Chairman's View: Revaluation (Dec. 20, 2018)

Chairman’s View: Revaluation

DECEMBER 20, 2018 BY JOHN ENGEL. CHAIRMAN, TOWN COUNCIL

New Canaan’s real estate grand list fell by $570 million (7.15%) compared to 2017.In the recent revaluation:

• 4,861 parcels saw average decreases of 11%.
• 2,308 saw average increases of 13%.
• For homes worth more than $3 million, the average decrease was 14%.
• For $2 million to $3 million homes, the average decrease was 10%.
• For $1 million to $2 million homes, the average decrease was 7%.

Homes less than $1 million saw an average increase of 1%. Multifamily homes decreased 4%. Commercial properties increased an average of 13%. Condominiums increased 9%. 

We will not know what the new mill rate is and the new taxes are until the MuniVal consultation period is complete (this week and first week of January), then the Board of Assessment appeals process is complete (February) and then the (town and school) budget process ends with the Town Council vote April 4, 2019. 

If your revaluation is factually wrong then schedule a meeting this week for early January with MuniVal, the revaluation company and correct the facts (203-292-5500 or newcanaanreval@munival.com). If unsuccessful, then you must appeal in person to the Board of Assessment Appeals with facts about your house and comparable sales that occurred between Oct 1, 2017 and Oct 1, 2018. Appointments are given February 1 to 20 and the appeals take place in March. Sales that fall outside of that 1-year window are considered but carry less weight. 

After the 2013 revaluation the Board of Assessment Appeals increased two assessments and reduced 187 of the 285 appeals filed. Some homeowners appeal alone, others take a Realtor or an attorney. Some attorneys charge by the hour. Others work on contingency, taking a percentage of a successful appeal. If an appeal process is unsuccessful, the recourse is a lawsuit. Five years ago, 13 homeowners filed lawsuits against the town. Two were subsequently withdrawn. It takes three or four years to resolve a lawsuit.

Assuming health care rises 5%, town salaries rise 2.8%, school salaries 2.2% and $2.5 million comes from the general fund I expect expenses to increase 1.47% with “level services” and 1.86% if we follow Board of Finance guidance. Therefore, the mill rate announced in May will be between 18.61 and 18.69. That’s up 10% from 16.96.  A homeowner’s revaluation would have to decrease 9% in order to see a drop in taxes. To calculate your 2019 taxes multiply .01862 by your new valuation. (The spreadsheet is posted at johnengel.com).

Darien is revaluing now. Their assessor predicted most revaluations within 3% or 4% of their previous valuation. He expects the Darien mill rate to remain close to their current 16.08 rate. Wilton, now at 28.19, will send out revaluation letters in early January. Ridgefield’s grand list rose one half of one percent in their February 2018 revaluation, a 28.78 mill rate. Westport’s mill rate has been flat at 16.86 for 2 years and they won’t revalue until 2020. New Canaan experienced a 3% drop in the 2013 (reval) grand list but gained 1% in most years since (up $84 million, $85 million, $81 million, then $51 million in 2017).

Chairman's View: Spoiler Alert. I Like New Canaan's Prospects (April 11, 2019)

Spoiler alert. I really like New Canaan’s prospects. Here are 5 observations taken from the revaluation, the town budget, the state election, and the first quarter real estate sales. There is a happy ending.

1. The uncertainty coming from Hartford is probably worse than anything Hartford will actually do to us. We accept a certain amount of pain is coming and we adjust. But when house-hunters from New York say, “I heard the New Canaan train is going away” or “What’s going on with your schools?” we know the headlines are worse than the reality will ever be. 

2. New Canaan government is working leaner and smarter. Our budget went down .43%, the greatest cut in a decade while improving services. We built new playgrounds, turf fields and gas lines while putting solar on town roofs. Our roads will be new, and our schools will remain #1. Town Hall will sell antique buildings and find a way to co-invest in the world-class library our residents want. Progress is being made on parking, senior & affordable housing and improved cell service. It’s a great time to live right here.

3. The Waveny Conservancy, Land Trust, Library and Athletic Foundation are examples of the high-energy volunteer organizations we have in New Canaan restoring treasures like Waveny Pond with donations, paying it forward.

4. New Canaan real estate is stable. First quarter house sales are up 20% with average prices in the $1.3’s, (same as 2012-2013 & same as Darien). New Canaan is drawing buyers out of Westchester and NYC. (If we speed up the trains, wow, the landscape shifts more dramatically in our favor.) Why is the market recovering from the bottom-up?  75 million Baby Boomers are trying to sell their houses to 66 million GenX’ers (like me, late 30’s to early 50’s) and there are just not enough of us. Be patient. There are 83 million Millennials (23-38 yrs old) who are starting to discover that Texas and San Francisco are expensive. They have to live somewhere. Why not here? We are downright cheap.

5. New Canaan’s downtown is healthy with less than a 5% vacancy rate. A few years ago vacancies were lower and rents unaffordable. Rents are attractive again. P&Z and the new Tourism & Economic Development Commission are responding to changes in the market, giving us the flexibility New Canaan needs to compete in a changing retail environment. Developers respond with exciting new projects all over town. The Grand List is growing again. Consider the new developments built or planned for downtown: Pine Street Concessions, Oxygen, The Merritt Village, a new Post Office, a new Merrill Lynch, new mixed-use on Forest, Locust, Cross and Vitti Streets. Soon look to the corner of South & Elm and for more development on Pine Street to keep the next station to heaven vibrant.

