you you you you you you you you you you you you you you you you you you you I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. I'm going to go to the next slide. Okay. Okay. I'll set it down. Okay. We're going to call to order. Our Nairi gets a town council work session. Today is Monday, March 4th, 2024. The time is 518. The purpose of this work session is discussing tax structure. And I'm going to give a little bit of background on this work session. So at the November 6, 2023, regular town council meeting, a motion to refer to the finance committee or review of the town's current tax structure and to analyze potential tiered alternatives and propose any potential recommendations to ensure a stable and predictable revenue model for the town was approved. This motion requested the Finance Director and Tax Assessor to collaborate with the Finance Committee in reviewing and comparing the current tax structure to various tiered models for residential and commercial property rates. The analysis was to identify various tiered options and include a comparison to the current homestead tax exemption, owner occupied incentives, or other alternatives as precedented in other municipalities. The Finance Committee was asked to specifically propose recommendations to continue existing tax structure or propose alternatives to the residential, commercial, and personal property tax rates that will ensure a reliable and fiscally sustainable revenue source. Key goals of this assessment was to include promoting affordability of owner-occupied housing, maintaining a competitive commercial rate structure, and ensuring revenues keep pace with forecasted expenditures. The finance committee's review is now complete and all resulting recommendations will be reviewed by the town council with the town manager, Finance Director, Tax Assessor, and Finance Committee at this work session. So again, this is a work session. This is just for the Finance Committee to discuss the report and recommendations. And there's no formal action being taken today. Again, Texas always seems to be a complicated thing. So that's what they're here for. And I would like to extend a big thank you to all those who worked on this. It was a lot of work. I want to thank the Finance Committee. I saw all the hours and the meetings and a lot of time spent on this. And as we know, many, I think all of the Finance Committee members, almost of them have full time jobs. And so it is commendable that they are giving their time back to the community with their talent. So I appreciate that. I want to extend a big thank you to our finance director today. And we also have our deputy tax assessor here, Erica Duckworth with us today, our town manager, town clerk's here, members of the town council. And I'd like to introduce Ron Kenonzaro, who's here, Thomas Mann, James Platner, and Rick McCory. So thank you for all for being here. Again, this is for us to help understand what the recommendations are. So we will turn it over at this time to Mr. Cattanzaro who will be who has a PowerPoint prepared and will go through it with everyone and for anyone on the public wishing. Again this is just exchange of information and there's going to be no formal action. Any any recommendations that may be taken by the council will be on any in the future if that is the plan and for members of the public to always be able to participate in that part. So again I'll turn it over for you. Thank you. Thank you very much. Council President, panel council, by any answer committee. Let's jump right in, because time is valuable. I understand that. OK, so the agenda is going to be as follows. We're just going to take a quick slide to let you guys know what we've done as a finance committee. Since we've been together for a while with the Finance Director, we're proud of some of our accomplishments. We'll give you the workshop purpose background, the options for tax structures comparing the homestead exemption, the two-tier model, and recommendations in a critical path forward. Okay? So just to refresh, the Finance Committee, well over a year ago, almost two, I think at this point, put into policy with the town, the investment policy. And we think we are only one of two towns in the state of Rhode Island with an investment policy, so we're quite proud of that. And we know that given the changes in the financial environment that it's really helped town revenues from yield standpoint, we did identify a very critical shortfall on the wastewater enterprise fund, such that the fund was about to go belly up, if I'm not a term. And then we worked to help figure out how to substantiate and revise the rates. We also then, from further, from that, figured that we needed some type of enterprise fund policy as well to help the folks that are managing those enterprise funds and so then we did put that forward as well. So we feel like we're adding value to hopefully to Christina and the town. Purpose of the workshop, as you had mentioned already, is that we took instruction from the town council to study some stack structures and with the trying to meet the three objectives that you clearly else stated already so I won't repeat. So what did we do from a background standpoint? We started with the existing home, home-stead exemption. We just did a little bit of quick history on it, tried to understand, you know, at that time, what was happening, why 10%. So we got ourselves a little bit deeper into the background of it. In doing that, we realized that just as a point of interest, that there's only 15 municipalities in Rhode Island with a home state exemption. And only seven of those are actually implemented. So it's just kind of an interesting point. So the current tax levy from the 2023 certified tax rolls and keep in mind that all the data that we have in the presentation does come from directly from the town. This is what it currently looks like, and you can see that residential class one is the lion's share of revenue that the town gets. The commercial and the real property, intangible property you can see are very small slices therefore, make affecting change really is difficult unless you're going to do it with the residential class one rates. So keeping up with this, this is what we've been able to determine from the data what the current profile is. The home exemption, home set exemption is currently about 3,044 properties that avail themselves of it. And then from there we had to calculate, we knew the total, and so then we had to go backwards into the seasonal because we had an approximation on the rental number of rental units. Note though that that's not the total number of rental units in the town. It's actually 2546, but that this is what represents a single taxable property address. Okay? And stop me at any time, anyone on the council if you have a question. What's that? Seasonal owners. So people who own but don't live reside year-round in the town of Narragansett. So