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WPCNR COMMON COUNCIL CHRONICLE-EXAMINER. By John F. Bailey. April 20, 2005: The Common Council met for the first time Tuesday evening in the Mayor’s Office to discuss the proposed $129.8 Million 2005-06 City Budget. They took exception to the city sale of land (along Railside Avenue) to balance the budget.
Mayor Joseph Delfino, head of table, and Budget Director Anne Reasoner, conducting a discussion of the 2005-2006 City Budget with the Common Council Tuesday evening. Photo by WPCNR News.
Councilman Roach said the expected $2.7 Million sale of land was selling a capital asset to cover operating expenses. The Mayor defended the land sale as “a one-shot,” item that had to be done this year, in anticipation of continued growth in revenues next year. Ms. Reasoner, Budget Director, said it was up to the council to decide whether they wished to pursue the sale of land, otherwise it would mean an 8% further increase in city property taxes, (now pegged at a 3.9% increase).
Fund Balance Use From 81-82 to 04-05. Source: City Hall. Photo by WPCNR News.
The council’s Rita Malmud, Tom Roach and Benjamin Boykin expressed concern over use of the undesignated fund balance (approximately $11.2 Million) to balance the2005-06 City Budget. Mayor Joseph Delfino noted that higher amounts of the fund balance had been used in the 1980s to balance the budget. However, the chart showing this fund balance trend of the 80s did not note the much lower city budgets in effect during those years, (below $75 Million, as contrasted with today’s $129.8 Million budget), and how much larger in proportion to the budget the fund balance was in the prior years.
Council Asks About Certioraris. City Does Not Have Answer Yet. WPCNR Does.
Ms Malmud and Mr. Boykin asked how much fund balance was available to pay certioraris in 2005-06. Ms. Reasoner said there was $700,000 under the line, Legal Judgments-Settlements under Insurance, Direct Costs. Paul Wood, the City Executive Officer, (and Ms.Reasoner confirmed this) said the Designated Fund Balance also contains a $3.4 Million dedicated to payment of certioraris.
Mr. Boykin, curious, asked Ms. Reasoner how much the city had approved in certioraris in 2004-05 so far. Ms. Reasoner said she did not have that figure. (Neither the Commissioner of Finance, Gina Cuneo-Harwood, nor the City Assessor, Eyde McCarthy were in attendance.) Photo by WPCNR News.
Ms. Reasoner assured the CitizeNetReporter this was not unusual their not being there at this presentation meeting. Mr. Wood said the city would get the certiorari figure. WPCNR asked Ms. McCarthy last week for the total amount of certioraris in litigation at the present time, that she expected the city to have to pay in 05-06. Ms. McCarthy has not gotten back to WPCNR with those figures as of this writing.
City School District Expects a Whopper.
The City School District Business Office has reported to the Board of Education that their lawyer, Mark Scharff of Slaw & Perelson, representing the City School District, who sits in on meetings with the city assessment review board and the City Assessor, has informed the District that they can expect $5 Million to $8 Million in certiorari settlements in 2005-2006. Mr. Wood, when told of this by WPCNR last Friday, said he had no knowledge of that. Nevertheless, the School District is proposing to bond approximately $10 Million for these expected certiorari paybacks.
Assessment Certioraris Skyrocket 1800% in 16 months of 2004-05
Dropping $725,101 in 2003, Eroding $12,436,386 Off RollsTo Date in 04-05.
Since the council has asked the question, WPCNR research using Common Council Minutes, presumed accurate, has tabulated the certiorari settlements voted on by the Common Council in 2003 and 2004-05 so far. The figures appear to indicate that in the sixteen months from January 2004 through April, 2005, the city has agreed to lower assessments of 18 properties, lowering their combined assessed values $12,436,386.
In 2003, by contrast, 20 properties settled certiorari actions resulted in lowering assessments $725,101. But the disquieting trend was just beginning. The Mayor blames the lowered assessments in the last year and a half on over accessed properties in the 1990s. But, certioraris were hurting the city in the late 80s and early 1990s, too, according to budget documents from those years.
From January, 2004 to April, 2005 the city has suffered a percentage loss of assessment value of 1800%.
City Pays Back $2,961,859.63 in certiorari refunds in last sixteen months.
