a house being constructed or whatever might be going on the hundreds or thousands of inspections we do at the large five unit, or five story buildings downtown. So that's very different. That's a very different inspection, you know, some of those take a long time to inspect. We have inspections that can take a day, you know if we're at Amherst College looking at concrete at a big project, or there's a roof replacement that john might board inspector might get out of their car walk 50 feet and walk back into their car and and those those inspections those thousands of inspections that are noted there are, you know, a button on their iPad closes out the record, you know so it's really quick and easy and dealt with fast so I wanted to answer the question with our with our data but I don't think it's useful when trying to figure out how much time is needed for a housing inspection, where an inspector as john mentioned is is referring to several different codes and working their way through a property looking at a number of inspection pieces, including zoning, you know so it's not just a building inspection it's also on the grounds and making sure there's only compliance. So that's why I'm not suggesting 700 inspections per year for an inspector, and somewhere between 150 and 200, knowing that there's prep work for an inspection, the inspection itself that takes the hour hour and a half. And then there's follow up emails communication and all kinds of stuff that happens afterwards that goes on for weeks on the properties that you know are not a nice easy, you know clean inspection. Thank you. So the number of inspections was was the whole bucket not just the rental bucket that the number of inspections did not include the rental piece that was only non related to non rental related. That's not even the total inspections for the department that's non rental related inspections. Thank you, Jennifer, and then we're going to move on to minutes and public comment after this. Okay, well, how well this is what not why raise my hand but just how many inspectors would you need in the, you know, ideal world. Well, I mean for this program, you know, what I think we need just for this program is we need john's position who john's a lead inspector. So john can coordinate for other inspectors for their daily work tasks. So I think we need john's position and to build two more code enforcement officers that are out there. In addition to who you have or to total to an addition to have. That would make how many that would for the program it would be three so it'd be a lead inspector plus to code enforcement officers out there in the field and I want to make sure that this is clear that we're thinking the same thing. I'm not expecting this to be complained only anymore. So when we when we hired john and created this position. You know, it was very clear to me by the town manager that we are we are there for complaint only we're not putting john out there, patrolling looking for things to correct. And john, we have this conversation all the time in fact we did yesterday that, you know, when he's going from place to place he needs to look place to place and not all around him, because, because he truly just doesn't have the time to deal with what would come from that. And we're not happy about that we never have been but I am seeing this as the opportunity to move away from complaint only so that inspector that's doing 200 regular routine inspections a year and all the follow up and prep work that's needed for that is also dealing with other things when they see trash containers and when they see cars parked all over the place and, and couches out in the yard. I'm expecting inspectors, those two additional inspectors to have a presence out there in the town, not sitting in the office waiting for a complaint to come in. And I did just want to say with the owner off I completely agree with the past that we owner occupants need to take out a need to a permit. And I don't think they should, you know, to be there, there is a, I think even a growing issue of trying to determine who's truly an owner occupant. You know, we, we, as Rob knows, there's a famous incident with the owner who would appear at like planning board and give his address had at a long metal but said he was living in a house he was renting to nine students and it was not owner occupied. I was just maybe trying to get to the retired couple who's, you know, renting out an ADU or room in their house and maybe as paying a more nominal fee as an owner occupant but maybe we just say, there's a certain fee for five units and under and that would, you know, not be so burdensome for the person who's renting out a room or they, you know, converted, they've added on to the garage to be an ADU. That's all. Thank you. We're going to move on because we have a start time for a specific thing at 530 so we're going to try and get through the rest of our agenda now obviously we're not done these conversations. We're going to go to minutes. We have two sets of minutes to adopt December 15 2022 regular meeting minutes and December 20 2022 special meeting minutes. Are there any requested changes to either of those minutes. I'm not seeing any and so I'm going to make a motion to adopt the December 15 2022 meeting minutes and the December 20 2022 special meeting minutes as presented is there a second. Second. Thank you Jennifer for seconding. Is there any discussion. Seeing none. We're going to vote pat. Why. Mandy is an I Pam. Sorry. I tried to unmute. I Thank you. That is four zero with one absent. Those minutes are adopted at this time. We're going to move to general public comment. I just want to say for now you guys are welcome to stay for both general public comment and the next hour, the hour after this will be a discussion with our assessor about assessments on residential rental properties, particular rent. Rent residential properties in particular rent rentals, but other questions and you're welcome to say stay, but you don't have to depending on what you want to do. But thank you for your time for this first hour before we move to general public comment. We appreciate you taking the time to come to all of these meetings to discuss all of this with us. At this time, we're going to move to general public comment. So public comments on matters within the jurisdiction of the community resources committee will be accepted at this time. If you would like to make a public comment, please raise your hand. In the audience, if you would like to make a general public comment, please raise your hand at this time. And then I will determine and people will be able to make their comments for up to three minutes. If they would like to make general public comment. We might get 10 more minutes of discussing fees. Seeing no general public comment at this time we are closing public comment. And since we cannot start the next meeting until 530. There is one, there is one hand there we go. A late hand so Patrick Kamens, please unmute yourself and see where you live or whoever you represent and make your public comment. So, Patrick Kamens, Kamens real estate property management owner in town. Last meeting, I wasn't able to discuss the energy conservation piece of it because it wasn't provided. You said I have a couple seconds to discuss that in reviewing it now I feel more complex, confident. It's not part of the health and safety of the bylaw. And so I'm not sure that the energy conservation should be a part of it all, because it's not part of the charge of the health and safety of the rental stock in town. So that's the comment to last meetings that you afforded me to give a couple seconds to thank you for allowing me that. So the fees obviously I'm not excited about my industry being taxed almost a half a million dollars for additional fees, etc. I'm not sure what we as landlords gain from the half a million dollar fees. I was up, you know, nine years ago of course. And, you know, I understand. I'm not sure why this wouldn't be a tax that would be paid by the entire tax paying population of the town of Amherst. If the building department feels that every unit should be inspected. I would think that that would be a burden of the entire taxpayers, not just the population that you're picking on, for instance, you know, gas stations, you know, they have to be inspected restaurants, they have to be inspected. I'm not sure that additional taxes are placed on them. So I'm not sure why this is being a burden to just my industry, which I believe the industry is probably the largest tax paying group in the town of Amherst. There's a lot of people that are looking for affordable housing in the town of Amherst, and to tax my industry another half a million dollars is not a good step in the way of affordable housing in the town of Amherst. I appreciate all the efforts that you've made, and I appreciate the way we're going and I appreciate how you guys have thinned this down. And thank you for listening to my comments tonight. Thank you for your comments Patrick, we appreciate them. We just got one other hand so we're not a shepherd please unmute yourself and state your name where you live and make your comment. Hi, I'm Shepard from Justice Drive in Amherst. I totally agree with Patrick. It is a lot of taxation and every time I look at proposals, you know, or earlier on I was very hopeful and saying oh instead of a $250 you know in my unit that's, you know rented below market. I was, you know, excited to see that it would probably drop, you know back to $100 and maybe be inspected every three years included in that price and that's doesn't look like it's going to happen. I'm very frustrated. And also I have a question in terms of the long term. I have a long term tenants that, you know, in a good property might be inspected every five years and then with every turnover I don't understand if it's with every turnover because suppose that I'm unlucky enough to have somebody, you know, moving every year. I'm going to be paying extra every year just because you know that it seems like a penalty. I'm not going to avoid that. There's no avoiding it. And being a small landlord. It just seems unreasonable and unfair. I'm just hoping that, you know, things get better with these discussions and that's all. Thank you. Thank you for your comments, Renata. And with that public comment is closed at this time. I'm going to make our announcements. The next agenda announcements and preview and then we will move on to the opening the council and finance committee special meetings. There aren't any announcements per se. I had two items in our agenda is next agenda preview. Next, next agenda itself on the 26th. We'll be back to the engagement report and hopefully reviewing the draft nuisance property bylaw that I discussed. So we'll take a little bit of a break from the actual regulations by law and fees on this bylaw move to nuisance property and come back to this bylaw in February. At this point, that is the tentative. We just had another referral to this committee for a public hearing on some, some duplex and triplex proposals and zoning bylaw changes. We're working with the planning department to determine when those hearings are. It sounds like the planning boards hearings will be in February. Late February at the earliest, if not March, and we have until April 1 to open those hearings. It probably will be somewhere in March where we do that, but we might take some time in February to discuss that before we actually have a hearing. So I'll keep you updated on that. And then there is a tentative date of February 13 for our, what I would hope is our last public forum on the residential rental bylaw a last listening session I guess I would say on all of this packet and all that is the only date Monday in February that is available. I don't know whether it is an appropriate one and whether we'll be ready in time so I would like people's thoughts on that. As to whether we think that's a good time to do it. I think we can put the bylaw and regulations that we've reviewed out there for that and then maybe the nuisance property but I don't know whether fees will be ready in time. So thoughts on that and Pat, you have your hand up. Yeah, I just wanted to say because you brought up the 26 I'm having surgery in the 25th, and I do not know what state I will be in so it's very possible I'll be missing that meeting. Thank you for that. And we hope all goes well with that surgery. And just does everyone is okay with the February 13 meeting or 10. So I can turn it from tentative to the listening session. It would be a Monday night. It's the only Monday in February that's available that's not a holiday or a council meeting. So we will turn that from tentative to planned. And with that, we're going to break for about 30 seconds as we confirm that we've got everyone here for now it's 530 if we've got quorum so Bernie's here. Andy, do you have a quorum of finance committee present. I need to ask that whoever is controlling the meeting bring Alicia was just brought in. Okay, thank you. Yes, because, according to Athena, a quorum is a majority of the committee, not a majority of the voting members. So that we, we do have a quorum present. Would you like to call that meeting to order now then and do all of your stuff. Yes, I will call the meeting to order and I'm sure that you have provided prior notice that pursuant to chapter 20 of the exit 2021 is extended. The meeting was being held by promote means, and have given notice that it's being recorded. And so I'll just quickly make sure that my count is right and that people can be heard I know that there are a couple of people who could not attend. But Lynn. Present. Hegner is not here. Matt Holloway might be joining. He's going to try to be joining but he thought he'd be a few minutes late. I'll keep an eye out for him Bernie could be at present. Unfortunately, I have a hard stop at 630. We'll be done by then. Promise. Michelle Miller I don't think is here. I don't see her. Yep. Kathy Shane is here, Kathy. Yeah, I'm here. Thanks. And Alicia Walker. Here. Yes, so that constitutes five of eight members and therefore it is a quorum of the committee. And so the meeting is in order. One other thing that I just want to let you know real quickly. And then I'm turning it back to you of course Mandy because you're chairing today. And that is that Sean had asked me to send any questions that I had about what we're going to be talking about the advance. I did he forwarded to them to Kim. I was encouraging that they be presented the information be presented as a part of the presentation tonight. But if there is any reference to questions that I posed I wanted to disclose that in advance so that you'd know. So thank you Mandy and I'm going to move myself now. Thank you Andy Lynn, please call the council to order and check. I think there's only one counselor you need to check. I think that's correct. Given that we have a quorum of the council present I'm calling the council meeting to order at this time. And I would like to check on whether or not on a deadline got here