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<font face="Verdana" size="2">1471 Highland Avenue</font></b><p style="margin-top: 1; margin-bottom: 1"><b>
<font face="Verdana" size="2"> Needham, MA 02492<br>
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<font face="Verdana" size="5" color="#0000FF"><b>Information About Fiscal Year 2004 Real
Estate Tax Bill</b></font></p>
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<p style="margin-top: 1; margin-bottom: 1"> </p>
<p class="MsoNormal" style="margin-top: 1px; margin-bottom: 1px"><b><i>
<span style="FONT-FAMILY: Verdana">Did the property values in Needham
change from last year?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Yes. As is required by
State law, the Board of Assessors performed the triennial revaluation of
all property. The average percentage change in real and personnel
property values from last year is 18%. The average residential property
value increased 22% and commercial property increased by 5%. These values
represent the market value of properties as of January 1, 2003, and
reflect the continuation of a strong residential market in Needham, and a
stable commercial market. It is important to note that while the average
single family home value increased by 22%, there are individual
differences in valuation changes among neighborhoods. In some
neighborhoods, recent sales have resulted in value increases of greater
than 22%. Other neighborhoods have experienced less than a 22% increase
in value.</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">Are all properties taxed the
same?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">No. There can be a
shift of the tax burden among the property classes. Taxable property in
Massachusetts falls under one or more of the following classifications:
residential, open space, commercial, industrial, and personal property.
Massachusetts communities may shift some of the residential tax onto the
commercial, industrial, and personal properties by adopting a residential
factor which creates a split tax rate. Needham has a split tax rate,
taxing commercial and industrial property at a higher rate than
residential property. The split tax rate represents a $612 cost savings
for the average residential property owner. Although Needham�s commercial
properties remained stable, they cannot keep pace with the rise in
residential property values. The Board of Selectmen, in consultation with
the Board of Assessors, voted to set the FY 2004 shift factor at 1.75, the
maximum amount allowable by law. This means that for FY 2004, commercial,
industrial, and personal property, while representing only 13% of the
total taxable value, will pay 22% of the total taxes. The shift factor
was 1.75 in fiscal year 2003.</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Since the
implementation of the two tier tax rate in 1988, the Town and the
residents have experienced significant benefits by shifting the tax burden
to commercial property. However, because commercial properties are now a
much smaller share of the Town�s total property value, the ability of the
commercial property to shoulder the tax burden has diminished. The Town
has been proactive in attempting to maintain a healthy commercial tax base
which generates stable tax revenues from businesses and enhances, rather
than detracts, from the quality of life for Needham residents. The
on-going revitalization of the Town�s commercial base, particularly after
the re-zoning of the New England Business Center in 2002, is a vital
component of Needham�s future, and our ability to maintain the quality of
services and broaden the tax base.</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">What is the change in real estate
tax rates for fiscal year 2004?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">The residential and
commercial property tax rates have decreased in fiscal year 2003:</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<u><span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Tax Rate
FY03 FY04 $ Change % Change</span></u></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Residential $
9.21 $ 9.45 +$ .24
.26%</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Commercial $
18.18 $18.56 + $ 0.38
.21%</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">Why did the tax rates drop?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">This is due to the
revaluation; the Town cannot receive any additional tax revenue as a
consequence of revaluation of property. The tax rate must be adjusted so
that any increase in value will not generate additional tax revenue for
the town because of the value change. The only increase in the tax levy
is the 2� % from the previous year�s tax levy, new growth (new
construction), and any approved override.</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">What is the total tax levy to be
collected by the Town?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">The tax levy is the
amount of revenue a community can raise through real estate and personal
property taxes. The total tax levy for fiscal year 2004 is
$61,456,585.23. This is approximately $4.8 million, or 8%, more than
fiscal year 2003. The increase in the levy is comprised of the allowable
2 �% increase, growth in the tax base from new construction, the impact of
debt exclusion overrides not previously included. </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">How can my taxes go up by more
than 2 � %?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Proposition 2 � places
limits on the total amount of tax levy that can be raised by a city or
town. It does not include voter-approved debt exclusion overrides, nor
does it apply to an individual tax bill. Each individual tax bill is
affected by the change in value of that property compared to changes with
all other property, and the change in the tax rate.</span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">How are Properties Valued?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Massachusetts is a
state which requires that all property be valued at 100% of "fair market
value". Prior to 1961, assessments were done haphazardly. There was little
if any equity. Equity means that all tax payers pay a proportionately
equal tax bill. Assessed values must reflect market value in several
stratifications. The assessor cannot make an across the board percent
adjustment to values. </span></p>
<p style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; TEXT-ALIGN: justify">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">To develop values, the
assessor conducts an analysis of the sale of real estate during the
previous year (in this case, 2002.) These sales are put through a
statistical analysis. In 2002 there were over 600 sales. These sales are
scrutinized to ensure that only "arms length transactions" are included.
For the FY04 analysis, 428 residential single family sales were used.
These properties are then stratified by neighborhood, style, age, sale
date, and sale price. The first test is a ratio of assessed value to sale
price. To meet state requirements, the overall median ratio must be
between 90% and 110%. Then, each stratification must also fall within this
ratio, i.e. all capes must be between 90% and 110%, all ranches, etc. Sale
date and sale price ratios are studied in a quartile for the year.
Furthermore a neighborhood stratification is then required. For example,
all colonial style houses in a particular neighborhood are reviewed. This
must be done for each style of house in each neighborhood. When that
analysis is completed, the assessor must develop a coefficient of
dispersion for each category previously mentioned. That is to say that all
of our capes have to be in a range of 5 to 8 percent of the cape sale that
was the median in that particular sample. This again is done for each
style, age, sale price and date. </span></p>
<p style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; TEXT-ALIGN: justify">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">The <u>FY02</u> median
assessment to sales ratio for the year based on year 2000 sales was 94%.
By the time 2003 assessments were being developed, that ratio had dropped
to an overall of 76% due to the sharply increasing residential values.
However, we do not have to look very far back to see the reverse of that
scenario. During the late 80's and early 90's, values were dropping, and
that ratio was moving in the opposite direction. </span></p>
<p style="MARGIN-TOP: 1px; MARGIN-BOTTOM: 1px; TEXT-ALIGN: justify">
<span style="FONT-FAMILY: 'Trebuchet MS'"> </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<b><i><span style="FONT-FAMILY: Verdana">Are there Programs to assist
those who have difficulty paying their taxes?</span></i></b></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
<span style="FONT-SIZE: 10pt; FONT-FAMILY: Verdana">Needham offers a
variety of tax exemptions and other programs to relieve the tax burden for
qualified individuals such as the elderly, the blind, disabled veterans,
and widows and widowers. For more information on these programs, contact
the Board of Assessors at 781-455-7507. </span></p>
<p class="MsoNormal" style="text-align: justify; margin-top: 1px; margin-bottom: 1px">
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