after studying what the town situation is, we went to the state situation, looked up 44, 5, 11.8 to understand what were the requirements and regulations that the state imposed on us. So we added that to the, you know, what we needed to do before we could begin to look at different options and structures. So given that, we felt like we would review the following three potential tax structures. We could do nothing, status quo. We could examine in the state of the state, and then we could do something that we could do. And then we could tax structures. We could do nothing, status quo. We could examine increasing the existing homestead exemption to 20%. And we began to look at the new port model and apply it to Narragansett and what we name it as a two tier and it's two tier class one residential that's really what it's that's really what it comes from so we'll just call it two tier to make it easy to talk about going forward okay and the reason we did that is that we that new port has implemented it for better for over a year now, and they feel that it's starting to realize some of the goals that they had, which were similar to Niagara Gansets in that it was affordability and year-round residency. So it was an interesting place to start for us in terms of looking at different tax structures. Okay, so comparing our current 10% for us in terms of looking at different tax structures. Okay, so comparing our current 10% in the 20% homestead exemption. So on the graph down the left, you can see that the blue line is our current 10% homestead exemption and then the 20 on top of it. And you can see also from the table that we just took two data points to give you an idea that really the higher value properties get the bigger discounts if you just use the home stead with the home stead exemption. So you can see a $3 million valued property gets a significant tax savings versus a $300,000 property valuation. And to us, that seemed to be opposite of what we were trying to achieve. If we're trying to drive affordability in year-round residency, we really need to get the higher tax savings on the lower value properties because typically folks that are in that $3 million valuation aren't necessarily concerned about tax rates and wouldn't really impact the decision whether to move in the town or not. So that was really as far as we took this because really it showed up till now the 10% homestead exemption hasn't really shown any history of improving our housing affordability or year-round residency and 20% would seem to only exasperated in some senses. Okay. All right. So now onto the new port model 2T here. What you can see right off the bat, and I just want to point you out the scale here, we flipped so that you could see the same type of graph. So now the lower valuation properties are down here and then higher here. And so what you can see is by implementing the two tier model, we drive the highest tax savings to the lowest value properties in the town. And you can see in the table that, yes, we will. I'll do what I get to the table. Okay, but I just wanna get the net effect out there so you can understand right in terms of meeting their overall goals. So what you can see here that the highest percentage of tax savings is here and then it starts to go down where you reach a breaking point, a parity point I should say and I'll show you that in the later slide. But it achieves that. How we did that was that we took an average valuation of the Class 1 homestead residential properties and then we applied a 20% discount to that to create the $1,137. That savings you can see goes across all properties at all valuations and that's what gives you the progressive scale that allows you to get the bigger discounts to the lower value properties. Okay, so the takeaway here is higher value properties get a smaller percent discount and then at some point it's no discount, and in some cases as you get higher up into the valuations, if they were a homestead property, they would actually see a little bit of a tax increase. Okay? Whereas the lower value properties now get the higher discount, and the reason that we started to move in this direction was because we felt that this enhances your number one goal which housing affordability and year-round residency and in sense year-round residency because that band from 300 to say 600 to 700 you could pick the other point but the point being the lower end of the valuation ban is where we have the opportunity to get folks and families and people to move into the town year-round residues. And maybe keep people in their houses as well that are here already. And so it was in our mind the best way we could find to achieve the goal set to us by the town council. Did you create a chart that showed how many houses in our stock in the town? You know, we're in the 300 to 500,000 ranges opposed to the upper level. That would be the graph pie chart up on the right. Okay, so it's... So you can see the percentage. So for us, if you wanna pick up to 750, you can see that it would be upwards of what's 45, 27, right? So... the upwards of what's 4527, right? So 72% of the properties would fall under 750,000 valuation and that's where the bottom of the total properties and there against it. The homestead with the homestead exemption to that. Yeah, these two. And not everybody who has access to the home-stead exemption actually takes it, right? That's true. That's true. Some people find out about it. They don't know about it. Right. Yeah, yeah. But as of this data was taken from that snapshot in time in 2023, so it may have gone up as conversation as this goes out, people find out about the homestead exemption. Okay? Yep, thank you. You're welcome. While we're on this slide then, so here's where we're comparing the 10% homestead exemption with the two tier model that ultimately becomes our recommendation. And you can see that as you move up the valuation chart here on the left hand side, you can see that we kind of reach a parity point here. So it's at that point that in the calculations that we did that you, if you were a homestead availing yourself of a homestead exemption and you were in that 1.2, 1.3 million dollar evaluation property, you would not be getting any tax break with the two tier model. And then as you go up from there, you would actually, if you were getting the 10%, you wouldn't, and obviously your tax rate would go up. And yeah, you can look at the number of properties as we go up here. So the 1 million is the purple, the 1.25 is the blue, and then anything over 1.3 is here. So you're talking about 18% of the properties in better currently in the homestead. And then if you bring your eyes down to the bottom right, we tried to kind of give it a whole number for you. So the remember that there were 3,044 properties in the homestead right now. We estimate, and it's just an estimate, that about 2,887 of the properties or about 95% of the properties will see a lower tax rate and about 157 will likely see a higher tax rate from it that are in the current hom home state exemption right now. Quick question. Deputy Director Duckworth. With the evaluation coming out, do you see this being similar to what we are looking at now? You've had a quick peek at the numbers all. Don't mean to put it in the spot. No. Okay. Thank you. Okay. Any other questions? We'll keep moving. Okay. And then we did a quick comparison this way on the tax level as well just to give you some idea. One of the things that I will point out here is that the two tier gives it some additional benefits but I think actually it's on my next slide so I won't jump ahead but this is just to give you another comparison of you know the two tier versus the 10% homestead and you know from a number standpoint. And again, oops, sorry. Oh, wow, that really went all the way back. My apologies, I don't know what happened there. Again, these numbers and things like this is calculated on our side, Christine and her team will, you know, if you guys wanna move forward or need to get it tightened up a little more, Christine and her team can do, you know, the final stuff. This is not done from her and her team, just to be clear. Okay, so our recommendation, it would be to recommend you that you adopt the two-tier model for now, or get based on the following objectives. It most aligns with promoting affordability of owner occupied properties in the town. It incentivizes year round residency. It gives tax breaks for qualified year round rental properties. So one of the things I didn't mention is that in the homestead, if you're a rental property, you're a rental property. You can't get a discount. But the flexibility of the two-tier model would allow the town council to say of the 458 year-round rentals, and that's an estimate. You could put them in here. All of our calculations have been done, including them, because it meets the objective of incentivizing year-round residents. Right? It gives, it supports the current class one tax levy, so your instruction was make sure that we have a stable revenue base. And so the two-tier model would do that. And you can maintain a commercial rate. But let me also tell you that, if the town council chose and the economic development council came and said, hey, we could drive a really big business into town, the right kind of jobs, excellent revenue for the town. We got to do something on the commercial rate. This would allow the town council to do that type of thing because when you adjust the commercial rate and then you apply the formulas, you would just be raising the different amounts across the classes and you could drive economic development with the town this way more easily. Keep in mind that now against it has one of the, I think we're at number seven in the state with a competitive commercial rate so maybe we don't need to do that but we wanted to point out to you that again it would be another tool in the toolbox for the town council to drive economic development in the town. So we feel like the two tier options supports the town council's first two key objectives on the third objective. We feel like the two tier options supports the town council's first two key objectives. On the third objective, we feel like that's outside the purview of what we could do as a finance committee. We would just suggest that we're always careful how we spend money, right? That's all. So that's really it. I think from the rest of this is an appendix. It's in case you guys had questions on things. I could pop up immediately, but we are open to questions. Okay, at this time, thank you for that presentation. Great job. And again, great work as a committee and amazing work. I see a lot of work went into this, there's a lot of data points there, so appreciate that. Anyone from the council wishing to ask the first question? What is that even if you question? Okay, sure. Do you want to talk or how do you want them? Thank you very much. It was a very interesting presentation. I agree, I agree that way. I was a very interesting presentation. I agree. I agree that way. I was curious a couple. I didn't really have a chance to look at the revised version from today, but I do thank you for putting page numbers on there. I believe that was my suggestion because it drives me crazy with our page numbers. So I did want to know the old what I call page two. You mentioned the guest speaker who came. Can we know who that was? Yeah, it was Harry Skullfield. I think you actually had emails back and forth with him about what we can do before we actually sent that answer. Right, but I didn't tell him that. And the other thing, I just want to, one of the things that I am concerned about is this is, you know, municipal taxes and I'm not remembering having worked with you guys for a couple years that you had a lot of experience with municipal taxes in the past. So I just was, one of the things that I would probably want to make sure that we did, you know, as we go through this process is that we did have an actual expert, you know, kind of take a look and see what makes sense. And so am I wrong about that? I just wanna double check. So sure, so would you like to go over the expertise as a committee or how? I just need an answer to that question. Oh, I know there are some of it. Did we have an expert? Well, we have the time finance director as part of our committee. Well, she was with us all along the process. We did reach out also to the state through Christine and her team to get questions answered. We also reached out and spoke several times through some other intermediaries with the new pork folks that administered their model, I got it passed, and have been since implementing it. So we got real world. And that's been for how long, like that was like two years or something that they've done that a long time ago. There is, I think. Do you remember exactly how long? I don't know the exact date, but it's well over a year. Do you know? 18 months. Yeah. So not a whole lot of data points. Okay. One of the concerns that I had reading through this and, you know, trying to work my way, I'm not a tax expert either. Work my way through this was that I'm, you know, valuation is not the same thing as, you know, what you would sell your house for. So in Narragansett, you know, I've seen houses small, tiny, two bedroom houses go for over $600,000, which I assume would change their tax valuation at some point in time, right? So that's of concern to me because one of the things that you talk about is that you're promoting affordability of owner-occupied houses. And I think that's a really excellent objective and goal, but I think it's a little bit difficult to do that through tax activity as opposed to the cost of housing. A lot of, I mean, a $600,000 house, let's just say that's probably a likely low cost house in Narragansett. By and large, you have to have $120,000 just to get started on that. And that sometimes is beyond the range of people who would be moving in here, young families with children, etc. So it would be interesting to see somehow, you know, if we could come to some engagement of that issue as much as this one. In other words, I don't disagree that what you're saying is that, you know, this has value and the one that you have chosen to recommend makes, you know, it has some good recommendations. I think it's not a bad idea, but I do think that it would be very hard to make an assumption that we could attract a people who needed affordable housing in this town just based on tax adjustment. So I just think that's important to know. So do we know exactly what the nature of the new port's success was? I know you have a slide up there. So because the other piece of all of this is really about what impact does this have on the general fund. We can't have less, you know, like I mean like you, sorry. It meets the tax levy. It meets the tax level. Absolutely. Yeah, so it's revenue neutral, well, and we also have, you know, the fifth lowest tax rate in the state, which is an important point. But it's, so we know for sure that that's tax neutral? I didn't do a deep dive, but apparently at first glance it looks like it's tax neutral. I would make sure it's tax neutral. It would have to be tax neutral. I can't take the last tax. It would have to. Right. Well, that was the point that I made. And I think we've had some conversation about in budget times where we know for a fact that we're going to have to raise taxes pretty much every year in order to meet a whole host of our requirements for the town. And we're facing reality this year because we have, you know, we no longer have the support of the ARPA funds, et cetera. So I just want to, you know, I think there's a lot of parts to this. It's a very complicated. It's a more complicated process when you start looking at all those parts. And I just want to make sure that we consider all those before we make any kind of decision to change anything. I'd like to address your question. Sure, go ahead. On the first one about whether the tax structure is an appropriate place to address affordability, I would agree with you that it's not going to make housing more affordable, but the specific task was to look at the two structures that are currently allowable by state law. State law says you can do it this way or you can do it this way. And because affordability was one of the objectives, we felt like the two tier was the only way that addressed an affordability metric. So I think you're correct in thinking that that's not going to solve the problem of houses causing a lot, but it would certainly help. And this coupled with other tools would make sense for an overall policy. Your second question about whether or not this was effective at Newport. What was interesting about the Newport case is that they had a homestead exemption allowed on the books for a while that they did not implement. And I would expect that other communities that are authorized through the General Assembly to do it, they don't do it because they can't. Because if you give a credit of 10% or 15%, or 20%, it's all over the model, you have to pay for it somehow. And there are rules about how much you can increase another tax rate. So a lot of communities, they're hand-strung. They have the authority, but they don't have the ability because they would affect the commercial rate so dramatically. So what we've found is that with a two tier, it gives you more flexibility between the three different rates to implement different policies. So if the policy was directed at housing affordability, then you could apply this to a rate structure and then define a class of people who qualify that would help them. As Ron mentioned, if your goal was to make the commercial rate lower or even higher, then you could apply it and it would give you that flexibility whereas if you don't have that too tiered, you have less ability to do those things. So I would not get hung up on the actual rate because the actual rate is going to depend on what the new valuations are. But rather the flexibility it gives you to charge different rates and apply discounts in a way that helps the people who are subject to those rates. And so it's less about the rate being 777. It could be when you calculated it, is it being $9 or $10, but you can still have those multiple rates to do those things. And I get that. I understand that. I think one of the concerns I have is just this, you know, I'm really interested in creating affordable housing in this town. I don't think it's an easy thing to do. And I honestly don't think that changing tax rates will have very much impact on that. That's, I just don't, because of the value of housing in Narragansett, it's so unusually high even in this state. So that's really just where I was going with that. So, excuse me for a second, if I could. Sure. I would agree with you. There's a macro issue that the finance committee can't address with the town. We get that, but I think from a town council standpoint, you would want as many tools in your toolbox to be able to affect affordability as best you can. And so there is no silver bullet, as we all know, but maybe a combination of different ways, and this being one of those tools in the toolbox, would allow you to have some effect on it in the future. And that's how I look at this as well. This is part of an overall campaign that we would have. We'd have the short-term rental ordinance. We'd have the three unrelated, the three student, and then this tax plan altogether would hopefully allow us to bring workforce housing, very important for us, More year round housing. Very important for us. I think this is part of a piece of the puzzle that altogether can potentially have some really big impacts on town and I agree with Ella. Thank you so much for all the hard work on this. It was a lot of work. Thank you. Councillor Copeck, do you have any more questions or is that just looking at my sheet? Okay. I'll move on to Councillor Frandy if he has any and we'll come back to you. Councillor Frandy. Thank you, whoever. Ron, could you put the slide up that shows the make-up of the pie chart. That one there, right? With the, you know, you said the sweet spot is around like 1.1.2 after that. It has diminishing returns for property owner that has evaluation of that. What's not fact it in probably right now is that the current be evaluation that we're in at this point. And I know last time in 2020 we had, if I correct me, I think it was a 10% overall average for the town, but there were neighborhoods that spiked up and down due to the recent sales. And I'm worried that that's going to happen again. And so would that mean like the if everything went up in those particular neighborhoods would it be at a little higher than the 1.1? It'd be because evaluations would be higher. I know the rate would come down as far as where that sweet spot of what you know. So if everybody's properties is worth more now. Yeah. Which we we're assuming that and specific neighborhoods have spiked unbelievably, right? And I don't know what tools the Tax assessor has had for adjusting the spikes up or in different neighborhoods Typically, you know right by the ocean and the south end where there's a lot of rentals And I mean you know even the North end in Metatuxin and all those, maybe three and 400,000, probably six and seven now. How does that affect, will it work itself in the numbers with that average sweet spot will be at a higher rate? Because everybody's tax property values are higher. I don't know that I would call that a priority point the sweet spot. That's the zero intercept. No, I understand that. I mean, that's what I'm, I know it's more than I mean, I know it's more than I mean, I know it's more than I mean. If you think about this holistically, right, if all values in the town went up by 10%, right, then everything kind of just stays% higher, right? And so your points, all your model works, it doesn't break the model, right? It just changes the point, right? So let's say that when the valuations come in, they're dramatically higher. Say they went up 20%. Right. What's going to happen is that we still have to generate the levy. We're at 58 million, we got to raise $58 million. So if the valuations are higher than the tax rate just goes down, proportionately it could be the same. So I think that was kind of my point earlier about don't fixate on what the dollar amount is, but what's the delta between the two rates and the commercial rate, they would all change proportionate to the valuations. You're still gonna raise the same money. In that same vein, it's not easy to compare one community to another community, because if the valuations are really high in another community, like downtown Providence, then the tax rates are gonna be lower. It's really about how much money does the town need to bring in, and that's what you'd have to look at when you're comparing to other communities. The actual rate you see in a sheet is not indicative. The total of the valuations is what really drives what the rate is. Chris, I saw you had your hand in your button. Do you want to add something? No, I was just going to reiterate, you know, the 4% tax levy increases, the 4% tax levy increase. This doesn't, this all plays into the tax rate, not the tax levy. The tax levy is the tax levy. I want 60 million just saying for him round about number. 60 million, I'm still going to get 60 million or you're still going to get 60 million. The town manager is going to get 60 million. It's just how you get 60 million or you're still going to get 60 million. The town manager's going to get 60 million. It's just how you get there. That's what changes. Thanks. Just one more ever. And I'm not sure if you can answer, but just would be for the deputy tax assessor. And that spiking as I spoke about, is there any method of, you know, what method of reevaluating does that? How much of do they take the spiking of a property next to yours or within a neighborhood? Is it like one street, a neighborhood? You know, and I've always wondered how that factors into these housing, especially when they're spiking all over the place. So is there any adjustment? I don't know. Sometimes they looked at adjusting the spiking and evening them all over the place. So is there any adjustment? I don't know, sometimes we looked at adjusting the spiking and evening them out throughout the town. It's a little difficult because if you have one house that sells for so much, that's what the market value is. But what does that have an effect on the rate of that evaluation at the next level of the time of the evaluation? So people's heads are there classified evaluation at the next level of the time of the evaluation. So the neighborhoods are, they're classified right now with this revaluation, it's the statistical revaluation. Right. So the reval company is mainly looking at sales over the past three years. So with that being said, there is going to be a significant increase. And it is by neighborhood. So it goes by factors, you know, are you in a busy area that's more commercialized? That's going to play a neighborhood in that. The Rebell Company does that. Right. That's us. Yeah. But do they have any parameters of the town on options of how to apply all of that spiking? No, we don't take options or they deliver the numbers and the reports. And then we vet those but we don't change those we don't change for spikes or leveling out or anything to that nature. Okay, thank you, that answer. And thank you very much for the committee. I think it's certainly a viable option here to talk about you know, affordability and adjusting the tax structure a little bit along with other tools that maybe the council can use to try to affect our goal of keeping either keeping people in their homes or getting new families to purchase in their homes. So thank you for all the good work that you've done. Councillor Frandy is the liaison. He's the council representative on the finance committee. So thank you for your time too as well. Councillor Lawn. Dev was the former as well. So LaWan. Councillor LaWan. And Deb was the former as well. So thank you Deb for being on that finance committee last. Councillor LaWan. I just had one question. It was mentioned in the slides that we did not review a little bit about the snowbirds. Can you talk to us a little bit more about how you decided that that would probably not be a group that we want to include. You know, we had a guest speaker, Mr. Skollfield, that came in. We were aware that he had done work on the two-tier model. And when he presented to the Finance Committee, at that time, he actually suggested that we consider applying the discount of the tier one to the snowbirds and so we looked at that and when we modeled it and looked there were two issues. Number one the number of snowbirds really kind of blow up the model and it doesn't give you the ability to create the lower tier. So it just didn't work from a financial sense. And then secondly, of the snowbirds, some of those snowbirds have chosen to establish residency in other areas where they're getting other exemptions and paying less taxes and that's a personal decision. And so we didn't feel the affordability goal of this, really correlated to that. Why give a benefit to someone who's already getting a benefit in another state. And we actually learned from talking with our colleagues and the staff here in interactions with Newport about Florida having a lot more robust capabilities to look at fraud and people claiming exemptions in two states illegally. And it's actually a thing. And in Florida, because they have so many of them, even the municipalities have much more capability to investigate those things. And so it turns out that we get phone calls from, you know, in there against it, you know, from