COUNTY OF ALBEMARLE

 

                                                                EXECUTIVE SUMMARY

 

 

 

AGENDA TITLE:  

Annual Real Estate Reassessments

 

 

SUBJECT/PROPOSAL/REQUEST:

Approve recommendation to move Albemarle County to an annual versus biennial reassessment process.

 

 

 

 

STAFF CONTACT(S):

Messrs. Tucker, Davis, Wiggans, Woodzell; Ms. White

 

AGENDA DATE:                      

May 4, 2005

 

ACTION:      X                            INFORMATION:

 

CONSENT AGENDA:         

     ACTION:                             INFORMATION:

 

 

ATTACHMENTS:  

 

 

REVIEWED BY:

 

BACKGROUND:

Two reports, which explored the possibility of moving the County’s real estate reassessment process from a biennial to an annual appraisal process, have previously been brought to the Board of Supervisors for review.  Subsequent to the last report on December 2003, staff was requested to bring this proposal back to the Board’s attention, so that both real estate staff, as well as the public, would have sufficient time to prepare for the change, should the Board decide to move to an annual cycle.  The executive summary has been updated with current statistics and includes a recommendation for Board action. 

 

DISCUSSION:         

Current Assessment Process

The County of Albemarle consists of approximately 740 square miles and currently contains 38,015 real estate parcels. These parcels are assessed on a biennial basis by the County Assessor’s office.  Office staff consists of fourteen employees: a County Assessor, eight appraisers, a tax supervisor, and four clerical staff.

 

The current assessment process takes approximately one and one-half years to complete.  Each appraiser is assigned a geographical area to assess and is responsible for assigning value to approximately 5,000 parcels.  During this eighteen-month process, all parcels are visited and reviewed by the assigned appraiser.  In addition, values are assigned for new construction that may have occurred; if applicable, the land use status is reviewed; and values are assigned to parcels that have been newly created by subdivision of property.

 

In 1999, the assessment process changed from a completely manual process to a computer assisted mass appraisal (CAMA) process.  With this system, every cost schedule associated with CAMA is updated to accurately reflect current market conditions and costs prior to the start of the reassessment process. These tables assist the appraisers in arriving at their property valuations. In addition to increasing the efficiency of assessment operations, the CAMA software speeds mathematical computations and allows extraction of data for reports and analyses.

 

Annual Assessment Process

Currently, annual assessments are being conducted in 11 of 80 counties and 16 of 35 cities in the Commonwealth. The City of Salem is scheduled to convert to annual assessment in 2007, effective for 2008.  Of the remaining counties and cities, 20 conduct their assessments on a biennial basis with the remaining localities performing their assessments every 3-6 years. Staff conducted a survey of the localities conducting annual assessments to determine the following: number of parcels, ratio of developed vs. undeveloped land, appraisal staffing levels, percentage of parcels visited each year, cycle of parcel review, and sales ratio information.  This data is summarized in Exhibit A.

 

The annual assessment process will take approximately nine to ten months to complete.  This condensed time frame will require that the majority of the assessments be completed from sales ratio analysis conducted in the office.  It is anticipated that a physical inspection of most properties will be limited to those parcels which have sold, have a current building permit, or whose owner has requested a review.  However, International Association of Assessing Officers (IAAO) Assessment Standards recommend every property be physically inspected at least every sixth year. The County Assessor’s Office will meet and/or exceed this recommendation.

 

 

This limited timeframe will also require the reduction of the appeal period to the County Assessor from 45 days to 15 days and to the Board of Equalization from 30 days to 15 days.  These appeals periods would be in line with the condensed timeframe required for an annual assessment program. 

