One could be producing double the income as the other.
It usually doesn't happen but your example hypothetically could be true. It could be true.
But I would say, my guess is that one that's producing more income is substantially rehabilitated inside to get more income.
So, therefore, that would not be compared to the one on its block.
But how do you know that there's been substantial improvements?
Assuming they took the permits out. 198 10/01/02 - FINANCE - PUBLIC HEARING
Well, I would think they would have to do the kind of improvements that you're positing in your hypothetical.
I still don't feel that I can go and respond to that constituent, but I see you're trying. On that particular block, there's also a unit that is designated as condominium. How do you assess that particular building? Condominiums should be in the Equalization Program, and they will be in the Equalization Program. They are not yet. They are still part of -- they are evaluated by a group that simply does condominiums. There are two employees that simply evaluate condominiums. We believe, and we are working in that direction, to get them into the Equalization Program, and we will get there. But they are valued, Councilman, just giving you that as a procedural answer, substantively they are really valued the same way except it's a bit easier to evaluate because they are within a neighborhood of their own, so to speak. Now, I'm talking about a condominium building that might have 20 or 30 or 40 199 10/01/02 - FINANCE - PUBLIC HEARING units. Within each building, there are X number of sales that take place all the time. So what we do is value the units within a building based on the sales within the building. And what we've generally found out that what happens is that they're very good indicators of what the value of those units are as to look at the value of the sale within the unit and you can also see it escalates as you go higher. If you're in a high-rise condominium, you're paying more for the higher floors than you're paying for the lower floors. If you're on the river, you're paying more if you're closer out to water than if you're closer to Christopher Columbus Boulevard, so to speak, when we're looking at Pier 3 and Pier 5.
I'm talking about the six-unit property that is designated as a condominium property in a particular neighborhood.
Well, initially, we would try to see what the sales of those condos were inside that six-unit building. And if there aren't any sales that are recent in that six-unit building, we're going to try to find that which is similar by location, by size, I mean, again, using the same methodology, if you will except an individual 200 10/01/02 - FINANCE - PUBLIC HEARING evaluator will do as opposed to an equalization program.
All right. Mr. Glancey, I'll probably need to revisit this in a private settling because I really -- I'm a little perplexed with respect to some of your responses. It seems like there needs to be some work done in the BRT in certain instances such as this, but I don't want to take the time of the Committee, particularly since I'm not on the committee.
Happy to meet with you anytime. Appreciate your questions and happy to meet with you.
Thank you very much. We had a follow-up question from Councilman O'Neill and then Councilman DiCicco.
Again, I appreciate your testimony and your frankness and willingness to try to work as much as we can together. If you could just let me know after the hearing if you have a chance to think about it, the more I was thinking about my suggestion to put the comparables, you 201 10/01/02 - FINANCE - PUBLIC HEARING know, let the people have them, I think the first suggestion isn't that good with the appeal form because it may not be relevant. But certainly, when people have filed their appeal and you're sending them a notice of their hearing, that might be something you could put in there. And some may not want to come down if they see that it's something they really can't defend very easily; I don't know. The other is, if you could break down this bar graph. There's an ambiguity that will get more ambiguous as we get lower with the numbers. If you have to 30 percent and 10 to 20 percent below 14 it, 20 percent is in two groups.; you follow? 20 15 percent is in two groups. 16
We have 0 to 10 percent 17 which you don't see that as a bar. Then we have 10 18 to 20 percent -- 19
Stop right there. 20 So 10 percent is in two groups. It should only be in one. As you're getting new numbers for me with the lower, if you could keep them real micro. In other words, to 4, to 7, to 10, something like that, like maybe three breakdowns on the small ones?
Let's take the to 8 percent. At 10, it means 10.0001. Anything over 10 9 percent up to 20 percent is included in that 69,062. 10 And it works its way up from there. But your real 11 question is to make cuts that are more -- 12
It looks like 10 13 percent is included in both, though. 14
How long would that 16 take? I'm hoping within the next week or so I can 17 get a breakdown of the -- get a bar of the smaller 18 ones. 19
Council 203 10/01/02 - FINANCE - PUBLIC HEARING President Anna Verna.
Thank you. Mr. Glancey, what is a representative sale?
A representative sale? It sounds like a comparable sale, if that's what you mean.
A comparable sale. A representative sale, I think, and an comparable sale are probably the same thing.
Yes. And a comparable sale is trying to find -- there are no two absolutely perfect matches, but trying to find properties that are like other properties. That's what comparable sales are.
Can you tell us how many properties is an assessor responsible for.
I'm going to turn to Davey and he might be able to give you that information. Or actually, wait a second, I think I might have that here. 204 10/01/02 - FINANCE - PUBLIC HEARING While he's looking, let me tell you this. We have roughly 440,000 residential properties. And if you just did the math of approximately 41 or 43 full value appraisers, you're looking at roughly 10,000, maybe a little bit more, 10,000 properties per evaluator. Now, they vary, of course. Certain have more, certain have less. And I can give you some information about that. We have 26,262 singles.
Do we have different assessors for industrial commercial?
With the residential, can you give us some idea as to how many assessors we have?
And of that number, how many properties will the assessor do a visual inspection?
That's what I brought because Councilman Nutter asked that last week. We figured out -- and I tried to do it by property type. I think it makes most sense to do it that 205 10/01/02 - FINANCE - PUBLIC HEARING way. Single or detached properties which are the hardest to view, for instance, an evaluator in Chestnut Hill has a lot more property to see and more space in between properties. We believe that he can probably evaluate per year about 960 of those properties. For twin or semi-detached properties, about 7200 views a year are made by the evaluator for twin and detached properties. For rows and town houses, we believe roughly 14,400 can be views can be made for rows and town house. Now, having said all of that, I mean, we still have -- what we did over two years was to put conditions from new construction down to vacant and boarded, eight different codes on every property, every residential property in the City. It took us about two years to do that. And that's because sometimes we don't have street signs, sometimes we don't have correct addresses, and sometimes locations really simply require more than one person to go to the site so there might be some security issues in certain sites. But those numbers are actual the best we can do in averaging out, given the number of properties, the amount of our employees, and the average they can view a year. 206 10/01/02 - FINANCE - PUBLIC HEARING
Tell us what a visual inspection entails, please.
Absolutely, yes. We do not go inside a property because, A, we don't have the staff to do it; and quite frankly, I don't know of any urban jurisdiction in the country that allows appraisals, inside appraisals all the time unless they contract it out, unless it's contracted out to some agency that does that once ever four or five years or whatever. But you would really need to have appraiser to go into somebody's property. What we do is we look at the exterior condition of a property. The evaluator tries to make notes as to what the construction of the property is, makes locational notes about the property. And by that, I mean really neighborhood type notes. This is a property that's located on a nice block but something's happening at the corner. We will see that kind of information on an evaluator's report. 207 10/01/02 - FINANCE - PUBLIC HEARING Plus, what you will see are the eight codes. Does this look like it is a new property? Does this look like it is a recently rehabbed property? Does this look like it's in average condition? Does this look like it's in poor condition, et cetera.
See, I think that is one of the issues that trouble many of the seniors in that there is not an interior inspection made. Many of them have not be able to make improvements in their homes for years and years, and yet they have a neighbor that lives in the same block who has done probably a total rehab. They're being taxed the same amount of money. And they just feel that it's not fair.
We attempt to answer that question, Councilwoman. And of course, again, as I said, I'm not here to defend everything, but there are times when it doesn't work. We attempt to answer that by putting these exterior condition codes on a property. Even though you're doing an interior renovation, many times you can tell that something has been done by looking at the outside of the property. If you can't, you can't. And then 208 10/01/02 - FINANCE - PUBLIC HEARING you're right, that's the person whose property gets caught in the sense of being revalued when they shouldn't have been. If we get that information from somebody, we certainly react to that without having anybody have to file an appeal.
So when these people file appeals, they will certainly be given consideration?
We need to give the stenographer five minutes. Can you hold your point for five minutes?
Thank you. We will give the stenographer a five-minute break. Thank you. (Brief recess.)
Mr. Glancey, you were holding a point and you were in discussions with Council President Verna on issues so, Council President, you and Mr. Glancey have the floor.
Do I have the floor, 209 10/01/02 - FINANCE - PUBLIC HEARING Council President? You had mentioned the senior citizens' problems, and during the course of this -- it was very interesting. I had a member of my staff just do some checking in other jurisdictions around the country, because it really is something that comes out of the State of Pennsylvania as opposed to City Council, and we found some very interesting situations. Washington, D.C., for instance, has a household income threshold of $100,000 and an age limitation of 65. And if you meet the $100,000 and you're 65, your benefit description is it can reduce your property taxes by 50 percent. New York City has a household income threshold between $21,500 and $28,900 and, again, a household age of 65. And you can receive a partial exemption ranging from 5 to 50 percent based on income. According to what we've heard, that would have to be some state legislation, obviously, to affect either of this. Cook County, which is Chicago, has a household income threshold of $40,000 and an age limitation -- an age threshold of 65. And that is 210 10/01/02 - FINANCE - PUBLIC HEARING what's very similar to what we do here in Philadelphia. Freezes equalize the assessed values at the year prior to the application. They also offer two other senior exemptions which can save up to $700 in real estate taxes. Allegheny County, much closer to home, has a $30,000 income threshold because they're allowed to do that under the State Act that Councilman Kenney was talking about. Second class counties can have an income and age limitation already. Their Councils can do that. Our Councils cannot because there's no income or age limitation allowed here. Anyway, Allegheny County has a $30,000 household income threshold, which excludes 50 percent of social security, SSI or railroad benefits. And it has an age limitation, basically it's you're 60 years old or if you're a widow or a widower, your deceased spouse would have to be 60 years old or more, and is a flat percent discount 21 on the real estate tax. 22 And of course, as you know, in 23 Philadelphia we are at $14,000 -- I should not say 24 that. We in Pennsylvania are at $14,000 for a 25 single, $17,000 for a married couple. The age 211 10/01/02 - FINANCE - PUBLIC HEARING threshold is 65 and we freeze taxes at the year prior to the filing of the application. So I just thought I'd bring that information to you, if you would find it of some interest when you're discussing this with colleagues and certainly with your legislative colleagues.
Thank you, Madam Chair. The Computer Assisted Mass Appraisal System, what is that? What information does the technical staff enter into it? How do they interpret that information, in the simplest of terms, if you can? And if you can't do it all today, maybe something in writing might be appropriate to the Chair. I'm sure it's very complex, but if you can give us some generalization as to what it does.
I'll try to do that. And if I stumble, I'll maybe ask the experts that are on my staff. What it is in its simplest form, I believe, is to get as many -- to sort and group 212 10/01/02 - FINANCE - PUBLIC HEARING parcels of real estate. Sort first, group them second, parcels of real estate in the City of Philadelphia, and then analyze those groups with sales of properties within those groups so that you can extrapolate a value from those sales to like properties within those groups. In a nutshell, that's the simplest way I could put it. But I think, what I've often said when I've discussed this before, try not to think in computer models. Try to think of it as, you know, a mathematical relationship, if you will. That you have X amount of properties that sell, and in this round it was 40-some-thousand properties. From that group of 40-some-thousand properties, we extrapolated values for the 270,000 or so properties that received tax -- I'm sorry -- received market value increases this year. That's the simplest way I can put it. This little booklet, when you get a chance, Councilman, maybe you and I could sit down in your office. I think this really, in a nutshell, attempts to describe how behind the methodology -- allows you to know the methodology, plus our own administrative practices as you go through this, our 213 10/01/02 - FINANCE - PUBLIC HEARING own identifiers, if you will.
In your testimony, and I know you touched on this through some of the other questions that were asked, basically you say that the work of the BRT is not yet complete. But within the national accepted parameters, what makes the BRT's work not yet complete? What improvements do you think we need to make?
Great question, because I think -- and I don't want to give you the Chamber of Commerce answer. The Chamber of Commerce answer is, "Well, we're not complete because we're never tired." But the real answer to that is we do have some specific goals that we'd like to achieve. I gave you a short -- again, one-side pictograph showing coefficients of dispersion and price-related differentials. Those are significant measurements of how we will you're doing in your jurisdiction for uniformity, both horizontally and vertically. Our PRD, our price-related differential, which is, again, a comparison of properties that are similar high to low, that's why it's vertical. High-end properties are being valued at the same 214 10/01/02 - FINANCE - PUBLIC HEARING percentage as low-end properties. The national standards say that you should be about 1.10, 1.15 -- is that correct? 1.15. And I know I have it in front of me somewhere, but I seemed to have lost the papers. We're below 1.15. I think we're about 1.13 with that horizontal -- I'm sorry -- that vertical uniformity measure. Coefficient of dispersion is another measure of uniformity, which is horizontal, because you're valuing like properties in the Northeast part of Philadelphia to like properties in South Philadelphia. Now, we all know they're different locations and different numbers on that. But there, I believe, we have some work to do. -- you know, 16 .20 is where we want to be because that is what the 17 national standards say is great. Anything below .20 18 is terrific. Urban jurisdictions get some leeway 19 because we're old, and we're urban. And lots of 20 urban jurisdictions don't do what we do by way of trying to adjust these -- adjust our values using automated methods. So we are today at .24. We should be at .20, I think, to fit within where we should fit in. That's one area that we have a lot of work to do. Prior to this equalization round, we 215 10/01/02 - FINANCE - PUBLIC HEARING were at .27. After this equalization round, we are at .24. So the equalization round has helped. This is all pre-appeal. But it has helped us get that kind of horizontal equity that is measured by a coefficient of dispersion. Now, let's talk about some other things. What we can do -- and, again, what I think I've learned over the last month, I thought we were transparent. I thought we were giving everybody all the information we could every which way we could. It seems to me, although we make it available, we have to let folks know better where it is available and how to do it. I mean, I think we have all the information we want to give people. I think what we need to do now is tell people that this is where you get it. And that's going to cause some outreach. And I think we have to do that. We have, I believe, been constantly, constantly upgrading our customer service, if you will, when taxpayers contact our office or we go out into the community. And you have firsthand knowledge of some of that, I'm sure. Where we try to make sure -- these aren't -- I'm using the word taxpayers. That's the old word. These are our clients. These folks who are here 216 10/01/02 - FINANCE - PUBLIC HEARING today, they're our clients and we should treat them that way, and I think we do. So I think there are things that we have to do along those lines as well. And are there other substantive things that we should do? Yeah. Yeah. I mean, I think every day we can make our evaluators be more careful about selection of what properties we're going to use for comparables. Because even though the CAMA process, the software, can give you X amount of comparables -- I think Councilman O'Neill raised a question about, well, maybe we should look more carefully at the sales we use to measure against the value that we're extrapolating from those sales. So I think that's just a short group of things that we can do and we can do in the short term. And I'm sure there are others that will come along as we get through this process.
