Ad-Hoc Committee on Reappraisal

Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 AD-HOC REAPPRAISAL COMMITTEE Thursday, December 1, 2022 Bushor Conference Room and via Zoom DRAFT MINUTES Members Present: James Unsworth, Chris Haessly, Alan Bjerke, Kevin Stapleton, Jonathan Chapple-Sokol, Joan Shannon, David Edwards, Dan Kirk Staff Present: John Vickery (City Assessor), Joseph Dempsey (City Attorney’s Office Staff) Others in Attendance: Beach Conger, Trine Bech Meeting called to order at 6:05 PM. 1.0 Agenda 1.01 Motion to Amend Draft Agenda Motion to Amend Agenda to include Item 2.02: Public Comment. Motion by Joan Shannon, Seconded by David Edwards. Final Resolution: Motion Passes. Yes: Unanimous. 2.0 Adopt Minutes from 09/22/2022 2.01 Motion to Adopt Minutes from 09/22/2022 Motion to Adopt Minutes from 09/22/2022. Motion by Alan Bjerke, Seconded by Kevin Stapleton. Final Resolution: Motion Passes. Yes: Unanimous. 2.02 Public Comment Trine Bech: I have been here before. After having done this process and being a retired lawyer, I am still at a loss at how to approach our case next time. We just received a decision from our hearing officer. The officer threw out the City’s argument. The appraisal method went from cost to sales approach. We asked in discovery for how the City came to the cost approach assessment. Because the City changed the approach, we never got our question answered. Page 1 of 6  Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 We still don’t know why our street is 70% more expensive. When John Vickery did the assessment he used the sales approach and used 4 out of 5 comparables to what we had. We didn’t want to argue about things like how much a garage costs, etc. We were at a loss as to what to do. We received no explanation as to why they used the cost approach at first. There was no basis for the changes that John Vickery made, yet it came to a different appraisal. We need an understanding about how to go about it the next time around. We were prepared to argue a cost approach, but the sales approach reduced the appraisal by $70,000. We wanted to go to City Council with an agreement, but John Vickery insisted we have a hearing. When I was a lawyer and sat on the bench, two opposed parties usually come to an agreement if possible. John Vickery was not interested in doing that. I am hoping that the next time this happens we will have a better process. Beach Conger: As a person responsible for trying to figure out our appraisal, I just could not make it work. The hearing officer said that because we did not submit how a value was come to, he would throw out the value we came to. There was no explanation from John Vickery as to how the City came to its values. We felt like we missed the boat to justify our numbers since we were caught off guard. 3.0 Subgroup Presentations of Findings 3.01 Presentation from Alan Bjerke and David Edwards Alan Bjerke submitted and presented a report addressing their charge of: 1. Identification of timelines and practices during the assessment process that are impediments to citizen participation and fair valuations; and recommendations around those; 2. Review of the appeals process and recommendations Joan Shannon: The main thing with the timeline is the state requirements. We can’t change such a thing at the City level. Would it be prudent to ask to change it at the state level? From the taxpayers’ perspective, they don’t like the timeline since it does not allow for income sensitivity. In order for them to get that income sensitivity, would they have to get this done by March 1 to file on their taxes? John Vickery: It wouldn’t matter since the state is very tight on timing. They have a hard time reviewing our info and to reset everything. We base taxes on the year prior, but it is a problem. Joan Shannon: When we present about the timeline, I think this is the number one issue for the taxpayer. Alan Bjerke: That is somewhat tied to reappraisal. It looks back rather than at present. The income sensitivity is always rear-looking. James Unsworth: How is this calculated? John Vickery: It is complicated, but the goal is to have people pay no more than 2% of income to the education fund. It also caps based on property value since some buildings go up in value, but owners don’t have increased income. Joan Shannon: We can’t change the timeline and it probably wouldn’t help. We should flag this issue at the state level and that taxpayers are being stressed by this problem. I think this committee needs to flag this issue and explain it. John Vickery: One roundabout solution is that more regular reappraisals would cause less severe tax changes. A 10% adjustment is a lot less shocking than a 40% one. James Unsworth: I think we should have as a recommendation about this issue and make sure we raise this to the state. Jonathan Chapple-Sokol: That recommendation seems beyond the scope of this group, unfortunately. The City does know Page 2 of 6  Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 how much of a portion of the Grand List so that could be used to estimate people’s property taxes. John Vickery: That is a good point, but it is difficult to answer every problem at the same time. Jonathan Chapple-Sokol: It is about practicality, of course. One of the first comments was that people did not appeal since they did not know how much their taxes would go up. The important step that was missing was the informal hearing stage. The City needs to add to the timeline the informal hearings. John Vickery: The prior reappraisal we had 5-6 appraisers and the informals went off well. The company did not have enough people on call to deal with the formal appeals because we missed the informals due to Covid. Alan Bjerke: I thought I had an informal hearing with Tyler and someone from the Secretary of State’s office, but that ended up just being the formal hearing. Joan Shannon: The Tyler people did not have the paperwork in front of them when doing the formal appeal hearing. The formals seemed informal since they were unprepared. Jonathan Chapple-Sokol: The Board of Tax Appeals became the formal appeal board since we did not have informals. We need to have that extra step added back in. Joan Shannon: The issue of income sensitivity was something the City Council really wanted addressed in this committee, and the more frequent appraisals should help mitigate that issue. James Unsworth: Perhaps the City can talk with our legislators to see if the State can assist. John Vickery: Our City timeline follows state statute. I would not recommend putting the appeals until after the tax bills are due since it extends things out too long. I would recommend sending out notices earlier for reviews since things get very busy and still have to be done by July 1. Alan Bjerke: That solves the issue of people wanting to appeal their appraisal, but people still won’t know their tax bill. John Vickery: We could add a tool to estimate a tax bill with the caveat of it being informal and non-binding. Joan Shannon: When appraisals come out, the CC has not set the tax bill. The appraisal is supposed to be revenue neutral, but tax still go up every year. By sharing the fractional number, they could estimate their new taxes. Alan Bjerke: A fraction would not be very helpful, but the tax bill would make sense. David Edwards: If we gave out a hypothetical number, is there any risk to mortgage escrow departments? If people send out that new number then could that confuse people and cause issues? John Vickery: We already have a tax calculator on the City website and we could expand upon that. Joan Shannon: I think when we did the calculator we forgot the income sensitivity issue and we could add that. 3.02 Presentation from Alan Bjerke, Jonathan Chapple-Sokol, and Chris Haessly Alan Bjerke submitted a report from the Education Subgroup. Jonathan Chapple-Sokol submitted an appendix to that report. The Education Subgroup’s charge was: 3. Develop a best practice around education and participation of citizens in the assessment process and how their properties are valued. Provide recommendations on how that support will be offered; Page 3 of 6  Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 Alan Bjerke: We did not make a recommendation for an ombudsperson. Such a person would be an advocate for the taxpayers. We recommend having a person getting educational materials and know the process rather than directly advocate for them. Joan Shannon: I think a need a key to decipher the tax assessor’s card. I think this committee should prepare this key (with the help of Vickery). The values and factors seem profoundly subjective but supposed to be objective. If we had a list of materials etc that would qualify for good vs not good etc. The taxpayer expects the assessor to show their math and even the smartest people cant figure out the numbers. The numbers behind ‘very good’ or ‘good’ should be visible an transparent. Some things on the card are not part of the assessment and other things are missing from the card. Our card should show the math. John Vickery: I agree, it is not easy to follow. I understand how it is built, and it has a base cost that is adjusted by factors. Joan Shannon: I am recommending that we do the card rather than just recommend doing it. Alan Bjerke: Some of the factors are large tables rather than just simple multipliers and the card could get very confusing very quickly. We should improve the card, but it will be more complicated. James Unsworth: it also seems impossible to explain every tiny aspect to the taxpayer and we might get too bogged down. Having a full page equation is probably not the answer. Joan Shannon: Many people went through many materials to learn about the appeal process, but the complex mathematics behind the appraisal is still complicated. John Vickery: I did the sales comparison approach as a second check on the cost approach. These should be similar and vary only a little. I don’t know why the hearing officer did not accept the values that I came up with. I think most people like