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Department of Taxation and Finance

EQUALIZATION PROJECT TEAM

MINUTES
Thursday, March 18, 2004

10:00 a.m. – 3:00 p.m.;
Video-Conference Between ORPS Syracuse & Newburgh Offices

 Attending:

Assessors:  Dave Briggs, Edye McCarthy, Walter Smead, Roger Tibbetts

County Directors:  Tom Bloodgood, Paul Burckard, Bob Diener, Barry Miller

ORPS:  Pat Holland, Jim O'Keeffe, Tim Maher

Other:  Dave Williams

2004 Rates Status and Issues:

There was a discussion regarding whether ORPS stratifies the sales when they conduct sales ratio studies.  It was explained that the ORPS analysts do not use stratification in their sales ratios studies unless it is brought to their attention that there is something unique in the assessing unit, and then staff will stratify the sales ratio study.  In the 2004 rate procedures we specifically added the following language “If there is evidence that different groups of property within major type A are assessed at different market value ratios then the major type may be stratified before estimating the market value of major type A.” 

It was recommended that we add language to the 2005 equalization rate procedures to require ORPS to offer a pre-decisional (PDC) meeting to the assessor at least 60 days prior to tentative roll date. 

We discussed that the PDC process for 2004 rates was better than the process for 2003 rates, however all of the team members think that we need to make more improvements for 2005 eq rates.  The team feels that the goal should be to complete the PDC process by January 1, 2005 for 2005 rates.

Dave Williams distributed a draft of a “PDC memo” that ORPS planned to send to Town Supervisors and City Mayors.  Dave Williams indicated that the purpose of the memo was to educate the CEOs regarding the assessing functions and the PDC process.  There were concerns that the memo did not present a realistic picture of what actually occurred with the 2004 PDC process.  There were also concerns that the CRMs are not comfortable answering the questions that might result from the memo.  The group decided that we would recommend that ORPS not mail the memo this year.  We decided that at a future team meeting we would discuss the possibility of sending out a similar memo to CEOs. 

Market Value Estimates in Small Municipalities:

We discussed the accuracy of our residential market estimates in municipalities that have very few sales.  In the current eq rate process we conduct CAMA ratio studies to estimate the residential market values in these towns.  Many of the members are concerned that it is very difficult to develop CAMA models that produce reliable and consistent market estimates in towns with very few sales.  We discussed the following alternatives for estimating the market values in these towns:

1)      if the CAMA results for the current eq rate year do not make sense then we could take an average of several years worth of CAMA results and then trend to the current year;

2)      conduct appraisals in any town where there are not enough sales to conduct a sales ratios study.  The estimated workload is approximately 6000 appraisals every three years (30 appraisals multiplied by 200 towns).  The possibility of paying a consultant to appraise these samples parcels was discussed.

3)      compare the current year CAMA estimate to the prior year CAMA estimate and if the current year estimate is not reasonable then ORPS would adjust the prior year estimate by the trend for the market area.

4)      provide the town with a random sample and ask the town to appraise the sample.  ORPS would conduct a quick review of the market estimates and accept the market values if they are reasonable. 

There was discussion that ORPS should be required to always have at least two estimates of residential market value for every city and town.  

Rules & Legislation Update:

Jim reported that three sets of rules are out for public comment.  The State Board is scheduled to act on these rules at their meeting on April 27.  The proposed rules are:

1)      increase the RPS fees;

2)      adjust the depreciation schedule for ceiling railroad properties;

3)      equalization changes

a.       change the definition of isolated properties to state that isolated properties will be defined in the annual procedures

b.      simplify the assessor's report process to eliminate the filing of the AR4 and AR9 and to require a standard format for the filing of the assessment roll

c.       modify the 10% impact limitation for the establishment of segment rates to say that if a segment rate was established for the segment in the previous year then a segment rate can be established in the current year if there is at least a 5% impact in one of the segments.

Jim reported that there are three bills that impact equalization.  They are:

1)      a bill to eliminate certified counties.  A county could determine equivalent tax rates for municipalities with the same eq rates without asking for the approval of ORPS;

2)      change the valuation date from January 1 to July 1 of the previous year;

3)      mandate that if a new equalization rate is established as the result of litigation that ORPS will issue new special franchise assessments and notify the school district that they need to adjust the apportionment of school taxes. 

School Tax Shifts:

In response to a RPTAC assignment, we reviewed the issues around school tax shifts caused by changing equalization rates.  Tim distributed data regarding the impacts of changing equalization rates on the apportionment of the September 2003 school levies. 

We discussed the data and decided that the process is working correctly.  The team does not think that there should be limits on tax shifts.  The team thinks that we need to focus on ensuring that ORPS is determining accurate market value estimates for every city and town.   

Sales with Significant Inventory Changes:

There was a brief discussion on the subject of sales with significant inventory changes.  It was decided that we would discuss this topic at the next meeting.  At the next meeting we will review the sales correction process and discuss the definition of significant change. 

Next meeting – Wednesday, June 23, 2004 in the Syracuse office of ORPS from 10-3.  We will video-conference to the ORPS Newburgh office. Proposed agenda topics include:

-         Status of 2004 equalization rates

-         Discuss how we can ensure the accuracy of equalization rates in small municipalities with limited data

-         Discuss sales with significant inventory changes

-         Plan for 2005 equalization rates 

Updated: