Second Revaluation Defended at Village Meeting

The Board of Trustees sought to explain the process for Scarsdale's second tax revaluation, to answer questions and to quell dissension at a meeting on March 17, St. Patrick's Day. The original meeting was rescheduled due to snow and this session was squeezed in just before the election of the new Mayor and trustees on Wednesday March 18th.

Following the first revaluation in 45 years that was implemented in 2014, the Village plans to do a second revaluation this year, to take effect in 2016. The fee of $245,000 will be paid for over three years using some funds remaining from the first revaluation.

John F. Ryan, the man who was hired to monitor the first revaluation done by Tyler Technologies has been given the contract to do this second round and some are questioning why. Critics reason that if the first revaluation was done right and approved by Ryan, why a second one would need to be done so quickly afterwards, and why was Ryan selected to carry it out.

However, the Mayor and trustees are unanimous in their resolve to hire Ryan to carry out this update and clearly laid out their case.

Mayor Steves said that this second round would "solidify our database" and make the process "fair and impartial." About Ryan he said, "I am confident in the staff choice of John Ryan Associates. Under Village law it is legal to select staff (rather than seek bids) where there are a limited number of vendors." He continued, the revaluation "is not mandated but it is the right thing to do. We are doing this because it is equitable."

Trustee Marc Samwick concurred saying "it was the right thing to do a revaluation after 45 years ..... while it appears that the pendulum has swung from one extreme to another, there are good reasons to do it (the second revaluation.)

Samwick enumerated those reasons saying:

• This second round will "correct some of the shortcomings of Tyler's revaluation.
• It will utilize market values rather than "automatic comparable sales."
• It will redefine the neighborhoods into more natural delineations to create more meaningful valuations.
• A new model will be developed.
• It will create a regular process and maximize equitability with reliability.

He concluded with, "Let's make sure we have a clear and open process. Meetings such as this one are important steps. Based on improvements in the reassessment process I am confident we will have a more equitable process moving forward."

John Ryan also defended the second revaluation, saying, "Industry practice recommends that assessments be updated as frequently as possible. New York State
recommends revaluations be done at a minimum of every four years. Taxable values should be updated and reflect market value.... the market changes so values should be adjusted accordingly and if not, those that are over valued subsidize those that are undervalued. Regular assessments reduce challenges and minimize the value of those challenges."

Explaining the process, Ryan said that it will involve three steps:

• The village staff will do sales verification, checking new construction, open permits and properties that have been sold.
• Using recent sales data, Ryan will develop a new Direct Market Model, which examines all sales, not only 3-5 comparable sales.
• An experienced appraiser will do a "windshield review" of each property and compare what can be viewed from the street to the data card for each property to assess overall condition and quality and to do a physical inventory. Unlike the prior revaluation, the appraiser will not enter homes unless conditions have changed. Ryan said, "The Village made a big investment in canvassing and doing an inventory of all homes. We don't have to do that again, we just need to maintain it."

Trustee David Lee asked how many comparables will be used to value each home and Ryan explained that variables such as "size, location, etc are compared to current sales. The Direct market model is informed by all sales in the model."

Trustee Thomas Martin said, "We just used an automated comparable sales and the state said it was valid – why not stick with it?" Ryan responded saying, "The Direct market model is better for a reassessment. If we continue to use the automated comparable sales method a few years down the road things shift and you have oscillation from year to year."

Trustee Stacey Brodsky asked about the time frame for the revaluation and Ryan said, "Sales verification will happen soon, modeling will be done over the summer and the field review will start in the fall."

Robert Berg, who was a proponent of the first revaluation said, "I would rather fix potholes than do a reval" and asked if the village planned to do this every two years. Village Manager Gatta told Berg, "We are doing this adjustment two years after a comprehensive revaluation to make sure that we have our base correct. Our base is as good as any I have seen. We didn't use one method – we used all three. Now we are adjusting. I think we will do it again in four years – but we don't have to. The elected officials can decide if we do it again sooner or later."

Berg continued, "I believe Tyler did a good job with good methodology. Ryan signed off on everything they did and was paid handsomely to do it. Now we are using a new method for no apparent reason. That's my problem here: the timing. The town could use the money for other infrastructure needs."

Mayor Steves assured Berg saying, "We are going to have to find money to fix the roads. We feel we need to tweak it (the revaluation). Berg also asked if there have been disproportionate changes in one neighborhood over another to justify a second revaluation. Village Assessor Nanette Albanese replied, saying, "No. This is to maintain values across the community. The justification is to maintain market value year over year."

Statistician Michael Levine came to the mike and said, "If I thought the first reval was good I would prefer to spend the money on potholes. But I think there are problems we need to fix." He continued, "I am endorsing this process – but the more confidence I have the more I will endorse it."

He then presented some data on the validity of the first revaluation, explaining, "I kept hearing this was a great revaluation because of the 4.39 coefficient of dispersion. I looked at how it was calculated and it is misleading to say that this proves anything.  This coefficient compares sales values to assessed values for sold properties. This measure makes sense when the sale price was not known at the time of the assessment or was not used in developing the assessed value. But in this case, the coefficient was based on the sale of 340 properties whose sale prices were used in the model to develop values for the entire town. More importantly, in over 95% of these cases, the sold property was used as one of its own comparables in determining its own assessed value. So, the coefficient was based on properties where Tyler knew and used the sale price in developing the assessed value. It's like knowing the answer before you take the test. The IAAO (International Association of Assessing Officers) agrees with me, advising that the coefficient "will be biased" if it is based on sales that "are used as comparables for themselves". For the coming year, if future sales are in line with declared assessed values a low coefficient would be good and would prove the accuracy of the reval, but I don't think the 4.39 coefficient that keeps getting cited proves anything."

Mayor Steves responded to Levine, saying, "We are not resting on our laurels. Ryan was not hired to confirm what Tyler did or say it was 100% perfect. Ryan was hired because a second look is appropriate. Given the complexity it was necessary to take another step."

Bill Ortner said, "Tyler weighed the land more heavily than the house. Some assessments had a higher weight for the land – but you spent much time scrutinizing the house. Fox Meadow was split up into three communities and valued as such. But little scrutiny was given to the land. On Olmstead Road one side was in one neighborhood and the other side of the road was in the other." Turning to Ryan he said, "Are you going to use the same formula that they did for land? Will you look if it is sloped? Does it flood? Is the property in the front or in the back? I urge you to scrutinize the map – it looks like a gerrymandered Congressional district."

Ryan said, "We will only do an exterior look – the study does not allow for looking at the land. If a property is subject to flooding, that should be captured and recorded. To the extent that it affects value it will be considered, as will traffic. However that changes year over year. Neighborhood land values will be re-evaluated – and neighborhoods will be defined by the sales."

Former Village Trustee Bob Harrison took the mike and spoke at length. He asked Albanese for counts on the settlement of the 750 challenges that were filed to the first revaluation. He asked if it was a priority to spend the $245,000 to tweak the reval. Saying that it costs $300,000 to repair a mile of road he said "we will never catch up." He said,"we value our tax dollars dearly. I don't think Scarsdale is ready for it now. I think we will be ready in two more years. Maybe we will have a petition (against it) with a thousand signatures."

Steves closed the meeting by telling Harrison that "We deal with priorities all the time and weigh those decisions. We made this a priority." Gatta then invited residents to let the Village know about potholes and promised to repair them.