Full Minutes from the NLNA Special Actual Value Initiative (AVI) Meeting on March 14


St. Michael’s Russian Orthodox Church, Thursday, March 14, 2013
Matt Ruben, President of the NLNA, called the meeting to order at approximately 7:15 p.m.

Matt made an opening statement about the meeting’s purpose and procedure. The purpose was to have the voices of community members heard, and for information to be obtained. The procedure
would be for him to first outline the issues/concerns presented by AVI and then to pose questions
to each of the guest speakers. The questions would encompass the concerns/questions raised in
the numerous emails NLNA received prior to the meeting. After that, the floor would be opened
to the meeting’s attendees.

Matt introduced the invited guests present:
Darrell Clarke, City Council President – 1st District
Mark Squilla, City Council Member
Jim Kenney and Bill Green, City Council Members At-Large
(a representative from the Board of Revision of Taxes (BRT) canceled)
(a representative from the City Office of Property Assessment (OPA) was expected)

After the introductions, Matt briefly summarized the purpose of AVI, stating that it is intended to
address the history of inequitable assessment of property values in Philadelphia. It does this by
bringing every property’s assessed value up to (or close to) market value.

But the community has been concerned about several issues, since OPA has released the new
AVI assessments:

  • Some new assessments are higher than sale prices, or appraisals received from other sources such as banks and mortgage lenders.
  • Some assessment make sense, but the resulting tax increase is still unbearable financially
  • Land value assessments seem low, with structure or improvement assessments high deprives the city of revenue from abated homes, parking lots, and so on.
  • Old-construction homes seem to be assessed relatively high, and new-construction homes relatively convervatively – the assessments understate the new-construction price premium that clearly operates in the marketplace.
  • Large commercial assessments have gone up only moderately, or in some cases have gone down, resulting in huge tax decreases – and a shifting of $10s of millions in property taxes from commercial to residential owners.

Questions from Matt to the guest speakers

What can City Council do legislatively to address the tax bill concerns?

Clarke – A series of bills have been introduced. He and Council member Kenney have co-sponsored a gentrification protection bill, to limit the amount of tax increase on long-time homeowners. The PA state legislature must provide authorization to allow City Council to take such action and that authorization is currently pending.

Squilla – The gentrification protection bill requiring a minimum of at least 10 years residence, a certain percentage in tax increase, and some means-based testing will require the agreement of 9 City Council members to get passed. He also has advocated for a gradual, 4-year phase-in of the new AVI assessments and tax bills.

Kenney – His recommendation is that property owners “appeal everything” to challenge the OPA assessments. He also questions the $1.2 billion in revenue the Mayor seeks to generate via property tax, and advocates for revenue sources within the City budget, i.e., business wage and delinquent tax collection. He believes we should start with a 1.0% tax rate and make the Mayor justify the need
for the extra revenue.

Green – The City budget is the problem. As of today, the 1.34 to 1.4% tax rate is effective unless a law is passed to change it. He would eliminate the homestead exemption so that the millage (tax) rate for everyone would be the same, and lower overall. But means-testing and age considerations should be effected citywide to allow for tax relief.

Do all city council members present agree to some form of gentrification protection?

All city council members present – Yes.

Green – Gentrification protection should include means-testing.

Kenney – Means-testing and the income level for such is often a difficult issue on which to reach a consensus – don’t want to exclude people who need help but have slightly above the required maximum income level.

Clarke – There are four matters pending in the PA State legislature which would address the City property tax concerns: gentrification protection; tax deferrals; constitutional amendment to permit a separate tax rate for commercial and residential property; and delinquent real estate tax collection.

Matt then explained the two (2) types of appeals of property value assessments:

  1. An informal request to OPA if you feel something was wrong with the property assessment, like the amount of square footage, etc. – first-level review.
  2. A formal request to BRT about your property tax liability – appeal.

Matt further explained that you do not have to do both. You may appeal to the BRT without having filed a request for review with the OPA.

According to Councilman Squilla, you may file an appeal with the BRT without having received your actual tax bill, as of April 1, 2013.