can hear us. I can thank you everybody. Thanks. So thank you. And so for our minute taker. The counselors that are not present for the town council meeting are Michelle Miller. Let's see, Dorothy Pam. Shalini, Shalini, which Kelly already has. And is that it. Anika. Anika. Sorry, Anika Lopes. Nine and four yep that that's it okay. Also welcome. Sean Mangano, our finance director, Kim, you, our principal assessor, and Paul. Paul is here in the town manager. And Dave Zovec, who is the assistant town manager has been here the whole time. So with that, and Kim. Where did Kim go. I'm here. I'm going to turn this over to you. I've heard you have a short presentation for us before we go to questions. I do. Am I able to share my screen. Perfect. Okay. I think. Bear with me for a moment. There you go. Okay, wonderful. So thank you for having me tonight. I'm glad to be able to discuss this with you guys. So as you know, we will be discussing our evaluation methods. So the purpose of this presentation tonight is to review how properties are assessed for local property tax to understand the difference between residential and commercial properties. And to understand the difference between the market approach, the incoming approach, and I just briefly have to touch on the cost approach since that's one that we use. So we will start out with this slide, which many of you may recognize from our classification hearing. I will just briefly touch on personal property and industrial property. These are the conditions that are given to us by the Department of Revenue. So this is how we classify each type of parcel that we will be valuing. So I've highlighted the residential and the commercial property and I just want to go over those quickly. So commercial property by DOR standards includes property held for the purpose of conducting a business, such as stores, office buildings, hotels, and all vacant classified land as chapter land so chapter 61 a 61 B and chapter 61. So those are basically all farmland or land as recreational which is left at its natural state. Residential property includes all property containing one or more units used for human habitation. The class includes accessory land and buildings such as swimming pools tennis courts garages and sheds, etc. And single family homes are the largest part of the class, but this also does include large apartment buildings, two and three family homes as well as condos. So just this is really important because these, as I had mentioned, our definitions given to us by the Department of Revenue on to how we actually have to classify each of our properties. So moving on something that I thought was really important to talk about tonight was mass appraisal and what basically that means just because we live in Massachusetts it doesn't actually have anything to do with us mass appraisal is just a group as a whole. And basically, it is the standard procedure for how we collect data, how we appraise properties, and value, uniformly, and we just want to make sure that everything is equitable. And we use the same common data, the same methods. We do on each and every class of property and type of property. We do statistical testing. You know, just making sure that everything is equitable. So in short, basically that's what that explains there. How we actually to get into sort of the nitty gritty, how we determine how property is assessed is basically to find out what the full and fair cash value is. So how do we get there. We, we get to the full and fair cash value by knowing what a willing buyer and a willing seller will pay or sell a parcel for in the market. And this is something that we absolutely must know. To get there, we have to collect data and then analyze the data. And the goal of that is just to estimate the full and fair cash value so we're trying to figure out what is the, what is the, what is the sale price. What is the assessed value of each and every property. And so, again, that will include different methods. We look at different ways to value the properties which is what I will get into in the next couple of slides. We look at zoning we look at conditions of the economy we look at, you know, anything that could basically affect the value of that that property. So some of those approaches that we look at the three most common are the market, the income and the cost. So again, I will get into that into the next slide but something else that I think is really important to point out is that the assessors may not take into consideration who owns and occupies any parcel that that we're valuing the goal is to value the land and anything that sits on the land it does not matter to us who owns or occupies the property. So here we have our different methods of assessment so the most common and most simple approach is going to be our market approach. And so this is basically looking at the market seeing you know studying the sales that are happening. It just so happens, the most common sale is a single family to family three family and commercial and a, excuse me, a condo. So we look at those sales we look at comparables to each of in every one of those properties. We break it down to residential inside of the residential class we break it down to single family to family three family so on and so forth. And then even inside of that class we break it down to style of house so farmhouse Cape Victorian so on and so forth and we do the studies based on those. So what we do, as I had mentioned, in every town in Massachusetts, the generally speaking, there are many more sales of this type of property, rather than the larger buildings, such as apartment buildings, the commercial industrial and retail. So this market approach is much preferred for the higher volume of data. So onto the income approach which is a little bit more complex. The income approach is basically established by looking at people's income and expense information and I do have some examples to show you in some future slides so if this is a lot looking at these words, I will break this down a little bit more for you coming up. So the most common properties to be looked at with the income approach our apartment buildings offices retail buildings, and often the the industrial buildings as well. So the formula is taking the net operating income and dividing that by the capitalization rate to set the value. The net operating income that is the information that is provided on the income and expense form where the person tells us what they make per apartment, or as a whole on their apartment building. Their potential gross income is the next thing that we take into consideration. So we do a calculation to get to this point by taking away the agency potential vacancy we take away their expenses, and any sort of miscellaneous income. We look at as well so something that I put on here was the vending machines in the parking spots. This could be a number of different types of things there could be ATM fees, or excuse me not fees but ATM machines and buildings and things like that. So we take away the vacancy. And again those those expenses. So, then we take the net operating income divide that by the capitalization rate. And we figure out what their percentage is to get their value. So I know this is a lot and again I will show you some actual data on the next slide. So hopefully that will help you to understand I know this one is a little bit confusing. One thing to think about as well is when we get these income and expense forms from all of these people who own and occupier own resident excuse me