Up from $228,677 in 2003. Approximately a 1,300% Increase in Cert Payments.
If Mr. Wood and Ms. Reasoner are saying there is $700,000 budgeted for 2005-06, and there is $3,400,000 budgeted for certioraris in the designated fund balance and it is carried forward, as Mr. Wood told WPCNR Friday afternoon, then it would appear the Designated Fund balance of $3.4 Million is used up with a $2,961,859.63 certiorari tab already paid out of the designated fund balance of $3.4 Million. Or, is this figure before deducting the certioraris paid? It was not made clear how the extraordinary certioraris in the last 16 months have affected these reserves.
This would appear to mean that even with the $700,000 set aside for settlements in 2005-2006, that the city only has $1,138,140 to cover certioraris, which according to what the school district has been told could range from $5 Million to $8 Million, or approximately $1,000,000 to $2,000,000 for the city. (For every $4 in taxes the School District collects in property tax, the city collects $1).
Paging Eyde McCarthy.
Ms. McCarthy is expected to make the actual certiorari expectations clear to the Board of Education, May 2 at Education House.
The big winners.
In 2003, assessed value declines from certioraris was $725,101, resulting in the city paying $228,677.20 in certiorari refunds. The big winners of refunds for prior tax years, were Paladin’s Keep Condominium, $51,315.10; ASC Capital Holdings, LLC, $42,575.25; Josephine Perriello, $22,652.70; Regency Condominiums, $18,367; CCM Realty, Ltd., $11,035.75; Frehild Realty, $10,965.75.
High Rollers Hit Up the City Hall Certiorari Casino
The trickle of certioraris turned into a flood of red ink in 2004, as the bigger players, (some of Westchester’s toniest properties), placed their bets in the certiorari casino at City Hall.
The hits on the reserve for certiorari’s kept on coming with major numbers. Assessments were settled by the City Assessment Review Board and Assessor and legal team lowering assessments on 18 properties in the amount of about $12.4 Million.
Walking away with big winbacks were AT & T Properties, an $834,963.43 refund on 360 Hamilton Avenue, 400 Hamilton Avenue, 440 Hamilton.; Parker, Hutchinson Corporate Park Associates, winning a $77,719 handle on 1311 Mamaroneck Avenue; State of Wisconsin Investment Board for 60 Broadway, $103,361.08; Nordstrom, Inc. for 135 Westchester Avenue, $186,368.57; and Gateway I, One North Lexington Avenue, $419,924.10.
Most recently, the biggest winner was Westchester One, receiving an $843,815.80 refund, on a lowering of their assessment by $2,500,000.
That is a total of about $2,466,000 in certiorari refunds on six of the more attractive commercial properties in the city.
Will there be a 2005-2006 Surprise?
In the 2005-2006 budget, it is expected that the Designated and Undesignated Fund Balances combined at the close of the year will be $12 Million. However, if the trend in certiorari settlements continues, it could erode below $10 Million, leaving very little Undesignated Fund Balance to balance the 2006-2007 budget.
Of course, if the sales tax, described as “on target” by Mr.Wood and Ms. Reasoner, Tuesday night, continues to grow this will alleviate the problem. However, the certiorari factor and whether the dizzying pace of assessment erosion will continue as the School District maintains, threatens the budget scenario.
Commissioner of Planning Numbers Reflect the Commercial Assessment Drain
At the last meeting of the Comprehensive Plan Review Committee, Susan Habel, Commissioner of Planning noted that commercial assessments had plummeted from 50.49% of revenues in 1994-95 to 41.89% of revenues in 2004/05. The overall percentage of commercial property assessements has dwindled from $214,896,688 in 1994 to $127,644,026 today, according Ms. Habel’s Assessment Roll by Use Category Chart.
Ms. Habel’s percentages on Commerical Decline are sobering. From June 2004/2005 to date Commerical Assessments are off 6.5%, down $8,870,698. The Total Assessment of all property, residential and commercial in the city as of April, 2005 is $304,680,309. Down 3.92%.
The certiorari refunds paid out in 2003, 2004 and the first four months of 2005, sharply up are offset, in part by other increases in assessments, but WPCNR, if the School District information from the assessment review board and their attorney is correct, another round of heavy certioraris can be expected in 2005-2006.
