Loading...
HomeMy WebLinkAboutAgenda - 01-21-2016 - 4-b - 2017 Countywide Revaluation Update 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 21, 2016 Action Agenda Item No. 4-b SUBJECT: 2017 Countywide Revaluation Update DEPARTMENT: Tax Administration PUBLIC HEARING: (Y/N) No ATTACHMENT(S): INFORMATION CONTACT: Memorandum on 2017 Revaluation Dwane Brinson, Tax Administrator, Example of Summary Description Letter (919) 245-2726 PURPOSE: To receive an update on the Orange County Tax Office's administration of the 2017 countywide revaluation of real property. BACKGROUND: North Carolina State Law, North Carolina General Statute (NCGS) 105- 286(a), mandates that counties conduct a countywide revaluation of real property at least once every eight (8) years. Orange County's last revaluation took effect January 1, 2009. All current property tax assessments in the County reflect each property's market value as of the last revaluation date. The 2017 revaluation will capture eight (8) years of market changes, and it will involve reviewing the most current market information available to produce an estimate of market value. FINANCIAL IMPACT: There is no financial impact associated with receiving this update. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends the Board receive this update. 2 4 0 t. 17 m rig.71 °Jib ccixo\s''' ORANGE COUNTY TAX ADMINISTRATION 228 S CHURTON S MEET, SUITE 200, PO BOX 8181 HILLSBOROUGH, NORTH CAROLINA 27278 Telephone(919)245-2725 Fax(919)644-3332 T. Dwane Brinson, Director Memorandum To: Orange County Board of Commissioners Cc: Bonnie Hammersley, County Manager From: Dwane Brinson, Tax Administrator Date: January 21, 2016 Re: 2017 Property Tax Revaluation Update North Carolina state law, G.S. 105-286(a), mandates that counties conduct a countywide revaluation of real property at least once every eight years. Orange County last conducted a countywide revaluation effective for January 1, 2009 and current tax assessments reflect market value as of that appraisal date. Therefore, Orange County is required to complete its next revaluation no later than January 1, 2017. This memorandum serves as an update of the 2017 countywide revaluation. Current Market Conditions It is evident that the economy is improving. Sales volume is increasing, sales prices are rising and properties are selling faster. As part of this report an analysis of Orange County qualified sales is provided. Real property tax assessments in Orange County currently reflect market value as of January 1, 2009, the County's last revaluation appraisal date. Figures, ratios and statistics provided in this report compare the County's current tax assessment based on January 1, 2009 market value against recent qualified market sales. This is performed annually to determine the impact of a countywide revaluation, in part. Elaboration on recent qualified market sales and the statistical measuring tools is provided below. 3 Sales Analysis The predominant rucd`odoFroeaoudogmuaa appraisal cUecbvcncsais through the median sales ratio. This is computed by dividing the assessed value by the sales price. A sales ratio of greater than l indicates that the tax assessment is higher than the property's recent sales price and vice versa. One simple way to describe this measure is that the sales ratio shows what percentage of market value is represented by current tax assessment. For example, a median sales ratio of 1.05 indicates that tax assessments in that category represent 105Y6 of current market sales. However, this ratio is only a measure of central tendency. Ratios higher and lower than the median exist, too. Coefficient of Dispersion (COl)) shows the data spread. A lower COD is better, and one less than 15 is a post-revaluation goal. The lower the C()[), the more tightly-compacted the sales are around the median sales ratio. Based on the 2015 qualified market sales, Orange County tax assessments are within an acceptable range. The median sales ratio has been gradually falling over the last several years, which indicates a rise in sales prices since tax assessments are the controlled variable. The COD is acceptable considering the sales analyzed are six years removed from the last revaluation. 2015 Median Sales Ratio —0993 2014 Median Sales Ratio— 1.007 2013 Median Sales Ratio— 1.04 2015 Coefficient of Dispersion — 13.30 Revaluation Process Field reviews for the 2017 revaluation began in April 2014 and have continued to date. Tax office appraisers are visiting residences and talking to residents when possible. During the visit, even if no one is home, the appraisers are leaving postcards at the residences as a means of collaboration between the tax office and residents. We want records to be accurate and the 2017 revaluation value to be indicative of market value. A tentative timeline is provided below: • April 20l4 — May 20|6: Field visits to verify property records, grade, depreciation, etc. • January 2016: Mail summary descri ion of property with annua listing forms • January 20l6 —April Z0|8: Field reviews of sales used in models • April 20l6 — July ZOl0: Development of new rates for SOV and testing • July/August 2016: Finalize 8(}V • September 2016: Public Hearing on SOV • October/November 2016: Ado inoo[8OV • December 2016: Final, holistic review • [)cccozk�r�nouuzy20|7� S�odou\ vu|u� cbun�cuoh�cx • January 20|7 — March 20l7: Informal appeals • April 2017 June 2017: Board of Equalization and Review hearings 4 Collaboration with Community A local government project that directly affects each resident as much as a countywide revaluation should have built-in education and collaboration efforts. The tax office realizes that completing this project accurately and successfully requires assistance from the public. Moreover, collaboration is the cornerstone of Orange County Government, and the tax office embraces that approach as well. We feel it is not enough for the public to hear about the 2017 revaluation only at the very end of the process through a notice of new value in early 2017. Below are some proactive programs we are excited about. 1. 