SAMA Presentation February 7-15, 2013 RMAA and UMAAS Sponsored Workshop Series

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1 SAMA Presentation February 7-15, 2013 RMAA and UMAAS Sponsored Workshop Series

2 Presentation Overview SAMA Who we are and what we do Summary of assessment legislation and policy Valuation publications Valuation of regulated property Valuation of non-regulated property Questions and wrap-up

3 SAMA s Roles and Responsibilities AMA Act -- Board Governed Agency Governance $159B / $1.4B Ass mt/ Taxes Policy Quality Assurance Computer System Communication Assessment Services 756 of 774 municipalities Annual Maintenance General Re-inspections Revaluations Support of Value

4 Vision and Mission Statements Vision SAMA is the recognized leader and authority on property assessment, and Saskatchewan s service provider of choice Mission SAMA develops, regulates and delivers a stable, costeffective assessment system that is accurate, up-todate, universal, equitable and understandable. Core Values Integrity, professionalism, dedication, solution focused.

5 SAMA Regions Saskatoon North Battleford Regina Moose Jaw Weyburn Melfort Yorkton Swift Current

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

8 Assessment Principles Ad Valorem Property Values Property Assessments Assessments

9 Assessment Principles Mass Appraisal Base Date Four Year Updates (Revaluations) Foundation in Legislation Market Valuation Standard Regulated Property Assessment Standard Equity SAMA Board Orders

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

11 Assessment Legislation The Assessment Management Agency Act (AMA Act) Regulations Board Orders The Cities Act (CAct) Regulations The Municipalities Act (MAct) Regulations The Northern Municipalities Act, 2010 (NAct) Regulations

12 Assessment Legislation The Assessment Management Agency Act (s12.(1)) Prepare assessment manuals, guidelines, handbooks and other materials. Perform valuations and revaluations. Maintain a central database. Ensure public, municipal councils a government aware of assessment methods and policies. Confirm assessments of municipalities.

13 Assessment Legislation The Assessment Management Agency Act (s22) SAMA to direct and supervise a revaluation every four years. Saskatoon, Regina, Moose Jaw and Prince Albert perform their own valuations unless an agreement with SAMA. SAMA currently performs valuations for Moose Jaw. Municipalities have the choice to opt out/in of SAMA s assessment services.

14 Assessment Legislation The Assessment Management Agency Regulations Revaluation base date and implementation date. Range of one to three years allowed. 30 months for current revaluation (June 30/06 with 2009 implementation. 24 months for the 2013 revaluation (January 1/11 with 2013 implementation. Provision of preliminary assessments for a revaluation. April 1, 2012 for the 2013 revaluation. Acceptable range of primary audit. ASR range of 0.98 to 1.02.

15 Assessment Legislation The Assessment Management Agency Act SAMA Board Orders. Revaluation base date. - January 1, 2011 for Market value evidence for the respective base date. - December 31, Up to May 31, 2011 for income/expense related information. Regulated Manual for regulated property for each respective base date Manual

16 Assessment Legislation The Assessment Management Agency Act

17 Assessment Legislation The Assessment Management Agency Act

18 Assessment Legislation The Assessment Management Agency Act

19 Assessment Legislation The Assessment Management Agency Act SAMA Board Orders (cont d). Quality Assurance Standards. - Relates to the market valuation standard - An assessment to sale price ratio (ASR) standard - A standard for residential property and a standard of other property valued using the market valuation standard (commercial). - Standards require assessment appraisers to strive to achieve a level of with an acceptable range of for a municipality. Complements primary audit requirement of for all improved property in a municipality.

20 Assessment Legislation MAct, CAct, NAct Assessment definitions specify two valuation standards. Market valuation standard Regulated property assessment valuation standard Related definitions to the valuation standards. market value mass appraisal non-regulated property assessment regulated property assessment (ag land, RPE, R/W, heavy industrial property, P/L)

21 Assessment Legislation MAct, CAct, NAct regulated property assessment " means an assessment for agricultural land, resource production equipment, railway roadway, heavy industrial property or pipelines. "regulated property assessment valuation standard" means the standard achieved when the assessed value of the property is determined in accordance with the formulae, rules and principles set out in this Act, the regulations made pursuant to this Act, the assessment manual and any other guideline established by the agency to determine the assessed value of a property.

22 Assessment Legislation MAct, CAct, NAct non-regulated property assessment" means an assessment for property other than a regulated property assessment. mass appraisal means the process of preparing assessments for a group of properties as of the base date using standard appraisal methods, employing common data and allowing for statistical testing. market value means the amount that a property should be expected to realize if the real estate in fee simple in the property is sold in a competitive and open market by a willing seller to a willing buyer, each acting prudently and knowledgeably, and assuming that the amount is not affected by undue stimuli.

23 Assessment Legislation MAct, CAct, NAct "market valuation standard" means the standard achieved when the assessed value of property: (i) is prepared using mass appraisal; (ii) is an estimate of the market value of the estate in fee simple in the property; (iii) reflects typical market conditions for similar properties; and (iv) meets quality assurance standards established by order of the agency;

24 Assessment Legislation MAct, CAct, NAct All property in a city/municipality is subject to assessment. Regulated and non-regulated assessments. Regulated property assessments shall be determined according to the regulated property assessment valuation standard. Non-regulated property assessments shall be determined according to the market valuation standard.

25 Assessment Legislation MAct, CAct, NAct Preparing annual assessments. Shall use only mass appraisal. Assessed as of the base date. Dominant and controlling factor in assessment is equity. Facts, conditions and circumstances as of January 1 as if they occurred on the base date.

