COUNTY OF ALBEMARLE

 

EXECUTIVE SUMMARY

 

 

AGENDA TITLE:

Annual Real Estate Reassessment Update

 

 

SUBJECT/PROPOSAL/REQUEST:

Additional information concerning the recommendation to change to an annual from the current biennial reassessment process

 

 

STAFF CONTACT(S):

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

 

LEGAL REVIEW:   Yes

 

AGENDA DATE:

July 6, 2005

 

ACTION:     X                       INFORMATION: 

 

CONSENT AGENDA:

  ACTION:                            INFORMATION: 

 

 

ATTACHMENTS:   No

 

 

 

REVIEWED BY:

 

 

 

BACKGROUND:

At the May 4, 2005 meeting of the Board of Supervisors, staff discussed the recommendation to change to an annual from the current biennial reassessment process.  During the discussion, the Board expressed concern about the proposed changes to the current timetable for appeals.  In addition, the Board requested information concerning additional expenditures and revenues related to the change.  This Executive Summary addresses these issues.

 

 

STRATEGIC PLAN:

4.2 Fund County services in a fair, efficient manner and provide needed County public facilities and infrastructure.

 

 

DISCUSSION:

Appeals – Following the May 4th meeting, staff reviewed the revised timetable as presented to the Board.  Staff determined that the timetable for Assessment Appeal Hearings (appeals to County staff) will not need to change.  In other words, if the Board approves the change, the period for Assessment Appeal Hearings will remain from mid-January (when Reassessment Notices are mailed) to February 28th.  This allows the property owner approximately six weeks for this process.  However, to meet the compressed schedule that annual reassessment requires, staff has determined that the deadline for appeal to the Board of Equalization (BOE) will need to change from March 31st to March 15th if annual reassessment is approved.  It is important to note that citizens are allowed to petition the BOE during the entire hearing process (beginning in mid-January), thus giving them approximately sixty days to petition the BOE.

 

Expenditures - Staff analyzed the additional expenditure costs and savings related to the change.  As noted in the May 4, 2005 Executive Summary, additional costs for the program are for Salaries/Benefits (due to staff reclassifications), printing and postage of the notices on an annual basis, and the annual costs for the Board of Equalization, which total approximately $28,000 annually.  Expenditure savings will be realized by a reduction in the number of Real Estate Division vehicles, which will save approximately $12,000 annually.  Therefore, the net cost to the Division of changing from a biennial to an annual reassessment process is approximately $16,000 annually.

 

Revenues - The chart below details the impact on total Albemarle County Real Estate Tax Revenue.  The 13.0% biennial (6.5% annual) growth rate reflects the average biennial growth in value in Albemarle County over the last five reassessments.

 

As indicated in the column labeled “Difference”, total Real Estate Tax Revenue will increase by $6.4 million in tax year 2008 due to the change from biennial to annual reassessment effective 1/1/2008.  This increase in revenue would grow to $8.1 million in tax year 2012.  The total difference over the six year period is $21.7 million.  In addition, the change to annual reassessment would impact the County’s Revenue Sharing Agreement with the City of Charlottesville.  The amount the County contributes to the City is based on a tax rate of 10 cents per $100 of the total assessed property values from the tax base two years prior.  Changing from a biennial to an annual reassessment would result in this contribution increasing annually.  The

additional contribution to the City would be approximately $1.0 million every other year, beginning in tax year 2010.  This results in a net increase in revenue over the six-year period of $19.6 million.

 

                                           

ANNUAL VS. BIENNIAL REASSESSMENT

IMPACT ON TOTAL REAL ESTATE TAX REVENUE

                                                                   

Assumptions:

Current Value (1/05) (Billions)                       $11.7              

Growth in Value - 1/05 to 1/07                        13.0%              

Annual Growth in Value After 1/07                     6.5%              

Tax Rate (per $100)                                      $0.74               

                                                       

     Annual                     Biennial                                                  Revenue

             Reassessment -       Reassessment -                                        Sharing              Net

 Tax      Tax Revenue             Tax Revenue                    Difference         Increase             Increase

Year       ($ Millions)                ($ Millions)                    ($ Millions)      ($ Millions)       ($ Millions)

-------       ----------------                -----------------                    --------------       --------------           --------------

2008             $104.2                            $97.8                          $6.4                  *                       $6.4

                                                                                           

2009             $111.0                          $111.0                          $0.0                  *                       $0.0

                                                                                           

2010             $118.2                          $111.0                          $7.2                  $1.0                  $6.2

                                                                                           

2011             $125.9                          $125.9                          $0.0                  $0.0                  $0.0

                                                                                             

2012             $134.0                          $125.9                          $8.1                  $1.1                  $7.0

                                                                                             

2013             $142.8                          $142.8                          $0.0                  $0.0                  $0.0

       ----------                           ----------                        ---------                 ------                  --------

TOTAL          $736.1                          $714.4                         $21.7                 $2.1                  $19.6

 

 

* Real estate values used for this calculation are lagged two years.  Therefore, annual reassessment,
   effective 1/1/08, would not impact the Revenue Sharing Agreement until Tax Year 2010.                                                                                          

 

 

The following chart details the impact on the owner of a median valued home in Albemarle County.  The current median valued home is $275,000.  The chart indicates that the owner of a median valued home would pay $511.29 in additional real estate taxes over the specified six-year period, beginning in tax year 2008.   

 

 

ANNUAL VS. BIENNIAL REASSESSMENT

IMPACT ON OWNER OF MEDIAN VALUE HOME

       

        Assumptions:                                                               

        Current Value of Median Home (1/05)                   $275,000          

        Growth in Value  - 1/05 to 1/07                                 13.0%         

        Annual Growth in Value After 1/07                              6.5%         

        Tax Rate (per $100)                                                $0.74        

                                                                                           

          Annual Reassessment                Biennial Reassessment          

         -----------------------------------            ----------------------------------

 Tax      Value of                                          Value of 

Year   Median Home     Tax                Median Home      Tax                Difference
------    ---------------       --------------           ------------------     ---------------      -----------------         

2008     $330,949       $2,449.02               $310,750      $2,299.55              $149.47

                                                                                             

2009     $352,460       $2,608.21               $352,460      $2,608.21                  $0.00

                                                                                             

2010     $375,370       $2,777.74                $352,460     $2,608.21              $169.53

                                                                                             

2011    $399,769       $2,958.29                $399,769     $2,958.29                  $0.00

                                                                                             

2012     $425,754       $3,150.58                $399,769     $2,958.29              $192.29

                                                                                           
2013     $453,428       $3,355.37                $453,428     $3,355.37                   $0.00
                                -------------                                   --------------                -----------

TOTAL                     $17,299.21                                 $16,787.92             $511.29

 

 

RECOMMENDATION:

Staff recommends the implementation of annual reassessment beginning in 2007, effective 1/1/2008.

 

 

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