Change is hard. For a town of steady habits that fears change New Canaan is adapting well, improving in so many ways, poised to compete for the next decade and beyond.

TOWN OF NEW CANAAN PRESS RELEASE TOWN COUNCIL APPROVES FY2020 BUDGET OF $150.94 MILLION -- DECREASE OF 0.43% IS THE LOWEST IN LAST 10 YEARS FUNDS TO BE RAISED BY TAXES DECLINES 0.56% -- FIRST DECLINE IN MORE THAN 10 YEARS

The Town Council on April 4th approved a Total Expenditure Budget of $150.94 million

for fiscal year 2019-20, representing a decrease of 0.43% over the current fiscal year’s amended

budget expenditure of $151.58 million. This is the first decline in more than a decade. The

funds to be raised by taxation declined to $139.23 million from the current year’s $140.02

million, a decrease of 0.56% -- the first decline in more than 10 years.

The Town Council budget will be filed in the office of the Town Clerk and will become

effective eight days after publication unless a notice of intent to file a petition for a referendum

has been filed in the office of the Town Clerk within seven days after publication (Town Charter

Sections C4-13 and C4-14).

The Total Expenditure Budget includes Board of Education operating expenses of $91.43

(up 1.86 %) , Town department operating expenses of $39.92 million (up 0.56 %), debt service

of $16.84 million (down 9.29 %), and tax-funded capital projects of $1.73 million (down 40.32

%). To fund this budget, the amount to be raised from taxation is $139,230,687 (down 0.56%).

“We have much to be thankful for. Town leadership really came together to deliver the

tightest budget in over a decade, one which accurately reflects our priorities as a town: the #1

school system and among the lowest taxes in what most experts agree is still the best place to

live in Connecticut,” said Town Council Chairman John Engel.

The Town Council’s budget takes into account the 2018 Revaluation as of October 1,

2018 where the town’s 2018 Grand List declined 7.64% to $7.71 billion from the 2017 Grand

List of $8.34 billion. The decline in the grand list was primarily due to lower valuations of homes

valued at more than $2 million. The overall average decrease in residential property values was

7.2%. Commercial properties increased on average 10.8 %.

The reduction in the Grand List will result in an increase in the mill rate from the current

16.960 to an estimated 18.259. The final mill rate to be set by the Board of Finance on April 9.

Attached is Board of Finance FY 2019-2020 Budget Summary showing further details of

Town Department and Board of Education (BOE) year-over-year budget changes.

For further information, contact: Lunda Asmani, Budget Director, 203-594-3026.

Chairman's View: Council Faces Cost of Debt, Capital Projects and Lower Property Values (Oct 4, 2018)

Chairman’s View: Council faces cost of debt, capital projects and lower property values

OCTOBER 4, 2018 BY NEW CANAAN ADVERTISER

A guest column from New Canaan Town Council Chairman John Engel.

New Canaan has the highest per-capita debt in Connecticut at $5,800, double that of Darien because we are a larger town with many more miles of roads and dozens more buildings. Therefore the Board of Finance has presented to the Town Council their recommendation that we reduce our debt service as a percentage of expenses over the next five years from 12% to 10%.

Capital Plan

The Town Council, Board of Education and Board of Finance agreed last year to work on common budget guidance in the fall. Those meetings are still needed. There is a disconnect between current Board of Finance guidance to reduce Town debt service to 10% levels and the new public-private initiatives we read about each week. Your town government needs to have an honest conversation about priorities and scrub the five-year capital plan.

State and local

High net worth taxpayers are continuing to leave Connecticut. The election will have an impact on our budget thinking. We need to vote for a change in our taxes that will have an impact on our budget planning. The latest poll shows Lamont leads Stefanowski by 6 points with a margin of error of 4 points. 40% of Connecticut voters are independent. Stefanowski has gained 6% with unaffiliated this month, but he trails among women by 22%. This race is too close to call.

Congressional elections, transportation  

New Canaan tax base is largely dependent on Wall Street, and it benefited from recent deregulation of the financial sector, federal stimulation and the bull market. But, the latest polls predict a Republican Senate and a Democratic House in Washington. We should anticipate gridlock from a balanced Congress at a time when what New Canaan needs is federal attention on our infrastructure. New Canaan needs multiple good commuting options, particularly faster and more trains. Town leaders are working on the affordable expansion of Talmadge Hill to make more parking available for commuters. This should shorten the waiting lists. I am surprised at how few people are taking advantage of newly available “Boxcar” parking in the St. Aloysius lot. Parking habits are equally slow to change.

2019 Revaluation

The property tax change is a concern for budget planning. In January we will learn that many tax bills will rise between 10% and 20%. Why? The Grand List is predicted to shrink 8% reflecting a reset at the top end of our market and subsequent compression as top tier prices fell and put price pressure throughout the system on lower-priced homes. Those homes will make up the deficit. 

Therefore, the Board of Finance and Town Council must re-evaluate our Tax Relief for Seniors program and its means-testing in light of the coming property tax volatility. We want to retain our seniors as we explore new senior housing options. It’s a small line item but deserves a fresh look.