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Department of Taxation and Finance

EQUALIZATION PROJECT TEAM

MINUTES
Wednesday, June 23, 2004
10:00 a.m. – 3:00 p.m.;
Video-Conference Between ORPS Syracuse & Newburgh Offices

 Attending:

 Assessors:  Edye McCarthy, Walter Smead, Roger Tibbetts

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

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

 Others: Tom Frey, Colleen Adamec (Assessor in the towns of Greenwich and Kingsbury in Washington County)

Communications with RPTAC:

The team thinks we need to improve our communications with RPTAC.  We decided that in addition to placing our meeting minutes on the ORPS website, we will e-mail the minutes to the members of RPTAC.  We also agreed that Tim will distribute the draft minutes to members of the Equalization Team within one week of our meeting.  The team members will comment on the draft minutes within 10 days of receiving the draft.

We also discussed that historically an ORPS member of the team has been responsible for verbally reporting to RPTAC on the status and progress of the team.  We decided that verbal reports to RPTAC will be conducted by both local officials and ORPS members.  For example, at the RPTAC meeting in September, Walter and Tim will present a combined verbal report to RPTAC.

Rules & Legislation Update:

Jim reported that the State Board adopted four sets of rules at their meeting on April 27, 2004.  The 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 Part 4 and Part 9 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;

4)      modernize the advisory appraisal process to allow for electronic transfer of data and to coordinate the process with the annual reassessment program.

Jim reported that three bills that impact equalization have passed both the Assembly and Senate.  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 (S6602);

2)      change the valuation date from January 1 to July 1 of the previous year (S6605);

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 (S6604).

Sales of Multiple Parcels:

Barry explained that the RPSv4 valuation system does not allow for use of multiple parcel sales as comparable sales.  It was discussed that this is a problem in farm communities because many farm sales include multiple parcels.  The team is concerned that the failure to use multiple parcel sales could result in inaccurate market values and possibly inaccurate equalization rates. The team agreed that ORPS staff and local officials should use multiple parcels sales in the valuation process.  The team also agreed that the RPSv4 valuation system should be modified to allow for the use of multiple parcel sales as comparables.  Tim will draft a memo to the RPS Change Control Board notifying them that the RPTAC Equalization Team thinks this is an important issue and that this modification should receive a high priority.

2004 Rates Status and Issues:

Tim reported that tentative 2004 State equalization rates have been established for 955 cities and towns.  The equalization rate is the same as the Level of Assessment (LOA) declared by the assessor for 82 percent of these municipalities.  By comparison, in 2003 the LOA was confirmed as the equalization rate for 76 percent of cities and towns and in 2002 the LOA was confirmed for 64 percent of cities and towns.  He said that ORPS is on schedule to establish final rates for all municipalities before the first levy of taxes.  We expect to have the vast majority of rates final by August 1. 

There was discussion regarding the use of the total assessed values from the 2003 roll to establish tentative 2004 equalization rates.  There was concern that this might either be an advantage or a disadvantage to particular towns.  Tim reported that the 2003 roll assessed values are only used if the municipality is not updating assessments this year and has not yet filed their tentative roll with ORPS.  Tim said that the final rate is not established until ORPS has the final roll data for the municipality.  If ORPS discovers that there is a significant change between the data used to establish the tentative rate and the data on the final roll, then ORPS rescinds the tentative equalization rate and establishes a new tentative equalization rate.

There were concerns expressed regarding one of the footnotes on the report of equalization rates that is distributed when the tentative equalization rates are established.  The footnote states “Column C is the percentage change in the estimate of full value between the 2003 State equalization rate and the 2004 State equalization rate due to the change in full value standard from January 1, 2003 to January 1, 2004.”    Paul will draft language that will make the footnote easier to understand and make the report more useful.

Pre-decisional Collaboration (PDC) Process for 2005 Equalization Rates:

We discussed the meeting that was held on June 15, 2004 regarding the proposed PDC process for 2005 equalization rates.  The team discussed the notes from that meeting and is in general agreement with the proposed schedule.  The team thinks that there should be several additions to the schedule.  They are: 1) on a monthly basis the CRMs should attend county meetings (possibly the assessor's association meetings) to review valuation data such as lists of sales.  At these monthly meetings the assessors could also share data with the CRMs.  2) the local officials and ORPS staff need to agree on unique market influences, boundaries and market areas for all property types in July or August.  3) the local officials and ORPS staff need to identify the towns where we can not build reliable residential CAMA models in July or August.  4)  we need to emphasize that PDC is a continuous process not just a meeting. 

ORPS staff is reviewing the proposed PDC schedule and will report back to the attendees at the June 15 meeting and to the RPTAC Equalization Team regarding the feasibility of the schedule.

Market Value Estimates in Small Municipalities:

The team agreed that ORPS, the assessors and the county directors should be involved in identifying the towns where we can not build residential CAMA models that produce reliable and consistent results.  The team struggled to develop concrete criteria to identify these towns.  It was decided that as part of the PDC process the local officials and ORPS staff should identify and agree on the towns where we can not use a CAMA model.  The team recommends that for 2005 equalization rates we should attempt to use appraisals if we can not use a CAMA model.  If we do not have time to conduct appraisal then we should trend the 2004 CAMA model estimate to the valuation date for the 2005 rates and plan to conduct appraisal for 2006 rates. 

Plan for 2005 Equalization Rates:

We discussed a framework for 2005 equalization rates.  There was agreement on the following issues: 

-         Establishment of tentative rates within 10 days of tentative roll date (in May for most towns)

-         Establishment of final equalization rates at least 30 days prior to the apportionment of taxes (by August 1 for most towns)

-         Conduct new sales ratios studies for the residential class every year

-         Conduct new CAMA studies for the residential class every year

-         Continue to confirm the LOA as the equalization rate if the difference between the LOA on the tentative roll and the initial ORPS market value ratio is less than 5 percent

-         Limit trending to three years for all municipalities

-         Conduct appraisals at least once every three years in municipalities that are not conducting reassessments

-         Continue to allow municipalities to complain about any data used to establish the tentative equalization rate

-         Pre-decisional collaboration meetings should be held by January 1, 2005 for all municipalities.  Priority should be given to municipalities that are conducting 2005 reassessments.

Edye wants the team to review the policy of not conducting appraisals in property classes that are a small percentage of the municipality.  She is concerned in particular with the utility class.  We decided that we will discuss this issue at our next meeting.

Sales with Significant Inventory Changes:

There was a brief discussion on the subject of sales with significant inventory changes.  Several members of the team expressed concern that defining significant change as inventory changes that change the market value of the property by more than 10% and occur between taxable status date and the date of sale is too restrictive.  It was decided that we would discuss this topic at the next meeting.  Prior to the next meeting Tim will distribute copies of the rules and procedures regarding significant change to the team members.  At the next meeting we will review the definition of significant change and see if we can develop a more appropriate definition. 

Next meeting – Wednesday, September 8, 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

-         Status of PDC process for 2005 equalization rates

-         Review draft procedures for 2005 equalization rates

-         Discuss sales with significant inventory changes

-         Discuss the sampling procedures for property classes that are a small percentage of the assessing unit 

Updated: