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Department of Taxation and Finance


Thursday –January 28, 2010 (1:15pm – 4:45pm)
Friday – January 29, 2010 (8:30am- 11:30 am)

Facilitator: Alan Kresge
Recorder: Bonnie Hellum

Day 1 - Thursday, January 28, 2010
Assessors: Cathy Conklin, Tom Frey, Sue Otis, Randy Holcomb, Peggy Jenkins, Curtis Schoeberl.
County Directors: David Hastings, John McCarey, Robin Johnson, Tim Murphy, Mike Swan.
ORPS: Vic Mallison. Tom Bellard, Tim Maher, Pat Holland, Jim O'Keeffe, Paul Szwedo, Gayle Everitt, Paul Miller, Joe Gerberg, Tom Pinto, Darlene Maloney, Phil Hembdt, Geoff Gloak.

Get Organized: Alan Kresge.
Alan introduced new members and reviewed the agenda. The order of some items was changed. He reviewed the Action Items from the last meeting.

    1. Budget/ Merger with Dept. of Tax and Finance/Agency Initiatives

Vic Mallison said that the Governor continues to have to deal with a $7.6 billion hole in the budget. A billion of that is going to have to come out of state agencies. The merger of ORPS with Tax & Finance will save $1.9 million, along with the Article 7 bill. ORPS has no Executive Director. After we merge, the Governor will appoint a Deputy Commissioner, who will report to the Commissioner of T&F. The State Board will be eliminated.
A lot of the savings will be in not paying rent on this building. We will save $2 million if we are out of the building by April 1.
Our personnel services budget was cut by $2 million. Vic presumes that this will come from attrition. We will be down to 298 F/T employees by the end of the fiscal year. We are at 305 right now. There are ongoing discussions about personnel numbers, both internally and with the Dept. of the Budget. DOB is saying that we will be at 268 by April 1, 2011. Vic thinks that we can manage attritions so that they are not in the business units.
There is also a cut to contractual services in the budget. We will use T & F's contracts for maintenance and IT. Travel will be curtailed. There will be about $2 million in cuts to aid programs. Training reimbursement is going from $650,000 to $350,000. Vic says that this is realistic, with the rule changes and the fact that most of the New York City training is done. He anticipates fights in future years. Vic said that our senior managers and T & F's are having wide-ranging discussions about what we do here and how we do it, including laws and interaction with locals. We have written memos describing each product. The Logistic Team and the Culture Team are in place.
Vic's hope is to transfer some savings to the personnel side of the budget so we can continue to deliver our product.
T & F has 600 IT people—there are fully-funded resources for IT products. Tom Frey said that he thinks the merger with T & F is a bad fit. He has put out a position paper for the New York State Assessors' Association saying that a merger with the Dept. of State would be better.
Vic said that the Governor has a big job managing the lack of resources the state has, and that the merger is NOT a bad thing. He said that if we are careful of the details, we can continue to provide the services we need to. He appreciates Tom speaking up but said that that train has left the station.
He added that, according to the Acting Commissioner at T & F, there will be no layoffs as a result of this merger.
Tom Frey asked about local governments' RPS.
Vic said that they haven't talked about that yet, adding that he is in an odd position right now, as he is handling policy in addition to fiscal concerns. His position on this is that RPS is a shared program that benefits both ORPS and the locals, and that it should continue with the cost being shared.
Sue Otis said that her concern is with service to the locals. The saying that there is “never assessment urgency” is not necessarily true. Will we be able to get an answer without a process, without a long turnaround time? She asked if assessors would have input into the process, noting that assessors have their own perspective, as do county directors.
Vic said that he has started voicing these concerns to Tax. He wants to get the Acting Commissioner in front of our folks so we can ask questions about moving forward and protecting our mission.
Sue Otis said that there is a huge learning curve when dealing with the general public. During a dispute about rebate checks, Tax and Finance turned their phones off. Sue said that if that's how they take care of business, it's not working. They need to address such things up front. It was a statewide issue.
Robin Johnson asked if the IT and RPS people will pick up and move over to T&F so that the locals have support right away.
Vic said that the IT people could look for other jobs. He hopes that they will see the opportunities for advancement at T & F.
Tim Maher said he thinks they will continue with us at least for the short term. T&F wants to see this succeed, too.
Robin asked how we will insure that RPS stays viable. The governance team stays in place……what can we do to help this?
Vic said that's a good question. He is going to a meeting with the Commissioner in a few minutes, and he will ask if she is open to communicating with RPTAC and he will let the group know.
Tim Murphy asked how they are going to legally eliminate the State Board. Joe Gerberg said that the budget includes, in related bills, language that abolishes the State Board.
Our budget does not have money for a building or other contractual things. We're not sure how much free space the DOS has. T&F has free space. There is $23 million for ORPS to run our programs. Given the $7.6 billion hole in the budget, that $23 million is not going to expand, no matter where we move. The people who provide the services are the ones he wants to be sure are here. 

Action Item:Vic will get back to the group about what they can do to help with the merger.

The order of agenda items changed because of people leaving for the 2:00 meeting with the Acting Commissioner of T&F.

    1. Electronic Archives

Sue Otis said that her office is attempting to become paperless. In Sept. of 2004 she asked for Jim O'Keeffe to give an opinion on storing inventory electronically. She passed out a copy of his response, which was revised in 2008. She purchased Apex software, and has digitized sketches, photos, etc. She scanned deeds and 5217s, and stored the paper copies in the basement. There was an issue with converting to Build 9—she had to wait for a patch. The scanning program did not provide for audit trail capability.
Tom Frey asked what they do with the personal information that is submitted with exemption applications, such as Soc. Sec. numbers.
Sue said they haven't decided yet.
David Hastings said that the statute does not provide for digital tax mapping. You have to be able to produce paper.
Sue said that condensing paper gave them extra space to deal with these things. She had been working out of cardboard boxes due to lack of space for filing cabinets.
Robin Johnson asked what would happen if you discover a clerical error; how would you make the correction? How would you know if it was inputted wrong, which is a correctable error.
Sue said she hasn't gotten to that point. There is a record in the notes section of the PRC.
Tom said that when we go to court, we need original documents.
Gayle Everitt said that you can certify copies of documents as authentic.

Action Item:Paul Szwedo will send out the link to the New York State Archives page on electronic retention.

Robin asked if you need to keep audit files, if you decide to go paperless. Sue asked that we discuss this topic at the next meeting, after reading the information from Paul Szwedo, and perhaps scheduling a class.

    1. STAR Application

Robin Johnson said that she was happy with the changes made to the STAR form. But she has found that there is still trouble with “spouse”—it should read, “do you or your spouse have a STAR exemption in another municipality?” She received a letter from a taxpayer about this. Each spouse may have a legal residence. The language needs to be changed.
Tim Maher said he will look in to that.
Geoff Gloak said he has gotten feedback on asking if an applicant had a homestead exemption in another state.
Tom Frey said that ORPS has said that they don't care what anyone does in Florida.

Action Item:Review the STAR exemption form, and add “or your spouse.” Add the question about a homestead exemption in another state. Pat Holland

Curt Schoeberl said that tens of millions of dollars are squandered on people having multiple STAR exemptions in various municipalities.
Tom Bellard said that T&F has a reciprocal agreement with Florida, and can also check records within New York State. 

    1. Agricultural Issues, presented by Don Collins, an assessor in Ontario County and a former farmer; Nicole Willis, who specializes in policy and research for New York Farm Bureau; and Jacob Kent, a partner in William Kent, Inc., auctioneer, real estate agent, and appraiser of farm chattel and farm real estate. 

Don said that there are 13 different forms for agricultural exemptions, and that this is a problem for assessors. Dairy farming is the strongest industry in New York. The majority of loans and progressive agriculture are in the bread basket area of New York.

He wants farmers to be able to do their exemptions online, using digital signatures.

This would be voluntary. It would cut down on the work involved. Don made an extensive presentation and distributed notebooks full of handouts. Tom Bellard supports Don's proposal to streamline the yearly renewal of ag exemption forms and updating the reporting of ag sales.

Action Item:Find out how the valuation is done on multi-parcel farm sales. Tim Maher.

