HomeMy WebLinkAboutBoard of Selectmen Agenda 09 08 2010 Packet_201402061615185130Overview of theOverview of the Fiscal Year 2010 RevaluationFiscal Year 2010 Revaluation Prepared by: Debbie Dilworth, AssessorPrepared by: Debbie Dilworth, Assessor for Presentation to the Board of Selectmenfor Presentation to the Board of Selectmen, September 8, 2010 , September 8, 2010 Assessor Prepared by: Debbie Dilworth, Assessor For Presentation to the Board of Selectmen 9/8/2010
BackgroundBackground Constitutional requirement that all property is to be taxed proportionately. 1961-”Bettigole vs. City of Springfield, Massachusetts”. SJC declared that proportionality could only be achieved if each parcel of real estate was assessed at its “full and fair value”. 1962-1973- Only half of the cities and towns in Massachusetts complied with the Bettigole Decision. 1974-”Sudbury Decision”. City of Sudbury, Massachusetts. Gave the Commissioner of Revenue the power and duty to direct local assessors to assess at “full and fair value”. 1975-1979- Citing a lack of sufficient funding, many cities and towns in Massachusetts continued to delay the achievement of “full and fair value” as no deadline had been established by the court. November 1979-Chapter 797 of the Acts of 1979 -Strengthened the Commissioners authority. Commissioner to establish guidelines for achieving “full and fair value” Cities and Towns must appropriate adequate funding for a revaluation or the Commissioner will. 2005 The Department of Revenue issued a mandate that communities must also conduct “interim year adjustments” to property values in the years between certifications.
NantucketsNantuckets First First ““RevalReval”” Almost thirty years ago Nantucket was one of the earliest communities to be certified as being at “full and fair value” when total property values went from $39,235,561 in 1980 to $668,923,450 in 1981.$0$100,000,000$200,000,000$300,000,000$400,000,000$500,000,000$600,000,000$700,000,00019801981Total Real and Per Prop ValueAlthough property values increased, overall, tax bills were equalized by the drop in the tax rate and the adoption of a split rate.1980 Single Tax Rate 1981 Split Tax Rate$128.00 Residential: $ 8.60Open Space: $ 6.87Commercial: $ 12.94
The Valuation ProcessThe Valuation Process The Commissioner of Revenue sets forth the criteria that communities must follow in order to receive “certification” that they are assessing at “full and fair value”. Every three years communities must be “certified” by the Commissioner. Certification is a prerequisite for setting a tax rate and mailing tax bills. Assessments are determined through the use of mass appraisal techniques. Mass appraisal is the process of valuing a group of properties as of a given date, using standard methods, and allowing for statistical testing. Statistical Testing measures both the level and uniformity of assessments to sales price.
• The assessment date is the January 1st each year for the following fiscal year. • For the Fiscal Year 2010 the assessment date was January 1, 2009.• Sales that occurred during the calendar year 2008 were used to determine full and fair value. Notably, during this time frame the volume of transactions had decreased significantly but prices had not yet begun a steep decline.• The assessment level (ASR) is determined by dividing the assessment by the sales price. • Example: If a property is assessed for $750,000 and sells for $740,000, the ASR is 101%. • $750,000/$740,000• For each class of property the ASR must be determined for all sales.• After “unqualifying” or removing all sales that were not “arms-length” (i.e.: physical change in the property or a sale between related parties) 102 single family homes sales were used in the analyses.
The Commissioner of Revenue has determined that the median ASR for each class of property must be within 90%-110%. For the Fiscal Year 2010, Nantucket's median for the single family class was 95%. Note: The data shown below is a sample of the sales used for illustration purposes only.Date Use Code Sale Price Assessmet ASR7/10/2008 101 $2,140,000 $1,932,600 90.00%9/15/2008 101 $1,775,000 $1,634,900 92.00%5/9/2008 101 $690,000 $633,200 92.00%5/6/2008 101 $1,330,000 $1,219,800 92.00%9/30/2008 101 $3,000,000 $2,765,700 92.00%10/9/2008 101 $850,000 $787,700 93.00%4/11/2008 101 $2,550,000 $2,375,000 93.00%9/3/2008 101 $1,460,000 $1,376,800 94.00%10/16/2008 101 $2,800,000 $2,646,300 95.00%3/19/2008 101 $2,260,000 $2,150,800 95.00%9/17/2008 101 $1,125,000 $1,071,700 95.00%9/24/2008 101 $2,295,000 $2,173,200 95.00%8/18/2008 101 $695,000 $658,800 95.00%6/23/2008 101 $1,315,000 $1,249,100 95.00%6/3/2008 101 $750,000 $714,900 95.00%4/3/2008 101 $750,000 $746,100 99.00%10/14/2008 101 $1,500,000 $1,531,400 102.00%95.00%
Assessment UniformityOnce the median ASR for each class has been determined, the absolute variation or difference from each sales ASR must be calculated and summed to determine the average absolute deviation from the median. The sum of these variations are then divided by the median to calculate what is called a coefficient of dispersion or COD. This will determine the uniformity of the proposed values. The Commissioner of Revenue has determined that an acceptable measure of uniformity is a COD of less than 10% for Single Family Homes. For the Fiscal Year 2010, the COD for single family homes was 7%. Note: the illustration below is shown just as an example of how to calculate this COD and does not show all of the sales used.Date Use Code Sale Price Assessmet ASR Median DeviationASR5/9/2008 101 $690,000 $633,200 92.00% 0.95 3%5/6/2008 101 $1,330,000 $1,219,800 92.00% 0.95 3%9/30/2008 101 $3,000,000 $2,765,700 92.00% 0.95 3%10/9/2008 101 $850,000 $787,700 93.00% 0.95 2%4/11/2008 101 $2,550,000 $2,375,000 93.00% 0.95 2%9/3/2008 101 $1,460,000 $1,376,800 94.00% 0.95 1%10/16/2008 101 $2,800,000 $2,646,300 95.00% 0.95 0%4/3/2008 101 $750,000 $746,100 99.00% 0.95 4%10/14/2008 101 $1,500,000 $1,531,400 102.00% 0.95 7%7/7/2008 101 1,425,000 1,403,700 102.00% 0.95 7%1/29/2008 101 1,250,000 1,364,700 102.00% 0.95 7%3/10/2008 101 1,100,000 1,689,100 102.00% 0.95 7%9/8/2008 101 835,000 959,200 102.00% 0.95 7%0.95 53%4.077%
Final Estimation of Value In addition to the analyses by property class, assessment levels and uniformities were measured for all sold properties based on:Building StyleAge of BuildingLocation or NeighborhoodWater viewsTopography/wetlands issuesLot Size• Each of these “sub-studies” revealed that the proposed assessments for the sold properties were well within range of acceptable or “certifiable” medians and COD’s.• Based on these studies, new building rates, depreciation schedules and land pricing schedules were developed and applied to all properties to determine their new estimates of value for the Fiscal Year 2010.
Although many waterfront and high end properties saw an increase in value due to a continued strong market in 2008, for the first time since 1994, overall, total property values decreased 3.65% from $20,819,085,012 in Fiscal Year 2009 to $20,063,008,015 in Fiscal Year 2010.Town of Nantucket Taxable Value$-$5,000,000,000$10,000,000,000$15,000,000,000$20,000,000,000$25,000,000,0001993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
AbatementsAbatements Because of the timing of the Reval, during one of the worst economic times in years, public perception was that the values should have been much lower. For the Fiscal Year 2010 total abatement applications received topped the charts at 943. The Most Common Reasons or Causes for the Volume of Appeals in FY 2010 1. Timing. The values for FY 2010 were based on the market from 2008 which had changed significantly by the time bills were mailed. 2. Public disclosure time-frame was too short. The original schedule had allowed for a full 2 months for review by taxpayers. This was shortened due to the delays in obtaining Preliminary Certification. 3. Changes made to the “land model” that resulted in some problem areas. 4. Changes Mandated During the Preliminary Review. 5. “Frequent Fliers” Note: Due to the volume of appeals that will be granted it is anticipated that there will be a deficit to the Overlay Account. However, it is anticipated that prior year balances will serve to offset this deficit.01002003004005006007008009001000200820092010
The Time-frame of the FY 2010 Reval June 12, 2008 Revaluation of Commercial and Residential Properties for Fiscal Year 2010 put out to bid July 11, 2008 Contract for the reval is awarded to Vision Appraisal, (the Towns vendor for over 25 years) March of 2009 1st meeting with DOR representative in Hyannis to discuss the reval program. April of 2009 The Town and its consultant Vision Appraisal begin the revaluation.• Full field review of all properties• Sales Analyses November 2009 Town issued a preliminary tax bill in anticipation of delays to secure cash flow. December 2009 Sales analyses January 2010• Development of new cost tables• Data review• Preliminary estimates of value February 18, 2010-Proposed property values are ready. DOR meets with Vision Appraisal in Northborough to review the data in anticipation of Preliminary Certification from DOR. February 19- March…………………….waiting to hear from DOR…………………….. March 29, 2010- While still awaiting Preliminary Certification the Town requests and is granted permission to Conduct public disclosure program. April 1 2010 Notice that the new Proposed Values for Fiscal Year 2010 were available on the Town Website was published in the I & M and postcards notifying Off-Island Homeowners to visit the site or call the office were mailed. April 7-April 21 Assessors Office responds to taxpayer inquiries and concerns making any necessary changes. May 7, 2010 DOR issues Preliminary Certification of the values. May 10, 2010 DOR issues Final Certification of the values. May 12, 2010 Tax Rate Hearing is held with the Board of Selectmen May 21, 2010 Tax bills for the Fiscal Year 2010 are mailed. June 21, 2010 Deadline for Fiscal Year 2010 Abatement Applications. June 30, 2010 Fiscal Year 2010 ends.
ConclusionConclusionThirty years after the “Bettigole” case, Massachusetts now has one of the fairest tax programs in the country with a market driven assessment program and tax limitation statutes like Proposition 2 ½ that protect its taxpayers. It is clear that some “guidelines” were necessary to uniformly effect the changes brought on by Chapter 797. But, has the original intent of these early legislative changes been interpreted too broadly? Where early on the intent of the legislature was to ensure that guidelines were in place for local assessors as opposed to centralizing the process at the State level, with the most recent revaluation, the State appears to be centralizing the establishment, or a portion thereof, of full and fair value with little to no local input.Early on it was the cities and towns who did not have adequate funding and often delayed the completion of their reval programs. Today, even in difficult times, cities and towns have been able to have adequate funding to support these programs but we are beginning to experience an increase in certification time due to budgetary constraints at the State level. In Fiscal Year 2010, two meetings with the States local advisor were held off island whereas in the past they would have been held here. The timely review of information submitted by local assessors is critical as any delays in the tax billing cycle have an impact on cash flow for the municipality.Interestingly, Interim Year Adjustments mandated in 2005 which do not require such a stringent review by the State have already been completed over the summer months (in conjunction with handling 943 appeals) and Fiscal Year 2011 Tax Bills are nearing completion for an October 15th mailing. These new values will be based on the market conditions from the calendar year 2009.Some relief is forthcoming however, as the Municipal Relief Package this year allows for a “re-shuffling” of the communities scheduled for certification. To date and as a result of those early years where no deadlines had been established the 351 cities and towns in Massachusetts were not equally split into thirds making some of the cycles, like the one Nantucket has been in, over-crowded. Although this “re-shuffling” will defer revals for some communities normally scheduled for FY 2011, Nantucket will remain in its current cycle and next be ready for “certification in Fiscal Year 2013. Preparation for that program will begin soon.
CPC Application Requests for FY 2012revised as of 09-07-10DepartmentAmountPurposeTown Admin RecROW Committee (?)$50,000 Island-wide trail plan (?)waiting for info as of 090210Planning$100,000Public access to open space & recreational resourcesokay?Aff Housing Trust Fund$100,000Housing plannern/aPark & Rec$250,000Nobadeer Farm Rd playing fields field houseapprovePark & Rec$1,000,000Completion (?) of second playing field and assoc infrastructurewaiting for add'l info as of 090210Town Clerk$226,000Town-owned cemetery headstone restoration; expansion of Newtown Cemetery; professional services for establishment of Town Cemetery Deptapprove (if allowed by CPC criteria)Other (Hummock Pond Assoc)unknownInvasive plant species removal from Hummock Pondendorse
Sewer and Solid Waste Sewer and Solid Waste Enterprise FundsEnterprise Funds Fourth Quarter ReportFourth Quarter Report Apr Apr –– Jun 2010Jun 2010Department of Public WorksDepartment of Public Works
Discussion PointsDiscussion Points Solid Waste:Solid Waste: TonnageTonnage Revenue & ExpenseRevenue & Expense Cost CentersCost Centers Sewer:Sewer: FlowsFlows Revenue & ExpenseRevenue & Expense Sewer ConnectionsSewer Connections Privilege FeesPrivilege Fees
MSW TonnageMSW Tonnage MSW YTD tonnage is up 6.5% over the same MSW YTD tonnage is up 6.5% over the same period last year.period last year. 10,496 tons of MSW YTD10,496 tons of MSW YTD ( Jun. 30, 2010)( Jun. 30, 2010) For each of the last 12 months MSW tonnage For each of the last 12 months MSW tonnage exceeded comparable monthly tonnage in the exceeded comparable monthly tonnage in the previous yearprevious year Tonnage numbers are trending upward over Tonnage numbers are trending upward over 2009 but are well below 2008 & 2007 levels2009 but are well below 2008 & 2007 levels
Solid Waste Enterprise FundSolid Waste Enterprise Fund MSW TonnageMSW Tonnage
C&D TonnageC&D Tonnage C&D Tonnage has stabilized, over the last 12 C&D Tonnage has stabilized, over the last 12 months, at a monthly average of 599 tonsmonths, at a monthly average of 599 tons Total C&D tonnage is 10.1% less than for the Total C&D tonnage is 10.1% less than for the same time period last year same time period last year C&D is trending very slightly upward from a C&D is trending very slightly upward from a low of 462 tons in Aug. 2009, to 790 tons in Jun. low of 462 tons in Aug. 2009, to 790 tons in Jun. 20102010
C&D TonnageC&D Tonnage
C&D RevenueC&D Revenue Revenue is trending upward from a low in Aug. Revenue is trending upward from a low in Aug. 2009 of $151,693 to a high in Jun. 2010 of 2009 of $151,693 to a high in Jun. 2010 of $277,050$277,050 Even with this upward trend, 2010 C&D Even with this upward trend, 2010 C&D revenue is down 9.6% as compared to YTD revenue is down 9.6% as compared to YTD revenue numbers for 2009revenue numbers for 2009 YTD 2010 revenue for C&D=$2,493,961YTD 2010 revenue for C&D=$2,493,961 YTD 2009 revenue for C&D was $2,758,133YTD 2009 revenue for C&D was $2,758,133
Solid Waste Cost CentersJul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10MSW compostingRevenues (18,840)$ (25,711)$ (21,352)$ (33,026)$ (234,249)$ (110,843)$ (24,356)$ (20,349)$ (32,188)$ (19,626)$ (41,862)$ (35,898)$ Expenses 258,029$ 255,144$ 257,498$ 253,793$ 263,951$ 275,408$ 263,923$ 237,481$ 281,701$ 256,467$ 235,445$ 273,644$ Deficit (surplus)239,189$ 229,433$ 236,146$ 220,767$ 29,703$ 164,565$ 239,568$ 217,132$ 249,513$ 236,840$ 193,583$ 237,746$ RecyclingRevenues-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Expenses 36,013$ 33,215$ 33,172$ 33,333$ 36,527$ 35,727$ 37,473$ 37,315$ 37,784$ 32,675$ 34,036$ 32,023$ Deficit (surplus)36,013$ 33,215$ 33,172$ 33,333$ 36,527$ 35,727$ 37,473$ 37,315$ 37,784$ 32,675$ 34,036$ 32,023$ C&D waste managementRevenues (165,031)$ (117,697)$ (142,559)$ (153,927)$ (153,699)$ (166,428)$ (177,042)$ (170,053)$ (194,597)$ (250,465)$ (238,498)$ (240,805)$ Expenses 197,470$ 210,654$ 186,474$ 185,236$ 197,086$ 197,796$ 202,104$ 188,929$ 216,955$ 242,463$ 258,049$ 279,264$ Deficit (surplus)32,439$ 92,957$ 43,915$ 31,309$ 43,386$ 31,368$ 25,062$ 18,877$ 22,358$ (8,003)$ 19,551$ 38,459$ Hard to manage wasteRevenues (33,950)$ (33,997)$ (29,117)$ (30,948)$ (25,935)$ (18,753)$ (17,557)$ (13,126)$ (26,275)$ (26,555)$ (30,702)$ (36,245)$ Expenses 13,833$ 14,415$ 8,339$ 31,820$ 3,002$ 17,379$ 6,939$ 5,525$ 20,629$ 7,527$ 42,555$ 6,762$ Deficit (surplus)(20,117)$ (19,582)$ (20,778)$ 872$ (22,932)$ (1,375)$ (10,619)$ (7,601)$ (5,647)$ (19,028)$ 11,854$ (29,483)$ Landfill managementRevenues (None)Expenses 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ Deficit (surplus)45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ 45,800$ OverheadRevenues-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Expenses 24,118$ 7,684$ 23,541$ 5,464$ 7,363$ (14,571)$ 6,959$ 27,758$ 19,657$ 21,349$ 5,864$ 8,361$ 24,118$ 7,684$ 23,541$ 5,464$ 7,363$ (14,571)$ 6,959$ 27,758$ 19,657$ 21,349$ 5,864$ 8,361$