Some property owners still have not received assessments. NLNA is part of a coalition of other
civic associations to get 30 to 45 days from notice of the assessment for property owner to
request the review from OPA.

There was some discussion of accuracy of assessments. OPA states all assessments are within +/- 15% of market values, which is the industry standard for assessments. However, Matt stated that
analysis by the Inquirer and AxisPhilly.org have shown variances of 40% or more for thousands
of properties. Councilman Green stated that his office did an analysis of property sales in the last
3 years using a sample of 23,000 sales and found variations of more than +/- 20% as well.

Audience member – Why do individual taxpayers have to appeal or sue to get an explanation of
OPA’s methodology in making property value assessments.

Squilla  – The OPA was created as independent from City Council, by a ballot question voters approved. He would like data and questions from the public about their property value assessment concerns to present when OPA comes before City Council during budget hearings to begin next month.

Audience member – How can OPA be trusted if it is working for the Mayor? Why not a sales based property value assessment?

Clarke – The BRT may be a counter to OPA because the Mayor tried to eliminate the BRT.

Green – The City budget (which he voted against) last year automatically set AVI in motion; today the Mayor proposed a 1.32% rate.

Audience member – Tax abatements for new construction are not fair.

Clarke – City Council member Wilson Goode has introduced a bill to reduce tax abatements in length and amount by percentage. City Council President Clarke would like to see abatements reduced or eliminated in areas of the City where development is plentiful and extended in areas where it is not so that the revenue base for the City could be increased.

Audience member – Were there block assessments done? He lives at 5th and Girard and assessments appeared to differ for properties immediately above and below Girard.

Clarke – OPA reviewed 500,000+ properties in approximately 6 months, so mistakes certainly were made, but he doesn’t know if block assessments were done.

Kenney – Appeal to the BRT with evidence of differing assessments, etc. and relief should be obtained. Help, including the appointment of representation, is available from City Council for filing BRT appeals.

Matt – He believes Girard Avenue may have been a boundary line OPA used and advised audience member to file an appeal.

Audience member (to Matt) – How do we hold City Council members’ “feet to the fire” to implement the solutions they have proposed?

Matt – NLNA can coordinate an email campaign to Council members, organize groups (large or small) to visit Council members, particularly those with differing views than the City Council members present at the meeting

Audience member – City of Philadelphia has the second-highest cumulative tax rate in the country according the Wall Street Journal and yet City services are minimal. There is a foreshadowing of collapse similar to Detroit. NL residents and business owners with the means will leave the City. He suggested City Council get rid of “DROP” and “clean its own house” before seeking additional tax revenue from City property owners.

Clarke – He understands the neighborhood demographics; he lives on the other side of Girard Avenue. The City must increase its revenue base using methods other than taxes. He and other Council members have proposed land bank legislation to generate revenue from currently vacant or city owned property. His proposal for municipal marketing – advertising on garbage trucks and such – was struck down.

Green – The middle class is leaving the City. Poverty rate went from 24% to 27% according to the last Census. City government bureaucracy needs to be eliminated

Kenney – He voted against retaining the DROP program and has foregone pay increases and a City car.

Audience member – What is “GMA”?

Matt – GMA stands for “Geographic Mapping Area” which was used by OPA for its assessments. A GMA can be smaller than a zip code or neighborhood area.

Audience member – What happens when you win an appeal before the BRT? She had successfully challenged a “spot” assessment of her home before the BRT, but the City filed a lawsuit against her on behalf of the School District, challenging the reduction of tax bill by the BRT.

Squilla – confirmed that spot assessments were done throughout the City to raise revenue. City Council should look into the City’s filing of such lawsuits.

Audience member – Her recent assessment would result in multiplying her tax liability by 8. She has two school-aged children and understands that the property tax increases are to benefit schools. Is there any “kick back” to families with school-age children?

Squilla – there is no city voucher for education currently proposed. He advised that City Council be monitored on that issue.

Audience member – In her Point Breeze neighborhood all the property is under-assessed, but not uniformly so. What effect would her challenging her assessment have on her neighbors?

