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EQUALIZATION PROJECT TEAM

MINUTES
Monday, September 16, 2002

10:00 a.m. – 3:00 p.m.; Manlius Town Hall

Attending:

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

County Directors:  Bob Diener, Barry Miller

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

Others: Frank Ferrari, Tom Frey, Sue Otis 

Rules and Legislation:

Jim reported that the Governor signed Senate Bill 6729 on July 23.  This law allows school districts with two or more municipalities with the same equalization rate to apportion taxes in the same manner as certified school districts.  The law also changed the deadline for counties to choose to be either Title 1 or Title 2 from September 1 to November 1.

 Jim reported that Senate Bill 6221 has passed both houses but has not yet been delivered to the Governor.  This bill seeks to correct the problem caused by a disagreement between the locality and ORPS on the value of a “large property”.  This disagreement results in the taxes paid by properties with the same market value in different towns within the same school district to be different.

 Segment Rates for School Apportionment:

Jim explained that Section 1314 of the Real Property Tax Law specifies that, where it is made to appear to the State Board that the State equalization rate established for a city or town is inequitable as applied to real property within a school district in such city or town, the State Board shall determine a special equalization rate for the segment of the school district in such city or town.  A special equalization rate for a segment is necessary where the average level of assessment for the town is substantially different than the level of assessment in a school district segment. 

 Historically, we have established segment rates where a large parcel or a class of property is assessed at a higher level than other property in a town.  Our existing method for calculating segment rates allows for the use of market value ratios determined by property major type in the calculation of the State equalization rate to compute the segment rate.

 This year we received requests to establish segment rates where it is alleged that residential property is assessed at different levels in different school district segments within a town.  Our current methods do not provide for the calculation of a segment rate based on this situation.  Jim distributed proposed procedures for 2003 that will specify the process we will use to calculate segment rates when it is alleged that the discrepancy is within a major type of property.

 Jim asked the team to provide him with comments or suggestions by October 15.

 2002 Rates Status and Issues:

Tim reported that final 2002 State equalization rates have been established for 936 cities and towns.  The equalization rate is the same as the LOA declared by the assessor for 66 percent of these municipalities.  The equalization rate is the same as the LOA for 98 percent of the municipalities that conducted 2002 reassessments and is the same as the LOA for 51 percent of the municipalities that did not conduct 2002 reassessments. 

 Final 2002 equalization rates were established in all municipalities for 428 of the 433 school districts that apportion taxes on September 1 on current assessment rolls.  The five school districts that did not receive current rates are in Rockland County. 

Tim reported that 63 municipalities filed equalization rate complaints.  As a result of these complaints the State Board changed 22 rates.

Tim distributed charts showing the average percent change in full value from January 1, 2001 to January 1, 2002 for municipalities that conducted reassessments and those that did not conduct reassessments.  The average percent change in full value for all municipalities was 4.2 percent.  The average change for municipalities that conducted 2002 reassessments was 3.9 percent and the average change for municipalities that did not conduct reassessments in 2002 was 4.3 percent. 

Dave Briggs distributed a report from the assessor members of the team.  The report expressed a number of concerns with the equalization process including problems with communication, timing and training.  The conclusion of the report was as follows:

We believe many of these issues are resolved or improved with better communication and providing the municipality more time to review all information.  Currency has always been a goal.  Accuracy and acceptability can not be sacrificed for currency. 

Adequate staff must be devoted to the process.

We suggest that municipalities be provided complete equalization rate information at one time for review and comments.  This would be all areas that make up the rate process and it would be provided before a tentative rate has been determined.

 We strongly urge that these issues be discussed and a course of action put in place for the 2003 equalization rate process.  Without such effort, the product will lose credibility, there will be more assessor dissention and that will result in increased pressure on the process and potentially more equalization rate complaints.”  

Tim reported that ORPS is committed to sharing and discussing preliminary market data and equalization data prior to the establishment of the 2003 tentative rates.  The plan is to increase the communication between the assessor and ORPS staff prior to the establishment of the tentative rate so that there will be an increase in the percentage of assessing units where the level of assessment (LOA) stated by the assessor is accepted as the equalization rate. 

Several members of the team expressed concerns that ORPS is verifying reassessments at 100 percent when the actual ratio of assessed value to market value is less than 100 percent.  Tim said that he would examine sales ratio data and CAMA ratio data for all of the 2002 reassessments and provide this data to the team at the next meeting.

