Angry Residents Ask Scarsdale Village Board to Discard the 2016 Revaluation

Long time residents, small property owners and retirees had their night in Village Hall on Tuesday June 14 when they came to express their dismay about their new assessments after the second village-wide property revaluation. Unlike the aftermath of the first revaluation in 2014, when owners of large homes in the Heathcote Association and Murray Hill dominated the conversation, this new revaluation appears to have had the biggest impact on those least able to handle a tax increase.

This second revaluation comes just two years after the Village conducted the first village wide revaluation in 45 years in 2014. That revaluation, conducted by Tyler Technologies and audited by John F. Ryan, brought big increases in assessments to some of Scarsdale's premium homes. Just as homeowners questioned the validity of this revaluation this week, in May, 2014 David Bunzel who lives in the Heathcote Association 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" and said there is "substantial support from your constituents to defer it and get it right the first time." 

In 2014, Josh Frankel of Black Birch Lane defended Tyler and quoted a report from the Scarsdale Forum that said, "many large estate properties were substantially under-assessed and these property owners are enjoying a windfall on the backs of other Scarsdale taxpayers."

On Tuesday night, the audience appeared to be populated with far more owners of modest homes on .11 acres than their neighbors in Murray Hill who received large reductions in their assessments. For example, Steve Rakoff, who was a big proponent for a second revaluation, saw a significant decrease in the valuation of his own home. At a November 2015 meeting of the Board of Trustees, the Morris Lane resident and developer claimed that as a result of the 2014 revaluation, homeowners in Edgewood, Greenacres and sections of Fox Meadow were receiving "discounts" on their taxes at the expense of the owners of the larger properties. Rakoff said, "If you live in Edgewood on .2 of an acre and send three children to the schools, Scarsdale is funding you to the tune of $67,000. You have a real deal!" This time around, the assessment on his home decreased $750,000 from $4,650,000 to $3,900,000.

This week Village Hall was filled with scores of residents of more modest homes who complained that about the increase in their assessments, questioned the assumptions and methodology behind the new model and asked the trustees to revoke this new tax roll and return to the 2014 assessments.

Several people had called for the assessor to provide statistics on the revaluation; i.e. how many home assessments had gone up, how many had gone down and how many had remained the same. They also asked for assessment data by neighborhood so that they could see which areas were rising and falling. The Mayor said that this data would not be provided now, "as the staff is giving priority over the next week to answering resident questions about the grievance process and assisting them with procedural matters in light of the fact that the grievance filing deadline is June 21st, as you know. Among other things, it is noted that the sort of information you are requesting does not directly impact an individual property owner's grievance filing since such filing focuses on the assessed value of the resident's property."

Josh Frankel attempted to determine these statistics using the data that is available on the Village website. He called this new revaluation "not a tweak but a complete overhaul," that has reversed the effects of Tyler's work in 2014.

Here are the numbers he computed:

Of approximately 5,900 parcels in Scarsdale, 2,820 saw their assessed value change by more than 10% up or down and 19% saw their valuation change by more than 20%. The total of all properties in zone A1 (largely Heathcote) declined by 6% and relief for them was spread across other zones – A4, A3, A5 (Fox Meadow, Edgewood) where 3,900 parcels rose on average 50,000 each. On average A1 parcels went down by $233,000 each. Frankel said, "The onus should not be on the residents to clean up after the Village Board."

And Michael Levine, an expert statistician and resident, also analyzed the reval numbers. His report can be found posted on the village website here.

Mayor Mark and Attorney Wayne Essanason patiently explained the process for grieving the new assessments, yet many asked why individuals had to hire professionals to appeal when, in their view, the Village had made errors. Michael Kerr of Fox Meadow Road said, "If the person who drove by my house made a mistake, why is the onus on me to file a grievance. I bought my house three years ago and the assessment has gone up $500,000! I should not have to explain this at all. There should be responsibility taken for the mistakes that have been here. The model is flawed. I don't want to have to hire someone to explain this – I would like an apology."

Dennis Meahan of Barry Road echoed the concerns of many retirees at the meeting when he told trustees, "I have been in the house for 40 years. I hosted two STEP children from Mississippi and Tennessee. I have three grandchildren in Edgewood and they all go to school here. I have never challenged my assessment. Two years ago someone from Tyler went through the house and it went down. This year, it went up $135,000. We are senior citizens and we work part time. Does this town want diversity – does it want to keep its senior citizens?"

Karen Coape Arnold who lives at 1000 Post Road hinted at the effect teardowns and development may have had on the land value component of home assessments. She said, "I live at 1000 Post Road and have done several thousand closings. I am concerned that people will be attracted to big houses on small lots. What happened to a Village in a Park? Developers are going to buy these lots and destroy our neighborhood. I live across from a commercial business, and the fire station. I have no snow removal and my assessment went up $900,0000." (Note: her land value rose from $1,185,000 to $1,900,000 for a home on one of Scarsdale's busiest thoroughfares.)

Trustees originally authorized this new revaluation to tweak Tyler's work and correct "outliers" from the last revaluation. Though it utilized the same data from the home inspections conducted before the 2014 revaluation, a different methodology was used to do the assessments. The first reval used comparable sales to value similar homes, while for this one, a statistical model was built based on a regression analysis of a range of variables.

Several speakers at the meeting claimed to have professional experience with statistical models and questioned Ryan's work.

Mayra Kirkendall-Rodriguez said, "We have spent 200 hours analyzing the model.It pays no attention to model risk.... It is important to validate the data. It must be accurate and consistent and validated by an independent person. Our town's reputation is at stake. Credit rating agencies will not look favorably at a town with inconsistent income streams."

Neelson Daniels of 1109 Post Road concurred, saying that he has a background in statistics and that there are "fundamental flaws with the process and the model itself. I do independent valuation of models that are used by the banks. Are the outcomes reasonable? Will it predict the value of a home? Get an independent auditor to validate it. I would do it but I am biased! My taxes have gone up 30%. If we find it is flawed we can go back to the other model."

Like many residents on small lots, Kai-Hong Teng on Ridgecrest East in Greenacres experienced a big increase in his assessment, which rose 62% from $759,000 to $1,225,000. He said, "I worked with numbers for years. The first thing you do when you get numbers is to do a sanity check. Do the numbers make sense? And this does not pass the smell test. It does not pass any test."

Residents posed many theories as to why the model was flawed. Here are a few we heard:

• The sale of properties for teardowns had skewed the value of the land vs. the dwelling.
• Fox Meadow homeowners were paying a premium as it received the highest multiplier in the model of 1.30 with Heathcote at 1.15, and Edgewood, Greenacres and Quaker Ridge all valued equally at 1.10.
• There were too few sales of homes above $3 million during the period July, 2014- September, 2015 to have an accurate database for the model.
• The model was not validated by an independent auditor.

There were even a few who spoke who had not been adversely affected but were concerned with the outcome. Norman Bernstein said, "I don't have a dog in this fight. My taxes did not go up materially but I am concerned about the assumptions. The people who are benefitting have a high priced house. That is a grossly unequal and unfair result. You authorized this valuation you can unauthorize it! Don't tell me you need an evaluation in September – you have one – use the Tyler valuation."

As the night wore on, the audience grew more raucous, clapping loudly for extended periods and often screaming out from their seats rather than going up to the microphone to speak.

Residents questioned the mayor and the village attorney on how they might invalidate or disregard this new tax roll and continue to use the 2014 assessment. Village Attorney Wayne Essanason said, "Technically I believe that the board could adopt a resolution invalidating the reval process.... In order to do that there has to be sufficient reason, not just a politically motivated group. But then there would be a legal challenge from another group. We would need an objective basis to invalidate it. .... The court could find it arbitrary and capricious. It is a very high threshold."

One man said, "The dust had just settled on the first revaluation and now the BOT decided to go ahead with another revaluation and have angered even more people this time. I think you're better than that. I want to encourage you to do the right thing and consider your legacy as a board. Consider all your options going forward instead of putting the burden on us. There are other options that are available to you."

A Rock Creek Lane woman whose assessment rose $250,000 said, "Why did you reassess everything? Fire this man. He didn't do a good job."

Another man said, "We have the numbers in and we can't change them now. We have two valuations. Why can we not use the more thorough reval that was done by Tyler. Two years have gone by, a lot of people who would have grieved, already have. Why can't we pick and use Tyler. My grade and the condition of my house were bumped up and increased my assessment by 50%. That sounds illegal to me. If something was so flawed, there must be methodology of realizing this and not driving off the cliff. So the people who are the experts screwed up royally – and if they increased my assessment by 50% I might get lucky and get 25% back? Really – is that what we're worth? It's an embarrassment. It almost seems criminal to me."

Robert Berg, a proponent of the first revaluation who opposed the second one said, "As I said before, I think this reval was so flawed that it violates the equal protection clause and people can challenge it or file a class action suit to void it. I think this board has some ability to void this reval. I would urge the board to look into any legal ability they have to do it."

The Mayor assured residents that the Board was listening. He said, "We will give it some thought. We do hear you. We do hear the shock that many of you are in."