investigators in other states, you know, checking this very thing. So, you know, we recognize that there are people who own a second home and some who live in the state and some who live out of state. And we looked and tried to see if we could include that and provide that lower rate as an incentive not to do, say, short-term rentals or to look at ways to do neighborhoods more stable with more of the year-round population, but ultimately, just the economics of it didn't work. And when you couple that with many of those already get exemptions, we felt it was appropriate to put those in the second tier. Thank you. Can I just have one question just as a follow-up on that? If there was any way to have them, you know, I obviously not the tier lowest tier because they're taking your homestead maybe in another state. But some sort of a minimal tax credit possible. I mean, you'd have to figure out exactly what it would be. Almost like we have an exemption for an elderly or whatever it is or, you know, Rhode Island based on a occupied second home tax credit for a minimal amount. You'd have to kind of maybe figure out what that would cost. And then still be a residential discount no matter what how you look at it any kind of discount is a discount doesn't have to be called a homestead or anything it would still be a discounted rate as a resident. What about they still wouldn't be able to, if they're in another state and they get home, homestead there, they wouldn't be able to get it here. Yeah, no, I realize that you put, you put parameters like a elderly, it's 125 dollars tax exemption, right? It doesn't, it does create another rate, but not, you know, you're completing the parameters. So I'm talking about a attacks that way rather than just a possibility of a minimal amount to try to maybe back somebody's people and maybe wrote island based, owner occupied second homes at on getting a homestead anywhere else or any kind of deductions. I realize it's difficult to work that in, but, you know, their taxes are going to go up too. That's the only issue. And then I get it. It's not a home stutter. I understand the difficulties, but I was looking at the other ways. I was looking at the other skills to figure out if there were any other exemptions that the town could initiate. That would be something for a whole nother time. I don't know any of the rules around that. I don't know that anybody on the Finance Committee kind of research that. So it's a good thought, Steve, maybe. It's for some other work at another time. I see it. Mr. Vanger Mirsch is also another, he's another member of the Finance Committee. So he is here with us now. And he would like to, I believe, comment on that. Yeah, we spent, excuse me, spent some time talking about the effect on the educational system of declining enrollment and as a person involved with education for many years, this may be a real factor because as the class size gets smaller, the interaction between students becomes somewhat less. So this is something that would be a hope that younger families, which children could increase the, or stop the decrease of the enrollment in education, but the number of students, if they really get too small in a class, this really becomes a negative factor. Thank you. Any other questions for the council? I would one more. Sure. Let's go back. I drive her crazy. I just wanted to say that I agree with creating an impetus for year-round rentals, because I think it's a really necessary thing. And I think it actually could be a way around, you know, home ownership initially for folks too. I just, I think it would be interesting to ensure that this is an incentive to either retain the landlords that we have who already have year-round rentals. I'm not sure that it's something that would be an incentive for someone to move from seasonal rentals to year round. And that's sort of something else as far as verbal housing is concerned that I have on my mind all the time is that if there was a way to do that, I'm not sure this would be a big enough incentive to turn people into doing this. And I know that wasn't your scope either, but I just wanted to make that point that I would love to find another way to make that incentive, incentive enough so that some people would switch their rental properties to year round. So I don't know what the answer to that is at the moment, but I just wanted to say it. So thank you. So again, I don't think there's any one answer. I think you have to look at this as a combination of activities that the town council can take to try to do that. And maybe some folks that are tired of having their house beat up and maybe this is just enough then to say, you know what? I'll rent it year round. You never know. I do have any other questions from the council. No, I was just going to say one comment. I did not vote for the homestead years ago when this came because it did not include the year-round rentals. So that component is vitally important. I was just speaking to a business owner the other day and they said that they just don't have their workforce. If you have to find any housing in their aganse, so I do believe that if you're looking at a young workforce, that household of three young adults will be able to pay a landlord, probably the same amount as college kids. And they won't have to worry about the house being destroyed. And they'll be part of our community, and that's what we need for trying to attract. So good work. Thank you. So I do have a question for our finance director. So again, this is just for the public, we're just discussing this, we're reviewing the report with the finance committee of the task that we gave them. And they came back with a really robust report with a lot of great information with three different things we can do. We do nothing, increase home state to 20% or do a two tier. My question is to our finance director, if for example, and this is just an example, I'm not saying what, if we did convert to a two tier model, what is that entail from a town, a little standpoint from the finance department and tax and all that, like what would that look like? It's basically I'm just trying to get a picture of resources, of workload. Right. If you could just kind of- Right. I would definitely require additional staff. If especially if we went with a year-round rental, we would have to have staff audit, lease agreements, and to keep on top of that all the time. And to have all the, you know, we have homestead now, but that goes away, so then we're gonna have all these applications come in. For residents, I know Newport hired two, two additional staff for theirs. We would need at least one. I don't know what the time line is. You're looking at I'm not sure on all the details. Chris got to go in around the two tier. Yes. Could I just interject as far as the staffing? Mr. Tierney, I believe you have included in the plan. Staffing for for implementation of the short term and the other rentals. Would