commercial buildings and apartment buildings industrial buildings. We, we look at the whole we don't look at each an individual parcel. And when we, when we get the data we basically come up with an average to see, you know, are our values falling within that average for that type of property. But again, you know if there's something that's sticking out there in those properties we're going to take a look at that and we do look but but that information is not based individually on each and every piece of in of data that's given on that form. So briefly to touch on the cost approach. This is something that's pretty infrequently used in the assessing world. It's really best used on brand new properties when there isn't the sufficient market information on those. So typically specialized properties so battery storage for solar right now is something that assessors are using the cost approach on something that we had used it in the past was for the solar vehicles. I think many assessors had used it on buildings for marijuana dispensaries when they were brand new as well because there wasn't really a clear path as to how to value those properties. Were they commercial, you know, were they medical. So, often the cost approaches used. I'm not exactly sure the best way to value as well as not really having sufficient market data for that particular type of property. So again I hope that the next couple of slides will clear this up for you. Before you go to the next slide can I ask you to just add a couple more pieces can you just say quickly in Amherst what types of properties we use the income approach. And then can you talk about the capitalization rate a little bit more and what we typically use in Amherst and about what that is. Yep, yep. So typically we use the income approach for all commercial industrial properties as I had mentioned, but we also use it for apartment buildings of four or more. And then for that is just because there is not a sufficient number of sales that occur with all of those types of properties. So again, any apartments of four or more, any commercial industrial properties. So that's just not something we just don't have the sufficient data market wise to be able to use that and that's why we use the income approach on that. So three units, three units and less we use the market approach and four units or more we generally use the income approach right. Correct. Correct. Yep. So the cap rate that we generally use in in Amherst is about 9%. And again, that's the net operating income divided by the assessed value. And so we, you know, when doing these future calculations that I will show you in a moment, we generally try to keep it around the 9% like I had mentioned. But again, you know, when we do our reevaluation, we will look at these each and every year but but especially during the reevaluation to make sure that that cap rate, you know, is in line with everything and adjust that as as need be. So another way to think about the cap rate is sort of like a return on investment. So what's the, you know, what was the total cost of your investment and then annually what percentage return are you expecting to get back is another way to think about it. Yes, exactly. Okay, so moving on. This slide is just to show you that no matter how we value properties whether it be the income and expense whether it be the cost whether it be sales. We always have to look back to the median sales ratio. So we have to be within for every single class, we have to be within a 10% range of the median assessment to sales ratio. So basically what that means is if we find that our single family homes range within will just give an easy figure of $500,000. So our single family class has to be within 10% give or take, depending on the style of home, give or take depending on the condition of the property, a 10% range of that $500,000. So that's something really important to think about because if we start to value property differently, for example in this in the single family class parcels if we start valuing those income and expense methods on the properties that are rented. And then we also value those that are owner occupied based on the sales. They may not come out at that perfect 10%. If you have, you know, a neighborhood for example that's more than 10% or less than 10%, the state is going to come in and say, you know what's going on here why is this neighborhood being valued higher than the rest. Can you, you know what's your explanation, and likely, they will ask that we change the method to get them back in line with everyone else. So across the board we need to be within 10% of the median sales assessment ratio. So, sort of just to reiterate what I've just said the DOR does frown upon us using alternate methods within the same class of property just because they want us to accurately represent the fair market value and they feel as though valuing each parcel differently by a different method would not be an accurate representation. It's just it's really just best practice to keep everything valued the same within that same class. So here's a little bit of our data so hopefully this is the beginning of helping you to understand the income approach. The total number of residential parcels is 5,070 parcels. Now this includes single family homes to family homes three family homes, apartments of four or more, as well as vacant land and land without buildings on them. So I have this broken down for you to show you that there are 4,112 single family homes in the town of Amherst 349 two families 79 three families 100 apartment buildings and 438 pieces of property that are vacant and or have an outbuilding on them. And I had spoken with the building department and found out that it's approximately 700 single family homes that are registered in the town for rentals. As of this year. So, just a quick little graph to kind of give you a visual of what the breakdown looks like. And then, next year is going to give you some figures so this is going to help you to sort of figure out how things work. So, is it going to help us to value property, based on the income approach, not necessarily. And the reason is, is that you can see here. These particular two and three family homes would be valued at a lesser value and taxed at a lesser rate, giving us less revenue here. We don't have access to a whole lot of data for three to three family to family and single family homes because they're not required to provide this information based on state regulations. But I did just so happen to have these and I thought that it would be a great comparison here for you so just to break down a few we have the very top one, they're projected income after removing their expenses, taking the 5% vacancy of $29,070, which would in turn create their value of $323 based on the income and expense so taxes would be $6400. Whereas if we use the market approach and we look at sales. We have a much higher number at $449,900 excuse me 440,900. So that's giving us $888,800 in taxes. So as you can see that's quite a bit of a difference. I'm giving you total bedroom count and total number of livable square feet just as a comparison, because I can't tell you which properties these are. I just thought it would be a nice comparison to be able to at least see size wise similarity with these here so we'll just jump down to the first two family home again the projected income for this property would be $21,981. Using that that income approach, we have a value of $323,025 with the difference being the sales approach value of almost $500,000 