PITTSFIELD >> The amount used from surplus city funds to reduce this year's tax rate increase was the hot topic as the City Council approved the new rates on Tuesday.

The bottom line for taxpayers was a $126, or 3.98 percent hike, for a residential property at the average valuation of $176,234, and a hike of $1,193, or 6.44 percent, for a commercial property of average value at $517,812.

Mayor Daniel L. Bianchi had based his tax rate calculations on the proposed use of $2.25 million from the free cash account to reduce the rates, but councilors cut that figure to $1.5 million, citing concerns over the city's long-term fiscal health.

Bianchi said the amount of free cash he proposed would allow a residential tax rate of $18.70 per $1,000 in valuation and a $37.27 rate for commercial or industrial property.

After a lengthy debate, the council approved using only $1.5 million from surplus funds and retaining more in reserve, which meant slightly higher tax rates — a residential rate of $18.76 per $1,000 of valuation and a commercial rate of $38.06 per $1,000.

Councilor at large Barry Clairmont and others expressed concern that too much was being deducted from the surplus amount to lower the fiscal 2016 tax rate in light of stagnant property values in Pittsfield. "My concern tonight is for the future," he said.


Councilor at large Kathleen Amuso also declared at the start of the debate that she intended to propose a $1.5 million free cash figure, adding that Pittsfield has to find ways to make government more efficient and reduce spending.

"I think [department] directors have to come up with a decreased budget," she said, calling for an overall review of city spending.

And Councilors Kevin Morandi and Anthony Simonelli reiterated their prior calls to reduce spending in June when the annual budgets are approved, rather than in the fall when the tax rates are set.

Clairmont cited the potential effects of annually rising budgets and the city's falling Proposition 2½ tax levy "ceiling" — a figure based on the total amount of property valuation in a municipality, which in the city's case hasn't shown significant growth in recent years.

Clairmont noted that the city's auditor, Thomas Scanlon Jr., of Scanlon & Associates of Deerfield, has referred to a decline in the Proposition 2½ ceiling figure since 2009.

The ceiling number is derived from the annual 2.5 percent tax increases allowed under Proposition 2½ plus the increase in overall property valuation.

Last year, the city had about $8.5 million in excess levy capacity it could use if needed, Clairmont said, but the number for this year is about $7.5 million. Should property values remain at current sluggish levels, the average annual tax increases of 2.5 to 3 percent Pittsfield has approved recently could eat up the city's levy capacity in about four years, he said.

The mayor indicated he was open to amending the free cash figure after hearing last week that some councilors favored something lower than the $2.25 million approved along with the budget plan in June.

But he said the figure should be in the $2 million range to avoid a spike in the tax rates, especially on residential properties. "We have to consider the taxpayers," he said.

Clairmont first proposed using only $875,000 from free cash, which was rejected. He next proposed using $1.25 million in free cash, which also was shot down, and finally $1.5 million, which was approved on a 7-4 council vote.

The new tax rate figures compare to the fiscal 2015 rates $18.06 per $1,000 for residential property and $36.63 for commercial property.

Overall, the new rates will support a total city tax levy of $76,785,455 for the current July-to-June fiscal year, up from the $73,514,528 level approved last year.

City Treasurer and Finance Director Susan Carmel said the free cash amount is expected to be certified soon by the state at approximately $4 million to $4.5 million. The amount taken from free cash to lower tax rates has averaged about $1.9 million over the past decade, she said.

In answer to a question, Carmel said a surplus amount of from 3 to 10 percent of a municipal budget is generally recommended, adding that the city has retained a reserve of 3 to 4 percent of the budget in recent years.

Paula King, chairwoman of the Board of Assessors, said that if the new rates were figured as a single tax rate for all property that would be $22.97 per $1,000 valuation, up from $22.07 last year.

She said the total valuation of city property is $3,343,164,997 this year, compared to $3,331,646,372 in fiscal 2015.

Contact Jim Therrien at 413-496-6247.

Tax rates in Pittsfield, per $1,000 in assessed property value:

Fiscal 2016

Residential: $18.76

Commercial: $38.06

Fiscal 2015

Residential: $18.06

Commercial: $36.63