Assess mediation process defended

Another $14.1 million in assessed value has been taken off the tax rolls in Luzerne County through the latest round of 83 mediation settlements granted since April 29, records show.

That brings the reduction total to $31.6 million on 400 settlements since mediation started in December. The county still has 1,600 more mediations to process.

The county will lose about $143,300 in tax revenue from the $31.6 million in reductions. School districts will lose hundreds of thousands of dollars.

Mediation has come under attack because the county’s reassessment company – 21st Century Appraisals Inc. – recently filed court paperwork alleging that mediation has resulted in “compromised” values on properties without “proper factual support” and a sufficient record of the proceedings.

While the final mediation settlement amounts are public record, the negotiation process is conducted out of the public eye. In comparison, assessment hearings before county appeal boards and judges are public.

21st Century, which is trying to intervene in one of the mediations, said the mediation procedure is leading or may lead to “unconstitutional systematic undervaluation.”

County officials have argued that their mediation solicitor, David Schwager, is experienced in assessment law and would not agree to an amount unless it’s researched and cleared by certified Pennsylvania evaluators who work in the county assessor’s office.

County commissioners Maryanne Petrilla and Stephen A. Urban addressed the topic during a Wednesday morning breakfast with Hazleton area business leaders, saying the 100 percent mediation settlement success rate shows that property owners are satisfied with the results.

“I think David’s a fair man, and he doesn’t want to have to go to court unless he has to,” Urban told the business leaders.

“I think he gets to a point where he believes the value is correct, and if the party wants to be stubborn, then the next step is to go up to the Court of Common Pleas and go to a court action,” Urban said.

Without mediation, assessment challenges would “languish in court” for two or three years, forcing property owners to pay taxes on the contested values until their cases are resolved, he said. The addition of mediation last year means judges will only hear the cases that aren’t settled.

The largest single mediation reduction granted in the latest batch was $4.1 million for The Hershey Co. plant in Hazle Township.

21st Century originally valued the candy manufacturing facility on 28.51 acres at $10.17 million, and the county appeals board upheld that value. The property was reduced to $6.04 million at mediation.

Schwager said this reduced value was largely based on Hershey Co.’s past assessment court challenge. That court case, which was resolved in October 2008, concluded that the property’s old assessment should be $302,000, which converts to a market value of $6.04 million.

Twelve other properties received reductions ranging from $228,300 to $1.48 million in the latest batch of mediations.

Hoping to ease any concern about the growing dollar amount of reductions, Schwager stressed that the assessor’s office and permanent three-member assessment appeals board “stand behind” all mediation reductions. There’s no incentive to cut values without cause, because the county wants to maximize tax revenue, he said.

“It’s our charge to come up with the true and reasonable value of all the properties, and that’s what we think this process is going through,” Schwager said. “You know that an assessment is successful when neither party is happy.”