Mediation reduces values by $2.05 million for 40

Another $2.05 million has been knocked off the assessed values of 40 Luzerne County properties that went through court-level mediation, according to a review of settlement orders.

That brings the total mediation reductions to $2.59 million for 56 settlements reached to date.

Property owners undergo mediation when they challenge their county assessment appeal board rulings to the Court of Common Pleas. The county appeal board solicitor and property owner must both agree to the settlement amounts.

The largest reduction so far was $346,500 for a three-bedroom, 4,834-square-foot home in the Ice Ponds section of Rice Township.

Reassessment company 21st Century Appraisals Inc. originally valued this property at $1.1 million – $959,100 for the 2004 home and $135,700 for the underlying 5.87 acres.

After a formal assessment appeal, the value was reduced to $996,500 by lowering the home value but not the land.

Another $346,500 was taken off at mediation – for a new total assessment of $650,000 -- by reducing the home to $514,300.

Mediation paid off for the property owner, who will save about $4,600 in taxes because of the settlement.

School, county and local property taxes will be around 13.355 mills in Rice Township, according to county figures. The property owner would have paid about $13,300 in taxes on the county appeal board value, compared to $8,680 on the mediation one.

Of the 40 most recent settlements, six properties were lowered more than $100,000.

The highest of these was a $195,700 reduction for a four-bedroom, 4,183-square-foot home on Timber Grove Road in Jackson Township.

21st Century had valued the 1988 brick home on 2 acres at $801,400, and a county appeals board reduced the property to $770,700.

Mediation brought down the value to $575,000, saving the property owner about $2,600 in property taxes compared to the appeal board value.

The public has no way of knowing the rationale for the reductions because the mediation conferences are held in private, and the supporting evidence is not attached to the settlement orders.

County Assessment Office Director Tony Alu said two staff-certified state evaluators are analyzing all proposed settlements before they are accepted by appeal Solicitor David Schwager.

“There’s quite a bit of debate when a proposal comes in. Sometimes we say no to the amount being sought by the property owner. There’s a lot of back and forth,” Alu said.

County Specialty Courts Director Sam Guesto, who was assigned to oversee the mediation, said property owners are bringing appraisals, pictures, maps and comparable sales to argue their cases.

Since taxing bodies had to adopt budgets before mediation kicked into gear, the reductions granted through mediation will create unbudgeted revenue losses in 2009. The county is notifying taxing bodies of settlements as they are filed.

But Guesto noted that each settlement is saving the county the expense of arbitration, which is the next court-challenge step if mediation is unsuccessful.

The courts added mediation, arbitration and special master steps for reassessment court challenges, arguing that judges wouldn’t be able to process the cases in a timely manner on top of their regular workloads.

Three attorney arbitrators must sit on each panel, and they are each paid $125 per case – more if the challenge is unusually long or complex.

As of Thursday afternoon, a total 1,444 court challenges had been filed, including the 56 that were settled. The cost for attorney arbitrators would have been at least $541,500 without mediation.

More challenges are expected because the owners of roughly 4,156 properties have until Feb. 4 to contest their appeal board rulings.

Property owners must pay a $111.75 court challenge filing fee, which means the county has received $161,367 in revenue on the 1,444 mediations filed to date.

Guesto expects to process up to 20 mediation cases per week, which means the existing caseload won’t be wrapped up for 69 weeks, or the spring of 2010.

Tax bill reminder

Luzerne County Assessment Office Director Tony Alu issued a reminder Thursday that property owners with pending mediation will still be expected to pay their 2009 tax bills based on their county assessment appeal board rulings.

An overpayment refund will be issued if property owners obtain reductions at mediation.

County and municipal tax bills will be mailed in February, while school tax bills are usually issued in July. Property owners save 2 percent on their tax bills if they pay within 60 days.

“If people don’t pay in the rebate period and they don’t win a reduction at mediation, they’ll lose their chance to get a rebate,” Alu said.

After the 60-day rebate period, property owners have another 60 days to pay their taxes at face value. A penalty of up to 10 percent is added after 120 days. All 2009 property taxes must be paid by Dec. 31 to avoid additional charges that may be incurred.

Some mediation settlements may be reached during the rebate period, after the tax bills have already been printed and mailed. Alu said these property owners should pay the full amount listed on the bill if they want to receive the rebate. Overpayment refunds will be issued as soon as possible, he said.