Solid Waste EnterpriseSolid Waste Enterprise Expenses & RevenuesExpenses & Revenues$7,544,026$1,866,006$1,866,006$1,866,007$1,866,007Budgeted$7,861,708$7,210,282Totals$2,711,071$1,821,0914thQuarterFY10$3,634,573$927,811$588,253Revenue$1,878,4443rdQuarter FY10$1,740,2702ndQuarter FY10$1,770,4771stQuarter FY10ExpensesSolid Waste Enterprise
Sewer Enterprise FundSewer Enterprise Fund YTD billable flow is down 10.9% as compared to the YTD billable flow is down 10.9% as compared to the same period last year.same period last year. YTD monthly billings are up 19.2% as compared to the YTD monthly billings are up 19.2% as compared to the same period last year.same period last year. Budget Summary: 100% through FY 2010Budget Summary: 100% through FY 2010 EnterpriseEnterprise BudgetBudget % Expended% Expended CollectionCollection $407,700$407,700 84.46%84.46% Surfside Surfside ** $5,096,132$5,096,132 86.52%86.52% ‘‘SconsetSconset $275,400$275,400 93.94%93.94%Note:Note: % expended includes $2,421,316.46 annual debt service % expended includes $2,421,316.46 annual debt service paymentspayments
Flow & Billing Comparative Flow & Billing Comparative SummarySummaryFlow (CF) BillingsMonth of Consumption Latest Previous Difference Percent Latest Previous Difference PercentJuly 2009/2008 6,176,300 7,856,700 (1,680,400) ‐21.4% 437,960.84$ 368,259.36$ 69,701.48$ 18.9%August 2009/2008 9,107,500 10,724,200 (1,616,700) ‐15.1% 701,647.00$ 661,544.16$ 40,102.84$ 6.1%September 2009/2008 8,598,700 10,687,500(2,088,800) ‐19.5% 726,911.36$ 710,968.37$ 15,942.99$ 2.2%October 2009/2008 5,349,800 6,673,400 (1,323,600) ‐19.8% 457,209.00$ 459,730.86$ (2,521.86)$ ‐0.5%November 2009/2008 3,491,000 3,873,400 (382,400) ‐9.9% 365,238.00$ 271,398.61$ 93,839.39$ 34.6%December 2009/2008 1,923,600 2,066,000 (142,400) ‐6.9% 301,466.59$ 197,592.77$ 103,873.82$ 52.6%January 2010/20092,023,900 2,267,100 (243,200) ‐10.7% 306,488.09$ 221,491.05$ 84,997.04$ 38.4%February 2010/20091,549,900 2,063,300 (513,400) ‐24.9% 225,077.00$ 210,284.46$ 14,792.54$ 7.0%March 2010/20091,701,400 1,733,000 (31,600) ‐1.8% 232,095.50$ 199,550.51$ 32,544.99$ 16.3%April 2010/20092,335,100 2,265,100 70,000 3.1% 260,763.50$ 221,326.59$ 39,436.91$ 17.8%May 2010/20094,668,200 4,196,000 472,200 11.3% 617,096.08$ 414,683.51$ 202,412.57$ 48.8%June 2010/20097,082,900 6,176,300 906,600 14.7% 581,022.00$ 437,960.84$ 143,061.16$ 32.7%Totals54,008,300 60,582,000 (6,573,700) ‐10.9% 5,212,974.96$ 4,374,791.09$ 838,183.87$ 19.2%This worksheet summarizes the past 12 months of flows and billings and compares them to the previous year's flow and billingsEach month represents the monthly flows that were billed one month later. Thus the June 2010 billings represent May 2010 flows and are compared to June 2009 billings which represent May 2009 flows.For FY 2010, flows are down 6.6 million CF (10.9%) over FY 2009 flows.FY 2010 Billings are up by $838,183 or 19.2% over FY 2009 billings.The original FY10 increase was targeted for $877,679 or a 20% increase.Numbers may be off due to rounding.June 2008 Comparison Flow (CCF)June 2010 Flows 7,082,900 June 2008 Flows 7,856,700 June 2010/June 2008 (773,800) Percent Difference‐10%
Sewer Enterprise Sewer Enterprise Expense & RevenueExpense & Revenue$5,440,184$1,360.046$1,360.046$1,360.046$1,360.046Budgeted$6,463,414$5,510,541Totals$1,564,442$1,064,9914thQuarter FY10$1,358,689$1,767,665$1,769,618Revenue$1,576,2783rdQuarter FY10$535,8652ndQuarter FY10$2,333,4071stQuarter FY10ExpensesSewer Enterprise
Privilege Fee UpdatePrivilege Fee Update 371 privilege fees bills were mailed on 371 privilege fees bills were mailed on February 8, 2010 February 8, 2010 Total amount billed = $3,180,041Total amount billed = $3,180,041 $925,655 had been collected as of June 30, $925,655 had been collected as of June 30, 20102010