STATE BOARD OF REAL PROPERTY TAX SERVICES
MEETING OF NOVEMBER 10, 2011
A meeting of the State Board of Real Property Tax Services was held in Executive Conference Room A (Urbach Room) at the New York State Department of Taxation and Finance at the W.A. Harriman State Campus, Albany, New York. The following members and staff were present:
Michael Joseph, Jr.
Jason Ayotte, Equalization Support Services
Stephen Beals, Real Property Analyst 2, Valuation Services Bureau
Tom Bellard, Director, Valuation Services Bureau
Joe Gerberg, ORPTS Legal Unit Manager
Geoff Gloak, Office of Communications and Public Affairs
Patricia Holland, Director, Equalization and Central Services Bureau
Kim Lee, Equalization Support Services
Darlene Maloney, Assistant to the State Board
Jack Moodie, Valuation Services Bureau
Susan Savage, Assistant Deputy Commissioner and Acting Secretary of the State Board
NOTE: The minutes are summarized. Detailed staff reports/recommendations to the State Board are available upon request. Resolutions of the State Board and the audio webcast of the meeting are available after the meeting date on the State Board's page at the Tax Department's website.
Dr. Bacheller called the meeting to order at 10:30 A.M.
Agenda Item No. I - State Board Administration - Approve minutes of August 16, 2011 Board meeting
On motion of Mr. Joseph, seconded by Mr. King, Dr. Bacheller stated that the minutes of the August 16, 2011 Board meeting stand approved and are, hereby, adopted.
Agenda Item I-B - State Board Administration - Approve 2012 State Board meeting calendar
On motion of Mr. Joseph, seconded by Mr. King, the Board approved its calendar for the following year as follows: February 14, May 10, June 14, July 24, August 16 and November 8.
Agenda Item I-C - State Board Administration - Report on State Board's jurisdiction to review a residential assessment ratio and adopt State Board guidelines on complaints concerning determination of final State equalization rates
Dr. Bacheller said that at the last meeting the Board asked staff to research its jurisdiction to review residential assessment ratios. Dr. Bacheller asked Mr. Gerberg to present.
Mr. Gerberg presented his memorandum, dated October 25, 2011 concerning equalization rate complaint procedural issues. Mr. Gerberg said that the first issue discussed in his memorandum was whether an assessing unit may properly file a complaint against its residential assessment ratio (RAR), as the Town of Huntington attempted to do at the prior Board meeting. Mr. Gerberg stated he had researched the issue and determined that the Board's authority in reviewing a complaint against a tentative rate is over the equalization rates as a whole, not the components in the establishment of the rate. Mr. Gerberg stated that the determination of the RAR lies with the Commissioner of Taxation and Finance as a result of last year's agency merger. Mr. Gerberg explained that the RAR is a by-product of the overall rate process, i.e., if there is a complaint that attacks the equalization rate and if the complaint includes major type A data, then that data would be reviewed in the review of the complaint. Mr. Gerberg said that a complaint solely disputing the RAR is outside the jurisdiction of the State Board.
In response to a question from Mr. Joseph, Mr. Gerberg said that the recourse for a RAR dispute would be to file an Article 78 proceeding under the Civil Practice Law and Rules.
In response to a question from Dr. Bacheller, Mr. Gerberg turned to the second issue discussed in his memorandum, which involved complaints against equalization rates that equal the level of assessment (LOA) stated on the tentative roll. Mr. Gerberg explained that in the process of determining a tentative State rate, staff reviews the LOA and if the data is within a five percent tolerance, ORPTS confirms the stated LOA and sets that number as the tentative rate. The LOA is a matter of public record. Mr. Gerberg said that, technically, the locality may complain, but the locality is really saying one thing to the public, and another to the State Board which is not an appropriate use of the equalization process. Mr. Gerberg suggested that the Board consider adopting a guideline pursuant to new section 200-a(1) of the Real Property Tax Law stating that it would not indulge these types of complaints, and offered proposed Resolution No. 17 for that purpose.
Mr. Joseph thanked Mr. Gerberg for his analysis. Mr. Joseph then pointed to the sentence in the proposed Resolution which stated "... the assessing unit has declared to the public what it believes its level of assessment to be, " and questioned whether it was appropriate to attribute such a "belief" to an assessing unit.
Dr. Bacheller commented that when a locality makes a statement, it has to have a basis of its actions to declare the LOA. Dr. Bacheller said that the published LOA is the local assessment official's duty and belief as a public officer.
After a discussion of Mr. Joseph's concerns with the wording of the proposed resolution, Dr. Bacheller asked for specifics on where a complaint was filed against an equalization rate that was established using the assessor's stated level of assessment.
Ms. Holland stated said that of the 26 complaints filed in the past four years, 11 of them were filed where the LOA was adopted and established as the tentative rate.
Mr. Joseph asked if staff could see a "point of view" in any of the 11 complaints.
Ms. Holland responded that the staff recommendation was to not make any changes to the data or the rate. Ms. Holland said that Huntington and Mount Vernon were against the residential class and that many of the other complaints were similarly based.
Mr. Joseph said that localities are probably trying to avoid Small Claims Assessment Review cases. He said that he doesn't believe that he is "smart enough" to be able to identify all of the concerns and tell localities that they can't complain to the State Board.
Dr. Bacheller asked if staff agreed in any cases where we agreed with any of complainants where the tentative rate was LOA. Ms. Holland said that there is a five percent tolerance used in the establishment of the tentative rate; however for two localities the rate was changed because our tentative rate was greater than what they had claimed as their LOA.
Mr. Joseph asked if a complaint had not been filed, would that discrepancy been discovered. Ms. Holland said "no" because the locale would have set forth its LOA and staff would have established a rate within five percent of that value. She added that there is a pre-decisional collaboration process.
Mr. Joseph said that in many cases the locales do not have the expertise that ORPTS staff has to ensure a good equalization rate. Therefore, he said that we have to show them and protect them.
Dr. Bacheller said that he was annoyed with the presentation at the last Board meeting as he thought it was an attempt to obfuscate what was going on. He added that he is not sure that the resolution should be adopted at this time and that the rate complaint cases should be heard.
Mr. Joseph said that the issue/resolution has merit but is having difficulty with the nuances of it. He said that on merit the locales should be aware of what they put out to the public but they also have a responsibility to the equalization system. He said that because he cannot accept the verbiage in the resolution, Mr. Joseph moved to table the resolution.
Dr. Bacheller said that this is a serious issue and agrees with Mr. Joseph that the resolution should be tabled. Mr. King agreed. The Board tabled Resolution No. 17 and Guideline, "Review of State Equalization Rate Complaints."
Agenda Item I-D - State Board Administration - Approve delegation resolution concerning powers and duties of the State Board
Mr. Gerberg presented his memorandum, dated October 25, 2011 concerning the Board's omnibus delegation resolution delegating certain State Board duties. Mr. Gerberg said that this resolution updates last year's resolution subsequent to the agency merger with the Tax Department. He said that this resolution conforms language to the current title structure.
On motion of Mr. Joseph, seconded by Mr. King, the Board adopted Resolution No. 11-18.
Agenda Item No. II -State Equalization - Final 2011 State equalization rate for the City of Mount Vernon where a complaint has been filed
Dr. Bacheller asked staff to discuss the complaint that was filed by the City of Mount Vernon, Westchester County, as reviewed in the staff recommendation, dated October 25, 2011.
Ms. Holland stated that the City of Mount Vernon complained about the residential assessment ratio; staff reviewed the documentation and found no justification for a change to the rate data.
Mr. Beals provided an overview of the review of the complaint. He said that the complaint addressed the use of the one year sales study versus a three year study. He said that, for Mount Vernon, one year of sales was enough to pass the confidence test of plus or minus five percent of the weighted mean and was the appropriate amount of sales to use. He said, that interestingly, that two and/or three years' worth of studies produced a lower aggregate value, and one year was in the City's favor.
Mr. Beals distributed two handouts entitled: "City of Mount Vernon: 2011 Administrative Review" and "Town of Huntington: 2011 Administrative Review" (for comparison). He said that the ratio distributions need to be considered for appropriate normalcy. He said that in addressing the normalcy issue, he verified the results of the Kolmogorov-Smirnov (K-S) test and the Shapiro-Wilk (S-W) test. He said that these two tests are known to be flawed when data sets are large, such as Mount Vernon's, and can lead to a conclusion that the ratios are not normally distributed. However, Mr. Beals explained that that there can be a question if the results are normal enough to use a matter of center; in this case, he stated that it is normal enough to rely on the measures of center (mean). He said that with regard to spread (median), it is not normal enough. He commented that the normal deviation illustrates that it is plus or minus two standard deviations above or below the mean. He said that the alternate measure, if it were determined the spread was not normal, would be the median which is actually lower. Mr. Beals argued that the complaint is not supported by the International Association of Assessing Officers or any other authority on sales ratio studies; it is just some methodology that the City developed on its own. He concluded that there is no documentation to support any change to the tentative rate.
In response to a question from Mr. Joseph, Mr. Beals said that the Coefficient of Dispersion is 28.5 percent which is not good. In response to a question as to when the City last reassessed, Mr. Beals responded it was sometime in the early 1900's.
On motion of Mr. King, seconded by Mr. Joseph, the Board approved Resolution No. 11-19 and adopted the proposed Findings and Determinations, establishing the City of Mount Vernon's final State equalization rate at 3.31.
With no further issues to come before the Board and there being no further business to discuss, on motion of Mr. Joseph, seconded by Mr. King, , the Board concluded its meeting at 11:06 A.M.
Susan E. Savage
Acting Secretary of the State Board
A signed set of minutes, complete with attachments, can be obtained by writing or contacting:
Darlene Maloney at
NYS Department of Taxation and Finance
W.A. Harriman Campus
Office of Counsel, Building 9, Room 161
Albany, NY 12227