Thank you very much. Ms. Meade, I've had so many distractions while you were testifying, I do apologize. You state in your testimony that the proposed target date for the operational readiness of the CAMA project is late March 2008. We are now in April of 2008. Is your CAMA system now in operation? 199 4/8/08 - WHOLE - BILL 080022, etc.
We went live with the CAMA system on March 11th of 2008. So we met that target. However, we were not able to go completely live in the sense of having the CAMA system as our system of record. (Pause.)
Not a problem. We went live on March 11th. Originally the proposal in going live was that on the day that we went live, the new Realware system would become our system of record. Because of integration problems, we weren't able to do that, and so what we have done -- and this is with the suggestion combined of Colorado Customs, who is the provider of the Realware system, and Terry Phillis, who is with MOIS, and the other people who work for MOIS, what we're doing is a parallel track where we're working toward full integration of the new Realware system, 200 4/8/08 - WHOLE - BILL 080022, etc. and at the same time we're using that for training and we're doing the testing and we're still using our VSAM system as well. And that hopefully will keep us close to the track that we anticipated, which was within one year, and we hope by December of 2008, we would be using that system completely. We're thinking now that it might not be December. It might extend for a few months after that until the spring of next year. But we're hoping that by March 2009 all of the kinks should be worked out and that would be our official system of record.
Has the current downturn in the real estate market been reflected in your database?
It's not reflected in the database yet, and the reason is that -- and a number of our changes haven't been reflected in our database, and that's because in November, after we did last year's certification, we were required to go down -- we were not 201 4/8/08 - WHOLE - BILL 080022, etc. allowed to put any additional information into the system while they were working on the integration process and the conversion process. When we went live March 11th, if we would have been able to use that system exclusively, then we would have started to begun the process of uploading data into that system. Because we're still working on integration, that won't happen for a while. And then what we've been doing and so that we can make sure to get notices out, to get decisions on appeals out and to generate the information that we needed, we're using the parallel system, the old VSAM system. We have in hard copy all of the changes that should be reflected, and then when the time comes, there will be just a mass input of that data. That data probably -- that data isn't part of the old VSAM system because it hasn't been converted if it came in 202 4/8/08 - WHOLE - BILL 080022, etc. after November 30th and it's -- so we have to upload it separately with that. So, unfortunately, our database is not up to date before 11/30/07. So it doesn't reflect the most recent changes.
Thank you very much. The Chair recognizes Councilman Greenlee.
Thank you, Madam President. Good afternoon, Ms. Meade.
First I want to commend you and the Board on your statement about capping the increases this past year. I just think that makes sense. I think obviously some people, maybe justifiably or not, will be unhappy when they get any raise, but I think if it's seen that it's done with some kind of reason, within some kind of reason, I think a lot of people will accept it, and I think that was reflected by the at 203 4/8/08 - WHOLE - BILL 080022, etc. least somewhat less amount of appeals, correct?
Just one question. If my shaky memory serves me, when you were here last year, you had stated on the full valuation issue that you were not going to move on that until at least there was conversation with Council and we were sort of all sort of on the same page. Is that basically the same position that you have?
Yes, that's the same position, because we have to work intimately with Council and with the Revenue Department. One of the things that has slowed our conversation and one of the things we promised you was as soon as we had the numbers from the Realware system, we would be prepared to have full discussions. And I think then we had projected that we would be able to provide those numbers to you by the fall 204 4/8/08 - WHOLE - BILL 080022, etc. of 2008. We're thinking now it would be the winter/spring, as I said, of 2009. But we're ever willing and ready to do whatever we can, because this is something that we can't take on blindly or in isolation, we have to take on with the elected officials.
Full valuation is certainly controversial. I fall on the side that I'm not sure it's the great answer that some other people do, but regardless, I think it's great that you agree that we all have to work together on that. So thank you. Thank you very much. Thank you, Madam President.
You're welcome. The Chair recognizes Councilman DiCicco. 205 4/8/08 - WHOLE - BILL 080022, etc. COUNCILMAN DiCICCO: Thank you, Madam Chair. And good afternoon. Good afternoon to the Board.
Good afternoon. COUNCILMAN DiCICCO: Ms. Meade, could you just describe as briefly as you can the role of the BRT and the employees that work for you. The Board is approved by the Board of Judges -- or appointed by the Board of Judges; is that not correct?
Yes. That's correct. COUNCILMAN DiCICCO: And then employees are brought in to the BRT as a result of a hiring system that goes through the Board or --
We have Civil Service employees, as well as we have school -- (Fire alarm went off.) 206 4/8/08 - WHOLE - BILL 080022, etc. COUNCILMAN DiCICCO: And I didn't even bring up former Justice Nigro's name, and from his switchboard in Arizona, he hit the button. (Pause.)
I was responding to your question, Councilman DiCicco, about the staffing. We have approximately 145 employees on an allowance for 145 employees that are City employees. Ten of those employees are members of the Board of Revision and the Board of View. The rest of those employees are Civil Service employees, and we have to go by the Civil Service guidelines, which sometimes confound me, but that's what the Executive Director has to do in terms of finding that staff. And then there are right now 76 employees who are real property assistants, and they are School Board employees paid by the School District of Philadelphia, but on our payroll. COUNCILMAN DiCICCO: Thank you. 207 4/8/08 - WHOLE - BILL 080022, etc. Explain to us, if you will, the role that the Board plays compared to the role of the employees, the assessors, the evaluators and all those other folks. Is there discussion that takes place between the Board and the employees who basically do the day-to-day work of assessing, reevaluating, whatever the proper terms are -- I apologize. I may not have the right terminology. Are they separate and distinct? Does an evaluator or an assessor, is that person guided by what the Board's decision should be in terms of what they believe the value of a property should be assessed at or is that a separate role? Do you understand my question?
Yes, I understand. The Board vis-a-vis the staff day-to-day operations, the Board is to set policy for the staff. In terms of the values, the Board sets the policy for the staff. As the quasi-administrative agency that hears the appeals, then we do hear the 208 4/8/08 - WHOLE - BILL 080022, etc. appeals and we're able to make whatever changes in valuation that we believe are appropriate on the appeal. In terms of the day-to-day operation of the assessors and evaluation office, that's conducted by Mr. Gene Davey, and I could have him to give some further explanation of that, if you'd like. COUNCILMAN DiCICCO: No. I'm more concerned with the policy, if you will, and whether the Board -- does the Board charge the employees to go out and look at a specific property or properties and to come back with recommendations on the value or assessment on a particular property or properties? Does the Board direct its employees and, again, the evaluators, assessors or whatever that term is? And I apologize again. Is that the function of the Board?
That is the function of the Board when we receive inquiries, questions from taxpayers, 209 4/8/08 - WHOLE - BILL 080022, etc. complaints usually from a taxpayer about their own property or their own situation. And then on that instance, then we would provide that information. And normally I provide it to Mr. Gene Davey, who is the Director of Assessment, with the charge, and the only charge is to investigate and place the proper assessment, whatever needs to be done to do that. COUNCILMAN DiCICCO: Let me be a little bit more specific. There's no 14 secret that there was a much-written about Senator Fumo's house and the fact that some people felt that the home was underassessed based on the sale price that the Senator was asking for. And there's no secret that the Senator and I are good friends, so I'm not here carrying his water. I'm just a little bit concerned about he being such a high-profile person and that it seems that there was a targeting, if you will, of not only his property but maybe a 210 4/8/08 - WHOLE - BILL 080022, etc. handful of others that was a result of the publicity that was put forth by the news media. My understanding from talking to folks is that there was somewhere about a hundred or less than a hundred other residential properties that the Board of Revision basically charged their employees to go out and do a reassessment. It was kind of like targeting, if you will, I guess is the easiest way. Is that an accurate statement? Because there was such a concern about the media and the media's interpretation that this high, powerful Senator was getting a break over John Doe or John Citizen and he was being treated a lot differently than other folks. So at the end of the day, when it appeared as though it was just a target, that the Senator's property was being a target, the policy was to now go out and find others that may fall into this same category, whatever that 211 4/8/08 - WHOLE - BILL 080022, etc. category was, high-end residential real estate properties that may have been underassessed, undervalued. (Bell rung.)
And in answer to the accuracy of your statement, I'm reticent to say that a Councilperson here in Council is not accurate, but I can explain -- COUNCILMAN DiCICCO: Been wrong before.
-- respond to that question. COUNCILMAN DiCICCO: I sponsored Nigro to be judge once. I was wrong the first time, but the second time I was right.
My response to that question -- and I may need the assistance of Mr. Davey for this. That action was taken on that specific property by virtue of a Board vote. It came to the attention of the Board by virtue of a Board member bringing it to the Board's 212 4/8/08 - WHOLE - BILL 080022, etc. attention. What we learned from that experience and how the other properties became involved is the question for the Board before any of the additional comments came from any of the media was, how did this happen, how was this property missed. When we looked at the 2008 valuation project, we realized that there were certain parameters for that project that allowed that property and other properties to be missed. The parameters for that project included that there be, for residential property, five comparable sales, five comparable sales to ensure that we were not chasing a specific sale of a property, but five comparable sales so that we'd know that the market did indicate that there needed to be some changes. For certain properties that are unique properties, properties that are unique in and of themselves or properties 213 4/8/08 - WHOLE - BILL 080022, etc. that were different -- and that often times refers to high-end properties, those properties that did not have five comparable sales -- then the computer that we used did not include those as part of that valuation project. Those properties -- and one of the terms that we use in-house, there were properties that were outliers, a small group, but they were outliers. They weren't considered part of that project. The fact that we had 413,000 properties that we had to handle inquiries and send out notices and that fit within that realm, and the fact that we were moving and the CAMA project was going on, we did not pick up those outliers by the time that there was a public outcry over a problem and by the time that that hit the Board. The decision that was made was that it wasn't just isolating that one property, because we did not want to be accused of doing any form of spot assessment or chasing -- 214 4/8/08 - WHOLE - BILL 080022, etc. if you remember, the papers originally were talking in terms of the sales price the property being sold -- (Loudspeaker on.) COUNCILMAN DiCICCO: Thank you.
That particular property being sold. And so we cannot, by virtue of prohibitions from spot assessment, chase that assessment. But then there was the realization and the Board voted not to do anything for 2008, that we had missed that. But then the determination was made what else is out there, because then there was the recollection that there were these properties that wouldn't have the five sales. We didn't have a list of the properties or know those properties specifically. It became, go back into the computer, let's see what properties fell out because they didn't have five sales and would fit the criteria because of that uniqueness and take a look at those. Actually -- and, again, our 215 4/8/08 - WHOLE - BILL 080022, etc. Director of Assessments can -- (Loudspeaker on.)
-- address the issue. But more than a hundred properties, I believe, were looked at. It was, one, those outliers. Then because it was known by the Board and everyone there, any information that came in about other properties, if it appeared that they had not been reviewed during the 2008 valuation project, then it became, those need to be looked at, too. That assignment was for the Director of Assessments, because those are the people, the assessors, who value the property. He began that, I think, around November or December, trying to pick up on all of those properties for the 2009 valuation period, and that's what was done. If you want specifics on which properties and how many -- and I know the media has contacted us for a list of those properties as well -- Mr. Davey can 216 4/8/08 - WHOLE - BILL 080022, etc. give you that information. I don't have it, simply because I leave that to him. COUNCILMAN DiCICCO: If you could supply that to the Chair, that would be helpful.
And what specifically -- would you want the listing of the properties? COUNCILMAN DiCICCO: Yeah, the number of properties that fell into that category that you described.
As outliers, okay. COUNCILMAN DiCICCO: As we move and we continue to discuss the potential or possibility of full value reassessment, I was with your predecessor and Gene and a few other folks. I probably had six community meetings in my district to talk about full value reassessment, what it meant, and they were very informative. Obviously people were still frightened to death over it, but they were informative. So I just -- I think that the outsider -- the -- 217 4/8/08 - WHOLE - BILL 080022, etc.
Outliers. COUNCILMAN DiCICCO: Outliers, I think we could probably pretty much say that happens on just about every single block in the City of Philadelphia, or in most cases. There are similar situations. I mean, where you will have a home on a unit block that the homeowner has invested huge, huge sums of money in that far exceed the value of the other homes on that block. So to go after or to look at a very small number of properties in comparison to the total number of properties in the City of Philadelphia, I think is not the appropriate way to do things, and I know there was a lot of pressure from the media, and with all due respect to the media, they can write a lot of things about a lot of people a lot of times, but in the interest of fairness, people come to you as the Board as the last line of hope, if you will, when they are disputing or not 218 4/8/08 - WHOLE - BILL 080022, etc. comfortable with their tax bill.
Absolutely. ) COUNCILMAN DiCICCO: Well, the system does work. So -- I kind of lost my train of thought. Well, in any event, people 219 4/8/08 - WHOLE - BILL 080022, etc. come there and it has always been the position of the Board -- and I have not been in front of the new Board, if you will, but it's always been that the Board -- who knows Philadelphia, Board members are Philadelphians, they know the City, they know the neighborhoods, and they can pretty much sympathize or be sympathetic to the concerns and the appeals by various homeowners. I remember in, I think it was, 2003 when there was a massive reassessment. In my district alone there were 35,000 properties that had received notices. Some were as little as $10 and others were in $10,000, $12,000, almost $20,000 range, and we took our case to the Board, and just about every case that I'm aware of, people walked away feeling as though that people listened to them, understood them and they were very well pleased with the manner by which they were treated, in addition to obviously getting a reevaluation. 220 4/8/08 - WHOLE - BILL 080022, etc. I can honestly say this -- and this is not because of my personal differences with one of your Board members, who is not here today. Some people will interpret that what I'm about to say is just my way of being petty. But I know of a number of people from my district, in particular from the Society Hill district, who came to me and complained that when the former Justice was questioning them on their appeal, he made them feel slighted and insulted. ) COUNCILMAN DiCICCO: When they were arguing about the significant increase in their real estate tax, his comments were basically, Well, if you really only think your house is worth what you say it is, I'll give you cash for it tomorrow. If he were here, I would tell him to his face. It's just a horrible message and it sends the wrong message about not only the City but about the 221 4/8/08 - WHOLE - BILL 080022, etc. Board of Revision of Taxes, because everyone gets painted with a broad brush. So I'm on record as saying that this is not meant to you or your other members here directly. I just needed to get that on the record. And it wasn't an isolated case. It's been a number of cases, and with all due respect to the judge that's sitting here with us today, the other intimidation comes to when people refer to him as Justice, and in his tone they almost feel as though they're on trial. They're on trial and they have to plead their innocence or else they will be found guilty. And that is not an exaggeration. I see my colleagues grinning on the other end. It is a reality that I needed to make public, and if he were here today, I would say it in front of him. It's so contrary to the manner in which the Board of Revision of Taxes, at least during the 13 years that I've been a Councilperson, has treated the 222 4/8/08 - WHOLE - BILL 080022, etc. citizens of this City. And, again, I just needed to get that on the record. And whatever you can do as a Board, I would ask that you do that going forward, because it's scary for some people to get a tax increase. Some people could afford it and there are others who can't afford it. And to conduct ourselves in a decent way in which we understand their concern and to try to work with them is, I think, our role. That's the role of all of us in government. So I just wanted to say that to you, and thank you for listening to me.
If I could just briefly respond, each individual Board member will have to respond for their comments and their approach, but I can say that it is my responsibility to set the tone as the Chairman of the Board of Revision of Taxes when I'm conducting the 223 4/8/08 - WHOLE - BILL 080022, etc. hearings, and every attempt that I make is to assure that all participants, petitioners, no matter their level of education, no matter their ability -- I have to deal with regularly people who are belligerent, as you sometimes do. I try to set a tone that allows people to present their case and that they can have their case heard on their terms and that they're being treated fairly. I've also set a tone in our meetings in which -- at our hearings in which for the taxpayers who appeared this year, we bent over backwards to also do what our current Mayor or Mayor Nutter calls customer service, and I'm well aware of that and I wholeheartedly agree with that. And one of the things that we've done even at hearings, which aren't done at most hearings around the City -- and I've chaired the Tax Review Board as well and sat on other boards -- is that we've provided information for the residential homeowners. We had tax 224 4/8/08 - WHOLE - BILL 080022, etc. freeze forms there. We provided not only the form, but when we saw people that seemed to be frail or that seemed to have difficulty understanding, we tried to connect them with someone on our staff who would assist them in filling out the form. If we saw in an application an indication that the person might be over 80 years old and then they couldn't afford it, we asked assessors, who it's not really their job, but they took it on seriously, Would you call that person to see if they're eligible for the tax freeze. We encourage and welcome the participation of the Councilpeople and the staff of Councilpeople, and we've had Councilman O'Neill's staff members, Councilman Rizzo's staff members come over almost to every residential hearing, the Council President's staff members. And any opportunity that they have in which they can intercede in providing us information on particular constituent 225 4/8/08 - WHOLE - BILL 080022, etc. service issues that they're dealing with or the Councilpeople are dealing with, we also allow them to do that, and sometimes just to sit to encourage the taxpayer who is preparing the case to present that case. This year we also provided a list, which we have in Citizen Service, in our Citizen Service Center, and we would encourage people to do various things that have nothing to do with valuation as far as customer service. So, for instance, we had the dates for the rebate program, the number to call for the state for the rebate program. Any number of times we've heard citizens who come to us because they not only can't afford to pay the tax, but as part of the testimony you hear that there's a serious disability with the property and it's in a state of deterioration and they're low income, and we've provided the information and the contact for the Basic Systems Grant Program. If we have 226 4/8/08 - WHOLE - BILL 080022, etc. any representative of Council -- and I know that Councilpeople stick within their district, but they've been so accommodating. It becomes, And can you help this person so that they'd have a number to get a contact before they get -- if they have a problem getting to PHDC or to any agency that runs that program. Any information that we have, we try to provide as a part of a customer service, but not just because it's our duty and our responsibility, but because we are Philadelphians. We love the City, we serve the City, and we recognize that this City is its people, and they're wonderful people. And we recognize very seriously that we have a City, though, with 40 percent of the population that is very low income and below poverty level and may own property. So any opportunity that we have to assist them, we will.
And for citizens who don't have that need but who 227 4/8/08 - WHOLE - BILL 080022, etc. have other needs for information, if we can assist them in any way, then we do. And I want you to know that that is something that my staff knows and they understand that that's our mandate, and our mandate is one of public service, and we take that seriously. And if there's any evidence that that is not being done, then I want to know about that and the Executive Director wants to know about that, because we expect people -- they may not always agree. We may not be able to change the value, but we plan to always, from every member of the staff, be pleasant, professional, provide the service in a timely fashion. And when we feel that there's difficulty in understanding what we can do, if we're trying to stretch, we won't contravene the law, but we do not hesitate to contact the Law Department to say, Is there any way that within the ambit of this law that we can serve this taxpayer. So I take your statements very 228 4/8/08 - WHOLE - BILL 080022, etc. seriously. As I said, each person sits by virtue of a vote for the Board of Judges, so we each have to ask individually. But my tone and my goal and my promise is that not just customer service, but treating the people from the City of Brotherly Love with brotherly love and sisterly affection is what I desire to do, what I plan to do and what I will continue to do as Chairman of the Board. COUNCILMAN DiCICCO: Thank you.
Thank you very much. The Chair recognizes Councilman Green.
Thank you, Madam Chair. Of course, we would all agree, and as I said during the campaign, every citizen of this City, whether they serve on the Board of Revision of Taxes or whether they're a citizen appearing before them, should be treated with 229 4/8/08 - WHOLE - BILL 080022, etc. dignity and respect.
Thank you. I would like to talk a little bit about the CAMA system. It's up and running. I have some specific questions. If you don't have the information with you, if you could provide it to the Chair in a timely fashion, I would appreciate it. The first is, using the CAMA system, now that it's up and running, what is the total value of real estate in the City of Philadelphia?
No. What I want to know is what the system says it's worth. I know you haven't vetted the information.
No, no, no. What I want to clarify is, the system is not up and running. We're at a stage where what I explained is we're using the parallel 230 4/8/08 - WHOLE - BILL 080022, etc. systems. The system is being tested now.
I understand, but there are property values in CAMA right now; are there not?
Right. So it's generated property values based on the new system.
It's not generating property values yet. What it has is the information that was converted from the old VSAM system into the CAMA system. So they're still working on the integration, the balancing, from the conversion. So, no, it's not generating values yet. Also, to generate the values with the CAMA system, the component that has to be added once we have the balancing of the data that went from old 231 4/8/08 - WHOLE - BILL 080022, etc. VSAM to the new CAMA system, once that balances and that's in correctly, and also once we've uploaded the data that is in hard copy now, then our next step is to do the modeling. And basically with the CAMA system, how it functions is that there are statistical analyses that have to be placed into the CAMA system.
Well, the models come with the CAMA system. That's essentially what you purchased, and so --
So you've got modeling as part of the CAMA system. What happens, as I understand it, is that it's going to automatically then generate assessments based on sale data of like properties. It will then update every other property in that GMA or category automatically.
But the analysis for the modeling is not complete in the CAMA system. We have to do the statistical analysis for inputting the 232 4/8/08 - WHOLE - BILL 080022, etc. regression analysis as well, depending upon the particular type of housing stock. So that still is a component that will be done.
Are we sticking with the same GMA categories in CAMA and --
The GMA categories in CAMA, it won't be an exact match in terms of using the same GMAs. What I can do is, Gloria Mitchell, our Project Manager, is here and she could further explain in terms of the status of that system. But it's not ready for use yet. And one of the things we plan to do, to generate values, and before we can actually go forward to generate those values, we plan to bring in modelers to assist us with the statistical analysis. And then our staff will prepare statistical analysis housing stock by housing stock. We plan to have the RFPs for the modelers online this month.