so it's a pretty big difference on these particular ones. You know, would there be other parcels in the two and three family homes as well as a single family homes that maybe went the other way where their rents are higher sure absolutely that's a possibility. But these are the only ones that I actually had access to. They happen to turn in income and expense paperwork last year so these are actual figures that people had represented using our tax rate of $20 and 10 cents per thousand to get these figures so I'm sure there'll probably be some questions on here but I'm just going to keep going and I can always bring this slide back up if need be. Kim can I say one thing quickly. Sure. And one other thing just to keep in mind is, regardless of what method you use it's not going to change the overall tax levy it's not going to bring in more revenue to the town it's just going to change how that tax levy is maybe divvied up, but choosing one method over another doesn't increase or decrease the tax levy. Right. And we'll take questions when Kim finishes the presentation. Yes. And here I just wanted to display in this picture of basically what it looks like the difference between owner occupied and non owner occupied. So and I just want to make it clear that owner occupied parcels are someone's domicile so it's someone's permanent residence they live here all year round. And non owner occupied parcels are not someone's domicile, and they would live either in another town in Massachusetts another town or another building in immersed, or maybe they live in another state altogether. And then I also want to make it very clear that that 33% of non owner occupied parcels also includes those 400. And there will be eight parcels of vacant land as well, because obviously we can't, we can't tent on one of those and call that our domicile so. So just really important figure there to, to look at, you know, to see the difference between the owner occupied and non owner occupied. And that's it for today. Kim for the presentation. We are going to take questions now. And so I would ask the, the committee members, everyone who's a panelist, if they have questions to raise their hands and I'm going to try and go down in the direct order Kim you might want to stop sharing your screen. I can't figure out how. Sorry. It's somehow kicked me. I'll just pop this back up there. Sorry about that. There's a icon usually up at the right that says stop sharing. Thank you. Thank you. Okay, with that we're going to start with with me. Yes. I have just a really quick question and it's curiosity. So we, is a mixed use building where the lower floor is all commercial and the rest is residential. Is that considered residential versus or what. That is actually considered a mixed use building so that was great terminology there. So we would value the commercial, we're going to look at the income and expense on a mixed use building, because that there's going to be rentals in that building, whether that be on the commercial side, maybe it has multiple commercial businesses on the bottom, but it only has one single residence. Maybe that residence is owner occupied. So there would not be income and expense data on that part but there's still going to be income and expense data on the, on the commercial parts. And that could go vice versa as well. So if there were more residential units and it wasn't owner occupied, then it wouldn't change the category. It's still going to stay as mixed use it's still going to be looked at with the income and expense method because, even if there's more residential pieces to it than commercial. But just because there is the opportunity for, for commercial space and the rental space on that particular property it would be considered mixed use and again used with the income and expense. Thank you. And that's another one that there's probably not a lot of sales to do a sales approach because they don't turn over all that often. Yeah, absolutely. Pretty much anything that has commercial involved with it. You know storefronts offices, things like that will be considered with will be used the, the income and expense. Thank you, Kathy. It looks to me like Pam might be set, Pam might be second, but it's okay. I'm ready. Okay, so I'm just building on the first question Kim, if, if the ownership of the mixed use building is different on the first floor than on all the apartments up above. Are you, are there two separate tax bills then. Um, so it. That's a that's a difficult question because if there's a building that has separation so if it if it's one building all stuck together there's commercial on the bottom residential on the top, but there's different owners, it's generally going to be listed as condos. And in that case, if they're commercial condos then yes we'd absolutely be using the income and expense method. However, if the top floor is fully residential and it's just that way across the whole board. There's no, you know, each of them has their own individual ownership, then those would be valued using the sales method. I'll be more specific up in North, up in North Amherst, we have a very large apartment complex and beacon owns the top floor and Coles Jones owns the bottom floor. They're, they're separate and they're not condos. So would you do and then let me just follow it up with if, if the commercial space is vacant. So that would apply to one of the downtown buildings where they intend to have something but there's not. Do you value it on potential income, or do you take the fact that there is no income for that space so what do you do with, and that question goes for either of them that is space ready to be rented. Sure, so if there's vacancy in a parcel, whether it be commercial or whether it be residential, we would hope that the landlord would tell us that on the income and expense form just so that we're aware. It is something that we would consider, but also we're going to look for long term vacancy vacancy is not necessarily going to affect your assessment. If you're going to assess its long term, and if you're having trouble renting a property, then yeah we're going to consider that and we're going to see, you know what's going on. For example during COVID, there was a lot of vacancy, and that may have affected the commercial buildings because there was just nobody and people were working from home they didn't need the office space anymore. There may still some result of that so there may be in the future there may be an issue with long term vacancy in in commercial buildings as for residential buildings. I've never really seen an issue with long term vacancy. I looked at the same way if there's long term vacancy and for some reason these buildings are not being rented. You know, then we would, we would take that into consideration but generally speaking, there is some vacancy in every building, you know, which is why when we're doing the income approach we do take at least a 5% reduction with that. As for the building over at Kohl's I'm not. I'm not quite familiar with that building and so I'd like to do some research and be able to get back to you on that. It may not appear to be a condo and it, it may actually be a condo so I would like to get some more information on that one and get back to you if that's okay. That's fine. Um, can I just have one more, you know you've just building on the same this is the multiple unit one, a townhouse that has 10 separate units, or each of them, a separate single family, or is it. Is it, how does the townhouse work. The townhouse would work as for example if it has four units within it, it would be considered an apartment building, unless those units were separated out into condos. So if it, if it has three units then it would be considered a three family if it has, you know, eight units then it would be considered an apartment building. It may not look like an apartment building, but it would still be classified as one of those. If you classified as condo it means there's an owner for each of the units is that why you're distinguishing them. Yes. Okay, thank you. Although you know I mean an owner could own potentially multiple units, but there's the classification where there's a condo association. So it's intended to have separate owners. Thank you. You're welcome. Thanks. So actually back to that vacancy rate in using 5%. I'm thinking about Amherst as a as a college town with a lot of people looking for housing. I thought the vacancy rate was really much, much lower, more around, I don't know, half a percent or something like that. Perhaps we should consider using a different number, especially if it's dealing with the residential portion of a building. As opposed to the commercial. Another question is back to your, your cap rate that you use of 9%. So is that, is that simply what you see across town as an average for those buildings for which you use the income and expense method. Is that 9% our number or is it sort of an industry standard number. That number is unique to Amherst. Yes, that is something I actually had spoken with David about that number, just to verify that that was the average and that that's what he has been using in the past and and yes that number is unique to Amherst. David former assessor. Yes, sorry. We remember, we remember. It's been nice to be on a first name basis you can throw out a first name and everyone else. I thought it was Dave Zomac so I was like wow really broad variety of talents. Thank you. So how does, how, just because I don't understand, how does the cap rate get applied how does that 9% get applied into what Um, go ahead. No, can can you can answer that question. Okay. So the cap rate, I had briefly mentioned that cap rate is basically the net operating income, divided by the assessed value, and that helps us figure out our Lost my words there sorry about that. That helps us to figure out our. Oh my goodness. I'm sorry I've completely lost. The cap rate is the taxable value for the property. Yeah, so you divide the net operating income by the capitalization rate so if it was, let's say $25,000 and the cap rates 9% you divide that 25,000 by the 9% and that will produce what we would then, if we were using that method that would produce the taxable value for that property. Thank you. I thought I thought Kim said that it produces a percentage. And you apply that to. Okay, that's what. Yeah, the cap rate. Again, think of it like return on investment. You know so if you, if the property let's say cost $100,000 and then that operating income was $10,000 you'd have a cap rate of roughly 10%. And so it's a way of doing that you look at some examples and then you can apply that across sort of all properties because you can't necessarily calculate it for every single property. So they develop standard sort of a cross the board benchmark that they use and it can be, it's something that can be updated annually we have a consultant that we work with that we can monitor that cap rate to see if it's, you know, staying where staying around that 9% range. Thanks, Sean. Okay, so my question is with mixed use buildings. And I've heard that in a mixed use building, the residential side gets the residential tax rate and the mixed use side gets the mixed use gets the commercial tax rate. The, the commercial side so most of our mixed use in downtown say the first floor is commercial second and above is residential. The residential floors would get the residential side of the tax rate, even though we have a tax rate of one or whatever it is and the other side would get the commercial side and so that's where they're classified. Do they have different cap rates do they do you take you do you split when you're doing the assessed value of these do you assess the residential side separately with different methods than you do the commercial side of those buildings. Yes, we would look at the commercial side separately but we also do look at it as a whole as well. So it's sort of, it's sort of a rounded figure to be accurate for you know representing the commercial piece of it but it's also you know a piece of it is going to be the residential because if you value the parcel just as a whole. Then, you know, someone may say well what how much is the commercial piece valued at and you can't, you can't come up with that figure so. And you also don't want to overvalue that piece of the property so yes that is done separately. Thank you, Lynn. First of all thanks me Joe and him thanks for this lesson for all of us. My focus on two different issues, first of all is condos. So, suppose we have a condo association. Suppose that condo association has 100 units. Some people have lived in that association for years and others just sold. And how do you value each of the individual condos and because they do receive individual tax bills. Are we continually upgrading based on the most recent sales of those condos. Yes. Okay, and when you use the hundred apartment building number, those don't include condos right or do they. I'm sorry can you say that one more time when you back before you had like apartment buildings they were like in Amherst. Okay, does that include. No that's something completely separate so condos on my on my slides condos are considered a 102 with the land use code. So those are completely separate so those. I don't think I actually included those in my figuring. But if you were interested in how many condos we have I can certainly get you that figure. I'm just interested because there. There is a condo market in Amherst interestingly enough it doesn't necessarily appreciate at the same rate that single houses Joe. Totally separate subject. The university is building this new public private partnership to sets of whatever. So is that taxed. So that's something that we're working on we need to look at some of the agreements and ownership of that so at the moment I don't have the answer for that. But what I can tell you is when we are looking at condos valuation is based on the interior of each individual each and every individual condo. Anything that's on the outside the hallway, any decks or anything that's included is not considered for that individual unit unless it is written that way in their master deed. So, so each and every condo is updated whether or not along with any, any property in town actually is updated each year whether or not it has sold. It's not done in their home, whether it be condo or single family for 50 years, but their assessment is still going to increase or decrease depending on what's happening in the market. So let me just stick with condos then for a moment later on when we're more clear about how how we're going to deal with the new dorms. We'll come back to that. So we suppose you have a condo Association, it's got 100 units and it also has, you know, lovely balconies and pool and maybe a common room. How are they assessed and how do they pay taxes. So if there's common room as you had mentioned a pool things like that. They do not necessarily get an individual tax bill. They are put on to the main condo record card. However, those things, depending on how the master deed is written generally like, like I had mentioned those are common space. So those basically are an amenity that would be considered in the sale price of each an individual condo. So the value, although it's not a separate value from each, you know, unit. They have all, you know, included in each an individual unit. Okay. Thank you. I'll be curious down the road how we're going to deal with a public private partnership. Thanks. Jennifer. Yeah, thank you. So I had two questions first is just kind of cut and dry. Is a rental townhouse development considering an apartment. A rental townhouse? Well, I guess it would be. It would depend on how many units there are and how, you know, is it one single building with units in it? Or is it multiple buildings on one piece of property. So it's not built yet, but it's been permitted like the sunset fearing. Who thinks of it as a townhouse. So it's like, I think five buildings, but within them they have more than one unit. Yes. So that would be considered an apartment building. Okay. Yes. It's an apartment that looks like townhouses. Yes. Basically, although something may have only four units and look like a townhouse or, you know, it could have multiple. Just because the fact that it has more units than four. It would be considered for assessment purposes as an apartment. Kim is a, is a townhouse a type of parcel. Right. We, the townhouse has been brought up several times. I just want to clarify is it in the chart you showed your single family, two family, three family. There's no townhouse classification. No. So that's why you're asking how many units are in it because it's going to, that's going to determine what classification of falls under correct. That's correct. Yes. So that's why when you keep asking about townhouses that that's not a, it may help with the value and how it's being valued, but it's not a specific classification of property. Right. No, it's interesting because people in their minds distinguished between the two when they're so that's good to know. Excuse me. I mentioned that we're using a 5% vacancy rate. If in fact over time we see that Amherst has a lower vacancy rate. And that might increase the assessment of the property. And is that something we might look at would it be an increase that might be significant. I can't say yes or no, but absolutely something that we would be looking at and something that we should be looking at every year. These happen this, this particular chart I just used that because again looking at the town obviously we don't generally have a lot of vacancies is my assumption. So we just picked a low number as 5%. But I can hear what you're saying where, you know, maybe it is lower for Amherst. And that can be a study that's done, you know, in the future and yes, that does happen here in Amherst. So this was just sort of a to throw out some figures for you so the 5% is not necessarily the exact number that we would use when actually valuing for the state purposes for the end of the fiscal year this was just for purposes of this presentation. Thank you. Thank you, Pam. And again, I really appreciate your clarification of, of valuing rental properties. And, but I would love to see the not the 5% being included in that something much lower percentage back to mixed use buildings. If are you running the numbers in a way that does look at the very, I'm going to say profitable rental apartment rental units, compared to the commercial floor which we know going forward is, you know, not what maybe 30% of the ground floor. I don't want to be cynical, but if I had a big building that had a vacant and underperforming commercial space, but I had a very, very productive residential component. Are we separating those out so that we are valuing that building at full potential based on the residential component. So again, we would separate the two pieces so that the commercial section of the building will have a separate value and it may be a lower value than, for example, a building next door that has a full lineup on the on the bottom floor. And then on the top floor where it's or the top floors, where it's all residential if it's if there is a very low vacancy rate there. Again, that will have a separate value. So I would take that into consideration so that it would be valued appropriately based on the higher rents and the non vacancy. Does that answer your question. So, just so I'm sure so that that rate of return or the, the NOI. Is that is that vacant space helping, helping bring that all down. And I'm again I'm being, I'm being cynical. Yeah. Yes and the answer is yes and no. So yes it's bringing down the piece of the building that's commercial valued, but no it's not bringing down the piece of the building that's residential valued. Overall, is it bringing down a piece of that yes. And something that might help again, do you do the capitalization rate on each individual building, or do you do it across a group so that if one individual building, for example, was, you know, try one individual building parcel cannot necessarily affect the capitalization rate based on vacancy. Do the capitalization rate based on an average across the board so we do a study to figure out, you know, is there one particular building in general that has high vacancy. You know, do we do we take that one into consideration when figuring the capitalization rate or not. You know, so, so we do look at each individual property, and then we try to figure out. So would we be including that in all properties or is it just that particular one. And in the case of something like that, maybe we value it at its full and fair potential. But then we put some sort of a reduction of some sort on that one because it has higher vacancy in the commercial section of the building. So that it wouldn't affect all properties if they're not all being affected by vacancy as such. But to your point Pam, if they reduce the amount of income that the property generated by keeping it vacant, even if we kept the same capitalization rate would reduce the taxable value of the property. And again to that to if we see that there's high vacancy in a building if there's one particular building that has a vacancy rate. We will be doing some research as to why is it, you know, are they asking a lot for rent. Are they in a bad location, do they have a small space, you know what is causing that vacancy rate. If we can't figure it out just by I we will try to make contact with the owner of the building to find out what's going on there that they're not getting rentals in that building you know are they keeping it vacant for some reason is there. There's no issue with that unit that's, that's, you know, not visible to the eye, you know what's going on so we do do some some research. If we do see that's happening, because, you know, as you're mentioning, you know wouldn't be fair for anyone if one particular owner kept a place vacant, just to bring down values and and I don't know that anyone would do that in particularly but at the same time. You know we still have to be fair and equitable to everyone. Thank you, that would be a love on the street. Thank you. We have about 10 minutes left Kathy. Okay, I just in terms of the questions that Pam has been asking, I think, as I understand what your cap rate is. If you decided our vacancy rate was two, rather than 5% that cap rate would be 9% would be something low. I don't know how much lower, which means, which means the valuation would be higher if you think of dividing it by 8% or dividing by seven. So that's why this