Item Coversheet

Action Item - 19.

Title: Amendment of Contract with Keystone Realty Advisors, LLC ($2,000,000)

Board of Education Meeting Date:
  3/26/2020

Action under consideration

 The Administration recommends that the Board of Education authorize The School District of Philadelphia, through the Superintendent or his designee, to execute and perform an amendment of a contract, subject to funding, as follows:

 With:
Keystone Realty Advisors, LLC 

 Purpose: 
To serve as the primary identifier of under-assessed properties in the City of Philadelphia where the value of the under-assessment exceeds the minimums established by the School District.  They are the property valuation side of the Assessment Appeals project.

 Original Start Date:  9/9/2016

 Current End Date:  8/31/2019

 Amended End Date:  8/31/2022

 Currently Authorized Compensation:  $3,000,000

 Additional Compensation: 
$2,000,000


 Total New Compensation:  $5,000,000 

 Location: 
Administrative Offices(s)


 Renewal Options:  Yes

 Number of Options: 2

 Duration of each option to extend: Years: 1  Months:
 Maximum compensation authorized per option period:   $1,000,000

 Description:

Under Pennsylvania law, local school districts are permitted to appeal property valuations that are believed to be below market.  Dozens of school districts across the Commonwealth contract with consultants to evaluate whether current valuations are appropriate, and to follow the local appeals process for establishing equitable valuations.  The School District undertook a similar effort to identify properties which are significantly undervalued and appeal those valuations, to ensure that the property tax revenues which are utilized to fund School District operations are being applied equitably, and continues to do so given the success of the effort to date. This vendor represents one of the two vendors (the other being the legal representative) involved with this project. Since the inception of the program, over 880 properties have been identified for appeal.  450 of the appeal filings have resulted in negotiated settlements which have increased City tax revenues by over $6.9 million, and School District revenues by over $3.9 million in year one (net of fees) and $8.4 million annually for year 2 and beyond.  These figures relate to the entire Assessment Appeals project, and reflect the combined performance of both the legal and property valuation vendors.



 Anchor Goal(s) Supported: Anchor Goal 4 - 100% of funding for great schools is secured with zero deficit   

 Related resolution(s)/approval(s): 

September 15, 2016; A-4

June 21, 2018; A-10


 Funding Source(s): 

FY21: Operating

FY22: Operating


 Office Originating Request: Finance