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

Sharon Planning Board 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

Sharon Planning Board 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

Sharon Planning Board 4 History of Passed by Commercial Developments S. Main StreetAnnual – $1,500,000 – $2,000,000 –Spring acres Cobbs Corner Annual – $130,000 - $170,000 –Spring acres Cannon Forge/Sharon WoodsAnnual – $3,000,000 –Spring – 280 acres Sacred Heart Dormitory buildingOne-time – $1,000,000 Saw Mill land on Canton St. incl. Temple Sinai & Box Co.$100,000 –19666 acres Annual $4.7M – 5.3M

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

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

Sharon Planning Board 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

Sharon Planning Board 8 Majority of Commercial Facilities > 20 years

Sharon Planning Board 9 Newer Facilities Generate $6k more / Acre

Sharon Planning Board 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

Sharon Planning Board 11 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 Development Tax Revenue Opportunity $900k to $1,250k

Sharon Planning Board 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

Sharon Planning Board 13 Sharon OpEx Budget

Sharon Planning Board 14 Sharon OpEx Budget School 2005 $29.3M Selectmen 2005 $8.3M School 1995 $14.5M Selectmen 1995 $5.0M

Sharon Planning Board 15 Annualized Growth Rates School 10 year 7.3% Selectmen 10 year 5.0%

Sharon Planning Board 16 Budget Composition Shift School accounts for 75% of 2005 OpEx Budget School accounts for 80% of $18.6M increase since 1995

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

Sharon Planning Board 18 No Relationship between Budget and CPI

Sharon Planning Board 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

Sharon Planning Board 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

Sharon Planning Board 21 Sharon State Per Student Expenditure

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

Sharon Planning Board Year Growth Rate in Spend per Student Sharon Removing > 10% and < 0% Growth

Sharon Planning Board 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.

Sharon Planning Board 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

Sharon Planning Board 26 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 Summary of Findings

Sharon Planning Board 27 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 Multi-Tiered Approach: $2.2 to $3.0M $2.2 to $3.0M

Sharon Planning Board 28 Economic Development and Commercialization Committee Dev LoansNew BusinessNew Revenue Alan Lurie  Seth Ruskin  Rob Maidman  Ben Pinkowitz  David Spiegel  Keevan Gellor  Jeff Seul  Mike Bossin  Eli HauserChair Bill HeitinChair Tam Ly

Sharon Planning Board 29 Pipeline Valuations Avalon –156 2 br apartments$80k 190,000 Simpson –198 2 br apartments$80k 240,000 Brickstone –100 2 br assisted living$100k 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 acres rezoning on S. Main $ 250k to $ 500k New Sources –Wind Turbine; Town WiFi; GreenFuel; Cell Tower$ yyy

Sharon Planning Board 30 Sharon Land Use Residential Zoned –Developed6,200 Acres36% –Undeveloped2,550 Acres8,75020%55% Business Zoned –Developed2251.3% –Undeveloped %2% Conservation –Audubon Land1,966 Acres12% –Conservation Land1,805 Acres 11% –State Land1,173 Acres7% –Open Water626 Acres4% –Trustees of Reservations345 Acres5,9142%37% Town –Town Properties848 Acres8485%5% 15,848