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Department of Taxation and Finance

EQUALIZATION PROJECT TEAM

MINUTES
Wednesday, September 8, 2004
10:00 a.m. – 3:00 p.m.;

Video-Conference Between ORPS Syracuse & Newburgh Offices

 Attending:

 Assessors:  Dave Briggs, Walter Smead, Roger Tibbetts

 County Directors:  Tom Bloodgood, Paul Burckard, Bob Diener

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

 Others: Todd Wiley

  Rules & Legislation Update:

Jim reported that four 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/A10839);

2)      eliminates the phase-down and sunset provisions for annual aid. Imposes a sunset for triennial aid of 2008 (S6602/A10838);

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/A10836).

4)      change the valuation date from January 1 of the current year to July 1 of the previous year (S6605/A10835);

 Jim reported that the four bills listed above have not yet been delivered to the Governor.  It was suggested that the Governor sign the valuation date change bill at the NYSAA conference in Kerhonksen in early October.

Jim reported that there is still pressure on the legislature to pass bills to limit year-to-year changes in the equalization rate and to establish commercial class equalization rates.  These proposals are coming from communities in Suffolk and Westchester County.  The goal of these proposals is to reduce the number of tax certs.

Jim reported that there is a proposed rule change that will require applications for annual aid to be submitted 120 days prior to tentative roll date.  The current rules require applications for annual aid to be submitted within 6 months after final roll date.  The State Board is scheduled to act on this rule change at their meeting on November 9.

Sales Issues:

There was some concern that the dates for use of sales in the calculation of RARs, CODs and equalization rates are different.  It was explained that the sales date range for all of these products for a town with a final roll date of July 1 is from July 1 to June 30.  The 2005 RARs and 2005 equalization rates will be calculated using sales from July 1, 2003 to June 30, 2004.  The CODs for State aid determinations for the 2004 roll will be calculated using sales from July 1, 2003 to June 30, 2004.   

Todd Wiley and Walter reported that recently they have seen RP-5217 forms for the sales of new homes that do not reflect the actual selling prices of the homes.  It appears that in some cases the RP-5217 form only reflects a portion of the true selling price.  Tim said he will discuss this at the RPTAC meeting on September 23 to see what actions RPTAC thinks are appropriate.  

The assessors and county directors think that it is important that in the PDC process the assessors see a list of all of the sales that will be used in the equalization rate calculation.  Subsequent to the meeting Tim discussed this with Dave Williams (Director of ORPS Regional Operations) and Dave said that regional staff will provide a list of sales to any assessor that requests this data.

2004 Rates Status and Issues:

Tim reported that final 2004 State equalization rates have been established for 954 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.  Final equalization rates were established prior to school levy date for every city and town in a school district that levies taxes on September 1. 

Tim reported that there have been 25 rate complaints filed.  The State Board changed the equalization rates for 13 of these municipalities.  In three cases the equalization rate was changed to the Level of Assessment stated on the assessment roll. 

There were concerns that one of the footnotes on the report of equalization rates that is distributed when the tentative equalization rates are established is very confusing.  The footnote states “The aggregate adjustment factor represents the percentage increase or decrease that the major type estimated market value is adjusted between years.  Often times this adjustment corresponds to the time trend for the calendar year.  However, sometimes this may be different from the time trend, in order to obtain a more appropriate 2004 major type aggregate full value.  For example, a 2003–2004 factor of 1.02 means a 2% increase in market value between January 1, 2003 and January 1, 2004.” 

It was discussed that the third sentences is only relevant to a few municipalities each year.  It was decided that for 2005 equalization rates the footnote will be simplified and will be reduced to just the first sentence of the existing footnote.

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

Several assessors, county directors and ORPS staff met on June 15 and July 27 and developed a proposed PDC schedule for 2005 equalization rates.  The proposed schedule was shared with the RPTAC Equalization Team via e-mail on July 30.  Proposed letters to assessors and municipal CEOs were also shared with the Team.  The ORPS Customer Relationship Managers are currently scheduling the initial meetings with assessors and county directors to start the 2005 PDC process.  We will discuss the status and success of the PDC process at our next meeting. 

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.  ORPS staff and local officials should look at the CAMA results over a multi-year time period.  If the results look questionable then ORPS should attempt to do a second measurement.  This second measurement could be appraisals or possibly a sales ratio study of more than 3 years.  ORPS staff should also provide the local officials with a list of samples and the local officials would have the option of appraising these parcels to use as support for their LOA.   

The team agreed that it would be desirable to have two estimates of market value for every municipality.  

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.

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. 

Segment Rate Procedures:

Jim distributed draft procedures for establishing special rates for school tax apportionment (segment rates) in 2005.  The procedures are an attempt to put a structure around the segment rate process and to put the emphasis where it should be – the determination that different levels of assessment exist in a single municipality and that these different levels result in an inequitable apportionment of taxes.

The draft procedures provide that any applicant would be held to a standard of, at a minimum, showing what assessment practice distinguishes the segment from the municipality as a whole.  This would focus the analysis on the alleged differing levels of assessment in the segment and the rest of the municipality.  The procedures would then provide that each request for a segment rate would be analyzed using the tests specified in the procedures.  The State Board's rules require submission of segment rate requests at two Board meetings.  Prior to the first Board meeting, staff would provide the results of the tests and the staff recommendation to all affected parties.  The State Board would then decide how to proceed in each instance based upon the staff recommendation and any subsequent comments received.  

Next meeting – Wednesday, December 1, 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: