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Hamilton Taxpayers Overcharged, Money to be Returned on 2012 Bills

The Hamilton Board of Selectmen has decided to return a total of $275,000 in taxes that were overcollected from the fiscal 2011 tax bills because of an accounting error.

The average Hamilton homeowner will get back $85 on their 2012 tax bill because of an accounting error in paperwork filed with state officials.

While the 2012 budget won’t be set until Town Meeting in May, the total amount of money collected will reflect a reduction by the amount of taxes that was overcollected in fiscal 2011.

It was an “accounting error” made by Hamilton accountants that resulted in an additional $275,000 in taxes being collected, said Town Manager Michael Lombardo. The error, on what is known as the “recap sheet,” wasn’t discovered until after the paperwork was recently finalized and submitted to state officials.

Hamilton Selectmen on Tuesday night agreed that they had no other choice than to return the money to taxpayers in 2012.

Lombardo gave the board two options, either to return it or to transfer it into the town’s reserve account.

No formal vote was taken but a majority of the board informally agreed that the money will be returned on 2012 bills. Later, Lombardo said the money would come off the 2012 tax rate, meaning it will be returned equally through all four tax bills.

Selectmen Chairman Jennifer Scuteri said Lombardo handled the situation very well - he found the error quickly, acted on it by meeting with a Department of Revenue representative and town officials and then by bringing it to the Board of Selectmen.

“I think it is important to our residents to know that is how we handled it,” she said.

When the error was discovered, Lombardo said he met with the local representative from the state Department of Revenue, along with Selectman Bill Bowler and Scuteri and Finance Director Deborah Nippes-Mena.

Without the error, the 2011 tax rate would have been 19 cents lower, meaning the tax bill for a home assessed at $440,000 – the average – would have been $85 less.

“It’s not insignificant,” Scuteri said, later adding: “I lean heavily towards ‘let’s reverse it right away.’”

Bowler said the town has been struggling to build up its reserve accounts and that the town should seriously consider "option 2" presented by Lombardo to use the money to build up its reserves. With more in reserves, the town is given a better bond rating, which in turn lowers the cost of borrowing money with a lower interest rate. That means the town saves money, he said.

Board member David Carey said he favored returning the money to taxpayers.

"I don't see any other option other than No. 1," said Selectman Jeff Stinson, referring to the first of two options outlined by Lombardo. "It is an error and it needs to be returned immidiately, or as soon as possible."

Finance Committee Chairman John McWane said the committee’s first reaction was to reverse the overcharge on the fourth quarter tax bill. But it was too late for that, he said.

Three out of four of the Finance Committee members said they wanted to “correct it as soon as you can,” McWane said.

McWane said there is a “straightforward way” to increase the town’s reserves - the stabilization fund – by making an argument to voters to increase it.

Selectman Marc Johnson said he favored returning the money to taxpayers.

“Next year let’s make that a separate case,” he said about the need to increase the town's reserve account.

Jay Burnham March 03, 2011 at 12:46 PM
Let me get this straight...According to Mr. Bowler, "the town saves money" by keeping an over-payment of taxpayers' funds. By that way of thinking, why not save a bunch more by raising our taxes even higher than they already are? Can you say "give me a break?" Thanks go out to the rest of the board members that did the right thing by agreeing to return the funds to the people that were over-charged. Even Mr. Bowler admited "It's the people's money". At least he was right on that count.
Bill Bowler March 03, 2011 at 02:33 PM
Thanks for your opinion, Jay. Our professional town manager presented us with two options, one of which was to use the money to increase reserves which under prudent financial guidlines we should do. That was also the recommendation of the DOR representative. The selectmen have an obligation to examine the options and that's what I/we did. I did not say we WOULD save money. I said if we increased our reserves so we do not have to use Revenue Anticipation Notes and we improve our bond rating we COULD save money.
Jay Burnham March 03, 2011 at 03:05 PM
And thank you, Bill, for the clarification. The article did not differentiate "would" or "could" in your statement. All in all, I think FinComm chariman John McWane said it best: "It's the taxpayer's money. They gave it to us by an error. We'll give it back." As a taxpayer, I appreciate the return of money that was mistakenly taken.
Robert Foringer March 03, 2011 at 09:37 PM
Agree Mr Pizzano!!!! What no response from Mr Bowler??? Time for Bill to move on accountabilty to the people.
Questionable Ethics March 04, 2011 at 06:43 PM
The money probably needed to be returned to taxpaying residents to avoid any hint of impropriety, but Selectmen Bowler is correct. The DOR recommends that towns keep reserves at 3 percent of the annual municipal budget, and Hamilton has the second lowest bond rating on the North Shore. And we are in danger of being downgraded -- a move that would cost taxpayers in terms of servicing existing debt. While it is generally the practice of towns to move an unexpected surplus into reserves, and it would have been perfectly legal to do so here, it would be hard to justify using an accounting error by the town to bolster reserves to residents. Having expressed that, FinCom and the Selectmen should make the case to bolster town reserves at this year's ATM. QE
Kenneth Seacon March 05, 2011 at 12:05 AM
It is not however Selectman Bowler has never let that stop him. It is time to move on for this man who has created a town with hidden secrets, stolen funds, and just plain wrong actions. The vote is what counts at the elections. Vote no on Bowler.
Questionable Ethics March 05, 2011 at 05:46 AM
Legal and right are two different things. QE
Robert Foringer March 05, 2011 at 08:04 AM
Kenneth I agree 100% Bowler is part of old way things were done in this town. Amazing he would come out this plat forum to debate what he said could, should would,shell game over! Time to move on like Walter.
Robert Foringer March 05, 2011 at 03:08 PM
Rudy QE Stands FOR BB...LOL
Questionable Ethics March 05, 2011 at 04:15 PM
Odd that I am being attacked so for making a simple statement of fact. I agree with the Board's decision as it was the right one, but nothing that Bowler (with whom I am hardly a fan of) stated was incorrect. Those who love the truth support it irrespective of who is speaking it, and those who love power more than truth lie when it is convenient for them to do so. As for me, I back up everything that I write with verifiable facts and sound reasoning. Always have. Just remember that when you are paying higher taxes to service the debt when our bond rating gets downgraded. Don't say that I did not warn you. QE
Richard Liftell March 10, 2011 at 12:47 AM
QE - I think you are above reproach. I have not seen you ever make a statement that was not based in fact or good thinking. I think so many people are use to Hamilton's faulty way of thinking ever siknce the begining of the oems scandal, the BOS cover ups and the hidden agendas that anyone who tells the truth is lumped into the pile with the corrupt. Thos if you have forgotten are far more prevalent in the BOS \, police department, fire department. We have a BOS in the past made out of liers and deceptionists. A police department chock full of immoral persons and a fire department so upset with its leader that it is pulling apart at the basic threads of the job. In short, Hamilton is not use to straight shooters as you can count them over the past 1/2 decade on one hand!

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