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EQUALIZATION PROJECT TEAM

MINUTES
Wednesday, December 1, 2004
10:00 a.m. – 3:00 p.m.;
Video-Conference Between ORPS Syracuse & Newburgh Offices

Attending:

Assessors:  Dave Briggs, Edye McCarthy, Curt Schoeberl, Walter Smead, Roger Tibbetts

County Directors:  Paul Burckard, Bob Diener

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

Others: Tom Frey, Todd Wiley

New Members:

Two new members were introduced to the team.  Curt Schoeberl, the assessor for the Town of Shawangunk, and Tom Pinto a manager for the ORPS Northern Region.  

2004 Rates Status and Issues:

Tim reported that the final 2004 State equalization rate is the same as the Level of Assessment (LOA) declared by the assessor for 82 percent of the cities and towns.  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 were rate complaints filed by 29 municipalities.  The State Board changed the equalization rates for 17 of these municipalities.  In three cases the equalization rate was changed to the Level of Assessment stated on the assessment roll. 

There was a discussion that there is concern among some local officials that ORPS is confirming reassessments at 100 percent when the municipality is not at 100 percent.  Tim mentioned that last year ORPS introduced additional tests (residential sales ratio and residential CAMA ratio) to ensure that we only confirm reassessments that are actually assessing at their stated LOA.  It was decided that ORPS will create a file of sales ratio, CAMA ratio, LOA, initial municipal ratio (before LOA test) and equalization rate data for every municipality for 2004.  ORPS plans to e-mail this file to the team by December 15.

Sales Issues:

There is still disagreement over the definition of significant change.  It is ORPS‘ policy that a sale is only excluded from a ratio study if the inventory change occurred between the taxable status date of the latest assessment roll and the sales date.  Many of the local officials on the team think that inventory changes that occurred prior to the taxable status date but without the knowledge of the assessor should qualify as significant change. 

At the last meeting 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 and Todd discussed this issue with RPTAC at their meeting on September 23.  In October, a group of RPTAC members held a teleconference to discuss the issue.  At the RPTAC meeting on December 9 there will be a discussion regarding the options available and the next steps regarding this issue.  At the next team meeting Jim will update the team on RPTAC's decisions.  

Tim, on behalf of the team, sent a memo to Mike Griffen, the manager of the ORPS RPS Unit requesting a modification to RPSv4.  The memo asks for a change to RPS to allow for the use of multiple parcel sales as comparables.  The current RPSv4 valuation system does not allow for use of multiple parcel sales as comparable sales.  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.

Rules & Legislation Update:

Jim reported that three bills that impact equalization have been signed by the Governor.  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).

Jim reported that the bill to change the valuation date from January 1 of the current year to July 1 of the previous year (S6605/A10835) passed both the Assembly and Senate and was delivered to the Governor on November 26.

Jim reported that on November 9 the State Board adopted rules that require applications for annual aid to be submitted 120 days prior to tentative roll date.  The old rules required applications for annual aid to be submitted within 6 months after final roll date. 

Jim reported that at the State Board meeting on January 25 we will ask the Board to adopt 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.

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

We reviewed the status of the PDC process for 2005 equalization rates in relation to the schedule we developed for PDC in July 2004. 

The items in the August/September timeframe in the schedule in most cases were completed in a timely fashion. The CRMs were in contact with the local officials and shared and/or discussed the items identified in the schedule.

There were serious concerns expressed regarding one of the key items in the October/November/December portion of the schedule.  The item states “the CAMA ratio, sales ratio and trend results are shared with the local officials.”  Tom P reported that we have shared this information with about 25% of the municipalities.  Tom P also reported that we plan to share this data with local officials for almost every municipality by the end of December.  The team expressed concern that when the schedule was developed we expected that by December 1 this data would have been shared with between 50 and 67% of municipalities.  The majority of the team thought this data would have been shared with some local officials in October, some in November and then some in December.  Tom P reported that we are on schedule to share the final PDC ratios for most municipalities with local officials in January.

The consensus was that the local officials would like to receive this data earlier.  We decided that at our next meeting we will review the 2005 PDC schedule and develop a 2006 PDC schedule.

The team agreed on several improvements to the PDC process:

1)      ORPS needs to share data earlier (especially commercial and vacant trends).

2)      ORPS needs to share data as soon as it is available.  In at least one case, unofficial ratios were shared in October and the official ratios have not yet been shared.

3)      We need to make certain that all CRMs are aware that assessors can suggest alternative methods (ex. stratify ratio study by lake and non-lake properties). 