As for the transparency -- from my notes I was going to ask the question a different way. I'll just offer it as a suggestion, that maybe we need to include the particular building -- the property building, characteristics, payment information and comparables. That may help, if it's not already 217 10/01/02 - FINANCE - PUBLIC HEARING being done, because I don't think that's on the web.
I think you're right. I take your suggestion along with Councilman O'Neill's suggestion.
I think initially, maybe, as we send out a notice to tell people when they're appealing. We may not be able to do it this round. But if we do it next round, send them the comparables.
Because according to my notes, again, it seems that Cook County and Chicago, Los Angeles County, Allegheny County, New York, do supply that information on their web sites as well.
We will be doing that as of hopefully early -- late November, early December of this year. I think there was also the point raised that maybe everybody doesn't have access to a web site. We're going to put it on the web. We know that. That's going to happen, and that's done. That'll happen hopefully before the end of 2002, but maybe we can do more next year, if we want to 218 10/01/02 - FINANCE - PUBLIC HEARING actually send these things to folks who have filed appeals prior to them coming in.
And I think the way the system is now, where that the homeowner basically supplies a lot of the information that was in error by the evaluator, creates a lot of anxiety in the property owner. The client over the phone, in person as -- all of the sudden now, I'm giving you information what's in my house, but why didn't you know that in the first place. You know, because you sent out a notice about what my property is worth, my value of my property, and here it is you really didn't have the proper information. And there are cases, I'm sure, that it may work to the advantage of the homeowner. I'm not going to suggest that that doesn't happen. But in either case, I think it makes people suspicious or they feel there's a lack of effort on the part of the BRT. And I'm not subscribing to them. I'm just saying that I think that those are some of the things that the public has a problem dealing with.
We would welcome any suggestion on how to get that data. I'm the first 219 10/01/02 - FINANCE - PUBLIC HEARING one to tell you that if we have the better data, you'll have the better values. There was an attempt done about years ago by the Department of Records 5 to gather that information upon the transfer of a 6 property, so when a deed came in that if -- there 7 was a form that was filled out, should have been 8 filled out, by, I guess, the buyer and/or the 9 seller, giving property characteristics, number of 10 bedrooms, number of fireplaces, lot size, square footage. I don't know how we can get that information today without the help of the clients, of the taxpayers. If we could send out a survey -- and I have no objection to doing that. I'm just not sure what our response would be. Maybe that's not a good enough excuse. Maybe we ought to just try it and see what the response would be. But I'd be happy to do that. We did at one point -- and I meant to say that to Council President Verna -- we did at one point try a pilot program to knock on doors, ask people if we could look at their property inside. I will tell you, the success rate on that was diminimous. If we had 10,000 property accounts, I'm guessing it was an under 2 percent rate because 220 10/01/02 - FINANCE - PUBLIC HEARING folks would not want us in their house.
You've testified last week and again today about the current real estate market in Philadelphia. The substantial increases that go back 7, years. Again, the 7 question that comes up at the town meetings and when 8 we get calls is that, well, we realize that market 9 values are going up. Why did it take so long? Why 10 has it taken us all these years to get to that point? Why did we not do some gradual increases, which would have been less painful? There are a few people in my district that did get a gradual increase last year and the year before. And for those folks, obviously, now they're getting an increase of 100, 200 percent. They feel as though they're totally being misrepresented because they did get some gradual increase and now in a year's time -- I mean, last year some property owners received a $2,000 increase. This year as high as 5 to $10,000. So, you know, again, this is the anxiety that builds up. And we talk about, well, the market is where it is. And the bubble is there and maybe it will burst. Maybe it won't burst. It's just too 221 10/01/02 - FINANCE - PUBLIC HEARING much for these folks to absorb all at one time.
I think in your district, particularly, that is the case. The run-up of the market since 1998 until the present time in the 2nd, 5th, 8th, 15th Wards, parts of the 30th Ward, has been incredible. It has been -- I'm talking about sale prices -- it has been 150, 200 percent in many occasions. So -- and I know this is not a satisfactory answer, not to you and clearly not to the client, is that while we may have raised values rather substantially, relatively it is still gradual as opposed to what the actual sale price of the property is. Now, that doesn't mean that it's not painful, and I understand that. And I encourage, as you do, everybody who feels that they were aggrieved, to file an appeal with us or to talk to the evaluator first. But I think, Councilman, it may have been -- and again, I'm not trying to shirk responsibility. Not having six months of sales in 1998, my sense was that some of this, some of the major league run-up that we have this year, would have been gradually increased somewhat last year and we may not have been facing what we're facing this 222 10/01/02 - FINANCE - PUBLIC HEARING year if we had that data. But -- and again, that is no excuse. That is our responsibility.
Thank you for acknowledging that. One final question and -- I think, actually, two. According to our records that were supplied to us by the BRT, close to 97 percent of the non-residential properties received either a zero or a less increase in their taxes. Will these non-residential properties be receiving a property tax increase?
Yeah. I don't know if you were in the room. Our notices for commercial and industrial properties are probably going to go out this week.
I was probably in the room. I didn't hear that. Because I just left on the break. Thank you for that.
But I might add -- I'm sorry. I didn't mean to cut you off. I might add that all real estate markets don't rise or fall together. What we've seen is an extraordinarily hot residential real estate market. And our commercial market, although it is not terrible, it is not bad, it is rather flat. 223 10/01/02 - FINANCE - PUBLIC HEARING
Do you think that an increase would discourage additional sales?
Do you think that an additional increase in commercial properties may discourage businesses from coming in?
I mean, if the market is already flat, then I don't see how that --
I mean, that's not your job, I understand. I'm just --
We made a lot of effort over the last several years to make Philadelphia a more attractive place, which leads me into my last question. There are a number of people who have 224 10/01/02 - FINANCE - PUBLIC HEARING come up to me in the last few weeks, especially during my town meetings, and basically accused me of the bills that I sponsored, which were the abatement and exemption bills that were unanimously supported by City Council and signed by both Mayors. I know a lot of it is generated by my political opponents who want people to realize, or think at least, that the abatements are the reason for this massive increase in property values and reassessments, this recent reassessment. I know that is not true. Unfortunately, people will believe what they want to believe. Every week there is some idiot standing outside telling people that I pay $330 in real estate taxes and all that stuff. In your opinion, in your professional opinion -- and we've had a lot of hearings about this, on the abatement and on the exemption bill for the industrial buildings, which became converted buildings for residential use -- do you think that there was any impact as a result of those abatements and exemptions that is causing any of the increases in the recent reassessments?
I don't see how it could. And I'll tell you why. Because abatements, 225 10/01/02 - FINANCE - PUBLIC HEARING particularly commercial properties, would have no 3 impact, obviously, on the residential sales. I don't believe that has any impact on the residential sales. Abatements on residential properties, when we do our analyses, we don't compare them to properties that are already, what we'll call, previously-owned properties. We only compare abated properties which are brand-new to other abated properties which are brand-new. That's how we value those properties. So they're a separate market entirely from the market that -- I'm sure the folks are coming from your district and talking to you at these town meetings, these are folks that don't have brand-new homes. These are folks who had houses that are in the City of the Philadelphia previously owned or owned by them for a long time. The abated values have no connection whatsoever to the previously-owned properties. And let me just say, abatements, it seems to me, are one of the best things that this City Council and both administrations, the Rendell and the Street Administration, have done to get people into the City of Philadelphia. I think abatements -- and I know there is -- reasonable 226 10/01/02 - FINANCE - PUBLIC HEARING people can differ on whether abatements are a good thing. My opinion -- and this is mine, not the Board's opinion, because I'm speaking philosophically now. My opinion is that the more we can do to bring folks into the City, the more incentives you can offer to bring folks into the City -- and there might be some short-term real estate taxes losses doing that, in the long run you will see a significant gain financially and population wise. So I happen to think that abatements are a great thing that you folks did.
Thank you. And, again, the irony of this whole thing on the attacks on me is being generated by labor. And they probably benefited the most because we created literally thousands of jobs for the building trades in the City of Philadelphia as a result of all the conversions to the industrial buildings and the like. So I just wanted that on the record. Thank you. Thank you for your testimony.
Thank you, Councilman. I assume that Councilman Nutter -- Councilman O'Neill and Verna, are you two all right? 227 10/01/02 - FINANCE - PUBLIC HEARING
Just to pick up on the last place where Councilman DiCicco was, it doesn't necessarily require a response. But, Mr. Glancey, your sense of what abatements have done for the City is, I believe, one, absolutely correct. What we are starting to hear now, though, from people who have been the long-term residents in the City who stuck it out, didn't leave, and are now experiencing, for some, these exorbitant assessment increases, and naturally the property tax increase that goes with it, is "What about me? Where do I fit in in the entire scheme. It's good that you have programs to attract people to the City. You're providing a financial incentive for them to come. What program do you have, whether it's low income, no income, middle income, upper income, for people who have stayed here? " And in your terminology, how do we separate, again, for the public, the assessment process, which is clearly a Board of Revision of Taxes technical process, from the revenue needs or interests of the City? And what should we do in order to, not only attract the residents with initially short-term and now longer-term abatements, for new people, how do we create some kind of new abatement program, if you will? You can call it whatever you want to call it, but if we take less, then people are getting some benefit and some savings for longer-term residents. And it would seem to me that a part of this discussion, this exercise, this angst, and even in your testimony, the anger that's being expressed should be utilized in the most positive fashion possibly to bring about change, to bring about fairness, to bring about a sense that we want to attract those who have either never been here before or who possibly moved out and some are moving back, but there has to be some fairness and some reward for people who stayed. As I said last week, we participate on 229 10/01/02 - FINANCE - PUBLIC HEARING both sides of this economic transaction. We take money from people as their assessment increases for those who did not buy the property for investment purposes or for short term, but are here forever. We take it as it's happening on the one side of the equation, and then we ask for 3 percent on the real estate transfer tax to get the full benefit of all of that appreciation over time. We are, in fact, at a certain level, double dipping on people and creating an unfair situation for folks who have no 12 intention of going anywhere. The fact that your house is more valuable, some of which you've created, some of which you have nothing to do with it because of what the market is doing it around you, if you never put a coat of paint on the place, but you don't get any benefit. In the near term, by the fact that the value of your property has increased -- I mean, maybe you can borrow more against it. You can do a wide variety of other things but, you know, it's all on paper. But we continue to benefit from that. And so to the extent that we can take less of that appreciation, which is a Finance, Revenue, City Council, Executive decision, should 230 10/01/02 - FINANCE - PUBLIC HEARING not interfere with or negatively impact your ability to do what the state statute says, which is value properties, do it on an annual basis. And the discussion we had earlier about 71 percent, 100 percent, we should be able to make that decision. Now, I need to go back to an earlier discussion. I don't want you to go too far because you've got your items situated there in a comfortable fashion. I need to get the Revenue Commissioner back and a representative from the Law Department to go over some financial issues that I've discussed earlier. I think she may have some answers for us. Commissioner Kammerdeiner, we had some dialogue earlier, and I was asking you when the FY 2003 budget was put together -- we are presently in FY 2003.
Finance and certainly Budget, possibly Revenue, had to make some estimates which were incorporated into the budget that we passed this spring for what the real estate tax expectation would be, which I think either theoretically or in fact you had to do somewhat blindly. But I guess based on past history, because you did not know at the time what the proposed new assessments would be, 231 10/01/02 - FINANCE - PUBLIC HEARING what the value would be, how many people would appeal or even what the certified values of those -- what do they call them, precepts, I think -- you couldn't know that at the time the budget was put together. So the question I asked earlier was, how much did the FY '03 budget anticipate in growth; and you told me 2 1/2 percent. But then we got into a discussion about the actual dollar amount. What is the number?
Since we talked earlier, I've had an opportunity to speak with the Budget Director, Rob Dubow, between meetings, and he was able to pull out some of his work papers and give me a rundown on what transpired. You're correct, we do make the estimates in a time period long before the assessment notices go out. We do that on the basis of prior year history and look back at several years in terms of what's happened, any growth rate or trends that we see. It's done tax by tax. But with regard to real estate tax, the assumption that they came up with after looking at past trends was a 3 percent growth in assessments, 232 10/01/02 - FINANCE - PUBLIC HEARING but then that would have been about $300 million because that would have applied against an assessment base of just over $10 billion. But they also assume that a certain number of appeals would be filed and that there would be reversals on some portion of that $300 million in assessment growth. And the assumption they made was that $80 million in those assessments --
Not $300 million, you're talking about assessment values?
These are assessment values. We're not talking about tax. I'm talking about the assessment values.
Right. I understand. But you know that my question is --
They basically assume then a growth in assessed value of about $220 million, and that translates into approximately $8.2 million in terms of City tax. Right now I'm only looking at the City budget and the assumptions on the real estate tax that comes to the City. Using 233 10/01/02 - FINANCE - PUBLIC HEARING that information, they forecast the City portion for Fiscal '03 at $321.7 million. That's the number on which the budget forecast was originally based, at least that's what I'm told. At the time that they were making that forecast, they were forecasting City revenue on the real estate tax for Fiscal '02 to come in at $338.5 million. But, of course, you know that Council -- the Mayor was proposing and Council was considering at that time a shift in millage. And so when you take the $25 million in millage shift away from that forecast, that would mean that we were, at that time, forecasting $313.5 million if we stayed at the '02 rate. You add the additional tax from the growth potential and come up with the 321.7. Let me add that when we have the preliminary actuals from Fiscal '02, once you take the millage shift of million out, the comparable 20 is 311.5 million. So our '02 numbers are actually 21 about 2 million less than was forecasted back in 22 December of '01 for the Fiscal '03 budget. And 23 that's where the number comes from that I referenced 24 in my testimony last week. 25 If you compare the budgeted number of 234 10/01/02 - FINANCE - PUBLIC HEARING 321.7 million to our actual collections from '02 of 311.5, it's approximately a $10 million growth expectation that we're looking for between '02 and '03.
Okay. So you're expecting an additional $10 million. And the preliminary indications are based on the assessment notices that have been sent out. We have not gone through the appeals. We don't know what's going to be certified, but the preliminary calculation is that the City, if somehow, some way, no one was successful in an appeal, which is not necessarily likely, but the City would anticipate growth of $35 million; isn't that correct?
I would have to defer to Mr. Glancey on that because we don't have those numbers.
The question is, what's the anticipated revenue growth based on the assessment notice that have gone out to the citizens in terms of 2003 tax revenue?
These are market value numbers that I'm giving you. Tax numbers follow that. That's not my position, as you know. 235 10/01/02 - FINANCE - PUBLIC HEARING Overall, what has taken place from 2002 to 2003 in market value growth, if you take the entire universe, it's 4.13 percent. If you take just the universe of those properties that were increased, that's about 6.6 percent.
Okay. Is it fair to say -- and do you back into the number by -- you gave us earlier, certified 2002 was $31,000,000,745. You gave us the '03 at $33,000,000,108.
Market value. That, I believe, is a $1.4 billion difference. You would take the $1.4 billion times .32?
And would that amount, do you know off the top of your head, is that $35 million?
It could be a little bit more because there were commercial industrials in there.
Thank you, Mr. 236 10/01/02 - FINANCE - PUBLIC HEARING Glancey. So Commissioner Kammerdeiner, what I'm trying to understand is you made a budget and submitted it to Council in January, which we approved, under which circumstance you were anticipating receiving an additional $10 million. We now come to find that, based on at least the assessment notices -- we don't know the end of the process, but based on the assessment notices, the City is now anticipating the prospect of $35 million; is that correct?
That's City and school together. So the City portion of that would be approximately 42 percent.
Well, let's go back to the $10 million discussion. When the City was anticipating an additional $10 million dollars, what was the School District anticipating?
I don't have their precise numbers here, but I understand that they used essentially the same formula that we did, and the differential was approximately $14 million between what they had in '02 and '03.
So is the number $24 237 10/01/02 - FINANCE - PUBLIC HEARING million total between the two governments?
So would the number be $24 million total between the two governments?
And so now we're saying that, again, between the two governments, we're anticipating a $35 million increase?
Following the calculations that you and Mr. Glancey did, yes.
So is it fair to say that, again, between the two governments, but taking the total amount of revenues to be generated, there is approximately $11 million more being generated than you anticipated when the budgets were put together?
Based on the assessments that have been sent out, but we still have the appeal process to go through.
Councilman, maybe just for clarity is the only reason I'm stepping up here, is that not only do we have an appeal process, but I'm also talking, as I indicated when I gave all those numbers before, gross numbers. It has nothing to do 238 10/01/02 - FINANCE - PUBLIC HEARING with delinquencies. It has nothing to do with past year problems. So what Ms. Kammerdeiner has said is what they usually collect, somewhere around $750 million, I think she said, for a given year. And what I'm talking about is substantially more than that because I'm using gross numbers. The relationship should be the same, if that's your question.
I understand. I guess one of the directions this is leading in is, given the size of the increase for some citizens and given that there is a potential -- I don't want to say revenue windfall, but certainly revenues in excess of anticipated revenues to put a budget together. And so as to not end up in a discussion about any action that we might take that would potentially unbalance the budget, it sounds like there is some amount of leeway, from a legislative and a fiscal standpoint, that would potentially allow us to take some actions to, in fact, scale back the amount of revenues that we technically need to collect in order to have a balanced budget and run the FY '03 budget year the way it was 239 10/01/02 - FINANCE - PUBLIC HEARING anticipated when the budget was introduced and approved.
In gross numbers, at this point in time, that would appear to be correct. We still have the appeal process to go through. We still have the certifications to come in. It is possible that some of the gap that you're referring to will be reduced, but there would appear to be some differential there between what we need in order to balance the budget and the numbers as they are proposed at the moment.
We will, since we're having for the moment a philosophical or theoretical discussion --
And if I may add, we're talking here only about real estate taxes. And as I indicated in my testimony, the economic picture is such that we do have other pressures on the budget that are out there. So in terms of a balanced budget, talking about real estate tax in isolation is something we can do theoretically. But when you're looking at the whole budget, there are other things you look at, growth in some areas over and above your forecast to balance out where your 240 10/01/02 - FINANCE - PUBLIC HEARING forecast has been too high in other areas. And so that is something that I think you need to take a look at in terms of balancing this. We can talk theoretically about real estate by itself, but that doesn't mean that final decisions can and should be made in isolation.
We will, I understand that. But, I mean, with every respect, when people go to the BRT to discuss what their assessment is, I think the BRT only wants to have a discussion in isolation about real estate taxes. I don't think they want to hear about the price of bread, the cost of gasoline or what your auto insurance was as a function of whether or not they'll reduce the level of your assessment. So, I mean, we're either going to allow a fuller discussion on both sides of the discussion, or we're going to have an isolated discussion about only those items that are relevant.
That's why really we need to keep the assessment process and the taxes that are levied against that assessment separate. Because you are correct, the discussion at the Board should only be on the value of the property. But 241 10/01/02 - FINANCE - PUBLIC HEARING the discussion that we have in terms of the taxes that are levied against those assessments can and should be taken into balance with a lot of other factors in addition to that.
Okay. That's that one issue. Now, Mr. Fader, you were up earlier and you were very forthright and firm in your views, or at least expression of views of the Solicitor, with regard to Council's authority with regard to passing laws; when is a law a law, when is a law not a law, judges, courts, Solicitor's opinions, City Charter, state statutes, Pennsylvania Constitution. I think you pretty much threw in everything short of the Magna Carta. But we haven't finished our discussion here day. Let me read to you a very interesting dialogue that took place back on December 29, 1980, between some members of Council and the then City Solicitor, Allen Davis. This starts, actually, with a comment by Councilwoman Verna, now our Council President, having had some discussion with the Solicitor. " Mr. Davis: "That's right. " Councilman Street -- Mr. " "Councilman Street: Are you suggesting that you would advise the Board that they could ignore the bill and would not have to go to court in order to get any legal or judicial determination as to the legality of the bill? "Mr. Davis: I don't know whether they would have to go to court or not, but I would advise them that the bill is not legal. "Councilman Street: I would like to know whether or not, in your opinion, it would be necessary for the Board of Revision of Taxes to go to court to get a judicial determination as to the legality and/or Constitutionality of the bill, or whether or not you would advise them to just ignore the bill? "Mr. Davis: I would advise them that 243 10/01/02 - FINANCE - PUBLIC HEARING they have the option of going to court and testing it that way, or waiting or not putting, in effect, a freeze and letting a taxpayer raise it. It's a matter of procedure. " You may recall this was a bill about freezes. "Councilman Street: But you would not advise them that they have any obligation to adhere to this bill until such time that a judicial determination was made? In other words, you don't think that they are bound by it at all? "Mr. Davis: No, sir, I don't. "Councilman Street: Now, are you suggesting then that such advice could reasonably be given to say the Mayor or some City agency, if you or that agency felt that a law were invalid or unconstitutional or illegal, that any bill that we pass could be ignored until such time that somebody went to court to seek its enforcement? "Mr. Davis: That's generally the case with legislation, yes. "Councilman Street: That's not generally the case with legislation. "Mr. Davis: Well, if someone believes 244 10/01/02 - FINANCE - PUBLIC HEARING that a law isn't right, they have a right to ignore it and test it. "Councilman Street: Sir, that completely ignores my comment and my question. We are the legislative body of the City of Philadelphia. And assuming that we pass an ordinance which requires this Administration to do X, are you suggesting that it is normally the process that the Administration could refuse to do X and that this Council or some citizen will go to court in an effort to enforce -- to force the Administration to do X? "Mr. Davis: If a bill is illegal, it is void and of no effect. It is not binding on anybody. "Councilman Street: But it isn't that. "Mr. Davis: The court determines the question of legality. "Councilman Street: Isn't it only void and illegal until determination is made? "Mr. Davis: No, sir. "Councilman Street: And isn't it true, that up until that point, that this City will be bound by that Bill? 245 10/01/02 - FINANCE - PUBLIC HEARING "Mr. Davis: No, sir. Just the same as a taxpayer who believed the assessment was illegal wouldn't have to pay it and could ignore it and make the City go to court and make them try to collect it. "Councilman Street: Okay. " Mr. Fader, who was right in that discussion?
In my opinion, the Solicitor was correct. That the Solicitor is obliged to advise the Mayor and the Board and the Council what he believes, in his judgment, is the law. And that if a Council ordinance is enacted that goes beyond Council's authority, it is the Solicitor's obligation to advise the Mayor that, in his judgment, it goes beyond the Council's authority and it is not effective.
Okay. Now, what is the Solicitor's responsibility with regard to either legislation that's drafted or in working with the 246 10/01/02 - FINANCE - PUBLIC HEARING body -- I mean, the Solicitor is, again, in that wonderful position of representing both the Administration and the Council. What's the Solicitor's responsibility with regard to assisting its client in the passage of legislation or making it correct or making it legal?
The Solicitor has a responsibility to all of his clients, both the Councilmembers and the Administration. As you and many members of this Committee and this Council know, our office works closely with any Councilmember to draft any legislation that the Councilmember or the Council wants drafted. We will do whatever possible to try to make it in as legal a form as possible, although we'll draft it in any form that the Councilmember asks. And we will try to think creatively with the Councilpeople, if asked, to try to come up with legal ways to accomplish what they want to accomplish. In the end, however, we're going to advise them what we think is the law.
And do you think that the opinion that we received recently meets that test, or is that an opinion that just primarily 247 10/01/02 - FINANCE - PUBLIC HEARING tells us what we cannot do?
I think it most definitely meets that test, Councilman. As I pointed out to you last week, for instance, we spoke about one of your Bills, which we said, although there are pretty good arguments that it is illegal, we would be prepared to defend it, at least with respect to future fiscal years, along the lines of the Coleman vs. Green settlement. Because we think there are good equitable arguments that we could make in court, even though there are very strong legal arguments against the Bill.
With respect to the Bills that the Solicitor said he felt they were illegal, is because we did not feel there were any arguments that we could make in court to defend them.
From that same point in time, in the same discussion, between the same two people, I also found it interesting, this 248 10/01/02 - FINANCE - PUBLIC HEARING statement. This is still with Councilman Street and City Solicitor Davis, which goes in this fashion: "Oh, one other thing. And that goes to the City Solicitor's capacity and ability to represent the Council and the Administration and the Board of Revision of Taxes in these situations which are fraught with conflict and problems, both for the City Solicitor and for the Council. And the problem that I have is that when you have a lawyer, you want a lawyer to advocate for you. And I don't need a lawyer, I do not need a lawyer anywhere that is simply going to take an idea I have, is not going to develop it to the point where that lawyer seeks to achieve an objective that I have. "And one of the problems that I have felt is that, although I can get advice and this Council can get advice, we do not get the kind of counsel that puts us in a position where we can go to the Solicitor and say, this is what we want to do. And what we want to do is correct the bad problem for the citizens of Philadelphia, particularly a group that are being hard hit now. "We need somebody, not to simply take what idea we have, put it in the form of a Bill and 249 10/01/02 - FINANCE - PUBLIC HEARING then at the same time get a letter saying that it's unconstitutional. But we need somebody to look and find a way to do it. You see, if we had our own lawyers, I guarantee you we could say, find a way to do it, find a way. And a way would be found, because that's just the way it is. A way would be found. So that says to me that perhaps we need to work on a Charter change provision that would give this Council independent legal representation so that we don't have to -- so that neither one of us has to be in this uncomfortable position. Thank you." Do you know what the Solicitor's view is or opinion on whether Council should have its own legal counsel separate from the City Solicitor and amend the Charter to do so?
I do not know the Solicitor's view on that, Councilman. But I can tell you that the first half of that speech you just read, the Solicitor, I'm sure, would agree with completely, which is that Councilpeople have the right to ask the Solicitor and anybody in the Solicitor's office to work with them and to try to come up with ways to the best of our ability to 250 10/01/02 - FINANCE - PUBLIC HEARING accomplish the goals that you want to accomplish. That is absolutely our responsibility to do that.
Well, let me ask this question, and I don't know whether you or Ms. Kammerdeiner know. Who is, again presently, working on any of these various ideas, either things we though of, things that Mr. Glancey has suggested -- I don't know the Administration's position on his proposals -- today or any other ideas that may exist? Who in the Law Department is working on trying to find a solution to any of these problems?
I cannot answer that question, Councilman. I don't know that there is anybody tasked specifically with finding a solution to all the many problems that are being discussed here. We try to work with the problems that Councilpeople bring to us and that the Administration brings to us, and we're prepared to work with you to continue trying to do that. I don't know that there is anybody specifically working on those questions right now.
Okay. I understand that. Let me ask the question a different way. I mean, are you aware of any discussions that are 251 10/01/02 - FINANCE - PUBLIC HEARING going on, whether in the Law Department, the Finance Department, the Budget Office or the Mayor's Office in general, that has any group of people seeking to put forward any ideas with regard to reform or changes to the current assessment system to make it more fair for the citizens of Philadelphia?
I'm flattered to think that you would think that I would be party to those discussions, but I wouldn't know if those discussions are taking place, Councilman.
Mr. Fader, you're much too modest and you shouldn't undervalue yourself. Well, maybe I should then make a request that various parties from the Law Department, the Revenue Department, the Mayor's Office, the Finance Department, the Budget Office and the BRT, and even if you want to just, you know, throw in for excitement a couple members of City Council, to sit and work as a group to see if we can reach some level of agreement and accommodation on these kinds of issues. Could you possibly take that message back to the respective parties?
I would be happy to and it 252 10/01/02 - FINANCE - PUBLIC HEARING sounds like an excellent suggestion.
Okay. Thank you. Mr. Glancey, can I have you back, please? I'm sorry. Either Mr. Fader or Ms. Kammerdeiner, does anyone know the Administration's position on the three or four points that Mr. Glancey laid out in his testimony in terms of possibly changing the system to 100 percent market value? Mr. Glancey testified that he seems to be somewhat okay with at least one or a couple other Bills, although there's been testimony that the Administration either opposes them or doesn't believe that they are legal. What is the Administration's position on the three or four suggestions that Mr. Glancey has made in his testimony?
So far as I know, today when he made the presentation is the first that we have heard these as his proposals. So there has not been an opportunity yet to consider his input on that. And that's certainly something that I know I would want to discuss with others to fully understand the impact at our end.
All right. Mr. Glancey, what other elements, in 253 10/01/02 - FINANCE - PUBLIC HEARING addition to the proposals or ideas that you've laid out today, what other -- if we were going to -- and I want to be careful in the language. I don't want to necessarily talk about change the way we assess properties, because I believe both by state statute and by -- what is it, the International Assessors --
IAAO. -- that there are standards and criteria for how you conduct that work. That is possibly, I guess, a little less art and probably a little more science with some subjective judgment attached to it, but there are many other elements that go to standards, criteria, oversight, accountability. Councilman DiCicco has talked about transparency, the ability to understand. If we were going to change and make more fair the assessment system or process, what do you think are some of the critical elements that would lead toward a more fair system?
Well, let me just take a step back. First thing I would do is go across the country and gather every possible bit of information I could as to how you can set standards without crossing the line, if you will, the boundaries of 254 10/01/02 - FINANCE - PUBLIC HEARING what the evaluation process is. And having said that as a procedural background, I think at least from what we're hearing in Philadelphia, is that there has to be public information, starting with that. What is it that you do and how do you do it? I think we can explain what is it that we do and how we do it. But as I said before, I think our problem is we're not getting that message out clear enough. So that's number one. I think that has to start. Number two, and just to reiterate what Ms. Kammerdeiner said, I did not share my testimony with the Administration. You're the first group today that saw the testimony. I do believe --
That is a precedent and a stunning revelation, Mr. Glancey, that we would be the first to receive anything from anyone under any circumstance. I appreciate you setting that precedent, although I will not get used to it.
The ability to make values connected more to what people think values are. That's the best way I can describe it. Have something that is closer in value to what people think their homes sell for, I think, would go a long way to giving the impression of fairness, although I 255 10/01/02 - FINANCE - PUBLIC HEARING have to give you a caveat. I think the process will be the same. It's simply a different number that we're going to work with. The number is that whatever your property would sell for, you would get a notice from us somewhat closer, let's say 85 or 90 or 100 percent of that value. There will be a gap, as you admitted. We believe we do that very same thing today, except the relationship is a mathematical difference from 100 down to 70 percent. So those are two things right off the top of my head. I think thirdly, and this is maybe somewhat radical, but it's something that my staff and I have talked about, is having somebody in our office who is an advocate, a consumer advocate, if you will, not an IG kind of advocate, but somebody who, A, where all of the complaints that come to me and come from Board members and come from Council, that person would be the person we would funnel those citizen complaints to. That person would be an advocate for those citizens. And then that person would also be responsible, I think, for just kind of making sure that the evaluation staff is doing what they're supposed to be doing vis-a-vis 256 10/01/02 - FINANCE - PUBLIC HEARING these kinds of things. I mean, right off the top of my head, I think there is three very good things that we can do. Maybe there are other things that we can do by making more simple. And I think we're doing -- and again, I know everybody's not on-line. I think we're doing on-line better than we're doing in hard copy. I think we're making our descriptions of what we do on-line. I think we're giving information of what we have on-line a lot better than when we send notices. I think our notices, we think are as clear as can be, but they're very busy. There's a lot of stuff, if you will, in a notice. Maybe there's something we can do along those lines. And I think all of those standards -- there could be standards that would be set for those sorts of things. And I also believe that, you know -- again, going back to your question about the IAAO, it might be important for me to go through those 81 -- I think there were 81 or 87 recommendations that were made.
58 recommendations that were made. There were a substantial amount that 257 10/01/02 - FINANCE - PUBLIC HEARING were done. We now have -- you know, entry-level college degrees are necessary in order to be a full-time evaluator. But again, off the top of my head, Councilman, having said all of that, I do think that I probably would feel more comfortable going to look at other practices and other jurisdictions and coming back with you with some suggestions there.
Let me ask you this question. What would be your reaction to -- again, if we were to go through the entire process, utilize the authority and power that we have, ultimately seek voter approval, and put all of this in Bill 15 form and then incorporate it actually into our Home Rule Charter as a way to, again, get the objective evaluation of both how the system is functioning and how properties are being evaluated on an accurate basis. The Board agreed back in 1981 to, through the Finance Office, pay for an analysis by the IAAO of your practices. And the result was the '81 report, 58 recommendations, you've done some, you haven't done some others for various reasons. First my question would be, what would be your reaction to a requirement that on no less 258 10/01/02 - FINANCE - PUBLIC HEARING than five, no more than 10-year basis, that kind of independent analysis was done for the Board paid out of your budget, paid out of our budget? It's all in the same big budget. Ultimately it doesn't matter if you're hiring an outside entity. What would be your reaction to that?
What would be your reaction for maybe around about the same time frames, no less than five, no more than 10 -- this might be a little trickier and possibly a little more expensive. When people go to do a transaction with their home, home equity loan, refinancing, whatever the case may be, the first thing generally the bank wants to know is how much is your property worth. How much equity do you have in the house. And they're going to make their decision based on what they believe the value of that property to be, which is often very different than what the City believes the value of the property to be, at least currently because we're dealing with 70 percent and the like. What would be your reaction to a 259 10/01/02 - FINANCE - PUBLIC HEARING requirement that, over some period of time, every property in the City would have an independent appraisal done of that property? Which, as I think about this, has an independent entity who is in the appraisal business taking a snap shot at some point in time of what's going on with that particular property, which then basically gets matched up with what the BRT says the property is valued at. And you'd either see they were within some range or there was significant variance, which I think is going to tell you maybe that there is a problem going on. Should there be regular, although infrequent, independent legitimate appraisals done of properties, and does that add any value to this discussion?
I think the word that for me would rule this out is, infrequent. I think it would have -- if you were telling me we had the money to be able to do this, if we had the funding to be able do this, and every three years on a rolling basis to have every property have an independent appraisal value, I think to me that would be the best way to value property in the 260 10/01/02 - FINANCE - PUBLIC HEARING country. That would work. But when you say, infrequently -- and I know why you say it, because it's really a practical way of doing it.
Right. Infrequently -- when we see appraisals that come before us - and I must read 300 to 400 appraisals a year for commercial and industrial properties -- if that appraisal is older than months, it's suspicious 12 because things change. 13
Well, let's go back. 14 I asked you last week -- and last week's hearing was 15 more about the Bills. Let's talk about the office. 16 Now, I am not trying to get you in any trouble with 17 the Budget Office, although I think technically they 18 can't really do much to you, at least at the moment. My recollection is that you told us that there were approximately 485,000 residential properties and we had 43, 44, 45 or so residential assessors.
You're right on the residential assessors. I think we're roughly 450,000 residential properties.
And then another 261 10/01/02 - FINANCE - PUBLIC HEARING number of commercial and industrial that took us up over 500,000.
Is it truly possibly for 43 people to legitimately, accurately, regularly assess 450,000 properties?
And if you were going to get more, how many more would you need to ensure regular, consistent, fair, appropriate, and within whatever the standards are, the guidelines to really have that work done properly?
My wish list would be at least to start this process. And I think it would certainly be -- it's something I have shared with the Budget Director in conversation, but not in the form of making a budget request, because I just don't think it would have been done. If we could get 10 more staff, 10 more human beings, good, solid real estate-trained human beings, if we could have 10 of those and another half a million dollars for technology, I think that that million investment -- roughly that's what the 10 positions would cost.
10 people is a half 262 10/01/02 - FINANCE - PUBLIC HEARING a million and a half a million for technology.
If we could get that initial investment of a million dollars, I mean, I think that would improve the quality of what we do a great deal.
Of the total number of assessors, can you give us a breakdown between -- some of the assessors, actually, technically either are paid by or technically work for the School District; is that correct?
No. We do not have any evaluators who work for the School District. We have real property assistants. That's what they are. They are all School District employees. And Council President Verna was terrific in getting us a career path for those folks.
Real property assistants assist the professional evaluation staff. Some of the things that they would do, they get deeds for us if they -- if we can't get them flushed over to us electronically, they go to the Department of Records. They do the clerical work around what is necessary to be an evaluator. They are also now -- 263 10/01/02 - FINANCE - PUBLIC HEARING we've trained them on use of some of the computers to input information from deeds into our system. If you could imagine a clerk-plus, that's basically what we have for a real property assistant from the School District.
Did you respond to a question last week when you were asked about commercial/industrial properties, that they did not receive notices this year or that they're going to receive notices next year? Was that your testimony last week?
If it was, that was mistaken. My testimony is they're going to be getting them sometime this week.
Sometime this week. Okay. So residential, commercial and industrial properties were all assessed in the course of this year?
They were all valued in the course of this year. And as I said to Councilman DiCicco, you may have been out of the room, is that all real property does not rise at the same level. Residential properties have risen sharply. And our commercial and industrial 264 10/01/02 - FINANCE - PUBLIC HEARING properties, some of them will be looking at valuation increases, but it has been a stable market. It certainly has been better than some other cities.
As the ultimate holder of all the information that many, many people are searching after, including, I guess, soon the Department of Revenue, have you given thought or asked any of the technicians to run potential models of what some of these bills or proposed bills would actually do; what the impact would be to the City, what the impact would be to the School District, whether it's Councilman O'Neill's Bill at 4 percent, Council President Verna and I at 10, Councilman DiCicco at a freeze, Councilman Rizzo at a deferral, and started to run any spreadsheet models on what any of this impact would be?
I did not think you would ask that question. I swear to you I did not think you would ask that question. The answer is yes.
And you know we haven't spoken about this. We have run a spreadsheet with 265 10/01/02 - FINANCE - PUBLIC HEARING the Nutter-Verna Bill, with the percent cap. That was the only one that we did. And I saw it for the first time yesterday. And there were assumptions that were made in that model, that there would be, based on a five-year history, an appreciation of real property among types. To make a long story short, what we tried to do was to run equalization five times, run it out to 2007. Okay. So I saw the spreadsheet yesterday. It looks as if your model, your Bill, would meet the five-year plan standards. However, it would not meet them for 2003. Now, having said that, I am not convinced that we have made the right assumption from '02 to '03 yet, so it is not complete. I appreciate you asking the question, and I hope you appreciate my answer. I'm just not ready to send it to anybody at this point until I check the prior year to '03.
One of the things I might ask you to do -- and I know we have to be very careful with all of this information -- but again, given the conversation with the Revenue Commissioner, Budget Office and Finance, it seems to 266 10/01/02 - FINANCE - PUBLIC HEARING me that we have a short-term response that needs to be made to citizens, and then we have a longer term, more permanent response that should be the real solution. I don't sit here this afternoon believing that we have necessarily found the solution. I think we have some elements of the solution and we could benefit from any one or combination of the Bills that are floating around at the moment. But it seems to me there has to be a way to do something right now that lessens the assessment shock that people are experiencing, not unbalance the budget, allow for the anticipated growth that the budget predicted, not knowing what the assessments were going to be back in January, and do that with the goal of returning something or providing some relief or lessening the burden for '03. And out of that and in the course of the next year, before we find ourselves in this position again, and we should seek to impose a bit of a deadline, whether we say we're only going to have that system in place for a year, and should we, I would think, wrongly, if not stupidly, do nothing. We would then find ourselves right back in the same situation. So we would hopefully be compelled to do 267 10/01/02 - FINANCE - PUBLIC HEARING something in the course of the next year. Put a plan together with the kind of cooperation that we talked about earlier and have something available for the voters come May of 2003, which would be hopefully a plan that we could live with and that people would feel comfortable with. It would have to be sold. Does that sound like anything that's reasonable or within the realm of possibility to you?