August 1 City Council Meeting

The Council had a full agenda on Monday August 1. Prior to the City Council meeting of the full Council, the Finance Committee met with the Special Committee on the Property Tax. Issues addressed during the City Council meeting included reports from the Planning Board, updates on capital improvement projects ongoing and planned, the City’s use of eminent domain in light of a recent US Supreme Court ruling, the time construction can begin at work sites in the City and the property tax.

Zoning Matters
Both the Planning Board and the Ordinance Committee have been meeting this summer. An amendment to the Zoning Code will require Large Project Review for proposed developments involving the addition of more than 2,000 square feet but less than 50,000 square feet in the Massachusetts Avenue Overlay District. The Board and the City Council are also reviewing proposed changes to zoning in the Concord-Alewife area.

Lafayette Square Update
In response to an order the City Manager reported on completion plans for Lafayette Square. The work began in March of this year and is expected to be completed by the spring of 2007. Information on the Lafayette Square project is available at www.cambridgema.gov/~CDD/et/infra/lsq/lsq.html

Police Headquarters
The City is in the process of hiring a project manager and beginning design of the new police headquarters that will be built within the envelope of a building the City has purchased on Bent Street.  Due to this move the City Manager has submitted a change to the Municipal Code that would exempt municipal police and fire facilities from the Parking and Traffic Demand Management Ordinance. 

Councillors have also begun discussions on re-using the current Police Headquarters once the move is made to the new facility. Options include moving other City or School Department offices to this site, including the Community Learning Center and/or School Administration, or selling the site for affordable housing or another use. The cost to renovate the existing headquarters was an issue in the selection of a new site and will become an issue as the City considers re-using the building for its own uses.

Eminent Domain
A recent US Supreme Court ruling that is viewed as expanding the ability of government to take property by eminent domain has led many government bodies to look at their use of this power. Cambridge is no exception and an order passed on Monday asks the City Manager to confer with the Law Department on the ruling by the Supreme Court and analyze a hypothetical taking based on this ruling of a long derelict site such as the Faces property on Route 2. A second order asked for an analysis of an eminent domain taking to construct a pedestrian bridge over railroad tracks in the area near the Rindge Towers and Jefferson Park housing developments.

Change Proposed for Construction Start Time
An order asking Harvard University to move the start of construction of its graduate student dormitory in Riverside form 7 a.m. to 8 a.m. was amended to also ask the City Manager to report back to the City Council on moving the earliest time all construction can begin to 8 a.m. from 7 a.m., as currently allowed by ordinance.

Property Tax Discussed
The purpose of the Committee hearing was to discuss analysis of several options previously suggested to provide property tax relief. This became an issue last fall with the receipt of tax bills when some residents, particularly owners of one, two, and three family homes, saw significant tax increases resulting from increased valuation.

City Councillors and administrators have acknowledged that State law limits the City’s options. State law defines how the City assesses property, establishes the exemptions the City can offer, establishes payment requirements, and limits the City’s taxing authority to real estate and some other property (vehicles, equipment, etc.) and a hotel/motel tax. Any change thus requires a change in State law and Councillors and City officials who have met with members of the legislature have noted that the legislatures focus is on changes needed to address issues affecting communities around the Commonwealth, not just Cambridge.

The committee received information analyzing two possible changes. One proposal would change the minimum tax from ten percent of assessed value to ten percent of assessed value or ten percent of the average value of all residential property, whichever is greater. A second proposal is to have sub-classifications within the residential classification for the purpose of setting the residential exemption. The exemption is now based on thirty-percent of the average residential property. This change would set the exemption at a percentage of the average assessment within a sub-class. An evaluation of these two proposals showed that owners of less expensive properties, particularly condominiums, would see increases in property taxes while resident-owners of one, two, and three unit properties would see a decrease in taxes.

Two other proposals have been put forward. One would provide a tax credit or other reduction for owner-occupants who rent at an affordable rent. This would require the City to establish on an annual basis what the affordable rent is and a method to verify that an affordable rent is being charged. A fourth proposal is to change make it easier for property owners to defer paying property taxes and to reduce the interest rate charged. Under current State law owner-occupants who are 65 years of age or older and have incomes below $40,000 can defer payment at 8% simple interest until the property is sold. The proposal is to reduce the age, increase the income, and reduce the interest rate.

Councillors and staff noted that the current budget includes the smallest increase in the tax levy in ten years and that City services have essentially been level funded for the current year. Assessor office staff reported that commercial real estate value appear to be recovering as vacant commercial space is rented. Most residential properties will not be reassessed this year as all were assessed last year as part of the State mandated tri-annual assessment of all properties. It is likely that the shock many residences experienced last year when receiving their tax bill will lessened due to these factors. The City is also working to improve its communication with residents to reduce confusion some experience when receiving their tax bill.

The good news for the business community is that in more than three hours of discussion little was mentioned about increasing taxes on commercial property, which pays 62% of City property taxes. There was some discussion about taxing properties owned by nonprofits and used for nonprofit purposes but, as this will require State action, such a change is unlikely.

While I do not usually editorialize in these notes I feel it is necessary to note that much of the rhetoric at both the Committee and the City Council meeting where simply grandstanding by individuals in an election year. Given the continued call for new spending, on everything from rat-proof garbage cans to dog runs to skating rinks it is unlikely that this or the next Council will look at reducing the cost of government which means that any change in the property tax will only transfer costs from one group to another and any change in the taxing authority of the City will transfer costs from one group to another. I expect that City staff and elected officials are hoping the worst is over and that there will be little controversy when the next round of tax bills hit people’s mailboxes in October. I also expect that the City’s communication efforts to all taxpayers, and especially those property owners who are about to see a large tax increase, will be substantial.

For a listing of public meetings, visit the Public Meetings link or the Public Meeting Notices area of the City of Cambridge Web site.