Property Assessment

Assessors: Plan the Best Defense Now for 2010 Assessment Appeals

Add This Exercise to the Routines to Follow Before Completing the Reassessment Process

Imagine yourself sitting before the Board of Equalization or Board of Assessment Review and hearing the various cases brought forward in astonishing detail for each type of property in your community.  Now imagine the Board wrapping up its cases for the year and adjourning.  As though in hind-sight write out your responses to the following questions:

1. Could specific public relations efforts have addressed some of the issues raised as part of the hearings and perhaps even have eliminated some of the appeals? For example, could a mailing or online notice have explained how property transfers as a result of foreclosures were considered by your office have saved telephone calls or appeals? Could reminder letters to the owners of income-producing properties have brought in more income and expense statements to support rental rates, vacancies, and operating expenses?
2. Could targeted presentations to the Board have addressed some of the issues raised as part of the hearings? In the past I have urge the Board to hold a public meeting each year that functions as an organizational meeting to discuss meeting dates and times, procedures, and protocols and to hear a presentation by the assessment office concerning changes in values for each class of property as a result of the reassessment. As part of this overview I stress the important valuation issues that I thought might come before the Board during their hearings. If your Board cannot hold a separate meeting ask them to set aside extra time before the first hearing for each major class of property where staff can present this same kind of overview. Ideally, the presentations would be mentioned in any public announcement of the Board meetings so that interested property owners could also attend.
3. What valuation issues were hardest to defend before the Board? For example, if you envisioned a large number of owners of income-producing properties appealing their assessments, did you spend the appropriate amount of time before the completion of the reassessment supporting your positions relative to the rental rates, vacancies, and capitalization rates used? Similarly, were sales organized and summarized in a manner for ease of use by the Board?
4. What evidence or information could you or your staff have developed prior to the hearings that could have helped your defense? For example, if you choose to follow specific procedures concerning the use of foreclosures or bank-owned property sales, did you document how you developed your procedure, perhaps from International Association of Assessing Officers guidance and talking to assessors in neighboring jurisdictions?
5. Could various exercises or mock staff preparations have improved your ability to defend the assessments? Especially with president setting appeals you may have wanted to develop departmental positions that were consistent throughout the Board hearings. Having a 10 minute discussion before the hearing with the staff appraiser who will defend the assessment before the Board can be very productive. It is also helpful to develop standardized presentation documents for staff use before the Board (i.e., sales verifications, sales listings by property class, comparable assessments and comparable sales spreadsheets, etc.).

These are only a few ideas as your visualization may be quite different depending upon your unique circumstances.  This exercise can help you defend assessments for the upcoming reassessment as well as improve other assessment administration programs (i.e., data collection, public relations, Board relations, etc.) that lead up to the hearings.

Richard L. Sanderson

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Hoping for a Tax Assessment Reduction in 2010?

City Assessor Advises Commercial and Industrial Property Owners to Take Action

If you only have time to do one thing in the next week file an income and expense statement with your local real estate assessing office informing them of the current ability for you to lease your commercial or industrial property in today's market.  Even if you own and occupy your property you should be current with asking rents, rental concessions, vacancy rates, tenant fit-up expenses and operating expenses for similar properties.  Call your local assessor and find out how you can provide his or her office with income and expense information about the type of property that you own.

Assessors can and often do reflect current real estate market conditions using what valuation experts call the "income approach to value."  But in order to consider this approach your local assessors needs to know how your property and competing properties are fairing in today's market.  So this is not only a plea for you to provide such information to the local assessor, but other commercial and industrial property owners as well.  It stands to reason that an assessor will be swayed by strong evidence that indicates prevailing market conditions more than just a few instances of the lowering of rents and high vacancies. In some states, like Virginia, if the local assessor asks for income and expense information and you did not comply with the request neither the assessor, Board of Equalization, or circuit court judge will consider the income approach to value as part of the assessment review and appeal process.  As such you are left only with construction costs and comparable sales approaches to value.  Don't eliminate this valuable approach! 

Most assessors have downloadable income and expense statements available on their websites.  Unfortunately there is very little standardization in the real estate assessment field at this time.  So don't use a statement from another assessor website.

If you would like more advice, tips, and suggestions about real estate assessments subscribe to our e-alerts or check back at this Property Assessment blog often.  You'll understand how assessors do their jobs and how to take constructive action when they don't.

   

Getting to Yes on Budget Approval for Critical Needs

Effective Property Assessment Administration Programs Need Essential Funding

The Challenge
Getting budget approval to fund critically needed assessment program improvements has gotten more difficult in the last two years given declining local government revenues.  While declining assessments have been the prime reason that revenue shortfalls are occurring, assessors must do everything possible to keep current with changing markets and increase program efficiencies.  The outlook for revenues increasing is unlikely in the near future, especially when taxpayer sentiment will not tolerate increased taxes.  So how do you convince those in the position of recommending that items be included in your departmental budget that your specific needs should be funded?