distinction is important, and you said you take, if there's one really big space that vacant. An anomaly you're taking it out is what you said when you're trying to figure out what the overall vacancy rate is. I mean this has been very helpful and trying to understand that on on this issue of townhouses. If the townhouse, if there are 10 of them, each of them is separately owned, that would then be considered condos, you would if there's a condo association made then yes we would consider those as condos and likely if there was 10 different owners, that would be the case yes I'm sorry I didn't mean to interrupt. That's okay and we don't in New York they have a lot of them but we don't have too many co-ops right where it's even a more complex, they get their own category is that what happens with a, if we had had them, they get their own category. A co-op. Yeah. So, there are 20 units in it, but the co-op association owns. Yes. And just legally wise condos are differently than different than co-op so it's a co-op. Do they have their own line in your. So if the condo associate or if the co-op association I understand what you mean they're the ones who sort of everybody that lives in them is sort of essentially a part ownership. So condos would go in as apartment complexes, because there is really technically one owner which is the, well, I mean, the owner of the association essentially there's one tax bill that's generated each individual unit doesn't get a tax bill. So it would be considered part of that unit, part of an apartment complex, although it is something completely different. So I don't need to press you on it because I think condo association, you do sell, you sell your share when you leave there's a market, it's in the market value world that's different than the whole building has to be sold or not. So I don't need to press you on it, but it is this distinction on, can you look at a market for it or not. And if you can't, then you do the other methods. Correct. It's been very clear. Thank you. Thank you, Andy. It's all been very good. Thank you, Kim. I just sort of confirm that those houses that have been single family homes, but are being rented to one or more tenants are still being assessed on the market approach. Is that correct. Basically, the reason being is that the, as I had mentioned before, the assessors assess the land and the buildings that are on the piece of land, we can't assess the ownership. And I guess the second is one that I've raised in my conversations and with Sean, but I think that it's time to determine, and that is if we since as Sean pointed out under proposition to the amount that we're taxing in the community doesn't change if you change the assessments, it only change the changes to the amount that each individual owner is paying for their share. And, you know, what kind of an increase would you need to be so for a more vigilant income approach in order to really make an effect of any significant amount to the single family residences. It would seem that it would not be likely to have a large effect, except for the very large buildings which you're already working on right now based on the chart that the examples that Kim's looked at if we were to value those properties in the income approach, it would actually increase the tax, the individual taxes paid by those that are not using the income approach, using the sales approach because they all actually result in less taxes being paid using the income approach so again, as Kim said there may be others we only looked at a handful of them there may be others where it goes the other way but as of right now, based on the numbers we're seeing there's nothing conclusive that would say using the income approach would would shift taxes towards rentals. Thank you. So I have one question and I don't know whether it might end up being the last one, which is the income approach you said the owners report the income. I'm curious what kind of checking on that is done and how is it reported is it in, you know, is it sort of reported as what they filed their taxes on, like, how is it reported because we've heard, you know that that sometimes on the residential there might be four bedrooms and say a residential in an apartment in or two bedrooms in an apartment, but they're collecting rent from three or four individuals on an individual basis, instead of a unit basis, but only two of those individuals would be on a lease or something and so how are you checking to make sure that the income numbers presented are essentially reasonable for that building that is saying this is the income we have to ensure that they're not under reporting that and therefore ending up with a lower assessed value than they should. So, there is a state form that goes out every year for income and expense for all properties that would need it. So just briefly commercial industrial apartments a four or more. So that is sent out in the beginning of the year and it is an honor system. Those people who fill those out give us a different variety of responses. Some people actually physically fill out the form. Some people give us their paperwork that they've submitted to their accounting firm. And sometimes we don't get those until later in the year so we generally those forms I feel like if they're being submitted to the accountant. That's what they're submitting for their taxes. But it is an honor system. You know, if we see something where we feel like this is a huge building and it's not making a lot of money, for example, we might look a little bit more into it, but we do have to honor that what they're providing for that information is correct. However, with that being said, if we are looking at our sales analysis and we're looking at our values and we're comparing, you know, we're, for example, we're looking at all large apartment building so anything for or more apartments, and we see that there's an outlier, whether it be way higher or way lower than the rest. We're going to pick that one out we're going to go back and look at their income and expense did we get it first of all. And then we're going to say, okay, you know what's going on here, try to analyze this property. If we need to we're going to try to touch base with the owner and or property management company to try to find out exactly why this property is higher or lower than the rest and what's going on at that property. So actually physically checking the actual numbers on their income and expense for me is not something that we do, but we still do some digging. If there's something that feels wrong and looks wrong and on paper it's sticking out because the door is going to do the exact same thing. So we try to just cut that off and do it first so that we don't have to wait on their analysis at the end of the year and hold up our tax rate. I don't see any other hands and it is the promised 630 that I said we had turned by. I want to thank Kim and Sean and Paul for coming to this I want to thank Andy for a random conversation that realized both finance and CRC wanted the same thing. So we were able to combine this to to use more staff time more wisely, but thank you all for coming. I think we're going to go. Lynn, do you want to do first or last? Should you be last? Yeah, I could dismiss the salt by the way. Town council is adjourned. Andy. Finance committees adjourned. We're adjourning the community resources committee at 630 thank you all and thank Kelly for taking the minutes for such a big meeting multiple meetings. Of course it was a, it was a interesting challenge.