Sharon Economics Discussion

1. Sharon Economics Discussion Presentation to Sharon Board of Selectmen E. Hauser, Vice-Chair Sharon Planning Board 1 April 2006

2. Agenda • Review Sharon Tax Revenue • Average Tax v. State Averages • Sharon Business Valuation Discussion • Review Sharon 10 Year OpEx Budget History • Budget Composition and Growth Rates • Massachusetts State School Budget Growth Rates Comparison • Next Step Recommendations • Summary of Findings • Best-in-Class Comparisons • Revenue Enhancement Programs

3. Sharon Tax Factoids • Average tax per household = $6,828 • Places us nicely into top 10% of MA Average Tax • Residential sources accounts for 94% of Sharon tax revenue • 10 year tax growth rate = 6.83% v. 5.81% average for MA • Current commercial properties generate $1.72M in taxes • 87 parcels, 150 acres, are developed • 15 parcels, 38 acres available to be developed • 36 parcels, 138 acres, appear on paper to be undevelopable • Propose a “6% solution” in new tax revenue • Goal: $3 - $5M in new tax sources

4. History of Passed by Commercial Developments • S. Main Street Annual – $1,500,000 – $2,000,000 • Spring 2004 138 acres • Cobbs Corner Annual – $130,000 - $170,000 • Spring 2004 6.1 acres • Cannon Forge/Sharon Woods Annual – $3,000,000 • Spring 1988 250 – 280 acres • Sacred Heart Dormitory building One-time – $1,000,000 • Saw Mill land on Canton St. incl. Temple Sinai & Box Co. $100,000 • 1966 6 acres • Annual $4.7M – 5.3M

5. Sharon Massachusetts Average Tax v. % Residential Sharon $ 6,828 Average $ 4,884

6. 90th percentile 75th percentile Average Median 25th percentile Massachusetts Department of Revenue Division of Local Services Municipal Databank/Local Aid Section Sharon 10 Years of Y/Y Tax Growth Rate v. State > 90% Residential Tax, > $1B in assets Sharon Sharon 6.83% CAG Average 5.68% CAG

7. Sharon Commercial Inventory • Current commercial properties generate $1.72M in taxes • 87 parcels, 150 acres, are developed • 15 parcels, 38 acres available to be developed • 36 parcels, 138 acres, appear on paper to be undevelopable • Buildings < 10 years old generate 2x Building-Tax / Acre • Buildings < 10 years generate $12.5k / acre in Building-Tax revenue • Buildings > 10 years generate $6.5k / acre in Building-Tax revenue • New developments can be estimated at $12.5k Tax / Acre • e.g. 20 acres might yield ~$250k in building tax revenue

8. Majority of Commercial Facilities > 20 years

9. Newer Facilities Generate $6k more / Acre

10. Implication for Aging Buildings • Create economic redevelopment package • > 10 Years age • Target participation range between 25% and 45% • Expected valuation - $200k - $300k in new tax revenue

11. Development Tax Revenue Opportunity • Redevelopment of Existing Facilities • $200k - $300k in new tax revenue expected value • Development of Zoned Parcels • $450k in new tax revenue • 15 parcels, 38 acres x $12.5k building-tax/acre incremental • 100% participation • Potential Rezoning of S. Main Street Parcels • $250k to $500k based on 20 to 40 acres $900k to $1,250k

12. Agenda • Review Sharon Tax Revenue • Average Tax v. State Averages • Sharon Business Valuation Discussion • Review Sharon 10 Year OpEx Budget History • Budget Composition and Growth Rates • Massachusetts State School Budget Growth Rates Comparison • Next Step Recommendations • Summary of Findings • Best-in-Class Comparisons • Revenue Enhancement Programs

13. Sharon OpEx Budget 1994 - 2005

14. Sharon OpEx Budget 1994 - 2005 School 2005 $29.3M School 1995 $14.5M Selectmen 1995 $5.0M Selectmen 2005 $8.3M

15. Annualized Growth Rates School 10 year 7.3% Selectmen 10 year 5.0%

16. Budget Composition Shift 1995 - 2005 School accounts for 75% of 2005 OpEx Budget School accounts for 80% of $18.6M increase since 1995

17. Enrollment Change v. School Increase Initial correlation apparent; Less correlation in last 4 years

18. No Relationship between Budget and CPI

19. Average 10 Year Growth Rates, 1995 to 2005 • Total OpEx Growth • From $20.5M to $39.2M ~6.7% Growth / Year • School Budget at $29M ~7.3% • Selectmen Budget at $8.2M ~5.0% • FinCom Budget at $1.4M ~5.2% • School Budget accounts for 80% of Budget increase • Enrollment • From 2,704 to 3,481 ~2.6% / Year • Consumer Price Index • No correlation visible between CPI and Sharon Budgets

20. Agenda • Review Sharon Tax Revenue • Average Tax v. State Averages • Sharon Business Valuation Discussion • Review Sharon 10 Year OpEx Budget History • Budget Composition and Growth Rates • Massachusetts State School Budget Growth Rates Comparison • Next Step Recommendations • Summary of Findings • Best-in-Class Comparisons • Revenue Enhancement Programs

21. State Per Student Expenditure Sharon

22. Sharon Spend per Student Removing > $25,000 and < $0 per Student

23. 10 Year Growth Rate in Spend per Student Sharon Removing > 10% and < 0% Growth

24. Compared to State Performance • Per Student spend at $7,870 • Above State Average • Within range of State Spend • Growth in per Student spend at 5.2% • Above State Average • Within range of State Spend Growth • School Budget seems to track to State averages State Budget data does not match Sharon Budgets, leading to some general discrepancies.

25. Agenda • Review Sharon Tax Revenue • Average Tax v. State Averages • Sharon Business Valuation Discussion • Review Sharon 10 Year OpEx Budget History • Budget Composition and Growth Rates • State School Budget Growth Rates • Next Step Recommendations • Summary of Findings • Best-in-Class Comparisons • Revenue Enhancement Programs

26. Summary of Findings • Sharon per Household Tax is among top of State • $6,828 per Household • 94% of Tax Revenue is from Residential Household • CAG growth = 6.83%; 1% higher than peer average rate of 5.68% • Business Tax Revenue • Increased valuation for newer buildings • $12,500 per acre is benchmark for newer buildings • 38 business acres remain to be developed • School budget • ~7.3% average over last 10 years; $2.2+M per year • Accounts for 75% of OpEx • Growth seems consistent with State averages

27. Multi-Tiered Approach: $2.2 to $3.0M • Reduce growth of School OpEx $600 – $800k • Target near term 5.5% • Conduct Best-in-Class studies w/ comparable academic quality • At 7.2%, we will be at $40M within 5 years, $10M over today • On-deck developments $750 – $950k • Increase business tax revenue $950 – $1,500k • Development Funds ($250 - $500k) • Update buildings > 20 years old w/ low interest redevelopment funds • New Business ($700 - $1,000k) • Attract development to empty parcels; create new smaller zones • New Sources ($ yyy) • Wind Turbine; Town WiFi; GreenFuel; Cell Tower $2.2 to $3.0M

28. Economic Development and Commercialization Committee

29. Pipeline Valuations • Avalon • 156 2 br apartments $80k per @$15.11 $ 190,000 • Simpson • 198 2 br apartments $80k per @$15.11 $ 240,000 • Brickstone • 100 2 br assisted living $100k per @15.11 $ 150,000 • Lexus • 12.5 Acres $12.5k / Acre $100k to $150k • Redevelopment • Fund renovate existing facilities (25%-45% participation) $ 200k to $ 300k • New Business • Attract development to 38 acres of empty parcels (10 yrs) $ 450k • Assess 20-40 acres rezoning on S. Main $ 250k to $ 500k • New Sources • Wind Turbine; Town WiFi; GreenFuel; Cell Tower $ yyy

30. Sharon Land Use • Residential Zoned • Developed 6,200 Acres 36% • Undeveloped 2,550 Acres 8,750 20% 55% • Business Zoned • Developed 225 1.3% • Undeveloped 111 336 0.7% 2% • Conservation • Audubon Land 1,966 Acres 12% • Conservation Land 1,805 Acres 11% • State Land 1,173 Acres 7% • Open Water 626 Acres 4% • Trustees of Reservations 345 Acres 5,914 2% 37% • Town • Town Properties 848 Acres 848 5% 5% • 15,848