Don said that V4 doesn't do a good job on farms. His form would help improve that, no matter what type of farm used it.

Nicole said that their Farm Bureau members want to see the online exemption applications.

Bob Mark asked what choices the assessor and ORPS have. The legislature decides the framework. The biggest problem is complying with the Electronic Records and Signature Act, about securely receiving genuine documents and storing them in a secure manner.

Vic said he is trying to push a conversation on electronic communication. He is cognizant of the security concerns.

Tom Rutnik said that there are also liability issues.

Tom Frey said he would like to see the stumbling blocks of online applications set out on paper.

Action Item:Problems with online filing. Bob Mark

Action Item:Explore the way we do valuation of farms. Valuation Issues Team

Vic gave the group an update on his meeting with T&F.

He said there are issues with other bills that are part of the budget, not just the merger bill. He had an informative conversation with T&F, and they agreed to look at the bill and to set up a communication process. The Tax Tribunal will take part of the place of the State Board. They will do the final determination on the equalization, special franchise and railroad ceiling complaints.

Tom Frey is concerned about the timing—if the budget passes, what happens to the equalization rate? The Tribunal doesn't understand equalization rates. The segment rates will go to the Commissioner. He wonders if the board will meet in Feb.

Vic said he expects the board to meet and transact business at their next scheduled meeting, which is Tuesday Feb. 9. He said that there will be bumps in the road, but we're not going into this blind. The Commissioner is a consummate professional. She should be able to wrap her head around our stuff with the help of Joe Gerberg, Jim O'Keeffe, etc. He said that she is willing to meet with the County Director's Association and the Assessor's Association to talk about issues. Vic said he has learned about assessment issues and the commissioner will, too.

Curt said that Vic was concentrating on assessment issues; the Commissioner has a lot else to deal with. 

    1. Inventory. Tim Maher handed out “Draft Language for Inventory Letters” and said that this letter went out last week to about 80 municipalities. We will be contacting the recipients in the next few weeks to see how ORPS can assist. 

Action Item:Summarize responses from inventory letters. Tim Maher.  

Adjournment at 4:55 p.m.

Day 2 - Friday, January 29, 2010

Assessors: Cathy Conklin, Tom Frey, Peggy Jenkins, Sue Otis, Randy Holcomb, Curtis Schoeberl
County Directors: David Hastings, John McCarey, Robin Johnson, Tim Murphy, Mike Swan
ORPS: Vic Mallison, Tom Bellard, Tim Maher, Sally Cooney, Pat Holland, Jim O'Keeffe, Paul Szwedo, Gayle Everitt, Tom Pinto, Joe Gerberg, Dan Giblin, Paul Miller, Steve Beals

Get Organized:
Alan Kresge handed out a new agenda. 

    1. Legislative Update Joe Gerberg handed out PPGG Merger Packet and 2010-2011 Executive Budget—RPT-Related Provision. He said that ORPS will still be recognized as a distinct entity run by a Deputy Commissioner selected by the Governor, and reporting to the Commissioner of Tax and Finance. 

The merger bill takes effect immediately upon passage of the budget. The Tax Appeals Tribunal will deal with special franchise, equalization rates, and railroad ceilings. The Commissioner will rule on everything else.

Tom Frey asked where this will save money, except for on building space.

Joe said that there is opportunity for synergy in support functions such as Legal, IT and administration. We can share people.

Tom asked how the merger will affect the opinions of counsel.

Jim O'Keeffe said that T&F has formal procedures for getting information from legal. Our questions are mostly from the assessment community. T&F gets a lot from taxpayers. The timelines are in the regulations.

Curt asked how much downtime there will be during the move.

Jim said possibly a weekend plus a day or two.

Paul Szwedo said it will be a week until we are up and running, as there is always a glitch or two when you move things.

Turning to the 2010-2011 Executive Budget—RPT-Related Provision handout, Joe said that there are more RPT-related bills than usual. Alan will email everyone the electronic version of this so people can click to pull up the text of each bill.

Action Item: Distribute electronic copy of Joe Gerberg's handout. Alan Kresge.

