members of the Education Committee have done remarkable

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1 MAAO M A A O MAAO CALENDAR Summer Conference Red Jacket Resort, Yarmouth, MA June 21 24, 2016 Annual School at UMASS August 1 5, 2016 IAAO Annual Conference August 28-31, 2016 Tampa, FL MAAO Clerks Meetings Chelmsford, Sept. 15 Holyoke, Sept. 28 Swansea, October 13 MAAO Fall Conference October 20, 2016 Publick House, Sturbridge, MA Contact Information Mailing address for all correspondence: MAAO PO Box 70 Shrewsbury, MA Physical Location: MAAO 241 Boston Post Rd. West, Marlborough, MA Bob Ellia, MAA Executive Director Fax: execdir@maao.org XXXXVI NUMBER II MAY 2016 Published by the Massachusetts Association of Assessing Officers FROM THE PRESIDENT President Ellen M. Blanchard, MAA #758 What a busy year this has been! I have been able to renew old friendships and start new ones. I am so grateful for this wonderful association and how it brings us all together, not just for education, but for networking and mentoring and creating wonderful friendships. It is amazing how quickly the year has flown by. We have offered some wonderful programs for you this year. The Education Committee has outdone themselves with the quality of the programs that they have made available for you to attend. First the Winter Conference in February offered the Solar presentation by Lane Partridge, Chris Reidy and Elizabeth Rose. The information presented was invaluable, particularly since the solar industry is expanding so rapidly, and the importance of how you value the solar projects will be revenue positive to your town or city. Which brings us to PILOT payments, or as I prefer Tax Agreements, with the Solar industry. Knowing how to back into the valuation so that it will benefit the town/city is extremely important, and the presenters gave an easy to understand presentation that helps us all. Finally, affordable housing and valuation is critical since we all need to be capable of putting those valuations together. With the state mandate of 10% affordable housing in your town/city, it is imperative that you understand the concepts involved. The more you know, the better your input and output will be. We will never know it all, so make sure you attend these important presentations. The Policy Review Committee, under the leadership of Chair Peter Caron, has spent many hours of Christine Purple, Education has always been the backbone of our organization. their time in direct contact with the Bureau of Lo- Administrative Assistant Education Chair Bill Mitchell and the cal Assessment, making certain that they are aware members of the Education Committee have done remarkable work to bring you the most current news assessing and assessors in Massachusetts. While of some of our concerns in regards to the future of Fax: adminasst@maao.org and how-to s in assessing. The educational programs they have presented during this year were from our profession and few coming up in the ranks, it seems on the surface that there are many retiring President Ellen Blanchard, MAA outstanding, and continue to surpass each of their it is not as dismal as it seems. We have a great number of talented, professional people waiting in the Carver, MA previous presentations! This summer at Amherst, ellen.blanchard@carverma.org you will also be treated to some really great specialty wings! Under Peter s tutelage I believe we may be (508) classes. The reviewing and rewriting of the MAAO making strides in that direction. Courses, and writing new courses, is almost com- continued on next page May 2016 MAAO NEWSLetter 1 plete and should be available at Amherst somethings to look forward to. Make sure you take advantage of their hard work!!! While you all were enjoying the educational programs at the Lantana, I was in Savannah, Georgia attending the IAAO GIS Conference. What an amazing opportunity to experience what others are doing around the country with GIS! The IAAO partnered with URISA (The Urban and Regional Information System Association) to present the power of GIS as it relates to assessing. We were introduced to some great uses of GIS in assessing and other fields. One of the best opportunities was the Hands on Learning Lab sponsored by ESRI, a self-paced program from the beginning to the more complex. You will find pictures from Savannah on the Forum website. The Legislative Committee has been working overtime with the Legislators in trying to get them to understand our position on various aspects assessing. Chairman Lane Partridge and the entire committee deserves kudos for the amount of time and effort that they continually put into working with the House and Senate towards getting our interests considered and understood.

2 OFFICERS President: Ellen Blanchard, MAA Carver President Elect: Peter Caron, MAA Lynn Secretary: Marion Fantucchio, MAA Quincy Treasurer: Deborah Robbins, MAA Westwood Immediate Past President: Michael Flynn, MAA Newton EXECUTIVE BOARD Eric Josephson, MAA Weston Richard W. Finnegan, MAA Plymouth William Mitchell, MAA, RMA Leominster Susan L. LeMay, MAA Lowell Christopher Wilcock, MAA Melrose Virginia Thompson, MAA Manchester-By-the-Sea EDITOR Bob Ellia MAA PO Box 70 Shrewsbury, MA Tel: COUNTY CONTACT PERSON Barnstable - Cathy Fryxell, Truro Berkshire - Tammy Blackwell, Sheffield Bristol - Theodora Gabriel, Seekonk Essex - Sheila Hambleton, Nahant Franklin - Jacquie Boyden, Erving Hampden/Hampshire - Diane L. Bishop, East Longmeadow Norfolk-Suffolk - Debbie Robbins, Westwood So. Middlesex - Jean-Paul Plouffe, Westford No. Middlesex - Susan LeMay, Lowell Plymouth - Ellen Blanchard, Carver Worcester - Jennifer Sclar, Milford Island Assessors - Alycelee Pigman, Tisbury Any reproduction of the contents of this newsletter must include credit to the Massachusetts Association of Assessing Officers newsletter. MAAO NEWSLETTER ADVERTISING RATES Half page $200 Quarter Page $100 Employment Ads $50 CALL FOR PAPERS (ARTICLES) We are soliciting articles for the newsletter and encouraging any and all of our members to submit an item that they believe would be of interest to our readers. If you have any desire to share knowledge of specific issues, procedures or interesting stories about the workings of your office or your community, or even a letter to the editor please send them to execdir@maao.org. We will be glad to publish them in our newsletter. continued from page 1 The Human Resources Committee, chaired by Kathy Pierce, has been writing a manual for the benefit of our Executive Director and Administrative Assistant, Bob Ellia and Christine Purple. It was recommended by our auditors, and the committee is making great strides to accomplish this. Thank you doesn t seem enough to say to those of you who donated to the Shriners Burns Hospital in Boston. We delivered 16 pairs of earbuds and headphones, more gloves and hats that I could count, and enough paper goods for many birthday and going home parties for a few years, I think! A Bruins hoodie, Patriots hats, Star Wars shirts, baseball hats, a handmade baby blanket, purses, wallets, socks and a Frozen play suit, and much more. And you donated $615 for them to use as they see fit! I am so proud to belong to such a generous and caring group of people. A special thank you to the Lowell Seniors who donated over 25 handmade with love hats! Thank you so much for your kindness. As I sit here at the NRAAO Conference in Ocean City, MD, I am also proud that we have so many in attendance representing the MAAO. A great venue and a great group of people! And thank you to the MAAO for continuing to support our sister organizations. We are an organization with many talents and talented members, and I encourage you all to participate. Not only do you represent our profession with dignity and knowledge and pride wherever you travel, but you, in return, receive the benefits of all that the MAAO has to offer. I am looking forward to an excellent Summer Conference at the Red Jacket and hope to see you all there, attending at least one program. It is well worth it! It has been my pleasure to be your President this year. What a terrific organization we have! COUNTY NEWS BARNSTABLE COUNTY: After many years of employment with the Town of Barnstable Assessors Office, Assistant Assessor, Tony Podlesney retired on February 11, We would like to thank him for his service through the many years working in Eastham, Mashpee and most recently in Barnstable. We wish him good luck in his well-deserved retirement. Congratulations to Barnstable s new Assistant Assessor with the promotion of Pamela Taylor. Pamela was the Office Manager and had previously worked at the Town of Mashpee and at Plymouth County Registry of Deeds. PLYMOUTH COUNTY: Collaborative Meeting On May 11, 2016 the Plymouth County Assessors Association in conjunction with the Plymouth County Collectors/Treasurers Association held a joint meeting at the Middleboro Town Hall. There were over 70 attendees. Guest Speaker, Attorney Mathew Thomas, Esq. presented a program outlining the process of collecting taxes entitled Don t Drop the Baton. Attorney Thomas likened the process to a relay race amongst the Assessors, Collectors, and Treasurers. Topics included Owners Unknown, Rollback and Conveyance Taxes, Re- 2 MAAO NEWSLetter May 2016

3 2016 ELECTION RESULTS On May 5th the ballots were counted by the nominating committee. The results of the 2016/2017 Election are as follows: President-Elect: Votes Counted Eric Josephson, MAA Weston 461 E-Board: John Neas, MAA, RMA, CMA 346 Ellen Brideau, MAA, Wayland 288 Robert Alford, MAA, Easton 239 Fred McAnulty, MAA,Boston 119 As a result, on July 1st John Neas will occupy position #5 on the Executive Board and Ellen Brideau will occupy Position #6 on the Executive Board. The position of President Elect will be held by Eric Josephson and he will ascend to the Presidency in July of Congratulations to the winners and thanks are extended to all those who ran for office and to those who voted. vised & Omitted Bills, Reassessments, Supplemental Taxes as well as Tax Takings. It was an informative and interesting presentation. Plymouth County Assessors Association would like to thank Attorney Thomas for his donation of time and expertise to our group. HAMPDEN/HAMPSHIRE COUNTY: On March 30, 2016, the HHCAA Spring Meeting was held at the Summit View Banquet & Meeting House. Sam Konieczny was the guest speaker presenting a Personal Property seminar. It was perfect timing as most of our offices were inundated with Forms of List. FROM THE EDUCATION COMMITTEE INTERIM ADJUSTMENTS Jacqui Nichols, Wareham Instituted just over ten years ago, Interim Adjustments allow us to appropriately mirror the market changes which occur during the years between revaluation certifications. Using the LA3 and LA15 as the main reporting vehicles, assessors are required to perform a sales analysis, similar to that performed in a certification year, in order to determine whether any adjustments are necessary to maintain statistical compliance with sales ratio guidelines. If your Community contracts with an outside vendor to complete your Interim, it should be very clearly delineated as to who is responsible for verifying the sales validity, performing the sales analysis, adjusting the necessary modeling, and reporting the findings to you and to the Bureau of Local Assessment via Gateway. As with any sales analysis, the devil is in the details.our data must be accurate. The sales must be properly coded and the data current and complete. To our advantage, the Commonwealth of Massachusetts is a state where sales prices are readily available in varied formats. Review of deeds, Multiple Listing Service and other internet sites provide us with a wealth of information. When there is conflict or doubt, I do not hesitate to call the broker, buyer or even seller to straighten it out. Sales verification forms are a great way to garner information when they are returned. Inspection of sales properties is always recommended. Assessors are a diverse group. Five assessors may come to the same reasonable conclusion using as many different tools. This is my process: Print an LA4 for starting point information Extract sales for analysis including all unqualified Review the unqualified make sure N codes have reasoning and no qualified sales have slipped through. Clean up sales reports and fix any incorrect coding, check vacant land sales and P sales May 2016 MAAO NEWSLetter 3

4 Print reports showing where things stand prior to any database changes and update the global parameters in the CAMA system (base year and depreciation). Recalculate the database. Run detailed sales analysis reports in your preferred format (CAMA, Excel, etc.) by style, neighborhood, year built, building and lot size, date of sale, quality, and so on. Review the reports for conformation with the medians and COD statistics necessary to meet BLA guidelines for certification published on the BLA website. Look for statistical patterns of disparity and/or shifts in value using the detail reports. It is likely that some adjustment will be necessary to bring values into compliance. Common changes include adjusting building rates, land curve values or neighborhood factors for residential and commercial properties alike. Commercial/Industrial/Apartment changes may include capitalization rates, vacancy rates or rent schedules. Make sure you have strong support and backup for any major changes you make. Once all subclasses have been reviewed and modeling has been adjusted, run final analysis reports and review once again. Now you may confidently run the LA3 and upload it to Gateway. Speaking of Gateway, there have been welcome changes to Gateway this year. The LA3 submission will now be the same template for both Interim and Certification years and Gateway will know the difference. The previous year NAL codes will no longer be a headache. The BLA listened to everyone and made that change this year as well. A new field on the LA3, optional for FY17, is a field for GIS loc_id. And finally, be aware that the BLA will now be looking at quartiles (if appropriate) via Gateway. There are other changes and updates still in process for Gateway and, according to Jim Paquette of the BLA, Gateway will be a much more interactive and automated process than in the past. We can see that already with the LA3 and LA13 changes. The LA13 New Growth form has welcome changes as well. We all know our new growth numbers. Now, when the new growth number is entered into gateway, the revaluation numbers will auto generate. Form submission to Gateway should be as follows in order to efficiently allow processing and review: LA4 - Enter and SAVE as opposed to Submit. This will allow the parcel totals to populate other forms. LA3 Sign and Submit the Sales Report using the new upload feature LA15 Sign and Submit the Interim Adjustment form. The data from the LA4 and LA3 will populate this form LA13 Finish the New Growth while the other forms are being reviewed The BLA has restructured their forces and now we have one representative reviewing all of our forms. This will make the process more efficient as we will know who to talk to and will answer a question once. I would like to thank Jim Paquette and Deb Joyce for their assistance with this article. LEGAL MATTERS Rosemary Crowley, Esq. A HOUSE OF ART When a charitable organization owns property that is being used to provide housing, the question of whether the property qualifies for exemption can be tricky. We re all familiar with the cases involving nursing homes, group homes and faculty housing. Each of these categories of cases can seem to have their own specific type of fact scenarios. In The Sterling and Francine Clark Art Institute, Inc. v. Williamstown Assessors, (Oct. 28, 2015) the question came up in the context of housing for visiting scholars in connection with an art museum and its libraries. The case provides a handy outline to assist in analyzing whether any residence or residential facility owned by a charitable organization qualifies for exemption. The Appellate Tax Board stepped through the traditional questions presented by a Clause Third charitable exemption analysis. Is the property owned by a charitable organization? Is the property occupied by the charitable organization? Is the property occupied by the charitable organization to further its charitable purpose? The answer to each of these questions has to be yes for the property to qualify for exemption. Pursuant to its Articles of Organization, The Clark had among its purposes: (a) to maintain art institutions in support of Williams College; (b) to provide facilities for study and research; (c) to establish and maintain art collections for the use of students, teachers and other qualified members of the public; (d) to engage in or assist with the educational activities of Williams College; and, (e) to assist promising and deserving students and teachers of fine arts, art history and related subjects. The parties agreed The Clark, which in fact owned and maintained an art museum and libraries in Williamstown, was a charitable organization. The property at issue was a three-story colonial-style dwelling (built in the late 1800s) that The Clark used to house visiting scholars. It was located across the street from The Clark s museum and libraries. The house contained six fully furnished apartments for resident scholars and two bedrooms, each with its own bath, for visiting lecturers. Common areas included a large kitchen, dining area and library. All units shared the same utilities and The Clark paid the utility bills as well as provided cleaning services to the common areas of the house. There were no leases and no rent. Clark reserved the right to access the entirety of the property and the ability to relocate residents within the building to accommodate visiting scholars. After examining the lack of exclusivity and control the visiting scholars could exert over there living quarters, the Board found that The Clark, and not the visiting scholars, occupied the property. The scholars had been invited from around the world to use the resources of The Clark to complete projects that are of primary importance to the study of the visual arts. The scholars were unpaid, although some received small need-based stipends. In addition to their study, the scholars give lectures and interact with students and faculty from Williams College. The program is recognized by the U.S. Department of State as an Exchange Visitor Program under the Fulbright-Hayes Act. The Board found the house was necessary for the operation of the visiting scholars program. Without the free 4 MAAO NEWSLetter May 2016

5 IMPORTANT INFORMATION, 2016 SUMMER CONFERENCE CONFERENCE DATES JUNE 21 THROUGH 24 Time is getting close. The price goes up June 11th. Register now!! Also, be aware that the overnight room conference rate applies to registrants to the MAAO Summer Conference. If you don t register for the conference you will pay the Red Jacket market rate for your room, so make sure you are registered for the conference! Also, we have recently implemented credit cards as a form of payment on our web site. We hope this service will make things a bit easier for you to pay for events, and incidentals such as the spouse registration fee, golf, and additional banquet tickets etc. patriot PROPERTIES, INC. Property Revenue Optimization CAMA / Appraisal Services - Real & Personal Property / Collections AssessPro - a highly versatile and comprehensive computer Assisted Mass Appraisal application Simplified data entry, search and look up features and reporting for easy use Reduced risk by eliminating multiple independent applications Improved communications and auditing across departments and reduction of the need to import and export data Consolidated databases for improved integrity and reliability Personal Property application includes online filing of forms of list Embedded GIS links using ESRI tools. Geo Reference points can be attached to the property sketch for exact orientation of structures on the plot! Integrated Sketching and Geospatial tools that graphically extend the CAMA functions Multi-year handling, work can be performed for future dates CollectPro - an optimized, integrated tax administration package for local government Assessing, Treasurers and Collectors Simplified data entry and look up features for ease of use Reduced risk by eliminating multiple independent applications Direct communications and data sharing between departments Improved reporting and auditing across departments and reduction of the need to import and export data Significant reduction of manual data entry Consolidated databases for improved integrity and reliability Enable the Assessors and Collectors to work together in a streamlined and cohesive manner From CAMA to Collections Your Source for Reliable Solutions With hundreds of installations across North America, Patriot has been continually growing over our 28 years of unparalleled service to Local Governments. Patriot prides itself in our phenomenal support and vast experience in the design, conversion, setup, installation and training for all of your needs from CAMA through Collections. Patriot is fully committed to meeting your goals and our references can attest to Patriot s track record of being on time and on budget with high marks for ongoing client satisfaction. Please call or go to our website for more information. PATRIOT PROPERTIES: 123 Pleasant Street, Marblehead, MA May 2016 MAAO NEWSLetter 5

6 housing, the Board found The Clark would not have been able to attract scholars to engage in the research, lectures and teaching that were in furtherance of The Clark s charitable purpose. The Board found that The Clark s occupancy of the property was in furtherance of its charitable purposes. Having found that the answer to each of the key Clause Third questions was yes, the Board found the property qualified for exemption. Rosemary Crowley is with the firm of Doherty, Wallace, Pillsbury and Murphy, P.C. in Springfield. Ms. Crowley s address is RCrowley@DWPM.com. She welcomes comments on this column and suggestions for future topics. LEGISLATIVE UPDATE MAY 2016 The legislative session has been very active with a number of issues impacting assessors at the forefront: PUBLIC RECORDS BILL Debate over a public records bill continues. Significant media scrutiny has been placed on the length of time and costs for public records information requests to be processed. To address this issue the Legislature has worked to pass a Public Records Bill to expedite information inquires to state and local government. The House passed bill has is a measured approach that has reasonable requirement for communities to meet. The Senate passed bill is more restrictive and could present challenges to communities in executing. One Monarch Place 19 th Floor 1414 Main Street Springfield, MA Experienced in resolving state and local tax matters before the Appellate Tax Board. Rosemary Crowley, Esq. RCrowley@DWPM.COM PHONE: (413) to subscribe to the Appellate Tax Board Update The 2 versions are in the process of trying to be worked out for a final conference committee report. MAAO is working with MMA and others to address concerns in crafting a final version of the bill. GOVERNOR BAKER S MUNICIPAL MODERNIZATION ACT PASSES 1 ST COMMITTEE. BILL BEFORE HOUSE WAYS AND MEANS COMMITTEE Governor Baker filed the Municipal Modernization Act, H earlier this year. MAAO was at the announcement press conference of the bill. The bill includes 23 initiatives in 52 sections of the bill that MAAO supports. The Act was broken up into 5 separate bills (H. 3906, H. 3907, H. 3908, H. 3909, and H. 3910) assigned to their Committees of subject matter MAAO has been testifying and meetings with Committee chairs on issues important to the organization. The main bill, H. 3908, includes a large number of MAAO initiatives including a change from 3 year to 5 year on the recertification process. This bill was reported FAVORABLY by the Revenue Committee and is presently before the House Ways and Means Committee. MAAO has met with the Committee in support of the bill. MAAO LEGISLATIVE SESSION PRIORITIES The goal of the MAAO legislative agenda is to ensure the state s tax policy laws are administered in a fair and equitable way. We aim to identify inconsistencies and remedy them. NEW BILLS SOLAR TAX EXEMPTION MODERNIZATION H 2465 Rep. Gailanne Cariddi The current state law on solar tax exemption is outdated and ambiguous. Technology has changed and the law hasn t kept up with it. This bill clarifies the property tax exemption for people who use the power on site, contiguous site or on-contiguous real property owned or leased by the owner, or in which the owner otherwise holds an interest (up to 125%) or have a PILOT agreement with their community; and excludes solar facilities from M.G.L. Chapter 38H which was intended for generation facilities and implemented when deregulation happened. STREAMLINE CHAPTER LAND FILING DEADLINE DATES (for revaluation and recertification) H 2491 Rep. Carolyn Dykema The legislation streamlines and clarifies the filing dates for landowners for Chapter land applications. Current laws regarding application deadlines during revaluation and recertification periods are inconsistent. This bill would streamline and synch the dates. CREATE UNIFORMITY ON TAX EXEMPTION APPLICATION DUE DATES H 2462 Rep. Jim Cantwell This measure helps taxpayers know when exemption applications are due. The City of Boston recently passed a bill (Chapter 115 of 2014) to create uniformity in application deadlines for property tax. This bill would create that uniformity across all communities. Cur- 6 MAAO NEWSLetter May 2016

7 rently exemption applications are due three (3) months after actual tax bills are issued, which is different all over the State. This would make the deadline date specific. BOAT MODERNIZATION BILL/ AN ACT RELATIVE TO MARINE VESSELS S 343 Sen. Bruce Tarr H 2504 Rep. Ann-Margaret Ferrante This legislation modernizes and streamlines the excise collection system. The current excise collection process for boats is outdated, archaic and cumbersome. The current statute is antiquated, difficult and labor intensive to implement. Consequently, many cities and towns do not issue boat excise tax bills, losing badly needed revenue for communities and creating an unfair advantage for boat owners in these communities and boat owners in communities where the boat excise tax bills are issued. Below is an article Reprinted from The Boston Globe, April 27, As you will see Harold was quite a man with a very impressive background. HAROLD VAUGHAN, 91, KENNEDY AIDE AND PIONEERING CANDIDATE By Bryan Marquard Globe Staff April 27, 2016 RE-FILED BILLS RIGHT of FIRST REFUSAL FOR TAX EXEMPT PROPERTY H 2513 Rep. Sean Garballey This bill would allow the community to have the right of first refusal to purchase a tax-exempt property (at market value) which is being sold to a taxable entity. CONDOMINIUM PHASE-IN BILL H 2586 Rep. Stephen Kulik This bill would enable assessors to assess the development rights of condominiums in phased condo developments. Currently, because there is no land assessment on condos, when the master deed is filed the value of the land goes away, even if the developer does not complete the phasing of the project. The redrafted version specifies that the un-built unit interests are subject to the property tax but not the common areas. FAIRNESS AND UNIFORMITY FOR SUPPLEMENTAL REAL ESTATE TAXES H 2537 Rep. Kate Hogan Currently if the total value of a parcel of property increases by more than 50% state law has assessors send a supplemental tax bill under MGL Chapter 59, Section 2D. This bill would exclude the value of the land from the formula, so that if the value of the improvement increases by 50%, regardless of the land value, cities and towns would issue a supplemental bill. The same addition to home may be taxexempt solely based on the neighborhood or location of that home. The bill also allows communities to more easily help homeowners in cases of damage or disaster. If a property is damaged due to disaster or storm, a families abatement shouldn t be predicated on where they live if 50% of the value of their home has been destroyed. In April we lost Harold Vaughn. Harrold was President of the MAAO in He was the Assessor in Boston for many years and served under Mayors Hines, Collins, and White. He is a strong representative of the quality of people associated with our association. Mr. Vaughan worked on the Senate election campaigns of John F. Kennedy in the 1950s When Harold Vaughan worked on John F. Kennedy s US Senate campaigns in the 1950s, the candidate once encouraged him to make sure African-Americans registered to vote to wield power at the polls. But it was a teenage trip to the nation s capital with a young Malcolm X that made Mr. Vaughan first want to work in government. Mr. Vaughan, who was 91 when he died Friday, was shining shoes when he met Malcolm X, known at the time by his birth name, Malcolm Little. When I was 15, after Malcolm and I got friendly, we got jobs for the railroad, Mr. Vaughan told the Globe in He was a train boy with Malcolm, selling sandwiches, coffee, and dessert, said Mr. Vaughan s daughter, Robin, the clerk-magistrate at Stoughton District Court. After first working on a train to and from New York City, Mr. Vaughan and Malcolm X switched to a run that brought them to Washington, D.C., where they encountered a kind of racism they hadn t seen in Boston. I remember trying to flag down a cab and they just kept going by me, Mr. Vaughan said in the 1997 interview. The starter walked May 2016 MAAO NEWSLetter 7

8 up and said, Son, the cabs for colored people are around the corner. That was the first time someone told me that because I was colored, I couldn t have what they had. I remember the flag flying over the buildings, just like in my school books. I just kept saying, This is America. I guess I was just so hurt. It was then, Mr. Vaughan said, that he knew he wanted to be where the decisions were made. He made good on that goal, holding jobs during the administrations of three Boston mayors, for whom he supervised assessors and chaired the tax review board. In his later City Hall years, he also ran a private law practice in the evenings, having returned to college in his 40s to become an attorney. A pioneering statewide candidate, he was the first African-American ever to seek election to lieutenant governor on the Democratic ticket in Massachusetts, the Globe reported in The second of four children, Harold Lee Vaughan grew up in Roxbury. His father, George D. Vaughan, worked for what was then the Metropolitan Transit Authority, cleaning subway tunnels and trains. His mother, the former Mabel Furman, cleaned houses. After graduating from Roxbury Memorial High School, Mr. Vaughan worked for a year in Maine at the Bath Iron Works and returned home to work at the Watertown Arsenal. There he met another worker, Josephine Williams, whom he married in First, though, he was drafted into the Army and served in Europe near the end World War II with a motor vehicle ordnance company. When Mr. Vaughan returned home, he attended stenotype school and was a State Police dispatcher before using the GI Bill to attend Boston University, from which he graduated with a bachelor s degree. With his wife, Mr. Vaughan worked on Kennedy s US Senate campaigns and on the presidential campaigns of John and Robert Kennedy. The Vaughan s also campaigned for Boston mayors John B. Hynes, John F. Collins, and Kevin H. White. Mrs. Vaughan, a nurse who specialized in obstetrics and gynecology, died in While working on John Kennedy s Senate campaigns, Mr. Vaughan helped schedule appearances and events in Boston s African-American community. In an interview with NECN that was broadcast in 2013, the day before the 50th anniversary of Kennedy s assassination, Mr. Vaughan recalled that at times the candidate sought his counsel: Jack would say to me, What do you think, Harold? Kennedy offered him advice, too, as Mr. Vaughan recalled in the 1997 Globe interview. John once told me, What you have to do is make your people register and vote. They may not have the money I have, but keep in mind that I can vote once, they can vote once, Mr. Vaughan said. He was pointing at me, waving a cigar, which was incidentally the only time I ever saw him smoke. He said that the way the colored we were colored in those days were coming into Massachusetts, we could wind up with the balance of power. I never forgot that. It irks me now when I see so many young people not caring. There was so much possible back then. Mr. Vaughan, who graduated from Suffolk Law School in 1968, worked in City Hall during the Hynes, Collins, and White administrations. He focused his law practice on probate and real estate and often did extensive pro bono work for people and organizations, including Boston s NAACP branch, for which he was chairman of press and publicity. Mr. Vaughan also served the Improved Benevolent Protective Order of Elks of the World as grand exalted leader and as legal counsel. There are people, even to this day, that he helped that we never knew about, said his daughter Robin of Randolph, who is Mr. Vaughan s only immediate survivor. Following his lead, she became a lawyer, too, and she said her father was thrilled to live long enough to see an African-American governor preside over the ceremony when she became a clerk-magistrate. It was a real big thing for him to have witnessed the elections of Deval Patrick and Barack Obama. He was very excited, she added. He said, Imagine, I saw them both. I got to see the governor swear in my daughter. Mr. Vaughan, who died of complications from Parkinson s disease, had divided his time for many years between Randolph and Palm Beach Gardens, Fla., before living more recently in Milton and Needham. A funeral for Mr. Vaughan will be held at 2 p.m. Saturday in Trinity Episcopal Church in Randolph. In the 1997 Globe interview, Mr. Vaughan also spoke about the times he faced racism in his City Hall years and how his mere presence helped educate the mayor s constituents sometimes when they least expected it. One day a woman calls me up, upset about busing, and she says I have got to talk to the mayor. They re going to send a bus over to my child s school with all those boogies, Mr. Vaughan recalled. I said, Is that right? I know the mayor will be concerned. Two days later, I recognize her voice. She s outside my office, asking to talk to me. Ever seen a person trying to swallow her tongue? She was remembering all those things she said on the phone and there I was, a boogie, working for the mayor. It was a moment, let me tell you. Bryan Marquard can be reached at bryan.marquard@globe.com. ASSESSORS NEED TO FOCUS ON VERIZON NEW ENGLAND APPEALS Richie Allen, Springfield City and town overlay accounts are at risk due to appeals brought by Verizon New England (VNE). Verizon New England (VNE) is the landline company providing traditional telephone dial tone service in all 351 cities and towns. In addition, it currently offers FIOS, its bundled internet access, television, and telephone service in 112 communities in Massachusetts. Verizon Wireless is a related company and is not the subject of this article. VNE has been very active in trying to reduce its property taxes for the last fifteen years. It has two sets of appeals. The first involves challenges to value and the second addresses the tax rates implemented in split-rate communities. 8 MAAO NEWSLetter May 2016

9 VNE CERTIFIED VALUE APPEALS Per statute, Verizon New England s personal property is valued centrally by the Commissioner of Revenue (COR). The Bureau of Local Assessment distributes these class 505 certified values on or before May 15 each year, and local assessors and the taxpayers can dispute the values by filing petitions at the Appellate Tax Board (ATB) by June 15. These values, as well as explanations and other guidance, can be located on the Division of Local Services website. The statewide certified value for VNE has declined from a high of nearly $3.7 billion in FY2011 to $2.2 billion in FY2017. VNE has pending ATB cases against the Commissioner of Revenue, involving city and town overlay accounts, for Fiscal Years Among these are cases affecting all 351 Massachusetts municipalities for the class 505 values in both FY2010 and FY2011. Beginning with FY2012, VNE became more selective about the communities from which it would seek relief. Please be aware of the possibility that overlay funds might be needed to cover abatements for FY2010 and FY2011, and FY2012 forward if VNE filed petitions for those years in your community. These valuation challenges by Verizon are the subject of a recent order by the ATB which established a number of dates leading to an ATB hearing in April The ATB ordered that VNE mail the order to all municipalities. Attorney Hazel s office handled the mailing on behalf of VNE. All cities and towns have a stake in the result of this VNE litigation. VNE must prove overvaluation in each city and town for FY2010 and FY2011, at a minimum, and in certain cities and towns, for each of the seven years (FY ). Several municipalities are Community Software Consortium working together to prepare for this litigation and have hired a lawyer to represent them at the ATB. While DOR may have primary responsibility for the defense of these certified values, it is the municipalities who will be required to fund any abatements. Therefore, I urge all assessors to take an active interest and consider contributing to the cause, to gain additional protection for your overlay accounts. Also, please consider filing ATB petitions disputing the COR s FY2017 certified values before the deadline of June 15. VNE TAX RATE CHALLENGE VNE and RCN filed FY2012 appeals against the City of Boston at the ATB in which they disputed the constitutional basis for a higher tax rate being applied to personal property than VNE s suggested rate. In June 2015, the ATB found and ruled that the statutory scheme for taxation of personal property in municipalities electing split rate taxation, as Boston did here, also furthered that legislative goal [favoring the residential class] and results in a narrow, rational, proportional, and constitutional implementation of the split tax rate system. VNE has filed these challenges annually, beginning in FY2012, in communities that elected to classify rates. There are a total of 112 communities that classify rates. The Supreme Judicial Court of Massachusetts, the state s highest court, heard VNE s appeal of the ATB decision on April 7. The MAAO, Massachusetts Municipal Association, and the Massachusetts Municipal Lawyers Association joined in a friend of the court brief. DOR had filed a brief at the ATB and thus that was included in the record. We anticipate that the SJC will rule sometime before mid-august. CSC is a non-profit municipal consortium of Massachusetts communities. We provide robust software & support for PC & Cloud-based: Assessing, Public Access, Collections, Finance & Remote IT Come Join Us! Application Specifications: + Oracle & Cloud Based Assessing & Valuation System + Internet-based Public Access & Sales Analysis + Integrated with Cloud Based Collections & Accounting + Access & Cloud based Personal Property For More Information Visit: csc-cloud.us Or Rebecca@csc-cloud.us May 2016 MAAO NEWSLetter 9

10 We are hopeful that the SJC will affirm the ATB s decision. If the SJC rules in favor of VNE s suggested rate, it would have profound implications for local property tax rate decisions and municipal finance for split rate communities. The consequences at the local level could well be the most severe since the implementation of the full fair cash value standard and the advent of classification in the early 1980s. Imagine shifting a large amount of levy from personal property to the residential class and its direct impact on the residential tax rate. Consider the very large refunds that could be owed if VNE filed abatement applications and ATB petitions challenging your local tax bills (as distinguished from the challenges filed against the Commissioner of Revenue).The electric and gas utilities and VNE are typically among the highest taxpayers in a community on the basis of their personal property value. In summary, it is important that all assessors understand and consider participating in the defense of the FY2010-Fy2016 VNE assessed values. At the same time, split rate communities should pay close attention as we await the SJC ruling. ASSESSING PERSPICACITY Gary J. McCabe, CAE PART II VALUATION STANDARDS Data Collection & Analysis Data collection and analysis involves making both objective decisions, such as counting rooms, and subjective decisions, such as determining effective age based on a property s actual age, renovations, and current condition; both require regular checks against those same decisions made during prior visits to comparable properties. Each town can have a different standard for labeling a room a bedroom for instance. How do you define a bedroom? Is your standard consistent with the town s zoning by-laws? Of course our best tool has become the computer because we use it to store, maintain, and analyze data. Our data is grouped into major categories, such as area data, neighborhood data, property data, and economic data. Economic Principles of (Fair Cash) Value Develop an understanding of the economic principles of value; what makes value. When property is purchased based on anticipated future income; then the income approach makes sense. Value is created based on the principle of anticipation. The upper limit on value is based on the principle of substitution. Why pay more for an existing building than it would cost to build a new one. When considering the highest and best use of a property don t forget to consider whether there is a market for the continued existing use. As we move forward with technology to electric cars, will we need gas stations? The esteemed and much admired Joan Youngman, Senior Fellow and Chair of the Department of Valuation and Taxation at the Lincoln Institute of Land Policy in Cambridge, MA wrote a terrific book, Legal Issues in Property Valuation and Taxation: Cases and Materials (IAAO 1994), in which she explores the meaning of property value through the compilation and evaluation of various court rulings on matters of property valuation and taxation from across the United States. We should all be grateful for Joan s work on this book and her career spent on the study of property taxation throughout the world. Joan includes several Massachusetts cases in this book including an appeal of the value of a deed restricted property; Mashpee Wampanoag Indian Tribal Council, Inc. v. Assessors of Mashpee, an SJC case (379 Mass ). The court ruled that a deed restriction, as a matter of law, does not make land valueless. If fair cash value cannot be ascertained by reference to sales of comparable property, it is proper to determine fair cash value from the intrinsic value of the property, including any and all the uses to which the property is adapted in the hands of any owner. Joan s new book, A Good Tax, is a must read for all assessors. The Income Approach Getting back to the use of the income approach; it turns out that the direct cap model is not very agile. The Income/ Rate = Value formula works well in a stable market. If the market is changing by more than the rate of inflation, rental income can be adjusted based on asking rents, but capitalization rates tend to get stuck in the rear-view mirror. A property tax appeal case from the 1980 s brought against the Board of Assessors of Brookline and still often cited today, is instructive on the matter of using the income approach to value. The case was originated at the ATB then taken up by the Supreme Judicial Court of Massachusetts on appeal. When the SJC takes a property tax case, it is worth reading. The court made the following statements in this decision, with reference to earlier decisions: The capitalization of income approach is an appropriate method for calculating the fair cash value of income-producing real estate. 1 While it is true that results obtained under the capitalization of income approach should reflect what a willing buyer would pay a willing seller, it is not necessary that the rate of return element of the valuation equation be derived directly from the market sought to be analyzed. The only requirement is that the rate derived should reflect the return on investment necessary to attract investment capital. We still live with that exhortation today. One of the expert appraisers in this case was Charles Akerson, MAI, who was a widely recognized valuation expert and author of books and articles including, the ground-breaking 1970 article, Ellwood without Algebra. This case is also why a hearing today before the ATB on any case involving income producing property is a dual of opposing experts and well positioned attorneys. The assessor is a bystander. If the assessor brought their economist hat to the hearing we could testify on the matter of the rate of return on investment necessary to attract investment capital. I read in the Wall Street Journal that the prime rate has been at 3.25% for a while. I know that real estate investments are risky, require some management and are less liquid than safe investments, so adding a percentage for each additional factor (3) gets me to 6.25%. That s what I think the capitalization rate should be, 6.25%. Check it out, it s pretty close, unless the property is in a very undesirable location or in a very desirable location, then 1 Board of Assessors of Brookline vs. George V. Buehler 396 Mass. 520, 523, 527 (1986) 10 MAAO NEWSLetter May 2016

11 the rate could be lower or higher based on having less or more risk, requiring more or less management, and being more or less liquid. One of the variables in the Ellwood cap-rate model is anticipated revenue growth over the expected holding period. If an investor expects an increase in income in future years, the cap-rate at sale will be lower. Experts in this area say we should look at a kindred property, a similar property, for such data. If we look at a sale of comparable property that occurred in prior years and see what has happened to the income since the sale, a clearer picture of the sale price and cap-rate at sale develops. One of the skills we seem to have in common among assessors is the ability to compare properties for similarities and dissimilarities. I know a kindred property when I see one. The assessor can testify in court to the assessed value; it s our value estimate. To testify to a different, say higher value, one would need to be qualified as an appraisal expert. Mass-Appraisal versus Fee-Appraisal What is the difference between mass-appraisal and single property appraisal (fee-appraisal). A mass-appraiser considers all of the sale properties in the relevant period, based on the given assessment date, while the single property appraiser considers only a selected number of most comparable sales, given the date of appraisal. The single property appraiser is valuing one property. The assessor is valuing all of the properties. We used to be able to identify the year and model of any car that went by, so valuing all of the cars wasn t that hard, but now to value all of the cars at market value we would need a sophisticated mass-appraisal system. A single property appraiser could still use a typewriter to write their appraisal report. Beyond the systems employed, the difference lies in the knowledge and skills of the appraiser. The time-allocation chart discussed earlier suggests that assessors spend 25% of our time on valuation. Our knowledge and skills are required to be broader than a valuation specialist s. An assessment cycle is one-year, approximately 250 works days, so we spend about 62.5 days a year on valuation. Depending on how many properties need to be assessed every year, you might value 100 properties a day over those 62½ days. Multiple Regression Analysis (MRA) A regression analysis can be used to estimate the value of an entire property or as a quantitative way for measuring the contributory market value for property components, including for example, a building. If you consider how useful a sale price is as a known value, what is not known is what the contributory value of the components is, such as the land and the building separately. If land values were developed using vacant land sales, then a sale price of an improved property less the estimate of land value results in a market value estimate of the building. In turn, the market value of the building subtracted from the replacement cost new (RCN) of the building equals the amount of depreciation as of the assessment date. The amount of depreciation divided by the RCN equals a depreciation percentage. An estimate of depreciation derived in this technique can then be used to indicate an appropriate effective age of the building. The relationship between effective age and depreciation can be adjusted based on an overall condition rating and applied in a market-adjusted cost, mass-appraisal model. MRA is a tool that could effectively produce an adjusted sale price of every property, then the results used to calibrate the cost model employed as the primary approach to value. MRA can also be used to develop adjustments for changes in market conditions over time instead of relying on conventional wisdom (see Foreign Investors). MRA is a very good valuation tool to consider developing for groups of properties, provided that the necessary data is current and accurate and sales or income data is available. Foreign Investors What does the value of local real estate have to do with the price of tea in China? It turns out that they are connected through the global economy. An analysis of real estate transfer data published by the Banker & Tradesman of properties within Brookline, MA in the five years since the great recession shows that approximately onethird of the transactions with reported sale prices over $100,000 were not financed with mortgages. The assumption then is that they are all cash transactions. In prior decades we viewed sale prices not involving conventional financing as warranting an upward adjustment. I don t think that is the case today. All cash transactions are just as likely to be for more than the asking price versus less than the asking price. Buyers are investing in real estate in the current market because it is a good investment compared to alternatives such as the stock market and bond markets. When five-percent is a reasonable rate of return with less risk than the stock market, people with the money to invest will find the best real estate to buy. Do you know where your best real estate is? Get ready. PAST PRESIDENTS LUNCH Every two years the Past Presidents of the MAAO get together for a social gathering and affable luncheon. It is always an enjoyable day and always pleasant to see old friends and reminisce about Old Times. This year the luncheon was held on May 4th at the Historic Wayside Inn in Sudbury. There were 28 people in attendance and 19 were Past Presidents, a good turnout. Below are a few images of the gathering. Past Presidents Galore The Three Amigos Arthur Holmes, Frank Ragonese, Dick Weaver May 2016 MAAO NEWSLetter 11

12 Municipal Audit Professionals, LLC Business Personal Property Tax Auditing Daniel Crumley, CPA, has been performing personal property audits nationally for over 12 years and in Massachusetts for over three years. In Massachusetts alone, those audits have discovered over $350,000,000 of new property returning in excess of $6,000,000 in additional first year tax revenue to jurisdictions. With an average return of over $10 in additional tax revenue for every $1 spent on a program, auditing represents a fiscally responsible use of scarce resources to ensure equity and uniformity in the tax base. Daniel Crumley, CPA Municipal Audit Professionals, LLC 759 Chief Justice Cushing Highway, Box 325 Cohasset, MA (P) (C) dan@municipalauditing.com The Warren Group is the leading provider of timely and reliable information for real estate and financial service professionals. Our commitment to deliver impartial news and accurate data has earned the trust of informed decision-makers since Thanks to all of you for your support & cooperation as we continue our working partnership. Please visit to learn about The Warren Group and our Real Estate Records Service a searchable database of every $1,000+ real estate transaction that has taken place in New England since Linda MacDonald Phone Fax Summer Street Boston, MA BANKER & TRADESMAN THE COMMERCIAL RECORD 12 MAAO NEWSLetter May 2016

13 LOMBARDO S WINTER MEETING 2016 The annual MAAO Winter Meeting held at Lombardo s in Randolph proved to be a very well attended session that provided a strong educational component to our members. The discussion on solar power is, obviously, a topical subject that garners significant discussion and lots of questions. The afternoon sessions also were very well received. The Affordable Housing session by Elizabeth Rust generated much interest and the latest tech toys from Chris Wilcock always fascinates. If only we all had the dollars to utilize the new technology!!! This year our President, Ellen Blanchard, asked us to collect items to be donated to The Shriners Hospital for Children in Boston. The Shriners Hospital for Children - Boston specifically deals with children to age 18 that have either orthopedic, burn care, cleft lip and palate needs. A great big THANK YOU to the attendees who were very generous with their donations. Several boxes of items were donated and have been delivered to the hospital and I am sure they are greatly appreciated by the patients. Elizabeth Rust, Regional Housing Services Chris Reidy and the rest of the Solar panel Thanks to all for their generosity!! And it all ended up on Ellen s desk to be delivered to The Shriners Hospital for Children in Boston Have you seen our Web site lately? MAAO.ORG Resources & Forms Calendar Announcements Employment Opportunities May 2016 MAAO NEWSLetter 13

14 SPRING CONFERENCE 2016 The annual MAAO Spring Conference was held at Devens Commons in April again this year. A well-attended and informative program was presented to our members. The GIS program, the Interim Adjustments program, and the Assessors Calendar presentation provided much useful, timely, and valuable information. The venue was excellent and the convenient location is very beneficial to many of our members. Sue LeMay and Lane Partridge, Assessors Calendar Feng Yang, GIS Presenter Jacqui Nichols, Interim Adjustments MAA DESIGNATIONS Several Designations were awarded at both the Winter and Spring meetings. Congratulations to our new designees. The enthralled attendees Sue Gore, MAA # 1256 Linda DuLong MAA# 1261 Renee Brabant, MAA#1258 Also awarded but designees were not present: Jose C. Alves, MAA# 1254; Thomas F. Lyons, MAA#1255; Jessica R. Cristani, MAA# MAAO NEWSLetter May 2016

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