A commissioned report released Friday by the Board of Assessors revealed “significant issues” with last year’s property valuations, citing “incorrect methodology” that led to “unrealistic” rates.
The report, obtained by the Current via a public records request and authored by independent consultant Jim Doherty, found that adjustments to land value tables resulted in unrealistic building cost table adjustments. Land value tables are tools assessors use to set property values across different neighborhoods or areas of a town. These tables help ensure that similar plots of land in the same area are valued consistently, taking into account factors like location, size and local amenities.
The audit reveals that many homes in the Naugus Head and Cloutman’s Lane neighborhoods were over-assessed, along with homes on the “inner Neck.”
The report noted that, in formulating the assessments, there were problems with both the building and the land costs used, which it noted are the “backbone and lead drivers of the valuation process.”
Doherty found that the assessor had essentially done the process backwards, adjusting the land values first, in what turned out to be a misguided attempt to bring assessment ratios more in line with Department of Revenue requirements. The problem with that approach was twofold, Doherty explained.
“The initial focus on adjusting land values significantly not only created potential inequity amongst various neighborhoods but required nonsensical adjustments to building cost,” Doherty wrote.
It “should have been a clear red flag” that nearly half of the building style tables — for ranch, split-entry, bungalow, conventional and Cape-style homes — required a “downward adjustment,” he added.
Instead, what the assessor should have done was adjust the building tables first, then the land tables, according to Doherty.
“The focus on the land tables initially caused the building tables to be radically adjusted to meet certification requirements,” Doherty wrote. “If the building rates were all adjusted at the beginning of the analysis the increase in land values would not have been so dramatic. No building base costs would have gone down.”
These issues led to a surge in abatement requests, with 334 filed in January — the highest number since 2008. The board approved over 80% of these applications, resulting in approximately $541,000 in refund checks.
The abatement process also revealed “indications of incorrect data on building characteristics and neighborhood coding,” Doherty noted. He recommended rebuilding the cost tables and conducting a field review to ensure the integrity of the data.
“It is critical that the property data be as accurate as possible, it is the foundation of the valuation,” wrote Doherty.
The Board confirmed that homeowners with over-assessed values who did not file an abatement by Jan. 31 are not eligible for refunds now.
Board member Jonathan Lederman emphasized that while many homes were over-assessed, some were undervalued, incorrectly shifting the tax burden. He addressed residents’ concerns that the valuation process was a “money grab,” pointing out that the town collected only the legal limit allowed under Proposition 2 1/2 townwide, not more.
Board Chairman John Kelley said Town Assessor Karen Bertolino remains on paid administrative leave, costing taxpayers over $23,000 in the past three months.
“We want to resolve the issue as soon as possible,” Kelley said, referring to Bertolino. “We’ve already started the next fiscal year, we have a lot of work to get done.”
The board said there is some uncertainty on who fires and hires assessors, after a May Town Meeting vote that placed the assessor position under the jurisdiction of the Finance Department. Kelley said they’re still seeking legal advice on possible conflicts between state law and the recent Town Meeting decision about the assessor’s appointment process.
Kelley announced that the town is hiring Patriot Properties to start a complete reassessment this summer. Residents will see a preliminary assessment, called an impact statement, this fall and will be invited to comment on the value before it’s finalized.
While Marblehead typically conducts a full revaluation every five years, with the next one scheduled for 2025, the board has decided to accelerate much of this process to 2024 due to the serious errors.
The board released a letter alongside the report Friday, explaining the report’s findings and their next steps.
“This revaluation process is designed to make sure that all properties are fairly assessed,” the letter read, emphasizing that it will not change the total amount of taxes collected across town, which is determined by Town Meeting.
The board’s letter concludes: “We sincerely apologize for the issues that have occurred and are committed to restoring trust in the assessment process. We appreciate your understanding and patience as we work through these necessary remediations.”
