1. April 12, 2017 Town of White City Presentation
2017 Revaluation
April 12, 2017
Town of White City Presentation

2. Presentation Overview
Responsibilities
Purpose of Assessments
Assessment Basics and Principles
Overview of the Cost Approach
SAMAView

3. SAMA’s Roles and Responsibilities
AMA Act -- Board Governed Agency
Policy (Advisory Committees)
Quality Assurance
Computer System
Communication
Safety Net for Province
Governance
$160B /$1.83B
Ass’mt / Taxes
Annual Maintenance
General Re-inspections
Revaluations
Support of Value
Assessment Services
760 of 768 Municipalities

4. Purpose of Assessments
Financial Foundation for local governments
Municipal services (police, fire, streets, water, parks, recreation, libraries...)
K to 12 Education
What is does with it is up to the local government
Local Autonomy

5. Assessment Basics
Valuation policies are now stabilized going forward with the 2017 revaluation with notable changes to the 2013 (carryover from 2011)Manual as follows:
Improved the definition of “heavy industrial property.
Created rules regarding long term closures of heavy industrial property.
Currently proposing revamped agricultural mixed use land valuation procedures to ensure agricultural use land assessed correctly.
The 2011 Manual revisions went through extensive consultations before implementation.
Quality Assurance Standards implemented with extensive consultation with assessment service providers and provincial government.

6. Assessment Principles Ad Valorem
Property Values
Property Assessments
- Striving for equity between property values and property assessments

7. Assessment Principles
Mass Appraisal
Base Date (January 1, 2015)
Four Year Updates (Revaluations)
January 1, 2011 base date for
January 1, 2015 base date for
January 1, 2019 base date for
Foundation in Legislation
Market Valuation Standard
Regulated Property Assessment Standard
Equity

8. Assessment Principles
Three Accepted Approaches to Value
Cost Approach
Sales Comparison Approach
Property Income (Rental) Approach

9. Valuation Publications
The Saskatchewan Assessment Manual – 2015 Base Date (2015 Manual) contains rates only for regulated property.
Property types valued using the regulated Manual.
Agricultural land, heavy industrial property, pipeline, railway, resource production equipment (mine, oil & gas).

10. Current Valuation Publications
Non-regulated valuation publications.
Market Value Assessment in Saskatchewan Handbook.
SAMA’s 2015 Cost Guide.
Marshall Valuation Service (MVS), October 2014 service update.

11. Assessments - Foundational Component of the Property Tax System
SAMA
Tax Classes,
Percentage
of Value &
Exemptions MA
Property Taxes Payable
Local Mill
Rates &
Tax Tools
Municipality
Uniform Education
Mill Rates MA

12. Assessment Changes Tax Changes
Before Revaluation
Local Gov’t
Budget Needs
$250,000
Taxable
Assessment
$25,000,000
Required Mill Rate
10 (0.010)

13. Assessment Changes Tax Changes
Before Revaluation
Local Gov’t
Budget Needs
$250,000
Taxable
Assessment
$25,000,000
Required Mill Rate
10 (0.010)
After Revaluation
- Emphasis on revenue neutrality
Local Gov’t
Budget Needs
$250,000
Taxable
Assessment
$50,000,000
Required Mill Rate 5 (0.005)

14. Overview of the Cost Approach

15. Land Valuation Average selling prices for land
As of the applicable base date (January 1, 2015)

16. Land Valuation Non-Agricultural Land Valuation
Arm’s length sales are collected and verified
Determine units of comparison
Identify neighbourhoods
Determine base land rates (select median based on sales in the neighbourhood)

17. What’s new for 2017 Simplified residential cost model
Commercial exterior walls
Commercial depreciation adjusted
Why change
First two items – aligns our system more directly with the costing service we use so less work to keep using in the future.
Commercial Cost Simplification - Exterior Wall
Tested 62,000 commercial building sections using MVS default wall costs:
Ratio = RCN simplified / RCN detailed wall costs
Some assessment shifting will occur
Median Ratio No overall assessment shift.
COD = Minimal assessment shift on average. Reviewing high/low ratios for issues.
Commercial Age Life Depreciation
2013 revaluation market analysis = Over depreciation for 11 of 256 commercial building types:
Life Expectancy from the Marshall Valuation Service
Overly short life expectancy for 11 building types
17,500/78,000 building sections (22%) impacted
11 occupancy codes are in MVS, Section 17 - Sheds and Farm Buildings
15 to 35 year “life expectancies” in MVS
Buildings fully depreciated after 15 to 35 years; not recognized in marketplace / sales
Buildings receive excess depreciation; causes low cost approach values relative to selling prices, and this causes high market adjustment factors (MAF’s)
Recommend using substitute life expectancies (LE’s) from comparable buildings in MVS, Section 14 – Garage, Industrials, Lofts, Warehouses

18. Why change?
It still runs, but it takes a lot of work to keep it going.

19. Residential Cost Simplification
Sequence Steps = 19
(was 75)
Sequence Step Options = 83 (was 336)
RCS FOR USE STARTING WITH 2017 REVALUATION
STRATEGIC DIRECTION TO DOUBLE PRODUCTIVITY
Residential Cost Simplification
Current basis is Marshall Valuation Service detailed wall costs:
97,000 rows of wall costs in CAMA
Recommend using MVS default base rate wall costs:
Eliminate data collection of wall materials
Reduce errors and improve consistency; improve efficiency of CAMA updates

20. Residential Cost Simplification
2017 marks a major change to how residential properties are valued.
Previously 36 quality classes reduced to 7.
Allows for increased consistency and easier application of Marshall costing service.
Previously Marshall manual was converted each base year from the 6 Marshall qualities to 36 SAMA qualities
Only one quality per property versus quality of each attribute (deck, house, garage)
Depreciation and condition applied to entire property

21. Improvement Valuation
Replacement cost new determined from SAMA’s 2015 Cost Guide (residential and selected commercial) or Marshall Valuation Service (commercial)
Adjust for depreciation (based on the age and condition of the structure)
Adjust to reflect average selling prices for comparable improvements as of the base date (January 1, 2015) by using a MAF (market adjustment factor)
A MAF is calculated for each sale and the MAF applied is developed from the median of comparable sales in the neighbourhood

22. Improvement Valuation
Market Adjusted Cost Approach
Calculate land value from sales
Calculate Replacement Cost New (RCN) of Buildings less Depreciation
Depreciated RCN X MAF = Building Value
Land Value + Building Value = 2015 Assessed Value

23. Summary of the Cost Approach
Property Value = land value + building value
- Vacant land sales used to estimate land value.
- Buildings are costed (RCN) using standardized procedures; actual cost is not used
- Physical depreciation assigned
- Market depreciation assigned (MAF)
MAF generally represents the relationship between building market value and building cost (eg. The market demonstrates that building value is 84% of RCNLD). Also is a final adjustment for any plus and minus adjustments due to depreciation and land value.
Restated, MAF is calculated by extracting the land value from a sale and comparing this residual value to what we have calculated for building cost less physical depreciation.

24. Assessment Shifts
Value changes represent market update from January 1, 2011 to January 1, 2015
Three levels of shifts
Provincial (SAMA)
Local
Property

25. Percentage of Values
Only change here is the railway, pipelines and elevators have increased from 75 to 100%
New percentages of value will be out in the fall of 2016

26. Additional Resources www.sama.sk.ca SAMA’s website - www.sama.sk.ca
On-line manuals, handbooks, FAQs etc
SAMAView
Ministry of Government Relations website
BoR Handbook
Assessment Appeals Manual.
Tax policy review

27. SAMAView

28. Search Options Direct access to website. www.samaview.ca
All legal land descriptions maintained by SAMA
Qtr/Sec/Tp/Rg/Mer.
Lot/Block/Plan
9 LLD formats in all
ISC Parcel No.
Integrate ISC link to old legal desc.

29. Regular Data Updates Data currently updated in an ad hoc manner
Developing automated procedures to maintain current assessment information on SAMA View
Updated values will be posted to SAMA View as they are validated

30. Questions?