Finding efficiencies from mapping the assessment

process and use of metrics

Presented: April 3rd and 10th, 2018.

by John Vickery, Vermont Assessors and Listers Association

1

Town Officers Education Conferences

Workshop Objectives

1. How can our office obtain greater outcomes and better service?

2. What should we be measuring? What are our core functions?

3. Should we change/adjust our RESOURCES (staffing, systems, processes)?

4. Review the Assessor’s Office MISSION

5. Mapping the Assessment Process

6. Mapping Value Changes From Permits

7. Mapping Value Changes From the Equalization Process

8. Performance Metrics – Overview

9. Diving into the Data

2

MAPPING THE ASSESSMENT PROCESS.

Assessor’s correct assessment inequities

Mapping the drivers that lead to unequitable property assessments.

Following standard assessment review procedures

Setting priorities for which property assessments receive value adjustments

Execute the plan.

3

Action Item

Mapping the

Assessment Process

CHANGES IN PROPERTY

VALUE

VALUATION SYSTEM

BECOMES DATED RELATIVE

TO DATE OF LAST

CITYWIDE REAPPRAISAL

PHYSICAL CHANGES TO

A SPECIFIC PROPERTY

VARYING RATES OF

MARKET CHANGE

PERMITTED CHANGES

UNPERMITTED CHANGES

CHANGES IN PHYSICAL OR FUNCTIONAL OR

ECONOMIC DEPRECIATION/APPRECIATION

SEPARATE FROM CHANGES REQUIRING

PERMITS

RELATIVE TO PROPERTY

CLASS (ie single family,

condos,…)

RELATIVE TO LOCATION

(ie.. Assessment

Districts)

RELATIVE TO THE

PRICE RANGE OF

SPECIFIC PROPERTIES

DATA AND PRICING

TABLES/FACTORS IN ASSESSING

SOFTWARE BECOME

PROGRESSIVELY UNRELIABLE

VALUATION MODEL SPECIFICATIONS

BECOME PROGRESSIVELY LESS

REFLECTIVE OF THE MARKET

(ie.. Assessment District boundaries

no longer accurate)

What Drives Inequity of

Assessments?

4

MAPPING VALUE CHANGES FROM PERMITSIdentify properties with new

permits

(decide Property Class to review

annually)

Sort data, filter & select for additional review or

not Does not warrant a value change

Properties that may warrant

a value change but set aside

dependent on staff resources

Additional Review of Permits, Plans, Zoning

Applications, other docs.

Exterior inspection onlyFull inspection needed

Contact owner; mail letter, email and/or phone

No Response to

Assessors request;

exterior

inspection, in

office review,

preliminary

revaluation

Scheduled inspection,

conduct inspection,

preliminary

revaluation

Review of

revalued

property with

Supervisor

Exterior inspection, in

office review, preliminary

revaluation

Owner is

notified of new

valuation (May

5th)

Owner may appeal

property to Board of

Assessors (May 20th –

25th)

Owner may meet

with Assessor

informally

5

GOAL: IDENTIFY

BOTTLENECKS IN

THE PROCESS

Burlington Assessor’s Office

Performance Metrics – Overview

6

Measure

Fiscal Year 2017 Performance

Actual Target Benchmark Status

# of Valuation

Changes464 465 465*

Grand List

Change$32.5m >=$22,m $32,m*

# of Appeals 34 <70 93*

1.*Number of Valuation Changes Benchmark is average of past 9 years.

2. Grand List growth above Target, but anticipate <10,Million reduction from Property Appeals.

3. Seven property appeals are going before the Board of Tax Appeals.

ACTIONS TO ADDRESS PROPERTY VALUE INEQUITY

Second Steps: Actions to address specific drivers of inequity

Physical changes to a specific property

1. See next Slide

Varying Rates of Market Change

1. Equalization of Assessment Values*

2. City-wide Property Appraisal project

*Equalization. The process of adjusting assessments to the overall level of

appraisal for a standard grouping of properties that are statistical outliers. (KK)The process by which an appropriate governmental body attempts to ensure that all property under its

jurisdiction is assessed equitably at market value or a ratio or ratios as required by law. (IAAO)

7

MAPPING VALUE CHANGES FROM THE

EQUALIZATION PROCESS

1. Annually, calculate Sales Ratio Studies ie; CLA, COD

2. Apply performance standards to these ratio studies for Property

Class & Assessment district (to identify outliers & equity issues)

3. Determine which equalizations will be performed.

Based on greatest outlier, staff resources & legal considerations

4. Public notification on Assessor website of intent to equalize property group

5. Mailing notification of intent to equalize to affected property owners

6. Conduct property inspections, review reassessments and finalize “equalized” valuations

8

Real Estate Property Assessment Changes

9

581

204

9 9

54 53

356

23 13 19

-

100

200

300

400

500

600

700

Apartments 1 and 2-Family Houses Res. Condos Commercial All Other

Real Estate Property Assessment Changes FY16 & FY17

FY16 FY17

Property Valuation Appeals – May 2017 – Action Item

• 464 properties were re-appraised• 403 (87%) increased assessment• 61 (13%) reduced assessment

• 34 were appealed to the BOA (8 appeals were not based on re-appraisal)• 18 appealed properties were inspected following appeal• Total adjustments in Grand List: +32,527,900 (0.88% of taxable Grand List)• Corrections in Grand List through appeal: -$2,545,300 (7.8% reduction of increase, 0.07% of GL)

10

Appellants’ Reasoning Property Class

Count of Assessment Value Changes

326367 324

446

726

577523

368

527

857

464

0

100

200

300

400

500

600

700

800

900

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Number of Assessment Value Changes & Property Valuation Appeals

BOA Property Appeals Real Estate Assessment Changes

11

Property Valuation Appeals

110

114

181

66

4134

27

65

142

80

34

0

20

40

60

80

100

120

140

160

180

200

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Property Valuation Appeals by FY

BOA Property Appeals Benchmark

12

Annual Change in Grand List

1.0%

1.1%

0.9%

0.7%

0.9%

0.7%

0.9%

1.1%

2.4%

1.2%

0.8%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

$100,000,000

3.43B 3.47B 3.50B 3.53B 3.56B 3.59B 3.62B 3.66B 3.75B 3.79B 3.82B

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Perc

ent

Gro

wth

in G

rand L

ist

Gra

nd L

ist

Gro

wth

Total Grand List Value by FY

Value Change Percent Change

13

ASSESSOR’S OFFICE

TAX EQUITY CHARTS26 SEPTEMBER, 2017

14

Action Item

ACTIONS TO ADDRESS PROPERTY VALUE

INEQUITY

First Steps: Identify, quantify, standardize measures of equity/inequity

How is equity/inequity measured and monitored:

1. Sales Ratio Studies

2. Coefficient of Dispersion

3. Price Related Differential

Note: These statistical measures are calculated annually for

trending analysis and for determining the best allocation of office

resources to address inequity issues.

15

FY17 - Yearly change in median sales ratio

Single Family

Sale Ratio 0.79 & COD 10%

Condominium

Sales Ratio 0.82 & COD 9%

Sales ratio is the quotient of a sold property’s appraisal value / sale price Coefficient Of Dispersion is a measure of the spread of the median sale ratios within the property class

Co

effi

cien

t o

f D

isp

ersi

on

Sale

s R

atio

Co

effi

cien

t o

f D

isp

ersi

on

Sale

s R

atio

Arrows indicate critical level of imbalance (ratio) or inequity (COD)

16

Sources of inequity: Location/Neighborhoods - Sales Ratio for properties as a

function of Aggregated Assessment Districts (1-Family Homes, 1/16-7/17)

Properties in some neighborhoods appreciate faster than others. Based on 1-family sales ratios, the

South End properties are appreciating faster than New North End, and thus are under-appraised,

with a 0.1 difference in ratios.

SALE

S R

ATIO

NU

MB

ER O

F H

OM

ES S

OLD

17

FY17 - Yearly change in median sales ratio

Duplex

Sales Ratio 0.72 & COD 12%

Three Family

Equity correction in 2015-2016

* Low Sample

Three Family properties shows recovery in ratio from equity correction in fy15/16. Additional review of Duplex properties are needed as indicated by the low ratio (.72)

18

Apartments

Yearly change in median sales ratioSa

les

Rat

io

CO

D

19

Sources of inequity: Location/Neighborhoods - Sales Ratio for properties

as a function of Assessment districts (1-Family, with 5+ sales 1/16-7/17)Properties in some neighborhoods appreciate faster than those in other

neighborhoods

SALE

S R

ATIO

NU

MB

ER O

F H

OM

ES S

OLD

20

Measure of Equity - Price Related Differential

NUMBER OF PROPERTIES SOLD

Fewer home sales compared to prior years

PRD = mean / weighted mean

Property taxes are somewhat regressive but meet

acceptable standards

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016 2017

SINGLE FAMILY

CONDO

0.995

1

1.005

1.01

1.015

1.02

1.025

1.03

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

PRD OVER TIME

SINGLE FAMILY CONDO

21

Sources of inequity: Price Point - Sales Ratio for properties as a function of sales

price (greater or less than median, 1/16-7/17)

Properties with higher sale prices tend to show a wider difference between sale

price and assessment. This is a source of unaddressed increase in inequity.

SALE

S R

ATIO

22

ACTION ITEM1. Burlington compared to other cities:

1. BTV grand list growth is approximately .09%.

2. Growth is average compared to; Colchester VT., So. Burlington VT., Essex VT., Portland ME., Concord NH., Manchester NH., Ithaca NY., and Charlottesville, VA.

2. Burlington has a diverse mix of tax revenue sources. See pie chart

3. What’s driving growth in the grand list in 2017?

1. New construction 34%

2. Improvements 66%

3. Grand list maintenance for Equity purposes 0%

23

Real Estate (Inclds. Local

Agre.)55%

Business Equipment Tax

2%

Tax Increment Finance (TIF)

6%

PILOTs10%

Fees for Services12%

Commercial 120% factor

2%

Rooms & Meals Tax8%

Sales Tax4%

Downtown Improvement Tax

(DID)1%

Late Homestead Penalty

0%

Tax Revenues in fiscal year 2017