2008 Complaint on Tentative Special Franchise
&
RP-7142 (4/04)
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COMPLAINT ON TENTATIVE SPECIAL FRANCHISE
ASSESSMENTS FOR THE YEAR 2008
Before the
NEW YORK STATE BOARD OF REAL PROPERTY SERVICES
All relevanT parts a/the complain/form must be completed. Submit any additional documentation which you/eel
supports your complaint, Serve an original and one copy o/this complaint on the Assistant to the Slate Board and one
COPJI on each adverse party. Service may be made in person or by mail,
PART ONE: GENERAL INFORMATION
1. Special Franchise Owners: Complete this section
a. Complainant Information
Frontier Communications of Sylvan Lake, a/k/a Citizens COIIIIII\JIlications Co.
Company Name
3 High Ridge Park, Stamford, C'l' 06905
Street Address, City, State, Zip
(203 ) 614-4663
Fax Number
(203 ) 614-5173
Telephone Number
b. List of Assessing Units and Company's Estimates of Assessment (Attach additional sheets, if needed)
County Name(s)
Assessing Unite s)
ORPS Tentative
Assessment
Company's Estimate
of Assessment
SEE ATTACHED
2. Assessing Units: Complete this section
a. Complainant Information
( )
Telephone Number
Assessing Unit Name
SEE ATTACHED
Street Address, City, State, Zip
( )
Fax Number
b. List of Companies and Assessing Unit's Estimates of Assessment (Attach additional sheets, if needed)
County Name(s)
ORPS TentativeAssessment
Assessing Unites)
Estimate of Assessment
SEE A'l-rAr.mffi
RP-7142 (4/04)
IJage 2
PART ONE: GENERAL INFORMATION (CONT.)
3.
Designation of Representative (Optional)
I S"TFfA~ ~iS~CH ,,-' K:..
,
, on behalf of complainant, hereby designate
Hiscock & Barclay, LLP to act as my representative in any and all proceedings
before the State Board of Real Proper(y Senrices for purposes of reviewing the tentative special franchise
assessment(s) for the year 1008 d t:b 'f
an erea ter.
Signaturerritle IA]I- DJIle:.-TOfL
February ~, 2008
Date
Name, address and telephone number of representative:
Lawrence A. Zimmerman, Partner, Hiscock & Barclay, LLP
Contact l}erson and Title
50 Beaver Street, Albany, New York U207
Street Address, City, State, Zip
( 518 ) 429-4242
Telephone Number
(518) 417-3483
Fax Number
4. Senrice on Adverse Party
A copy of the complaint form and any supporting documentation must be served on the adverse party at the same time
of filing with the State Board (at least ten days before the hearing date).
Have YOll attached the affidavit of service?
Yes
x
No
If no, the affidavit of service must be filed with the Assistant to the State Board at least five (5) days prior to the
hearing date.
P ART TWO: GROUNDS FOR COMPLAINT
(Check one or more)
[iJA Unequal Assessment
The tentative assessment did not reflect the proper equalization rate or uniform percentage of full value for the
assessment roll in question.
[!JB. Improper Full Value
Full value of property is erroneous
[!]c. Unlawful Assessment
1. Tangible property included in value is not special franchise property.
2. Tangible property is owned by a municipal corporation.
3. VaIue includes property that is exempt.
RP-7142 (4/04)
Page3
PART THREE: INFORMATION NECESSARY TO DETERMINE
SPECIAL FRANCHISE ASSESSMENT OF PROPERTY
(Check and complete one or more)
You must provide information to support the value of property cIa imed in Part One, section I.b. for special franchise
owners, or, section 2.b. for assessing units. You must supply facts, figures, calculations and underlying assumptions
that support your position.
GJ 1. Inventory
Previously filed ammal report on or before April 30, 2007.
(If additional explanation or documentation is necessary, please attach - # of attached pages ----.J
[~b. Valuation
Complaint considered all three valuation approaches, but based
claimed assessed or full values on RCNLD as more fully set forth
in the attached Complaint.
