Minutes of a special meeting of the Town Board of the Town of Olive held Tuesday, July 29, 2004, 7:30 pm at the Town Meeting Hall in Shokan, NY. The purpose of the meeting as stated in the legal notice is to discuss with attorneys from the law firm of Hacker and Murphy and with designated representatives of the Onteora School District the recent updates regarding the City of New York’s property valuation. If necessary, the Town Board will adjourn to executive session with Olive’s attorneys from Hacker and Murphy to discuss assessment litigation issues regarding New York City properties.
Members Present: Berndt Leifeld, Supervisor
Henry Rank, Council Member
Helen Chase, Council Member
Bruce La Monda, Council Member
Linda Burkhardt, Council Member
Recording Secretary: Sylvia Rozzelle, Town Clerk
Others Present: Justine Winters, Onteora Superintendent of Schools; Lev Flournoy, Marino D’Orazio, and Kathy Hockman, Onteora School Board Members; Robert Cross, Town of Shandaken Supervisor; and Richard Hockman, Planning Board Member; Mike Sommer, Sole Assessor; Patrick Seely, Attorney for Hacker and Murphy
Supervisor Leifeld stated this being a workshop meeting he would like to restrict conversation to include the attorney, Town Board members, and school board representatives. He stated for months they have been going to Albany talking to the staff from ORPS (Office of Real Property Services) and ORPS has agreed that their department has had the reservoir under valued. He stated that for years in court the City of New York has reiterated that NYS says the reservoir is worth $119 million and now the state has increased that value to $340 million.
Mr. Seely stated that ORPS’ main duty is to calculate equalization rates to determine what tax rates get applied to the tax bills. In Olive there has not been a reassessment for years and in order for Olive to pay their fair share they use calculations to come up with these percentages. He stated a big impact in the Town of Olive is the Ashokan Reservoir carrying over one half of the value of the town which in turn has a huge impact on the state equalization rate. ORPS has felt it was worth $119 million and the town has always felt it is worth considerably more than that. He stated they went to ORPS last year to talk to them about this figure feeling this figure should be more realistic since the City of New York has always relied on that number in their filings with the courts. The City of New York has always been pushing the figure supplied by ORPS and over the past eleven months they have shown ORPS the town’s numbers backed up by appraisals, the City’s numbers, and Judge Bradley’s opinion. He stated ORPS agreed with Olive in the most part and came up with a value of $340 million. He stated at this point the Town of Olive feels the reservoir property is worth over $400 million. He stated that what this does is cause a shift of school taxes and county taxes into the Town of Olive.
Mr. Seely stated he would like to take a step back and talk about the large parcel bill. He explained how the large parcel bill would work and with the City taken out of the equation the Town of Olive could see a tax increase as high as 75-80% noting this is why Olive chose to go to ORPS because getting ORPS to agree to a change in the value would make the school tax shift be shared across all properties including the Ashokan Reservoir. He stated with ORPS new reservoir value the shift will be somewhere in the low 40 percentile increase in Olive’s taxes. He stated that is a pill that is tough to swallow but it is a lot better than it would have been had the town not gone to ORPS and taken the step they did. He stated the Town of Olive has been somewhat quiet over the past year about this issue of trying to get the state to recognize this property is worth a lot more. He stated that Ulster County can implement the large parcel bill also but the amount will be spread over a bigger area noting the town will see the same kind of shift. He stated the steps that the town took will have an approximate shift of 30-35% into the Town of Olive. He stated the trigger mechanism of the large parcel bill was set by statute and is based on a rule of fives: the property has to be worth more than $5 million; has to account for 5% of the town’s assessed value; must be five per cent of the school district’s value; and also has to create more than a 5% difference in value of the town’s equalization rate and the apportionment rate. Even with this change this property still qualifies for the large parcel bill.
In a response to a question as to what the town would have to do to not qualify for the large parcel bill, Assessor Mike Sommer responded either lower the city’s assessment or we can knock on ORPS door again and say their $340 million figure is still $80 million shy. He stated that if ORPS agreed with the town then there would be no large parcel bill.
Supervisor Leifeld stated in order to get out of the large parcel bill the town could do a re-evaluation of commercial and residential properties bringing that value up to within the 5%. Mr. Seeley responded "yes" stating that this would be a third option added to Assessor Sommer’s list.
Council Member La Monda explained to the school board members that by Olive doing what they did they helped out Woodstock and Shandaken and have already handed them the large parcel bill by giving them a 10-12% reduction in their taxes. He stated to Shandaken Supervisor Bob Cross that Olive has given his town the tax rate deduction they were looking for so if he and Woodstock Supervisor Jeremy Wilber still want the large parcel bill then they will be punishing us twice noting that Olive has done for this year all that we can do. He asked Mr. Cross and Mr. Wilber to reconsider their position on the large parcel bill.
Shandaken Supervisor Cross stated he would be willing to sit down with the Woodstock Supervisor, Real Property Director, and Olive to take a closer look at the figures.
Supervisor Leifeld stated he was in Mr. Wilber’s office in Woodstock yesterday to discuss the issue and anything we can do to sit down and talk it out is good.
In response to Shandaken Supervisor Bob Cross, Assessor Mike Sommer stated he calculated the numbers today along with Mr. Seely who calculated the numbers independently and they both came up with the same numbers. Assessor Sommer stated with the state appraising the reservoir at $340 million right now the burden of tax for the Onteora School District for Town of Olive residents will be somewhere around 40% increase in Olive and 10-12% decrease for Shandaken and Woodstock. He stated if the school board does pass the large parcel bill then his calculation would put an additional 13% on top of that for Olive. Mr. Seely stated his calculations were somewhere around 30-35% increase for Olive and if the large parcel bill is adopted then an additional 12-13% increase would be added to Olive.
School Board Chairman D’Orazio asked how an increase in value of the reservoir punishes Olive. Assessor Sommer stated that ORPS has just raised the number which means that Olive just increased in value by another $220 million which means when the pie gets cut into slices then Olive is worth this much more in the school district; therefore, Olive pays a larger portion of the pie. He stated the assessment has not changed but with ORPS valuation being increased then Olive is worth more than it was yesterday. He stated that the 30-35% increase to Olive will be shared by residents and reservoir alike.
School Board Chairman D’Orazio stated that within the Town of Olive it’s the City that will carry the biggest burden. Assessor Sommer stated they will pay 55% of the tax and they will pay in a proportionment amount the same as everyone else. He stated where the City does not pay is when the school board enacts the large parcel, then they get taken out of the equation, rates are recalulated and there is a little extra of the pie that shifts back to the residents in the Town of Olive.
School Board Chairman D’Orazio asked if it is possible for all three Supervisors of towns that are affected to be at the next school board meeting standing up and saying there is no need to do this. Supervisor Leifeld stated he would be one of them. Bob Cross stated that two of Supervisors would have to look at the figures more.
School Board Chairman D’Orazio stated the argument he hears is that individual homeowners within Woodstock are carrying a much greater burden of school taxes than an individual homeowner in Olive. Council Member La Monda responded that you are now beginning to see that shift with the conclusion of the shift being when we do the reval. He stated Olive’s taxes are going up 35% and Woodstock and Shandaken’s taxes are coming down 12% noting we can’t do this all at once but we are closing the gap and have done what we can this year. He stated if the school board hits us with the large parcel bill then it will be like pulling the rug out from under us this year.
Craig Grazier stated that on ORPS own website they say you cannot compare one municipality to another and that is why there are equalization rates. He stated you can not compare Woodstock to Olive and for the school board to turn this into a political football, which they have, the budget was defeated and the children are suffering because of this. He stated he can only speak before the school board for two minutes and is held to that and Woodstock Supervisor Jeremy Wilber is chosen from the crowd two or three times for 5-10 minute dissertations then that is political.
In response to a statement by Shandaken Supervisor Bob Cross that the Town of Olive may find they will have a bigger tax break than stated; Assessor Mike Sommer reiterated that right now today, based on the old school rates, the Town of Olive will see approximately a 1/3 increase in tax rates.
Richard Hockman stated the tax increase to the taxpayers in the Town of Olive will be approximately 30-35% if the large parcel bill is not implemented and if the large parcel is enacted then on top of this is another 10-15% increase to the Olive taxpayers; but, you’re not looking at an additional decrease to Woodstock and Shandaken which is approximately 3-5% to which Attorney Seely stated is correct.
Council Member La Monda stated the school board should focus on the fact that the Town of Olive is bringing this disparity together and that was the intent of this from the start and we are talking between their decrease and our increase approximately 40-42%.
School Board Chairman D’Orazio asked if the towns could get together and help the school board with this. He stated they hear so many sides of the argument of which all make sense but what would be helpful to the school board is if towns most affected could say we can live this year with this. He stated they are not tax experts on the school board but the one thing that seems to make sense tonight is what Council Member La Monda said is that Olive will increase around 30-35% and a decrease of 10-12% will occur in Woodstock and Shandaken.
Supervisor Leifeld stated in conversation with Mr. Wilber yesterday he is in agreement that the Supervisors should get together with Real Property Director Dorothy Martin and each town’s Asssessor.
School Board Chairman D’Orazio stated the school board has been told they must act on this on August 17th.
In response to a question as to what Olive can do to get the legislation corrected to not include reservoirs, Supervisor Leifeld stated the town went to the state with one representative saying he wouldn’t help us but he wouldn’t hurt us and the other one saying that he would initiate legislation in the Senate and he felt Olive should get support in the assembly. He noted that we personally had to make a donation to his fund and found out later the information they received wasn’t true. Supervisor Leifeld stated when we talk about a $200,000.00 house in Woodstock, Olive, and Shandaken you are never going to see the time when that will be even—mainly because of location, location, location.
Supervisor Leifeld stated the Town Board instructed our assessor about six months ago to talk to companies to do a reval stating the town approached eight companies, three responded, and one company was interviewed. He noted the one company the Town Board interviewed submitted an estimate of around $200,000.00 and the other two were much higher. He stated the town will be done all at once and will take approximately two years. He stated that no municipality would do a reval of properties when one property is 53% of your town and you can’t touch their assessment unless you want to defend it in court every year. Supervisor Leifeld commended the town’s law firm of Hacker and Murphy noting the attorneys did an excellent job. He noted that once we do a reval and increase the reservoir during this reval then there goes the state aid to the school district and county.
Carol La Monda asked about the intent of the law. Supervisor Leifeld stated that Senator Larkin, who co-sponsored the law, had sent them a letter stating that it was not intended for reservoirs and that all municipalities affected in the large parcel issue must agree on implementing it.
Supervisor Leifeld stated they will be getting the Supervisors and Assessors together noting it will be difficult for Supervisors Cross and Wilber to make an about face because this has turned into a political issue.
On a Leifeld/La Monda motion and unanimous Town Board approval the Town Board adjourned to executive session at 8:55 pm for the purpose of discussing with Attorney Patrick Seely the City of New York assessment legal claims and litigation.
Supervisor Leifeld reconvened the regular meeting at 9:35 pm at which time the Town Board adjourned on a Leifeld/La Monda motion.
Sylvia Rozzelle, Town Clerk
