Special Bd. of Aldermen — 02/27/2017 Page 7
vacancy rates. We'll analyze those to develop a net operating income and we'll capitalize that to develop a
valuation for the property. It’s typically commercial and industrial properties and apartments over five units.
The Mayor talked a little bit about the assessment ratio. It’s just the relationship between the assessed value
and the market value of a property. An example would be if you had an assessment of $200,000 and it sold for
$250,000. The assessment ratio would be 80 percent. So it would be at 80 percent of market value. The
statistic that we use most often is the median ratio which is the middle of a data set. We'll look at all the sales
and array them from lower ratio to high ratio. We're looking for where the middle ratio lies.
The coefficient of dispersion probably the easiest way to explain this is is if you have your assessment ratio or
your median at 100 percent and you think of it as a bullseye, it’s how close those other ratios are to that center.
The tighter the better appraisal model that we’ve developed it predicts value better. Your price related
differential what that does is basically test low value properties versus high value properties and is the
relationship the same or different.
On a statistical revaluation, the process would be we begin in late March with a startup meeting with the city
and the Department of Revenue Administration. We would start by measuring and listing all the residential
sales from 4/1/17 to 3/31/18. On the commercials we'll look at a two year data set. The reason is those sales
are we're going to develop our model based on those sales so we want the most accurate information. We'll
analyze all the sales through various ratio studies. We'll look at where the deficiencies are and we'll update all
the tables as are indicated from the sales analysis. We'll analyze the income and expense statements
returned by commercial, industrial, and apartment owners and create income tables. Once the initial values
are set, we'll review all properties in the city so just a parcel by parcel review of every parcel in the city. Once
we’re finished with that, we’ll publicly post the values to notify the property owners of the new assessments.
We'll conduct taxpayer hearings so they can come in and ask us questions about their property or maybe just
an overall. When we’re completed with that, we deliver a USPAP which is Uniform Standards of Professional
Appraisal Practice Manual to the city and to the Department of Revenue.
The goals of a revaluation: it corrects disproportionate taxation by valuing all property at its fair market value
as of April 1, 2018. It adjusts value from market shifts, ensures that various class of property valued at the
same level of assessment. With that, it creates uniformity and assessment equity. It would create a mass
appraisal model basically using a systematic approach which gives us consistency. With that, I'll turn it back
over to the Mayor.
Mayor Donchess
Does anybody have any questions for KRT at this point?
President McCarthy
So would you actually complete the appraisal by April 1° or what’s the timing of the project?
Ken Rodgers
No | think the end date is October 1*.
Rob Tozier
That’s with the data value so there will be a value as of April 1°.
President McCarthy
So you would get it to us when we submit the forms for the tax rate setting for Fiscal ’19.