There were also concerns expressed regarding the methodology for developing commercial trends.  There was discussion that ORPS should look to outside sources to check their trends.  There was a suggestion that maybe ORPS and the assessors could send a survey to private appraisers asking for their input on commercial trends.  Tim will talk to ORPS staff regarding the status of various plans to improve the methodology for developing commercial and vacant trends.  Tim will report back to the team at the next meeting.

Criteria for Sampling Classes in Market Value Surveys:

Tim distributed the criteria for determining the classes where we will select sample parcels to appraise.  Tim also distributed a report that showed the percentage of assessed value by class for each municipality where we conduct appraisals.  There is some concern that not sampling all classes might cause distortion in the equalization rates.  It was decided that ORPS will look at data for the most recent survey where we sampled all classes.  ORPS will calculate the town-wide ratio using all classes and then calculate the ratio using the current procedures for sampling classes.  ORPS will create a file and e-mail it to the team prior to the next meeting. We will discuss the data at the next meeting.

Procedures for 2005 Equalization Rates:

We briefly reviewed the draft procedures for 2005 equalization rates.  The procedures are similar to the 2004 equalization rate procedures.  The changes from the 2004 procedures include the following:

1)  The 2005 rate products for cities and towns will be based on a valuation date of July 1, 2004.  The 2005 State equalization rate will represent the ratio of assessed value on the 2005 assessment roll to the July 1, 2004 full value of these municipalities.

2)  The measured roll for a reassessment municipality will be the 2002, 2003, 2004 or 2005 reassessment; whichever is the most recent reassessment.

3)  The measured roll for new appraisals will be the 2003 assessment roll

4)  For measured rolls that are earlier than 2005, the aggregate full value for each major type will be adjusted to a July 1, 2004 aggregate full value.

5)  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.

6)  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, 2004 and the measured roll will be the 2004 assessment roll.

7)  If it is determined that we 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 2004 estimate will be trended to the valuation date for 2005 equalization rates.                                        

Tim reported that the draft procedures will be placed on the ORPS website and distributed to assessors and county directors.  We expect the State Board to adopt procedures for 2005 equalization rates at their meeting on January 25, 2005.

Development of Alternative Methods for Valuing Commercial and Vacant Classes:

There were discussions on the ORPS initiatives regarding the valuation of commercial and vacant classes.  Tim distributed a copy of plan 1B in the ORPS Strategic Management Plan.  The plan states that ORPS has a target date of April 2005 to complete a study of the use of computer assisted mass appraisal (CAMA) methodology for commercial and vacant property types.

The team discussed that for several years there have been discussions regarding the use of CAMA techniques for commercial and vacant land valuation in the market value survey.  The team has seen this as a valuation issue and the responsibility of the RPTAC Valuation Team.  However, the lack of progress in this area is a major concern to the team.  Since the integration of commercial and /or vacant CAMA into the market value survey would be within the charge of the team, the team is willing to take ownership of this initiative.  At the RPTAC meeting on December 9, Tim will ask RPTAC if they want the Equalization Team to lead this initiative.

Communications with RPTAC:

At the RPTAC meeting on December 9 Tim and Curt will report on the status of the team.  Tim will draft an annual report and distribute it to the team by December 9.

Summary of Next Steps:

-         ORPS will create a file of sales ratio, CAMA ratio, LOA, initial municipal ratio (before LOA test) and equalization rate data for every municipality for 2004 equalization rates.  ORPS plans to e-mail this file to the team by December 15.

-         ORPS will provide the team with statistics on sales by municipality.  This will include the number of sales, number of arms-length transactions, number of sales excluded and the reasons for exclusions.  ORPS plans to e-mail this information to the team by January 10.

-         ORPS will provide the team with data for every municipality with new appraisals for 2005 equalization rates.  The data will include the number of samples, the number of redo samples and the number of years the sample has been a redo.  ORPS might stratify this data by high and low interval.  This data will not be available until all the appraisals are completed for 2005 equalization rates.  ORPS plans to e-mail this information to the team by February 15.

-         ORPS will review the status of various plans to improve the methodology for developing commercial and vacant trends.  ORPS will report back to the team at the next meeting.

-         ORPS will develop a process to keep the team members aware of the status of PDC.  This may include the e-mailing of status reports on a periodic basis (possibly weekly).

-         The assessors think that it is appropriate for Tom Griffen to participate in at least one meeting each year.  We will invite Tom to our next meeting.

Next meeting – Wednesday, February 16, 2004 in the Albany office of ORPS from 10-3.  We will video-conference to the ORPS Syracuse office. Proposed agenda topics include:

-         Status of PDC process for 2005 equalization rates

-         Develop PDC schedule for 2006 equalization rates

-         Valuation of commercial and vacant classes

-         Discuss appraisal workload for 2006 equalization rates (discuss criteria for redo appraisals)

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

Updated: