Comments from Mayor Jon Mark on the Revaluation and the Village Budget

Mayor Jon Mark offered the following explanation of the procedure for the 2016 tax revaluation at the April 26 meeting of the Village Board. He provided information about the new evaluation model, pertinent dates and how those who wish to file grievances can do so.

Also, the Mayor commented on the Village Budget and answered questions about fund balances. The Village Trustees adopted the 2016-17 Village Budget at the meeting on April 26. You can watch the meeting in its entirety and listen to comments from the Village Trustees on the budget and appropriate level of fund balances here.

(from Mayor Jon Mark)

2016 Revaluation: I would like to start by providing highlights of the timeline for the 2016 Village-wide reassessment over the coming two months. The tentative assessment roll will be filed on June 1st, as required, and notices of the 2016 assessments are expected to be mailed on June 2nd.

As is the case every year, residents are entitled to grieve their assessments. Pursuant to New York State law, grievances can be filed with the Village Assessor's office between June 1st and the third Tuesday in June, or June 21st for this year's statutory grievance deadline. The Village Board does not have the authority to modify the dates established in accordance with NYS law.

Some general notes about the revaluation process. Unlike what occurred in connection with the 2014 revaluation, this year more detailed information will be made available to residents directly and on the Village website soon after the filing of the 2016 tentative assessment roll. Among other things, I understand that the notices residents will receive will be approximately two pages in length and will contain sufficiently detailed information to allow residents to understand how the value of their property was calculated. For example, I am advised that the notice will set forth the physical attributes of the property that were taken into account in the modeling process and the corresponding coefficients applied to calculate the total property value estimated as of the revaluation assessment date which is July 1, 2015. That estimated value will become the 2016 total assessed value. In addition, the model used by the Village's project consultant, J.F. Ryan Associates, will be made available on the Village web site within a few days of the posting of the 2016 tentative assessment roll. Therefore, it should not be necessary to file numerous FOIL requests to obtain an understanding of how the 2016 revaluation was accomplished. This level of transparency should be an improvement over 2014.

Second, without getting into details of the technical or logistical aspects of the revaluation as to which I am not qualified to speak, it is noted that the process being utilized in 2016 has been simplified in a number of respects. For example, the neighborhood map that was used two years ago was simplified from 14 sub-neighborhoods to five neighborhoods that correspond to our five elementary school districts. Site adjustments, referred to as influence factors, will be made to specific parcels for the various factors that impact value (i.e., traffic, flood zones, etc.). The comparable sales data that transacted during the new sales base period in each of the respective five consolidated neighborhoods for the 2016 revaluation will similarly undergo a process of modeling; however, the 2016 modeling process will take into consideration all sales within each of the respective five neighborhoods. It is intended that the new neighborhood designations will ameliorate concerns that previously existed regarding the perceived inaccurate or inappropriate delineation of sub-neighborhoods. Similarly, the possible grades of construction quality assignable to each house were also simplified. The 43 grades that were used in 2014 have been mathematically consolidated into a more manageable grouping of 16 grade categories. These changes in approach, among others being employed, should result in a more robust valuation model relative to two years ago.

One other timing point: A comment has been made that the possible high demand for appraisers triggered by the revaluation will make it difficult for residents who wish to file grievances to find a suitable appraiser that is available to assist them. It is understood that while an appraisal is usually part of the preferred and recommended documentation submitted to support a grievance, the practice before the Board of Assessment Review ("BOAR") is to permit filers to supplement their grievance filing with additional supporting evidence of overvaluation, including an appraisal, after the initial filing of the grievance. It is not unusual for appraisals to be remitted for the BOAR's consideration after the grievance day deadline through the last week of August each year. I am advised that based on the schedule this year, the BOAR would accept additional documentation through September 1, 2016 -- provided that the additional documentation is supplemental to a grievance that was filed no later than June 21, 2016. Note that the statutory date for the Village Assessor to file the final assessment roll is September 15, 2016. Therefore, residents should have substantially more than three weeks to engage a suitable appraiser to prepare an analysis that they believe would support their grievance filings.

