2017-10-06 / Community News

Town begins cutting tax abatement checks

By Michael Kelley Staff Writer

Although the matter of a group of residents’ tax appeals from a period between 2012 and 2015 is still working its way through the court system, the town council Sept. 20 directed the town manager to begin processing payments through the undesignated fund balance account.

“This action would have us pay out these abatements as directed by your local board of assessment review. We will certainly continue through the legal process. There may be some further reconciliation depending on the decision, but at this point we will at least be able to gain control and stop the interest from accruing,” Town Manager Tom Hall said. The interest accrues at $75 a day or $2,200 a month.

Hall said the action by the council gives him the authority to use fund balance funding for the payment, which per the Board of Assessment Review decision would be $471,000, but since there is some funding in an overlay in the fiscal 2018 budget for tax abatements, the use of fund balance may be lessened as a result.

“Through all sorts of appeals through the legal system, this case was remanded back to the local board of assessment review to come up with an abatement amount and that decision is now under appeal. Essentially they are saying what the board ruled is not enough,” Hall told the Leader last week.

The Board of Assessment Review decided on May 10 to award each individual eight percent of his or her land value, plus interest. This comes out to be $471,000, but what the town ends up paying as part of the tax appeal settlement could be higher.

“Suffice it to say, they are seeking significant more in abatements than was granted through the board process,” Hall said last week.

Susan Hamill, a resident of Bay Street, told councilors at the Sept. 20 meeting, she would like the town to disclose “a range of possibilities” as to what the number might be, especially as the town and residents start preparing for next year’s budget and the public safety building bond question on the November ballot.

“I know how expensive these things can get. It’s been going on for a long time,” she said.

Hall said as of mid-September, the town has spent $360,000 in legal fees, but that number doesn’t include money paid to Durward Parkinson, legal counsel for the Board of Assessment Review.

“When all is said and done and we can put this behind us, let’s look back at this and see what we can learn as a town, as a town council and staff, everybody involved. If something like this came up in the future, it would be great to have those lessons fresh in mind,” Hamill told councilors.

Councilor Chris Caiazzo would like such a discussion, but is it too premature at this point.

“Once it is settled and finally completed to the satisfaction of both parties, I think it would be very good to debrief and have a discussion about the parameters around it,” he said at the meeting.

Hayes said “taking this step now shuts off that interest clock, which is a prudent thing for us to do at this point in time.”

Council Chairman Shawn Babine agreed.

“I think this is fiscally responsible but somewhat inconvenient given the financial circumstance we are looking at across the town. But it is absolutely necessary,” he said.

The tax abatement appeals stem from a property tax revaluation former town assessor Paul Lesperance did in 2012. After years of appeals through the legal system, the Maine Supreme Judicial Court found in August 2016 that the Scarborough’s practice of combining abutting parcels under common ownership for assessing purposes was illegal.

The court noted the practice violated two Maine laws: “the statutory requirement that each parcel of real estate much be assessed separately” and “the constitutional requirement that real estate be assessed at just value.”

Combining abutting parcels under common ownership for assessing purposes had been a long standing practice in town – going back at least 29 years – before it was discontinued in light of the August 2016 Maine Supreme Judicial Court decision.

Staff Writer Michael Kelley can be reached at news@scarboroughleader.com.

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