Revaluation for Dummies: Understanding Your New Assessment
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Even after Tyler Technologies held a meeting to clarify the process behind Scarsdale's village-wide revaluation, questions abound. Greenacres resident, statistician and certified actuary Michael Levine has studied Tyler's model and agreed to explain it to those of us who don't have an advanced degree in statistics. Here are answers to two questions that get to the heart of the matter.
1) What were the key factors that were used in the model – i.e. Which had the most weight?
Before I answer this, let me explain that the "model" fits into a bigger process. My understanding of this process is based on what I have pieced together, plus what Tyler said at the May 29 meeting. My analysis is limited to single family residences. The process basically has four steps
(1) Develop land values based mainly on neighborhood and lot area (acreage), with some adjustment for things like busy streets.
(2) Create the model and calculate model estimates for every property.
(3) For every property, identify five (or sometimes four or three) recently-sold properties as comparable sales ("comps").
(4) Based on the comps, adjust the value (up or down or no change) from the model estimate.
So, now I am explaining item (2). The model is a mathematical formula. A simple example of a model/formula – one that they did not use -- would be
Value = (Area in Square Feet) * (380 per SF) + 350,000.
The "model value" for a 3,000 SF house would = (3,000 * 380) + 350,000 = 1,490,000.
Where would they have gotten the $380 and the $350,000? By looking at recent sales for all of Scarsdale and using a mathematical technique called "ordinary least squares regression". The actual sales would have been at all different "per square footages". The model value will be over for some and under for others, but the theory is that this is the best formula for explaining the sales prices if you limit yourself to formulas that involves a factor per SF and a constant.
Obviously, square footage is not the only thing that should matter. The acreage should obviously matter. There are a whole list of characteristics that a common sense person would think could matter, such as location, number of bathrooms, existence (or not) of central air, age of the property, etc. Some important subjective considerations are
• The quality of construction – materials and workmanship – which is intended to be captured in the "grade" and "grade adjustment" characteristics. Grade is from A (Excellent) to E (Minimum). The Grade Adjustment is a percentage, such that the average for any grade level is 100, and it could up (e.g., to 90) or down (e.g., to 110).
• The quality of maintenance – the amount wear-and-tear and so forth – which is intended to be captured in the "overall condition" characteristic. Overall Condition is from 1 (Poor) to 5 (Excellent)
You can learn more about these definitions by looking at the New York Assessor's Manual, which is posted on the village website.
With many characteristics that could contribute to value, the math of the regression calculation becomes more complicated, but the goal is the same – find a formula that expresses a value as factors applied to characteristics. Also, there is some art in deciding which factors to use.
With this as background, I would say that the Tyler model for Scarsdale – the results of their regression -- heavily uses land value (which basically reflects acreage and neighborhood) and square footage, which make sense. Grade and grade adjustment are also very important. Condition is important, and there are separate square foot measures for finished basements and rec rooms. There is an addition if you have an inground pool.
The Tyler formula does not explicitly include number of bathrooms or bathroom quality or the existence of central air, for example. If you have 3.5 baths in and they incorrectly said 5.5, it would not have had any impact of their model's calculation of your value
I personally think the model is simply too sensitive to the refinements of the grade adjustment, caused by additional mathematical nuances factors that are beyond what I can explain here. I recently saw a case where changing a "B 115%" to a "B 110%" on a smaller-sized housed caused a $60,000 impact. I do not think the real buying market would discern these differences (as compared to number of baths), and this is supposed to be about real market value.
But even if the model can be mathematically justified, my biggest complaint about all of this is that the Scarsdale taxpayers were never, ever informed about the importance of grade/grade adjustment, or even that it would matter at all.
• Back in 2012, the press releases and flyers assured us that, after the physical inspection, "[a] letter detailing the physical attributes collected and to be used in the valuation, referred to as a data mailer, will be sent to you." (emphasis added.) My letter showed things like acreage, square feet, overall condition, and number of bedrooms and told me I should indicate any changes. The letter did not disclose grade/grade adjustment.
• A taxpayer who looked at the Property Inquiry on the village website any time up until a few weeks ago would not have seen grade/grade adjustment.
• The formula was not made public until I figured it out from a FOIL request and submitted it to the Board of Trustees on May 27.
• Thus, a taxpayer trying to contest a valuation in an informal meeting would never have known their own grade/grade adjustment, and would never have known that it mattered.
It is as though your boss gave you your "objectives" for the year, and you agreed to them, and then at bonus time your boss told you that you got a bad bonus because you did not do well on some objective that was important in the bonus calculation but that you had no idea about.
