City cuts ties with property revaluation company

Council won’t accept low bid on revaluation contract; firm’s work in 2017 was controversial

:OONSOC.ET – After a :arwick company performed a controversial and unexpectedly costly revaluation of city real estate in 201 , it won’t get the chance to do it again.

The 201 contract with Northeast Revaluation Group marked the first time the city had switched appraisal firms in 1 years. On Monday, the firm was the low bidder for the 2020 revaluation contract up for a vote before City Council, but Councilman -ohn :ard argued strenuously for dropping the company, citing the high cost of defending its work in court.

Councilors unanimously agreed, voting -0 to permanently table a resolution that would have resulted in the hiring of the Northeast for 12 ,000. Councilors wanted to amend the resolution to revert to the city’s prior contractor, 9ision Government Solutions, despite its having bid substantially higher for the same work – 1 ,000 – but they were advised by City Solicitor -ohn 'eSimone to draft a new resolution for action at another meeting.

:ard said 9ision might come with a higher price tag, but the city will likely save the money with the company in the form of reduced litigation expenses.

The councilman said Northeast’s work had resulted in an alarming level of dispute from property owners, including numerous lawsuits challenging the assignment of values to real estate – figures that drive tax bills. The city

routinely e[pects such challenges in the wake of a revaluation and budgeted 35,000 to defend Northeast’s work in court, Ward said, but the actual cost so far been 114,000.

“I just think it’s tragic that we have to spend this much money defending something I think, to a certain e[tent, many people feel was so poorly done,” said Ward. “I think the avoided costs of legal battles is worthy of simply going back to Vision *overnment Solutions to do this revaluation in hopes we can avoid the kind of litigation we’re currently involved in.”

Ward said he e[pects the legal e[penses incurred in defending the company’s work in Superior Court will continue accruing in 2021 because some of the suits will carry on into that time frame and may be settled. Typically, he said, there’s not much of an upside in the resolution of these property disputes because the courts either “divide the baby” with the city or the city loses.

“It is rare that cities win these fights,” said the councilman.

The work that Northeast did for the city in 2017 was substantially different than the job it’s now been e[cluded from doing. The first contract called for a full-blown property revaluation resulting from on-site inspections of all residential and commercial parcels by trained staff. State law reTuires cities and towns

to conduct these detailed updates of property assessments once per decade so that ta[es are based on current values and thus distributed eTuitably throughout the ta[ base.

In addition to performing inspection-based revaluations every decade, state law reTuires less rigorous adjustments every three years, based mostly on a review of e[isting data. It was one of these so-called “statistical” updates to the real estate stock that Northeast was bidding on.

When the city hired Northeast for the first time three years ago, officials had few Tualms about dropping Vision *overnment Solutions, largely because they were acting on the recommendations of the ta[ assessor and the finance director. The city paid 347,000 to hire the company for the full-scale overhaul of property assessments for more than 10,000 individual parcels of real estate.

At the time, 0assachusetts-based Vision *overnment Solutions had been doing the city’s revaluation work without interruption since 2002, officials said. The company also had at least 15 contracts with other municipalities in the state, as well as many others throughout the region.

During a brief phone interview after 0onday’s council meeting, Ward said it was the late Albert *. %rien, former council president and a real estate appraiser by trade, who first criticized Northeast’s

work. Ward said some of the greatest concerns about the company’s calculations involved commercial apartment comple[es like Hanora Lippitt 0anor, 1 0ain St.

Some of these properties were hit with “e[treme changes” in value, which led their owners to challenge the new assessments assigned to them by Northeast in court. Ward said he had obtained a list of the litigants from the Law Department, but did not have it available as of press time.

While Ward and other officials were ready to amend the resolution to swap out Northeast’s bid for Vision on 0onday, DeSimone recommended voting on a replacement resolution at the ne[t meeting. The proposed change was so comprehensive that DeSimone said he was worried that making it without proper advance notice might run afoul of the state Open 0eetings Act.