Mayor Defends Second Tax Revaluation at BOT Meeting

Former Trustee Robert Harrison and Scarsdale Forum President Bob Berg continued to ask the Board of Trustees to reconsider a decision to conduct a second tax revaluation in 2016, just two years after the 2014 revaluation. The former board and Mayor Bob Steves passed a resolution to retain John F. Ryan Associates to conduct this second revaluation and to pay him $245,000 over three years. The first payment uses funds that were originally appropriated for the 2014 valuation. Critics have argued that these funds would be better used on road repairs – but since almost $1.3 million in funding is now available for repaving, that argument has lost some of its strength.

Just a few weeks into the job, Mark came prepared with a lengthy analysis of the arguments against the revaluation and the decision making process, outlining why he believes the Village should proceed with this follow-up revaluation. He defended the selection of Ryan, the timing of the revaluation and ended by saying, "it's time to move on."

Speaking to the newly elected Board of Trustees at the April 14th meeting, Harrison reiterated many of the points he has made at previous meetings and in emails and letters to the Board of Trustees.

He said, "Newly elected boards can make decisions – 4 members of the board did not vote on the 2016 revaluation. I hope you will decide not to spend $245,000 on the reval with J.F. Ryan Associates. He was paid to oversee the prior revaluation. He appeared here at Village Hall and I thought his presentation was weak. He talked about Florida – we don't live in Florida. In New York revals are recommended every four years. Ryan originally recommended we do a reval in 2018. He told us the results of the first revaluation were excellent."

Harrison continued, "Now we still have 500 grievances and article 78's outstanding. They cost the village money –and they cost residents money - $500 for an appraisal. If we do another reval, those people will file grievances next year. For 100-200 under-assessed homes, should we spend $100-$200,000 to correct them?"

"I hope this board will push out the revaluation to 2018. Since nothing has been done yet we can just pay him 10-20,000 for his time in the interim."

He asked the trustees to look at the comments on Scarsdale10583.com where he claimed that 353 residents have indicated their opposition to the 2016 reval.

Robert Berg then welcomed new trustees to the board, and said, "I think the prior board reached the wrong decision on the reval and this new board should reconsider the decision." About the process he said, "There were two unadvertised meetings. When I heard there would be a hearing I spoke against the revaluation.

No resident has spoken in favor of doing the reval. It seemed to be a done deal before anyone was heard on this issue."

About the man who has been given the contract to conduct the next reval, Berg said, "I found Ryan's presentation to be unconvincing. Ryan could not give a straight answer as to how his reval would improve on Tyler's revaluation. Until 500 grievances have been settled, the dust has not settled. A new reval will further aggravate residents. I ask the board to have an ample public hearing on it. All I have heard is negative comments from everyone on this when you can't drive down the street without smashing into a pothole."

Mayor Jon Mark responded to the two by reading the following statement: Here is what he said:

I have followed this issue since it arose.

Among other things, I have read letters from Messrs. Harrison and Mattioli; comments on Scarsdale 10583.com; the public comments by Messrs. Berg, Harrison and Nadel at the Board of Trustees' meeting of January 29, 2015; viewed the Board of Trustees' meeting of February 10, 2015 at which Mr. Harrison commented on the revaluation; attended the March 17, 2015 meeting of the Finance Committee; and read the emails sent by residents to the Board of Trustees. I have just listened to Mr. Harrison this evening as he repeated his previously expressed views. In short, though I am just rejoining the Board, I believe I am "current" on this issue.

Criticisms of the revaluation are being made on several grounds. These include that:

It is being done too soon after the 2014 revaluation;

One element of this point seems to be that with some grievances arising from the 2014 revaluation still pending, the 2014 revaluation is not done yet;

The $245,000 price, payable over three years, is too expensive;

The money should be allocated to other things – most frequently mentioned road repair;

The contract was not put out for competitive bid;

The firm chosen monitored the 2014 revaluation and should have done a better job to point out any deficiencies.

The Village Manger once commented in an early meeting that doing a revaluation at four year intervals was a New York State guideline with respect to mass appraisals and therefore a revaluation conducted within a shorter time period was imprudent.

It is understandable that all of these criticisms and comments are being raised. The 2014 revaluation was an enormous undertaking that had a significant impact on many residents and the prospect of another revaluation soon after that effort is naturally a cause for questions. At the Finance Committee meeting held on March 17, 2015, Mayor Bob Steves, the Trustees then in office and John Ryan of Ryan Associates, the firm engaged to do the 2015-2016 revaluation, responded to these questions and listened to public comments by residents. I attended the meeting and listened as well.

Hearing the questions and criticisms raised, I start by taking a step back to consider the matter as a whole. The 2014 revaluation was a very ambitious project and long overdue. The goal was to achieve a more equitable allocation of the property tax burden among Village property owners. For the first time in 45 years, property data was updated parcel by parcel. The cooperation of residents in getting that done was impressive and virtually unprecedented. Over 95% of residents granted the appraisers access to their homes in aid of the data collection process – an almost unheard of level of cooperation.

Following the data collection, new valuations were generated. These valuations were essentially more than 5,900 opinions on values, namely the value of each property assessed in the Village.

No matter how methodically arrived at, any opinion, including an opinion on property value, has a subjective aspect to it. Given that subjective quality, it is not surprising that there would be some level of disagreement with some of the valuations arrived at in the 2014 revaluation. In addition, in light of the size and Village-wide scope of the 2014 revaluation it is also not unexpected that some level of errors in fact or judgment might occur.

It is with this context I have considered the criticisms of the 2015-2016 revaluation.

I start with the benefits to be achieved from the present revaluation – a point its critics do not seem to wish to weigh in the balance. In my view, the present effort represents a good faith attempt to finish off what was largely completed in 2014. In that sense, I view it as an effort to refine what was done utilizing the extensive and current data base compiled in that process. It is expected to eliminate a number, though perhaps not all, of the inequities that may still exist in the allocation of the property tax burden.

To the criticism that it is being done too soon after the 2014 revaluation, I respond that the time to make such refinements and corrections is while the process is still fresh in the minds of those who participated in the work and so maintain the focus on the issues to be addressed. Delaying this re-look at the 2014 revaluation introduces the passage of time into the process which can allow thoughts on what might be improved to be forgotten, fall through the cracks or otherwise not be addressed as they might be. It will also allow the Village to maintain and update, at lower cost, a market-value data base that is relatively current year to year. This should improve the fairness of the allocation of property taxes among Village residents for years into the future.
The fact that 950 grievances, representing approximately 16% of the properties revalued, were triggered by the 2014 revaluation, does not mean that the 2014 revaluation is not done. At this time, 371 cases remain open and it expected that these will be resolved in due course. Grieving property valuations is a well-established process and the number of grievances filed each year fluctuates as the result of a wide variety of factors. In terms of the number of grievances presently cited, it is noted that in the years before the 2014 revaluation the Village had experienced spikes in the number of grievances filed. In a comprehensive report issued by the Scarsdale Forum in November 2010 that supported the initial revaluation, it was noted that "The 2009 assessment roll was the first one to feel the brunt of the collapse in real estate values following the 2008 financial meltdown. Grievances surged to 551. On Grievance Day 2010, 756 grievances had been filed." While the impetus in 2009 and 2010 was different, the effect was the same – an increase in the number of residents who disagreed with the assessed value of their property. Therefore, while the fact that disagreements were prompted by the 2014 revaluation is noteworthy, it does not persuade me as reason for not doing the next revaluation. The pending matters will be resolved in due course as they have been in prior years.

Criticism of no-bid contract: To this point there are several observations to be made (most of which have been articulated by the prior Board). First, there is no legal requirement that the contract be bid out, especially when the universe of potential vendors with the requisite expertise was small as I understand was the case here. Second, Ryan Associates has a base of information and experience about the 2014 revaluation that should not be lightly dismissed or cast aside.

