November 29, 2023

Select Board Reviews Capital Improvement Program Recommendation for FY2025-FY2029, Establishes Means Tested Senior Tax Exemption Rate, Discusses Tax Classification of Property in Andover 

• Select Board Reviews Town Manager’s Recommended Capital Improvement Program for FY2025-FY2029;
• Establishes Means Tested Senior Tax Exemption Rate; and
• Conducts public hearing on classification and taxation of all property in Andover for FY2024.

ANDOVER, MA – The Andover Select Board considered several significant fiscal matters as it gaveled in on Wednesday, November 29 at the Robb Senior Center. The Board began its review of the Capital Improvement Program for FY2025-FY2029, which proposes capital investments totaling $17.95 million for the upcoming fiscal year; began the process of establishing the tax classification of all property for FY2024; and set a rate for the means tested senior tax exemption.  

Capital Improvement Program
Town Manager Andrew Flanagan presented an overview of the recommended Capital Improvement Program (CIP) for Fiscal Years 2025-2029, marking the initial step in the yearly budget development process. The document provides a comprehensive framework for capital investments in Town projects, and equipment over the next five years. 

The CIP recommends the expenditure of $17,954,126 in FY2025 divided amongst several funding sources: general fund revenue, general fund borrowing, free cash, specially dedicated funds (e.g., Chapter 90 funding), and the Water and Sewer Enterprise Fund.

The priorities recommended to be funded in the plan are intended to sustain the Town’s multi-year effort to improve the quality and condition of public spaces, including improvements to Town and School buildings, recreational areas, and sidewalks, according to Flanagan.

Notable investments proposed in the plan include an updated Town and School Facility Master Plan, which will replace the previous assessment conducted in 2016 and account for significant improvements to facilities over recent years. It also includes a study to assess the creation of a stormwater utility, continued investment in sidewalk repairs and improvements, and investigation and implementation of safety enhancements at key intersections.

The CIP will undergo further public review throughout the weeks ahead. A Tri-Board Meeting to review the plan and revenue and expenditure assumptions for FY2025 will be held on December 6, and the Select Board will consider formal adoption of the CIP on Monday, December 11, 2023.

The full plan can be viewed online at: andoverma.gov/CIP2025. 

Means Tested Senior Tax Exemption
The Select Board voted to set the means tested senior tax exemption rate for FY 2024. This program provides a tax exemption to certain residents who have owned and occupied their home for at least the last 10 years, were 65 years of age as of last December, and received the senior circuit breaker tax credit when filing their previous year’s Massachusetts income tax return.

Andover approved a home rule petition establishing a means tested senior tax exemption at Annual Town Meeting in 2018. The measure went into effect in FY2020. The home rule petition allows the rate of the exemption to be set at 50 to 100 percent of the amount of the circuit breaker income tax credit received by eligible applicants in the previous year.

The Select Board voted to set the means tested senior tax exemption rate at 100 percent of the circuit breaker tax credit, consistent with the rate set in all years since the program was adopted. 

The deadline to apply for this exemption was September 2023. The Assessor’s Office conducts extensive outreach in partnership with Elder Services to ensure that potentially eligible residents are aware of the program. 

A total of 115 applicants qualified for the exemption for FY2024. The cost to fund this exemption is estimated at $9.57 per taxpayer, based on the average tax bill. 

The exemption is credited to eligible taxpayers on the February 1 and May tax bills. 

Tax Classification
The Select Board conducted a public hearing on the annual tax classification process, reviewing several factors related to setting the tax rate for FY2024, including the establishment of a residential factor which determines the tax burden to be borne by each property class.

Chief Assessor Tristan Hoare provided an overview of pertinent data that will inform the tax classification process for FY2024, including the FY2024 assessment of property in Andover recently approved by the Department of Revenue (DOR).  

According to Hoare, the total assessed value of residential property in Andover is $10.06 billion, which reflects an increase of 10.8 percent over last fiscal year. This value includes single family homes, condominiums, and multi-family homes. The average single family home assessment increased from $858,952 to $957,215 in the latest assessment, an increase of 11.4 percent.

The assessed value of commercial property in Andover increased 12.5 percent in FY2024, and the assessed value of industrial property increased by 16.8 percent. The total assessed value of all property in Andover, across all classifications, is $12.15 billion according to the DOR-certified assessment. 

Andover has a split tax rate, meaning that commercial and industrial property taxpayers pay a higher rate compared to residential taxpayers, and share more of the overall tax burden. The amount of the overall tax burden that is shifted to commercial and industrial property (CIP) is determined by a shift factor, and corresponding residential factor, which must be determined by the Select Board annually.

The Chief Assessor reviewed estimated tax rates at varying shift factors, focusing on two potential options for the Select Board’s consideration.

A shift of 169.5 would result in the most uniform tax increases across all classifications. This option would set the residential tax rate at $12.88 per $1,000 of assessed value, and $25.49 per $1,000 of assessed value for CIP classifications. Under this model, the average single family property tax bill would increase by 5.2 percent, due to the increased assessed value of residential property.

A subsequent model presented would set the shift factor at 171, resulting in a residential tax rate of $12.84 per $1,000 of assessed value, and $25.72 for CIP classifications. This option retains the shift adopted by the Town in FY23, and would result in an increase to single family property tax bills of 4.9 percent for the upcoming fiscal year. 

In FY23, residential property taxes accounted for 83 percent of the Town’s total tax levy, with commercial, industrial, and personal property accounting for 17 percent. 

The Select Board will revisit the tax classification process at its next meeting on Monday, December 4.

A full recording of the November 29 meeting can be viewed online through AndoverTV.