Coming Next Week, Montclair: Your Reassessment Letter

Montclair Township is about to drop something in your post-Christmas stocking, Montclairions. You’ll have to tell us next week whether you got some plum pudding or a lump of coal … when your new 2011 property assessment arrives in the mail.

From the township:

Montclair property owners should expect to receive letters notifying them of the reassessed value of their property sometime next week. The Township hired Realty Appraisal Co. of West New York in July of this year to conduct the township-wide reassessment in order to adjust Montclair’s property assessments to reflect current market conditions and reduce the disparities created by five years of property tax appeals.

The new assessments are based on 2011 property sales and listings and largely rely on the building and land data collected in the 2006 township-wide revaluation. In addition, Realty Appraisal Co. personnel visited homes with outstanding building permits and township representatives performed exterior inspections on many other properties.

Most Montclair homeowners will see the assessed value of their property decrease. Residents who have questions about their new valuation may schedule to meet with a Realty Appraisal Co. representative later this month. Meeting times will also be available in early January for those who are unable to schedule a time to meet with a representative this month.

All property reassessment meetings will take place at the Municipal Building. 205 Claremont Avenue, Montclair. Property owners should be prepared to present evidence to support their claims about their property’s market value.

Where the 2006 township-wide evaluation of all Montclair properties was mandated by the Essex County Board of Taxation and the State of New Jersey, Montclair voluntarily undertook the 2011 property reassessment. Over 1,100 taxpayers filed appeals in 2011, resulting in millions of dollars of refunds.

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  1. So what does this mean if you appealed your taxes, they are raising the rate and your taxes will go back up?

  2. Assuming that most homes will assess for less than the 2006 eval, then the total rateables for the town will drop, and then we’ll have to raise taxes? OK, I’m dim on this, but just trying to figure out how this works. Does the town want to match the previous total property tax numbers, but re-apportion within?
    And as to those who have appealed, one would assume that they may go up slightly, or down slightly, but that their numbers would be closer to true value than those of us who did not appeal.
    Can anyone with tax-smarts shed light on how this all works?

  3. No one understands it, floyd. It’s one of the mysteries of the universe, like relativity and quantum physics, or the origins of Homo sapiens, or the behavior of the stock market. No, it’s even worse, because unlike those things I listed, the secret of property tax assessments (and municipal budgets, for that matter) is fundamentally unknowable. There is no data, nor will there ever be. No analysis can embrace it. All we have to go on is animal instinct, our imaginations, and our feeling of awe as we behold the Creator of All Things.

  4. The town is NOT going to lose money on this. They should have found a way to cut the town’s expenses so that everyone could get an “appeal”. The Council has no guts.

  5. The town will take in the same amount of property tax revenue as before. By leveling the playing field between the homes that appealed and the homes that didn’t, it will make it impossible for homeowners to appeal their property values in the immediate future. Yes Virgina, your property is worth a lot less today than it was worth in October of 2006 at the housing market peak; most likely to the tune of 30-40%. Yes, even though town councilor after town councilor promised you that every action they were taking was in an effort to maintain Montclair’s high property values, it was all a lie.

    Some of us asked the council to perform the reassessment years ago seeing how it would cost the town millions in legal fees fighting appeals as well as paying refunds of the Essex County tax portion we all pay, but they don’t give back. This would have saved the town tens of millions of dollars. Way more dollars than we saved cutting the aids’ benefits, the library hours, pre-k stipends, the art council and the sale of the Label Street property. We probably could have bought the Senior Center too. But the council was too busy taking field trips to China, fighting for bicycle rights, extending their own terms and placing Blue Wave reps to the local court and town lawyer positions. Remember this when you go to the polls next year. Almost all of our cuts over the past few years could have been avoided if our town council listened to a few knowledgeable constituents. Instead, Fried writes back, “It is my opinion that commentators like yourself need to learn more about our budget situation before you assume you have the ‘correct’ perspective…”

    Correct??? Wrong again boob!

  6. I think the Baristas should set an over/under Vote on the page pertaining to the new percentage of assessed value homeowners will pay.

    I would use/estimate 3% as the number. My vote would be over at 3.1/3.2%

  7. We are at 2.563 currently. Figure they will estimate your homes values at 10% less than true value to limit initial appeals. After all, when your home is worth $500K and you are assessed at $450K, you think you got a good deal. I’m going with 2.8193. Factor in next year’s enormous tax increase (would expect double digits) due to the lame duck status of Montclair’s town council and this should bring the 2012 rate to 3.1%. What a bargain!

  8. So if the town’s goal here is to reassess every property, but keep the total property tax revenue income number the same, then it would seem that the numbers are being fudged. What am I not understanding here?

  9. And to those of you trying to sell your home, imagine how appealing your home will look after the assessment and after next year’s tax increase. Your house now will be assessed at $450k, but your taxes will be $16,000. Bargain, right?

  10. No fudging. Floyd. Say house X, house Y and house Z are identical and assessed by the town to equal 500K each at the 2006 town-wide reval. Each house pays $10K in annual property taxes. In 2010, house X is sold for 400K. In 2011, house Y appeals his property value based on the recent sale price of house X. House X also appeals his property value based on his purchase price. Assuming taxes haven’t increased since 2006 (insert maniacal laugh track here), house X and house Y are now paying $8K each and house Z is still paying $10K. Realistically, the town is still collecting $30K in taxes so they’ve been slowly adjusting the tax rate upwards to maintain their revenue steady so it’s more likely the town is now collecting $8,666 from house X and house Y. House Z (who has not appealed is now making up most of the difference and is now paying $12,668. This is where we are today in Montclair, even though technically, all three properties are valued the same. So the town hires an assessment company to look at all sales throughout the town (like house X) and brings house Z’s value down to be level with house X and house Y. Now all three houses are still taxed $10K each, even though their property values are now all estimated to be $400K each. The tax rate is increased so the town doesn’t lose any revenue. You can’t fight your property value again unless there are new sales on identical homes in your area that are significantly cheaper than what your house is now ‘properly’ assessed at.

    Really, this all could have been avoided if the town reassessed when home values were dropping at an 8% clip per year. They knew better as there were much more pressing needs. We needed to show China how to sustain mother earth!

  11. Good explanations, Stu!

    The company doing our reassessment has an impressive list of “before and after” tax appeals, i.e. before they did the reassessment, and after. The after numbers are dramatically lower. In one instance I saw appeals went from 700 to 70.

    So, assuming the homeowner gets a realistic assessment, yes, the tax rate will go up so the net to the town will remain the same. And the homeowner SHOULD pay the same.

    But, if one has had a recent reassessment, and that number is good, because the RATE is going up you will experience an INCREASE. No one is expecting this will be “huge,” and it may turn out that even recently reassessed properties will see yet another decrease.

    The reassessment, which could have been done three years ago, was finally moved forward when I decided to investigate the “tale” that the Council was being told, namely some “magical” 15% “hurdle” hadn’t been met.

    I called around, and finally spoke to the very knowledgeable County Tax Assessor who said “What ARE you talking about? WHAT 15% hurdle?”

    No one else EVER questioned the “hurdle” number. The Council was told for YEARS that they couldn’t reassess.

    In any event, at that point where I found out the 15% was BS our Town Attorney took the ball and ran with it.

    But it has cost us plenty, even only considering the legal fees that were “wasted.”

    By the way? Upon further investigation it turns out that there is a 15% hurdle, but THAT number enables the COUNTY to force us to do a reassessment. We can, however, decide to do a reassessment whenever we want. Smart towns don’t wait until the numbers get totally out of whack.

  12. Well, there’s three people involved — the former Town Manager, the Tax Assessor, and the former CFO. Perhaps at one time even they were being given the wrong information.