2) How were the neighborhoods of Scarsdale weighted or ranked in terms of land value?
I am interpreting this question as asking about the results – the "ranking" and not the math or theory Tyler went through to do it.
As background, I should note that land value enters the valuation in two different ways. There is the "official" land value that appears on the formal assessment roll along with the total value. That value is then used within the model formula. The model does not just add 100% of this amount. So, a second way you could measure land value is in the sense of how it works through the model, and thus how much it actually ends up adding to your total value. I will call this the "contribution to total" land value.
Tyler's calculation of official land values appears to have been done early on. It seems they ended up developing 14 "neighborhood codes" – two for Greenacres and three each for the other elementary school codes. The village website now has the map that shows the neighborhood codes.
Tyler published formulas for official land values. The results are calculated and presented in this graph, and this shows you the relative ranking of neighborhoods
You will see that there are rally only eight distinct lines or curves, with some neighborhoods sharing the same curves.
I should also note the following.
• These lines are what I call the "primary" curve for each neighborhood. I would say the majority of homes have values on these lines, but there are secondary and tertiary curves within [most] neighborhood – lines that are about $50,000 lower than the primary. These lines will have the houses that are on busy streets, or very close to busy buildings or other factors that reduce value.
• This graph only goes out to one acre. If the graph went out further, you would see the Heathcote 01 (black) line going up more steeply, compared to the others. At 2.0 acres, Heathcote 01 is at $3.6 million and Fox Meadow 01/Greenacres 01 (blue) is at about $2.34 million. Edgewood 01 (a few houses on Taunton Rd) and Quaker Ridge 01 (Brittany Close) would theoretically be in between, but they do not actually have any properties at the larger land sizes.
Now, regarding the "contribution to total" land value. The Tyler model formula includes 98.97% of the official land value, plus or minus an amount that varies by neighborhood, as follows.
In other words, Tyler has concluded on some basis that the official land value is not a perfect indication of a neighborhood's contribution to total value. This slightly shifts the ranking of the neighborhoods, especially at the lower lot sizes. Fox Meadow 01 has the greatest land contribution to value for lot sizes up to 0.61, with Heathcote 01 having the greatest value at larger lot sizes.
Residents Take Complaints About Reval to Scarsdale Village Hall
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Mayor Steves opened the May 27 by remembering former Village Trustee Sharon Lindsay who passed away at the age of 65 last week. He called her "an amazing force who has contributed mightily to the village. He said, "She worked selflessly with dignity, patience and intelligence." He asked for a moment of silence to remember a "remarkable woman gone much too soon."
Steves reminded listeners about a community meeting with Tyler Technologies on Thursday May 29 at 7:30 where Tyler will discuss the methodology behind the recent revaluation. He said that the meeting would be televised and that those who could not attend could submit questions for Tyler to [email protected].
He offered thanks to the men and women of the American Legion Post 52 who sponsored the Memorial Day Parade on Monday and called for younger residents to step up to help continue the activities of the veterans.
Public comments brought a litany of complaints against the recent tax revaluation.
Michael Levine of 54 Walworth Avenue said that he is a statistician and credentialed actuary who submitted multiple FOIL requests to the Village and used the information he received to do what became a "big study" of the methodology used by Tyler for the revaluation. He said, "I feel I understand Tyler's process and have a good sense of the issues," but doubted that "there are more than a handful of taxpayers who understand the model." He said the model was at best "goofy," in that it puts a high value on a "relatively obscure element called the grade adjustment." He claimed that the formula hurts small houses and did not account for the number of bathrooms, condition of bathrooms, the presence of air conditioning or garages. He said the comparables used to value homes "cause more distortions than they correct," and said there was a wide variance in the 400 comps used as a basis for the revaluation. He said, "the flaws are comprehensive and hit the whole village," and ended by saying, "I ask the trustees to set up a committee to review fairness and come up with a model for Scarsdale that realtors can support and taxpayers can understand." See his report and model formula here.
Hamden Vinyasa of 66 Mamaroneck Road said he was "A little surprised by the reassessment that took place." He said that he had been trying to sell his house for five years and has failed to get an offer that met the assessed value. He said that the Tyler representative who inspected his home was " impersonal and did not want to communicate with him." He said his assessment had risen 30% in the revaluation though he lives on a busy, noisy street.
