AGAWAM – On Feb. 15, a video was posted to the town of Agawam Facebook page featuring Mayor William Sapelli and Chief Assessor Samuel Konieczny. Sapelli and Konieczny joined together to explain the increase in resident’s tax bills.

In November, there was an increased tax rate from $16.61 to $16.65 and an assessed property value increase of 5 percent. While Konieczny explained that the increased tax rate only added about $2 to each tax bill, the higher property value was a major contributing factor to the increase in the bill amount that Agawam residents saw.

In the video, Sapelli said, “There was quite a change from this tax bill versus the tax bill they received prior to this year’s tax bill. I know the tax bill can be somewhat confusing to most of our residents and I understand that. I wanted to clarify some of the misconceptions that are out there with regard to the tax bill.”

Sapelli explained the two factors that affect the tax bill are tax rate and assessed value. Agawam’s tax rate was previously $16.61. In November, the tax rate was increased to $16.65, an increase of $0.04 per $1,000.

“It’s not a bad thing. Especially when you’re selling your home, it’s a good thing. But when you’re paying your taxes, you can’t appreciate the fact that your home is going up in value, which is probably your most valuable asset, and it’s actually a good thing if the value is increasing,” Sapelli said.

The assessed value of the residential property in Agawam increased by 5 percent. The average home in Agawam is currently valued at $237,000.

“I know this year in Agawam, the assessed value of all the residential property went up 5 percent. If you couple that increase, which was 95 percent of the change in your tax bill, with that $0.04 per thousand, that combined resulted in a difference of the tax bill,” Sapelli said.

Residents receive four total bills per fiscal year. The fiscal year runs from July 1 to June 30 each year. The first two bills, called preliminary bills, are issued in July and October. These bills do not reflect the increase in tax rate or market value, as these values are set in November.

Because the increase is not calculated into the preliminary bills, the increase is applied to the January and April tax bills, called actual bills.

Konieczny explained that there were higher increases to tax rates in past fiscal years for the town of Agawam. Using examples from 2014-2018, numbers reflected increases ranging from $0.13 to $0.44.

In regard to market value increases, Konieczny explained that the value of property is on an upward trend, resulting in higher tax bills. “Each year as assessors, we are bound to assess at what’s known as the fair cash value of a property. Assessments are always a reflection of the market rather than a prediction, so we use the sales data from a calendar year 2017 for our analysis period for fiscal 2019. Each year, we do this. This particular year, we saw one of the largest increases in market adjustments that was done since the financial meltdown of 2008,” Konieczny said.

Konieczny continued, “It’s basically supply and demand. As the demand increases and the supply decreases, typically prices rise. For example, this previous year we had a higher demand with less supply. Homes were selling much more quickly on the market, so there was less inventory. That drives prices up.”

Sapelli said, “If that’s your most valuable asset as a resident, more valuable than probably anything else you have unless you have a business, that could be a good thing because you want your value to go up. You don’t necessarily want it to go down.”

Konieczny explained the process of determining market value. “When we do our analysis, we take what’s known as ‘the arm’s length sales.’ Arm’s length sales is very simple. It’s a willing buyer and a willing seller. Both parties are well informed. Two willing buyers and sellers meet, on the open market and the price is dictated by the free market. That’s how we arrive at a sale price for just about anything, but for a house in particular, we take those arm’s length sales and we use those for our analysis period to do our statistical modeling for that fiscal year,” Konieczny said.

Konieczny continued “We compare the median of the sales price in a particular segment against our assessed values, the median of our assessed values for those properties. If there’s a difference between the assessed value and the sales value, we do what’s known as a market adjustment, either up or down. We had a large market adjustment because the market is moving up.”

According to the video, “Many other municipalities in Massachusetts saw increases of 10 percent.” This is double the increase that Agawam saw.

Konieczny explained that the increased tax rate had little affect on the increase in resident’s bills. When calculated, the increased tax rate only applied about $8 divided across all four bills. “The main difference you’re seeing in your tax bill for 2019 is due to market adjustment,” Konieczny said.

Konieczny said that residents could expect the market value to increase in the next year. “Provided during our sales analysis the market is going up, and it is trending up still, so I can almost for sure tell you that the market adjustments will be going up. I don’t know how much until we do our statistical modeling and our analysis. However, provided that there is an increase there, if the budget were to stay the same or move up and down, you could see the difference,” Konieczny said.

For residents who have questions about exemptions or need help understanding how each bill is calculated, Konieczny said the Assessor’s Office at Town Hall is happy to help.

“One of the things that I want to let the public know is that in my office, I have wonderful staff and they’re very knowledgeable. I encourage anyone that is interested in the senior exemption, a disabled veterans exemption or a blind exemption to please come into my office and speak to my staff or myself and if there’s any way an individual qualifies, we’re happy to help them out and it’s an honor,” Konieczny said.

Sapelli said, “Many times, the director of our senior center, Mike Squindo, helps a lot of the seniors with that information. [Exemptions] are contingent on an income level but nonetheless, it doesn’t hurt to ask.”

Konieczny included several calculated examples and slides within in the video to help break down each calculation of bills. To view the full video, please visit https://www.facebook.com/townofagawam/. The Assessor’s Office is located within Town Hall at 36 Main Street. The office is open weekdays from 8:30 a.m. to 4:30 p.m.