2017 Revaluation Partner—we have developed this program for those residents wishing to take the extra step and test what they have learned through our educational resources. A significant overhaul of the "Revaluation" section of our website was recently completed, and the revisions provide numerous educational offerings. The program begins with a review of the data on our website, moves on to our three (3) 2017 revaluation"learn and share"videos and culminates with an interactive and educational 10-question quiz. At the end of a successful quiz, the resident is awarded a Certificate of Achievement for successfully participating in our 2017 Revaluation Partner program. Earning this distinction shows a willingness to engage and collaborate with their local government, and it will prepare each participant to discuss the 2017 revaluation with other members of the community. As a 2017 Revaluation Partner, they also may be involved in pilot studies and asked for input over the course of the 2017 revaluation. Certificate (Of Aciltefrex ent Dwane Brinson got a score of 100/100 (100%) I on 2017 Revaluation Partner Quiz - Orange County, North Carolina Jan 4,2016 2017 Revaluation Partner 'k6 2. Summary Description Mailing—On December 31, 2015 we mailed 39,260 letters with the 2016 Property Tax Listing Forms. These letters provided residential real property owners with a snapshot of the data on record with the tax office. An important preliminary step in the appraisal process is ensuring accurate data. This effort is a way to show our desire for community collaboration and involvement in the 2017 revaluation. 5 3. Sales Bank Data/Appeals Process—Another portion of our collaborative approach is to prepare residents on not only their appeal options but also how to prepare a successful appeal. This approach creates a win for all stakeholders. As step one in this effort we are providing our raw sales data on our website for anyone to review. From there, we provide a brief overview of how to compare their property to other sales, and we even provide a hypothetical sales adjustment grid for a visual. Lastly, we dedicate nearly an entire video in our revaluation video series to the appeals process. Revaluation Goals With any large project goals are established. As part of contingency planning, those goals must be prioritized as part of a larger strategic plan. The tax office has an opportunity to accomplish many goals with the 2017 revaluation, and a list of primary goals is provided below: 1. Update 2009 real property tax assessments to reflect market value as of January 1, 2017 a. Ensure accuracy of records through field visits, questionnaires, etc. b. Build community support through collaboration and education 2. Capture building use data, i.e. commercial, residential, industrial and their subcategories a. Will allow tax office to better assist Economic Development and Chambers of Commerce with studies and analyses 3. Review exempt properties in Orange County a. Currently approximately $7B of exempt property in Orange County b. Important for Asset Management Services, Risk Management and the State's annually-required AV-50 report Correcting Records Should egregious record inaccuracies be discovered during the process leading up to the county's 2017 revaluation, those changes would take effect in the corresponding year. All records for the revaluation will be keyed into the system with an effective date of January 1, 2017. Any resulting change in tax assessment would take place with the revaluation date and the tax bill to be mailed in July/August 2017. Conclusion Market statistics show Orange County real estate markets to be improving. While we notice manifestations of properties selling for more or less than the tax assessment, those will occur in any market in any year. The majority of current qualified market sales hover around current tax assessments. Furthermore, the economy is improving with more market activity, shorter selling times and higher selling prices. The sales ratio has been gradually declining in recent years indicating that market values are rising. 6 LPP to add Typical OC Outgoing Address with Logo xxxxXXXXXXXXXX XXXXXXXXXXXXXX XXXXXXXXXXXXXX XXXXXXXXXXXXXX XXXXXXXXXXXXXX December 30,2015 John Doe 100 Main Street Hillsborough,NC 27278 Parcel ID Number(PIN): XX Dear Property Owner: Provided below is a snapshot of data from your current property record. As we work towards the countywide revaluation of all real property to take effect January 1,2017,we hope you and others in our community will serve as partners in producing a top-quality product. Your review of the data below is an important step. For more information on the 2017 countywide revaluation,how you can become a revaluation partner,and to fill out an electronic version of this form,please visit www.bit.ly/2017reval. If the data below is accurate,there is no need for further action at this time. The tax office appraisal staff has been conducting an organized canvas of properties in the County for approximately the last 18 months. These visits have served to confirm or correct our records. If you believe the property characteristics as outlined below are inaccurate,you have the right to request an additional site visit and property review. OUR CURRENT FILE HAS YOUR PROPERTY LISTED AS SHOWN BELOW Parcel Id Number(PIN) Legal Description Year Built *Exterior Siding Total Heated Square Feet Air Conditioning/Heat Type Full Baths Half Baths Number of Fireplaces Other Comments If year built is not listed in the above description,please provide that information on the Data Correction Form below and return the entire form in the supplied return envelope. Instead of mailing your corrections,you can fill out an electronic version of this form by visiting www.bit.ly/2017reval. Data Correction Form Parcel Id Number(PIN) Legal Description APP:OCREVSUM 7 Year Built *Exterior Siding Total Heated Square Feet Air Conditioning/Heat Type Full Baths Half Baths Number of Fireplaces Other Comments *Exterior siding types: Frame—includes masonite,hardiboard,vinyl siding,wood, cedar shake,board and batten Masonry—includes brick veneer and concrete block Aluminum—includes traditional aluminum siding only APP:OCREVSUM