GUILDERLAND — Last year, the town of Guilderland completed property revaluation with the expectation it would receive aid from the state for each of the nearly 13,000 revalued parcels.

Supervisor Peter Barber was informed in an April 13 letter that the aid is being denied. The town has decided to appeal the decision.

“They did everything they were supposed to do,” said Barber of the father-and-son team, Laurence and Andrew Farbstein, of Industrial & Utility Consultants, who were hired by the town for $250,000 to help with the revaluation.

“Our results were within one-half of 1 percent,” Barber said. “The goal was ultimately to more fairly and equitably spread the tax burden so residential [property owners] wouldn’t be subsidizing commercial. We did that.”

“I think their decision was arbitrary,” said Guilderland’s assessor, Karen Van Wagenen. “We’re not one of their favorites.” Many assessors have issues with the outdated computer program used by the state, she said, and that was at the root of the problem.

The Farbsteins have offered to do the work of filing the appeal pro bono. The initial paperwork is due in June with the hearing probably in August, Van Wagenen  estimated.

Andrew Farbstein called the denial from Paul N. Miller, director of Regional Service for the Office of Real Property Tax Services, “shameful” and “egregious.”

Miller did not return calls seeking comment.

The state encourages reassessment by paying up to $5 per parcel if a municipality agrees to revalue once every four years. The Aid for Cyclical Reassessments program is allotted $750,000 each year.

The amount given per-parcel varies depending on how many municipalities apply in any given year. Last year, Van Wagenen said, several large municipalities in western New York completed revaluation. So the most that Guilderland would receive would be 50 cents per parcel, for less than $6,500, Barber said.

“It’s more that we’re all bothered,” said Barber of the reason for pursuing the appeal. He also said, “It’s really protecting the integrity of the process.”

The cost of the revaluation was covered by reserves the town had, Barber said, and there was still money left at the end of the process, which will be reserved for future revaluation.

Guilderland used to conduct revaluations every four or five years since moving to full-value assessment in 1980, but hadn’t done so since 2005.

“Glitch”

Farbstein told The Enterprise that the state required a letter be sent to each parcel owner that showed both the old and new assessment number and was also meant to show property owners both the old and new taxable amounts.

Because the state’s DOS-based software was so out of date, Farbstein said, “That letter wouldn’t print so we printed the change-of-assessment letter and put together by hand another document on a way for property owners to calculate the tax impact.”

Farbstein went on, “This is a problem with their own computer system … The irony is mindblowing. The taxpayers are losing out because of the state’s own computer problems … The state has denied the town funds as a result of the state’s own glitch. It was their fault.”

Van Wagenen and Barber both agreed with Farbstein’s explanation.

“We did pretty much everything and they denied it,” said Van Wagenen.

She said of the state’s 15-year-old computer program, “They do patches to the system, like putting on Band-Aids … Glitches pop up. We have some ghost things where you delete something and it shows up again. One of these ghost things disrupted our system so we could not produce those letters … People from ORPTS come out almost every year and can’t solve the problem.”

Because of the issue with the state’s computer program, the required letters came out blank, Van Wagenen said. “It spit out a blank template — no names, no addresses, no calculations,” she said. “We were in here Friday, Saturday, Sunday,” she said, as the deadline for sending the letters lomed.

“Because of the problems with the state’s software, they worked overtime,” said Barber, “and came up with a better product.” Although 75 percent of properties come with exemptions, Barber said, the state doesn’t account for that in the required letter telling residents about their new tax rates.

The method that Farbstein and Van Wagenen devised for property owners to calculate their new tax rates was also posted on the town’s website.

State report

Guilderland received a 36-page document from the state’s Office of Real Property Tax Services that reviewed its reassessment project.

The document lists all the many steps that the town did properly. On page 33, in a “Summary of Compliance with Criteria for State Aid,” all of the items — including all property assessed at a uniform rate, sales reported in a mechanized format, assessor’s report in compliance, and valid exemption codes  — but one are marked with “Y” for “yes.”

The one item marked “N” for “no” is: Assessment disclosure notices as required by Real Property Tax Law Section 511 were sent and required meetings were held.

Farbstein says the required meetings with property owners were held. The state’s report itself explains the reason for denial: “The town failed to send assessment disclosure notices as required by section 511 of the Real Property Tax Law.”

The state’s report answers this question with an “N” for “no”: Has the assessing unit substantially complied with states and rules … ?

Farbstein pointed out the word “substantially” as he listed all the important procedures Guilderland had done by the book.

History

“It’s punitive,” Farbstein asserted of the denial. “It goes back to the equalization-rate complaint.”

In 2017, Guilderland challenged its state-set equalization rate, arguing before the New York State Office of Real Property Tax Services Board that the state’s system is flawed both because it merely samples values and it does not look at a county in its entirety, which creates disruptions in communities.

In 2017, the state had set Guilderland’s equalization rate at 75.58 percent, a marked change from the previous year’s 88 percent. The rate is meant to equalize taxes among municipalities so that, for example, with county taxes, if someone owns a house worth $100,000 in the city of Albany, that person will pay the same amount of Albany County taxes as a person who owns a $100,000 house in Guilderland.

The shift in equalization rates affects not only county taxes but any taxes where different municipalities are involved. People living on the edges of Guilderland, with homes in other school districts, saw their school taxes spike tremendously because of the dropped equalization rate. State legislation gave some temporary relief to those taxpayers but didn’t fix the larger problem.

Guilderland was represented by Laurence Farbstein at the 2017 hearing before just three members of the state’s Office of Real Property Tax Services Board. The board is supposed to have five members but had just three, with two vacancies. Since a majority vote — that is, three of five members — was required for action, all three members of the current board had to vote the same way for a resolution to pass.

“There is a disconnect,” Laurence Farbstein argued before the board in 2017.

When regional trends show a 1-percent adjustment factor, he said, it makes no sense that Guilderland’s commercial properties were valued at $935 million in 2015 and $1.26 billion in 2017 — an increase of 35 percent.

“Either the trend bears no relationship to what’s happening in a community or … the selection process … and the way the properties are chosen have skewed the numbers,” Farbstein said.

He told the panel further, “Inequities are built into your rules.”

None of the three board members disagreed. One, picking up on Farbstein’s point, asked of department staff, “How do they explain the difference of 35 percent?” Referring to the two-year increase in Guilderland’s commercial value, he asked, “Where is that disconnect?”

“The state of New York allows individual towns to set their assessment levels,” responded Paul Miller, for the Office of Real Property Tax Services. He called this a “nightmare scenario.”

“We have 1,000 jurisdictions. We let them set their own assessments. Most states have a single standard of assessment,” he said, and many fewer separate localities.

In the end, all three panel members voted for 75.58 as Guilderland’s rate in 2017. This is what led Guilderland to undertake a town-wide revaluation, the first in 14 years.

This week, Andrew Farbstein referred to the proceedings as “a kangaroo court” and said he wouldn’t have blamed the town if it had decided not to appeal.

“It’s that proverbial kangaroo court,” Supervisor Barber agreed. “They about said, ‘You’re right, but you’re going to lose.’”

“It’s kind of stacked against us,” concluded Van Wagenen.