RPTAC Equalization Project Team
FROM: RPTAC Equalization Project Team
DATE: December 27, 2005
SUBJECT: 2005 Annual Report
Our team is chartered for a one-year period with evaluation by RPTAC occurring in the last quarter of the calendar year. We are submitting this report to identify the issues discussed, report the progress made and make recommendations for future topics.
In 2005 the team met on February 16, April 13, June 15, September 7 and November 16. The meetings are usually held in the ORPS Syracuse and Newburgh offices with a video-conference connecting the two locations. The meeting agendas, minutes and annual reports are available at http://www.tax.ny.gov/research/property/assess/rptac/minutes_index.htm.
Issues Identified for 2005 and Summary of Results:
The following twelve issues were identified in December 2004:
1. Review the 2005 pre-decisional collaboration (PDC) process and develop a schedule for 2006 PDC. Result: There was consensus that the 2005 PDC process was better than the 2004 PDC process. The team also agreed that we needed to make improvements for 2006 PDC. The team decided we needed to improve the communications and understanding surrounding PDC and decided to develop Guidelines for Pre-decisional Collaboration. The guidelines were developed and distributed to all assessors, county directors and ORPS regional staff. The team presented a course on PDC at the New York State Assessors' Association Conference. The team also developed a schedule for 2006 PDC.
2. Monitor the status of PDC for 2006 rates. Result: It was decided that Tom Pinto will distribute a status of PDC to the team on a monthly basis. This will allow the team to address any issues prior to any major problems. In accordance with the 2006 PDC schedule, ORPS appears to be on schedule to share final PDC ratios with local officials for the vast majority of municipalities early next year.
3. Review the process for developing 2005 equalization rate trends for the commercial and vacant classes. Analyze and evaluate alternatives for developing trends. Recommend improvements for developing trends for 2006 equalization rates. Monitor the implementation of these improved techniques for developing trends for 2006 equalization rates. Result: The team discussed these issues but did not reach any conclusions. The team will address this issue at our meeting on January 11, 2006.
4. Review the criteria for determining property classes where ORPS conducts appraisals in the market value survey. Make changes for 2006 equalization rates if appropriate.
Result: The team discussed this issue and recommended no change to the current procedure of not selecting samples from property classes that are a small percentage of a municipality.
5. Review the criteria for conducting redo appraisals in the market value survey. Make changes for 2006 equalization rates if appropriate. Result: The team discussed this issue and decided that at least 33 percent of the properties appraised should be properties that were not appraised in the previous market value survey. ORPS modified their internal procedures for the 2006 market value survey to ensure that at least 33 percent of the properties that are appraised in each municipality will be properties that were not appraised in the previous survey.
6. Evaluate the experiences of 2005 rates and make recommendations for future rate years. Result: The Level of Assessment (LOA) declared by the assessor was accepted as the 2005 State equalization rate in 82 percent of cities and towns. By comparison, in 2004 the LOA was confirmed as the State equalization rate in 81 percent of cities and towns, in 2002 the LOA was confirmed as the equalization rate for 64 percent of cities and towns, in 2000 the LOA was confirmed as the equalization rate for 33 percent of cities and towns and in 1998 the LOA was confirmed for 15 percent of cities and towns. The team believes that with the development of the PDC guidelines and increased communication and collaboration between ORPS staff and local officials prior to the establishment of 2006 equalization rates that this percentage may increase slightly in 2006. However the team thinks it is not realistic to expect every municipality to claim a LOA that is confirmed by ORPS.
7. Review the 2005 rate complaint process and make recommendations for future rate years. Result: Equalization rate complaints against the 2005 rates were filed by 23 municipalities. The State Board changed the equalization rates for 7 of these municipalities. In two cases the equalization rate was changed to the Level of Assessment stated on the assessment roll. The team hopes that the development of the PDC Guidelines will encourage more assessors to participate in the PDC process and resolve differences prior to the filing of the tentative roll.
8. Develop proposed procedures for 2006 State equalization rates. Result: The draft procedures developed for 2006 equalization rates are similar to the procedures for 2005. The changes from the 2005 procedures include the following:
a) The 2006 rate products for cities and towns will be based on a valuation date of July 1, 2005. The 2006 State equalization rate will represent the ratio of assessed value on the 2006 assessment roll to the July 1, 2005 full value of these municipalities.
b) The measured roll for a reassessment municipality will be the 2003, 2004, 2005 or 2006 reassessment; whichever is the most recent reassessment.
c) The measured roll for new appraisals will be the 2004 assessment roll.
d) For measured rolls that are earlier than 2006, the aggregate full value for each major type will be adjusted to a July 1, 2005 aggregate full value.
e) A residential full value will continue to be developed with a sales ratio study where there is a sufficient number of sales and with a computer assisted mass appraisal (CAMA) ratio study where there is sufficient inventory data.
f) Where a sales ratio study or a CAMA ratio study is used for the residential class, the full value will be as of July 1, 2005 and the measured roll will be the 2005 assessment roll.
g) If it is determined that ORPS does not have sufficient data to conduct a sales ratio study and can not build a residential CAMA model that produces a reliable result, then if time permits ORPS will conduct residential appraisals. If ORPS does not have time to conduct appraisals then the 2005 equalization rate residential estimate will be trended to a July 1, 2005 valuation date.
The draft procedures developed by the team will be presented for adoption to the State Board at their meeting on February 14, 2006.
9. Push for ORPS to study the expansion of CAMA modeling techniques to the commercial and/or vacant property classes. Result: This issue is an initiative in the ORPS strategic management plan. The team will receive an update on the status of this initiative at our meeting on January 11, 2006.
10. Ensure that 2005 reassessments are appropriately confirmed at 100 percent. Result: The team reviewed the sales ratio and CAMA ratio data for the municipalities that conducted 2005 reassessments. The team is comfortable that ORPS made the appropriate decisions regarding confirming or rejecting the 2005 reassessments. The team plans to review the data for the 2006 reassessments to ensure that they are appropriately confirmed at 100 percent.
11. Monitor the status of legislative changes that impact equalization rates. Result: Each meeting included status review of legislative proposals and their connection and impact on the equalization program. In 2005 there was legislation enacted that removed the equalization rate from the calculation of special franchise values for most municipalities. The legislation enacted in 2004 that changed the valuation date for most municipalities from January 1 of the roll year to July 1 of the year preceding the roll year was incorporated into the local assessing practices and the equalization rate process without any major problems or issues. The team does have some concerns that if market values start to decline there may be some problems caused by having a valuation date that is twelve months prior to final roll date.
12. Improve communications with the RPTAC Valuation Team regarding valuation issues that impact the establishment of accurate equalization rates. Result: The RPTAC Equalization Team will share their meeting minutes, agendas and annual report with the members of the RPTAC Valuation Team.
The team reviewed data regarding exclusion of residential sales by local officials. The team agreed that it is important that assessors throughout the state consistently use appropriate exclusion codes for sales. The team agreed that if a pattern of inclusion or exclusion of sales falls outside the typical pattern, then ORPS should investigate the reasons for the unusual pattern. The team also thinks it is important that ORPS publicize their review process to the entire assessment community.
At our meeting on November 16, 2005, the team agreed that we should continue to exist and continue our work on improving the equalization program. Our focus in 2006 will be on the following issues but additional issues may develop during the year.
1. Review the 2006 pre-decisional collaboration (PDC) process and develop a schedule for 2007 PDC.
2. Monitor the status of PDC for 2006 rates and 2007 rates.
3. Review the process for developing equalization rate trends for the commercial and vacant classes. Analyze and evaluate alternatives for developing trends. Recommend improvements for developing trends for 2007 equalization rates. Monitor the implementation of these improved techniques for developing trends for 2007 equalization rates.
4. Evaluate the experiences of 2006 rates and make recommendations for future rate years.
5. Review the 2006 rate complaint process and make recommendations for future rate years.
6. Develop proposed procedures for 2007 State equalization rates.
7. Push for ORPS to study the expansion of CAMA modeling techniques to the commercial and/or vacant property classes. The team is concerned with the lack of progress in this area
8. Ensure that 2006 reassessments are appropriately confirmed at 100 percent.
9. Monitor the status of legislative changes that impact equalization rates.
10. Improve communications with the RPTAC Valuation Team regarding valuation issues that impact the establishment of accurate equalization rates.
11. Investigate the possibility of splitting the commercial property class and/or vacant property class into sub classes for appraisal and/or trending purposes.
12. Monitor the tests and criteria for reviewing irregularities in residential sales exclusions. If appropriate, recommend changes to this processfor 2007 PDC.
The team consists of five representatives from the County Directors' Association: Tom Bloodgood, Paul Burckard, Richard Dean, Bob Diener and John Noto; seven assessors: David Briggs, Tom Frey, Edye McCarthy, Curt Schoeberl, Walter Smead, Roger Tibbetts and Todd Wiley; and four ORPS staff: Patricia Holland, Tim Maher, Jim O'Keeffe and Tom Pinto. ORPS will continue the practice of bringing the appropriate additional staff depending upon the specific issue.
The team expects to meet at least four times in 2006. Our next meeting is scheduled for January 11, 2006 in the ORPS Syracuse and ORPS Newburgh offices with a video-conference connecting the two offices.