Town grapples with loan, delayed tax rate

Town grapples with loan, delayed tax rate

Eryn Dion
News Staff Writer


TEMPLETON — Residents can expect their Fiscal Year 2014 tax bills to arrive mid-May, according to Town Administrator Bob Markel, pending the approval of  a $505,000 override passes the May 5 Town Election ballot.

Should the override pass, Mr. Markel has already scheduled a tax classification hearing for the following day, where the rate will be set by the Board of Selectmen. After, the Department of Revenue will expedite the certification process and bills can be sent out.

While residents may not mind waiting another month to pay their taxes, the town relies on that revenue to operate and as Mr. Markel explained during this week’s meeting, money is starting to get tight.

“Without having collected taxes in the third and fourth quarters, we have a cash flow problem,” he said. “Meaning we’re low.”


On January 24, the board authorized then-Treasurer Dan Keeney to take out a $2.6 million loan to cover the town’s remaining expenses until a tax rate was set. The two main expenses for the year include $1.3 million in school assessments and $1.2 million in payroll. That note comes due May 15, leaving very little time for the town to collect enough and cover the debt. Recognizing the predicament, both Mr. Markel and acting Town Accountant Matt Angel recommended the board roll the note over – or pay a fee to extend the deadline – giving them more time to collect. Mr. Markel also stated that the accountant may need to add between $400,000 and $500,000 to that loan to cover other incidental expenses. Taking out an extension will buy the town more time, however, all notes taken out by a municipality in anticipation of taxes must be paid by June 30 – the end of the fiscal year.

“The way we can pay off that note is to actually collect taxes for the third and fourth quarter of this year,” Mr. Markel said.

Tax bills for the first and second quarter were sent out earlier in the fiscal year, however these were estimates, as the official tax rate cannot be set until the town has a balanced budget. Residents were concerned that the taxes collected may not cover the entirety of the loan — to which Mr. Markel replied “it will be very close.”

The town can also send out estimated bills for FY15 to generate extra money from residents who may wish to pay early.

Mr. Markel said the accountant was also exploring a short term loan with the sewer department, and may ask the school to defer one month’s assessment payment — amounting to about $451,000.

“There are no other choices,” he said.

Vice Chairman Kenn Robinson was adamant that the board’s priority in the coming year should be intent on preventing similar situations from occurring in the future.

“This board’s focus really needs to be that this does not happen again,” Mr. Robinson said. “We simply cannot be in this position next year.”

“Hopefully with our new financial team in place and the new town administrator, whoever that may be, will make sure that it is a priority,” he added.

Residents can expect a significant jump in their tax bills from FY 13 — when the rate was $14.12 per $1000 of property value. The FY14 rate, according to estimates given by Mr. Markel, should be around $15.26 with the inclusion of Fall 2013 override. The FY15 rate could be about $16.20 with the May override, or higher, if the town approves a debt exclusion for the new elementary school project.

Comparatively, Templeton’s tax rate sits right in the middle of its neighbor’s – Hubbardston’s FY14 rate was $14.52 and Phillipston’s was slightly higher at $16.29.