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Bill Van Tuinen, an industrial assessor contracted by the Rumford Board of Assessors, addresses members of the Rumford Select Board and Board of Assessors during the Nov. 4 meeting to set the town tax rate. Seen around the table from top left are Select Board member John Pepin, Executive Secretary Mariya Gorham, Select Board Chair Chris Brennick, Town Manager Goerge O’Keefe, Select Board member Jim Theriault, Select Board member Theresa Sax, and Assessor Board member Jim Rinaldo.
Bruce Farrin/Rumford Falls Times RUMFORD — The town is performing a 40 percent market value adjustment this year, necessary to keep Rumford adherent to the Maine State Law of maintaining assessed values at 100 percent. Town Manager George O’Keefe said the town had a choice to make. “We can either keep our assessed values at 100 percent, in which case our specialized taxation, which is the industrial properties, stays at 100.
Or, we’d have to drop everybody down to 70 or below, which in this past year, would have ended up at 65. So we would have had to drop Brookfield and the mill down by 35 percent. This is a one-time adjustment based on a requirement from the Maine Revenue Service.
” After two brainstorming meetings with the town’s Board of Assessors, the Select Board voted 5-0 on Nov. 4 that the taxes due for residential and commercial properties will go up 4.85 percent.
The taxes due for the industrial properties in Rumford are going to go down because they’re already at 100 percent. Rumford had maintained a tax rate of $22.18 per $1000 of assessed value for the past two years, but O’Keefe noted that that was based on old assessed values.
He said the mill rate is getting set at $16.62 per $1000 of assessed value, but for residential and commercial property owners who have had their values adjusted, their taxes due are going to change, but they’re going to change to the tune of 4.858 percent.
On a house valued at $200,000, with a new value of $280,000, their taxes are going to be $4,653.60, an increase of $217.60 for the year.
Tax bills will be received by the end of this week, with first half of taxes due on Dec. 6 and the second half on April 1. Select Board member Frank DiConzo said when the assessed values go higher, your mill rate goes lower, because your mill rate only has to meet that assessed value.
“A lot of people don’t understand that, and you try to explain that to someone and they’ll come back and say ‘It can’t be. You’re wrong.’ But that’s how it works.
They don’t understand that because they’ll see an increase in their taxes,” he said. O’Keefe said, “I’m proud of the staff, the Select Board, the Board of Assessors and all the elected officials involved in the process, and I think we had a more open and transparent process this year than in the past. Talking about events in around the current fiscal year, he said, “We had the second worst flood in Rumford in the entire history of the flow records of the Androscoggin River (since the 1890s).
We had a 40 percent market adjustment due to covid. And the increase in home sales price that occurred here during the pandemic. We built a fire station that the town had been waiting on for 40 years.
We also managed to restore our outdoor fields and facilities in time for the Fourth of July.” At a select board meeting on August 15, Jim Rinaldo, a member of the Board of Assessors, said the town is performing a townwide market value adjustment this year, necessary to keep Rumford adherent to the Maine State Law of maintaining assessed values at a minimum of 70 percent-plus of actual values. He said this update ensures the town can provide the full benefit of property tax exemptions such as the Homestead Exemption, Veteran’s Exemption and Blind Exemption.
Without this update, the amount of tax relief provided would be cut substantially and lead to an increase in property taxes owed. At that meeting, O’Keefe said, “The value of the market rate adjustment on an individual home, perhaps, as the assessing board says, is going up 40 percent. However, that does not mean that their taxes due will go up by 40 percent because there are other properties that we assess every year — large industrial properties — which have a shift in value at times.
He noted, “It is critical that the public not become concerned that their property tax bill, by default, would go up by 40 percent simply because of market rate adjustment. It’s not true, and that’s partly because we have these significant, large specialized properties in our tax base that have some variation in their value and we also have things like community solar which pay us money.” O’Keefe said, “The result of this market rate adjustment is that the relative value of commercial and residential properties of our town, compared to the industrial properties, is going to grow.
So a larger proportion of the tax burden will be carried to the commercial and residential properties, and a smaller proportion of the tax burden will be carried by the industrial properties, and that’s because they’re already at current value, and commercial and residential is not.” Select Board member John Pepin said, “I think it’s important to stress that this is Maine State Law driven, not Rumford driven, and it’s statewide.” Most of the discussion around those two brainstorming sessions involved defraying taxation in a town that has pretty significant distress and lack of opportunity.
O’Keefe noted, “This is not good. It’s not easy. But we do have options.
And I want to very carefully take note of the fact that we’ve had a lot of equipment get replaced in this past year and paid for by the feds. We’re kind of in a good place in a lot of different ways. So if ever there was ever a time when we could take a pause on certain things or let’s think about this differently.
..there is the fiscal conservatism of holding onto cash and being careful, but then there’s also the acknowledgement that we have elderly residents who are hungry.
” Select Board chair Chris Brennick asked about the implication of using $1 million and taking the undesignated fund balance down to $2.315 million to defray the tax increase. O’Keefe had looked at increasing monies from excise taxes from $400,000 to $900,000 to also use to offset the increase.
However, Brennick reminded them that the town has a policy that says $500,000 from excise each year must go into the permanent roads account. The select board decided to utilize an allocation of $950,000 from the undesignated fund balance and an adjustment to put the excise tax monies back to $500,000. O’Keefe said holding the tax rate of 16.
62 also presumes that the town will get an expected $1 million in FEMA monies due to flood damage in Rumford last December. O’Keefe said the town, in this particular tax rate setting, is benefitting from extremely conservative cash management that has been engaged in the town for a long time. “The town has done a lot of good things for itself “by hanging onto as much cash as we have over the years.
That has put us in a really good position. On the other hand, sometimes you need to use it.” He said the previous town manager, Stacy Carter, placed the town’s cash into four-week and 13-week CDs.
The rates we’re getting right now are over 4 percent. And local government does not pay income tax. We have invest in guaranteed certificates of deposit, insured and protected by the full faith and credit of the U.
S. Government.” O’Keefe said, This past year, the town made $591,000 in interest from those CDs.
..it’s adding to the revenue base.
$591,000-plus in investment income is an extraordinary result for a town. That’s unheard of.” He said, “We are now at a stage where we are able to put some of that money to work, not only in investments but we’ve also put some of that money to work in the form of tax relief, which was the select board’s choice.
And we have plenty of tax base coming, and we’re gaining tax base every year. We’re just not gaining it fast enough at times. And when you have to go through an adjustment like this, it throws everything off.
” Tax Collector Tom Bourret said, “Here we are, in the fifth year after the reval, with a 40 percent market rate adjustment to residential and commercial, and go under 5 percent (increase), is pretty phenomenal. It says a lot about the many efforts of different departments.” Brennick said, “The economy has been hit hard with inflation.
Everything costs more. So I think to be able to come out with a number that’s less than 5 percent in a time like this, I think is really promising..
.We’re lucky. We’re in the right place at the right time.
” O’Keefe said Rumford is also getting $277,704 from the state of Maine for solar reimbursement. That represents a 50 percent reimbursement by the state on property taxes would otherwise would have been collected. That implies a valuation of $25.
1 million to our solar farms here. The town has three solar farms, with a fourth one being constructed on town-leased land behind public works, and a fifth one in the future behind Cedar Lane. Both of the latter ones have been fully approved.
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