2003 Rates:

We discussed the proposed procedures for 2003 equalization rates.  The procedures are similar to the 2002 equalization rate procedures.  The changes from the 2002 procedures include the following: 

1)  The 2003 rate products for cities and towns will be based on a valuation date of January 1, 2003.  The 2003 State equalization rate will represent the ratio of assessed value on the 2003 assessment roll to the January 1, 2003 full value of these municipalities.

2)  The measured roll for a reassessment municipality will be the 2000, 2001, 2002 or 2003 reassessment; whichever is the most recent reassessment.

3)  The measured roll for a non-reassessment municipality will be the 2002 assessment roll.

4)  For measured rolls that are earlier than 2003, the aggregate full value for each major type will be adjusted to a January 1, 2003 aggregate full value.

5)  A major type 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 CAMA ratio study where there is sufficient inventory data.

6)  Where a sales ratio study or a CAMA ratio study is used for major type A, the full value will be as of January 1, 2003 and the measured roll will be the 2002 assessment roll.

7)  As part of the review of a reassessment on the 2003 roll staff will conduct a sales ratio study. 

Tim asked the team to provide any comments or suggestions by October 1.  The plan is to ask the State Board to adopt the procedures at their meeting on November 12.

The team discussed some areas of concerns and some improvement opportunities for the 2003 equalization rate process.  Following are the flip-chart notes from that discussion.

COMMUNICATION – OUT REACH - EDUCATION

Needs to be done early

Needs to be done frequently

Needs to be timely

All information at one time (sales (residential), TSL, appraisals)

Information sent/received January through May

ORPS staff at monthly Assessor's meetings if requested

Consistency is necessary

- within region

-between regions

-region           local

-Albany          region

-Albany           local 

Same “tool” to develop time adjustments

- need to share how ORPS arrives at values (concepts and software techniques)

The history and economics of localities need to be used by ORPS staff to evaluate the LOA.  Need to work on ORPS staff involvement with the local staff.

Earlier informal review process, ideally October through December.

Notification of substantial (significant) change in full value prior to tentative rate

More effort is needed

Time line is needed

Equalization Rate Documentation

-both CAMA and Sales ratio studies should be shared regardless of  what was used to establish the tentative equalization rate

-need a consistent basic explanation of the CAMA methodology

-need model procedures to share with locals

-some regional staff are unfamiliar with the CAMA methodology

-need to identify the base variables and how they relate to the methodology

Not enough training has occurred for the locals to determine the LOA

- course is being developed target delivery date December 2002/January 2003

An explanation/understanding of the difference between a location adjustment and a time adjustment is needed. 

SALES

Sale not representative

- sales are of high-end property only or waterfront only

- is stratification needed?

Incorrect time adjustments to sales

Bad sales are being used.

When do corrections get made?  Get captured?

A RPTAC Sale Validation – Best Practices team exists 

Sale verification, how is it known that the corrections have been made?

- what is ORPS process when corrections come in?

Issues with Sales Web

-sales that consist of multiple parcels, there seems to be a problem

-are people using Sales Web to check if corrections are made?

OTHER

There is a lack of confidence in the program and will get worse if training and communication does not get better.       

Confusion over the different rates (final rate, last years rate, special rate, LOA) and their uses (school apportionment, county apportionment, agricultural exemption, STAR)

Use of trending

Why do the following happen?  Does this make sense?

-Annual reassessments that are not at 100

-Cycle reassessments that remain at 100 for the 3 years

Value verification is just a rubber stamp, there is a lack of communication

Taxpayer's lack of acceptance of a fast moving market

Taxable state owned land

- parcel level versus the aggregate level, as is needs to be changed. 

- notification of timber values (also, major type C)

- valuation procedures need to be communicated

Sample size – commercial (major type B)

-larger sample size would give a more accurate estimate of full value

-exploring alternate methods

-resources (staff and money)

-long-range goal should be to increase sample size

Use of retros (sample parcels that were appraised for a prior survey)

- this is a workload issue (cost less to reappraise a parcel than to start from scratch)

LOA Training for Assessors:

Tim reported that ORPS is developing an LOA training class for assessors.  He said the class will involve hands-on training and will not be just theoretical.  The plan is to start offering the course in December 2002.  

Next meeting – Wednesday, December 4, 2002 from 10-3 Manlius Town Hall.  Proposed agenda topics include:

-         2002 rates - status and issues

-         2002 rates – review of current year reassessments

-         2003 rates – plans for improved communication

Updated: