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Apr 15, 2009 11:04 AMPublication: The Southampton Press

Inaccurate data could jeopardize PILOT program

Apr 15, 2009 11:04 AM

New York State Assemblyman Fred Thiele Jr. said this week that he has prepared a bill that would repeal the Payment in Lieu of Taxes, or PILOT, program, and has threatened to introduce the legislation in Albany if Southampton Town does not provide accurate values of the lands used to calculate the payments.

Mr. Thiele has also prepared a second bill, one that permits the PILOT program to continue, albeit with tighter fiscal controls and clarifications on how the payments may be made. Which piece of legislation the assemblyman will introduce in Albany is up to the Town Board, Mr. Thiele said.

At issue is a flawed formula, according to Mr. Thiele, that has been used to calculate how much money can be doled out in PILOT subsidies from Community Preservation Fund revenues to reimburse taxing bodies for revenue lost when land is preserved. The assemblyman has requested that the updated, accurate data be provided by the town by the end of April. “Which bill will move forward will depend on the provision of accurate data by the town,” Mr. Thiele said.

According to Town Board members Chris Nuzzi and Anna Throne-Holst, who the assemblyman credited for interceding to obtain that accurate data, the information Mr. Thiele is seeking is forthcoming. Both Mr. Nuzzi and Ms. Throne-Holst said Town Assessor Ed Deyermond and CPF Manager Mary Wilson are working on the new figures and expressed confidence that they would be able to provide Mr. Thiele with the necessary data within his requested time frame.

However, the Town Board passed a resolution on Tuesday—with Mr. Nuzzi and Ms. Throne-Holst objecting—to spend $10,000 to procure an independent appraisal of those lands. Town Supervisor Linda Kabot said that bringing in an outside appraiser would add “integrity to the program.”

Ms. Throne-Holst questioned how bringing in an outside appraiser with only two weeks left before the end of month would get the job done. “That work is being done as we speak,” Ms. Throne-Holst said, adding that Mr. Deyermond has the expertise to assess land within the town.

An outside assessor, in the view of Mr. Nuzzi and Ms. Throne-Holst, is not what Mr. Thiele was calling for with his demands. Both Ms. Wilson and Mr. Deyermond are capable of compiling the accurate land assessments needed to satisfy the assemblyman, Mr. Nuzzi said.

Under the PILOT program, Southampton Town can tap up to 10 percent of its Community Preservation Fund for tax relief payments to school, fire and ambulance districts within the Central Pine Barrens that have suffered tax loss due to lands within those districts having been taken off the tax rolls for preservation purposes.

Created in 1998 to preserve open space and historic farmland, the CPF generates revenue from a 2-percent transfer tax on real estate transactions that is typically paid by the purchaser at the closing table. In 2002, the CPF law was amended to allow Southampton Town to allocate some of those funds toward tax relief in high-tax, low-property wealth districts where large swaths of land had been removed from the tax rolls.

But the PILOT payments, which the assemblyman has supported as a meritorious program to help mitigate the tax impacts of preservation, has been plagued by, in the words of Mr. Thiele, “use of ineligible parcels, wildly inaccurate assessments, and the use of an incorrect formula to apportion each district’s PILOT payment.”

One example Mr. Thiele cites is a piece of land in Hampton Bays that was assessed at $47 million, despite the fact that the parcel cannot be developed. During high tide, the majority of the property is underwater.

Ms. Kabot said she takes exception to Mr. Thiele’s characterization of the town’s PILOT practices. In a letter drafted Tuesday to the assemblyman, the supervisor accuses Mr. Thiele of politicizing the PILOT issue.

“You are very talented in misrepresenting the facts with regard to the issue,” Ms. Kabot states in her letter. “Rest assured, I will continue to work to ensure the integrity of the program to the best of my ability.”

In particular, Ms. Kabot criticized a 2007 amendment to the PILOT program that broadened its eligibility requirements, allowing more districts to qualify for the payments by basing the payments on a need index established by New York State Education Department. Conforming to that amendment, which did not go before the voters, resulted in the release of $4.8 million in PILOTs in 2007, which included an overpayment to Hampton Bays. Former town supervisor Patrick Heaney has been criticized by Ms. Kabot and others for scheduling a photo-op that year in which he presented an oversized check to the Hampton Bays School District before the funding had been secured.

The skewed land assessment evaluations have resulted, in Mr. Thiele’s opinion, in some districts being underpaid and some being overpaid in 2007. “In short,” Mr. Thiele said, “there has never been any correlation between the PILOT payments actually made and the legal requirements of the program.”

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