The opinion of the court was delivered by: Patricia A. McCULLOUGH, Judge
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE DAN PELLEGRINI, Judge*fn1 HONORABLE PATRICIA A. McCULLOUGH, Judge
OPINION BY JUDGE McCULLOUGH
Timothy and Laurie Sullivan appeal from the September 9, 2010, order of the Court of Common Pleas of Delaware County (trial court), which rejected their constitutional uniformity challenge and assessed their property in accordance with the common level ratio (CLR) established by the State Tax Equalization Board (STEB).
The Sullivans own residential real estate located at 65 Farrier Lane in Newtown Township, Delaware County, Pennsylvania. The property is within the Marple-Newtown School District. The Sullivans purchased the property in October 2004 for $1,530,807. At the time of purchase, the property was new construction and was assessed as a building lot at $307,250. However, on January 4, 2005, the Delaware County Board of Assessment Appeals (Board) sent the Sullivans an interim assessment notice, informing them that the land and building were now assessed at $1,432,010, effective January 1, 2005. The Sullivans did not appeal the 2005 interim assessment to the Board.
However, the Sullivans subsequently filed an appeal with the Board on July 31, 2006, pertaining to the 2007 annual assessment. The Board denied the appeal and concluded that the assessment would remain at $1,432,010. (Reproduced Record (R.R.) at 11.) Thereafter, the Sullivans appealed to the trial court, arguing that: (1) the ratio of assessment and the base year value used for taxing the property violates state and federal constitutional requirements for uniformity, equal protection, and due process; and (2) the Board's determination of market value is erroneous. (R.R. at 7-9.)
The trial court conducted a five day trial. The parties entered into the following stipulations: (1) the property's current assessment is $1,432,010; (2) the fair market value for 2007 and 2008 was $1,750,000; and (3) the fair market value for the years 2008 and 2009 was between $1,750,000 and $1,850,000, to be determined by the trial court based on appraisal evidence. They also stipulated to the following applicable CLR ratios calculated by STEB: for tax year 2007, 64.7 %; for tax year 2008, 61.1 %; and for tax year 2009, 58.3%. The trial court took judicial notice that the CLR for tax year 2010 is 61.3%.
The Sullivans presented the testimony of Paul Disciascio, a real estate appraiser, who was offered as an expert on "the statistical data of real estate transaction[s] in Delaware County." (R.R. at 700.) Based on court records, Disciascio developed data compilations for specific municipalities and transactions in Delaware County and determined the ratio of assessment to sale as reflected in the following exhibits:
Exhibit P-2, (R.R. at 188-92), representing, with certain exclusions, each transaction involving the sale of residential properties for a price of $1,000,000 or more in Newtown Township for the years 2005-2008. The ratios were 41.8% for 2005, 48.0% for 2006, 53.9% for 2007, and 54.3% for 2008.
Exhibit P-3, (R.R. at 193-205), representing, with certain exclusions, all arm's-length transactions involving detached, single-family residential properties, regardless of price, in Newtown Township for the years 2005-2008. The ratios were 52.5% for 2005, 54.2% for 2006, 54.1% for 2007, and 54.8% for 2008.
Exhibit P-4, (R.R. at 206-39), representing, with certain exclusions, all transactions in the Marple-Newtown School District for the years 2005-2008. The ratios were 53.8% for 2005, 48.5% for 2006, 54.1% for 2007, and 52.6% for 2008.
Exhibit P-5, (R.R. at 240-67), representing, with certain exclusions, all transaction involving the sale of detached single family residential properties in Marple Township and Newtown Township for the years 2005-2008. The ratios were 53.4% for 2005, 52.9% for 2006, 52.9% for 2007, and 54.2% for 2008.
The Marple-Newtown School District (District) presented the testimony of Pia DiGirolamo, Ph.D., who testified as an expert on economics and statistics.*fn2 Dr. DiGirolamo opined that the methodology utilized by Disciascio was flawed, primarily because the statistical samples were too small. She stated that a sample of a few data points, such as the three transactions in 2005 reflected in Exhibit P-2, is "definitely insufficient" data upon which to base a conclusive opinion. (R.R. at 878-79.) Dr. DiGirolamo explained that, regardless of size, a mere average, weighted or unweighted, is not necessarily representative of a group, so that inferences should not be made from an average alone. (R.R. at 878-92.)
The District also offered the testimony and the January 7, 2010, report of David Adams, another expert on economics and statistics. During his testimony Adams criticized Disciascio's methodology, noting that it did not make use of appraisals for any of the properties. (R.R. at 972-73) Adams also identified numerous data errors in Disciascio's compilations. (R.R. at 951-55.) In his report, Adams described Disciascio's calculations as revealing "a lack of statistical rigor." (R.R. at 36b.)
In addition, the District offered the testimony of John J. Coyle, III, and John Van Zelst. The Sullivans stipulated to Coyle's qualifications as an expert in the field of real estate appraising, and Coyle testified concerning Standard on Ratio Studies, the authoritative study promulgated and published in July 2000 by the International Association of Assessing Officers. Van Zelst, Chief Assessor for the County of Delaware's Assessment Office and a state certified evaluator, explained his office's practices with regard to the use of STEB codes, including "reject codes," and reporting to STEB.
On rebuttal, the Sullivans' presented additional studies, (Exhibit P-101), wherein Disciascio calculated ratios for Marple Township using the same criteria as used by STEB. (R.R. at 313-26.) The Sullivans asserted that all of the ratio studies show a lower level of assessment than the CLR. The Sullivans also presented rebuttal testimony of Donald J. Weiss, Esquire, who was offered as an expert on statistics and assessment matters. Weiss stated that Coyle's testimony was correct. (R.R. at 1112.) However, Weiss challenged STEB's "reject codes," which exclude certain property transfers from the analysis, asserting that STEB has no basis for using these codes.
After review, the trial court concluded that the Sullivans' property had a fair market value of $1,700,000. The trial court then calculated the assessment for the years 2007 -- 2010 by applying the applicable STEB CLR. Applying the CLR, the trial court reduced the Sullivans' assessment for each tax year by a significant amount, resulting in the following figures: for 2007 - $1,099,900; for ...