In a five-month span in 2006, houses on Somerset Street, Park Avenue and Marsh Street were sold and, suddenly, Belmont's taxes took an immediate hit of nearly $50,000.
That is because the homes literally disappeared from the town's Treasurer and Tax Collector's books as if they no longer existed.
The reason was quite simple; the three properties were sold to the Belmont Hill School and the Massachusetts Audubon Society, non-profits that are exempt from paying property taxes to Belmont.
And the purchase of property continues. In the past six years, Belmont Hill as bought or is in the process of purchasing three properties on Prospect Street worth $6 million. As of now, the properties are being using as rentals and continue to generate property taxes.
But their status will change and with it, so will Belmont's tax claims.
"We know once they have their expansion plans finalized, Belmont will lose nearly $70,000 in annual payments on those three properties," said Charles Laverty, chairman of Belmont's Board of Assessors.
With Belmont heavily dependent on property taxes to pay for its budgetary needs, Laverty wants all town non-profits to help redress the lost revenue stream by giving a little back to the town.
"These non-profits are great additions to the town and makes it a great town to live in," he said.
"But there is a cost to the town for them being here so they have some obligation to help out since our tax base is not expanding," said Laverty.
"This is a fairness issue," said Laverty.
The board's plan for voluntary payments in lieu of taxes, better known as a PILOT program, does get a sympathetic ear from two of the town's largest non-profits.
But while they are sensitive to what the town provides in services and belonging to the larger Belmont community, they are reluctant to answer with an unqualified 'yes' to Laverty's plan ... for now.
"We do want to be good neighbors and are taking this under advisement," said Annette Raphel, head of school for Belmont Day School.
Losing 25 cents of every dollar
The loss of taxable property is critical in Belmont where 44 percent of land is non-taxable (including town property and roads) with a quarter of total land owned by tax-exempt organizations.
In the past decade, a dozen properties in Belmont worth $13.2 million in assessed value have been taken off the tax rolls at a lose of nearly $157,000 to the town after their purchase by tax-exempt institutions.
The town is also hampered by 6.3 million square feet of designated agricultural and recreational land – the former Sergi Farm and Belmont Country Club – which can not be taxed in its present state.
With only six percent of land designated as commercial or industrial, the bulk of the burden from losing taxable real estate lands on the lawns of residential property owners in this "Town of Homes" where property taxes supports two-thirds of the town's budget.
If all property in the hands of non-profits would have been taxed at the current rate of $13.35 per $1,000 of assessed value, the town would receive an additional $533,000 with McLean Hospital leading the way with $212,000 followed by Mass Audubon at $165,000 with Belmont Hill $56,000 and Belmont Day $21,000.
That amount would close the current deficit facing the town's fiscal 2013 budget.
For the board, a request for voluntary payments – at a reduced rate compared to homeowners – is an equitable solution for all sides of the issue.
"They can take any property off the books so the PILOT is just trying to have (non-profits) not even pay the entire amount but just the essential services they use," said Robert Reardon of the assessors board.
Copying Cambridge's model of success
Laverty and Reardon are attempting to bring to Belmont an alternative payment program that has been successfully established in Cambridge.
Laverty created the plan used by Belmont's neighboring community nearly 35 years ago in which non-profits are requested to make a specific donation to the city. Today 22 non-profits, led by Harvard University and MIT, pays the Cambridge $5.8 million in lieu of tax payments last year. He notes that Boston is asking non-profits 25 percent of the expected tax they would have paid.
Currently, the town collects PILOT payments from:Waverly Woods/Belmont Housing Trust $25,693 City of Cambridge/Payson Park Reservoir $4,840 Belmont Housing Authority $4,457 Belmont Land Trust $611 Holy Armenian Catholic Church $200 First Church of Christ, Scientist $500 Lions Club of Belmont $500 Total $36,800
The Belmont Municipal Light Department contributes a $650,000 annual PILOT payment. McLean Hospital paid a significant amount in lieu of tax payments from 1999 to 2008 but that ended when private townhouses on the property came to the market.
Both men acknowledge the difficulty of creating a program that attempts to bring in a significant level of funds but not alienate non-profits and religious organizations so they will ignore subsequent requests for alternative payments.
In its first attempt at outreach, the town will send a letter asking non-profits pay 4.2 cents per square foot of assessed land, the calculated amount that goes to support police and fire services.
"What we are asking for is a very minimal amount," said Laverty, hoping to double the $36,800 the town's current PILOT programs brings in.
"That would be a great start," he said with a future target of bringing in $100,000.
The town revealed that police and fire departments are frequent visitors to the two largest private schools: Calls for Police and Fire departments excluding fire drills and medical calls over the past three years from Belmont Hill reached 142 and 145 at Belmont Day.
Belmont Hill School is aware of the plans from the board to request a voluntary amount "but we don't actually know what they are proposing," said William Mahoney, director of communications.
Over at Belmont Day, Raphel acknowledges "and we are grateful for the police and fire service which is extraordinary."
While the school's board of directors will discuss the plan, she points out that Belmont Day currently has 72 students from town which she calculates saves the Belmont schools $840,000 annually in reduced teaching costs.
The letters will go out in the next week, said Reardon. Yet in the past years, non-profits have told him that "the economy is difficult and its hard to budget this."
"But it seems that its never right time," said Reardon.
"This is not a contribution but a necessity in our public/private partnership," he said.