Fairtax better, but still needs work.

The passing of half-year property tax payment time has the city's computers once again generating erroneous "interest due" notices.

While the problem was first identified by PEW in May of last year, and then Finance Commissioner Joseph Lhota (now head of OMB) conceded there was a problem and they were working on it, the issue continues to burden some property owners.

Finance spokesperson Eamon Moynihan reported this is a problem that has "plagued us" since the property tax records were converted to the Fairtax system.

The Fairtax computer system was developed over the last ten years and has consolidated information on approximately 22 different taxes. But it has been criticized for a ballooning budget and improperly thought-out systems.

"It is not a problem with Fairtax itself," continued Moynihan, "but with the procedure used for processing payments. Some are erroneously being marked as late and we are sending out balance bills for interest charges." Moynihan noted, however, they have made changes in their procedures "so the number of such errors has been greatly reduced."

Indeed, calls to property owner organizations revealed the number of complaints is less than those received in July, when the first round of delinquency notices went out in response to that half-year payment, but that may be because owners are realizing, "it's that system again."

Moynihan suggested that affected taxpayers contact the Taxpayer Assistance line to check on the status of their account and to bring the specific problem to their attention.

"We knew it existed last time and we think we are doing a better job now, but obviously, it's an issue," Moynihan agreed.

Those familiar with the property tax interest issues suggested writing to the Commissioner, now Alfred C. Cerullo III, outlining the problem and including all pertinent documentation, including copies of certified mailing receipts or in-date stamped receipts, if the payments were hand-delivered.

For one Queens managing agent, who asked not to be identified, the problem has been compounded by Taxpayer Assistance personnel who refused to believe the tale or make the corrections.

"It's really stupid and is one more thing we have to do," said the manager, who has been additionally troubled by skeptical clients. "It's always the public that has to prove everything for the city."

On December 29, the manager mailed two envelopes, each containing about 20 tax payments for various properties by certified mail.

By the middle of January, the agent had received interest due notices on nearly all the properties, with many marked as having an input date of January 8.

"It's $20, $30, $40 on each property," said the manager of the annoying interest. None of these particular properties involves a Senior Citizen Rent Increase Exemption (SCRIE) or a J-51, which are apparently contributing to the problem for some owners.

Dan Margulies, executive director of the Community Housing Improvement Program (CHIP), a residential property owners organization, said he was aware of his members receiving interest due notices.

In a few cases, Margulies said, the payments have consisted of more than one property tax item - such as a SCRIE or a J-51 - and the entry was made on three different dates.

"But the owner isn't notified when the account is brought up to date," Margulies said. "The Finance Dept. has taken the attitude that these things will get corrected with the next batch entry, but owners don't have the luxury of ignoring [the interest due notice] and it is quite upsetting," he insisted. "This is a mechanical process that was badly designed."

Margulies believes the computer is programmed to accept a partial payment, but then triggers a delinquency notice.

"So if an entry is made on the first [of January] for 99 percent of the taxes and there is a SCRIE certificate outstanding, that night the computer automatically kicks out a delinquency," he said. "If a week later the SCRIE certificate is properly recorded, the computer shows the account fully paid, if the date is posted properly. But nothing would be sent to the taxpayer to tell them that. A little thought and they could have come up with a notice of 'payments still to be recorded' before a delinquency was assessed. They merely created a new problem."

Margulies said a talk with an official at the City Collector's office yielded another side of the story. In the past, the delinquency notices were so delayed that property owners who were late by simply a day or a week complained the interest mounted quickly in the weeks it took to get the notice telling them what they owed.

These are just the kind of "customer service" issues new Commissioner Cerullo was appointed to address, and owners will be watching to see what happens come July.