 

It is anticipated that the timeline for office workflow would be adjusted as follows:

 

Process

Biennial Assessment

Annual Assessment

 

Reassessment Notices Mailed

 

Mid-January

 

Mid-January

 

Assessment appeal hearings

 

Mid-January - February 28

 

Mid-January- January 31

 

Board of Equalization Appeal deadline

 

March 1 – March 31

 

February 1 – February 15

Inspection of new properties applying for land use and parcel divisions

 

 

Mid-January – March 31

 

 

February 1 – March 31

 

New Construction

 

March 1 – May 31 & October        

 

On-going

 

 

New Cost Tables Established

 

April 1 – May 31

 

February 1 – February 28

 

Reassessment work period

 

June 1 (odd yr.) to

December 15 (even yr.)

 

March 1 – December 31

 

 

Benefits of Annual Assessments

·         Provides a more current picture of the property tax basis;

·         Assessments are a more accurate reflection of current fair market value, especially in rapidly increasing or declining markets;

·         Assessment accuracy is essential to property assessment and can have legal benefits.  Taxpayers and the courts are becoming more cognizant of the desirability of annual assessments in order to secure a just valuation of property for taxation.

·         Annual appraisals reduce the dramatic changes in property values that a biennial schedule can produce.

·         Vehicle-related expenses (fuel, maintenance, etc.) will be decreased due to the reduction in vehicle usage.

 

Disadvantages of Annual Assessments

·         Costs associated with additional operating expense would result in an increase in on-going costs of approximately $16,000 per year for mailing costs and reassessment notice forms.

·         Appeal process will be shortened in order to accomplish all annual workload deadlines for both appraisal staff and Board of Equalization;

·         Market trends and sales ratio analysis, rather than a physical inspection, would be used to assess the majority of parcels. Therefore, appraisers will be less familiar with individual parcels.

·         In a declining market, the impact on the tax base will be more immediate, possibly requiring a rate increase to maintain revenue levels.

·         Parcels that are currently under the Land Use Taxation Program will not be subject to a physical inspection every two years.  Therefore, these parcels may not be immediately recognized should they fail to meet or maintain the requirements of the program.

·         Increases will have a more immediate impact on the Revenue Sharing Agreement with the City.

 

Implementation of Annual Assessments

Prior to implementation of annual assessments, several items will need to be addressed.

 

·      Albemarle County Code Sections 15-1000, Biennial assessment of real estate, and Section 15-1002, Time limits for appeals of real estate assessments, will have to be amended.  This requires advertisement of the proposed code changes followed by a public hearing. 

·      The assessment software currently being used for the computer mass appraisal system (CAMA), SMDA 2000, is capable of supporting the annual reassessment process without any significant software or programming changes at this time. Manatron, the County’s software provider, is scheduled to upgrade the County Assessor’s office to new software, Proval Plus, in May 2005.  Prior to the implementation of annual assessments, staff recommends the migration from SMDA 2000 to Proval Plus be used once for a biennial assessment, thereby lessening the learning curve associated with both the change in assessment process and new computer software. The software upgrade is anticipated to cost approximately $25,000 to $30,000.

·      A review of the appraisal staff assignments and job descriptions should be conducted.  In reviewing other localities that assess annually, most localities have several positions dedicated to appraisal review. Staff suggests two positions, Residential Review Appraiser and Rural Review Appraiser, will be essential in order to successfully accomplish annual reassessments. The review appraisal positions will be critical to insure the quality of appraisals required within the limited timeframe given to complete the annual assessment process. Staff estimates the realignment costs to be approximately $12,000.

·      Education of the public regarding the change in assessment process should also be addressed.   Staff would recommend that the change in assessment process and reasons why this change is necessary be promoted through press releases and other media prior to implementation.

 

 

RECOMMENDATION:

Annual assessment is feasible. CAMA Systems permit conversion to annual assessment with some minor modifications. In conjunction with the request to realign two current positions in the Assessor’s office, staff believes the change from biennial to annual assessments can be accomplished without additional appraisal staff. However, with an annual growth of approximately 725 parcels per year, additional appraisal staff may be required in the next five to six years. Staff recommends implementation of annual assessment beginning 2007, effective for 2008.

 

View Exhibit A - Comparison of Counties that Assess Annually

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