Joe gave an overview of what the bills contain.

There followed a discussion on Assessment Disclosure with no agreement reached.

Robin Johnson's position on disclosure is that the timing is wrong. "Municipalities that are doing reval and send out notices with explanations of the process, may well want to post their preliminary values to assist taxpayers in preparing for their informal hearings. However, at March 1, the assessor still has full authority to make any and all changes they wish to. Many will hold parcel splits until after March 1, new construction still has to be gathered and valued. It defeats the purpose of transparency to post inaccurate, incomplete or invalid data.
In addition, if a FOIL request were to be filed requesting this information, it could be denied on the grounds that it is work product, and remains work product until it is officially filed on the Tentative Assessment Roll.
The Directors have no problem with posting Tentative or Final assessment roll information."

Sue Otis said that she agrees fully with Robin's statement and that there are other concerns as well. "Most assessors' offices are fully underwater until the deadline for exemption filing, March 1. We must preserve Taxable Status Date. I am not comfortable at all with putting early, incorrect numbers out there that seems to ignore the assessment calendar. Assessors who are not in a reval year--which requires early notification--usually don't have their tentative numbers until sometime mid-April when their file is due. Putting out incorrect information is only going to confuse the taxpayer and cause chaos in the assessment office at a crucial time for the assessors when they should be formulating values that will appear on the Tentative Roll May 1. I don't think anyone has a problem with putting the Tentative or Final Roll out there, but this is just wrong. The Assessors Association is strongly opposed to the Disclosure issue."
Curt Schoeberl added that "This act would be an unfunded mandate in that, in order to comply or attempt to comply, extra staff would have to be hired to be able to collect and process all data necessary to complete the roll. In areas of the state where weather is an issue, new construction would have to be collected in January and February rather than in March or early April when the weather breaks. I doubt that there is one assessor north of Westchester County who completes collecting new construction before March 1st. We all have properties that are not accessible 12 months a year and the farther you travel northward the greater the problem. I believe someone at ORPS stated that they believed requiring a tape from local government would NOT be considered a mandate. Not everyone seems to understand that the data on that tape or disc does not get there without a great deal of labor and time. Condensing the assessor's calendar in order to comply with a short-sighted bill is not without cost to local government. Therefore a mandate, unfunded at that!"

E5217—give electronic option. T&F's TP584 is redundant. It doesn't make sense to have these 2 forms overlap. But tax returns are confidential and T&F can't share them with us. This bill allows us to work out an arrangement to collect this information on a single form and to share what is necessary. This is not an entirely new proposal.

Full Value Aid—this is a restructuring of the aid programs. Municipalities have to commit to a second reval—they do revals in the first and last years of the plan. The cycle is no longer than four years.

Under Part EE the counties would collect taxes for the cities, towns, villages and school districts.

TSOL payments—different from last year's bill.

STAR value limit—properties assessed at more than $1.5 million are ineligible.

STAR floor—same as last year. Floor is now 11 percent. This would increase the allowable rate of decline to 18 percent.

NYC PIT credit—income tax-related provision.

Circuit Breaker—credit against income tax, proportional to school tax paid. Lots of bells and whistles on this. There has to be money in the state circuit breaker fund. It is a built-in inducement for school districts to lower their taxes by making adjustment to credit.

Action Item: Pat Holland will talk to Greg Kidd about pending legislation regarding the STAR exemption and RPS. Any property valued at more than $1.5 million will not get a STAR exemption.

ORPTS budget—separately stated from T&F's budget because we are a discrete entity.
Paul Miller handed out the Senate Standing Committee on Local Government agenda and reported that both the Senate and House local government committees are up and running again. 

    1. Uniform Assessment Code In 2008, Jim O'Keeffe discussed with the State Board about addressing the UAC in their regulations. Last summer, a working team met and decided to change direction, moving away from the UAC and coming down with the Uniform Assessment Standards, as a goal for municipalities to aspire to. The handout that was distributed is the cleaned-up version with the most recent corrections. It is on the State Board's agenda, and it could be submitted to them for their Feb. 9 meeting. The group agreed that the document is ready to go to the State Board.  