    And then there’s the general lack of follow up and/or curiosity on the part of some on the Council. Maybe even some of those who voted to not let the Capital Finance Committee even SPEAK at the last Council meeting! Don’t tell us bad news seems to be the mantra, of some!

  13. “So–who has been telling the council the wrong information all these years??”

    That’s why we hire all these consultants Mara. So the council can avoid any blame.

    “what? we had no idea, we were misinformed, we were led to believe…”

    They always sing the same tune.

  14. Here’s the behind the scenes time line. Joe Hartnett reportedly briefed the Council on this and said he asked the Tax Assessor to check into the particulars of a “desk top” reassessment. Harnett claims the Montclair Tax Assessor reported that the town couldn’t just reduce its tax assessment rate on paper unless there was a 15% change in property values. At the time – the change in market values was less than that but still moving downward.

    This information proved to be totally wrong in the end but no one checked it at the time. We could have done a yearly paper or desk top modification to react to actual market moves so that appeals were reduced.

    Our CFO said, after the fact, that he thought the 15% explanation was odd but that he took his direction from the Manager. The Assessor may have misunderstood the County guidelines in communicating them to Hartnett. Montclair taxpayers got left holding the bag.

    As the market continued to drop – no one thought through the budget ramifications of over 1/2 the property owners here filing tax appeals just based on changes in market value.

    Instead of Montclair just changing everyone’s values on paper by a certain percentage, or even a bit more sophisticated neighborhood by neighborhood shift to respond to market moves to take away the main basis for an appeal — the Council and township kept all the paper valuations the same. Cary Africk was the only one pushing to do anything because he saw the light. End result: homeowners filed appeals on mass as the market dropped and most received a refund or multiple yearly refunds because of the real time changes which could be easily proven by sales or listings…..and there was now a totally unequal taxation of the same type of home throughout the Township. Quickly our municipal budgets began to show massive shortfalls not anticipated because of all of the resident tax appeals filed.

    After doing nothing on this for over 3 years…the Township then lost the right to do a paper-reassessment. Now we had to hire a company to do an actual home visit type revaluation…and conduct a review process once again. More costs. Apparently not the full Monty from 2008, but it delayed action for another year and the result was 6 million in appeals for 2011.

    Only a month ago – the current Council had to bond like $4 million for 2011 just to cover this years revenue losses from these tax appeals to avoid the budget from imploding.

    To make matters worse, no one has bothered to really investigate this mess in full detail. Did the County completely miss-inform us and therefore we now have a legal action against them to recover monies? Did our Assessor totally screw up and therefore she should be fired…did Joe Harnett or the CEO make the error and their names live in infamy? Did Marc Deshield drop the ball by not knowing to act even after the initial failure to respond under Hartnett. No one really knows. Not enough people on the Council think that $10 million dollars in screw up costs and at least $600k in legal fees is worth finding out exactly what went wrong so that so that it doesn’t happen again. I asked the question once at a Council meeting to Deshield and got a non-answer about the root cause of the problem. He didn’t even want to find out if the Tax Assessor had blown it — his employee.

    When you read about the various ramifications from this situation — bonding $4 million here….a budget shortfall there…it’s presented scattershot, as if the problem just fell from the sky without cause. It didn’t.

  15. Oh for the love of mercy. This is just another debacle. Why is that out of the entire population at 205 Claremont, it seems like Cary is the only one who actually cares??!!

    BTW no one visited my house…should I be concerned? Should I make an appointment *now*, in case they decide on a drive-by that I have platinum-plated floors and 14 bathrooms? Besides, I thought this one was “on the papers” unless there was an open construction permit?

    Once again here are my nominees for the Clean Slate Council. Cary, Mayor Carl, Stu, Martin Schwartz, Andrew Gideon, Roo because he’s so cute, and FrankGG for Planning/Preservation/etc., so he can be the last and final say on anything that has to do with construction of any variety whatsoever. (Stu, I know you dumped us for GR but I would make an exception and allow you to serve anyway!)