But then 233 4/8/08 - WHOLE - BILL 080022, etc. assessments are going to be automated?
And so when we have five -- so are you capturing the sales data that's historical into CAMA?
So that is already there, other than the stuff that's been on paper.
It's been transferred, yes. It's been transferred, but the best way that I can explain it, that information -- we've had three conversions with CAMA. Originally thought we'd have one conversion. There's been difficulty in balancing that, so we're on the third --
Well, my questions do relate to that, so maybe if Gloria can come up.
Ms. Mitchell. (Witness approached witness table.) 234 4/8/08 - WHOLE - BILL 080022, etc.
Well, I guess from the beginning, it's my understanding that CAMA will automatically generate assessments based on up-to-the-minute sales data that you have for like properties, and for each category or type of like property within a GMA, we'll then be able to generate new values; is that correct?
I'm sorry. You're going to have to identify yourself for the record.
I'm sorry. My name is Gloria Mitchell, Project Manager for the BRT. The correct statement would be that the new CAMA system has the ability to perform assessments based on GMAs, or whatever we're going to label them as. Because it is a new system, there is a 235 4/8/08 - WHOLE - BILL 080022, etc. new operational way in which we have to go about achieving the objective of whatever value system the City will choose to exercise, whether it's full value or whatever value. We have not reached that point yet. The technical implementation is nearly complete, as the Chairman has shared with you. March 11th we completed Phase I. We have two more short phases due very soon. And operationally the staff is still getting familiarized with those functions and identifying new workflows and business rules. All of that has to come together before we can actually use the system and start to create those models based on existing GMAs or new GMAs. So there's a lot of technical and operational work that has to be put in before we can get to that point.
Currently, is the recent historical sales data -- in addition to transferring over the current 236 4/8/08 - WHOLE - BILL 080022, etc. property values from, I guess it's, VMS to CAMA, is the historical sales data or recent sales data by GMA in CAMA?
Most of it is. We're still working on the conversion of the sales file. Most of the property records, the accounts for every individual property owned in the City is in the new CAMA system. The sales file itself, there were a couple of different areas of data that needed to be converted in separately. That is one of the last pieces that goes along with this last phase of the integration.
And once that is in CAMA, then using the automated processes, without having each property reviewed by assessors, you will be able to give us CAMA's total real property value in the City of Philadelphia; is that correct?
In time. Once the operational -- again, there are 237 4/8/08 - WHOLE - BILL 080022, etc. business processes, workflows that need to be defined before we get --
Well, that's outside -- that is among the people who work in the BRT, but the computer system itself is going to be generating values.
The computer system itself will have the ability. Any computer still requires human intervention, and it's that human intervention, that process around achieving that, that will need to be fine tuned and defined. We haven't created the models yet.
I think it's the human intervention that I am trying to take out of the process.
There's no 20 computer that does anything automatically for you.
I understand we have to get the models correct and that's what's going to generate values, but I guess what I'm trying to get to is, 238 4/8/08 - WHOLE - BILL 080022, etc. I think under VMS, the entire property value in the City of Philadelphia is something like $12 or $13 billion.
VSAM, yes. When you add up assessments based on fair market value --
The value against year 2007 balanced. That was one of our first exercises with the conversion.
If you need that information, Gene Davey, who is the Director of Assessment, has that information, if you'd like that.
What I'm suggesting is that once VSAM is -- I mean, once CAMA is up and the model is running and we're comparing recent sales 239 4/8/08 - WHOLE - BILL 080022, etc. data to property categories by GMA or whoever you decide to do it, that CAMA is going to be automatically generating a real property value in the City of Philadelphia of something on the order of a third to 50 percent more than the property values that are currently in the system --
-- for the total value of real estate in the City of Philadelphia.
No. No. If I understand your question, then the answer is no. 17
No, I don't think so. I'm having difficulty with your question, with all due respect.
No. That's okay. I guess what I'm suggesting is, we're going to get a far higher total assessed real property value once we have 240 4/8/08 - WHOLE - BILL 080022, etc. CAMA in -- I see some people nodding yes behind you -- and that that will allow us if we were to go to net -- the basic purpose of this questioning is to say when we go to net -- go to full value and then we go to what is no impact on City revenue, revenue neutral full value assessment, that we'll be able to go down far more than two-thirds in millage or assessed value, because the real property values in the entire City across the City will be far higher than the 13 billion currently assessed. And there are people nodding behind you and maybe they ought to have a chance to speak.
I don't know why they're nodding, but I can respond to that question.
May I respond to the question? Who is nodding? Are you sleepy? What's the problem? 241 4/8/08 - WHOLE - BILL 080022, etc.
Eugene Davey, Director of Assessments, Board of Revision of Taxes. I was nodding in the sense that our values tend to be conservative. Even in a soft market or a stabilizing market, our values are very conservative. I really wasn't talking about full value. I was really talking about the fact that we really should bring our values up some. I think the road to full value is first equity, accurate data and equitable values.
Absolutely, but what I'm suggesting is, we do have very conservative values citywide, and if we were truly to put in what the fair value is of every property in the City, that the total value of real estate in the City of Philadelphia would be one-third to 50 percent higher than it currently is. Do you think that's about right?
What I have to 242 4/8/08 - WHOLE - BILL 080022, etc. say -- and I'll respond to that question -- is, one, it seems, now that I understand, it seems to be a separate question in that it seems to be a CAMA question assuming sort of a full value approach and possibly assuming a fractional approach. I want to separate it in terms of the CAMA. The CAMA, I believe Project Manager Mitchell has explained that we're not at the level of business readiness and the type of modeling and statistical analysis that is needed. So that the computer can be used as a tool to generate values, and then our assessors, who are the trained professional people who are responsible for placing the value, can then review those values and, where necessary, make adjustments. Now, in terms of whether there would be a reflection of full value, as I said previously to Councilman Greenlee, we will not hold and entertain a discussion on full value until we're 243 4/8/08 - WHOLE - BILL 080022, etc. prepared to produce the numbers so that we're talking about real, true, accurate numbers which we can stand behind and so that we can provide that information to Council to make an intelligent decision. Previously we've provided hypotheticals, and we just learned that that doesn't work. On the issue in terms of where we are and I think in terms of our market values compared to sales price, I don't think anyone here can answer that question now. And why I simply say that -- and I'm not prohibiting my staff to speak, but simply because we have people working on the project now and they're working on the project and they haven't told me that they've completed the project, and I checked as recently as yesterday before I came. And that project is to make that determination, to find out where we are and how much the 2008 valuation project helped in bringing us to better equity and uniformity, I'll 244 4/8/08 - WHOLE - BILL 080022, etc. use that word, in terms of the relationship of our market value, the BRT market value, to the actual sales price. It's taking longer to do that simply because that is being done in the old VSAM system, because the Realware system is not ready. We're looking at that issue, because we believe it will be our next project, and one of the things that we do plan to do is, if Council would have us back, is to contact Councilman Verna when that information is ready and say to the Council President, We'd like to provide that information to you. It wouldn't be the Realware information. We're hoping that we'd be able to do that by the beginning of June.
You're using different terms I don't understand. Realware, how does that relate to CAMA?
Realware is our CAMA product. Realware is the CAMA product. That's the product, the Realware, the tool that's being used. 245 4/8/08 - WHOLE - BILL 080022, etc. And the CAMA is the computerized mass appraisal, but we're using Realware to accomplish computerized mass appraisal. So that what I would like is to leave with Council the information that I've provided, which is that we are doing that analysis now. We're very concerned with uniformity. We recognize that our mandate is one of uniformity. We're very also concerned with the equity issue, that all taxpayers are paying what is fair and equal to their neighbors. We're doing the analysis now. Originally we had hoped to do it out of Realware. We're not able to do it out of Realware now because Realware is not ready. We're doing it with our --
Wait. We're doing it with our VSAM system. We hope that once we have those numbers, we can come back to you and bring that.
I 246 4/8/08 - WHOLE - BILL 080022, etc. understand. You're just repeating your previous testimony, so please let me ask the next question.
So is Realware not ready because it's producing numbers that you don't like or don't agree with because of how they compare to VSAM?
No, no, no. And do you know what I would say to you and anyone who -- and I know this had been the suggestion before, that why is the BRT taking so long with this Realware project, and because that was one of my concerns when I started as Chair --
No, but I contacted 247 4/8/08 - WHOLE - BILL 080022, etc. Terry Phillis, and MOIS has been working intimately with us with this project.
I understand, but you're answering questions I'm not asking.
Right. But I only say that to say that the system is not ready. We went live partially on March 11th. We're running the parallel tracks. There's still difficulty with the integration of the data for that system. There's not a complete conversion yet. So the system isn't ready. It's not ready for -- that kind of technical information, if you want a technical report, that data has been submitted on various occasions to MOIS, and they're working with us, and we can get that kind of information to you if you need proof that the system is not ready. It's just because the system isn't -- because the data didn't convert in the first load and the second load, and now with the third load, it's not all matching, because 248 4/8/08 - WHOLE - BILL 080022, etc. we've had to continue the process of integration even though we went live. It's just not ready. And I'm frustrated about that. I want you to understand that. But I'm hopeful as well. And we're trying to get it right, and that's the time it's taking. But if you need more technical information as to why it's not ready and what needs to be done, then we can entertain that, but my Project Manager as well as MOIS can assist you in understanding that.
I guess my question is partly related to CAMA and Realware, but it's also sort of a simpler non-technical question of does the BRT have an estimate of how undervalued real estate in the aggregate is in the City of Philadelphia?
And there's never been an estimate of that by the 249 4/8/08 - WHOLE - BILL 080022, etc. BRT?
Well, there was several years ago if other Council -- I know Council President will remember, and Councilman DiCicco referred to it. We had an analysis done where we realized that -- we had a target, and that target created an equalization program, and the target was we were trying to reach for residential properties, about 70 percent of relationship between market value and sales price. We worked on that project for several years, from about '99 through 2003, and then that stopped. We believed that the CAMA system would only take a couple of years. It's taking longer. And because of the increase in the marketplace, our values relationship is much lower. In terms of where it is, I don't know the answer to that question. As I said --
-- we will know the 250 4/8/08 - WHOLE - BILL 080022, etc. answer to that question.
We were at 69.1 percent of sales price to market value for most properties we believe in 2002, and we did -- that was the basis of our 2003 assessment and valuation project that I think has resulted in over 200,000 properties being increased. But we hadn't had one since then.
So it is fair to say that it's roughly a third to 50 percent -- the aggregate value of all real estate in the City of Philadelphia is a third to 50 percent lower than it will be once we get there, once we get to CAMA/Realware being fully operational?
No, sir, and I'm not trying to repeat previous testimony, 251 4/8/08 - WHOLE - BILL 080022, etc. but I can only say that that analysis is being done -- there was a substantial increase in the marketplace from 2003 for four, five, six and the beginning of seven that everyone knows about. When those increases in the marketplace occurred to value, the BRT did not capture those increases at that time. And so now we know it's not at 70 percent, but where it is we're doing the analysis now, and we've been working on that for more than a month. And as I said, I'm anticipating that sometime in May, definitely by the beginning of June, but by sometime in May we can present Council with that data. I just don't have it now. And my staff is working on it. That's why I know they don't have it now.
All right. Once CAMA and Realware is fully implemented, will it have a value for the aggregate 100 percent value of real property in the City of Philadelphia? 252 4/8/08 - WHOLE - BILL 080022, etc.
Once we've achieved business readiness, it's fully up, functioning, yes.
And it will be based on the computer automated data and not data that comes out of VSAM?
No, not of this year. That won't happen -- earlier, as I heard Council President Verna just say, I explained that in terms of our business readiness and operational readiness, we still have the 12-month timeline from the "go live" date. That 12 months has been protracted simply because we didn't go live until March. So we anticipate that sometime by March of next year, March of 2009. When we were here last year, we believed that would have been December of 2008, because the intent and the projection was to go live in December 253 4/8/08 - WHOLE - BILL 080022, etc. 2007. But because that was protracted, it's still a 12-month timeline before we would be able to have that information.
Madam President, I have many more questions. I think for the sake of time, I'm going to submit them in writing to them and ask that you request that they send the answers back to you, if that's acceptable.
And may I also say because we depend so much on Council for the funding of this project and it is a massive project, we'd be happy to provide all of the information and any technical information that you need as well. And I have thought before this hearing, I had wondered yesterday, I thought, I wonder if I should have asked Mr. Phillis if he 254 4/8/08 - WHOLE - BILL 080022, etc. was -- CEO Phillis to come over and assist. We thought that it wasn't needed, but I'm sure that if we need to have a sit-down-and-meet with Council in terms of the project, that we could do that. And he's been very supportive. I know he would help to explain why there is just this difficulty in getting the system up and fully functioning.
All right. Thank you. The Chair recognizes Councilman O'Neill.
Thank you, Madam President. Ms. Meade, I, first of all, want to thank you for the original time that you and I met privately in your new headquarters, which weren't quite ready yet, to say the least, and you were very open and honest and forthcoming with both good, bad and other information, and I really appreciated that. We had quite a long talk, me giving you several years of 255 4/8/08 - WHOLE - BILL 080022, etc. my background and you giving me several years of yours, plus where you were at that time. I also want to thank you and the Board for making the decision, which I know is not an easy one, to put a cap on the increases, which I think was clear that the number of appeals was much lower than anybody expected. And while a lot of people may not have been happy that did appeal with the decisions, that's not for this hearing, as far as I'm concerned. We can talk about that later, because that has nothing to do with budget. But I have one -- I thought about this a long time. And Councilman Green and Councilman Kelly were at a meeting. The Inquirer held a meeting, and real estate taxes came up, part of Inquirer's series of -- Councilman Greenlee went to many of them in different districts. But based on my conversation 256 4/8/08 - WHOLE - BILL 080022, etc. with you back in August, I guess it was, and your description of how hard it is at this point to catch up to 70 percent when we have so many people that have dropped. Because of their increased value, they've dropped. And I understand this is a very difficult situation, and I really appreciate you and the Board's sensitivity to the fact that this City could implode if we just flicked the switch and we didn't take care of all the other parts of it besides just the value that would occur. And I have an idea, and I think it's fairly simple, and usually those ideas are the best when I get them coming to me, is keeping this whole thing of value as simple as possible. So we don't need any state help, we don't need -- which we'll probably never get. I mean, my feeling about the state Legislature -- and I'm sure it's no different when the states are dealing with Congress -- is, they don't give preventive care. They 257 4/8/08 - WHOLE - BILL 080022, etc. come in when there's a crisis on white horses and they give help, but there's already bodies in the street and everything. They very well know they could be giving us caps and other things to put in, and there's no interest. I mean, there just isn't any interest up there, because we don't have a crisis on our hands. We're telling them there's going to be a crisis if we do this. We need help with this. It's not happening. That's a little bit of a backdrop. But if we would just as a Board of Revision of Taxes, as a City, but particularly it's in your shop, get everyone in the City to 50 percent, however long that takes, and obviously trying to do it as soon as possible with the least amount of pain. When we get to 50 percent, there's magic in one half, because everybody understands one half. Everybody understands two times something and one half of something. 258 4/8/08 - WHOLE - BILL 080022, etc. Once you get to 50 percent and we're pretty solid that everybody is as close as 50 percent -- I mean, there's no 5 perfection here, but we get as close as we can. We don't need the state's help for you to double the value to a hundred and Council and the Mayor to decrease the rate by 50 percent or half. And I honestly think -- I've gone through this 500 ways to Sunday how we can do this and all the different things. And I've got some bills in Council, some of which passed, but all need state authorization. I've talked to legislators that I'm very close to, legislators I'm not close to. It just kind of goes around. There's nothing -- there's no crisis. There's no 19 reward if there's no crisis.
But I think we can do this ourselves if at the time whenever it's possible, with the least amount of pain getting there, to get to 50 percent, we flick two switches. You go to a hundred, we go to half. It's done. Everybody is 259 4/8/08 - WHOLE - BILL 080022, etc. at a hundred. Everybody is at half the rate, and everybody understands it too as they're getting there. I would ask you to continue to do what you've been doing, watching the hardship and the burdens of getting there. Councilman Kenney has remarked many times over the last several years that an entire Allegheny City Council -- it's a brand new Council, new executive, maybe the next Governor, from what I hear, but this was the previous executive. They all got thrown out on a very complicated and disastrous reassessment system in the whole county. Their county happens to be almost exactly the same size as ours, but with many cities in addition to Pittsburgh. I just had an experience where one of the best Mayors in the country, Bart Peterson in Indianapolis, Indiana, along with 80 percent of the Mayors in the State of Indiana, were thrown out of 260 4/8/08 - WHOLE - BILL 080022, etc. office for something they had absolutely no control over, and it actually was a function of an independent body appointed by the Governor. And it came out of a court case, but people had double and tripling of their taxes, similar to what would happen if we flicked the switch and went to a hundred percent. The Mayor could not convince people, nor could many of the other Mayors in Indiana, that they had nothing to do with this. They had been on the cost base system for years where your taxes didn't change. New houses who paid a higher price, you got assessed at whatever -- so the assessment was based on what you paid for the house, and it stayed that way. Other areas have it. It's actually in some ways fair, some ways not fair, so I won't go through all that today. But there was a lawsuit. The Supreme Court ruled it unconstitutional. They just happened to pick this 261 4/8/08 - WHOLE - BILL 080022, etc. particular year where there was actually very small assessor offices in each county, because you don't have to have a big office if everything is cost based. It never changes. Well, they got to reassess, and in 80 percent of the cities because the reassessment was wild -- I mean, I was there when the -- I almost missed the airport last summer because the -- this was in '07, because there was a rally. This is the middle of July and people were marching all over downtown, and they were doing it on a regular basis. The anti-tax sentiment was across the board. It was everybody. And you can go in -- this is all on record. This man could have been Governor, maybe still will be, but he's one of the finest elected officials I've ever met in my life and a good democrat, very progressive. This is a guy you want to be your Mayor in any city, and he's up at Harvard School of Government now, but 262 4/8/08 - WHOLE - BILL 080022, etc. class act. He got thrown out. He lost to somebody that isn't qualified to do anything. He's just a name on the ballot, because it was a protest vote. People said that Mayor Peterson -- Bart, that was a protest vote on my part. If I thought you were going to lose, I would have voted for you, something to that effect. He's out of office after two terms. It is a major problem that's easier to prevent from happening than to undo or do after. And I appreciate the approach the Board is taking and knowing that it has to be done right. I just tried to offer you the simplest way of doing it, knowing you might in that 35 or 40 range generally as opposed to where -- because of all these increases, you were telling me that it's much lower than anybody realized. But if we can get to 50, we can flick two switches and they both work, and people understand. 263 4/8/08 - WHOLE - BILL 080022, etc.
That's the extent of my presentation, and I appreciate what you all are going through, because it's easy to be the critic, as we often find out from others, and I'm just trying to offer something constructive.
Thank you. Any other questions or comments? The Chair recognizes Councilman Green.
Thank you, Madam Chair. Just following up on what Councilman O'Neill was saying, he's getting to a similar point that I was trying to get to, which is even if we went to 50 percent, Councilman O'Neill, it would increase City's revenues -- if we actually went to 50 percent of full value, it would increase the City's 264 4/8/08 - WHOLE - BILL 080022, etc. revenues by something on the order of, I would estimate based on what I have heard, somewhere between and or 30 5 percent over where they are today. So 6 getting to 50 percent actually hugely 7 increases the City's revenues. 8
So we would 11 have to lower -- in order to stay revenue 12 neutral, we'd actually have to lower the 13 millage as we're getting to 50 percent, 14 and that's why I'm trying to get to the 15 bottom of what is all real property 16 worth. And I agree with your proposal to 17 do it incrementally, but -- 18
Well, let 19 me make it clear. When I talk 20 incrementally and having some fairness 21 measures in here, some humane measures in 22 here, that 15 to 25 percent, if it's done 23 incrementally, it won't be any more than 24 revenue went up last year to the City in 25 a given year from the reassessments. 265 4/8/08 - WHOLE - BILL 080022, etc. I don't want this -- I know this is going to take a while. You're not going to be able to do it -- if you don't do it like you're a computer and the taxpayers are a computer, but you do it you're human and you're dealing with humans, you're going to have to do it more slowly than the computers would, because you have to get it -- you can't take somebody from 35 to 50 if that's where they are.
But you have to see your way there and then know if you get to somebody to 50, you stop. If somebody is at 45, we're just going to keep them at 50. If they're at 35, it's going to take a little longer. But when we get everybody to 50 -- and I don't want to judge what that time frame would be, whether it be two years, five years, whatever, but everybody understands it. The state, whoever wants to file suit against us or whatever, any decent judge 266 4/8/08 - WHOLE - BILL 080022, etc. that would get the case understands there's a plan. It's not like we're wearing blinders and we don't understand it. There's a plan. So I think we'd be okay with that, and the City would get its to 8 percent, but over many years. That's 9 all. 10
Thank 13 you. 14 Any other questions or 15 comments? 16 (No response.) 17
May I make one last 18 comment? We can see that it's going to 19 be an exciting time for us when we have 20 our Realware system up and ready, working 21 with Council hand in hand to set the 22 values, but I just want to emphasize that 23 what we recognize, that it's our job to 24 set the values, and we leave the job to 25 setting tax rates and the job to actually 267 4/8/08 - WHOLE - BILL 080022, etc. being the tax man to City Council and to the Revenue Department. Thank you so much for your assistance.
Thank you. And I personally want to thank you and members of the Board and your staff for all the courtesies that you have extended to my office. Thank you so much.
This Committee will stand in recess until tomorrow, Wednesday, April 9th at 10:00 a.m. Thank you all very much. (Committee of the Whole adjourned at 3:40 p.m.) - - - 268 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on April 8, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)