Planning and Development Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-377

Title:

AN ACT AMENDING THE CHARTER OF THE ODD FELLOWS HOME OF CONNECTICUT.

Vote Date:

3/24/2017

Vote Action:

Joint Favorable

PH Date:

2/15/2017

File No.:

518

SPONSORS OF BILL:

Senator Heather B. Somers, 18th Senatorial District

REASONS FOR BILL:

To increase the amount of the tax exemption for real and personal estate held by the Odd Fellows' Home of Connecticut to thirty-five million dollars and to specify that any tax assessed against said Home on or after June 15, 2012, and prior to the effective date of this act shall be calculated on the amount exceeding twenty-five million dollars.

RESPONSE FROM ADMINISTRATION/AGENCY:

NONE

NATURE AND SOURCES OF SUPPORT:

Senator Somers – The lack of clarity in the current law has created a difference of interpretation between the Town of Groton and the rest and acute care home owned by Fairview. The issue is the amount of property taxes the Town of Groton believes is owed by Odd Fellows.

In 1983, The Legislature gave the Odd Fellows Home tax-free status up to an assessed value of $5 million. With inflation, adjustments have been made, the latest in 2012 up to the $25 million threshold. An evaluation by the town subsequently put Fairview over the limit. Groton argues that it is owed taxes on the entire value once the cap has been surpassed. Fairview believes the law is clear that the taxes owed are only on the total values over $25 million. It is difficult to believe that this was the intent of the legislation back in 1983.

This bill will raise the limit to $35 million which is reasonable in standard.

Fairview originally provided nursing care for the fraternal organization the “Oddfellows” at little or no cost. Today the facility is a non-profit and hosts an acute care facility that includes a memory floor, rehab, long-term care and now additionally, housing for 55 and older that is used as folk's age with the eventual transition to the acute care facility. Over 50% of the patients are Medicaid patients. The facility employs nearly 300 in good paying, professional jobs and the majority of workers reside in Groton.

This organization is too important to Groton and the community at large to provide an unbudgeted expenditure that could severely curtail service, lead to job losses and issues with family members.

James Rosenman, CEO, of Fairview, Odd Fellows Home of Connecticut – We are a 5-star (under the government's Centers for Medicare & Medicaid's Quality Rating System) non-profit nursing home and senior housing provider that has been in Groton for over 120 years.

I am asking your support for SB 377 which raises the tax exemption amount from $25 to $35 million and affirms the century-old understanding of how the exemption is to be applied.

We ask for your support to increase the exemption threshold so that Fairview can have a predictable budget path moving forward and that we can continue to provide exceptional care and services in an already tough environment.

We are also asking you to support the language in the bill as to how the exemption is to be interpreted and applied. Since its beginning, the exemption has exempted from taxation all property up to its dollar threshold. Recently, some in local government have ignored the longstanding view. They have begun insisting that, if Fairview's property exceeds the exemption threshold, then all of Fairview's property, not just the amount that's over the threshold, becomes taxable.

Fairview believes strongly, that this newly expressed view ignores the clear intent of the legislature, the century old, common-sense understanding of how the exemption is to apply.

Seth Wakeman, Stonington – Member of the Board of Directors of Fairview Odd Fellows - When the State Legislature granted a multimillion dollar exemption to Fairview, a skilled nursing facility chartered not for profit, its INTENT was to enable the home to be free of a tax burden. A few years ago the legislature increased the size of the exemption to 25 million to enable the institution to grow without a tax burden.

Each year real estate values increase with inflation – I do not believe Fairview should be punished for inflation.

We realize that the Town and City of Groton provide us with services; especially fire and police protection but we do not ask for care of our streets. We do not provide a crop of school children that burden the school system. These two items make up a large portion of the municipal budget. We do not feel our existence is a burden on the town taxpayers.

Fairview is an important entity in the Town of Groton. We provide employment to area residents and we and our residents purchase goods and services from town providers. We only ask fairness in allowing us to provide our services without an additional tax burden.

Pamela Tankard, Resident of Thames Edge at Fairview – (Former Fairview Employee and Current Volunteer) – Attest to their excellence at meeting the health and social needs of its' residents. Fairview is a venerable non-profit that has stood the test of time (125 years). Wants to see favorable conditions afforded Fairview so it may continue its' noble mission and hopes that we not forget that it provides gainful employment to hundreds of people, therefore keeping workers and taxpayers in Groton and surrounding Connecticut towns.