Squilla – OPA has indicated that it would only change the assessment of the property owner seeking review; it would not change the assessment of your neighbor.

Matt – OPA may raise your assessment if you seek review, so be certain before seeking OPA informal review that no errors were made by OPA in your favor.

Audience member – An OPA representative has failed to appear for this meeting. Militant action is required like a protest march in front of City Hall. How will OPA and BRT handle the high volume of appeals?

Squilla – Legislation has been proposed to freeze any tax increases pending the appeal process.

Audience member – The Ukranian Society’s soccer field has been assessed at $3 million. The Ukranian Society disagrees with the assessment and will be unable to pay projected taxes on that property.

Green – The Ukrainian Society should apply for the appropriate tax exemptions if it is a charitable organization.

Audience member – The City should hire industrial engineers and fiscal managers to address the bureaucratic waste. Councilman Green stated that the recent City budget passed included information technology funding for work process flow studies, but Mayor has not used the funds to make the hires.

Audience member – City residents in their 20s and 30s like him want to stay in the City and start families but are concerned about the poor quality of City schools. If revenue is needed, why doesn’t the City make more ecological-based revenue generating efforts such as eliminating phone book/circular delivery or institute a charge for plastic bag use in stores?

Kenney – The Mayor has been resistant to such efforts. He noted that commercial free speech has certain federal protections. He has proposed legislation to fine businesses whose circulars end up as street trash. He sees this as a quality-of-life issue, as well as one of revenue-generation.

Green – He has written a paper school reform, describing the City school system as too big to succeed and recommends a charter school model.

Audience member – Delinquent taxes collection is an “old” issue: what can be done now?

Clarke – A discussion is finally occurring about investing in the appropriate City departments which can take action on the issue. Neighborhood public hearings will be coming soon.

Green – Legislation pending to allow payment plans if homeowner-occupied, but for delinquent property to be put up for sale within 1 year Audience member – What about missed revenue opportunities due to multi-family occupancy in single-family houses?

Squilla – Dept. of Licenses and Inspections (L&I) should be contacted to investigate. His office should be contacted. There have been instances of OPA assessing multifamily homes less than single family homes in same the area.

Matt – NLNA has tried to get L&I to address this occupancy issue without success.

Audience member – What is the time frame for City Council to take the actions discussed on
gentrification protection, etc.?

Clarke – expected that authorization for gentrification protection was the subject of PA State legislative assembly hearing today. He expects the bills to move through PA State legislature within the next month. Hopefully, City Council will act on gentrification protection up by the end of May 2013.

Audience member – Lower millage rate for all property owners across-the-board is a good goal. Should gentrification protection be tied to a homestead exemption?

Green – Stable neighborhoods with fewer recent sales appear to have been under-assessed by OPA. He advocates elimination of the homestead exemption, because it is not beneficial for anyone whose property is valued over $250,000 – and can actually raise tax bills in those cases.

Audience member – Does OPA informal review require an in-person meeting?

Clarke – is aware of property owners who have had reviews with OPA over the phone.

Audience member – AVI is a new system which is more unfair than the old unfair system. The longer you’ve resided in the neighborhood, the more disadvantaged you are. He has been subsidizing the City for years, so he has prepared an invoice for the more than 12,000 hours of volunteer services he performed for the community as NLNA zoning committee chair, etc., from 1987 to 2012, in the amount of over $700,00.

The audience expressed agreement by applause.

Matt noted that gentrification protection and information about the methodology used by OPA are the two issues to follow up on. He will contact the  neighborhood via email to follow up on those issues. Matt also noted that efforts will be made to organize groups to visit City Council members either en masse or in small groups.

He thanked the audience for attending the meeting and reminded everyone to provide their email addresses on the sign-in sheets to ensure information and updates from NLNA are received.

Councilman Green left at 9:15 p.m. The OPA representative did not appear for the meeting.

Matt paused the discussion to thank Father Vincent Saverino and Barbara Saverino for allowing
NLNA use of St. Michael’s Church for the meeting.

Matt adjourned the meeting at approximately 9:25 p.m.

Also Special Thanks to Lystra and Paula for stepping up to take these minutes!