  16. Thanks Kay,

    I suppose I could lie an say I live in my rental property in Montclair. Realistically, such a slate would probably be unbelievably successful. This assessment screw up was huge and this isn’t the first major snafu we’ve encountered with our Assessor. But the bigger issue to me is the capital debt and how much we waste in debt in service that could go to local services. Heaven forbid deflation rears it’s ugly head and the fed must raise interest rates to stop it. We’d be in big trouble and our neighbors wouldn’t.

    It absolutely slays me to see how great my services are in Glen Ridge for the same level of taxation. Did you know, they take my trash from the backyard and I can commingle my recyclables. I can even bag my leaves in plastic!!! Montclair should be able to obtain economies of scale due to their size. Instead (and this is Carl’s theory) the cogs get clogged with too many managers and not enough workers. What the next slate needs to do is cut capital spending to zero. Perhaps issue a tax increase to help cut down some of the debt. In four years, a real dent could be made in the debt and some of the money we pay in debt service can be used to reestablish cut services with the potential of even bringing in additional commercial revenue. This current council is so concerned with issues of such minor relevance to Montclair that they don’t even look at the major issues. It’s absolutely astonishing. To hear the mayor say, “he knows better,” as he royally screws up even his own pet project complete streets policy is pathetic. Weller is running for reelection yet she has openly claimed that she did not want to extend her own term since the experience was so miserable serving on this council when explaining why she wanted to move the elections. Nick is simply an overgrown baby. His body language displayed whenever he disagrees with anything the council debates is just plain immature. He loves to point out how rude the audience at the council meetings are, but he needs to look in the mirror some time. I really like Rene and her ability to ask the right questions, but she sold her soul for the seat on the planning board. Roger Terry is truly independent and votes all over the place, but I suppose this should be considered a positive. Rich, I love the guy, but he too sold his soul when after very difficult budget deliberations, he choose to refund back the cuts to the Pre-K from surplus. Come on Rich….get a back bone. We all know how Cary is. A bit too careful, but ultimately he gets it. What he can’t do though is play politics like Fried does to get his way, even when his way is not good for Montclair. I sincerely hope Cary doesn’t play these games because he refuses to stoop to this level.

    Ultimately, I anxiously await the announcement of the next council candidates. Though, I wish the ‘slate’ thing would be abandoned. I think the town could really use some independent thinkers and doers who have less of an agenda. It’s these agendas that are killing the town. Just run the town with an eye for improved service and efficiency and leave the capital projects (we need a legacy man) alone for a while.

  17. The Manager and Assessor are well paid professionals who are paid to keep up with this stuff. If this is true they both should be immediately fired.

    If any member of the council is not 1.) calling for an investigation and 2.) Pending an indication that this is true, not calling for the manager and assessor to be fired, then that council person is part of the problem.

  18. This is the problem with our form of government. The council needs to oversee the manager who is the liaison to the town employees. The council ends up being managed by the town manager due to their lack of understanding how proceedings work. This leads to the manager being easy on his direct reports. It’s especially bad when the council wants to be everyone’s friend. This is a recipe for disaster and is what we are currently experiencing. The same thing happens at the BOE for the most part. We give the superintendent the world in compensation and he really hasn’t shown a lot of improvement at all.

  19. but our form has the manager report to the council who can hire and fire him.

    So the problem ultimately with the council if no action is taken.

  20. Agreed. Do you think this council (or either of the prior two) would be willing to let go someone they hired. They would actually have to admit they made a mistake in hiring. Fried can’t even admit any of his actions were a mistake. He won’t even admit to saying things (angry residents) that he says.

  21. It’s not a “mistake” in hiring. You can’t always predict outcomes perfectly. They won’t do anything because they’re dolts. They should ALL be replaced as soon as possible.

  22. We need to be sure we don’t replace them with more dolts. I mean, can you even believe KWD is running for council? And will Jerry run with her? I think if they had gotten their November election there’s no doubt they’d run with Nick and actually have a decent shot at winning.