William Weinstein of 3 Claremont Road said the revaluation was "out of wack" for smaller homes where the interior square footage was more highly valued than space in larger homes. He also noted that a sum of $681,755 is deducted from every valuation after the model is applied.
David Bunzel, speaking for the Heathcote Association said there are "quite a bit more than a few disgruntled homeowners." He said that the new tax roll would be submitted on May 28 and questioned the purpose of a meeting with Tyler on May 29. He said the requested data had not been provided in a "timely manner"" and that the revaluation relied on a sample size of only 366 homes, or 7% of the homes in the Village for comparables. He also claimed that seven of the variables used in the model were subjective variables, open to interpretation by the assessors, and objected to the fact that "a half acre in Edgewood is worth substantially less than half an acre in Fox Meadow."
He told trustees that the Heathcote Association had posted a petition to delay the revaluation and received "a large number of signatures from people all over the Village including 80 in Fox Meadow and the 40 in our area (the Heathcote Association), saying there is "substantial support from your constituents to defer it and get it right the first time."
Don Dietz of 66 Brewster Road said if the reval is going forward the trustees should create "a mechanism for the village to recover from those who are undervalued and bill those who are under assessed" during the transition period. He called for the trustees to "Put things back to square one."
Josh Frankel of 45 Black Birch Lane took the other view and urged the Board not to "succumb to pressure" to delay the revaluation. He defended Tyler Technologies saying that "In 2012, when RFPs were out for the reassessment, then-Mayor Flisser commented about Tyler Technologies ... "In the last five years, Tyler has performed revaluations and assessment-related services to approximately 2,500 clients throughout the country, Canada and the U.K. This is the firm that completed the recent revaluation in neighboring Bronxville." Tyler's website claims that they have been "appraising properties for government since 1938." He continued, "Yet only in Scarsdale we are lead to believe that Tyler's methodologies are so flawed that we require a delay." He said that the number of informal meetings held by residents with Tyler met historic norms. He quoted the report from the Scarsdale Forum that said that "many large estate properties were substantially under-assessed and these property owners are enjoying a windfall on the backs of other Scarsdale taxpayers."
In other business, the Board of Trustees passed a resolution to de-map Woodland Road, a paper street that extends from Cushman Road toward Garden Road. The construction of a new subdivision there will include the demolition of two houses – one on Cushman Road and one on Woodland Road and the construction of four houses on Cushman Road by KOS builders. The Board held a hearing on May 13 and no public comments were received.
The Board of Trustees gave Richard and Loretta Rosenbaum of 16 Kensington Road a license for an encroachment onto the Village right of way for a stone walkway that did not follow the approved building plan.
They also approved $42,000 for the Sheldrake Floood Mitigation and Improvement Project, which is 10% of the total estimate cost of $416,496 to clean and remove silt in the open water course fro Cayuga Pond to Canterbury Road, install an open grating culvert, and construct a connector pipe to the open water course on the south side of Canterbury Road to balance flows.
Heathcote Association Members Call for a One-Year Delay on the Revaluation
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The Village Board appeared to be caught off guard by the many residents who turned up at the meeting on Tuesday night May 13th. Perhaps the Board could have taken a clue from the presence of the Village Assessor and John Wolham of the NYS Department of Taxation of Finance that a discussion about the revaluation was in the offing, but that wasn't revealed until the Mayor invited public comments. It was a good thirty minutes into the meeting before it was apparent that a group of homeowners had come to the meeting to question the assumptions and methodology used for the Village-wide revaluation, and to call for a one-year delay in its implementation.
David Bunzel of 2 Sherbrooke Road came to the podium and spoke on behalf of the Heathcote Association, of which he is the president. The Heathcote Association includes many of the largest properties in Scarsdale that line Heathcote Road, Sherbrooke Road and several of the surrounding streets. Many are on more than two acres and pay some of the highest taxes in town. He said that the 40 homes in the association have been "hardest hit" by the revaluation and that the revaluation was "promised to be fair and transparent" but "it has been just the opposite."
Bunzel inferred that these homes had been singled out and wanted to know "what instructions were given by the assessor's office to Tyler in terms of targeting and valuing older homes or homes on larger acreage," stating that "homes on larger lots appear to have been targeted for assessment increases well above village-wide averages." He also said that "outliers" were used as comparables ...mostly teardowns."
Bunzel told the trustees that the association was seeking to assess the fairness of the revaluation by hiring a statistician to review the data. However, he said that they need regression analyses, residential value analysis and the assumptions behind the model, or "the secret sauce." They have submitted a FOIL request for this information but the Village has not provided it as it will not be available from Tyler until August 15th.
Given the lack of available information, residents could not "assess the fairness of the study" or 
fairly plead their case. He therefore called on the Board to delay implementation of the revaluation by one year to "move forward on a fair, accurate and transparent process," and to "soften the blow for certain constituents whose assessments are to go up substantial amounts."
Ron Parlato, who lives on Sherbrooke Road but also owns another 10-acre lot on Mamaroneck Road near the Weinberg Nature Center echoed Bunzel's sentiments. He said that taxes have doubled on his property on Mamaroneck Road. He said there has been "confusion and misinformation" and that the revaluation was done without "transparency and accountability" and proposed a one-year delay.
Steve Rakoff, a resident of Morris Lane and a developer asked "what were the checks and balances?" He claimed that overstatements on the data cards were made to coerce inspections from residents who had not permitted the inspectors inside. Mayor Steves replied to Rakoff, saying, "We said from the outset, that if you don't let the assessor into the house, we will assume a high quality interior. Not deliberately inflating anything." Village Manager Al Gatta defended Tyler Technologies, saying, "Tyler is the leading firm in the country. They are even going to China. Nanette (Albanese) oversaw it – she was the contract administrator. In the end, she will certify the list. Nanette made sure they did it right. If you want to hire your statistician you are welcome to."
Rakoff continued saying that on his street, "24 valuations went up and 3 went down." He claimed, "On Morris Lane there were 30-50% increases. There may have been a mistake and land may have been overvalued. These are irregularities from a model that is not carefully thought out. He then questioned the assessor's role and said, "Was there over-involvement?" He ended by asking the trustees to consider a delay.
In response to these residents, Mayor Steves announced that Tyler Technologies would hold a meeting to explain the methodology, assumptions and the model on the evening of May 29th. Gatta also said that the Village Assessor would meet with those who had concerns.
Commenting on the meeting Nanette Albanese said, "Three persons spoke at the podium last night, all of whom live in Heathcote/Murray Hill, the estate area of Scarsdale and the neighborhood that the Scarsdale Forum report identified as containing most of the homes that were significantly under assessed prior to the Reval. I would not characterize those numbers as widespread dissatisfaction."
Asked about the methodology, she said, "Some of it is on our webpage and the remaining documentation, which is in the possession of Tyler, is scheduled to be provided by them within the coming days."
To answer Rakoff's concerns that she had exercised undue influence over the process, Albanese described her role: "Patrick and I vetted all of the sales, assisted in the creation of the neighborhoods, assisted in the assignment of the parcel specific influence codes, reviewed work produced by the data collectors, assisted in the training of the data collectors, made sure there was sufficient staff on premises at all times, particularly that telephone calls were timely returned and that taxpayer issues and problems were addressed, ensured that Tyler accommodated taxpayer schedules and needs, created all of the literature, news releases and website data for the Reval, ensured that their work conformed to all Scarsdale standards, ensured that turn around time schedules were met, reviewed some of the valuations produced, Required that they add staff to the drive by process and held them to restrict performance of the contract in all categories."
We also spoke to Bob Berg who championed the revaluation for the Scarsdale Forum about his view on a potential one-year delay, and here is what he said, "While I wasn't present last night, the suggestion that the revaluation be delayed another year is ludicrous. The fact that properties in the Heathcote Association have been particularly impacted by the reval demonstrates the success of the reval process overall. Indeed, when I first investigated the need for a reval in Scarsdale soon after I moved here, the Heathcote Association properties were the poster children crying out for dramatic increases in their valuation in order to achieve an equitable assessment roll. So it comes as no surprise to me that when Tyler applied its valuation methodologies, many of the Heathcote Association properties soared in value and now will pay property taxes based on those fair market valuations. The rest of Scarsdale's taxpayers have been subsidizing the property taxes of these estates for decades. My own analysis of a non-scientific selection of those properties leads to my conclusion that Tyler did a good job there. Undoubtedly, when individual properties are examined, errors will be found. That's the purpose of the informal reviews with Tyler that have just been completed. Hopefully, Tyler will make any necessary corrections and they will notify homeowners who met with them of their final determination. If a homeowner is still unhappy, she may file a grievance between June 1 and 17 which will be considered by the Board of Assessment Review of which, in the interest of full disclosure, I am a member. If the homeowner disagrees with that determination, she may appeal to the Supreme Court, Westchester County, in a small claims proceeding for qualifying properties or in an Article 78 proceeding. So homeowners have plenty of due process available to them. As to the transparency of the process, I have found both our Assessor's Office and the Tyler personnel very open and professional. If homeowners want more information about the model and comps Tyler used, they can file a request under the Freedom of Information Law. Delaying the implementation of the reval will not occur. That horse has long since left the barn."
