Thursday, April 5, 2012

T&G: City Hall Notebook - Just the facts facts, ma'am

Property valuation winners and losers
As Sgt. Joe Friday of Dragnet fame used to say on the popular police TV show: "Just the facts, ma'am."

Well, here are some facts about how some of Worcester's elected officials fared with their new property valuations.

According to city assessor records, six of the 10 city councilors who own homes in the city saw their property assessments go down, while four saw their valuations go up.

The following are those council members whose property valuations have gone down; it includes their new assessments followed by their previous-year assessments in parenthesis:

Mayor Joseph M. Petty, $388,200 ($394,200), District 2 Councilor Philip P. Palmieri, $313,900 ($321,600), Councilor-at-Large Joseph C. O'Brien, $164,300 ($195,500), District 3 Councilor George J. Russell, $337,400 ($344,700), Councilor-at-Large Frederick C. Rushton, $297,200 ($307,600) and District 5 Councilor William J. Eddy, $210,100 ($214,900).

Those councilors whose property assessments have increased are (previous year assessments in parenthesis): Councilor-at-Large Konstantina B. Lukes, $278,800 ($268,700), District 1 Councilor Tony Economou, $399,800 ($355,100), Councilor-at-Large Kathleen M. Toomey, $194,600 ($180,600) and District 4 Councilor Sarai Rivera, $333,800 ($310,100).

Councilor-at-Large Michael J. Germain does not own a home in the city.

Other local notables who saw a decrease in their property values include City Manager Michael V. O'Brien, whose home assessment dropped from $387,100 to $380,800.

Also, Lt. Gov. Timothy P. Murray saw his home property value drop from $194,000 to $170,000, according to city assessor records.

Meanwhile, U.S. Rep. James P. McGovern, D-Worcester, saw a modest increase in the valuation of his home, from $177,000 to $178,100.

Local residential property assessments have decreased by 3.8 percent on average compared to the previous year, according to city officials

The average valuation for single-family homes dropped by 3 percent, compared to the previous year.

Meanwhile, the average assessment for two-family/duplexes dropped by 7.2 percent; three-deckers declined by 4.15 percent; and condominiums dropped by 3 percent.

Approximately 3,664 of the 38,277 residential properties saw an increase in their assessed valuations. Much of those higher assessments are attributed to new construction, renovations and increased square footage.

Those are the facts.

Assessor under microscope
One city official who has received more scrutiny and comment than anyone else at City Hall regarding his new property assessment is none other than the city assessor himself, William J. Ford.

According to the assessor's on-line data base, the new assessment for Mr. Ford's Salisbury Street home is $620,000, an increase over the previous year's assessment of $601,000.

But that conflicts with Certificate of Municipal Liens details for the property, which indicated that the previous year's assessment for the property was $617,000.

Meanwhile, the folks at Accurate Worcester Assessments on Real Estate, who have been on top of Worcester's revaluation effort, contend the previous-year's assessment for Mr. Ford's property was $687,200, not the $601,000 listed on the assessor's data base nor the $617,000 listed on the CML.

In addition, AWARE contends that the assessment for Mr. Ford's property has dropped by some $270,000 in three years. The group says his home and property was assessed at $897,100 for fiscal year 2010, $687,200 for fiscal 2011 and the new assessment is $620,000.

That has prompted Worcester resident Steve Quist to file a complaint with the state Ethics Commission. He said he does not understand how someone's property valuation, the city assessor's no less, can go down by more than $270,000 in three years.

"The valuation of his property has gone down while it has gone up for so many other people," Mr. Quist said. "It all begs the question of who's guarding the henhouse?"

Mr. Ford could not be reached for comment.

Wednesday, April 4, 2012

Commercial Property Values submitted to the DOR

T&G - Commercial assessments may hold up Worcester tax bills


WORCESTER —  Fourth-quarter property tax bills, which city officials had hoped to mail out by May 1, will likely be further delayed, City Manager Michael V. O’Brien said yesterday.

Mr. O’Brien said the delay is likely because the city did not complete its review of all 4,800 commercial properties and submit those new property values to the state Department of Revenue until yesterday.

The manager did not offer a date when the fourth-quarter tax bills reflecting the new property assessments will be mailed.

“This overall (property revaluation) undertaking has been arduous to say the least, but critical in determining fair and accurate market values based on the current parcel and market conditions,” Mr. O’Brien wrote in a report that went before the City Council last night. “This intensive effort revealed just how antiquated previous systems were and the inconsistencies between previously entered data and current parcel/market status.

“I am extremely cognizant of the compressed timelines we face, but I cannot sacrifice a high level of quality for expediency,” he wrote. “I am convinced at this time that a May 1 mailing of the fourth-quarter tax fiscal 2012 actual tax bills is more than optimistic and will likely be delayed.”

To issue the tax bills by May 1, the City Council would have to hold its annual tax classification hearing and set the tax rates in the next couple of weeks. But the date of the tax classification hearing has yet to be set — an indication that a May 1 tax bill is unlikely.

What this means for city taxpayers is that they could get two property tax bills within a couple of months.

The fourth-quarter bill, which will be the first tax bill for this fiscal year based on the new property values and new tax rates, is expected to be higher for most taxpayers because the first three tax bills for the year used estimates based on old property assessments and last fiscal year’s tax rate.

If the fourth-quarter bill goes out in the middle of May, for instance, taxpayers would have until the middle of June to pay it. Then they will receive their first-quarter tax bill for fiscal 2013 on July 1, and that payment will be due Aug. 1.

But if the tax bills are not issued until the end of May, taxpayers would be hit with a one-two punch, receiving a new quarterly tax bill soon after paying the previous one.

Last month, the city received “pending preliminary certification” of its assessments of 38,277 residential properties — single-family, two-family and three-family homes — and those property owners have already been informed of their new property assessments.

City officials have said that local residential property assessments have decreased by 3.8 percent on average compared to the previous year.

Mr. O’Brien said updating the property values for commercial properties has proven far more complicated.

He said the city assessor used the industry-standard income approach to generate a fair-market value for those properties. The income approach is most applicable to real estate that is normally bought and sold on the basis of its income-producing capabilities.

In the process of modernizing systems, Mr. O’Brien said, assessors uncovered a previous practice of “manual overrides” on as many as 2,000 commercial and industrial properties. He said those overrides allow an assessor to manually enter a data element or formula into the assessment system and override the resultant valuation that should have been calculated by the system for that parcel. As a result, Mr. O’Brien said, the new property value would be based not on the internal calculations of the system, but instead based on the artificial override.

“This manual override would continue, indefinitely, unless human intervention removed it, and (it) was not obvious when reviewing a previous property record,” the manager said. “There may have been reasons for these overrides; however, there is no documentation in the files or the notes as to why or when these manual overrides were placed.

“There was no element within the old software program that highlighted that this action was taken or that prompted staff to review on a year-to-year basis,” he continued. “It appears that some date as far back as 30 years as far as we can tell, with no supporting documentation as to why or when the adjustments were made.”

Mr. O’Brien said all the manual overrides have now been completely removed, because they have no standing based on the current parcel or market conditions.