Office of Real Property Services

The enacted budget makes the following changes to the Executive Budget (analysis as of 3/30/09): 

• No changes to the proposed appropriations for state operations. This will result in the abolition/layoff of 12 FTEs and the attrition of 18 FTEs.  At least 5 PEF members will be affected by the host arrangement that ORPS is entering into with the Department of Taxation and Finance.

• Rejects Article VII language to change the “floor” adjustment used in computation of STAR exemption benefits from 11 percent to 18 percent;

• Rejects Article VII language to reduce state payments in lieu of taxes and freeze payments for taxes on state-owned lands (PILOTs).

According to the Assembly Yellow Book, (analysis as of December 31, 2008):

• The Division of Budget estimates that approximately 5 percent of the positions will be eliminated via attrition (6 FTEs), not filling current vacancies (4 FTEs), and by eliminating the remaining positions (20 FTEs). The Assembly analysis described the positions that will be eliminated as human resources and administrative positions.

The Executive Budget recommends (analysis as of December 16, 2008):

• The difference between the estimated FTEs for SFY 2008-09 and the adjusted level of 2008-09 FTEs is -26. This should be addressed at statewide labor management.

• The decrease of 30 FTEs from the adjusted FTE level for FY 2008-09 can be attributed to continued application of the hiring freeze and reduced staffing needs from a restructuring of agency administrative support functions. Specifically, the Executive Budget proposes a host agency arrangement for the ORPS with the Department of Taxation and Finance. The Agency Presentation states this arrangement will reduce overall costs for administrative support by approximately $700,000 on a full annual basis. The restructuring and change in staffing should be clarified with management.

• The total appropriation for Personal Service is $24.1 million, a $605,000 decrease (-2.4%) from SFY 2008-09. However the Executive Budget Agency Presentation narrative for the ORPS shows a net $2.8 million decrease in the Personal Service appropriation from the adjusted SFY 2008-09 agency appropriation. This reflects adjustments due to negotiated union raises and agency-wide reductions made during the fiscal year.

• An All Funds decrease of $12.5 million (-27.7%) from SFY 2008-09. This decrease is spread across all three accounts within the Policy and Organizational Support Services Program and across all areas of service: Improvement of Real Property Tax Administration Account (-$11.7 million); Industrial and Utility Service Account (-$422,000); and Local Services Account (-$397,000). According to the Senate analysis, this decrease is attributed to ongoing efforts to achieve administrative efficiencies.

• The Executive Budget proposes to fund most of the Office’s operations directly from the General Fund, discontinuing the use of a Special Revenue account that has experienced a deficit in recent years. This accumulated deficit, caused by declining revenues from a real property transfer fee that supports agency operations, is addressed by increasing the fee from $50 to $100 for housing cooperatives, from $75 to $125 for residential property, and from $165 to $250 for commercial property. 35 of the agency’s 293 FTEs will be funded from Special Revenue Other accounts

• ORPS plans to reduce its central office lease expense to achieve approximately $1 million in full-annual savings beginning in 2010-11. As a means to achieve these savings, ORPS is evaluating lease options for ORPS’ Albany operations, which may likely include relocation within Albany County.

• The Office of Real Property Services employed an estimated 43 employees under consultant contracts in SFY 2008-09 at a cost of $193,000 or an average cost of $4,488 per consultant contract employee.  It is estimated that $185,000 will be allocated for consultant contracts in SFY 2009-10 for 35 consultant employees, at a cost of $5,286 per consultant contract employee, which is a 4 percent decrease from SFY 2008-09.

• The following programs had substantial decreases in the proposed contractual services appropriation when compared to SFY 2008-09:

• Article VII language proposes to authorize an increase in real estate transfer fees. This proposal would increase the real property transfer fee that is paid whenever a deed is recorded. According to the Budget Briefing document the deposit of these fees, which support expenses of the ORPS, would be redirected to the General Fund.

• Article VII language to extend authorization for the ORPS to charge oil and natural gas producers for determining the property value of oil and gas units of production. The Article VII summary memo indicates that enactment of this language is necessary to implement the SFY 2009-10 Executive Budget because it authorizes an estimated $43,000 in fees that are dedicated to support operations of the ORPS.

• Article VII language to reduce state payments in lieu of taxes and freeze payments for taxes on state-owned lands (PILOTs).

• Article VII bills would also: eliminate the Middle Class STAR program; decrease the NYC STAR Credit amounts to pre-rebate levels (reduced to $125 for married/surviving spouses and $62.50 for others); change the “floor” adjustment used in computation of STAR exemption benefits from 11 percent to 18 percent; and permanently shift December payment for NYC STAR to June.