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QUARRY VIOLATIONS -
Mined lands should be assessed under a complicated state formula that few understand.
NEW SAUGERTIES TIMES, March 21, 2002, p. 1 Vernon Benjamin
Does Saugerties get enough taxes for the stone quarries that are here?
That tantalizing question arises in the fact that the town does not evaluate quarry areas along the formula provided by the New York State Office of Equalization and Assessment (E&A), the agency that helps guide localities through the complicated avenues of real property valuation. And in this case, a guide on the level of Beatrice is needed to fathom this Dantesque world.
Most lands are evaluated for assessment purposes on their vacant status. Values run higher for vacant land in industrial or commercial zones, but even then all properties are usually uniformly assessed according to the type. Lands that hold storage units also should be (and are) assessed differently, since the land space itself generates the income for the owner. The same might also apply to campground facilities.
E&A developed a separate formula for quarries and mined lands in the belief that these lands should be treated differently, since it is the property itself, not what happens on it, that generates the income. The complicated E&A formula bases the value on the income the quarry can be expected to produce over its lifetime, whether that be five, ten, 50 or 100 years.The "proven reserves" of stone, an "annuity factor" and a capitalization rate are used to assess the property based on an anticipated 5% profit margin.
E&A offered an example using Lehigh Portland Cement Company and the average price of crushed stone in 1991-1993. The value of the land, the agency said, can be determined if the assessor would "capitalize the potential net income received from the sale of the mineral deposit over the life of the quarry."
In the crushed stone industry, the potential net income is figured at 5% of the average price per ton. In 1991-1993, that was $11.32, so the net income on that tone was $0.55. At a rate of 800,000 tons a year (typical of Lehigh's production), that would net out at $44,000. That translates to a $4.4 million value of the quarry lands in this example, or an average value per acre of $3260.
Local quarries do not yield the amounts of mined stone that a cement quarry does. But a knowledgeable buyer, say, would estimate the net income per year and then capitalize that into a value for the property. Construction personnel are familiar with the arcane ways of measuring the amounts of stone in the earth. A similar pattern of reasoning, E&A implied, should also be used by the assessor in evaluating the land.
Instead, town assessor Paul Brazier has a much simpler approach. He simply assesses the quarry footprint of lands at a higher rate than vacant lands.
There are seven mining permits in Saugerties, more than in any other Ulster County community. One of them is held by the town for its quarry off Shear Road in Quarryville. Another is the Northeast Solite Corporation stone aggregate quarry in Mt. Marion. AMA Farm near Ruby holds a permit, as do Tom Simmons, Rich Simmons and Ray Rothe.
The largest (next to Solite's) is the mining operation of William Parr on Veteran's hillside (shown in the above photo). Brazier said the $110,000 assessed value he has placed on the 15 acres of the Parr quarry yields;about $25,000 in taxes each year under his formula. That's about the same tax income as is generated by the storage facility on Route 32.
Would the application of the E&A formula produce a different assessment? Hey, go figure.