The Strategy
What follows is a suggested strategy that has proven to be effective in getting budget approval for property assessment program improvements.  While this article addresses the process from the viewpoint of property assessment administration, this same strategy could apply to many other sectors as well.  Here then are three strategic steps for securing budget approval.  The steps are laid out in chronological order but if have already placed one or more items in motion, good for you!

1. Develop Measures and Indicators
First you will need to have numbers or a well documented account of how the desired program improvements will enhance your existing program and/or address critical needs that have been identified.  In other words you need to spell out the justification necessary to convince others why you need the requested funds and how they will be used.  As assessors we already know the convincing nature of well presented data that supports our positions relative to property values, now shift to supporting why your program needs to be funded.  Many of the measures and indicators that you are currently using to track the quantity and quality of work and public relations efforts may be useful here.  But if you need to design and implement new measures and indicators make sure you keep the bigger picture in mind, making sure that they also contribute to operational improvements or insights.

2. Utilize Available Resources
As soon as possible seek out the advice of the budget analyst, budget director, or finance director who works with your departmental budget.  Mention that you will be seeking budget approval for a new or enhanced program as part of the next budget process, but for the time being you need guidance on how the request needs to be presented, sample written requests for new programs, and what will need to be submitted for justifying your request.  If you are met with discouraging comments that include why it's a bad time to request additional budget requests, politely agree but convincingly state that you would like to go through the motions anyway.  While budget and finance directors are well informed of the local government's financial health and the political realities of the community, no one knows more about the needs of your assessment office than you do.  Assure others that you will only send forward budget requests that are critical to your operations.

In larger jurisdictions your budget request may need to be pre-approved or recommended by a committee (e.g., technology committee for computer hardware and software) before being considered as a budget request.  Find out what approvals may be needed and what documentation they are looking for before giving their blessing to a proposal.  While the budget or finance director can give you advice here, you may also want to ask the advice of directors or department heads that have recently received budget approvals that passed though the same committee. 

3. Present the Request and Follow-up
From the advice offered in earlier strategy steps that may include written samples of successful budget requests, prepare your presentation being sure to include supporting measures and indicators.  In addition to the normal proofreading ask someone outside of your office to review the request.  Ask someone who is completely unfamiliar with assessment administration.  Cut out jargon or wordy explanations that are not essential.  If you will need to orally present the request practice several times before a live audience so your presentation is polished.  Develop a list of anticipated questions and well thought out responses.  You have put too much work into your budget request at this point to be dashed by a poor response to a question that should have been anticipated.
 
Don't be discouraged if you don't get approval the first time around.  You may need to include your request in more than one budget year.  Other needs may take priority in the current budget, but if higher priorities can be satisfied this year your request may be nearer the top in next year's effort.  Keep positive and may all your critical requests get budget approval.

Primary Property Assessment author Richard Sanderson has been the deputy director or director of property assessment offices since 1977.  He has sought and received budget approval for many new and enhanced program areas of property assessment administration.

 

Recommended Website of the Week: Lincoln Institute of Land Policy

An occasional series that recommends useful websites to our readers as discovered by Property Assessment authors or suggested by readers.

 

Here is Exactly Where Land Policy and Property Tax Policy Intersect

 

Typically immediately after a new employee to property assessment administration is told about the International Association of Assessing Officers (IAAO), and perhaps the IAAO state chapter or affiliate, they are introduced to the Lincoln Institute of Land Policy.  Lincoln Institute of Land Policy publications and educational courses consistently get high marks from professional property assessors.

According to their website http://www.lincolninst.edu/, the Lincoln Institute of Land Policy, as a leading resource for policy makers and practitioners, addresses issues involving the use, regulation, and taxation of land. The Lincoln Institute seeks to improve the dialogue about urban development, the built environment, and tax policy in the United States and abroad.

I highly recommend this website for professional property assessors and those interested in property tax policy.

 

Real Estate Research Simplified

More than 30 Top Internet Sites for Real Estate Research

Appraisers, assessors, investors, real estate industry experts, and tax policy researchers.  Primary Property Assessment author Richard Sanderson has updated his popular Selected Internet Resources: Real Estate Research Centers (click here).  Originally posted on this blog on September 6, 2008 (Monitoring the Pluse of Real Estate), the updated listing includes 10 new Internet sites.  Each link was tested and updated where needed.  A thorough search was conducted to find similar Internet sites.  Updated sites include the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison and Mays Business School Real Estate Center at Texas A&M University.  New sites include the recently established Old Dominion University (Virginia) Center for Real Estate, the Tax Policy Center, and the Office of Tax Policy Research at the University of Michigan.