Presentation on theme: "5/6/20091 Lincoln Shoreline Community Organization LiSCO www.lincolnshoreline.org."— Presentation transcript:
5/6/20091 Lincoln Shoreline Community Organization LiSCO
5/6/20092 Commissioner Carrol Mitchem on April 29 th voiced concerns in the LT-N about all county taxpayers paying for a bus system that he believes was used almost exclusively by residents in East Lincoln. Did he have a problem will all the countys taxpayers funding a building for the farmers market in Lincolnton that benefited farmers from West Lincoln?
5/6/20093 Different areas have different needs Farmers from west Lincoln do not need to ride buses to Charlotte. East Lincoln residents do not get special use breaks on their property taxes. We are also unable to file for Federal Crop Subsidies for not growing crops. Lincoln farmers contribute 2% of the countys property tax revenue while more than 19% is contributed by the shoreline.
5/6/20094 Lincoln County is supported by the shoreline While many of her western residents defame us as a bunch of newcomers and Yankees. And now they are calling us communists!
5/6/20095 Why are we here? Eternal vigilance is the price of liberty -- Thomas Jefferson, 1732
5/6/20096 Why are we here? The LAST revaluation was a disaster to East Lincoln homeowners By the time the data on how bad it was became available, it was too late to take action except at an individual level Someone should have been watching this and sounded the alarm The designated watcher was asleep
5/6/20097 Lincoln Shoreline Community Organization LiSCO A watchful eye and a unified voice -- LiSCO Motto
5/6/20098 modus operandi One or more members volunteer to watch one area of interest When something seems about to happen, sound the alarm. The British are coming! -- Paul Revere, 1775
5/6/20099 Commercials ELBA East Lincoln Betterment Association ELPACEast Lincoln Political Action Committee
5/6/ The Organization Executive Committee: Chairman Vice Chairman Secretary Treasurer Board of Directors: Executive Committee Committee Chairmen Past Chairman serves ex officio Peter Browne Lori Glover Kim Adams Artis Boyd Martin Oakes Jerry Haney, Buck Moody, Don Voigt, Eddie Weatherman
5/6/ Peter Browne Lincoln Shoreline Community Organization LiSCO Chairman
5/6/ LiSCO Purpose and Goals Lobbying governments to improve the quality of life for people who are concerned with the Lake Norman Shoreline. Making the valuation of waterfront property fair and equitable when compared to actual sales in late Addressing other issues as they arise, including public safety, taxation, environment, lake issues in general.
5/6/ Member Services (1) Planned –Education about issues –Advocacy of positions –Coordination with and support of existing community organizations –Interface with local media regarding activities and positions of LiSCO
5/6/ Member Services(2) Planned –Sponsorship of committees, conferences and events –Shoreline Communities Watch Potential –Litigation regarding issues –Recommended list of Vendors and Services
5/6/ Structure Committees to address specific topics and issues Subject matter experts or passionate, interested citizens to: –Research the issues and –Help with fact gathering –Work on solutions and recommendations Regular meetings of Board and Committees –May meet electronically –Heavy use of as communications mechanism –Blogs for committees
5/6/ Organizational Support Committees Membership & Notification Committee –Statistical & Demographics Subcommittee –Technology Subcommittee Events Committee –General Meetings Subcommittee –Party & Festivities Subcommittee Don Voigt, Chair Jerry Haney, Chair
5/6/ Membership & Notification Committee Maintain contact information Phone chain for those not on line notification Circulate petitions Call to Action response capability E-news Letter Build a contact organization Consider commercial sponsors Jerry Haney, Chair
5/6/ Membership/Notification Subcommittees Statistical and Demographics –Develop information to support organizations position on issues Technology –Web site –Databases
5/6/ Events Committee General Meetings Subcommittee –Organize three or four meeting a year –Presentations by relevant public figures –Discussion/presentation of issues Party and Festivals Subcommittee –Organize a party to bring the community together and give public visibility to the organization. Perhaps to focus on expanding membership Perhaps as a fund raiser Don Voigt, Chair
5/6/ Government Services Subcommittee The Northeast Corner (Catawba Neck) Roads: paving and maintenance Water & sewer connections Liaison with LNMC We need one (or more) people to become subject-matter experts on ONE item within the above areas
5/6/ Environmental Issues Subcommittee Soil erosion and sedimentation Little Creek Water Intake Sewage spills Sewer Odor Liaison with Covekeepers/Riverkeepers Liaison with Big Sweep We need one (or more) people to become subject-matter experts on ONE item within the above areas
5/6/ Public Safety Subcommittee Evacuation Plan Fire Protection / Water Point Fire Boat Rescue Squad Asset Disposal Getting Shoreline Representation on DFD and ELFD boards Supporting community watch programs We need one (or more) people to become subject-matter experts on ONE item within the above areas
5/6/ Taxation Subcommittee Property tax Sewer tax Fire district tax Keeping members informed about taxation and appeals process Collect data about appeals We need one (or more) people to become subject-matter experts on ONE item within the above areas
5/6/ Legislative Subcommittee Homestead Exemptions No district representation Right to incorporate or secede Martin Oakes, Chair We need one (or more) people to become subject-matter experts on ONE item within the above areas
5/6/ Dont see YOUR Issue? Volunteer to cover When something is ABOUT to happen, tell the committee or sub-committee chair Sub-committee meets (perhaps electronically) and decides on a course of action Recommendations for action will be made
5/6/ County Spending Unrestricted Spending
5/6/ County Revenue Unrestricted Revenues
5/6/ Real Estate Valuation, Notification and Appeal Processes in Lincoln County Von (Buck) Moody
5/6/ Property Tax and Assessments General information and Trends in Property Tax Potential Areas of Contention in Assessed Valuation What to look for at the Jurisdiction Level Summary and Questions and Answers
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Assessment law in North Carolina is governed by the Machinery Act Subchapter II of Chapter 105 of the North Carolina Statute. Counties in North Carolina must reassess at least every 8 years. Basic Revenue Formula: Tax Base TIMES Tax Rate/$100 of Assessed Value = Revenue EXAMPLE: $2 billion TIMES $0.62 Tax Rate = $12,400,000 in Revenue Sixteen North Carolina Counties reassessed in 2008 (including Lincoln, Cabarrus, Union, Durham and Wake Counties).
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Infrequent revaluations can result in sticker shock and disparities in valuation equity. The Assessor creates a Permanent Record Card for each parcel of real property. Property taxation is governed by the title holder as of January 1 of each year (With pro- ration of property taxes at property transfer). Ownership is transferred by title via deed recordation or via a recorded will. Deed records are kept in the County Court House
5/6/ N C REAL PROPERTY TAX LAW SUMMARY The Tax Assessor is appointed by each Countys Board of Commissioners. They are not elected in North Carolina as they are in some states. In some states the Assessor is appointed by the City Manager or other official. Assessors in North Carolina serve an initial 2-year term beginning on July 1st of each odd year and afterward can be extended for 4 years at a time.
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Certification of assessment officials is sanctioned by the North Carolina Department of Revenue. An assessor can be removed only for good cause (as it relates to the public interest). The Assessor must take several state examinations OR hold a CAE designation of the International Association of Assessing Officers (IAAO). The Assessor takes an oath of impartiality as do the members of the Board of Equalization and Review (BE&R).
5/6/ N C REAL PROPERTY TAX LAW SUMMARY The typical NC County has around 40,000 parcels of real estate. Lincoln County has approximately 47,500 properties (most are residential). With 5 or 6 County appraisers the workload is roughly 8,000 to 9,000 parcels each. Typical reassessment cost is around $20/parcel as opposed to around $350 to $650 for private fee appraisals (residential only). Commercial appraisals can run in the thousands of dollars.
5/6/ N C REAL PROPERTY TAX LAW SUMMARY About 50% of the NC counties reassess more often than every 8 years as option allows. The standard by which property tax is set is ad valorem valuation (ad valorem means according to value or based on value). Market Value definition usually assumes: –A willing (and financially able) buyer and a willing seller –With neither party under undue duress –With sales terms in U.S. cash or equivalent –With each party possessing reasonable market knowledge –The property is exposed on the market for a reasonable period of time
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Market Value is based on a propertys highest and best analysis which consists of four basic tests: Legally Permissible Physically Possible Financially Feasible Maximally Productive Use Values (Value in Use) or Special Tax Category: –Agricultural, Horticultural and Forestry lands can be valued according to their actual use (as opposed to their highest and best use). Use Values carry a three-year roll-back provision. The owner who converts the use must repay the tax for the three prior years with interest at conversion to an alternate use which is usually the highest and best use.
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Typical property groupings are by Neighborhoods. Boundaries vary by geophysical, economic and other characteristics. There are Standard Mass Appraisal Methods that are universal as governed by the states and usually sanctioned by the International Association of Assessing Officers (IAAO) and must conform to Standard 6 of the Uniform Standards of Professional Appraisal Practice (USPAP) of the Federal Institutions Reform Recovery and Enforcement Act (FIRREA), Title 11 of the Appraisal Standards Board of the Appraisal Foundation
5/6/ N C REAL PROPERTY TAX LAW SUMMARY All states now recognize USPAP as the standard for appraisals and assessments. Sales Ratio Studies are one method of overview of assessment accuracy: $500,000 Assessment / $600,000 Sale Price = 83% Other metrics may include the Coefficient of Dispersion, the Regression Index and other various metrics applied specifically to residential, commercial and industrial properties. Oversight of the various county assessment offices is generally the responsibility of the State Department of Revenue (in NC)
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Three Basic approaches to valuation of real estate are: Cost Approach (Reproduction or Replacement) Market Approach (Direct Sales Comparison) Income Approach (Direct Capitalization or Discounted Cash Flow Analysis) The Countys Schedule of Values is derived from market and cost data analysis. The Schedule of Values is open to inspection by the public. Public Hearings are required prior to the approval of the Schedule of Values. The Schedule must be advertised in local newspaper of general circulation once per week for 4 weeks and at least 21 days prior to Board of Supervisors approval.
5/6/ N C REAL PROPERTY TAX LAW SUMMARY Computer Assisted Mass Appraisal (CAMA) is typically employed in counties. CAMA varies somewhat from typical fee (or private) appraisal techniques but should nonetheless be based on and supported by the same basic economic principles. Assessment notifications are required by law for properties with assessment changes and notices must be sent to the property owners last known address. Property Assessments can be appealed at four levels in North Carolina: Informal Hearing Board of Equalization and Review (BE&R) North Carolina Property Tax Commission State Supreme Court
5/6/ N C REAL PROPERTY TAX LAW SUMMARY The BE&R is comprised of 5 citizens (and two alternates) appointed by the County Board of Supervisors. The Assessor serves as the Clerk to the BE&R and must attend every meeting. The BE&R is charged with establishing reasonable procedures for taxpayers to follow for appealing their assessment. All sessions of the BE&R are audio recorded and are open to the public. North Carolina law holds that the burden of proof of correctness of the assessment lies with the taxpayer and the presumption of correctness lies with the Countys assessment.
5/6/ N C REAL PROPERTY TAX LAW SUMMARY North Carolina law holds that the burden of proof of correctness of the assessment lies with the taxpayer and the presumption of correctness lies with the Countys assessment. To be successful appeals must display some evidence of flawed methodology in the assessment. The driving element of proving erroneous assessed values lies with the greater weight of the evidence (as opposed to beyond a reasonable doubt as in criminal cases). Once support has been offered by the appellant to the jurisdiction at the appeal, then the jurisdiction must rebut the appellants supporting evidence to override the appellants argument. In some states and Counties the order of presentation is reversed.
5/6/ Example of Typical Tax Savings and Impact on Value (from an Actual Case) $1,160,000 Assessment Reduced to $1,000,000 = $160,000 Value Reduction Times.064 (Tax Rate of $0.64 PER $100 of Value) = $1,024 in Annual Tax Savings Times 4 YEAR Assessment Cycle = $4,096 Assuming 7% Capitalization Rate = $14,628 in Value Added Total Benefit of Tax Savings Plus Value Added … $18,724
5/6/ General Information and Trends in Property Tax Review Assessors work hard with limited resources to evaluate massive numbers of Properties. in Lincoln County an Assessor will do 7-8,000 Properties. They deserve Respect, Fairness and Courtesy in seeking Fair and Supportable Assessed Values. The Optimal Property Assessment Review Program will incorporate a Spirit of Partnership, Professionalism and Ethical interactions with all of their Taxing Jurisdictions. Mass Assessment entails high volumes of Valuations per Employee compared with Private Appraisals.
