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Jul 1, 2009 11:04 AMPublication: The Southampton Press

Town used wildly inaccurate numbers in calculating PILOTs, Thiele says

Jul 1, 2009 11:04 AM

The Town of Southampton has mismanaged its Community Preservation Fund, using “wildly inaccurate” assessments in calculating its tax relief payments to various school and special districts, New York State Assemblyman Fred W. Thiele Jr. said Monday.

In a press release, Mr. Thiele said the use of inaccurate assessments in calculating the payments resulted in $6.7 million in overpayments to those districts since 2003—a total he says the town will have to repay to its CPF.

Among the errors Mr. Thiele points to is a discrepancy in calculations of more than $43 million, which was discovered by the Nature Conservancy during a review of the town’s 2009 Payment in Lieu of Taxes, or PILOT, program. Under that program, the town may allocate a portion of CPF proceeds to certain school and special districts in the Central Pine Barrens to make up for lost property tax revenue resulting from land being preserved and removed from tax rolls.

PILOT payments, under state law, may not exceed 10 percent of the annual revenue of the fund or the actual tax loss to the district receiving subsidies.

However, in calculating PILOT payments for 2007, Mr. Thiele said the town assessed a 155-acre parcel off Dune Road in Hampton Bays for $47.6 million, despite the fact that the bulk of the acreage is undevelopable wetlands that stretch into Shinnecock Bay. The more accurate value of that parcel, Mr. Thiele said, is less than $3 million.

In an interview Tuesday, Mr. Thiele speculated the likely reason for the inflated evaluation of the parcel is that some of the properties used in determining the amount of PILOTs are 40 to 50 years old, and nobody in the town had taken a hard look at the assessments, and instead simply multiplied old numbers with equalization rates. In essence, the town assumed that over time that parcel’s value increased on par with similar properties, or even faster due to its waterfront location.

“The town keeps a townwide average of property values,” Mr. Thiele said. “And those values go up because of waterfront property.”

According to the assemblyman, the bulk of the overpayments between 2003 and 2009—$4.2 million to Riverhead School District, and $2.05 million to the Hampton Bays School District—should have gone instead to purchasing and preserving environmentally sensitive lands, which was the original and primary purpose of the CPF when it was established in 1998. Mr. Thiele was one of the original architects of the CPF law.

CPF revenue is generated by a 2-percent tax on real estate transactions paid by the purchaser at the closing table.

“It is imperative that this matter be resolved to protect the integrity of the Community Preservation Fund,” Mr. Thiele said. “Voters who approved this program expect land preservation goals to be met, not diverted to secondary purposes.”

Mr. Thiele is calling on the town to reimburse those overpayments to the fund while holding the districts who received the PILOTs harmless.

“The town, which utilized incorrect data, should replenish the fund,” Mr. Thiele said. “The school and special districts have no control over the level of payments, but merely receive these funds. It would be unfair to place this burden on the taxpayers of these districts.”

Mr. Thiele is also requesting that New York State Comptroller Thomas DiNapoli step in and review all of the town’s PILOT payments since 2003, certify the total amount of the overpayments and recommend a way for the town to replenish the fund.

“My position is to turn it over to the state comptroller, just like we did in East Hampton, and see what happens,” he said.

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It's a very nice sentiment to say that the town should replenish the fund, but where do you think the town gets it's funds? from the TAXPAYERS. If this is going to mean another tax increase to the residents, and it will, I believe most of us could care less about replenishing the CPF. The town can do without it. We're more concerned about being able to afford to stay in our homes and still feed our families. Are all of our town employees really this incompetent? There is no more room for assumptions ...more
By lol@hb (20), hampton bays on Jul 1, 09 1:55 PM