There was discussion at the March 17th Finance Committee meeting about the methodology Tyler Technologies, the firm engaged to do the 2014 revaluation, chose to emphasize in the 2014 revaluation. My take away from that discussion was that the method they chose – the sales comparison approach -- is a reasonable one recognized in the industry. The other method they referenced, but did not emphasize -- the market value approach -- is also industry recognized. Whether to emphasize one method or another is a matter of reasonable professional judgment. Therefore, I find no fault with Ryan Associates as the monitor of Tyler for not arguing that a different emphasis be employed in doing the 2014 revaluation. Ryan's job was not to be a second revaluation firm, but rather to provide oversight that the 2014 revaluation was done within industry standards. They did that.

Rather than view Ryan Associates as somehow unfit for the process now planned, I choose to view them as being in perhaps the best position to refine and correct judgments –while reasonable when made – that appear in hindsight might be made differently. Doing so should further improve the more equitable distribution of the property tax burden, which of course was the goal of the revaluation.

Criticism of dollars to be spent: This issue was addressed at the March 17th Finance Committee meeting as well. As Mayor Steves said, the entire budget process involves making judgments on how tax dollars should be spent. It is worth noting that $85,000 of the aggregate $245,000 was already budgeted for the 2014 revaluation and was not spent for that process. Thus, from one perspective, the present revaluation will use an additional $160,000 of newly budgeted funds, not $245,000.

However, whatever number is focused upon, this project is no different from any other budget item calling for the balancing of competing interests. As I noted in my opening remarks, the Village is emerging from a rugged winter that decimated our roads. We are aware of that situation every bump and swerve we make as we drive about town. The Department of Public Works has been filling in potholes and will be doing road repair all spring. As noted, with the agenda item to be acted upon this evening, we now will have $1,298,800 available for road repair in this fiscal year. That should go a long way to alleviating the most egregious situations.
The issue about the state of Village roads after the winter season is one that recurs each year. Spending an additional $82,000 per year in each of the next three years will not make a material difference in addressing this problem due to the simple fact that there is no permanent fix for post-winter pot holes. This is a condition that arises on an annual basis in varying degrees of severity depending, in part, on the severity of the winter. In contrast, spending the budgeted funds for the revaluation should yield lasting benefits to the Village for years to come.
Seizing on a single comment by the Village Manager and treating that comment as dispositive as to the course of action to be pursued, simply ignores the extensive discussion of this topic that has occurred and our particular circumstances. The reference made was to "guidance" published by the NYS Office of Real Property Tax as follows: "An appraisal of each parcel at full market value is conducted once every four years."

A few observations about this:

The statement is "guidance." It is not a law, rule or regulation.

The guidance given on the period between appraisals is "at least" every four years which clearly implies that if a shorter period is appropriate under the circumstances, those circumstances may be considered. The commentary on this guidance focuses on the question of whether short-term trends may be dramatic enough to warrant a shorter revaluation period.

The 2014 revaluation, by definition a unique event over a 45-year time span, presented the sort of circumstances that reasonably suggested to the prior Board and Village staff that varying from the NY State guidance might be warranted. It is now clear that after several lengthy public meetings of the prior Board on this subject, Board and Village staff thinking evolved to a consensus point of view to pursue the revaluation presently contemplated within a shorter interval following the 2014 revaluation. I have summarized what I believe those reasons are. Looking back at a single comment by the Village Manager and taking it out of context of all that has transpired since it was made fails to give a complete picture of the decision-making process. It is also frankly misleading to those who may not be following the development of the thinking on this issue as closely as its vocal critics.

In sum, I have heard the objections from a handful of outspoken residents about the present revaluation and am not persuaded by their arguments that we should not go forward. It is noted that not everyone who has commented publicly is opposed to the revaluation. In particular, resident Michael Levine has expressed his support for the process as he publicly stated at the March 17th Finance Committee meeting noting that he might do even more than the present plan contemplates.

In closing, I appreciate the fact that residents have spoken out. By asking questions such as the ones posed the prior Board had the opportunity to re-examine an important Village decision in a public and transparent manner. The fact that we now have a new Board in place does not mean that we should hit a reset button on this topic and disregard all the good hard work that has been done. Rather we should build on that effort and therefore, in my view, it is time to move on.