The 2016-2017 Proposed Budget: On the agenda tonight is a vote on the proposed 2016-2017 budget. It is not my intention to review the proposed budget again this evening as an overview was provided at the prior Board meeting. However, since we continue to receive comments from some urging us to use more of the General Fund to provide some measure of tax relief, I will reiterate some of the prior comments Board members have made on this point.

The purpose of the General Fund is to provide the Village with a funding source to address unplanned or emergency situations such as unbudgeted infrastructure repairs or severe storm related activity and to provide an overall cushion for the Village's finances.

The financial management policy of the Village is to maintain a strong General Fund balance. This policy is central to maintaining the Village's Aaa bond rating, a policy that is at the core of Scarsdale's fiscal strategy. When Moody's last reaffirmed the Village's Aaa bond rating, it specifically referenced the "Village's formal policy of maintaining this balance at 10-15% of budgeted expenditures for the ensuing fiscal year." Scarsdale's fund balance target is below Moody's standard 15-20% target as a result of our regular funding of capital items using cash within our annual budget. We understand that the General Fund balance is currently approximately $8.7 million, or 15% of budgeted 2016-2017 expenditures. However, the General Fund balance level fluctuates relative to budgeted expenditures. We expect the fund balance at the time of the Village's fiscal year-end audit to be about $800,000 below current levels, thereby placing the fund balance at approximately 14.25% of the proposed 2016-17 operating budget expenditures. It is fiscal year-end audited numbers that the rating agencies use when determining the Village's credit rating. We do not expect to have audited numbers from which a relevant determination of fund balance can be made until August or September.
The question that has been put to us repeatedly this season is: where should the General Fund balance be relative to the targeted range of 10-15%? This is a matter of judgment over which people may – and in this case do – reasonably disagree. It is the view of the Board that now is a time that we should be very prudent with our management of the General Fund balance. As an illustrative example prompting this approach, the fairly recent completion of the Popham Road bridge contained a nearly $2 million cost overrun. The General Fund balance is maintained exactly for a capital project cost overrun of this nature and magnitude.

When looking forward a few years, we see a number of major capital improvement projects. In the 2016-17 budget, the Village plans to repair the Heathcote Road Bridge, perform storm water management with the Sheldrake River Basin Improvement Project and undertake the Hutchison River Flood Mitigation Project. The Village also plans to start work on Fire Station #1. Looking forward a little further we plan to perform a comprehensive analysis of, and rehabilitation work on, the Village storm and sanitary sewer systems, pipe lining and valve replacement associated with our potable water distribution system, among other things. In addition, material work on the Library is also anticipated although the scope of the work that may be performed is yet to be determined.

These capital projects are in keeping with the Village's long term capital planning and represent one of the critical functions performed by the Village to invest, maintain and improve on critical and aging infrastructure. With these specific major capital projects anticipated over the next five years or so, now is not the time to draw down the General Fund balance for a relatively small amount of one-time tax relief. Not only is the potential benefit relatively insignificant, 0.67% of the aggregate anticipated tax bill (municipal, school district, county) for 2016-2017, but engaging in such a practice has proved to be the first step on a slippery slope for other municipalities which have imprudently depleted their General Fund balances through multiple drawdowns in successive years.

One other note. In addition to the criticism of the approach being taken in the proposed Budget, there has also been some support for it as well. For example, in the League of Women Voters April 12, 2016 letter commenting on the 2016-2017 proposed budget, the League wrote:

"The League commends the Village for their prudent and strategic use of some surplus as a tax relief measure, while leaving fund balance at appropriate levels. The League understands that the proposed application of $1,023,000 is deliberately somewhat lower than in the past. Last year's budget increased the use of fund balance in order to stay under the tax cap and then be eligible to obtain a one-time $2.2M tax rebate to many homeowners from the Governor's Tax Freeze Program. This fund balance, restored to historical levels, should be adequate to maintain the Village's Aaa bond rating and to address any unplanned or emergency situations arising from storms, infrastructure failures, etc. The League recommends that the Village continue to employ this responsible strategy and to regularly communicate this information with the community at-large."