Plants for Library Pond: 
In other business at the Village Board meeting, the trustees accepted a gift of $1,150 for native buffer plants for Library Pond from Girl Scout Georgina Stanley who raised the funds through bake sales, tag sales and by securing a $1,000 grant from Disney. She did this work toward her Silver Award Project for the Girl Scouts and will install the plants on Saturday May 17 at 10 am. The community is invited to stop by and help.
Sale of 3 Edgewood Road:
The Board announced that a foreclosed property at 3 Edgewood Road would be sold to Andrew Silverstein, the highest bidder. Trustees had considered accepting the second highest bidder, Tracey and Jonathan Czar, who promised not to tear down the house. However, the board said that the Board of Architectural Review and FAR regulations would "ensure the consistency of the character and size of the proposed new home" and that the Board would exercise their "fiduciary responsibility" and adhere to a "fair and equitable solicitation process" by selling the house to the highest bidder.
Westchester Fine Arts Festival 
The Board also approved a resolution to authorize the Scarsdale Chamber of Commerce to hold the Westchester Fine Arts Festival in the Village this coming weekend, May 17-18. A resolution was passed to recognize the workers at the Scarsdale Department of Public Works by proclaiming May 18 – 24 National Public Works Week in honor of the hard work and dedication of all employees of the Village of Scarsdale DPW.
Forum Committee Recommends Leaf Mulching in Place
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The Scarsdale Forum Sustainability Committee has submitted a report recommending changes to the Village's fall leaf collection practice to the Mayor and the Village Board of Trustees. The report recommends that residents ask their landscapers to mulch their leaves on site instead of putting them to the curb. Mulching is just leaving leaves where they fall and mowing over them. This finely shreds the leaves which then sink into and feed the soil. The practice of mulching will save residents money on topsoil and fertilizer as the mulched leaves will now be feeding lawns. The report also reveals that the Village spends $800,000 a year on fall leaf collection which could be eliminated if residents mulched... not to mention the pollution created by the trucks that are sent back and forth to upstate NY and CT every day to dispose of the leaves.
As an intermediate step towards mulching the report is asking that the Village require fall leaves to be bagged or containerized starting this fall. The hope is that residents will ask their landscapers to mulch their fall leaves on their lawns rather than putting them to the curb in bags or containers. Even if residents put leaves to the curb in bags there is a still a benefit to the environment and the Village. Bagged leaves tend not to flow into and clog storm drains. It also eliminates the hazard and nuisance of having large piles of leaves spilling onto sidewalks, streets and parking spaces.
The Village estimates that bagged leaves will save $200,00-300,000 a year because they are easier and faster to collect. Ultimately though the report urges residents to view their fall leaves as a precious resource not to be given away. The Sustanability Committee has asked the Village to educate and encourage residents to use their fall leaves to feed their lawns. The report shows that mulching is a big win for all –- it saves residents money on topsoil and fertilizer, makes healthier lawns naturally, saves the Village money and helps the environment. The report asks that the Village take all necessary steps towards these goals.
Read the entire report on the Scarsdale Forum website here:
927 Property Owners Meet with Tyler on Revaluation
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If you had questions about your new assessment, you were not alone. According to Village Assessor Nanette Albanese, 927 property owners, or about 15% of Scarsdale property owners, held "informal" meetings with representatives from Tyler Technologies, the company that conducted the Village-wide revaluation. Tyler is now reviewing the information gathered at those sessions and will determine whether or not to adjust the valuations in time for the June 2, 2014 tentative assessment role.
All 927 property owners will receive written notification of the outcome of their meetings. Even those who did not have a meeting could receive notification of a change in valuation if Tyler determines that "a change is warranted."
Apparently Tyler was alerted to a few homes that were under-assessed and they are taking a second look at those as well.
Though some whose valuations were decreased are bemoaning the fact that they are paying 2014 taxes based on the old, higher valuation, Albanese says, "It's not a matter of fairness ..... it is the law. Taxes are always paid on a prior year's assessment and the period to have addressed the purported "underassessment" has long passed."
Those who have noted errors on their property data card, even if it doesn't affect valuation, may want to call it to the attention of Tyler so it can be corrected. Tyler is currently working at 25 Ramsey Road and corrections can be sent to them at that address.
