2017 Reappraisal. March 10, 2017

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1 2017 Reappraisal March 10, 2017

2 Today s Presenters Cheyenne Johnson, Assessor Charles Blow, CAE Robert Trouy, TMA David Baker, Certified General Appraiser Joshua Forbes Shawn Lynch, JD

3 Together, as professional public servants, we will provide fair and equitable property values by locating, classifying, and appraising all the property in Shelby County for the benefit of its citizens.

4 The Assessor s Office is located at 1075 Mullins Station Rd. The downtown office is currently closed for remodeling. The Assessor s Office currently has 140 employees. Positions includes: Appraisers, Clerks, Managers, Abstractors, Cadastral Mappers, IT Analysts, Personal Property Auditors, Customer Service Reps and many others in the performance of our state mandated duties.

5 TCA requires that a reappraisal be performed to eliminate inequities that are created over time by changes in the real estate market to ensure fairness and equity for all property owners. TCA allowed Shelby County to select a four year reappraisal cycle. The last reappraisal was in The deadline for completing this year s reappraisal is April 20, Property taxes are the primary funding source for local governments. 61% of revenues to the Shelby County General Fund come from property taxes.

6 The office works under the general guidance of the Division of Property Assessments. The staff reviews Tennessee Code Annotated daily to ensure that all adopted policies and procedures are within the law. The office follows rules established by the Division of Property Assessments to ensure that property values remain constant in between reappraisal periods, except for changes to the property or through the appeals process. The appraisal departments adhere to all appraisal principles and professional codes of ethics while completing the reappraisal. The reappraisal is completed using mass appraisal techniques. The goal is achieving market value while ensuring fairness and equity for all properties.

7 The Assessor is responsible for valuing and defending property values for eight taxing jurisdictions in Shelby County: Arlington Bartlett Collierville Germantown Lakeland Millington Memphis Shelby County 785 Square miles of land & improvements and 22 square miles of water

8 Consisting of: 351,585 parcels composed of Residential parcels 302,532 Commercial parcels 20,361 Industrial parcels 4,387 Farm parcels 2,892 Exempt parcels 21,078 Multiple parcels 326 Mobile Homes 2,795 Mobile Parks 23 Cell Towers 300

9 Industrial Development /Health ED/ Edge Pilots / Center City parcels 709 Exemption by applications parcels 6,100 City and state owned parcels 11,746 Greenbelt parcels 2,001 TIF parcels 4 Highland Row The Guest House and Graceland Development Shops at Millington Uptown Development Personal Property parcels 39,951

10 Personal Property is the tangible property used or held for use in a business. It includes everything other than real property used in a business, such as: furniture, fixtures, office equipment, cars, signs and leased equipment. It is reappraised annually and is a self-reporting system with a yearly filing date of March 1.

11 Robert Trouy, TMA Manager of Residential Appraisal Shelby County Assessor s Office

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13 Mass Appraisal vs Fee Appraisal Mass Appraisal - The method of appraising property for ad valorem tax purposes. Fee Appraisal is a single property appraisal.

14 Visual Review - Visual exterior inspection of all properties and general surroundings to verify property characteristics.

15 Visual Review Office Reviews Advanced geographic mapping system, Pictometry, integrates the use of high-quality aerial imagery, at oblique angles, with the Assessor s CAMA system. Verify property characteristics such as: o Total Living Area o Year Built o Garage o Carport o Bath Count o Exterior Wall type o Swimming Pools o Other structures that exist on the property. Assessor s neighborhoods Properties with similar characteristics are grouped together. Regions delineations

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19 Field Reviews Site visits to properties monitored changes in property condition that can have a significant effect upon valuation. Third Party Chandler Reports to confirm physical data and sales information.

20 Sales Verification - Verifying each sale, as it occurs, to ensure it reflects an arm s length transaction. Visual Review - Visual exterior inspection of all properties and general surroundings to verify property characteristics.

21 Sales Verification Qualified Sales File serves as the foundation of the Reappraisal program. A team of appraisers analyzes each sale to ensure it meets the state s standard of an arm s length transaction. Foreclosures and Bank Sales are excluded from the Qualified Sales File. However, foreclosures are considered in our valuation processes.

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23 Valuation Analysis - Comparing the qualified sales, market activities and property characteristics to reflect market value. Sales Verification - Verifying each sale, as it occurs, to ensure it reflects an arm s length transaction. Visual Review - Visual exterior inspection of all properties and general surroundings to verify property characteristics.

24 The Valuation Analysis begins relying on the qualified sales file and property characteristics collected to reflect market value as of January 1, Assessor s appraisers analyze current market activities, construction costs and income data according to accepted appraisal practices. Computer-Assisted-Mass-Appraisal (CAMA) helps store, organize and value properties and assists our appraisers in achieving uniformity and reliability.

25 Sales Comparison Approach: Estimates a property s value utilizing comparable sales in the market. Cost Approach: Estimates a property s value by calculating current cost of the improvements (buildings) minus depreciation and then adding the land value. Income Approach: Estimates a property s value based on earning power, through capitalization of income.

26 Location lot, acreage, river bluff, busy street, neighborhood Quality/Style Brick, Frame, Stucco, Granite, pools Size Building and land Condos Story location, view, parking Other considerations - Topography, easements, ditches, flood land

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28 All reappraisal activities are monitored and approved by the State s Division of Property Assessments. Valuation Analysis - Comparing the qualified sales, market activities and property characteristics to reflect market value. Sales Verification - Verifying each sale, as it occurs, to ensure it reflects an arm s length transaction. Visual Review - Visual exterior inspection of all properties and general surroundings to verify property characteristics.

29 The 2017 Reappraisal is based on sales activity from 2014, 2015 & 2016 in the local housing market. The net effect will be an overall property value increase for most areas in Shelby County.

30 2017 Reappraisal Notices released early in an effort to resolve any disputes in advance of our April 20, 2017 Certification. Property owners are encouraged to contact the Assessor within two weeks of receiving their notice to request an Informal Review if they disagree with their Reappraisal value.

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32 2017 Preliminary Results Charles Blow, CAE Director of Appraisal Operations Shelby County Assessor s Office

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34 REAL PROPERTY- Shelby All PRELIMINARY 2017 PREDICTIONS CLASS PARCELS Percentage 2016 APPRAISED VALUE CERTIFIED 2016 ASMT CERTIFIED PARCELS Percentage 2017 APPRAISED VALUE 2017 ASMT % CHG FARM 1, % $ 248,983,400 $ 62,245,850 1, % $ 294,102,600 $ 73,525, % RESIDENTIAL 301, % $ 37,800,949,100 $ 9,450,237, , % $ 41,869,400,900 $ 10,467,336, % COMMERCIAL 20, % $ 11,242,125,300 $ 4,496,850,120 20, % $ 12,366,337,800 $ 4,946,535, % INDUSTRIAL 4, % $ 3,134,674,500 $ 1,253,869,800 4, % $ 3,448,142,000 $ 1,379,256, % TOTALS 327, % $ 52,426,732,300 $ 15,263,203, , % $ 57,977,983,300 $ 16,866,653, % TOTAL ASSESSED PROPERTY (excluding Multiples & Greenbelt) TOTAL ASSESSED PROPERTY (excluding Multiples & Greenbelt) PARCELS Percentage 2016 APPRAISED VALUE 2016 ASMT PARCELS Percentage 2017 APPRAISED VALUE 2017 ASMT % CHG TOTAL REAL ESTATE 327, % $ 52,426,732,300 $ 15,263,203, , % $ 57,977,983,300 $ 16,866,653, % 2016 Cert Total ASMT $ 15,263,203, Prelim ASMT $ 16,866,653, TOTAL ASMT GAIN (from 2016) $ 1,603,450,950 PCT AMST gain 10.51%

35 Shelby County Tax Jurisdictions 2017 Reappraisal Change in Value Analysis Residential Property Classification February 14, 2017 (Preliminary) JURISDICTION TAXYR 17 PAR COUNT 17 CLASS 17 TOTAL APPR 17 TOTAL ASMT 17 Chg in Appraisal 17 Chg in Assessment 17 Change in Parcel Count % Change in Parcel Count % Change in Value Shelby County ,628 R 41,908,233,000 10,477,080,750 4,044,957,000 1,011,261, % 10.68% ARLINGTON ,429 R 980,171, ,042, ,219,200 32,304, % 15.19% BARTLETT ,606 R 3,675,754, ,938, ,504,300 99,876, % 12.19% COLLIERVILLE ,803 R 4,840,009,600 1,210,002, ,267, ,566, % 14.86% GERMANTOWN ,511 R 4,945,637,800 1,236,409, ,181, ,045, % 11.86% LAKELAND ,661 R 1,166,262, ,565, ,201,900 25,300, % 9.50% MEMPHIS ,768 R 20,666,141,000 5,166,535,250 1,689,800, ,450, % 8.90% MILLINGTON ,558 R 336,715,800 84,178,950 8,876,100 2,219, % 2.71%

36 Percent Change in Median Values for Shelby County and Municipalities (Single Family Residential - Preliminary) Arlington Bartlett Collierville Jurisdiction Germantown Lakeland Memphis Count 2017 Median Year Built 2017 Median Sfla 2016 Median Value 2017 Median Value PctChg , , , ,850 16% 19, , , ,540 13% 14, , , ,530 18% 13, , , ,320 12% 4, , , ,000 10% 177, ,442 66,780 70,395 5% Millington 2, ,591 95, ,640 5% Unincorporated Shelby County 32, , , ,180 13% Shelby All 269, ,638 96, ,840 10%

37 Shelby County's Overall Assessment Percentage Change for Reappraisal Cycles 15.00% 13.00% 9.65% 10.51% Total -4.63%

38 Region 2 Germantown (Preliminary)

39 David Baker Certified General Appraiser Commercial Appraisal Manager Shelby County Assessor s Office

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41 Cap Rate Study Conducted an in-house Cap Rate Study utilizing published public and subscription data to develop cap rate estimates. Historical appeals data Reviewed actual income and expense information submitted during the appeals process. Professional publications Utilize publications to assist in developing value estimates such as, CoStar and Chandler reports. Property owners Reach out to property owners requesting actual income and expense information and property condition issues. Broker Interviews Invited local brokers in to discuss specific property types, such as retail, office, warehouse and multi-family in order to determine market conditions and value trends.

42 Joshua Forbes Appeals Manager Shelby County Assessor s Office

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44 The Shelby County Assessor s Office reappraises all real property once every four years, however, property owners may appeal every year. Every tax payer has the RIGHT to appeal the value of their property and to EXPLAIN why they believe that their property has been valued in error. Typically, the volume of appeals county wide is highest in a reappraisal year and tapering off to a few thousand in the fourth year of the cycle. Upon receiving your Assessment Change Notice (ACN), go online to the Assessor s website, or call the Assessor s office and file an Informal Review. If our office cannot adjust the value, file an appeal including evidence with the Shelby County Board of Equalization.

45 The taxpayer can file an appeal three ways: Online at boe.shelbycountytn.gov/efile Printing off the appeal form from boe.shelbycountytn.gov, fill it out by hand, and mail the form to the Shelby County Board of Equalization. Delivering the appeal form to the Shelby County Board of Equalization located at 1075 Mullins Station Road Suite C-142 Memphis, TN 38134

46 The window to file an appeal is from May 1- June 30, 2017 Tip: This information is found on the Assessor s web site

47 The Assessor s Web site: An excellent public resource for real estate information. Shelby County s first interactive Web-Site. Receives approximately 50,000 visitors a day. Interactive Maps Provides constant access to the entire assessment record. File Personal Property Schedules online.

48 What to expect during a hearing Hearing Officer Hearing -informal hearing with a real estate professional. You are allowed to provide evidence to support an adjustment in value. The Assessor s office representative serves in an advisory capacity to the hearing officer. The hearing officer decision is sent in the mail. Full Board Hearing- formal hearing before a group of eight members that are appointed by the various municipal Mayors. You are allowed to provide evidence to support an adjustment in value. The Assessor s office representative will also present evidence to support current value or recommend a change. The board members will discuss the appraisal and will render a decision before you leave the hearing.

49 What to do after the hearing Read the decision Letter- If the results are acceptable do nothing and you will receive an assessment change notice from the collector. Don t agree - exercise your right to appeal to the State Board of Equalization for another review. The State Board hearing is an informal setting with one Administrative judge. The Assessor s representative is also present to defend the office appraisal. The decision is sent in the mail. Remember, the Assessor may also appeal a board decision. Other levels of appeal are the Assessment Appeals Commission and the Full State Board of Equalization. The last level of appeal is the Chancery Court. (Rare)

50 Sales prices of similar properties in the immediate area dated in the year(s) prior to the tax year being appealed. For example, if a property is being appealed for the 2017 tax year, sales dates of comparable properties should be in 2016 and Recent Private Appraisal. Photos of the Property showing Condition. Rent Rates for Commercial Property. Any Additional Information that will assist in determining Property Value.

51 Shawn Lynch, JD Legal Advisor Shelby County Assessor Office

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53 Public Information Commercial vs Residential Assessments Duplexes Condominiums Vacant Land Pro Ration of New Construction T.C.A (b) requires the Assessor to prorate any completed construction before September 1 of any year. Emerging Issues Short Term Rentals Big Box Retailer Municipal Appeals

54 January 1 March 1 April 5 April 20 Tax Year Begins: Ownership, Assessment and Tax Maps are complete. Greenbelt Deadline Personal Property Deadline Errors and Omissions Deadline Mobile Home Deadline Deadline to apply for tax relief Tax Roll Certified May 1- June 30 Shelby County Board of Equalization accepts appeals. August 1 Important Deadlines Everything has a deadline - Ask for Assistance General Deadline for appeals to the State Board of Equalization is August 1, or within 45 days of the date the notice of the county board action was sent.

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56 Questions?