By JOHN T. WARD
At its semimonthly meeting Wednesday night, the council approved hiring a law firm to sue commercial property owners whose assessments appear to be low relative to the real estate market.
Following a closed-door executive session to discuss the proposal and other matters, the council approved the hiring of Blau & Blau of Springfield as special counsel to pursue litigation known as reverse appeals.
The aim is to “turn the tables” on “large-scale commercial property owners” who routinely file tax appeals, Menna said. Because the cases can go on for years, the taxes for the subsequent years become part of the case, and if the borough loses or settles, the financial hit can be substantial, “resulting in a drain on the Red Bank coffers,” he said.
The cost of lost and settled appeals was not immediately available. But “the borough has had to pay an extraordinary amount for old appeals simply because the evidence would not be sufficient to defend it,” Menna said.
Now, he said, he wants the borough “to use the system to our advantage, for a change.” Blau & Blau will be tasked with identifying commercial properties that appear to be under-assessed by borough Assessor Mitch Elias, who works for Monmouth County, despite his local appointment. Litigation and settlements would have to be approved by the council, Menna said.
Hiring Blau & Blau, he said, “aggressively sets forth that the municipality is now going to play the game, just like the petitioners do.”
The firm, if it wins a case, gets one-third of the money; if it fails, it gets nothing, and has to eat all the costs, Menna said. Such contingency fee arrangements “is the same basis on which [lawyers] do it for taxpayers,” he said.
This year’s filing deadline for appeals is Monday, April 2. Menna said Blau & Blau has already identified “10 to 12 properties” on which to file challenges and “is ready to go.”
In response to questions about whether the firm would be involved in existing appeals filed against the borough, Councilman Erik Yngstrom, who like Menna is an attorney, said it would not.
“The defense of our town would still be handled by our tax attorneys,” Yngstrom said. “This is just for prosecuting claims to increase the ratables.”
Resident Stephen Hecht, who has questioned many settlements and repeatedly called for Elias to be fired over assessments that have exposed the borough to appeals, repeated his critique Wednesday night.
While Hecht said he was “so pleased” by the borough’s action, ” Elias “continues to assess properties inelegantly, I guess,” with the result of putting the borough “in big trouble.”
“Tenure or not, if you don’t perform your job in a diligent way, it seems to me that you put yourself in jeopardy,” the Branch Avenue resident said.
Menna reiterated that Elias is a “statutory delegate” of the Monmouth County Assessor, Matthew Clark, and that the borough can’t fire him.
Tom Wieczerzak, of Oakland Street, echoed Hecht’s concerns about the accuracy of the assessments.
Elias “works four hours a week in a town that has volatile ratables,” Wieczerzak said. He called on the majority-Democrat council to ally with Democratic state legislators and Democratic Governor Phil Murphy “reverse address these tenure issues.”
During the meeting, Menna said he had just received a letter from a long-ago borough resident and family friend now living in Ocean County, who sent original, handwritten 1925 and 1926 tax bills for a house on Willow Street.
The assessed value of the house for both years was $900; the total tax bill was $37.18 in 1925 and $39.10 the following year. (That’s a five-percent increase.)
“Did he appeal?” asked Councilman Michael Ballard, who heads the finance committee.
“There was no basis for an appeal,” Menna replied.
Menna said the documents would be passed on to the borough library.