Stone Calls For Reval Redo – UPDATE: Umm, No
GOP mayoral hopeful Scott Stone let loose a media release today calling on Commissioners Chairman Jennifer Roberts and the county board to go back to the drawing board with the revaluation process:
Stone called for this “Reval Redo” so that process can be performed more fairly and so that the values more closely reflect actual market values.
“More than 41,000 property owners, all of whom are constituents of yours, have filed appeals. A large number of these individuals are among the 35,000 unemployed or more than 50,000 underemployed in Mecklenburg County, who are already struggling to pay their mortgages,” Stone wrote in his letter to Chairwoman Roberts. “I am proposing this ‘Reval Redo’ because it is clear to me and many across our community, and based on the data, that the process is fundamentally flawed and is riddled with inconsistent revaluations.”
In his letter, Stone proposed that the new process consist of three main elements:
1. Set a guideline of 10% maximum change in property value. For any property values outside of that range, the burden of proof should be on the county appraisers.
2. Set the maximum average increase to no more than 4%, which is in line with the growth in values since 2003 according to S&P / Case Shiller. The initial reval process had set an 8% average increase.
3. Plan to perform a new revaluation in 2014 as there will likely to be an improvement in the economy and property values will have stabilized, providing the county and the city with better data upon which to levy taxes.
Stone made it clear in his letter that he knew that the process was outside of the purview of the city, but as a candidate for mayor he believes that the process and the results directly affect city of Charlotte residents.
“This process directly and dramatically impacts the citizens of the city of Charlotte, as property values directly impact individual city taxes,” Stone wrote. “I call on Mayor Anthony Foxx to join me in supporting a ‘Reval Redo.’ I believe that the current process will put a great financial strain on a large number of our citizens. As we still struggle with double-digit employment, this new and additional financial burden will slow our much needed recovery.”
Interesting proposition. Stone’s letter to Roberts and the county board can be found here.
There’s certainly enough quirks to some of the revaluation numbers that have been produced to date, hence the 41K+ appeals, to justify a call for a redo; but I’m not certain it’s feasible given that the county board needs to approve a budget by the start of the fiscal year. Not sure if that would provide time for a complete reval redo and round of appeals, and even if it did, whether Stone’s call for percentage caps would pass legal muster (we have a call in to tax assessor Garrett Alexander for his take).
Even if it did, I’m not sure it would matter. Roberts and her Democrat cohorts have already made clear their intention to fund CMS and special pet programs and services to the maximum extent possible, any potential harm to taxpayers be damned.
Still, it’s encouraging to see Stone at least throwing something into the mix that argues for a modicum of accountability from local government, while essentially issuing a challenge to Mayor Anthony Foxx to follow suite.
UPDATE: Roberts’ response to Stone:
Dear Scott:
Thank you for your letter. What you are proposing is counter to current state law, would cost taxpayers additional money, and would not support fairness in the assessment process. I know that the process is complex, so our assessor has given me more specific information to assist in explaining it to you and others who are concerned about the way that the state directs counties to carry out revaluations.
The laws governing the revaluation process sets forth a requirement that it must performed at least once every eight years. North Carolina General Statute 105-317 sets forth the processes for the adoption of the uniform schedules of value, standards and rules for countywide real property reappraisal. The last revaluation was effective January 1, 2003. Mecklenburg County had intended to revalue all real property on January 1, 2009, but the Board voted to postpone that revaluation due to the severe economic decline occurring in late 2008. In light of the expected duration of the economic downturn at that time, the Board set the latest date which would allow the full impact of the declines in the real property values to be captured by the Assessor, and also meet the legal requirement of conducting the revaluation within the eight years following 2003. The eight-year requirement meant the revaluation had to be completed no later than January 1, 2011. This statutory process cannot be set aside without statewide legislative action which would apply to all 100 counties in North Carolina.
The Mecklenburg Board of County Commissioners approved the schedules of value, standards and rules (Schedules) for the 2011 Revaluation in December of 2010 according to statutory provision. In preparation for the adoption of the Schedules, the Board appointed a Citizens Revaluation Advisory Committee to review and advise them with respect to the validity and accuracy of the work of the Assessor’s Office. The committee is a group private citizens who are real estate industry professionals, and all of whom have decades of experience in Mecklenburg County. The committee completed its work in August 2010 and reported the Schedules were in compliance with G.S. 105-283, 105-284, 105-286, and 105-317 and gave its unanimous support of the Schedules. Upon this advice, the Board initiated the adoption process.
The Board published the required notices for a public hearing on October 20, 2010. The Board also made the Schedules available for public inspection prior to holding a public hearing to consider the adoption of the proposed Schedules. Following the period of public inspection and a public hearing, the Board approved the Schedules, issued an Order adopting them, and published the Order weekly for four successive weeks, as prescribed by statutory guidelines. The last day for challenging the validity of the Schedules by appeal to the North Carolina Property Tax Commission was December 18, 2010. Any challenge to the revaluation process and Schedules would have had to occur prior to that date.
The first reappraisal in eight years was challenging given the dramatic changes in real estate market since 2007, resulting in a smaller volume of sales to analyze compared to past revaluations. Notwithstanding, the Revaluation Team widened the scope of analysis by including distressed sales – foreclosures, bank sales, short sales – to measure the impact of the downturn in the real estate market. Assessments to sale ratios, based on 2010 sales, were monitored neighborhood-by-neighborhood to ensure that they met statutory and industry guidelines. Where sales were too few to arrive at meaningful statistics, the appraisers followed standard appraisal practice, searching for comparables in similar neighborhoods.
Upon completion of the revaluation the County’s overall statistics were well within professional guidelines, with a median ratio of 95.6% and dispersion about the median sale of 7.98%. The ratio reflects a conscientious effort to avoid over-estimating values in a market that is still in decline, while meeting the State’s requirement that property be assessed at fair market value.
Further support for the accuracy of the revaluation is the percentage of properties under appeal. In terms of professional standards, a typical revaluation is expected to create an appeals level of 10-15% the properties at the informal level. Currently there are 41,700 appeals filed with the Assessor’s Office which represents 11.7% of all the properties in Mecklenburg. Despite the most severe economic downturn in recent US history, this percentage is at a level comparable to industry averages and revaluations conducted in better economic times.
Finally, the County has already spent $884,933 for the 2011 Revaluation. That figure does not include $313,556 requested for FY12 to complete all the appraisal, new construction and appeals activities for the balance of the revaluation. That figure also does not include the cost of full time revaluation personnel. The cost of conducting another reappraisal, with staff costs included, is estimated to be $1.8 million.
Going forward, we intend to revalue property every two years to further increase the accuracy of the market values used by the Assessor’s office by comparing properties to market rates more frequently. We will go through this process again in 2013, and you are welcome to attend all the public hearings for each step of the process during that time as well. I would also encourage you to apply to serve on the Citizens Revaluation Advisory Committee if you would like to have even more input.
Thank you for your inquiry.
Jennifer Watson Roberts
Chairman
Mecklenburg County Board of Commissioner
With Commissioner Dumont Clarke piling on for good measure:
Scott,
I have read your letter and Jennifer Robert’s response.
We each took the following oath as required by the North Carolina Constitution.
Sec. 7. Oath.
Before entering upon the duties of an office, a person elected or appointed to the office shall take and subscribe the following oath:
“I, _______________, do solemnly swear (or affirm) that I will support and maintain the Constitution and laws of the United States, and the Constitution and laws of North Carolina not inconsistent therewith, and that I will faithfully discharge the duties of my office as County Commissioner, so help me God.”
Much of what you are asking us to do with respect to the recent revaluation of all property in Mecklenburg County is not authorized by and/or would contravene the laws of North Carolina. We could not do it, therefore, without violating our oaths of office.
Dumont Clarke
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