HomeMy WebLinkAboutAgenda - 05-15-2012 - 7aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 15, 2012
Action Agenda
Item No. 7 - (~
SUBJECT: Resolution Regarding the Next General Reappraisal of Real Property
DEPARTMENT: Tax Administration PUBLIC HEARING: (Y/N) No
ATTACHMENT(S):
Resolution
Slides
INFORMATION CONTACT:
Jenkins S. Crayton, (919) 245-2735
PURPOSE: To discuss the optimal year for the next general reappraisal of real property and to
approve a resolution establishing the year for the next general reappraisal of real property in
Orange County.
BACKGROUND: Orange County's next general reappraisal of real property is currently
scheduled for 2013. At the Board's March 1, 2012 budget work session, Tax Administrator
Jenks Crayton shared information with the Board regarding the planned 2013 general
reappraisal of real property. The Board reviewed various issues related to a 2013 reappraisal
and expressed an interest in further discussion on proceeding with the reappraisal in 2013.
Sales prices for real property moved abruptly during 2011 after finro years of little change, but
assessment equity continues to be excellent. However, the declining volume of useful sales will
make maintaining equity a challenging task if the revaluation occurs as scheduled.
Rescheduling the reappraisal would allow for more sales to accumulate, and the next general
reappraisal would likely be more accurate.
The Board may choose any year for the next general reappraisal befinreen 2013 and 2017, and
the Board may amend its decision in the future. It is worth noting that in 2009, twenty-one (21)
North Carolina counties, including Orange, conducted a general reappraisal. Seventeen (17) of
those counties have decided to schedule their reappraisals in 2014 or thereafter. Eleven (11) of
these counties, a majority, have chosen 2017.
FINANCIAL IMPACT: If reappraisal occurs as scheduled in 2013, and based on current
respective tax rates, each governmental jurisdiction in the County could potentially lose
estimated revenue in the 2013-2014 fiscal year as follows:
Orange County
Chapel Hill
Chapel Hill-Carrboro
Schools
Carrboro
Hillsborough
$9.9 million
$2.6 million
$1.4 million
$590,000
$280,000
The revenue neutral adjustments associated with the County, Chapel Hill Carrboro City Schools,
the fire districts, and the towns of Chapel Hill, Carrboro, and Hillsborough would create the need
to raise each jurisdiction's property tax rate to achieve the same prior year's revenues.
The Manager's Recommended FY 2012-13 Budget includes approximately $350,000 for a 2013
general reappraisal. If the Board establishes a different year for the reappraisal, this funding
could be redirected to address other FY2012-13 activities.
RECOMMENDATION(S): The Manager recommends that the Board approve the attached
resolution establishing 2015 as the year for the next general reappraisal of real property in
Orange County. The Manager recommends 2015 as it will allow additional time for more sales
to accumulate and it will also keep the County on an odd-year general reappraisal schedule.
(~~~_~o~a Td~~
ORANGE COUNTY BOARD OF COMMISSIONERS
Resolution Establishing the Year of the Next General Reappraisal
Whereas, Orange County conducted its most recent General Appraisal of Real Property
effective January 1, 2009; and
Whereas, the Orange County Board of Commissioners advanced its scheduled General
Reappraisal of Real Property to January 1, 2013, pursuant to North Carolina General Statute
(NCGS) 105-286 (a) (3); and
Whereas, after careful consideration, the Orange County desires to modify this schedule
to postpone the effective date of the next General Reappraisal to January 1, 2015, as permitted by
NCGS 105-286 (a) (3); and
Whereas, the Orange County Board of Commissioners also desires that the Orange
County Tax Administrator make an annual report to the Board regarding conditions in the market
for real property;
Now, Therefore, Be It Resolved, that the Orange County Board of Commissioners does
hereby postpone the effective date of the next General Reappraisal to January 1, 2015;
Be It Further Resolved, that the Orange County Tax Administrator shall each year make
at least one report to the Board of County Commissioners regarding conditions in the market for
real property; and
Be It Further Resolved, that the Clerk to the Board shall forward a copy of this
resolution to the North Carolina Department of Revenue as required under NCGS 105-286.
Adopted, this day of May, 2012.
Bernadette Pelissier, Chair
Orange County Board of Commissioners
Attest:
3
Clerk to the Board
The 2100( — 21009
Real Estate Tax Base at Market Value
15.0 (Billions of Dollars)
24.5
24.0
13.5
13.0
12.5
12.0
2007 2009 2009 ZOLO zoll 2012*
N—2012 is-ma.d.Source:NC Department of Pevenue andOrange County Tax Nlminisvacion.
Flave r-rj Drop
Real Estate Tax Base at Market Value
15.0 - (Billions of Dollars)
14.5
14.0
13.5
13.0
12.5
12.0
2007 2009 2009 2010 2011 2012*
N—,2012 is Q-2--
5
Qualified Sales of Real Estate:
Valuation Data Becoming Scarce
3,000
2,500
2,000-
1,500
1,000
500
0
2003 2004 2005 2006 2007 2008 2009 2010 2011
c Or Cwm Tax
• e
r
2011
— '_ a-•..cd...r....,-..,•.�••ate,a.�.�. S
7
k .�Y'
2007 2011
-- M1anie Cwnry TarM�n»Vr�iav 0.K:zds � —
Revaluation Triggers:Low or High Sales Ratios
"Keep It Between the Lines"
120 - —-----
us -
110
los - -------- -
100
95
85
80
75
2005 2006 2007 2008 2009 2010 2011 2012
Note:2012is eaG mated.Sources:NC Department of fterenue and Orange County Tax Administta
!'1
�rir if) !1 'd r (-J !11 C`/
Revaluation Trigger:A High Coefficient of Dispersion
Means a Lack of Equity or Inequality in Assessment
"Don't Cross the Line"
16
14 Equity is excellent.
12
10 a
s
6
4
2
2007 2008 2009 2010 2021 i 2012
Nale:1013 iz atimaied.Sources:NC pepartment of Re+enue and Orange County Tax Adminisira
P-vl-'rll�J ,' l�Ji lrr�ll
Revenues Needed
• Orange County: Up 7.7% or 6.6� $9.9 million
• Chapel Hill: Up 8.3% or 4.1� $2.6 million
• Chapel Hill-Carrboro
Schools: Up 7.6% or 1.4� $1.4 million
• Hillsborough: Up 6.2% or 3.8� $280 thousand
• Carrboro: Up 5.3% or 3.1 $590 thousand
A