5/6/ Property Tax Property Taxes are 70% of Total County Revenue Property Tax is often the Largest SINGLE EXPENSE to Property Ownership Property Taxation is the Second most Resented Tax (Second only to income Tax) Property Tax tends to be Regressive based on most studies County Programs are under State Oversight Many States prepare Ratio Studies to monitor efficiency Levels of localities Political Sensitivity is often misdirected at the Valuation rather than the Tax Rate
5/6/ Potential Areas of Review in Assessments Check for Application of NATIONAL PARAMETERS to Submarkets Ensure that the Assumptions are Typical of the Market or Submarket Depreciation in Cost Approach (Economic Age/Life not Realistic) Comparing truly Comparable Properties in Market Comparison Adjustments Check for Calculation errors or Overstatement of Square-Feet in Land or Improvements Check the Consistency of Units of Comparison extracted from Market/Sales Data Valuation of the Property Rights (watch for Leased Fee rather than Fee Simple) Contract Rental Rates rather than Market Rentals as most laws require
5/6/ Potential Areas of Review in Assessments Not recognizing obsolescence due to Design Limitations (High Ceilings, etc.) Counting all Covered Space as Finished Space (GIS Photo may hide Carports, Porches, etc.) Inappropriate Trending Ratios (County-wide Ratios applied to all Property Types) Incorrect Story Height (Two-Story vs. Three-Story, etc.) Obsolescence not fully considered in Cost Approach and/or Sales Adjustments Appraising Investment Value rather than Market Value as Law normally requires Using only the Highest Sales or Rentals to Value an Entire Submarket Errors in Recording or inputs (e.g., $1,250,000 vs. $12,500,000; Actual Example)
5/6/ What to look for at the Jurisdiction Level Most Require an Assessed Value based on Market Value, Fee Simple, Unencumbered Many Laws recognize Equalization as having Priority over Market Value The Burden of Proof of an Excessive Assessment almost always rests with the Taxpayer Some Laws term Market Value AS True Value, Fair Market Value, etc. Assessment Ratios & Common-Level Ratios Impact Market Value (GA, 40%, CT, 70%)
5/6/ What to look for at the Jurisdiction Level Qualifications and Credentials of Assessment Staff vary greatly Leadership, Processes and Policies of Assessment Officials can Impact Assessments & Appeals Smaller Municipalities are sometimes sparsely equipped and under- staffed Information & Technology Enhancements produce better Assessments today than in the past Strained Budgets can create gaps in Resource needs (especially in recessions) Levels of Training as well as processes can vary greatly among Jurisdictions Policies can be flawed (e.g., some Counties deny all appeals regardless of reason)
5/6/ Summary Property Tax Processes are Characterized by many moving parts with never-ending Deadlines, Large Portfolios and numerous Property Types. Assessment Review requires Negotiation Skills, an extensive knowledge of Appraisal and Assessment theory and a desire to promote positive relationships with Local Assessment Officers. Good Tax Policy should be views as a Partnership
5/6/ Future Majority of Board of Equalization and Review are new County Manager recognizes problems with land Valuations and plans to change the approach (needs monitoring)
5/6/ Call to Action (1) Current climate of tension –East Lincoln growing pains –Differing needs and issues between rural western Lincoln County, City of Lincolnton and East Lincoln –Organized West Lincoln political action
5/6/ Call to Action(2) Need for involvement and commitment –LiSCO – Specific taxation and appraisal issues –LiSCO – Specific shoreline environmental, public safety and support services issues –ELBA – All of the above, plus community betterment –ELPAC – political issues and support
5/6/ Call to Action Join LiSCO –Fill out the form tonight –Pay or commit to the $35 dues –Join and get active on a sub-committee Get active in ELBA and ELPAC –Join and pay the dues –Attend their meetings –ELBA: Maeneen Klein or any ELBA Board member –ELPAC: Liliana Barr or any ELPAC Board member
5/6/ Lincoln Shoreline Community Organization LiSCO A watchful eye and a unified voice