Philadelphia, Jan. 3, 2019 – City Council on Thursday made recommendations for the reform of the Office of Property Assessment (OPA), which is tasked with assessing the value of residential and commercial properties for fair and efficient property tax collection.
The recommendations, which include a complete overhaul of leadership, were made following an independent audit of OPA commissioned by City Council, as required by the City Code.
“Just as many members of Council and the constituents we represent feared, too many property assessments on which City property taxes are based are unacceptably inaccurate and inconsistent. More than five years after implementing the Actual Value Initiative, this is a wake-up call about the non-negotiable urgency of collecting and scrubbing City data regularly so that taxation and policy-making are as factually based as possible,” Council President Darrell L. Clarke (5th District) said.
Following the most recent round of property assessments, City Council in April 2018 issued a Request for Proposals (RFP) for qualified independent auditors to evaluate OPA’s methodologies and operations. J.F. Ryan Associates, a nationally recognized property appraisal and management consulting firm based in Massachusetts, was selected to conduct the audit in June, and auditors made their first requests for information from OPA staff on June 22.
Following a draft finalization process, which included opportunities required by the Philadelphia Code for OPA and the Kenney Administration to review findings and provide missing detail, the independent audit of OPA was reviewed by the offices of all 17 members of Council before being released to the public on Thursday.
Council recommends the following actions be taken as quickly as possible:
- Recruit new leadership for OPA, including Chief Assessment Officer and at least three Deputy Assessors, with the assistance of a nationally recognized executive search firm
- Contract with a mass appraisal firm or firms to assist with increasing the accuracy of annual assessments, as well as staff training
- Contract with a broad appraisal industry experience firm to assist with procuring mass appraisal services and monitoring the performance of the successful bidder or bidders
- Aggressively identify and correct potential assessment outliers between now and the March 31, 2019, certification of values for next year
Candidates for the position of Chief Assessment Officer should meet the following requirements:
- Three years or more as Chief Assessment Officer or Chief Deputy in a metropolitan jurisdiction (more than 100,000 properties) that includes multiple large commercial parcels (more than $100 million in value)
- Management experience in at least two separate municipalities, and experience outside of Philadelphia
- Experience using a nationally recognized Computer Assisted Mass Appraisal (CAMA) system
- Experience with market modeling using multivariate statistical analysis
- At least five years membership in the International Association of Assessing Officers
In addition, the Chief Assessment Officer should recruit at least three new Deputy Assessors, all of whom must have CAMA experience and experience outside of Philadelphia:
- Deputy Assessor for Residential Assessments
- Deputy Assessor for Commercial Assessments
- Deputy Assessor for Valuation Analysis
City Council’s recommendations are based on findings of the J.F. Ryan Associates audit, which include the following:
- Property assessments are not uniform, resulting in inaccurate and unfair property tax bills
- Property assessments on one-to-four-family homes and commercial and industrial parcels do not meet industry standards
- The only category of assessments that do meet industry standards is condominiums
- OPA is failing to meet 11 of its 18 responsibilities, as determined by the City Code, including failing to explain via OPA’s website how the City calculated individual assessments
- Properties valued under $100,000 are overassessed, meaning those property owners are paying more than their fair share in property taxes
- As of mid-September of 2018, OPA had completed action on just 36% of First Level Review (FLR) requests filed by property owners seeking clarification or correction of their assessments in May of 2018 – an unacceptably deficient pace
The City of Philadelphia reformed its property assessment system in 2013 by moving to the Actual Value Initiative (AVI). This reform was meant to ensure that all taxable properties would be assessed regularly to ensure consistent tax fairness in a growing city. But as many property owners have complained – and the independent audit validates – far too many properties are being either unfairly overassessed or underassessed, particularly in gentrifying neighborhoods.
Council President Clarke added:
“Council has been sounding alarms about OPA and the City’s inability to collect and maintain accurate data for several consecutive budget cycles – starting back in 2013, when we lowered a property tax rate proposed by the Administration based on inaccurate data, to more recently when we stopped an administrative attempt to sell off property tax liens, which could have had catastrophic consequences in low-income communities of color. The failure to ensure property data are accurate isn’t just about fairness — it’s about ensuring stability in our neighborhoods and earning the trust of residents and business owners.”
To ensure that the next round of assessments are more fair and accurate, City Council recommends redirecting and investing all appropriate resources between now and March 21, 2019 – the deadline for certifying assessed values for Tax Year 2020 – in order to identify and correct assessments on properties whose valuations appear to be significantly inaccurate.
Council President Clarke concluded: “Among the positive findings of this audit is that the First Level Review process for property owners appealing their assessments works well, albeit too slowly. The programs that were in place when we first moved to AVI – First Level Review, homestead relief, senior property tax freeze, and gentrification relief (also known as LOOP) – are still here to provide property tax relief. I look forward to working with my colleagues on Council and with the Kenney Administration to ensure that OPA becomes the efficient and effective office we know it can be. Taxpayers deserve no less than accountable, accessible, and competent government.”
Read the J.F. Ryan Associates audit report: