DLS City & Town

Introducing the DLS Data Analytics and Resources Bureau

Sean Cronin - Senior Deputy Commissioner of Local Services

I hope you're enjoying your summer and the FY19 close / FY20 open period of the budget cycle! In the February 1, 2018 edition of City & Town, I wrote about our Municipal Finance Trend Dashboard, an online tool comprised of key municipal fiscal health indicators based upon data that comes from required municipal submissions to the Division of Local Services (DLS), annual financial statements, state agency databases, and the US Census. Our Dashboard graphically displays trends in revenues and expenditures, municipal operating positions, demographic information, unfunded liabilities, property taxes, Proposition 2 ½ data, and debt information. These municipal fiscal health indicators are presented over multiple fiscal years in order to provide a broader perspective of trends.

As a local official, the Dashboard was designed to make it easier to get the information you need. It's no longer necessary to download multiple spreadsheets, combine different datasets, and create charts and graphs. For these key metrics, we've provided a resource that does it for you (please note that data for all 351 municipalities over multiple years is available as well – so no fears for those who like the raw data!). We believe the Dashboard is a great transparency tool and can help simplify the analysis that goes into determining the fiscal health of a community. Version 1.0 of the Dashboard has been a success, but we're committed to building upon and improving this tool.

The Dashboard resides on our website, and we're fully aware that the existing layout can sometimes lead to confusion and frustration for those seeking certain information, guidance or forms. To that end, we're taking direct steps to not only make the DLS website more intuitive and navigable, but develop and present training materials better suited for the needs of today's municipal finance professionals. As we face a generational workforce transition in municipal government, it's imperative that DLS provide online modules and instructions in an easily accessible format that support existing and future local leaders.

For these reasons, we have reorganized and combined two previously separate groups at DLS (IT and Municipal Databank/Local Aid) into a single Data Analytics & Resources Bureau (DARB). Data, and the services surrounding that data, are the foundation of everything DLS does. Many of our collective needs can be met, and better served, by changing how we manage and present our data. In addition, like many municipalities, DLS will have retirements over the coming few years. Therefore, we need to simultaneously do more with our data and plan for the future – especially in critical areas such as managing the DLS Gateway application and calculating/distributing local aid. In the weeks and months ahead, we'll be focused on "future proofing" our IT operations. Merging our existing bureaus reduces the risks involved with two separate, very small work units, allows for cross-training to protect critical responsibilities, and improves our ability to rethink and retool our website to create an improved user experience.

I'm a huge advocate for using data to inform our decisions, and, fortunately, DLS has lots of it! To better harness this data, we're in the process of hiring a Data Visualizing Specialist. Working within DARB, this individual will be tasked with enhancing Databank offerings and developing our Dashboard 2.0. As a result, I'm very excited about the future of DLS, DARB, and the possibilities that exist to elevate our data services to the next level, develop a comprehensive modern training center for local officials, and revamp our website so everyone has a better user experience. If you have any ideas related to these functions or resources, please let me know by emailing me at croninse@dor.state.ma.us. I want to hear from you!

Ask DLS: Lease Purchase Financing Agreements (TELPs)

This month's Ask DLS features frequently asked questions concerning municipal finance requirements, procedures and treatment of lease purchase financing agreements authorized under G.L. c. 44, § 21C. Please let us know if you have other areas of interest or send a question to cityandtown@dor.state.ma.us. We would like to hear from you.

What is a lease purchase financing agreement?

A lease purchase financing agreement is an agreement used to finance the acquisition of equipment or some other item where a city, town or district makes payments to the owner of the equipment (usually a financing company) for its use of the equipment during the term of the agreement and, at the end of the agreement, title or ownership of the equipment is transferred to the city, town or district for no or nominal consideration. These agreements are sometimes referred to as tax-exempt lease purchase agreements or TELPs.

When did the TELP statute go into effect?

G.L. c. 44, § 21C was added to the general laws by section 69 of the Municipal Modernization Act (Act) St. 2016, c. 218 and applies to agreements authorized by the legislative body on or after November 7, 2016.

For what purposes can TELPs be used?