James Evans (resident of Thames Edge at Fairview since 2014) – When Fairview decided to offer homes in the proposed independent living community on their campus, they put their names on the waiting list because of: 1) the efficient manner in which Fairview is run, 2) the units are well made and high quality, 3) they knew they would have a place to call home, 4) the services that were offered, and 5) knowing that Fairview was well established gave them peace of mind.

Fairview is a friendly, social and active community which offers socials, monthly community breakfasts, clubs, movies, Farmer's Market, physical activities (water aerobics, jazzercise) and many other opportunities. The clubhouse has been converted to an upscale restaurant serving dinner four nights a week. It is a place to take family and friends out for a nice social evening.

Due to the changes in tax collection, any new services planned might have to be cancelled or put on hold or our monthly rent will increase dramatically to offset these new taxes, which might impact the future of some of the residents being unable to afford to remain at Thamses Edge.

Jeri Baker – Old Lyme resident) - The family has been part of the Fairview community for at least two generations. Grandparents were residents at one time or another and his mom spent the last five years of her life in the care of this remarkable place. Fairview was chosen for its exceptional care, dedicated staff and its commitment to a level of quality that has been recognized, time and again, for its excellence. He wants to remain part of the Fairview family and community and continue the relationship for many years.

NATURE AND SOURCES OF OPPOSITION:

Bruce Flax, Mayor, Town of Groton and Mark R. Oefinger, AICP, Town Manager, Town of Groton – The Town of Groton desires a legal adjudication of the issues by the court (a lawsuit is currently pending in the Judicial District of New Britain (Docket HHB CV16 6034701S) - The Odd Fellows' Home of Connecticut is the owner of certain real and personal property located within the Town of Groton. As of the October 1, 2015 grand list, the Town determined that Odd Fellows' property was taxable with the exception of its skilled nursing facility exempt pursuant to C.G.S. sec 12-81(75). Odd Fellows has commenced a tax appeal challenging both the legality of the property tax and the Town's valuation of its property.

SB 377 seeks to retroactively limit the Town's ability to tax Od Fellow's property, and to also increase the value of property Odd Fellows may hold before becoming full taxable.

Since it is the Town's position that the legal issues surrounding the taxability of Odd Fellows' property should be resolved by the court, the town respectfully requests that this bill not pass.

Mary Gardner, CCMA II, Assessor, Town of Groton - For the October 1, 2015 Groton grand list, the combined real estate and personal property value exceeded the $25 million dollar exemption threshold for the first time. This was due to the partial completion of (40) forty newly constructed independent units. ON May 16, 2016, Old Fellows Home of Connecticut filed a lawsuit with Superior Court challenging the town's assessment and its application of the General Assembly exemption. On July 26, 2016, the Groton Town Council rejected an offer by Odd Fellows to enter into a payment in lieu of tax agreement and gave town staff permission to pursue adjudication of the issues contained within the lawsuit.

In 1983 the General Assembly granted an original exemption of real and personal property to Odd Fellows in the amount of $100,000. The original Odd Fellows Home in Groton consisted of a Victorian-style dwelling which served as a nursing home to the aged and crippled members of the Odd Fellows and their wives, widows and orphan children and was supported by donations & bequests.

Since the original exemption was granted, the General Assembly has increased I six times; the most recent being to the $25 million threshold in 2012 without consulting town officials for their input. The town agrees that under CGS 12-81(75) that the skilled nursing facility is to be considered tax exempt, and we maintain that exemption.

Today, the property consists of 70 acres with direct water views of the Thames River and includes a 120 bed five-star skilled nursing facility, 24 assisted living apartments, a clubhouse, a full service restaurant and forty independent living dwelling units that were recently constructed in two phases. These units are all contained in a Continuing Care Residential Community known as Thames Edge at Fairview. Residents who sign up pay contract entrance fees upfront that range from $340,000 to $475,000 per unit and in addition, agree to pay monthly rents between $1,900 and $2,400 per unit. Additionally, Odd Fellows has recorded plans in the town clerks land records that show future development to expand the facility to twice its current footprint.

It is the responsibility of the assessor to understand and follow existing statutes to equitably value all property in town. This insures the fair and equitable distribution of the tax burden for our residents. Our interpretation of the language of the General Assembly exemption differs from Odd Fellows' interpretation.

In fairness to the taxpayers in Groton and, in light of the governor's budget statement last week, the town would ask for your consideration of the time, effort and monies already spent on settling these issues with the current litigation.

Reported by: Mary Anderson

Date: April 7, 2017