(If additional e.."'planation or documentation is necessary, please attach - # of attached pages ----.J
[ih. Other
SEE A1'IACHED
RP-7142 (4/04)
Page 4
PART FOUR: CERTIFICATION
1 certify that 1 have read the foregoing complaint and know the contents thereof, that the facts stated therein are true
and correct to the best of my knowledge, information and belief, and 1 understand that the making of any willful
false statement of material fact herein will subject me to the provisions of the Penal Law relevant to the making and
fil ing of false statements.
February 28. 2008
Date
HISCOCK & BARCLAY, LLP
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/// Signatureffitle
Lawrence"""A. ZiDmerman
Partner
This complaint form and supporting documentation must be mailed or served upon the State Board at least ten days
before the hearing date to:
Darlene A. Maloney
Assistant to the State Board
New York State Board of Real Property Services
16 Sheridan Avenue
Albany, NY 12210-2714
A late complaint form and documentation will not be accepted. Please refer to the "Notice of Tentative Special
Franchise Full Values" which specifies the complaint submission deadline. Specific supporting documentation must be
provided in accordance with S6] 0 of the Real Property Tax Law. If supporting documentation is not filed, the tentative
special franchise full value(s) will be made final without change. A copy of the complaint form and documentation
must be served on the adverse party at the same time offiling with the State Board (ten days before the hearing date).
An affidavit of this service must be filed with the State Board no later than five days before the hearing date.
FOR OFFICE USE ONLY
Complaint Number
Hearing Date
Staff Review Completed
Date Complaint Delivered to State Board
State Board vote on complaint:
Approved staff recommendation
Did not approve staff recommendation
ST ATE OF NEW YORK
STATE BOARD OF REAL PROPERTY SERVICES
In the Matter of the Complaint Under
S 61 0 of the Real Property Tax Law
COMPLAINT
of
2008-2009 Special
Franchise Assessment
FRONTIER COMMUNICATIONS OF SYLVAN LAKE,
alk/a CITIZENS COMMUNICATIONS CO.
Hearing Date:
March 13, 2008
TO: THE STATE BOARD OF REAL PROPERTY SERVICES
Frontier Communications of Sylvan Lake, a/kJa Citizens Communications Co., (hereinafter
"Complainant"), a corporation organized and existing under the laws of the State of Delaware,
having its principal office at 3 High Ridge Park, Stamford, CT 06905 and engaged in the provision
of telecommunication services to consumers in the county of Dutchess, and other counties of the
State of New Yark, has received written notice, dated February 4, 2008, that, for the fiscal year
2008-2009, the tentative full values and assessments of its special franchise property in the
assessing units listed in paragraph 4 (Column "Assessing Unit") of this Complaint have been
determined by the State Board of Real Property Services (hereinafter "State Board") to be the
amounts listed in paragraph 4 (Column "Tentative Full Value or Assessment"). Said notice is
attached hereto as Exhibit A.
Complainant complains of and objects to the determinations made by the State Board, and
III support of this complaint alleges upon information and belief that said determinations are
excessive, unequal and unlawful as further set forth below:
1 . The real property in question is special franchise property as defined by RPTL S
102(17) and located in the assessing units set forth in paragraph 4.
ALLlBOI \206285\2
225204-3007554
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2. The State Board values special franchise property by the cost approach of
reproduction cost new less depreciation ("RCNLD"), as set forth in the Rules of the State Board of
Real Property Services, 9 NYCRR S 197, et seq. and its Special Franchise Assessments and Full
Valuesfor CilY, Town and Village Assessment Rolls ("SORPs' Procedures").
AS AND FOR A FIRST GROUND OF COMPLAINT
3. The State Board failed to adjust the service lives, net salvage factors, intangible
values and residual values currently employed in assessing Complainant1s property to address
market realities in the telecommunication industry. In addition, the State Board failed to recognize
all forms offunctional and economic obsolescence.
4. A schedule of the assessing units, the tentative special franchise full values or
assessments, Complainant's claimed full value for each special franchise assessment, and the
claimed overstatement offull value or over assessment for each is as follows:
FULL VALUE TOTAL TOT AL CLAIMED
OR TENT A T1VE FULL CLAIMED OVERSTATEMENT
ASSESSMENT V ALUE OR V ALUE OR OF FULL VALUE
ASSESSING UNIT NUMBER ASSESSMENT ASSESSMENT OR ASSESSMENT
Dutchess County
Town of Beekman 644200-1322 1,800,541 450,135 1,350,406
Town of East
Fishkill, Dutchess
County C.A.P. #2 644200-1328 9,610,959 2,402,740 7,208,219
Town of La Grange,
Duthess County
c.A.P. #3 644200-1334 1,930,963 482,741 1,448,222
Town of Union
Val ue, Dutchess
County C.A.P. #3 644200-1354 211,135 52,784 158,351
Town of
Wappinger ,Dutchess
County c.A.P. # 1
Town outside
villages 121,781
Total Town 644200-1356 121,781 30,445 91,336
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FULL VALUE TOTAL TOT AL CLAIMED
OR TENTATIVE FULL CLAIMED OVERSTA TEM ENT
ASSESSMENT VALUE OR VALUE OR OF FULL VALUE
ASSESSING UNIT NUMBER ASSESSMENT ASSESSMENT OR ASSESSMENT
TOTALS 113,675,379 3,418,845 10,256,534
5. The RCNLD methodology utilized in computing physical depreciation for the claimed
full value/assessment is straight-line depreciation down to a residual value of 5%, as approved in
Niagara Mohawk Power Corporation v. City of Cohoes, 280 A.D.2d 724 (3d Dep't 2001).
Additional amounts for functional and economic obsolescence have also been deducted. See 9
NYCRR ~197-2.8
6. As set forth in the SORPs' Procedures, Respondents wholly failed and refused to
InvestIgate whether a market exists for the subject property; arbitrarily assumed (without
investigation) that complainant's property was "specialty" property; arbitrarily, intentionally and
capriciously solely applied the RCNLD method of valuation to the exclusion of the two other
methods of valuation, the income and sales comparison valuation methodologies.
7. As a result, Complainant's special franchise property is overvalued or overassessed and
said full value or assessments should be reduced to reflect the claimed values/assessments set forth
in the preceding paragraph.
8. Complainant is aggrieved, is and will be injured by said determinations of the State
Board in fixing such tentative full or overassessments. Complainant will be required to pay a far
greater amount in taxes in fiscal year 2008-2009 than it would be compelled to pay had such
determinations been made justly and properly. As a result, Complainant will pay far more than its
just proportion of the aggregate taxes to be levied upon its real property, including special franchise
property, situated in the above assessing units for fiscal year 2008-2009.
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9. The tentative full value or assessment valuations referred to herein are erroneous by
reason of overvaluation, and are illegal and void in that the tentative valuations for the above
assessing units are in excess of the valuations of each of the special franchises.
AS AND FOR A SECOND GROUND OF COMPLAINT
10. Complainant repeats, reiterates and realleges each and every allegation of those
paragraphs of the complaint hereinabove designated 1 through 9 inclusive with the same force and
effect as if set forth herein at length.
A.
11. In fixing the tentative full values or assessments of Complainant's special franchise
property, including the intangible element of each of said special franchise properties, the State
Board applied an erroneous depreciation methodology (as set forth in the SORPs' Procedures),
which resulted in an erroneous and illegal estimate of valuation due to inadequate and insufficient
deductions for physical depreciation. As a result, it established tentative full values and/or
assessments for each special franchise property in excess of and more than the maximum value of
said tangible property, and in excess of and more than the fair market or full valuation of each of
Complainant's special franchises.
12. Respondent failed and/or refused to take into account present market conditions,
regulatory constraints and technological changes or to otherwise make adjustments attributable to
either functional or economic obsolescence, as required by New York law. As a result, Respondent
enoneously, improperly and illegally failed to deduct sufficient amount for functional or economic
obsolescence in determining the value of Complainant's special franchise property. The State Board
also failed to take into account the functional and economic obsolescence inherent in Complainant's
fiber optic cable.
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B.
13. The State Board, in its determination of the tentative full values or assessments,
separated the valuation of each of the special franchise properties into two parts, or elements,
namely, the tangible and the intangible. After evaluating the tangible part of the property, which
already reflected any "intangible" value, the State Board arbitrarily added an additional amount
representing the intangible element. The additional amount added for the intangible element was
without reasonable basis and the methodology employed to arrive at that added amount erroneously
included revenues not attributable to the tangible special franchise assets. In addition, the State
Board's methodology for valuing the Complainant's "franchise" fails to take into account the
deregulation of the telecommunications industry and its impact on the value of the Complainant
"franchise". Said franchises are utilizable by many of Complainant's competitors and has little, if
any, value separate and apart from the Complainant's tangible property. In addition, the State
Board's methodology measures all sources of Complainant's corporate revenues against the original
cost of Complainant's investment in its special franchise tangible property. Thereafter, the State
Board determines whether said revenues are "excessive". This methodology fundamentally
assumes that all of Complainant's revenues are derivable from a monopolistic "franchise" and that
Complainant's revenues are restricted to a "market rate of return" on the original cost of its
investment in its special franchise tangible assets. Such analysis is fundamentally flawed, irrational,
and ignores the current market based and competitive nature ofthe telecommunications industry..
14. In determining the "value" for the intangible element of Claimant's special franchise
properties, the State Board's tentative assessments are based on revenue items that were wholly
unrelated to the subject special franchise property and which, if reported differently, should not have
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been considered by the State Board in its determination of the intangible element. Moreover, the
inclusion of such revenue items in the computation of the intangible value is illegal and capricious.
As a result of this arbitrary and capricious consideration of these revenue items, the State Board has
computed intangible values that are illegal, contrary to New York law and are, in some cases, many
times the value of the tangible assets.
15. The tentative full value or assessment valuations referred to herein are erroneous by
reason of overvaluation, and are illegal and void in that the tentative valuations for the above
assessing units are in excess of the full or market valuation of each of the special franchises.
C.
16. The data used by the State Board, the indices employed to trend that data and the failure
to include proper adjustments for required construction, duplication and relocation, results in gross
overvaluation ofthe reproduction cost new used by the State Board.
D.
17. Complainant further claims that the aforementioned determinations fixing the tentative
valuations or assessments are illegal and void and unconstitutional in that they constitute an illegal
tax on income which the State Board is not authorized by statute to levy or assess and constitutes
double taxation in that the Complainant already pays state income tax to the State Department of
Taxation and Finance.
18. Complainant is aggrieved, is and will be injured by said determinations of the State
Board in fixing such tentative valuations, as Complainant will be required to pay a far greater
amount in taxes in fiscal year 2008-2009 than it would be compelled to pay had such determinations
been made justly and properly. As a result, Complainant will pay far more than its just proportion
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of the aggregate taxes to be levied upon real property, including special franchise property, situated
in the above assessing units for fiscal year 2008-2009.
19. The tentative full values or assessments referred to herein are erroneous by reason of
overvaluation and are illegal and void in that the tentative full values or assessments for the above
mentioned assessing units are in excess ofthe valuations of each of the special franchises.
20. No previous application for this relief has been requested for said special franchise
property for the 2008 final assessment rolls.
WHEREFORE, Complainant respectfully demands that:
The determinations of tentative valuations of Complainant's special franchise property in the
foregoing assessing units be annulled, canceled, and withdrawn by the State Board and that said
assessments be established as set forth in the claimed values/assessments in paragraph 4.
DATED: February 28, 2008
FRONTIER COMMUNICATIONS OF SYLVAN LAKE
a/kla CITIZENS COMMUNICATIONS CO.
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STATE OF CONNECTICUT )
) sS.:
COUNTY OF FAIRFIELD )
ROBERT LARSON, being duly sworn, deposes and says that:
1 . I am the Chief Accounting Officer of Frontier Conununications of Sylvan Lake,
alk/a Citizens Communications Co., the Complainant herein.
2. I read the foregoing complaint and know the contents thereof, that the facts stated
therein are true to the best of my knowledge, information and belief, and
3. I understand that the making of any willful false statement of material fact herein
will subject me to the provisions of the penal law relevant to the making and filing of false
statements.
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ROBER/ARSON
Sworn to before me this
~ day of February, 2008.
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Notary Public
NORENlE. riARTOG
NoI>>Y Public - StAle of Connecticut
MY COMMISSION EX!'IRr:I'. !>OR. 30. 2011
ALLlBOI \206211S\1
STATE OF NEW YORK
EXECUTIVE DEPARTMENT
STATE BOARD OF REAL PROPERTY SERVICES
16 Sheridan Avenue
Albany, New York 12210-2714
(518)474-1071
RP27
Dated
February 04, 2008
NOTICE OF TENTATIVE SPECIAL FRANCHISE FULL VALUE
For city and town assessment roll to be filed in 2008
Frontier Comm. of Sylvan Lake
C/O Mr. Steve Peleschuk
3 High Ridge Park
Stamford, CT 06905
644200
Hearing Date and Location:
March 13, 2008 at lO:OOam
Board Room - 5th Floor
16 Sheridan Avenue
Albany, New York
The State Board of Real Property Services has determined the tentative special franchise full values
for the following assessing unit(s) at the amounts shown below. The full values were determined in
accordance with Article 6 of the Real Property Tax Law and Part 197 of Title 9 of the Official
Compilation of Codes, Rules and Regulations of the State of New York. The full values .include both the
value of the tangible property situated in, upon, under or above public streets, highways, waters and
other public places and the value of the franchise, right, authority or permission to occupy such
public streets, highways, waters and other public places.
The State Board or its duly authorized representative will conduct a hearing in its office in the City
of Albany on the day indicated above as the "Hearing Date" to hear any complaints concerning such full
values. Complaints must be filed in accordance with the procedure provided in Section 610 of the Real
Property Tax Law. In order for a complaint to be considered by the State Board, a complainant must:
(I)' Specify its objections to the tentative special franchise full values on Form RP-7141 SAD
available from the Office of Real Property Services.
(2) Serve its complaint to the State Board at least ten (10) days prior to the hearing date. Service
may be made in person or by mail.
(3) Serve a copy of the complaint upon the appropriate assessing unit(s).
(4) File with the State Board, at least five (5) days prior to the hearing date, an affidavit stating
in substance that the copy required in step 3 above has been served.
Full Value
Number
Full Value Pct Change
From
Tentative Prior Roll
$1,800,541 30.1
$9,610,959 32.9
$1,930,963 30.2
$211,135 30.0
Town of Beekman, Dutchess County
Dutchess County C.A.P. #2, Town of East
Fishkill
644200-1322
644200-1328
Dutchess County C.A.P. #3, Town of La Grange
Dutchess County C.A.P. #3, Town of Union Vale
Dutchess County C.A.P. #1, Town of Wappinger
Town Outside Villages
Total Town:
Grand Total
644200-1334
644200-1354
644200-1356
121,781
$121,781
$13,675,379
54.1
54.1
T-08-0261
Page 1
STATE OF NEW YORK
EXECUTIVE DEPARTMENT
STATE BOARD OF REAL PROPERTY SERVICES
16 Sheridan Avenue
Albany, New York 12210-2714
(518) 474-1071
RP27
Dated
February 04, 2008
-fctJJlU
Richard A. Keil
Program Manager
State Valuation Services
Note: The amounts of the special franchise full values set forth in this notice are "tentative" and
must not be entered on the assessment roll. The final full values for entry on the assessment roll
will be transmitted at a later date.
T-08-0261
Page 2
