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Queens Chronicle

Liu audit slams DOF on co-ops, condos

Legislators urge Finance to speak up, comptroller to continue probe

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Posted: Thursday, April 19, 2012 12:00 pm | Updated: 2:04 pm, Thu Apr 26, 2012.

A pair of audit reports issued by Comptroller John Liu last week led to scathing attacks on the Department of Finance by elected officials in Queens who had asked Liu to probe the process by which DOF reassessed condominium and co-op tax assessments in 2011.

Speaking on April 13 at the Cryder Point condominium complex in Beechhurst, Liu said DOF still has not completely answered to his satisfaction just how it arrived at preliminary assessment increases that often topped 100 percent.

Cryder Point, for example, was initially increased 147 percent while other buildings in the same block went up in single digits.

“While real estate taxes are an important source of revenue for the city, homeowners should not have to endure the stress of being unable to anticipate their property taxes year to year,” Liu said. “DOF’s recent arbitrary decisions will affect families for years to come and raise serious questions.”

Liu said that even after the outcry from the public and elected officials, and the very high-profile audits conducted by his office, DOF still has no explanation for many of its measurements of market value for condos and co-ops in 2011. His office was universally praised by both residents and elected officials at the Cryder Point press conference.

“After this went public, our assessment [increase] went down from 147 percent to 6 percent,” said Phyllis LaPerchia, treasurer of the Cryder Point Condominium Association.

“I was a math teacher, and I’ve never seen a mathematical error like that,” she said.

Councilmen Mark Weprin (D-Oakland Gardens) and Dan Halloran (R-Whitestone), who represent some of the hardest-hit complexes, praised Liu’s staff and unleashed broadside attacks on DOF. Halloran said 92 complexes appear to have been greatly overassessed, most of them in his and Weprin’s districts.

“There is no way assessment values should be going up nearly 150 percent when the property value hasn’t changed at all,” Weprin said. “This shows we were right. Something is broken.”

Weprin said the DOF offered one explanation after another when he, Halloran and others began inquiring as to why its initial numbers were correct.

“First it was that we just didn’t understand their system, “ Weprin said. “Then they said it was the complexity of their computer system.”

Finally, Weprin said, officials said they discovered a glitch in the computer system.

“My favorite,” said Warren Schreiber, president of the Bay Terrace Co-op, “the ‘dog ate my homework’ excuse.”

Elected officials, including Borough President Helen Marshall, said DOF has not yet explained how assessors could have overidden the program to put in the values that initially caused so much consternation, something the department also said occurred in some cases.

Freshman Assemblyman Ed Braunstein (D-Bayside), who was just coming on board when the issue flared up, called the numbers “arbitrary and capricious. State Sen. Toby Ann Stavisky, whose own complex was hit with a 101 percent increase, agreed.

“The integrity of the system is at stake,” she said.

Liu’s auditing staff found that a lack of transparency on the part of DOF and some arbitrary decisions led to confusion.

He said that in the 2008-09 fiscal year the department switched its assessment methodology, resulting in some volatility in market values and taxes. But for 2011-12 it switched back to the old system.

“The DOF’s changes to its market value calculations, while permissible, particularly affected condos and co-ops of 11 units or more,” said Liu’s audit.

It stated that while co-op owners citywide saw average increases of 12 percent in one year, those in Queens averaged 32 percent. One Forest Hills complex went up 227 percent.

Liu’s people found that in many cases DOF ignored the practice of assessing co-ops and condos by comparing them to similar rental properties nearby.

It also found cases such as a co-op in Brooklyn that was assessed by comparing it to a parking lot. Liu’s recommendations include more transparency; a re-evaluation of overassessed and underassessed properties; and better public notification of any changes.

A statement emailed from the DOF did not address the audit directly.

“The Finance Department works each year to assess more than one million properties transparently and accurately,” it said. “We continue to work with New Yorkers throughout that process.”

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