this fall under that bucket as well? It has nothing. It premature to say. mentioned of the short term and the other rentals would this fall under that bucket as well? It has nothing. I can't hear too well, but yeah. Dan, if you raise a volume, thank you. Although it's not finalized yet, we did put additional staffing on the office of the building officials office and anticipation of the three student, three unrelated short term rental and any other type of ordinance that would fall into that. We would need that. It hasn't been the operating budget hasn't been given to the town council yet. You'll receive it on March 15th of all the staff and additions but yes there is additional staff I recommend doing that. Thank you. Not for the tax assessor's office. Correct. Thank you. Not yet. Okay. So, yeah. So, okay. Yeah. So that was just my question because I know anytime there's a change such as this, I mean this is a huge burden on, you know, just administrative staff and just getting things done. And my other question, I mean you can follow up with any other information you have about that, is what is the process from a legal standpoint for municipality to have to to be able to change their tax structure Does this require going to the general assembly? Is this something that we can do at a municipal level? That depends on the timeline and what exactly we're going for for the two tiered if that's what you're looking at If we are going to for the two tiered if that's what you're looking at. If we are going to do it before June 30th, I'd have to check with the solicitor on the equitability, I guess is the word. I'm the standard deduction, the standard discount for people that are in a certain range and not others. So some get it, some don't. So I don't know about the legality of that. I don't know if that would require legislative approval or not. I know we can go to two tier. I don't know about the standard deduction piece. That would require more information and that was municipal finance said to defer that to the solicitor. So I did get that question answered. Again, if your timeline is before June 30th, it probably wouldn't happen or if it did, the budget wouldn't happen. Right. Yeah, I'm aware that it's going to take a lot. Yeah, no, no, no. These are just theoretical kind of questions too, so that the council can understand the implications of making any changes. Because obviously it's like a domino effect. Right, right. Because what happened when they changed the ordinance in the past time with the, well, I don't know exactly what year, but they did not put in there that they follow 44-511.8 and that creates a problem. So since we don't say that we follow that, what is that? That's the general law. I just say to Rhode Island general law on taxes. I can't let you. Yes, sorry about that. So we don't follow that directly. It doesn't say it in our ordinance. And we have specific ordinance for our tax rates and also for the homestead. So I'd have to just double check that. We can do that without going to legislator. If we do it this year, if we do it next year, we have to go to legislator out of why. Mr. Tierney, I believe you want to just to follow up on what Christine said. All of it would require any change in the structure would require several ordinances depending upon what the council chose to do, chose to adopt any change in the, especially the one for sure any change in the homestead exemption would require legislative approval. Right now it's up to 10% from 2016. I think it was, 2016 when it was put in. That definitely would require legislative approval. And depending upon what the council chooses to deal with the recommendations, it would vary, but the solicit would have to draft the ordinances for these items. Yeah so that was the point I was trying to make there's a lot of coordination and collaboration that would be involved. A lot of moving parts and yes and there also is a bill that was introduced that would if passed would allow for up to 20% a homestead exemption. So I just wanted to make that point. Yeah, and that's still required a legislative move on us because of says 10. Correct. There's two other ones going through as well. Putting a cap on the women evaluations, three year to three year statistical, that you could only go up 20% in your values and then it has something to do with the effective rate. So there's a few that are going around. That could come into play. Right. A lot of moving parts. Okay, so any other feedback from the finance director or comments? I just want to clarify that the tax assessor and the finance director were staff liaison and we weren't really involved in a lot of the subcommittee work that they did. I don't want to be unfair but we were staff liaison's provided data and input and conversation and discussion but did not do the PowerPoint or the material presented just so you know everybody knows. We haven't had chance to look at it. Thank you. Any other last council comments? I was trying to end this at 615 but I would just do want to ask for any comments from the finance committee if anyone else would like to make any comments. I just wanted to clear up something that Christine said that might be misconstrued about the equality and the standard deduction that we're talking about in the two tier plan. Everyone gets the deduction. There's not some people, some people get it and some people don't. It's across the board. The effect, the effect of rate or discount that people would get would be different depending on the value of their home. But that standard deduction that we've proposed within the two tier goes across the board for every homeowner that would fit into the tier. So there's no exclusions for anyone. Everyone gets the same deduction. It's just a question of how gets calculated when the value is, you know, when it's compared to the value of the house. Thank you. I do need clarification on that. Because the last I heard it was capping out at the properties over 1.125 million. No, that's the point at where the discount changes. But they still would receive the discount. But they still get it. I was not clear everyone was talking. Thank you. Thank you. Thank you. where the discount changes. But they still would receive the discount. But they still get it. Yeah, absolutely. I was not clear everyone was talking. Everyone gets a discount. Thank you. Thank you, James. You're welcome. Anyone else for the Finance Committee? I do think we should talk to the people that speak if they want to. Okay, I do. If anyone wishes to speak, we do have a council meeting that we're, I need to break down for. So I'm going to limit it to just a couple speakers. Mr. Lynch. Yes, so this is to me in my simple, minded way of thinking about this. This is the same body of people, people homesteaders, people who live here year round. And everyone gets a discount now. But the thing that's somewhat confusing is, are we talking about percentages or are we talking about dollar signs? So the most important thing is dollar signs, right? We all write our checks with dollar signs or those of us who still use checks, not percentages. So this is a C-soil. So presently, if you're on the C-soaw and you're the $300,000 property owner, you're down here where your butt is touching the ground. And the two tier model shifts the seesaw so that now the $300,000 properties up on top and the $3 million is on the bottom in terms of the percentage value that you've not gained. So I think it's an interesting approach about affordability. And affordability, I think it's such an incredibly difficult thing in the town of Narragansett to come up with programs that will attract new home owners in. But I also think about affordability as keeping year round residents in their homes. If you look at tax records from, well, even if you look at the comprehensive plan, those three categories up there. Seasonal, homestead, and landlords. There are more landlord properties now in town than they were when this comprehensive plan was written. There are more seasonal properties and there are fewer year round properties. Fewer homestead properties. So while I agree with Deb, that it's will that $1,000 or $1,100 draw the new buyer into town. That in and of itself may not. But it will certainly go a long way toward keeping year-round residents in their homes, especially when we go to budget sessions and hear about the pressure on the town to increase taxes 3 and 4% for a number of years to come. So I think that's the true power of this affordability related to not having fewer and fewer homes that people live in year round. Mr. Riley. So there's three goals on here. First, we ask a question. How did this even come to the town council when they originally said they wanted to study this? No, this was a task that the town council voted on and we sent this as a task. It was a recommendation from the town council. It was an agenda item. What do you mean where did I get it? It means to me that your special guest speaker and this fellow right here are both from the Narrow Gatsick pure residents. So I will clarify this because we've been getting a lot of emails, like in the past when Newport instituted their two-tier model. And everybody started seeing a decrease like all the year-round residents. We were reporting to somebody before, it was less than two years. No, they do have the results. People started posting what their tax bills are. So there was a lot of emails that I received saying, why aren't we looking into, afford it like lowering our taxes for the year round rentals. So I looked into it as an agenda item. And I, we have a finance committee. So there was an agenda item. It wasn't just me that voted on it. We voted to task the finance committee. So there was an agenda item. It wasn't just me that voted on it. We voted to task the finance committee because they they have an of wealth of expertise, I believe, with their backgrounds. So you did this alone based on about your email. Do you got it? I based it as an option to look at affordability and increasing year-round rent. So the goal of this council, every one of ours, has been talking about housing affordability, coming up how to find year-round rentals. So that's where that came from. So anytime there's an opportunity to address those two issues, of course we're gonna move forward and ask to examine. So this- About affordability. Here, number one goal here. You're not making it more affordable for any family to come into this town. In fact, you're taking the lowest priced homes and you're giving them a benefit. So now that house is more valuable, how does that help a new family come into the town? It doesn't. And if your goal is, as Richard says, to get more kids in the schools, you need families. And they're probably on that lower end. But this doesn't do this. What you've actually proposed is a progressive tax, a progressive property tax, where the highest paying property tax payers are sending their money. It's a redistribution of wealth to the lowest homes. Why are we doing that? What is the goal here? You say the number one goal is affordability, but you've made it less affordable. The second thing is maintaining a competitive commercial rate structure. We had a discussion here. I watched your discussion on how the commercial tax was going to relate to various movements within the other tax rates. It didn't tell me about anything about maintaining competitive commercial tax. I'm actually an owner of a business and a full-round, full-year resident. I don't see this as doing anything other than taking money from the wealthy people and giving it to the less wealthy. Absolutely. Yeah, just to interrupt. So just to the did state that it gives the council a tool or an option to lower tax rates for businesses if we want to look for economic development. So they weren't tasked with telling us to lower the commercial rate. That's one of the things that we could use. That option. Europe max level. Above where. Okay. So again, this the purpose of this workshop work session actually was for the finance committee to discuss their report and the recommendations with the council. And this is this is a work session is different than a public hearing or if it's on the agenda. Of course, anytime we have something on the agenda on a regular meeting, the public is always welcome to comment on it. So this is just the opportunity for us to take this, it is a lot to digest. It's a big report. We're trying to figure it out. That's why the council members can ask questions. And this is not, we're not taking this to prime time. We're not making any decisions on this. This is the same thing like when we have the work session last week. We are. I am. All the time. But you're not. How is this not being transparent by having this report in a public manner? Everyone at home can watch this. Everybody can look at this tape again and review it. But thank you for your comments and thank you for speaking. Thank you for letting us be more transparent. Yeah, you're welcome. Thank you. So, for the sake of time, we do have our meeting, a regular meeting. So we will be ending this, we're going to be adjourning this work session again. I would like to thank the members of the Finance Committee of the town staff. Everyone that contributed, there was a lot of information as we saw here and there's a lot of steps that would need to go into making any changes. So this isn't the council stating that they're going to make any of these changes. It's just reviewing the three different options that we have, which we requested the finance committee to come up with. So this was a direct agenda item going to the finance committee. They finished their task, which we're very appreciative because it took a lot of hours to do this. This was an excellent presentation, excellent data, and again, it took a lot of effort from a lot of individuals. So thank you.