26 Assessment Legislation MAct, CAct, NAct Preparing annual assessments (cont d). Equity in regulated property assessments is achieved by applying the regulated property assessment valuation standard uniformly and fairly. Equity in non-regulated property assessments is achieved by applying the market valuation standard so that the assessments bear a fair and just proportion to the market value of similar properties as of the applicable base date.

27 Assessment Legislation MAct, CAct, NAct Decisions of Boards of Revision and Sask Municipal Board Non-regulated property assessments shall not be varied on appeal using single property appraisal techniques. An assessment shall not be varied on appeal if equity has been achieved with similar properties.

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29 Primary Valuation Publications Saskatchewan Assessment Manual (2011 Base Year) (Manual). Market Value Assessment in Saskatchewan Handbook (Handbook). SAMA s 2011 Cost Guide (Guide). Marshall and Swift/Boechk LLC. Marshall Valuation Service (MVS) Residential Cost Handbook (RCH)

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31 Primary Valuation Publications Saskatchewan Assessment Manual (2011 Base Year) Referred to as the Manual. Has the force of regulation. Established by SAMA Board order.

32 Primary Valuation Publications Saskatchewan Assessment Manual (2011 Base Year) Manual separated into two parts. Part I: Median Assessed Value to Sale Price Ratio - Applies only to properties that fall under the market valuation standard definition found in legislation (section 163(f.1)) - Assessment Management Agency Act (AMA Act) section 22.1(1)(d) specifies a primary audit requirement - AMA Regulations (section 3.6) specify an acceptable primary audit appraisal level range of 0.98 to 1.02 Part II: Regulated Property Valuation - Formulas, rules and principles for the valuation of regulated property

33 Primary Valuation Publications Part II Chapter 1: Formulas, Rules and Principles Valuation models are specified for regulated property. Agricultural Land Agricultural Land Mixed Use Heavy Industrial Land (includes rates) Railway Roadway (includes rates) Heavy Industrial Buildings and Structures Oil and Gas Well Resource Production Equipment Mine Resource Production Equipment Pipelines Environmental Contamination (industrial property only)

34 2011 Manual Changes Heavy Industrial Property Definition revised to clarify property stays in this category when closed or not in operation. Additional rules created to address situations when a property is closed for an extended period. Agricultural Mixed Use Land Provisions in Manual revised to ensure land used as agricultural land is assessed as agricultural land. Consultations on these changes included SARM, RMAA, affected municipalities, heavy industrial property owners and provincial government.

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36 Primary Valuation Publications Market Value Assessment in Saskatchewan Handbook (Handbook) A modified version of the document Market Value and Mass Appraisal for Property Assessment in Alberta. Reflects the industry standard for valuing property at market value using mass appraisal. Focus is on commercial property Focus on the property income (rental) approach to value

37 Primary Valuation Publications Handbook contains guides for the following topics. Valuation Parameters Depreciation Apartments / Multi-Residential Manufactured home communities Warehouses Strip commercial property Office buildings Shopping centres Gas stations Hotel/motels Golf courses Special purpose properties Grain elevators

38 Primary Valuation Publications Market Value Assessment in Saskatchewan Handbook Is a non-regulated document, does not have the force of a regulation. Intended to be used as a guide by all assessment jurisdictions in Saskatchewan. Is not intended to be a substitute for good judgement.

39 Primary Valuation Publications Market Value Assessment in Saskatchewan Handbook Is not intended to provide a fully detailed explanation of the valuation process. Intended to make the valuation process more objective, consistent and equitable. Document has being updated for with implementation with the 2013 revaluation.

40 Primary Valuation Publications Highlights of the Handbook Update SAMA established a working committee comprised of assessment service providers and industry (member of SAMA Commercial Advisory Committee). Removed out of province appeal references. Revised restrictive wording to make the document more flexible and less regulatory in nature. Clarified assessor vs assessment appraiser terms.

41 Primary Valuation Publications Highlights of the Handbook Update Removed references that suggest using a property s own market data to value the property. Update example tables and forms in this regard as well. Replaced current value references to as of the base date. Modernized spreadsheet example references as it relates to computer system (CAMA) alternatives.

42 Primary Valuation Publications Highlights of the Handbook Update Removed training specific references where possible. The Handbook is a general guide, not a detailed training document. Improved general format of the document. Implementation with 2013 revaluation base date valuation models prepared by assessment service providers. Revisions ensure the Handbook is in line with current legislation and the recent Court of Appeal decision.

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44 Primary Valuation Publications SAMA s 2011 Cost Guide (Guide) A non-regulated document, does not have the force of a regulation. Used by SAMA and may be used by other assessment service providers. Contains procedures on: Urban land valuation (cost approach) Replacement Cost New (RCN) for residential RCN for selected commercial (Marshall is primary source). Depreciation (cost approach)

45 Primary Valuation Publications SAMA s 2011 Cost Guide -Chapters Chapter 1: Introduction Chapter 2: Urban Land Chapter 3: Improvements Chapter 4: Residential Adjustments Chapter 5: Residential Dwellings Chapter 6: Residential Outbuildings Chapter 7: Commercial Tanks and Reservoirs Chapter 8: Commercial Elevators, Annexes and Bins Chapter 9: Commercial Miscellaneous

46 Primary Valuation Publications Marshall and Swift/Boechk LLD Cost Service Marshall Valuation Service (MVS). Currently used by all assessment service providers as the general basis for commercial costs. Residential Cost Handbook (RCH) An additional residential cost source

47 Primary Valuation Publications The Manual, Handbook and SAMA s Cost Guide are on the SAMA s website with copies available for purchase. Licence with Marshall and Swift prevents some rates from being provided on SAMA s website. Copies of the MVS and RCH are available for purchase from SAMA or directly from Marshall and Swift. Licence with Marshall and Swift does not allow MVS and RCH to be posted on SAMA s website.

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