Homeowners win tax refunds

LAFARGEVILLE — Three taxing jurisdictions must refund nearly $250,000 in property taxes to the owners of about 60 parcels at Thousand Island Park as part of a settlement agreement over disputed assessments.

The LaFargeville Central School District will take the largest hit, returning about $117,000 to the Wellesley Island property owners who challenged their 2006 and 2007 assessments in a state Supreme Court action.

Jefferson County must refund about $105,000 in property taxes, while the town of Orleans will return a total of about $18,000 it collected over the two-year period for property taxes, a fire district and highway funds.

In all, about $241,000 must be paid back to the property owners, according to a settlement agreement approved March 11 by Judge Joseph D. McGuire.

Cottage owners in the 200-acre complex on Wellesley Island enter into long-term, 99-year leases with the Thousand Island Park Corp. The owners pay taxes on structures and other improvements on the leased land, while the corporation is responsible for paying taxes on the land itself.

The property owners filed action under Article 7 of Real Property Tax Law two years in a row challenging the town's 2006 and 2007 assessments, claiming assessments on their seasonal residences soared after a townwide revaluation was conducted.

Because the cases have been pending since 2006, the school district's board of education has planned for any eventuality in the matter, according to Superintendent Susan L. Whitney.

"We've been fiscally prudent and created a reserve account to make sure that it's not going to hit taxpayers all at once," she said.

The larger issue for the district may be the decrease in assessments going forward. A reduction in the overall assessed value of the properties could have an effect on the district's tax rate, Ms. Whitney said.

In addition to the action brought by the 60 property owners, the corporation has filed two separate actions over assessments at the park.

One of the cases, also an Article 7 action started in 2006, was the subject of a bench trial in July, but no decision has been rendered, according to Orleans town Attorney James A. Burrows.

The property owners' case also was scheduled for trial last July, but the settlement agreement reached the day before the trial was to start precluded it, Mr. Burrows said. Since then, the two sides have been working out assessments deemed equitable to both sides.

"For the town and the school board, the goal was not to have the assessment as high as possible, or to justify an assessment," he said. "It was to be fair and make sure everyone in the community is treated the same."

Still out there is a challenge by the corporation to have its assessment lowered, an action that also should resolve the question of what method is used to assess all park properties. At least since the mid-1960s, each individual structure was assessed and each property owner sent a tax bill. The corporation also was assessed and billed, separately from the individual owners, for the land it owned.

Starting in 2008, Orleans's assessor, Denise J. Trudell, stopped assessing individual properties and deleted 428 of a total of 471 individual tax parcel identification numbers from the tax rolls. Only parcels that qualified for a veteran, senior citizen or STAR exemption stayed on the rolls.

In court documents, Mrs. Trudell said the individual parcels were provided "as a courtesy to Thousand Island Park many years ago." The individual parcels meant the corporation no longer had to distribute hundreds of tax bills, collect the taxes or wait until all the money was received before forwarding it to the taxing jurisdictions.

Ms. Trudell contended that the individual parcels represented "preferential treatment" for the park because the town did not separately assess improvements on other similar lands, such as trailer parks.

She claimed that because lease transactions in the park tend not to be publicly recorded, or if they are, there often is no dollar figure included, it is difficult to calculate comparable sales used in helping to determine assessments.

The corporation, which saw its total 2008-09 assessment rise from about $17 million to $90 million as a result of the change in assessing method, brought action seeking a court's review of its assessment and a determination on how properties should be assessed. It argues, among other things, that the change in method was retaliation for previous assessment challenges.