Action Item: Jim O'Keeffe will send the UAS document to the State Board for their Feb. 9, 2010 meeting. 

    1. Training Issues Sally Cooney said that a small group has met to revise the Reassessment course and is 60 percent done with it. She will go to the ORPS Regional Director's meeting and discuss it with them. There is progress in defining what the course would be. 

Tom Frey said he is not on board with the mandatory part of it.

Sue Otis said that someone posed the question to her that if an assessor has never done a reval and never will, how can the course be a requirement for that person?

Sally said that they are revisiting the initiatives, and that an update will go to the State Board.

Minimum qualifications --- there is one addition to the rules proposal previously shared with you. The assessor and county director representatives on the minimum qualifications sub-team both felt that, in addition to considering professional designations or certification as an assessor, county director of candidate for assessor as meeting minimum standards that some provision should be made for local staff. Many assessors and county directors groom their staff to take over for them when they leave office --- they mentor these individuals throughout their employment. In response to this concern, the current version of the proposed rules includes a new minimum qualifications standard:

- successful completion of an apprenticeship, approved by ORPS prior to the start of the apprenticeship, under the direction of a State certified assessor (or county director). Any such apprenticeship must include three years of full-time practical experience in the duties and responsibilities of an assessor (or county director).

It should also be noted that the proposed changes to minimum qualification standards will also be applicable to the position of county director.

The bid submission deadline for the summer program is Feb. 17.

Sue Otis asked about the new reimbursement program having an affect on the summer program. Sally does not expect it to have a significant affect.

Vic said that the DOB is on board with this because they see it as cost-effective. 

  1. Sub-Group Activity Updates
      1. Valuation Issues Team Steve Beals handed out Valuation Issues Team Report January 29, 2010. The team has met twice since the last RPTAC meeting. Their next meeting is March 23. They continue to work on the update of Volume 6. They are currently working on the Commercial used-as section. The update project should be finished by early 2011.

    Second page of handout—The group discussed the valuation of mineral rights in the Marcellus Shale. These pre-production mineral rights have gone up 100-fold. They are worth $5,000/Acre in some places. Dan Giblin brought this to their attention. He identified 8 valuation issues to be looked at.

    Vic wondered if someone from the southern tier should be brought in to voice concerns.

    Steve Beals thinks it is going to be difficult to get the data, but if he gets it, then the people who will be affected should have a say.

    Dan said it could be 20 to 25 years until drilling is actually done.

    Land that used to be worth $1,000/Acre is now worth $5,000/Acre, with a bonus payment upfront reflected in the assessment. It is not legally required for us to value these rights. The value of the property is increased because of the option.

    Mike Swan suggested we wait to see if the data will become available.

    We can't value these properties without the data. We must identify which parcels sold with the rights, and which sold without the rights.

    Steve said that as of right now, the data is not available.

    Tim Murphy thinks we should check with other states and see what they do.

    Steve said that is outside the scope of his team's responsibility.

    Jim O'Keeffe said these rights should not be separately assessed.

    Tom Bellard suggested that the team ask Jim Dunne to look at this.

    Beals said he and his team have gone as far as they can and they are road blocked. He cannot get the lease information. He needs something on a 5217 saying that the gas and mineral rights were retained. 

      1. Sales Processing Team Tom Maher said that this team has not met since the last RPTAC meeting. There are things in the budget bill that will impact sales processing, so there could be work coming up for this committee. There was not a lot of support for the Automated 5217 (bar coding) pilot program in Dutchess County.  


      1. Property Class Code This committee has not met; there have been no issues for the past six months.


      1. Equalization Project. They are going ahead with the 5 percent tolerance for 2010.

        Residential assessment ratio for 2009—new method of calculating it, based on assessed value, not selling price. Some communities complained. Villages downstate—close to a 2-year lag with valuation and RAR. Values dropping, but not reflected in this year's RAR. This could be a tougher problem to solve. 


    1. Public Education Sub-group Randy Holcomb said that at the last meeting, it was discussed where this committee wants to go. It is too long of a discussion for now. He asked what the group wants. Put the discussion of this on the agenda for next time. Patti Valvo will come for this.