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The town board rejected a resolution proposed by Town Supervisor Paul Feiner July 27 seeking to refund penalties and interest to 1,454 residents who didn’t receive tax bills due to a software glitch.

The resolution, which was presented but not seconded for a vote by the board, would have reduced interest and penalties to 2% and would have refunded any penalties paid above 2% after April 30 but before Aug. 1. Late payment penalties are 2% in May, but increase to 5% in June and July and 7% in August and September.

According to the town’s systems manager, Dipak Pandya, an indexing error in the town’s Property Assessment System (PAS), which is maintained by Software Consulting Associates (SCA), erroneously added bank codes to 1,454 random properties within the town’s database. When a bank code is assigned to a property, the tax bill is digitally forwarded to the bank so it can be paid through a mortgage and a physical bill isn’t sent to the homeowner. If a bank code is not assigned, tax bills are mailed to property owners using an outside mailing and packing company. The town’s tax receiver, Anne Povella, told the Inquirer that roughly 60% of the town’s taxes go directly to banks and she confirmed that both unincorporated as well as village residents were affected by the glitch.

Pandya said he contacted SCA, which was aware of the error and was able to fix it. He said the vendor would be available the next time tax bills were generated to make sure there are no errors.

“Software Consulting Associates is maintaining Greenburgh’s assessment program while they transition to the Tyler [Technologies] program, which has taken longer than we thought,” said Alexander Zane, the vice president of operations for SCA. “The database was 30 years old and such errors do occur irregularly.”

Town attorney Tim Lewis and Feiner told the Inquirer they didn’t know when the town began its transition from using PAS to Tyler Technologies Inc. software. The town has had a long relationship with the technology company, especially as it pertains to reassessments. In 2014 and 2019 Tyler Technologies was awarded contracts to conduct townwide reassessments for a total of $4.3 million.Pandya said the new software from Tyler Technologies wasn’t calculating bills and the town is waiting for the company to make the feature available. There is no estimate for when it would be integrated into the system.

Because of the error, Feiner said he would seek a partial refund from SCA’s $82,200 contract from 2016. Although the SCA contract says the company will provide services to correct software problems, the company made it clear that it was not liable for consequential damages.

At a town board work session on Aug. 3, Pandya said SCA agreed to apply a 7% or roughly $500 credit for the town’s maintenance charge next year. According to Pandya, this is the first time there was a glitch in the software since the town retained SCA’s services.

Povella said people began contacting the town around the April 30 payment deadline, asking why they didn’t receive a tax bill in the mail. Povella said the tax department emailed or sent physical copies to homeowners who didn’t receive a bill, though residents are also able to look up and pay the tax bill on the town’s website.

“It’s very unfair that maybe somebody didn’t get a bill, but that’s not a good enough reason not to pay your taxes,” said Povella. “It doesn’t hold up for the IRS, it doesn’t hold up for New York State income tax, and it doesn’t hold up for your credit card bills or anything else. If you don’t get a bill, they’re not really responsible for that. You still owe the money.”

Of the 1,454 properties affected by the glitch, 826 paid town taxes by April 30 without penalty; 321 homeowners paid with a 2% or 5% penalty and 307 haven’t paid yet.

According to New York State’s Department of Taxation and Finance as of 2019, a taxpayer who doesn’t receive a tax bill must still pay property taxes, and must pay late fees and penalties if the payment is made after the due date. According to the department, New York State’s real property tax law doesn’t provide authorization to waive the penalties or interest.

Though the law doesn’t directly allow a municipality to waive penalties and interest in the specific scenario of tax bills that are not sent or received, Section 1182 of the law allows a governing body of a tax district to cancel in whole or in part interest and penalties, if it’s determined that it is for “the best interests of the tax district.”

As prescribed in Section 922 of real property tax law, even if a bill isn’t mailed or received by mail, the taxes are still valid and must be paid.

At the town board meeting July 27, Lewis said that although property owners who didn’t receive a bill are obligated to pay taxes, the question was whether the board could waive penalties if it thought that was in the best interest of the town.

“I believe that the discretion is there,” said Lewis. “Others may not believe that, but that’s the crux of the argument.”

In a July 19 memo to the town board, Lewis wrote that the law was “crystal clear” on the issue of waiving penalties and he noted the town board approved a resolution in January 2020 to waive interest and penalties for 112 North Lawn Ave. so the property could be developed as two single-family affordable housing units.

Feiner said he felt like the town was responsible for the recent failure to mail bills and needed to “admit it and not punish residents.” Though he was steadfast in supporting the measure, he faced opposition from the board. He didn’t receive a second on the resolution from councilmembers Francis Sheehan, Gina Jackson or Diana Juettner and Councilman Ken Jones recused himself from the resolution, as he was one of the people affected by the glitch.

Sheehan argued that the board needed to be guided by the law and the board didn’t have the option to waive the penalties because of a mail-related error.

Sheehan also referenced a 1967 opinion from the New York State comptroller’s office, which found that although it seemed unfair, according to the law, the failure to mail a statement or the failure of the property owner to receive a statement by mail didn’t affect the validity of the taxes and the prescribed interest.

The tax department portion of the town’s website also reminds residents that the failure to receive a bill does not exempt them from penalties for late payments.

“There is a way to address this and that’s through our state legislators,” said Sheehan. “Not through a resolution of the town board.”

Feiner said he disagreed with Sheehan’s interpretation of the law. He also said he would be willing to adopt another resolution to ask the state comptroller for an opinion on whether penalties could be waived due to a computer glitch.

Lewis said there was a process for asking for a waiver, though Feiner was hesitant to pursue that avenue.

According to Lewis, the 1967 opinion from the comptroller is the most recent opinion on the matter, though there’s also a 1977 opinion from the State Board of Equalization and Assessment, which found that just because someone doesn’t receive a statement of taxes due to an error (in the 1977 case a resident was not properly entered on the tax roll and therefore did not receive a statement of taxes), there was no provision in the law that would permit a waiver of penalties and interest. There was also an opinion from the comptroller’s office from 1997 which found that, under certain circumstances, a tax district could cancel, in whole or in part, interest, penalties or other charges imposed by law.

Lewis said he planned to draft a letter to the comptroller’s office, though he doubted the response would be helpful.

“Often times the response is ‘do what you think is best,’” said Lewis. “They really don’t want to get involved … in these local issues, particularly if it’s not anything novel or they think the issue’s already been addressed.”

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