A Tale of Two 'Glitches'

When tax assessments of some Queens co-ops jumped as much as 147 percent last year, there was, at first, sticker shock.

The tax increase was so staggering that many hoped that the figures were simple mistakes which could be corrected.

But by the Department of Finance until against them, Freedom of Information disclosures , and co-op presidents and local politicians went on a circuit that the press called a “tax revolt.”

A reason for the crushing overvaluations was finally . The department offered to cap valuation increases at 50 percent that would be fazed into individual tax rates over five years.

But many found that reason to be outlandish. After reportedly dropping the excuse in media reports and in an open hearing before the City Council, the DOF disavowed the explanation. 

“Nothing failed,” said DOF Spokesman Owen Stone last week.

A New York Post article titled “Co-oops! City Goof Overtaxes home,” quoted Stone as saying, "There was a glitch." Stone told Patch last week that he was “disappointed” with the piece's author, David Seifman, and that the report was inaccurate.

He did not express disappointment in the reporting of Habitat Magazine, which also quoted Stone as saying, “Our system spit out some comparables that said ‘apartment,’ and when we looked at it again it was something that had some sort of commercial element to it.”

In other words, residential co-ops were being compared to commercial real estate to assess value.

According to media reports of a May 2 hearing——Stone’s boss, Dept. of Finance Commissioner David Frankel testified to the same.

"He must have misspoken," said State Sen. Toby Stavisky, at a press conference held at the Bay Terrace Co-op last week. She was standing along several Northeast Queens co-op presidents, and Assemblyman Edward Braunstein, D-Bayside, who said of the glitch excuse: “that was just something that went out to the press.”

The two politicians were not in the room when Frankel made the reported statements, but Councilman Mark Weprin, D-Oakland Gardens, was present.

Weprin wrote in an emailed statement on May 3 that Frankel “admitted that DOF initially discovered over 100 flaws in its computer program and may yet uncover further problems.”

He added, “This is in addition to DOF’s public admission last month that a glitch in the system resulted in the use of unsuitable comparable properties – even commercial properties for garden apartment co-ops – for calculating assessed values in a number of cases.” 

Weprin called on City Comptroller John Liu to do “a thorough investigation of DOF’s computer program and the numbers that it yielded,” saying the need was “now painfully clear.”

A source in Liu’s office said there was an investigation into the overvaluations, but would not give a time frame for completion.

The tentative tax roll assessments were due this week, but just hours before Patch was set to publish this report, the New York Post reported that a glitch has delayed them—citing Stone as a source.

“The Department of Finance showed that they’re capable of anything,” said Geoffrey Mazel, a tax attorney who also testified at the May 2 hearing. “There’s lack of quality control there—no one’s watching what’s going on."

Mazel says he “vividly” remembers the commissioner testifying to a glitch.

“That word came out of their office,” he said.

The record of the testimony forwarded to Patch by Stone made no mention of a glitch. The version did not include the question and answer session, during which Weprin and others grilled Frankel on the details of the computer generated comparables.

Instead, it listed three differences in the 2011 assessments from previous years. One of those differences, according to the testimony forwarded by Stone, was a “new, more sophisticated computerized assessment application, which made valuations more systematic, including the selection of properties for co-op and condo valuations.”

The other two differences listed were increased outreach to business owners and the return to a formerly used valuation method.

Stone said last week that only one home was affected by commercial comparissons. 

“That is what I would call revisionist history,” said Bob Friedrich, president of the Glen Oaks Village co-op. Friedrich was also present at the Council hearing and is an accountant by trade. “These agencies are into revisionist history and they do it later on when people aren’t interested anymore.”