  23. Decent shot at winning I highly doubt. Those three barely won the first time around. I think the average voter is aware of the dysfunction of this current council and will be surprised if anyone besides Cary, Terry and Rene get the repeat privilege. Just wait until the new assessments come in. Oh my!

  24. Trying to be less negative. So I take back “dolts” They are not stupid people. But they are misguided in their priorities, out-of-touch with the electorate and, in my opinion, not up to the task and should be replaced as soon as possible.

  25. Well going full circle with this, had the reassessment occurred three years earlier, not only would the town have saved boat loads of money, but the shock to the constituents when they get their reassessment letters in the mail next week would have been minimized.

    When your largest asset (typically the home in the middle class, assuming you actually stopped to pay some of the principal down) has dropped in value by 30%, it is quite eye opening. Having had to witness the drop over 3 reassessments would have been much easier to swallow. Add in that the new assessments will probably come in 10% under what the homes true market value is making it harder to appeal, the average home someone paid 500K for in 2007 will now be assessed at 300K. Think those homeowners will be happy paying $12,000 in taxes on their $500,000 home that looks like is now worth $300,000?

  26. Cary – How transparent is this number going to be? With an assessment pegged at 100%, the number is transparent and it’s relatively easy for the homeowner to know whether or not they got a fair assessment. Did Realty Appraisal “low ball” that number, to give the town downside protection for further declines in the market? If so, the homeowner should know what the new assessment value should represent. Did we peg the assessments at 90%, 95% 100%?

    Let’s say the assessments are actually supposed to be 90%, but the town does not give that information to the homeowner. Your house is assessed at 95%. It looks like you got a deal, thinking your house is actually worth more. But in reality, you’ve been screwed. You’re paying more taxes than you should be, but you won’t be able to successfully appeal (heck, you won’t even know that you should).

    I’ve seen Realty Appraisal play this game in Glen Ridge. Homes were clearly assessed below market value during their revaluation, but when our friends went in for their informal meeting regarding their assessment, the appraiser asked them “Do you really think your house is worth less than this number?”. Luckily for them, RA made a mistake on their exterior measurements, and this was easily proven, so their assessment had to be lowered.

    If the assessments were actually pegged at 90%, you shouldn’t have to prove that you were assessed above 100% in order to get an adjustment. But I suspect that’s what’s going to happen here. Do you want to overpay your Montclair taxes by 10%? I didn’t think so.

  27. @Kyle – There’s an article in today’s Montclair Times that pegs the drop in ratables to about 19%. That would put the equalized 2011 rate at about 3.07%. That’s BEFORE the 2012 tax increase. Darn those bookies are good!

    POSTED BY kyle41181 | DECEMBER 20, 2011 @ 1:49 PM
    I think the Baristas should set an over/under Vote on the page pertaining to the new percentage of assessed value homeowners will pay.

    I would use/estimate 3% as the number. My vote would be over at 3.1/3.2%

  28. Wait – that math could actually be too low. I multiplied out the current tax rate (2.58) to increase it 19%. I think that the rate should actually be divided by .81 (since ratables declined around 19%). If that’s the case, the equalized rate would actually be 3.185 before the tax increase. Ouch!

    For those of you keeping score at home, the 2011 tax rate in Glen Ridge is 2.97.

  29. Just got my letter in the mail. My assessment went down nearly 40%!! I’m torn between being psyched that my taxes will go down, and worried that my house is worth so little. Mostly I’m happy.

  30. My letter arrived today. 35% less than when i bought in Nov. 2007.

    “I’m torn between being psyched that my taxes will go down, and worried that my house is worth so little. ”

    Couldnt have said it better myself!

  31. We received our letter yesterday and the figure represents a drop of about 30% from our previous assessment.

    Does this mean I will see a drop in my taxes?

    Or does it simply mean the brain trust at 205 Claremont will raise my taxes to cover decreased revenues?

  32. Cary estimated the taxes will go up about 20%. But if your assessment dropped 30%, I would think that your taxes would go down about 10%.

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