City identifies $30M in taxable property; Uniform Commercial Code statements used.

Byline: Nick Kotsopoulos

WORCESTER - With local residential property values tumbling, the city's Assessing Department has been able to buffer some of the loss to the city's overall tax base by pursuing a new strategy to identify all taxable personal property.

Through its efforts, about $30 million worth of new personal property assets has been identified, yielding more than $780,000 in new tax revenue for the city, according to City Manager Michael V. O'Brien.

He said the Assessing Department was able to obtain information about the acquisition of property by local businesses by utilizing Uniform Commercial Code financial statements that are available on the secretary of state's Web site.

"After examining UCC filings made in calendar years 2006 and 2007, (the Assessing Department) discovered $30 million in new personal property assets for fiscal year 2009, representing approximately $786,000 in tax revenue," Mr. O'Brien wrote in a report to the City Council.

"This property included excavating and other construction machinery, dental and other medical equipment, and other business asset purchases," he added. "Due to this discovery, the city has been able to achieve our new growth projections for fiscal year 2009."

The total assessed value of all taxable property in the city has dropped by more than $600 million in one year - down from a high-water mark of $12.76 billion last year to $12.1 billion.

City Assessor Robert J. Allard Jr. said the 4.63 percent reduction, the first decline in the city's total assessed valuation since fiscal 1996, would have been steeper had it not been for the $30 million valuation increase in personal property.

Personal property generally includes tangible items that are not firmly attached to land or buildings and are not specifically designed for or of such size to be considered part of the real estate. Among such items include business equipment, office machinery, merchandise, tools, furniture and fixtures.

The community in which the property is situated on Jan. 1 has the authority to assess the personal property tax under state law.

Mr. Allard said most of the data concerning business personal property is reported to his office through the annual submission of "State Tax Form 2." He said while inspections of businesses are done throughout the year, new asset purchases are not always easily identifiable by his staff. On occasion, he added, new asset purchases are not reported to his office.

Mr. Allard said the city had been approached by a vendor who offered its services in uncovering new asset purchases by local businesses. But instead of paying that vendor a commission for those efforts, he said, the Assessing Department did the legwork itself, researching various databases available over the Internet where new asset information could be obtained.

"The result was that Uniform Commercial Code financing statements were found on the secretary of state's Web site and those filings enumerated new asset purchases within the city," Mr. Allard said. "The reason that the statements are recorded there is much like the recording of a deed; it is a statement of public indebtedness until the asset has been paid in full."

Mr. Allard said Uniform Commercial Code filings made during this calendar year will be assessed and taxed for fiscal 2010. He added that the Uniform Commercial Code search has now become an integral part of his office's personal property assessment process.