Politics & Government

UPDATED: Council Approves $600K For Property Revaluation

Town expects to pay out close to $1M in refunds for property tax appeals.

Madison Borough will have to pay out close to $1 million in property tax refunds over the next several years as residents and businesses continue to file appeals.

To bring borough property values in line with a softer real estate market, the Borough Council during its meeting Monday at Hartley Dodge Memorial unanimously approved an ordinance for emergency appropriations totaling $600,000 to pay for a county-ordered revaluation of property values, to be effective Jan. 1, 2013.

The most recent revaluation was conducted in 2000.

Tax appeals for 2011 total $180,000. About one-third of those, or $60,000, will be paid out of 2011's surplus. The remaining 70 percent are still pending in court, with estimated refunds totaling $480,000, according to council member Jeannie Tsukamoto, head of the borough's finance committee.

A total of $68,000 in appeals are still pending from 2009 and 2010, with estimated refunds of $250,000, Tsukamoto said, for a total of $938,000 in non-budgeted liability.

“That’s why I did not want to vote in a municipal budget without accounting for the tax refunds,” Tsukamoto said after the meeting. “We may have to bond it out, but we won’t know for sure until the process is completed in the coming years.

“But we must do it to prevent these kind of payments for appeals in the future,” she said.

She said the selection of a reliable assessor will be critically important, in order to manage property values in a real estate market where prices have fallen sharply over the past several years.

Borough Chief Financial Officer Robert Kalafut said to pay for the $600,000 for the revaluation, Madison would sell notes in 2011, rolling them over four times until they are extinguished.

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Interest would total about $35,000 at a rate slightly north of 1 percent over the life of the notes. The emergency appropriations also fall outside state spending caps and and there is an exemption allowed in the state tax levy cap.

In other business, the borough is withholding close to $170,000 in payments to a contractor involved in the renovation of Hartley Dodge Memorial, until several construction issues are resolved. These include outside handicap railings, thresholds, and balancing of air conditioning, since some rooms are too warm while others are too cold.

The Council unanimously voted to cancel capital spending ordinances associated with Hartley Dodge and the police and fire complex. This will return $45,000 to the General Capital Fund, according to Kalafut.


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