sales comparison approach, but not this officer. Joan Shannon: it seems odd that a hearing officer can throw out values only because they were based on sales approach. I don’t know who to hire to create a transparent record card, but we should be able to do it. John Vickery: Our officer needs a simpler cost approach that is more approachable. I can’t explain certain values that go into the equation, but the steps should be visible and helpful. Joan Shannon: Perhaps all the math can’t be shown on a property card, but we could have an online calculator that shows the deeper steps so you can see the steps if you want to. Chris Haessly: I don’t know if we should be hiring more consultants, but rather have the people in-house. A calculator with some tooltips and show the formula with extra depth. It would be fairly simple programming from my perspective. Alan Bjerke: Youtube and PVR reports are full of information. All of the education for an appraiser is free and available online or in person. Jonathan Chapple-Sokol: I think pointing people to resources is important, but the City really needs to make this clear on its own rather than direct them elsewhere. The City is ultimately responsibility. Alan Bjerke: A lot of questions are about quality and condition. We should not be too definite about quality and condition. Lots of issues of building code come up with quality and condition. If a building has certain numbers of violations then it will be below average even if it should be above average. John Vickery: Burlington should have its own criteria since we have more older houses that are very nice despite having code violations. Page 4 of 6  Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 Chris Haessly: We should separate out code violations into another category would be helpful. Kevin Stapleton: Do housing code violations reduce a person’s house value? John Vickery: Yes, some people argue that to reduce their taxes. Joan Shannon: I think there should be less subjectivity like Chris said. Chris Haessly: I think we should incentivize improving a building. Alan Bjerke: Different buyers offer different offers and appraisal is the same thing: no two people will come to the same conclusion. Chris Haessly: Depending on our bandwidth, we could have a workshop or something to observe what the differences between conditions and quality. Joan Shannon: We need to come to a conclusion on how far we will go in making change. We can just make a report to the Council or we could do more. It is easier to say we need a key for the card but much harder to actually craft a satisfying card. James Unsworth: I think we will need to go through multiple reappraisals with continued effort to make sure we get this right over time. Jonathan Chapple-Sokol: We have a bunch of recommendations in our presentations, but we don’t have the skills to create these tools to improve the system. Joan Shannon: We need to assess the capacity of our City employees and then see if we need to hire outside expertise. Chris Haessly: As we build up the Assessor’s Department that will build up institutional knowledge. Do you know how many staff the Department would need to do an assessment? John Vickery: We did a study and came to six plus consultants so that the algorithms were cleaner and closer to reality. Some places do rolling appraisals with a large inhouse staff, but I think the best option is having a decent size staff with some outside help with the complex properties and newer techniques. David Edwards: All that sounds great, but I question the math. I don’t think we will have a reappraisal every three years since the last few years have been very different due to the pandemic and climate change. James Unsworth: That’s kind of our big picture. We will make recommendations and we will see where the Council goes with staffing going forward. John Vickery: We are already at under 85% so we are waiting on doing a reappraisal. In-house staff would know the local properties and communities and outside help would provide newer techniques and specialists. The technology is always evolving and it can be hard to keep up. Alan Bjerke: Do we know how much time Tyler spent on data collection and analytics? John Vickery: They create a model with sold buildings and then they tweak the model until it matches the City landscape all the way until the end when things are complying. If the model gets close enough then you go and inspect the outliers. The newer way to do things is through google maps. James Unsworth: And how should we move forward? I think I at least have some more thoughts. Page 5 of 6  Ad-Hoc Reappraisal Committee Meeting - December 1 @ 6:00PM in Bushor Conference Room (City Hall, 1st Floor) and **REMOTE** 12/1/2022 Alan Bjerke: We can adjourn until after the new year and everyone has completed their reports. Agenda Items 3.03 and 3.04 will be tabled until the next meeting. 5.0 Adjournment Motion to Adjourn by Alan Bjerke, Seconded by Chris Haessly. Yes: Unanimous. Committee Adjourned at 8:06 PM. Page 6 of 6