Statistical Revaluation Project Town of Cumberland, RI Effective 12/31/2007

Certified Revaluation Company Incorporated in 1998 Incorporated in 1998 Since that time we have performed 25 successful Revaluation Projects in RI. Since that time we have performed 25 successful Revaluation Projects in RI. All of our clients are repeat customers All of our clients are repeat customers This is our 3 rd Revaluation project for the Town of Cumberland. This is our 3 rd Revaluation project for the Town of Cumberland. This illustrates our ability to get the job done accurately and on time. This illustrates our ability to get the job done accurately and on time.

The Statistical Revaluation Process includes: Physical Inspection of recent sales Physical Inspection of recent sales Physical Inspection of parcels with open Building Permits Physical Inspection of parcels with open Building Permits Rebuilding of Cost, Market, and Income pricing tables (Market Models) Rebuilding of Cost, Market, and Income pricing tables (Market Models) Application of Market Models to each property in Town. Application of Market Models to each property in Town. Review of resulting valuations Review of resulting valuations Perform Logical Edits Perform Logical Edits

Project Timeframe Preliminary Market Analysis – October 31, 2007 Preliminary Market Analysis – October 31, 2007 Completion of Field Inspections – Jan. 31, 2008 Completion of Field Inspections – Jan. 31, 2008 Preliminary Values to Assessor – Jan. 31, 2008 Preliminary Values to Assessor – Jan. 31, 2008 Mail Valuation Notices - February 29, 2008 Mail Valuation Notices - February 29, 2008 Informal Hearings – March 31, 2008 Informal Hearings – March 31, 2008 Project Completion – April 1, 2008 Project Completion – April 1, 2008

Market Conditions Median Sales Prices

Market Conditions Number of Sales

Market Conditions Days on Market

Our Sales Analysis Will be based on 2007 Sales Will be based on 2007 Sales Weighted for 4 th quarter sales Weighted for 4 th quarter sales Not based on percentage increase or decrease Not based on percentage increase or decrease Units of comparison developed from market Units of comparison developed from market Rate per square foot Rate per square foot Rate per unit Rate per unit Rate per acre Rate per acre

Income Analysis For commercial properties ONLY For commercial properties ONLY Income & Expense forms mailed to income producing properties only. Income & Expense forms mailed to income producing properties only. Confidential Confidential Voluntary compliance in RI. Voluntary compliance in RI. Considered only when sufficient data is available Considered only when sufficient data is available No business income considered – Real Estate Only No business income considered – Real Estate Only

Informal Hearings Data hosted on our website for property owners to view prior to meeting. Data hosted on our website for property owners to view prior to meeting. Property Owner is asked to fill out a brief form Property Owner is asked to fill out a brief form We will listen and consider property owner’s concerns We will listen and consider property owner’s concerns We will document the issues raised We will document the issues raised We will perform additional research We will perform additional research We will look for pattern of complaints We will look for pattern of complaints We will make Corrections when needed We will make Corrections when needed

Valuation Process Units of comparison are developed from the local real estate market (Model Development) Units of comparison are developed from the local real estate market (Model Development) Models are tested against recent valid sales Models are tested against recent valid sales Results must conform to Industry Standards Results must conform to Industry Standards Mainly developed by the IAAO (International Association of Assessing Officers) Mainly developed by the IAAO (International Association of Assessing Officers)

Model Example Step 1 Step 1 Living Area x Rate per square foot Living Area x Rate per square foot Adjustment for house style Adjustment for house style Adjustment for size Adjustment for size Adjustment for number of stories Adjustment for number of stories Adjustment for exterior wall type Adjustment for exterior wall type Adjustment for cathedral areas Adjustment for cathedral areas

Model Example Step 2 Step 2 Basement adjustment for partial or no basement Basement adjustment for partial or no basement Adjust for finished basement (if any) Adjust for finished basement (if any) Finished basement adjustment dependant on quality Finished basement adjustment dependant on quality Adjust for storage or expansion attic (if any) Adjust for storage or expansion attic (if any)

Model Example Step 3 Step 3 Adjust for heating type Adjust for heating type Adjust for central air conditioning (if any) Adjust for central air conditioning (if any) Step 4 Step 4 Adjust for number of bathrooms Adjust for number of bathrooms Adjust for additional plumbing fixtures Adjust for additional plumbing fixtures Wet Bar Wet Bar In-law Kitchen, etc… In-law Kitchen, etc…

Model Example Sep 5 Sep 5 Adjust for Non Living Area Sections Adjust for Non Living Area Sections Garages Garages Porches Porches Decks Decks Any other section of a house that is not living space Any other section of a house that is not living space

Model Example Step 6 - Adjust for building features Step 6 - Adjust for building features Basement garages Basement garages Fireplaces Fireplaces Unfinished living area Unfinished living area Unheated area Unheated area Non cooled area (Only applies to central A/C) Non cooled area (Only applies to central A/C) Adjustments may be positive or negative Adjustments may be positive or negative

Model Example Step 7 Step 7 Apply Desirability Index Apply Desirability Index Quality of Construction Quality of Construction Market desirability Market desirability Functionality of layout / design Functionality of layout / design Conformance with surrounding properties Conformance with surrounding properties Curb appeal Curb appeal

Model Example Step 8 Step 8 Apply Depreciation to reflect Apply Depreciation to reflect Age Age Condition Condition Wear & Tear Wear & Tear Functional issues (Example – Structural Problems) Functional issues (Example – Structural Problems) Economic Issues (Negative impact from adjacent property) Economic Issues (Negative impact from adjacent property)

Model Example Step 9 Step 9 Land Valuation Land Valuation Units of measure form market Units of measure form market Home site Home site Flat rate based on location Flat rate based on location Adjustment applied when undersized Adjustment applied when undersized Additional buffer land Additional buffer land Acre pricing Acre pricing No development potential reflected No development potential reflected

Model Example Step 10 Step 10 Value Site Improvements Value Site Improvements Detached garages Detached garages In ground Pools In ground Pools Sheds Sheds Barns & other miscellaneous structures Barns & other miscellaneous structures Value is based on quality, size and age. Value is based on quality, size and age.

Logical Edits After value generation logical edits are performed to identify potential errors. After value generation logical edits are performed to identify potential errors.Examples: Percentage Increase Percentage Decrease List of new parcels List of deleted parcels Vacant parcels with improvement values Changes in property Classification

Important Points Tax Revaluations do not raise additional revenue for the municipality Tax Revaluations do not raise additional revenue for the municipality New Tax Levy Cap in RI predetermines amount of revenue that can be raised from taxation. New Tax Levy Cap in RI predetermines amount of revenue that can be raised from taxation. Main goal of the revaluation project is to equitably distribute the tax burden. Main goal of the revaluation project is to equitably distribute the tax burden.

Thank You Questions?