• Acquiring equipment, the acquisition of which could be financed by the issuance of debt under G.L. c. 44 or other general or special law; or

• Improving a capital asset, the improvement of which could be financed by the issuance of debt under G.L. c. 44 or other general or special law.

Who can authorize the use of a TELP?

A recommendation of the chief executive officer of the city, town or district is required for the authorization of a lease purchase financing agreement under G.L. c. 44, § 21C. In a city, the chief executive officer is the mayor, in a town, the board of selectmen and in a district, the prudential committee, if any, otherwise, the commissioners. Upon the recommendation of the chief executive officer described above, a two-thirds vote of the legislative body is required to authorize a city, town or district to enter into a lease purchase financing agreement under G.L. c. 44, § 21C. The legislative body vote should, at a minimum, identify: (1) the equipment to be acquired/capital asset to be improved; (2) the maximum term of the agreement and (3) the department authorized to enter into the agreement. The legislative body vote could authorize one or more agreements provided they are each similarly identified.

What is the maximum term of a TELP agreement?

The term of a lease purchase financing agreement under G.L. c. 44, § 21C cannot exceed the useful life of the equipment to be acquired or the capital asset improvement. The chief executive officer of the city, town or district determines the useful life.

Can TELPs be used by Regional School Districts?

Although G.L. c. 44, § 28A makes the provisions of §§ 16 through 28 of c. 44 generally applicable to regional school districts, a separate, more specific statute applies to lease/purchases of equipment for educational purposes by regional school districts. G.L. c. 71, § 16(p). Because a general statute, G.L. c. 44, § 21C yields to a statute specifically tailored for the purpose, a regional school district should follow the provisions of G.L. c. 71, § 16(p) and not G.L. c. 44, § 21C.

Is the funding of a TELP a binding obligation?

An agreement that meets the requirements of G.L. c. 44, § 21C is a binding obligation of the city, town or district as if it were debt authorized under G.L. c. 44, provided the legislative body approves an appropriation, by majority vote, for the purpose of funding the payments due in the first fiscal year of the agreement. An appropriation for the funding for the first fiscal year payments may be included in the annual operating budget for the department or a capital budget or an appropriation may be separately approved by the legislative body.

Because the obligation is treated as if it is debt authorized under G.L. c. 44, the amount required for payments due under the agreement after the first year may be encumbered by the accounting officer for the purpose within the appropriate departmental or capital budget. If the legislative body has not otherwise provided for such payments, they will be included by the assessors when setting the tax rate under G.L. c. 59, § 23. This is the same procedure used for the payment of principal and interest on debt issued under G.L. c. 44.

Can a TELP agreement be refinanced by the issuance of refunding bonds?

Yes. An agreement that meets the requirements of G.L. c. 44, § 21C may be refinanced by the issuance of refunding bonds in accordance with G.L. c. 44, § 21A.

For more information, see Informational Guideline Release (IGR) 19-9.

Data Highlight of the Month: Local Option Community Impact Fee (CIF) - Short-term Rentals

Donnette Benvenuto - Data Analytics and Resources Bureau

The Division of Local Services (DLS) has received a significant number of inquiries regarding the short-term rental law. For all rental contracts entered into on or after January 1, 2019 for rentals of property on or after July 1, 2019, this new law imposes state and local excises on short-term property rentals. This law applies to all property rented for more than 14 days in a calendar year. Click here to view a comprehensive list of Frequently Asked Questions (FAQs) and video tutorials.

If your community has adopted the local option, it must be reported to DLS. To view communities with this adopted local option, please click here. Note that in order for a community to adopt the Community Impact Fee (CIF), it must have already adopted the Rooms Excise. Subsequently, there must be two separate votes taken to adopt the CIF. To notify DLS of either the Rooms Occupancy or CIF adoptions, please utilize the following forms found here. In order for the excise to be effective on October 1st, DLS must be notified of a community’s adoption by August 31st.

To request a list of establishments registered with the Department of Revenue, email us atdatabank@dor.state.ma.us. Finally, DLS has compiled FAQs to explain the changes related to implementation for municipal governments.

For more information, contact DLS directly at databank@dor.state.ma.us or (617) 626-2384.