Oct 27, 2002 By Paul Sunyak 6 min read

HARRISBURG – Only when Fayette County’s chief assessor uncovered a copy of the 1958 rate book in the bottom drawer of an old filing cabinet did he realize that the way his office had been grading properties for taxation since 1971 was inconsistent. James A. Hercik, CPE, testified to that effect Friday during the second of two days worth of testimony before a hearing examiner for the state Board of Real Estate Appraisers.

Charges brought by six county property owners – a group spearheaded by state Rep. Larry Roberts (D-South Union) – could strip Hercik of the state assessor’s license he needs to do his job. Assessors didn’t start being licensed by the state until 1992.

From the witness stand, Hercik said that ever since he started working in the Tax Assessment Office as a draftsman in 1977 and became an assessor the following year, he and other assessors operated under the assumption that the property grading manual they were given was the 1958 base year rate book.

When he became an assessor, Hercik said that then-chief assessor Richard A. Kasunic gave him a manual and a “quick overview,” after which Hercik was dispatched to do field work with a more experienced assessor. Kasunic is currently a state senator representing Fayette and Somerset counties.

What those assessors were in fact using, Hercik discovered nearly 20 years later, was a completely different manual developed in 1971 by former chief assessor Eugene Porterfield, who went on to be a state senator from Westmoreland County.

The “Porterfield manual,” as Hercik referred to it during his testimony, was markedly different than the 1958 rate book Hercik fished out of office storage under pressure from Roberts, who was demanding to know how the tax assessment on his Farmview Drive property was derived using base year calculations.

Hercik said that the matter became more complicated because he knew that a Computer Assisted Mass Appraisal computer program, developed and implemented by former chief assessor Dick Bitner in 1985-86, was designed to regress assessments back to values established using the Porterfield manual.

Hercik said he knew upon discovering the 1958 rate book in the spring of 1997 that not only was the Porterfield manual the wrong rate book to use, but the 1985/CAMA system used to assess properties for 12 years was inherently flawed because it was regressing tax assessments back to the wrong manual.

“The 1958 manual would have calculated it (a property’s assessment) slightly lower,” said Hercik, who added that the discovery of the 1958 rate book was kept under wraps for a few months as he, the county commissioners and assistant county solicitor John Cupp decided what to do.

“It was quite a revelation,” said Hercik. “I needed to talk to the commissioners and the solicitor … We needed guidance. We didn’t want to release anything to the public or the media (until we decided what to do).”

In the end, said Hercik, “I ultimately decided to train my assessment staff in using the 1958 base year manual.” Eventually the discovery of the 1958 rate book became public knowledge in relation to Roberts’ tax appeal.

Hercik testified that he found the long-lost manual “in the bottom drawer of an old filing cabinet … in a back section of an old records room” in the assessment office. It was mixed in with some old notebooks, said Hercik, who quickly discovered that using the 1971 and 1958 manuals would yield different tax assessments on the same property.

Hercik noted that part of the reason everyone believed the Porterfield manual was proper was that it didn’t state that it was for any particular base year. Under state law, all properties in a county must be assessed according to a uniform method.

In Fayette’s case the 1958 manual should have remained the only guide. Introduction of the Porterfield manual in 1971 created two different systems. A third was added with the 1985/CAMA system developed by Bitner back when Hercik was assistant chief assessor.

Hercik, who was elevated to chief assessor in 1988, explained how the 1985/CAMA system was designed. “At Mr. Bitner’s direction, I took a series of (property) record cards and priced them out of the Porterfield manual (to get an assessed value),” said Hercik. He said Bitner then took the same cards and priced them using the 1985 manual that had roots in a shelved countywide reassessment attempt in the mid-1980s.

Bitner attempted to equalize the two calculations and came up with a 12.8 percent reduction factor, said Hercik. Basically, under that system a property’s current market value was multiplied by 12.8 to calculate its assessment.

Ironically, that 12.8 percent figure precisely mirrors the county’s common level ratio – an aggregate measure of real estate sales values to assessed values – for 1986. The CLR, as it is known, is supposed to be used only for tax appeals, not for setting initial assessments on structures such as homes, garages and other buildings.

The county’s method for valuing land over the decades was even harder to trace for consistency. Hercik said that neither the Porterfield manual nor the CAMA system was ever used to develop land assessments, and noted that when he found the 1958 rate book the chapter on valuing land for taxation was missing.

“We had no manual for land pricing, so we used a weighted average … that we believed to be correct,” said Hercik.

Certified general appraiser Mark D. Ackerman, who assisted Roberts and several other property owners with challenges to the county’s tax assessment system, testified that his research clearly showed that the county had at least three groupings of property owners.

One of those groups had assessments based on the 1958 system, another group fell under the 1971 system and the third fell under the 1985/CAMA system, said Ackerman. While a particular property owner was apparently treated the same as others within his or her group, the three groups were treated differently in terms of tax assessment, said Ackerman.

Additionally, Ackerman said he found a flaw with the 12.8 percent reduction factor method that was the norm in 1996 when he began his work in Fayette County. “(They) were finding an assessed value first, then turning it into a market value” instead of the other way around, he said.

Ackerman said that he never received payment from Roberts or any of the other five property owners whose complaints led to the filing of charges against Hercik by the state Bureau of Professional and Occupational Affairs.

“No one paid me for this … I didn’t charge them a nickel,” said Ackerman, who like Roberts sat in on both full days of testimony. Roberts several times passed written communication to the two state attorneys prosecuting the case, while Ackerman sometimes bent forward to make verbal comments to them.

Chief hearing examiner John F. Alcorn will make a ruling on the 22 charges against Hercik. However, Hercik attorney Bob Hoffman said that Alcorn’s ruling could be accepted or rejected by the full state Board of Real Estate Appraisers.

Two members of that board – Robert F. McRae and William P. Wentz Jr. – sat in on the Hercik case in an advisory capacity to Alcorn.