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HomeMy WebLinkAboutReview of the Performance Augusta Richmond GA DOCUMENT NAME:"KC Vl.e- \/~ Ot" '-t- 'he. 'ye-r-fo rnlQ VI ce DOCUMENT TYPE: YEAR: 1-00~ BOX NUMBER: W FILE NUMBER: \ 103 1 NUMBER OF PAGES: 4q -r; .' fHA. ~,-J 0- d" 11 ~ ': ~k tk.. 'l-wl ~M ~ f40': / ' , ~,~ At. ~ ,~tJ, 'r f~/!; ~ , ~W 'bt ~ ~~ ~'rJ ,fU1M.T ~' ~(fdi:l',~ ~ A...:U. '. / ", "'~.__..../' \ \ # ~ -...:.. - ., ~.~ . '. ..~...;.;<. kt~~ La2lUlf Cllmamtulllur 1lJlparfmtuf nfiruruur Jmpmy mu 1tuiJimr tl~4!i JIltmaatimW JllIrlnnu , hittA ' .spm11e, 'arrgia 3Jl354-ms llrtlql!JlJtIr (4D4) B&JI-D1DT ~~ ,(484) !J6B.JJmI I.onu~ ' Mbso,Ittutm 1taau!J' t.. Jrimzrau Aotstat 1lzut4r December 17, 2003 Mr. Bob Young Mayor Augusta-Richmond County Commission Room Bo6, Municipal Building 530 Greene Street Augusta, Georgia 3091' Dear Mr. Young: Enclosed please ftnd the "Performance Review of the Ricnmond Counw Board of Tax Assessors" developed by the Performance Review Board appointed by the Revenue Commissioner in aCCOrdance WiTh O.C,G.A. Section 48-5-295,t, Also enclosed please find reports showing the expenses incurred by each member ot the Richmond County Performance Review Board. tn paying these expenses, please issue three checks, each payable to and in the amounts shown below. and retum tha checks to my office as soon as possible for distribution. Mr. EamestL Sims $'93.25 Mr. Dennis Lee $338.60 Georgia Department of Revenue $'180.70 I trust this report actdresses the resolution adopted by the Augusta-Richmond County Commission requesting a review of the Richmond County Board of Tax Assessors. Sincerely, SLf~~ Sha P. Hester Manager. Digest Compliance Section ~'~;t Cc: Bart l. Graham Revenue Commissioner An Equal' Opporumity F.mplnycr, http://www..s;tatc.ga.us/DepartmenWDORlpldl ,,." \.. J ........ .. "'7" Introduction Review of the Performance of the Richmond County Boarcj of Tax Assessors 'December 8, 2003 On September 22, 2003, the goveming authority of Richmond County, pursuant to O.C.G,A, ~ 4B~5-295. 1 ,adopted a resolution requesting that a performance review of the Richmond County Board of Tax ASsessors be conducted, This ' resolution was transmitted to the Commissioner of the Georgia Department of Revenue who appointed three competent and independent individuals to a performance review board (hereafter referred to as the PAS) on October 10, 2003, Those appointed were as follows:'- ' Wayne Blackwe'der Lamar Sims , Dennis Lee Mr. Blackwelder has been employed as an appraiser and instructor with the Property Tax Division of the Georgia Department of Revenue for to yearS,Prior to that service, 'he served as a property tax appraiser in Stephens County tor 4 years, He is certified as an Appraiser IV by the Department. Mi. Blackwelder served as,Chainnan of the PRS. Mr. Sims is appointed to the board of tax assessors ot RockdaleCounty and has as been employed as an , appraiser With Rockdale County tor B years, the last 4 , years he has served as the chief appraiser. Prior to that service, he served as a property tax appraiser in Newton 'County for 10 years, the last 3 of those as chief appraiser. He is certified as an APpraiser'lV by the Department. ' . , Mr: Lee is appointed to the board of assessors of TwiggS County and has been employed as the chief appraiser of PeaCh County tor 6 years~ Prior to that service, h,e served as the chief appraiser in TWiggs County for 3 years, He ' has also been employed by Bibb County as a, property tax appraiser for 8 years and has worked for several mass and fee appraisal companies since 1973. He is certified as an Appraiser IV by the Department. And is licensed as , a Certified General Appraiser, License No. CG807 by the Ge~rg;a Appraisal Board, . On November 3 - 5.2003 the PRS conducted Its investigation in the offices of the board of tax assessors in Augusta. Rictm'1Qnd County Board of Tax Assessors Performance Report Page 2 . "',, " '. h . Purpose , The purpose of the PRB, according to the statute, is tomake_a-thorough and complete jnvestigatjon~of. the county board of tax assessors WJthrespect to an actions of the county board of tax assessors and appraisal staff regarding the technical competency of appraisal techniques and compliance with state taws and regulations, The PRS is further directed by the statute to issue a written report of Its findings that shall include such evaluations, judgTnents.' and recommendations as it deems appropriate, The reasonable expenses of the PRS incurred in the pertorman~ pf their duties are reimbursed by the governing authority of Richmond Courity and Include mileage, meals, lodging and cost of materials, The goveming authority of Richmond County may use the findings in this report ' as grounds for removal of one or more members ot the county board of tax assessors pursuant to O.C.G,A. ~ 48-5-295 (b)' if, in its collective judgment, such removal is warranted, Scope of Review DocUmentS RevIewed, The PRS reviewed the minutes of board of tax assessors ~et;ngs tor Calendar years 2002 and 2003, a sample of homestead applications filed for 2003, new ' conservation use applications filed for 2003, property record,cards, tax maps, ' and deed records of the Richmond County Clerk of SUperior Court. Persons Interviewed / The PRS interviewed ;n person CommiSsioners, Richard Colclough, Bobby G. Hankerson, and Bill Kuhlke. Mayor Bob Young was interviewed bY,telephone, The PAS also reviewed written comments from Commissioners Steve Sheppard and Tommy BOYles, The PRB interviewed al/ members of the Richmond County board of fax assessors (hereinafter referred to as the BOA), the chiefappraiser, the chief administrator;n the Richmond County tax commissioner's office, all'members of Richmond County's 3 boards of, equalization. selected members of the county appraisal staff, and a group of concerned citizens. Property Reviewed ' The Department of Revenue (hereinafter referred to as the DOR) provided two,of its field appraisers to assist thecPRB in its investigation. The BOA authorized the appraisal staff to conduct a total revaluation of all property in the county in 2002. The PAS directed the OOR appraisers to field reView several properties in areas at the county where significant numbers of appeals had been filed in 2002, They were instructed to verify the accuracy of the county's tax records and competency of the techniques used to appraise the properties reviewed. December ,17,2003 . .!;" Richmond eounty Soard of Tax Assessors Performance Aep?~ Page 3 r ')7l Significant Findings , Richmond County is. One of the largest laxing/uriSdlctions in Geo'llia and faces signnicant challenges in the administration of property tax. The chief appraiser has Implemented sevaral improvements to the operations of the offlce that have been received well by laxpayers. In Our Interviews with real estate professionals in the county they Praised the chiel appraiser lor ttul overan improvements in Customer service and noted the staff to be more responsive to their requests. The chiel appraiser Inherited an' Obsolete computer aSsisted mass appraisal 8yStem When he assumed his POst in August 2000. He engineered the first conversion 01 a major COUnty to the stale endorsed WinGAPcomputer assisted mass aPpraisal program, Which was eldtemelycomplex. He also directed the county through a major revaluation in 2002 using in-county resources. The chief appraiser, the BOA members and all members of the appraisal staff have kePi their education CUrrent and are properly certified by the Depar1ment of Revenue. Further, the chief aPPraiser is highly skilled and holds sri Appraiser/V . - . -.. .-c. --...,Cert/lication. lr.cDllbeDepa""'mJU!LBe1lllOUe. anda MAldas;gnatlon from the ' Appraisal Foundation' .. The chief appraiser replaced some inappropriate Ilpprajsal procedures that were in place in the county when he took OYer with appropriate Procedures. He lollows the Department of, Revenue's Appraisal Procedures Manual. There are many other posltjve things that can be said about the tax assessors office. .butthere are also concerns that led the county governing authority to request a performance review to address those concems, determine ' accounlabllily and make recommendatiOns for improvements. The balance of the findings in this rePDtllncuses on What the PRB believes needs the allention 01 the county gOVerning authority and the board of tax assessors. Management Oversight The planning horizon 01 the management 01 the talC offiCe needs to be far in the future and the BOA must be alert to valuaticin trendS to property rilalch anticipated workflow with personnel, prOcedures and equipment. ReSOLlrces Reviewed The PRS toUred the offices assigned to the BOA. reviewed stafflng levels, and observed equipment being Used. The PRS COmpared the resoUR:es deplOyed to those found In comparabfe offices and industry standards. '" ,...'. , .. The PRS noted the BOA has a hlgn deg~ 01 confidence in the Chief Appraiser. H"-ver, the PRS also noted that this COnfidence may have lUlled the BOA into delegaflng duties to the chiefapPlaisei and his staff that nOrmally shOUld be retained by the board. It appears to have led to an environment of limited December 17. 2003 , Ricrymond qounty Board of Tax Assesso~ Performance Report' Page 4 , \'!' '. , " oversight Of the c.hief appraiser's policies or reviewot the day-to-day actions of him and his staff, As such, the PABwas not satisfied that the BOA was exercising the degree ofcoOll-ol over the chief appraiser and his staft that is contemplated by law. ' For example, the BOA Shoilld be moTe invofved in matters such as strategic planning, budgeting,reviewing sales ratio studies and identIfying proper responses to valuation trends, determining the most effective organization , structure, and appraisal staff deployrilent. These matters are more'or less being handled by the chief appraiser. ,,/ ..- The PRB's review of the ,minutes revealed little evidence that the chief appraiser or his staff presented Information about market trends or otherwise expfained the basis for the chief appraiser's decisions regarding the deployment of'the appraiser resources. There was little evidence of long term planning being discussed at BOA meetings, In general, we formed the impression that the BOA was satisfied that the chief appraiser was routinely handling these matters and little oversight was necessary; , Such high confidence can be attributed somewhat to the abilities and skifJs of the chief appraiser, but the, law nevertheless 'places the respon~ibllityfor the overall management of the office on the BOA. The limited. oversight' of ,the BOA over the chief appraiser may have set the stage for some of the problems enumerated later in this report, , Employee Morale The PRB observed there is a general discontent among several members of the appraisal staft with the management of the office, tn the view of the PRS, much of this discontent can be attributed to the employee's perception that the'chief appraiser had a somewhat intolerant management style, was not open to employee suggestions and was too autocratic., While these subjective observations may go wIth the ,t~rritory of being a manager, we noted that there were some underlying perceptions that the chief appraiser was not treating the employees fairly, We saw evidence that the BOA was aware of this diScontent but had dismissed it as not being a significant problem. Generally, the PRBbelieves the BOA should investigate the chief' appraiser's current top down management style, and give consideration to implementing a team approach. ' Quality Control A significant setback in the. preparation of the 2003 tax digest occurred when a mistake was made in the procedures, associated with the advertisement of the five-year history of the tax levy required by O,C,G.A. ~48-5-32, The PRS found December 17, 2003 .' ~ . ,.11 ;-. :- Richmond County Board of Tax Assessors Performance, Report Page 5 ,; this error 10 be in large part reiated to Ihe lack of oversight of the BOA over the ,.actions'Of the chief appraiser Who took upon himself the total responsibility tor ' the preparation of this faulty advertiseme.nt. ThePRB notes that this advertlsemenl is.lhe resPOnsibility of the levying authoritles and not the chief appraiser and sees the chief, appraiser's act of preparing the ad to be a' part of a pattem of over-extension of his duties and responsibilities, Such over-extension would be less likely to occur if the BOA had been exercising proper oversight. Another significant setback in the preparation of the 2003 tax digest that signiflcantly affected the levying authoritles was the/argedeemase in the total dlgest value from the previous year, In Our short review, it appeared this 'de~rease was attributabteto theunusual/y large reductions made by the board of equalization to the values established by the BOA on the 2002 tax digest. From our interviews with board of equalization 'members, staff and others, It appeared ,that the high number of appeals and unusual reductions gave some indication that the appraisal staff's review of the assessment changes during the revaluation in 2002 was less than optimal. More importantly, there was evidence that the BOA had notproperly reviewed the work of the appraisal staff. , Furthermore, a comparison of the minutes to the results of our interviews showed there were many signHicant appraisal decisions that affected the overall results of the 2002 revaluation made by the chief appraiser that did not appear to have, been approved by the BOA. As an exampl.e, by order of the chief appraiser all adjUstments were removed from the land values without a phySical review of the 'property to determine whether this would produce a-correct reSiJlf.As-another ' eXample, there were extensive revalliations of properties that were Overdue for a Physicalinspection or individual review of the property challiCleristlcs. Basing an appraisal on obsolete data may have resultedin some property being appraised in a less than appropriate manner: Appendix A, is a nationally recognized standard that outlines,the best practices for the: mass appraisal of real property, Communications While not a Iliquirement of law, beSI piactices dictate that the BOA cominunicate regularty with the levying authorities and alert them of unfolding trends, For example, the BOA should strive to let the levyingauthorfties know the revenue impact of newly created exemptions,' inflationary and deflationary adjustments to the digest and the magnitude of revenue at risk during appeals, ' Revaluations have a significant political consequence and it is very important that levying authOrities be briefed about revaluation planning. The commissioners the PAS interviewed indicated they did not feel they were being kept well informed ' on assessment trends. The PRB observed that the communications between the BOA and the levying .authorities were insufficient for these authorities to understand and thus timely and properly react to the changing levels of taxable properties in the county. The December 17, 2003 Richmond 'County Soard of Tax Assessors Performance Report Page 6 ';.. ,', PRe also believes that communication is a two-way street and.notes that there was little evidence that any of the commissioners were occasionally attending the 'meetings of the BOA. Resources The PRS observed that the office space allocated by the county governing , authority to the BOA was inadequate for a county of this size, There is insufficient space afforded each emPloyee and the lack of private offices fOr those individuals that meet with the public, This severely Inconveniences those taxpayers wishing to present confidential information to the appraisers to support their returns. Appendix B shows the standard tor office space in this type office. The' PRB also observed that While the BOA have them;nimum appraisal staff " required by Q,C,G.A. ~ 48-5.;.262. the complexities of the property mix in Richmond County calls for higher staffing levels than the general minimums enacted by this statute 31 years ago. In our view; the Current staffing levels contributed significantly to the lack of physical review of the properties during the 2002 revaluation, The PRB recommends that the county consider the standard guidelines shown in ApPendix A and Increase the appraisal staff to more appropriate levels, Summary , The' PRBbelieves that the office of the Richmond County Boanj of Tax ' Assessors is generally Operated in a manner COnsistent with ather similarty .. ,- '.'.'.-- --'-"-.-sltuatectCOunties-btltWithles~ cOntroI-betng-exerciserJ- by the BOA than is contemplated by the statute or appropriate under the Circumstances, The PRB reCOmmends that the chief appraiser confine his actions to the apPraisal and assessment of property and not extend his actions to responsibflities of the levying authorities, The PRS recommends that the BOA,and chief'appraiserimplement procedures that provide for more thorough review of property prior to establishing new valUes, These procedures'Shoutd provide fortha eventual,phys;cal review of all property at least once, every three years. Decerrwer17.2003 Ric~mond .county Board of Tax Assessors Performance Report .. Page 7 ~. ,. t The PRB recommends. that the BOA .evaluate Its needs and communicate these to the County governing authority. The county governing authority should evaluate carefully the resources it makes available to the BOA to ensure that its important function can be completed ina timely manner annually. Respectfully submitted December 17, 20Q3, .~ ' ' . "-':---:" ' , ~yne tslScJ(welaer , ,\ ~l.r.tr~/l.;7 C.:;J.l~O,:",,_~, ar Sims ' ~7', Dennis Lee , , December 17, 2003 ,t;. . Review of the Performance of the Richmond County Board of Tax Assessors December 8, 2003 Introduction On September 22,2003, the governing authority of Richmond County, pursuant to O.C.G.A. 948-5-295.1, adopted a resolution requesting that a performance review of the Richmond County Board of Tax Assessors be conduct~d, This resolution was transmitted to the Commissioner of the Georgia Department of Revenue who appointed three competent and independent individuals toa performance review board (hereafter referred to as the PRB) on October 10, 2003, Those appointed were as follows: Wayne Blackwelder Mr. Blackwelder has been employed as an appraiser and instructor with the Property Tax Division of the Georgia Department of Revenue for 10'years. Prior to that service, he served as a property tax appraiser in Stephens County for 4 years. He is certified as an Appraiser IV by the Department. Mr. Blackwelder served as Chairman of the PRB. Lamar Sims Mr. Sims is appointed to the board of tax assessors of Rockd~lIe County and has as been employed as an appr~iser with Rockdale County for 8 years, the last 4 years he has served as the chief appraiser. Prior to that service, he served as a property tax appraiser in Newton County for 10 years, the last 3 of thc)se as chief appraiser. He is certified as an App'raiser IV by the Department. Dennis Lee Mr. Lee is appointed to the board of assessors of Twiggs County and has been employed as the chief appraiser of Peach,County for 6 years. Prior to that service, he served as the chief appraiser in Twiggs County for 3 years. He has also been employed by Bibb County, as a property tax appraiser for 8 years and has worked for several mass and fee appraisal companies since 1973, He is certified as an Appraiser IV by the D~partment. And is licensed as a Certified General Appraiser, License No. CG807 by the Georgia Appraisal Board. On November 3 - 5, 2003 the PRB conducted its investigation in the offices of the board of tax assessors in Augusta. ". : Richmond County Board of Tax Assessors Performance Report Page 2 - '.-.. .. .t' Purpose The purpose of the PRB, according to the statute,is to make a thorough and complete investigation of, the county board of tax assessors with respect to all actions of the county board of tax assessors and appraisal staff regarding the technical competency of appraisal techniques and compliance with state laws and regulations. The PRB is further directed by the statute to issue a written report of its findings that shall include such evaluations, judgments, and recommendationsas it deems appropriate. The reasonable expenses of the PRB incurred in the performance of their duties are reimbursed by the goveming .'. authority of Richmond County and include mileage, meals, lodging and cost of materials, . The governing authority of Richmond County may use the findings in this report as grounds for removal of one or more members 6f the county board of tax assessors pursuant to O,C.G,A. 948-5-295 (b) if, in its collective judgment, such removal is warranted. Scope of Review Documents Reviewed The PRBreviewed the minutes of board of tax assessors meetings for calendar years 2002 and 2003, a sample of homestead applications filed for 2003, new, conservation use applications filed for 2003, property record cards, tax maps, and deed records of the Richmond County Clerk of Superior Court. Persons Interviewed The PRB interviewed in person Commissioners Richard Colclough, Bobby G. Hankerson, and Bill Kuhlke. Mayor Bob Young was interviewed by telephone, The PRB also reviewed written comments from Commissioners Steve Sheppard and Tommy Boyles. The PRS interviewed all members ofthe Richmond County board of tax assessors (herein~fter referred to asJbe BOA), the chief appraiser, the chief administrator in the Richmond Gountytax commissioner's office, all members of Richmond County's 3 boards of equalization, selected members of the county appraisal staff, and a group of concerned citizens. ' , Property Reviewed The Department of Revenue (hereinafter referred to as the DOR) provided two of its field appraisers to assist the PRB in its investigation. The BOA authorized the appraisal staff to conduct a ~otal revaluation of all property in the county in 2002, The PRB directed the DOR appraisers to field review several properties in areas of the county where significant numbers of appeals had been filed in 2002. They were instructed to verify the accuracy of the county's tax records and competency of the techniques us~d to appraise the properties reviewed. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 3 '-; .' .... j... Resources Reviewed The PRB toured the offices assigned to the BOA, reviewed staffing levels, and observed equipment being used. The PRB compared the resources deployed to those found in comparable offices and industry standards, Significant Findings Richmond County is one of the largest taxing jurisdictions in Georgia 'and faces ' 'significant challenges in the administration of property tax, The chief appraiser has implemented several improvements to the operations of the office that have been received well by taxpayers. In our interviews with real estate professionals in the county they praised the chief appraiser for the overall improvements in customer service and noted the staff to be more responsive to their requests. The chief appraiser inherited an obsolete computer assisted mass appraisal system when he assumed his post in August 2000. He engineered the first conversion of a major county to the state endorsed WinGAPcomputer assisted mass appraisal program, which was extremely complex, He also directed the county through a major revalua~ion in 2002 using in-county resources. ." . _ ,". '.. ..... '." H_" ..... ''''. .. . . . . ~."'.' ...,.... . . ;.,.,.. ,.....,.~.,._ _. .J'..... .' .,.:.-,..... .... ..,.. ., ,-' - ".',-.' ,,',., ..".. ,{".:'.,-,'" ......, ., :- '.~. '0'" .. . .. . . The chief appraiser, the BOA members and all members of the appraisal staff have kept their education current and are properly certified by the Department of Revenue. Further, the chief appraiser is highly skilled and holds an Appraiser IV ~ertification from thp npp~rtmAnt of Rev~mIJPand..a.MAI designation from the Appraisal Foundation The chief appraiser replaced some inappropriate appraisal procedures that were in place in the county when he took over with appropriate procedures. He follows the Department of Revenue's Appraisal Procedures Manual. There are many other positive things that can be said about the tax assessors office, but there are also concerns that led the county goveming authority to request a performance review to address those concerns, determine accountability and make recommendations for improvements, The balance of the findings in this report focuses on what the PRS believes needs the attention of the county goveming authority and the board of tax assessors, ' Management Oversight The planning horizon of the management of the tax office needs to be far in the future and the BOA must be, alert to valuation trends to properly match anticipated workflow with personnel, procedures and equipment. ,..... The PRB noted the BOA has a high degree of confidence in the Chief Appraiser. However, the PRB also noted that this confidence may have lulled the BOA into delegating duties to the chief appraiser and'his staff that normally should be retained by the board. It appears to have led to an environment of limited December 17, 2003 ;. " Richmond County Board of Tax Assessors Performance Report Page 4 .....,.... oversight of the chief appraiser's policies or review ofthe day-to-day actions of . him and his staff. As such, the PRB was not satisfied that the BOA was exercising the degree of control over the chief appraiser and his staff that is contemplated by law. ' For example, the BOA should be more involved in matters such as strategic planning, budgeting, reviewing sales ratio studies and identifying proper responses to valuation trends, determining the most effective organization structure, and appraisal staff deployment. These matters are more or less being handled by the chief appraiser. - The PRB's review of the minutes revealed little evidence that the chief appraiser or his staff presented information about market trends or otherwise explained the basis for the chief appraiser's decisions regarding the deployment of the appraiser resources. There was little evidence of long term planning being discussed at BOA meetings. In general, we formed the impression that the BOA was satisfied that the chief appraiserwas routinely handling these 'matters and little oversightwas necessary. ' Such high confidence can be attributed somewhat to the abilities and skills of the chief appraiser, but the law nevertheless places the responsibility for the overall management of the office 'on the BOA, The limited oversight of the BOA over the chief appraiser may have s~t the stage for some of the problems enumerated later in this report, Employee Morale The PRS observed there is a general discontent among several members of the appraisal staff with the management of the office, In the view of the PRB, much of this discontent can be attributed to the employee's perception that the chief appraiser had a somewhat intolerant management style, was not open to employee suggestions and was too autocratic, While these subjective observations may go with the territory of being a manager, we noted that there were some underlying perceptions that the chief appraiser was not treating the employees fairly. . We saw evidence that the BOA was aware of this discontent but had .dismissed it as not being a significant problem, Generally, the PRB believes the BOA should investigate the chief appraiser's current top down management style and give consideration to implementing a team approach. Quality Control A significant setback in the preparation of the 2003 tax digest occurred when a mistake was madf3 in the procedures associated with the advertisement of the five-year history of the tax levy required by O.C.G,A, 948-5-32. The PRB found December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 5 this error to be in large part related to th~ lack of oversight of the BOA over the actions of the chief appraiser who took upon himself the total responsibility for the preparation of this faulty advertisement. The PRB notes that this advertisement is the responsibility of the levying authorit.ies and not the chief appraiser and sees the chief appraiser's act of preparing. the ad to be a part of a pattern of over-extension of his duties and responsibilities, Such over-extension would be leSs likely to occur if the BOA had been exercising proper oversight. Another significant setback in the preparation of the 2003 tax digest that significantly affected the levying. authorities was the large decrease in the total digest value from the previous year. In our short review, it appeared this decrease was attributable to the unusually large reductions made by the board of equalization to the values established by the BOA on thf;} 2002 tax digest. From our interviews with board of equalization members, staff and others, it appeared that the high number of appeals and unusual reductions gave some indication that the appraisal staff's review of the assessment changes during the revaluation in 2002 was less than optimal. More importantly, there was evidence that the BOA had not properly reviewed the work of the appraisal staff. Furthermore, a comparison of the minutes to the results of our interviews showed there were many significant appraisal decisions that affected the overall results of the 2002 revaluation made by the chief appraiser that did not appear- to have been approved by the BOA. As an example, by order of the chief appraiser all adjustments were removed from the land values without a physical review of the property to determine whether this would produce a correct result. As another example, there were extensive revaluations of properties that were overdue for a physical inspection or individual review of the property characteristics. Basing an appraisal on obsolete data may have resulted in some property being appraised in a less than appropriate manner. Appendix A is a nationally recognized standard that outlines the best practices for the mass appraisal of real property. Communications While not a requirement of law, best practices dictate that the BOA communicate regularly with the levying authorities and alert them of unfolding trends. For example, the BOA should strive to let the levying authorities know the revenue impact of newly created exemptions, inflationary and deflationary adjustments to the digest and the magnitude of revenue at risk during appeals. Revaluations have a significant political consequence and it is very important that I~vying authorities be briefed about revaluation planning, The commissi.oners the PRB interviewed indicated they did not feel they were' being kept well informed on assessment trends, The PRS observed that the communications between the BOA and the levying authorities were insufficient for these authorities to understand and thus timely and properly react to the changing levels of taxable properties in the county. The December 17, 2003 , Richmond County Board of Tax Assessors Performance Report Page 6 \.' "'--., PRB also believes that communication is a two-way street and notes that there was little evidence that any of the commissioners were occasionally attending the meetings of the BOA. Resources The PRB observed that the office space allocated by the county governing authority to the BOA was inadequate for a county of this size, There is insufficient space afforded each employee and the lack of private offices for ~hose individuals that meet with the public. This severely inconveniences those taxpayers wishing to present confidential information to the appraisers to support their returns. Appendix B shows the standard for office space in this type office. ' The PRB also observed that while the BOA have the minimum appraisal staff required by O.C.G,A. 948-5-262, the complexities of the property mix in Richmond County calls for higher staffing levels than the general minimums enacted by this statute 31 years ago. In our view, the current staffing levels , contributed significantly to the lack of physical review of the properties during the' 2002 revaluation. The PRB recommends that the county consider the standard guidelines shown in Appendix A and increase the appraisal staff to more appropriate levels. ' ..'- . '. ~ t." '.....;....... ',..- . ,". ..._' ." .~.,. "..-,'~' ..... - ....~.~..~'..~..:.~.......,......_..,."""_....:.""'.,...,,. ..._..__.._lC."...........-.._'A... ....'....._. _....... Summary The PRB believes that the office of the Richmond County Board of Tax Assessors is genera~~y operated in a manner consistent with other similarly situated counties but will. less control being exercised by,the BOA than is contemplated by the statute or appropriate under the circumstances. The, PRB believes thecurrent job -centered management style of the chief appraiser should be should be reviewed by the BOA and chief appraiser and, consideration should be given to adopting employee-centered management style. This would involve improving interpersonal skills and being responsive to employee feedback. The PRB recommends that the BOA implement proper oversight procedures and hold the chief appraiser accountable for all his actions and decisions. The PRB recommends that the chief appraiser confine his actions to the appraisal and assessment of property and not extend his actions to responsibilities of the levying authorities. The PRB recommends that the BOA and chief appraiser implement procedures that provide for more thorough review of property prior to establishing new values, These procedures should provide for the eventual physical review of all property at Ie.ast once every three years. December 17, 2003 Richmond County Board of Tax Assessors Performance Report ' Page 7 The PRB recommends that the BOA evaluate its needs and-communicate these to the county governing authority. The county governing authority should' evaluate carefully the resources itmakes available to the BOA to ensure that its important function can be completed in a timely manner annually. " Respectfully submitted December 17, 2003, w~ ~01h4-~J~~ La ar SIms ", ' c:>-":'~ __ Dennis Lee December 17, 2003 ~~. . '..' .~ . ",,' -", Richmond County Board of Tax A~sessors Performance Report Page 8 Appendix A -IAAO Standard on Mass Appraisal of Real Property' ' Approved February 2002 , 1. Scope This standard defines requirements, for the mass appraisal of real property. The primary focus is on mass appraisal for ad valorem tax purposes. However, the principles defined here should also be relevant to computer-assisted mass appraisals (or automated valuation models) used for other purposes, such as mortgage portfolio management. The standard primarily addresses the needs of the assessor, assessment over-sight agencies, and taxpayers. ' This standard addreSses mass appraisal procedures by which property can be appraised at market value, including mass appraisal application of the three traditional appreaches to value (cost, sales comparis,on, and income). Appraisals made on an other-than-market-value basis or on an individual basis are outside the scope of this standard, Where assessed value differs from market value because of statutory constraints such as use value, acquisition value, base year value, or classification, this standard does not provide guidance for determining assessed value. Mass appraisal requires complete and accurate data, effective valuation models, and proper management of resources. Section 3 focuses on the collection and maintenance of property data. Section 4 summarizes. the primary considerations in valuation methods, including the role of the three approaches to value in the mass appraisal of various types, of property. SeCtion 5 discusses certain managerial considerations: staff levels, data processing support, contracting for reappraisals, support of valuations, and benefit-cost issues. This standard combines and replaces the 1983 Standard on the Application of the Three Approaches to Value in Mass Appraisal, the 1984 Standard on Mass Appraisal. and the 1988 Standard on Urban Land Valuation. TheIAAO's assessment standards represent a consensus in the assessing profession and have been adopted by the Executive Board of the International Association oj Assessing Officers (MAD). The objective oj the MAD's standards is to provide a systematic means by which concerned assessing officers can improve and standardize the operation of their offices. The IAAO's standards are advisory in nature and the use of, or compliance with, such standards is purely voluntary If any portion of these standards is found to be' in conflict with the Uniform Standards of Professional Appraisal Practice (USPAP) or state laws, USPAP and state laws shall govern. At the time of the completion of this standard, the Technical Standards Subcommittee was composed of NancY C Tomberlin, chair; Sheldon Bluestein,' Pamela M. Dubov, CAE; James L. Pence; Jan Vann; aiul Edward Crane, associate member. This standard also benefited from the recommendations and thorough reviews of m:any IAAO members. In particular, the subcommittee would like to thank Peter L. Davis; Alan S. Dornfest, MS; Robert J. Gloudemans; Wayne D. Llewellyn, CAE; Al Mobley, cAE, AAS,' Steve D. Pruitt; and Joan Young, RES. December 17,2003 ,-,. -,~ ~.-~l;.-'m:'~' '.' ' Richmond County Board of Tax Assessors Performance Report Page 9 ,..... ..' 2, Introduction Market value for assessment purposes is generally determined through the application of mass appraisal techniques. Mass appraisal is the process of valuing a group of properties as of a given date using common data, standardized methods, and statistical testing (IAAO [1990, chapter 5] and Gloudemans [1999, chapter 5]). To determine a parcel's value, ass~sing officers must rely upon valuation equations, tables, and schedules developed through mathematical arialysis of market data. Unless required by law, values for individual parcels should not be based solely on the sale price of a property; rather, valuation schedules and models should be consistently applied to correct, complete, and up-ta-date property data. Properly administered, the development, construction, and use of a computer-assisted mass appraisal system results in a valuation system characterized by accuracy, uniformity, equity, reliability, and low per-parcel costs (see section 5.5). Except for unique properties, individuaJ. analyses and appraisals of properties are not practical for ad valorem tax purposes, 3. Collecting and Maintaining Property Data Choose software wisely because it can limit the data that can be collected. The choice of data is largely dictated by the valuation software, whether it is programmed in house or supplied by a commercial service, a mass appraisal comPany, or a state agency. 3.1 Overview Uniform and accurate valuation of property requires correct, complete, and up-to-date property data. Assessing offices must establish effective procedures for collecting and maintaining H ,,;.pr.operty data (that 'is;-property 'ownership,'location, size,Huse,' physical characteristics, sales prices,. rents, costs, and operating expenses). Such data are also used for performance audits, defense of appeals, public relations, and management information. The following sections recommend procedures for collecting these data. ------"3:2'-Geographle-oata ----- ,_,__~~~__"'H' Assessors should maintain accurate, up-ta-date cadastral maps (also known as assessment maps, tax maps, parcel boundary maps, and property ownership maps) covering the entire jurisdiction. At a minimum these maps should display a unique parcel number for each parcel. Such cadastral maps allow assessing officers to identify and locate all parcels, in both the field and the office. Maps become especially valuable in the mass appraisal process when a geographic information system (GIS) is used. A GIS permits graphic displays of sales prices, assessed values, inspection dates, work assignments, land' uses, and much more, In addition, a GIS permits high-level analysis of nearby sales, neighborhoods, and market trends; when linked to a computer-assisted mass appraisal system, the results can be very useful. For additional information on cadastral maps, parcel identification systems, and GIS, see the Standard on Cadastral Maps and Parcel Identifiers (IAAO 1988 [revision forthcoming]), Procedures and Standardsfora Multipurpose Cadastre (National Research Council 1983), and GIS Guidelines for Assessors (URISAlIAAO 1999). . 3,3 Property Characteristics Data The assessor should collect and maintain sufficient property characteristics data for classification, valuation, and other purposes. Accurate valuation of real property by any method requires descriptions of land and building characteristics. December 17, 2003 _00. o' 00 ' Richmond County Board of Tax Assessors Performance Report Page 10 3,3.1 Selection of Property Characteristics Data Property characteristics to be collected and maintained should be based on the following: · factors that influence ~e market in the locale in question · requirements of the valuation methods that will be employed · requirements of classification and property tax policy · requirements of other governmental and private users · marginal benefits and costs of collectiJig and maintaining each property characteristic Determining what data on property characteristics to collect and maintain for a computer-assisted mass appraisal system is a crucial decision with long-term consequences. A pilot program is one means of evaluating the benefits and costs of collecting and maintaining a particular,set of property characteristics. (See IAAO [1990, chapter 5] and Gloudemans [1999, chapter 2].) In addition, much can be learned from studying the data used i.ri successful computer-assisted mass appraisals in other jurisdictions. Data collection and maintenance are usually the most costly aspects of a computer-assisted mass appraisal. Collecting data that are of little importance in the assessment process should be avoided unless another governmental or private need is clearly demonstrated. The quantity and quality of existing data should be reviewed. If the data are sparse and unreliable, a major recanvass will be necessary, Data that have been confirmed to be reliable should be used whenever possible. New valuation programs or enhancements requiring major recanvass activity or conversions to new coding formats should be viewed with suspicion when the existing 'database already contains most major property characteristics and is of generally good quality. See Gloudemans (1999, chapter 2) and IAAO (1990, chapter 5) for characteristics Qf land, location, and improvements usually required for mass appraisal. 3,3.2 Collecting Property Characteristics Data 3.3.2,1 Initial Data Collection The primary way to obtain property characteristics data is to physically inspect the properties. , This inspection can be performed either by appraisers or by specially trained data collectors. In a joint approach, experienced appraisers wQuld make key subjective decisions, such as the assignment of construction quality class or grade, and data collectors would gather all other details. 'Depending on the data required, an interior inspection might be necessary. At a minimum, a comprehensive exterior inspection should be conducted. To ensure that data are recorded correctly and consistently, the data collection program must incorporate a comprehensive quality control system with proper checks and audits such as audit trails, checks of logical consistency, and checks of validity (for example, numeric characters in numeric fields). 3.3.2,2 Data Collection Format Data should be collected in a prescribed format designed to facilitate both the collecting of data in the field and entry of the data into the computer system. A logical arrangement of the collection format makes data collection easier, For example, all items requiring an interior inspeCtion should be grouped together. The coding of data should be as objective as possible, with measurements, counts, and check-off items used in preference to items requiring subjective evaluations (such as "number of plumbing fixtures" versus "adequacy of plumbing: poor, average, good"). With respect to check-off items, the available codes should be exhaustive and mutually exclusive, so that exactly one code logically pertains to each observable variation of a building feature (such as December 17,2003 Richmond County Board of Tax Assessors Performance Report Page 11 .~ . . " type of room). In general, the data collection format should maintain consistency among data collectors, be clear and easy to use, and adaptable to virtually all types of construction. Specialized data collection formats may be necessary to collect information on agricultural property, timberland, industrial parcels, and other property types. 3;3,2,3 Data Collection Manuals A clear, thorough, and precise data collection manual should be developed. updated, and maintained. The written manual should explain how to collect and record each data item. Pictures, examples, and illustrations are particularly helpful. The manual should be simple yet complete, with a high degree of standardization for uniformity. Data'collection staff should be trained in the use of the manual and updates to maintain consistency, The manual should present guidelines for personal conduct during field inspections and, if interior data are required. should , outline procedures to follow when the property owner has denied access or when entry might be risky . 3,3,3 Data Entry - To avoid duplication of effort, the data collection form should be able to serve as the data entry form. All data entry programs must include data edit capabilities. These are error or warning messages generated in response to invalid or unusual data items. Examples of data errors include missing data codes and invalid characters. Warning messages'should also be generated when data values exceed normal ranges (for example, more than eight rooms in a 1,200-square-foot residence). Many problems can be prevented by incorporating editing in the data entry/maintenance programs rather than deferring the "cleaning up" of the data to the time when , the valuation models are being constructed. Data entry reviews should be made to determine possible problem areas. 3,3.4 Maintaining Property Characteristics Data Property characteristics data should be continually updated in response to changes brought about by new construction, new parcels, remodeling, demolition, and destruction. There are several ways of doing this. The most efficient involves building permits. Ideally, strictly enforced local ordinances would require building permits for all significant construction activity, and the assessor would be given copies of the permits. This would allow the assessor to identify properties whose characteristics are likely to change, to inspect such parcels on a timely basis (preferably as close to the 'assessment date as possible), and to update the files accordingly. Aerial photographs also can be helpful in identifying new or previously unrecorded construction and land use. Some jurisdictions have used self-reporting, in which property owners are given the data in the assessor's records and asked to provide additions or corrections. Information derived from multiple listing sources and other third-party vendors can be used to update property records. A system should be developed for making periodic field inspections ,to identify properties and ensure that property characteristics data are complete and accurate. Properties should be periodically revisited to as-certain that assessment records are accurate and current. Assuming that most new construction activity is identified through building permits or other ongoing procedures, a physical review at least every four to six years should be conducted, including an on-site verification of property characteristics. A reinspection should include partial remeasurement of the two most complex sides of improvements and a walk around the improvement to identify additions and deletions or independent review of the current measurements with specific requirements by an outside auditing firm or oversight agency, Photographs taken at previous physical inspections can help identify changes.' December 17, 2003 " ',,;' . . . Richmond County Board of Tax Assessors Performance Report Page 12 3,4 Sales Data ' < States and provinces should seek maildatory'disclosure laws to ensure comprehensiveness of sales data files, Regardless of the availability of such statutes, a file of sales data must be maintained. , Sales data are required in all applications of the sales comparison approach, iiJ. the development of market-based depreciation schedules iiJ. the cost approach, and in the derivation of capitalization rates or discount rates. Refer to IAAO (1990, chapter 5)' and Gloudemans (1999, chapter 2) for guidelines relating to the acquisition and processing of sales data; 3,5 Income and Expense Data Income and expense data must be collected for income-producing property, as these data are required in the application of the iiJ.comeapproach to value. (See section 4.4.) Refer to IAAO (1990, chapter 5) and Gloudemans (1999, chapter 2) for guidelines addressiiJ.g the collection and processing of iiJ.come and expense data. 3,6 Cost and Depreciation Data , Current cost and depreciation data adjusted to the local market are required for the cost approach (see section 4.2), Cost and depreciation manuals and schedules maybe purchased from c commercial services or created iiJ.-house, See Gloudemans (1999, chapter 4) for guidelines on ' creating manuals and schedules, , 4, Valuation 4,1 Valuation Models Any appraisal, whether single-property appraisal or mass appraisal, uses a model, that is, a - representation in ,words or an equation of the relationship between value and variables representing factors of supply and demand. Mass appraisal models attempt to represent the market for a specific type of property in a specified area. Mass appraisers must first specify the model, that is, identify the variables (supply and demand factors) that influence value, for example, square feet of living area. Then, mass appraisers must calibrate the model, that is, determine the adjustments or coefficients that best represent the value contribution of the variables chosen, for example, the dollar amount the market places on each square foot of living area. Careful and extensive market analysiS is required for both specification and calibration of a model that estimates values accurately. All three approaches to value-the cost approach, the sales comparison approach, and the income approach-are modeled for mass appraisal. Geographic stratification is appropriate when the value of property attributes varies significantly among areas. It is particularly effective when housing types and styles' are relatively uniform within areas. Separate models can be developed for market areas (also known as economic or model areas). Subareas or neighborhoods can serve as variables in modeling and can also be used in land value tables and selection of comparable sales, (See Gloudemans [1999, chapter 3].) Smaller jurisdictions may find it sufficient to develop a single residential model. Commercial and iiJ.come-producing properties should be stratified by property type. In general, separate models should be developed for apartment, warehouse/industrial, and retail properties., Large jurisdictions may be able to stratify apartment properties further by type or area or to develop multiple commercial models. 4,2 The Cost Approach The cost approach is applicable to virtually all improved parcels and, if used properly, can produce highly accurate valuations. The cost approach is more reliable for newer structures of standard materials, design, and workmanship.' December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 13 Reliable cost data are imperative in any successful application of the cost approach; The data . - , must be complete, typical, and current. Current construction costs should be based on the cost of replacing a structure with one of equal utility, using current materials, design, and building standards~ Costs of individual construction components l,Uld building items should also be included in order to adjustfor features that differ from the base specifications. These costs should ,be incorporated into a construction cost manual and related computer software. The software can perform the valuation function, and the manual, in addition to providing documentation, can be used when non-automated calculations are required. ' Construction cost schedules can be developed internally, based on a systematic study of local construction costs, obtained from firms specializing in such information, or custom generated by a contractor, Cost schedules should be verified for accuracy by applying them to recently constructed improvements of known cost. Construction costs also should be updated before each assessment cycle. One weakness in the cost approach tends to occur in the estimation of accrued depreciation. This estimate must be based on non-cost data (primarily sales) and can involve considerable subjectivity. \ Depreciation schedules can be extracted from sales data in several ways. Methods for extracting depreciation can be found in IAAO (1990, chapter 8) and Gloudemans (1999, chapter 4). Another key difficulty in use of the cost approach is determination of land value, which is estimated independently from sales (often from sales of improved property because sales of vacant land are scarce). Land values used in the cost approach must be current and consistent. Section 4.5 provides standards for land valuation in mass appraisal. 4.3 The Sales Comparison Approach The sales comparison approach estimates the value of a subject property by analyzing the sales prices of similar properties. Mass appraisal programs should be able to adjust sales prices for date of sale. Adjustments should be considered for financing, personal property, assumed leases, delinquent taxes, and special assessments. Sales with special conditions, such as trades, exchanges, partial interests, land contracts, and auctions require a thorough validation and may be used with caution, See Gloudemans (1999, chapter 6), IAAO (1990, chapter 6), and IAAO (1999). Reliability of the sales comparison approach rests on the number and quality of available sales. When sufficient valid sales are available, this approach tends to be the preferred valuation method. In mass appraisal, application of the sales comparison approach geIlerally involves the use of automated statistical techniques, with multiple regression analysis (MRA), adaptive estimation procedure (feedback), and automated comparable sales analysis. (See Gloudemans [1999, chapter 4], IAAO [1990, chapter IS], and IAAO [1999]:) 4.4 The Income Approach In general, for income-producing properties the income approach is the preferred valuation approach when reliable income and expense data are available, along with well~supported income multipliers, overall rates, and reqUired rates of return on investment. Successful application of the income approach requires the collection, nlaintenance, and careful analysis of income and expense data. December 17, 2003 .~ . ' -,' ;; Richmond County Board of T~x Assessors Performance Report Page 14 ~. .' . Mass appraisal applications of the income approach begin with collecting and processing income and expense data. (These data should be expressed on an appropriate per-unit basis; such as per square foot or per apartment unit.) Appraisers should then compute normal or "typical" gross incomes, vacancy rates, net incomes, and expense ratios. These figures can be used to judge the reasonableness of reported data for individual parcels and to estimate income and expense figures for parcels with unreported data. Alternatively, models for estimating gross or net income and expense ratios can be developed using actUal income and expense data from a sample of , ' properties ,and calibrated using multiple regression analysis. For an introduction to income modeling, see IAAO (1990, chapter 14) and Gloudemans (1999, chapter 3).The developed income figures can be capitalized into estimates of value in a number of ways. The most direct method involves the application of gross income m~tipliers, which express the ratio of market value to gross income. At a more refined level, net income multipliers or their reciprocals, overall capitalization rates, can be developed and applied. These multipliers and rates should always be extracted from actual income and sale price data obtained from properties that have recently been sold. Income multipliers and overall rates tend to provide reliable, consistent, and readily supported valuations when good sales and income data are available. Table 1 Rank of Typical Usefulness of the Three Approaches to Value in the Mass Appraisal of Major Types of Property Single-family residential Multifamily residential Commercial Industrial Non-agricultural land Agricultural. Special-purpose.. Cost approach 2 3 '3 1,2 Sales comparison approach 1 1,2 2 3 1 2 2,3 Income approach 3 1,2 , 1 1,2 2 1 2,3 1 · Includes fann, ranch, and forest properties ..Includes institutional, governmental, resort, and recreational properties 4,5 Land Valuation State or local laws may require the value of an improved parcel to be separated into land and improvement components. When the sales comparison or income approach is used, an independent estimate of land value.must be made and subtracted from the total property value to obtain a residual improvement value. Some computerized valuation techniques provide a separation of total value into land and building components. Land values should be reviewed annually. At least once every four to six years the properties , should be physically inspected and revalued. The sales comparison approach is the primary approach to land valuation and is always preferred when sufficient sales are available. In the absence of adequate sales, other techniques used in mass appraisal include allocation, abstraction, anticipated use, capitalization of ground rents, and land residual capitalization. (See IAAO [1990, chapter 7] and Gloudemans [1999, chapter 3].) 4.6 Considerations by Property Type The appropriateness of each valuation approach varies with the type of property under consideration. Table 1 ranks the relative usefulness of the three approaches in the mass appraisal of major types of properties. Thetable assumes that there are no major statutory barriers to obtaining cost, sales, and income data. Again, although certain approaches tend to produce better results for a given type of property, the use of;.two or more approaches should produce greater accuracy. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 15 ~..., ' 4,6,1 Single-Family Residential Property , The sales comparison approach is the best approach for single-family residential property, including condominiums, Automated versions of this approach are highly efficient and generally accurate for the majority of these properties. The cost approach is a good supplemental approach and should serve as the primary approach when the sales data available are inadequate. The income approach is usually inappropriate for mass appraisal of single-faririIy residential properties, because most of these properties are not rented. 4,6.2 Multifamily Residential Property The sales comparison and income approaches are preferred in valuing multifamily residential property when sufficient sales and income data are available. Multiple regression analysis and related techniques, have been successfully used in valuing this property type. Income multipliers can also be highly effective. As with other residential property, the cost approach is useful in providing supplemental valuations and can serve as the priIIiary approach when good sales and income data are not available. 4.6,3 Commercial and Industrial Property The income approach" is the most appropriate method to apply when valuing commercial and industrial property if sufficient income data are available. Direct sales comparison models can be equally effective in large jurisdictions with sufficient sales. When a sufficient supply of sales data and income data is not available, the cost approach should be applied. However, values generated should be periodically checked against available sales data. Cost factors, land values, and depreciation schedules must be kept current through periodic review. 4,6.4 Non-Agricultural Land The sales comparison approach is the preferred approach for non-agricultural land. Application of the sales comparison approach to vacant land involves the collection of sales data, the posting of sales data on maps, the calculation of standard unit values (such as value per square foot, per front foot, or per parcel) by area and type of land use, and the development of land valuation maps or computer-generated tables, in which the pattern of values is displayed. When vacant land sales are not available or are few, additional benchmarks can be obtained by subtracting the replacement cost new less depreciation of improvements from the Sales9prices of improved parcels. The success of this technique requires reliable cost data and tends to work best for relatively new improvements, for which depreciation is minimal. If neither vacant-parcel nor improved-parcel sales data are available, the assessor will need to apply allocation methods or use valuation methods that provide separate land and building values. Sometimes income approach applications can also be used, 4.6.5 Agricultural Property If adequate sales data are available and agricultural property is to be appraised at market value, the sales comparison approach would be preferred. However, nearly every state or province provides for use-value assessment (and usually appraisal), which significantly understates the market value for agricultural property, so the sales comparison approach is usually not applicable. Because of this limitation, it is imperative to obtain good income data and to use the income approach for agricultural land. Land rents are often available, sometimes permitting the development and application of overall capitalization rates. This method, of course, also entails the estimation of nor-mal land rents for unrented parcels. When agricultural parcels include improvements, the cost approach or sales comparison models that provide separate building values may be used to determine their value. December 17, 2003 , Richmond County Board of Tax Assessors Perfonnance Report Page 16 -' .,; 4,6,6 Special-Purpose Property The cost approach tends to be most appropriate in the appraisal of special-purpose properties, due to the distinctive nature of such properties and the general absence of adequate sales or income data. 4,7 Frequency of Reappraisals , , Section 4.2.2 of the Standard on Property Tax Policy (IAAO 1997) states that current market value implies annual assessmentof all property. Annual assessment does not necessarily mean, however, that each valuation must be reviewed or recomputed individmilly. Instead, trending factors based on criteria such as propertY type, location, size, and age can be developed and applied to groups of properties: These factors should be derived from ratio studies or other market analyses, ' Analysis of ratio study data can suggest groups or strata of properties in need of. physical review, In general, trending factors can be highly effective in maintaining equity when appraisals are uiliform within strata, However, such factors are not a substitute for physical reviews and individual reappraisals, which are required to correct lack of uniformity within strata. Although assessment trending can be effective for short periods, properties should be physically reviewed and individually reappraised at least every four to six years. This can be accomplished in at least three ways: . reappraising all property at periodic intervals (that is, every four to six years) . reappraising properties on a cyclical basis (for example, one-fourth or one-sixth each year) , reappraising on a priority basis as indicated by ratio studies or other considerations while still ensuring that all properties are physically reviewed at least every sixth year 5. Managerial Considerations , 5,1 Overview Mass appraisal requires human, computing, and other resources to be well managed and appropriate appraisal and analytical methods to be employed. In this section certain key managerial considerations are discussed, 5.2 Staffing A successful in-house appraisal program requires a sufficiently large staff composed of persons skilled in general administration and supervision, appraisal, mapping and drafting, data processing, and secretarial and clerical functions, Typical staffing s,izes and patterns for jurisdictions of various sizes are illustrated in IAAO (1990, chapter 16). Unless efficiency or practical concerns dictate other-wise, persons performing the various mass appraisal nmctions should be employees of the assessor. When these functions are not performed by assessment staff, it is imperative that they be adequately provided by other departments, an oversight agency, ~ service bureau, a qualified contractor, or another source. Strong lines of communication must be established between the assessor's staff and the designated support groups. ' 5.3 Data Processing Support , Computer-assisted mass appraisals require considerable data processing support. (See the Standard on Facilities, Equipment, Computers, and Supplies [lAAO 1996].) 5.3.1 Hardware j't December 17,2003 Richmond Co~nty Board of Tax Assessors Performance Report Page 17 The hardware should be powerful enough to permit computerization of appropriate applications of the cost, sales comparison, and income approaches, as well as providing word processing, data inquiry, and activity summaries. The requirements for efficient ruIining of desired 'software should be established before the acquisition of hardware. Computer equipment can be purchased, leased, rented, or shared with other jurisdictions. If the purchase option is chosen; the equipment should be easy to upgrade so that technological developments can be taken advantage of without purchasing an entirely new system 5,3,2 Software Computer software can be developed internally, adapted. from software developed by other public ' agencies, or purchased (in whole or in part) from private vendors. (Inevitably there will be some tailoring needed to adapt externally developed software to the requirements of the user's environment.) Each alternative bas advantages and disadvantages. The software should be designed so that it can be easily modified; it should also be well documented. at'both the appraiser/user and programmer levels. Security measures should exist to prevent unauthorized use , and to provide backup in the event of accidental loss or destruction of data: ~.4 Contracting for Appraisal Services 5.4.1 Overview Reappraisal contracts can include mapping, ,data collection, data processing, and other services, as well as valuation, They offer the potential of acquiring professional skills and resources quickly. Often these skills and resources are not available internally. Contracting for these services can permit the jurisdiction to maintain a modest staff and to budget for reappraisal on aperiodic basis, but also makes the assessor less likely to develop in-house expertise. (See the Standard on Contracting for Assessment Services [IAAO 2002].) d 5.4.2 In-House Staff The assessor's staff must have confidence in the appraisals and be able to explain and defend them, This confidence begins with application of reliable appraisal techniques, generation of appropriate valuation reports, and review of preliminary values. It may be helpful to have reports that list each parcel. its characteristics, and its calculated value. Parcels with unusual characteristics, extreme values, or extreme changes in values should be identified for subsequent individual review. Equally importaIit, simimary reports should show average values, value changes, and ratio study statistics for various strata of properties. These should be reviewed to ensure the overall consistency of values for various types of property and various locations. (See the Uniform Standards of Professional Appraisal Practice, Standards Rule 6-7, for reporting requirements for mass appraisals [The Appraisal Foundation, Appraisal Standards Board 2002].) The staff should also be prepared to support individual valuations as required. preferably through comparable sales. At a minimum, staff should be able to produce a property record and, explain the basic approach (cost, sales' comparison, or income) used to estimate the value of the property. A property owner should never merely be told that "the computer" or "the system" produced the appraisal. Generally, the staff should tailor the explanation to the taxpayer's knowledge and expertise. Equations converted to tabular form can be used to explain the basis for valuation. Cost tables can be used to explain values based on the cost approach. In all cases, the assessor's staff should be able to produCe sales or appraisaIs of similar properties in order to support (or at least explain) the valuation of the property in question. Comparable , sales can be obtained from reports that list sales by such features as type of property, area, size, and age. Alternatively, interactive programs can be obtained or developed that identify and display the most comparable properties. " December 17, 2003 ,Richmond County Board of Tax Assessors Performance Report Page 18 . .,.- Assessors should notify property owners of their valuations in sufficient time for property owners to discuss their appraisals with the assessor and appeal the value if they choose to do so (Standard on Public Relations [IAAO 2001]). Statutes should provide for a fonnal appeals process beyond the assessor's level (Standard on Assessment Appeal [IAAO 2001]). , , 5,5 Benefit-Cost Considerations 5,5,1 Overview The object of mass appraisal is to produce equitable valuations at low costs. Improvements in equity generally require increased expenditures. Benefit-cost analysis in mass appraisal involves two major issues, one of policy and the other of administration. ' 5,5,2 Policy Issues , ' An assessment jurisdiction requires a certain expenditure level simply to inventory, list, and value properties. Beyond that point, additional expenditures make possible rapid improvements in equity initially, but marginal improvements in equity diminish as expenditure increases. At a minimum, jurisdictions should budget to meet statutory standards of equity. Refer to the Standard on Ratio Studies (IAAO 1999) for a listing of performance standards. 5,5,3 Administrative Issues Maximizing equity per dollar of expenditure is the primary responsibility of assessment administration. The assessor must provide leadership, make decisions, and get results by planning, budgeting, organizing, and controlling within all social, economic, and gov-ernmental 'limits (lAAO 1990, chapter 16). The computer-assisted mass appraisal system selected must be designed and-used to evaluate appraisal performance and ensure compliance with laws, , regulations, and policies. References The Appraisal Foundation,' Appraisal Standards Board. 2002 (updated annually). Uniform standards of professional appraisal practice. Washington DC: The Appraisal Foundation. Gloudemans, Robert J. 1999. Mass appraisal of real property. Chicago: International Association of Assessing Officers. International Association of Assessing Officers. 1990. Properly appraisal and assessment administration. Chicago: International Association of Assessing Officers. International Association of Assessing Officers. 1988 [revision forthcoming]. Standard on , cadastral mapping, Chicago: International Association of Assessing Officers, International Association of Assessing Officers. 1996 [revision forthcoming]. Standard on facilities, computers, equipment, and supplies. Chicago: International Association of Assessing Officers. - International Association of Assessing Officers. 1996. Standtird on the valuation of personal properly. Chicago: International Association of Assessing Officers, International Association of Assessing Officers. 1997. Standard on property tax policy. Chicago: International Association of Assessing Officers. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 19 International Association of Assessing Officers. 1999. Standard on ratio studies. Chicago: International Association of Assessing Officers. International Association of Assessing Officers. 2000. Standard on professional development. Chicago: International Association of Assessing Officers. International Association of Assessing Officers. 2001. Standard on assessment appeal. Chicago: International Association of Assessing Officers. International Association of Assessing Officers. 2001.Standard on public relations. Chicago: International Association of Assessing Officers. International Association of Assessing Officer~, 2001. Standard on the valuation of property affected by environmental contamination. Chicago: International Association of Assessing . Officers. International Association of Assessing Officers. 2002. Standard on contracting for assessment services. Chicago: International Association of Assessing Officers. National Research Council. 1983. Procedures and standards for a multipurpose cadastre. Washington, DC: National Research Council. Urban and Regional Information Systems Association and International Association of Assessing Officers. 1999, GIS guidelines for assessors. Park Ridge, IL, and Chicago: Urban and Regional Information Systems Association and International 'Association ofAsses~ing Officers. Glossary Abstraction Method-Method of land valuation in the absence of vacant land sales, whereby improvement values obtained from the cost model are subtracted from sales prices of improved parcels to yield residual land value estimates. Also called land residual technique. Accrued Depreciation-(1) The amount of depreciation, from any and all sources, that affects the value of the property in question on the effective date of the appraisal. (2) In accounting, the amount reserved each year or accumulated to date in the accounting system for replacement of a building or other asset. When depredation is recorded as a dollar amount, it may be deductible from total plant value or invest-ment to arrive at the rate basefor public utilities. See also Depreciation. Acquisition Value-An assessed value based on the cost of acquiring the property; increases in this value are usually limited until the next qualifying sale. Adaptive Estimation Procedure (AEP)-A cOrilputerized, iterative, self-referential procedure using properties for which sales prices are known to produce a model that can be used to value properties for which sales prices are not known. Also called "feedback." Adjusted Sale Price-The sale price that results from adjustments made to the stated sale price to account for the effects of time, personal property, financing, or the like. Adjustments-Modifications in the reported value of a variable, such as sale price or gross income. For ex-ample, adjustments can be used to estimate market value in the sales comparison December 17, 2003 Richmond County Board of Tax Assessors Performance Report 'Page 20 . \. approach by adjusting the sale price of the comparable for differences between comparable and subject properties. Ad Valorem Tax-A tax levied in proportion to the value of thing being taxed. Aerial Photograph-A photograph of a part of the earth's surface taken by an aircraft-supported camera. Agricultural Property-Improved or unimproved land devoted to or available for the producti~n of crops or other agricultural products, livestock, and agricultural support buildings. ,=.' Allocation Method-A method used to value land, in the absence of vacant land sales, by using a typical ratio of land to improvement value. Also called land ratio method. ,Appraisal Foundation, The-The organization authorized by the United States Congress as the source of appraisal standards and appraiser qualifications. Appraisal Ratio-{l) The ratio of the appraised value to an indicator of market value. (2) By extension, an estimated fractional relationship between the appraisals and market values of a group of properties. See also Level of Appraisal. Appraisal Ratio Study-A ratio study using independent expert appraisals as indicators of market value, Arm's-Length Sale-A sale between two unrelated parties, both seeking to maximize their positions from the transaction. Assessment Cyc1e--A legally sanctioned reappraisal period generally ranging from one to ten years, Assessment Date-- The status date for tax purposes. Appraised values reflect the status of the property and any partially completed construction as of this date, Assessment Equity-The degree to which assessments bear a consistent relationship to market value. Assessment Level-The common, or oy-erall, ratio of assessed values to market values. Assessment Maps-See Cadastral Map. Assessment Rati~(l) The'fractional relationship an assessed value bears to the market value of the property in question. (2) By extension, the fractional relationship the total of the assessment roll bears to the total market value of all taxable property ina jurisdiction. See Level of Assessment. Assessment Ratio Study-An investigation intended to determine the assessment ratio and assessment equity. Assessment Rati~(1) The fractional relationship an assessed value bears to the market value of the property in question, (2) By extension, the fractional relationship the total of the assessment roll bears to the total market value of all taxable property in a jurisdiction. See Level of Assessment. December 17, 2003 Richmond CO,unty Board of Tax Assessors Performance Report Page 21 Assessment Ratio Study-An investigation intended to determine the assessment ratio and assessment equity. Audit-A systematic investigation or appraisal of procedures or operations for the purpose of determining conformity with specifically prescribed criteria. Audit, Perfonnance-An analysis of an organization to determine whether or not the quantity and q~ality of work performed meets standards. 'Ratio studies are an important part of perfoniiance audits of an assessing organization; Audit, Procedural-An examination of an organization to determine whether established or recommended procedures are being followed. ' Audit Program-The procedures undertaken or particular work done by an accountant in conducting an examination. Audit Trail-A set of records of the changes made to another set of records. Automated Valuation Model-A computer program for property valuation that analyzes data using an automated process. See also Computer-assisted Mass Appraisal. Base Year Value-In a nonmarket-value assessment system, the assessed value established as of a specific year. Benchmark--(l) A term used in land surveying to mean a known point of reference. (2) In property appraisal, a property of known value and of known effective age and replacement cost. (3) By extension, a model property to be used in determining by comparison the grade or quality class of other properties. Cadastral Map-A scale map displaying property ownership boundaries and showing the dimensions of each parcel with related information such as parcel identifier, survey lines, and easements. Calibration-The process of estimating the coefficients in a mass appraisal model. CAMA-See Computer-assisted Mass Appraisal. Capitalization Rate-Any rate used to convert an estimate of future income to an estimate of market value; the ratio of net operating income to market value. Capitalization of Ground Rents-A method of estimating land value in the absence of comparable sales; applicable where there is an income stream; for ex-ample, to farmland and comm.ercialland leased on a net basis. Class-A set of items defmed by common characteristics. (1) In property taxation, property classes such as residential, agricultural, and industrial may be defined. (2) In assessment, building classification systems based on type of building design, quality of construction, or structural type are common. (3) In statistics, a predefined category into which data may be put for further analysis. For example, ratios may be grouped into the following classes: less than 0.500, 0.500 to 0.599, 0.600 to 0.699, and so forth. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 22 ,. '.... Coding-{l) The act of reducing a deScription of a unique object. such as a parcel of real estate, to a set of one or more measures or counts of certain of its characteristics, such as square footage, number of bathrooms, and the like. (2) Encoding, a related term. is usually used to refer to the act of translating coded descriptions ~seful to human beings into a form that can be processed by computers. (3) Coding is sometimes also used to refer to the writing of instructions that direct the processing done by comput-ers. Coefficient-:-<l) In a mathematical expression, a number or letter preceding and multiplying another quantity. For example, in the expression, 5X, 5 is the coefficient of X, and in the expression a Y, a is the co-efficient of Y. (2) A dimensionless statistic, useful as a measure of change or relationship; for example, correlation coefficient. ' Commercial Property-Generally, any nonindustrial, nonresidential realty of a commercial enterprise. Includes realtY used as a retail or wholesale establishment, hotel or motel, service, station, commercial garage, warehouse, theater, bank, nursing home, and the like, Comparable Sales; Comparables--(l)- ReCently sold properties that are similar in important respects to a property being appraised. The sale price and the physical, functional, and locational characteristics of each of the properties are compared to those of the property being appraised in order to arrive at an estimate of value, (2) By extension, the term "comparables" is sometimes used to refer to properties with rent or income patterns comparable to those of a property being , ' appraised. Comparative Unit Methodc-(l) A method of appraising land parcels in which an average or typical value is estimated for each stratum of land. (2) A method' of estimating replacement cost in which all the direct and indirect costs of a structure (except perhaps architect's fees) are aggregated and specified with reference to a unit of comparison such as square feet of ground area or floor area, or cubic content. Separate factors are commonly specified for different intervals of the unit of comparison and for different story heights, and separate schedules are commonly used for different building types and quality classes. Computer-assisted Assessment System-A system for assessing real and personal property with the assistance of a computer. A computer may be used, for example, in the appraisal process, in keeping track of ownership and ex~mption status, in printing the assessment roll, in coordinating the work load of real property appraisers and personal property appraisers with respect to the assessment of commercial and industrial properties, 'and in a number of other areas. Computer-assisted Mass Appraisal (CAMA}-'--A system of appraising property, usually only certain types of real property, that incorporates computer-supported statistical analyses such as multiple regression analysis and adaptive estimation procedure to assist the appraiser in estimating. value. Cost-The money expended in obtaining an object or attaining an objective; generally used in appraisal to mean the expense, direct and indirect, of constructing an improvement. Cost Approach-(l) One of the three approaches to value, the cost approach is based on the principle of substitution-that a rational, informed purchaser would pay no more for a property than the cost of building an acceptable substitute with like utility. The cost approach seeks to determine the replacement cost new of an improvement less depreciation plus land value, (2) The method of estimating the value of property by (a) estimating the cost of construction based on replacement or reproduction cost new or trended historic cost (often adjusted by a local December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 23 .~ -. multiplier), (b) subtracting depreciation, and (c) adding the estimated land value. The land value is most frequently determined by th(: sales comparison approach.' ' Cost Schedules-Charts, tables, factors, curves, equations, and the like intended to help estimate the cost of replacing a structure from a knowledge of some other factors, such as its quality class and number of square feet. Data-The general term for masses of numbers, codes, and symbols generally . "Data'~ is the plural of datum, one element of data. Data Edit-The process of examining recorded data to ensure that each element of data is reasonable and is consistent with others recorded for the same object, such as a parcel of real estate. Data editing, which may be done by persons or by computer, Is essentially a mechanical process, distinct from verifying the correctness of the recorded information by,calling or writing property owners. Data Management-The human (and sometimes computer) procedures employed to ensure that no information is lost through negligent handling of records from a file, that all information is properly supplemented and up-ta-date, and that all information is easily accessible. Depreciation-Loss in value of an object, relative to its replacement cost new, reproduction cost new, or original cost, whatever the cause of the loss in value. Depreciation is sometimes subdivided into three types: physical deterioration (wear and tear), functional obsolescence (suboptimal design in light of cur-rent technologies or tastes), and economic obsolescence (poor location or radically diminished demand for the product). See also Accrued Depreciation. Depreciation Schedules-Tables used in mass appraisal that show the typic~ loss in value at various ages or effective ages for different types of properties. ' Discount Rate-The rate of return on investment; the rate an investor requires to discount future in-come to its present worth. . ' , ' Economic Area-A geographic area, typically encompassing agroup of neighborhOOds, defined on the basis that the properties within its boundaries are more or less equally subject to a set of one or more economic forces that largely determine the value of the properties in ques#on. Equity-( 1) In assessment, the degree to which assessments bear a consistent relationship to market value. Measures include the coefficient of dispersion, coefficient of variation, and price- related differential. (2) In popular usage, a synonym for tax. fairness, (3) In oWnership, the net value of property after liens and other charges have been subtracted. Expense Ratios-The ratio of expenses to gross in-come. Factor-(l) An underlying characteristic of something (such as a house) that may contribute to the value of a variable (such as its sale price), but is ob-servable only indirectly. For example, construction quality is a factor defined by workmanship, spacing of joists, and materials used. Factor definition and measurement may be done subjectively or by a computer-assisted statistical algorithm known as factor analysis. (2) Loosely, any characteristic used in adjusting the sales prices of comparables. (3) The reciprocal of a rate. Assessments may be equalized by multiplying them by a factor equal to the reciprocal of the assessment ratio, and value can be estimated using December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 24 the in-come approach by multiplying income by a factor equal to the reciprocal of the discount rate, Feedback-See Adaptive Estimation Procedure. Front Foot-The unit or standard of linear measure used in measuring frontage. Geographic Information System (GISHl) A database management system used to store, re!rieve, manipulate, analyze, and display spatial information. (2) One type of computerized mapping system capable of integrating spatial data (land information) and attribute data among different layers ,on a base map. Gross Income-- The payments to an owner that a property can generate before expenses are deducted. Gross Income MultipIier-A capitalization technique that uses the ratio between the sale price of a property and its potential gross income or its effective gross income, Improvements-Buildings, other structures, and attachments or annexations to land that are intended to remain so attached or annexed, such as sidewalks or sewers. Income Approach-One of the three approaches to value, based on the concept that current value is the present worth of future benefits to be derived through income production by an asset over the remainder of its' economic life. The income approach uses capitalization to convert the anticipated benefits of the ownership f property into an estimate of present value. Industrial Property-Generally,any property used in a manufacturing activity, such as a factory, wholesale bakery, food processing plant, mill, mine, or quarry. Integrity-The quality of a data element or program being what it says it is; usually distinguished from validity, 'the quality of its being what it should be in terms of some ultimate purpose. After data are edited and encoded and programs are prepared" their integrity is ens.ured by safeguards that prevent accidental or unauthorized tampering with them. Land-( 1) In economics, the surface of the earth and all the natural resources and natural productive powers over which possession of the earth's surface gives man control. (2) In law, a portion of the earth's surface, together with the earth below it, the space above it, and all things annexed thereto by nature or by man. See also Improvements. Land Residual Technique--See Abstraction Method. Legal Description-A delineation of dimensions, boundaries, and relevant attributes of a real property parcel that serve to identify the parcel for all purposes of law. The description may be in' words or codes, such as metes and bounds or coordinates. For a subdivided lot, the legal description would probablyinc1ude lot and block numbers and subdivision name. Level of Appraisal-The common, or overall, ratio of appraised values to market values. Three concepts are usually of interest: the level required by law, the true or actual level, and the computed level, based on a ratio study. Level of Assessment; Assessment RatiO---:-The common or overall ratio of assessed values to market values. Compare Level of Appraisal. Note: The two terms are sometimes distinguished, December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 25 but there is no convention determining their meanings when they are. Three concepts are commonly of interest what the assessment ratio is legally required to be, what the assessment ratio actually is, and what the assessment ratio seems to be, on the basis of a sample and the application of inferential statistics. When level of assessment is distinguished from assessment ratio, "level of assessment" usually means either the legal requirement or the true ratio, and "assessment ratio" usually means the tnie ratio or the sample statistic. Linear Regression-A kind of statistical analysis used to investigate,whether a dependent variable and a set of one or more independent variables share a linear' correlation and, if they do, to predict the value of the dependent variable on the basis of the values of ,the other variables. Regression analysis of one dependent variable and only one independent variable is called simple linear regression, but it is the word 'simple (not linear) that distinguishes it from multiple regression analysis with its multiple independent variables. Location-The numerical or other jdentification of a point (or object) sufficiently precise so the point can be situated. For example, the location of a point on a plane can be specified by a pair of numbers (plane coordinates) and the location of a point in space can be specified by a set of three numbers (space coordinates). However, location may also be specified in other terms than coordinates. A location may be specified as being at the mtersection oftwo specific lines by identifying it with some prominent and known feature (for example, "on top of Pikes Peak:" or "at the junction of the Potomac and Anacostia Riv-ers"). . Map--A conventional representation, usually on a plane surface and at an established scale, of the physical features (natural, artificial, or both) of a part or the whole of the earth's surface. Features are identified by means of signs and symbols, and 'geographical orientation is indicated. Map, Tax-A map drawn to scale and delineated for lot lines or property lines or both, with dimensions or areas and identifying numbers, letters, or names for all delineated lots or parcels. Market-(l) The topical area of common interest in which buyers and sellers interact. (2) The collective body of buyers and sellers for a particular product. Market Adjustment Factors-Market adjustment factors, reflecting supply and demand preferences, are often required to adjust values obtained from the cost approach to the market. These adjustments should be applied by type of property and area and are based on sales ratio studies or other market analyses. Accurate cost schedules, condition ratings, and depreciation schedules will minimize the need for market adjustment factors. Market Analysis-A study of real estate market conditions for a specific type of property. Market Area-See Economic Area. Market Value-Market value is the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by agencies that regulate federal finanCial institutions in the United States is: The most probable price (in terms of money), which a property should bring in a ' competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this defInition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: The buyer and seller are typically motivated; Both parties are well informed or well advised"and acting in what they consider their best , December 17, 2003 'Richmond County Board of Tax Assessors Performance Report Page 26 interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; The price reprcients the nonna! consideration for the property solei unaffected by special or creative financmg or sales concessions granted by anyone associated with the sale. Market-Value Standard--A requirement of law or practice that the assessment ratio of all properties be equal 'to one. Two issues are implicit here: that fractional asseSsment levels be , avoided and that all property be as~essed on the basis of its market value and not on the basis of its value in some particular use-for example, agriculture-unless that use is the only use to which the property can legallY be put (in which case its use value would be equal to its market value). Mass Appraisal--:- The process of valuing a group of properties as of a. given date, using standard 'methods, employing common data, and allowing for statistical testing. Mass Appraisal Model-A mathematical expression of how supply and demand factors interact in a market. Model-(I)A representation of how something works~ (2) For purposes of appraisal, a representation (m words or an equation) that explains the relationship between value or estimated sale price and variables representing factors of supply and demand. Model Area-See Economic Area. Model Calibration-The development of adjustments, or coefficients, based on inarket analysis, . that identifies specific factors with an actual effect on market value. Model Specification-The formal development of a model in a statement or equation, based on data analysis and appraisal theory. . Multiple Regression, Multiple Regression Analysis (MRA)-A particular statistical technique, similar to correlation, used to analyze data in order to predict the value of one variable (the dependent variable), such as market value, from the known values of other variables (called "independent variables"), such as lot size, number of rooms, and so on. If only one independent variable is used, the procedure is called simple regression analysis and differs from correlation analysis only in that correlatiori measures the strength of relationship, whereas regression predicts the value of one variable from the value of the other. When two or more variables are used, the ' . procedure is called multiple regression analysis. See Linear Regression. ' Neighborhood--(l) The environment of a subject property that has a direct and immediate effect on value. (2) A geographic area (in which there are tyPically fewer than several thousand properties) defined for some' useful purpose, such as to ensure for later multiple regression modeling that the properties are homogeneous and share important locational characteristics. Net Income-The income expected from a property after deduction of allowable expenses. Net Income Multiplier-A factor expressing the relationship between value and net operating income; the reciprocal of the overall rate. Objective-The quality of being definable by specific criteria without the need for judgment. December 17,2003 Richmond County Board of Tax Assessors Performance Report Page 27 Open Market-A freely competitive market in which any buyer or seller may trade and in which prices are determined by competition. Overall Rate (OAR)-A capitalization rate that blends all requirements of discount, recapture, and effective tax rates for both land and improvements; used to convert annual,net operating income into an indicated overall property value. Parcel-A contiguous area of land described in a single legal description or as one of a number of lots on a plat; separately owned, either publicly or privately; and capable of being separately conveyed. Parcel Identifier-A code, usually numerical, representing a specific land parcel's legal ' description. The purpose of parcel identifiers is to permit reference to legal descriptions by using a code of uniform and manageable size, thereby facilitating record-keeping and handling. Also called parcel identification number. Personal Property-Consists of every type of property that is not real property. Personal property is movable without damage to itself or the real estate and is subdivided into tangible and , , intangible. Price, Adjusted Sale-The sale price that results from adjustments made to the stated sale price to account for the effects of time, personal property, atypical fmancing, and the like. Price, Market-The value of a unit of goods or service, expressed in terms of money, as established in a free and open market. Note: This term is sometimes distinguished from "rruirket value" on the ground that the latter term assumes that buyers and sellers are in-formed, but this assumption is also implied by the phrase "free and open market." Compare Price, Sale. Price, Sale-(l) The actual amount of money exchanged for a unit of goods or services, yJhether or not established in a free and open market. An indicator of market value. (2) Loosely used synonymously with "offering" or "asked" price. Note: The sale price is the "selling price" to the vendor and the "cost price" to the vendee. Property-(l) An aggregate of things or rights to things. These rights are protected by law. There are two basic types of property: real and personal. (2) The legal interest of.an owner in a parcel or thing. Property Record Card (Form)-An assessment document with blanks for the in~ertion of data for property identification and description, for value estimation, and for property owner satisfaction. The basic objectives of property record forms are, first, to serve as a repository of most of the information deemed necessary for identifying and describing a property, valuing ,a property, and assuring property owners that the assessor is conversant with their properties; and, second, to document property appraisals.'tJse of properly designed property record forms permits an organized and uniform approach to amassing a property inventory. Ratio, Assessment-See Assessment Ratio. Ratio Study-A study of the relationship between appraised or assessed values and market values. Indicators of market values may be either sales (sales ratio study) or independent "expert" appraisals (appraisal ratio study). Of common interest in ratio studies are the level and uniformity of the appraisals or assessments. See also Level of Appraisal and Level of Assessment. December 17,2003 Richmond County Board of Tax Assessors Performance Report Page 28 RCN-Replacement cost new or reprOduction cost new., RCNLD-Replacement cost new less depreciation or reproduction cost new less depreciation. Real Estate-The physical'parcel of land and all improvements permanently attached. Compare Real Property. Real Property-Consists of the interests, benefits, and rights inherent in the ownership of land, plus anything permanently attached to the land or legally defined as immovable; the bundle of rights with which ownership of real estate is endowed. To the extent that "real estate" commonly includes land and any permanent improvements, the two terms can be understood to have the same meaning. Also called "realty." Reappraisal-The mass appraisal of all property within an assessment jurisdiction accomplished within or at the beginning of a reappraisal cycle (see below, sense 2). Also called revaJ.uation or reassessment. Reappraisal Cycle-(l) Theperiod of time necessary for a jurisdiction to have a complete reappraisal. For example, a cycle of five years occurs when one-fifth of ajurisdiction is reappraised each year and 'also when a jurisdiction is reappraised all at once every five years. (2) The maXimum interval between reappraisals as, stated in laws.' Reassessment-(l) The relisting and revaluation of all property, or all property of a given class, within an assessment district by order of an authorized officer or body after a finding by such an officer or body that the original assessment is too faulty for correction through the usual procedures of review and equalization. (2) The revaluation of au. real property by the regularly constituted assessing authorities, as distinguished from assessment on the basis of valuations most or all of whicl) were established in some prior year. See also Revaluation. Reciprocal-The result obtained when 1 is divided by a given number. Reconciliation-The final step in the valuation process wherein consideration is given to the -relative strengths and weaknesses of the three approaches to value, the nature of the property appraised, and the quantity and'quality of available data in formation of an overall opinion of value (either a single point estimate or a range of value). Also termed "correlation" in some texts. Regression Analysis-See Multiple Regression Analysis. Reliability-The degree to which measures, are free from random error and therefore yield consistent results; the extent to which a procedure yields consistent results on repeated trials. Replacement Cost; Replacement Cost New-The cost, including material" labor, and overhead, that would be incurred in constructing an improvement having the same utility 'to its owner as a subject improvement, without necessarily reproducing exactly any particular characteristics of the subject. The re-placement cost concept implicitly eliminates all functional obsolescence from the value given; thus, only physical depreciation and economic obsolescence need to be subtracted to obtain replacement cost new less depreciation (RCNLD). Replacement Cost New Less Depreciation (RCNLD)-In the cost approach, replacement cost new less physical incurable depreciation. ' Reproduction Cost; Reproduction Cost New-The cost of constructing a new property, reasonably identical (having the same characteristics) with the given property except for the absence of physical depreciation; using the same materials, construction standards, design, and December 17, 2003 Richmond Co~nty Board of Tax Assessors Performance Report Page 29 .'~ .:; quality of w{)~kmanship, computed on the basis of prevailing prices and on the assumption of normal competency and normal conditions. Residential Property-Property used for housing such as single-family residences, duplexes, or apartment buildings. Residual-The difference between an observed value and a predicted value for a dependent variable. Residual Technique-A method of arriving at the unknown value of a property component by subtracting the known values of other components from a known overall value. Revaluation-A reappraisal of property; especially a complete reappraisal of real property after assessment for one or more years on valuations most (or all) of which were established in some prior year. Compare Reassessment and Reappraisal. Review-(l) Consideration by a boarei of appeals, a board of equalization, a board of review, or a court, of individual, property class;' or district assessments, whether for the purpose of adding omitted taxable property, removing exempt property, or, equalizing the valuations 'placed. on listed property. (2) The act or process of critically studying a report, such as an appraisal, prepared by another. Sale, Arm's-Length-A sale in the open market between two unrelated parties, each of whom is reasonably knowledgeable of market conditions and under no undUe pressure to buy or sell. Sale Price-See Price, Sale; Price, Adjusted Sale. Sales Comparison Approach-One of three approaches to value, the sales comparison approach estimates a property's value (or some other characteristic, such as its depreciation) by reference to comparable sales. Sales Data-(l) Information about the nature of the transaction, the sale price, and the characteristics of a property as of the date of sale. (2) The elements of information needed from each property for some purpose, such as appraising properties by the direct sales comparison approach. Sales File-A file of sales data. Sales Ratio Study-A ratio study that uses sales prices as proxies for market values. Schedules-Tables, equations, or some other means of presenting the relationship between the values of two or more variables that are functionally related. For example, cost schedules present the relationship between cost per square foot and living area for a number of quality classes, building heights, and other characteristics. Single-Property Appraisal-Systematic appraisal of properties one at a time. Site-The location of a person, thing, or event. Site Characteristics-(l) Characteristics of (and data that describe) a particular property, especially land size, shape, topography, drainage, and so on, as opposed to location and external economic forces. December 17,2003 Richmond County Board of Tax Assessors Performance Report Page 30 Software-(l) Computer programs. (2) Those parts of a computer system that are not machinery or circuits; procedures and possibly documentation are included along with programs. Special-Purpose Property-A property adapted for a single use. Standard 6-See Uniform Standards of Professional Appraisal Practice. , " Stratify-To divide, for purposes of analysis, a sample of observations into two or more subsets' ac-cording to some criterion or set of criteria. Stratum, Strata (p1.)-A class or subset that results from stratification. , Subclass-A group of properties within a c1ass,smaller than the class, usually (although not necessarily) defined by stratification rather than by sampling. Subject Property-The property being appraised. Subjective-Having the quality of requiring judgment in arriving at an appropriate answer of value of a variable (such as the quality class ofa structure). Three Approaches to Value-A convenient way to group the various methods'of appraising a property. The cost approach encompasses several methods for estimating replacement cost new of an improvement less depreciation plus land value. The sales comparison approach estimates values by comparison with similar properties for which sales prices are known. The methods included in the income approach are based on the assumption that value equals the present worth of the rights to future income. Time-adjusted Sale Price-The price at which a property sold, adjusted'for the effects of price changes reflected in the market between the date of sale and the date of analysis. Trending-Adjusting the values of a variable for the effects of time. Usually used to refer to adjustments of assessments intended to reflect the'effects of inflation and deflation and sometimes also, but not necessarily, the effects of changes in the demand for microlocational goods and services. Trending Factor-A figure representing the increase in cost or selling price over a period of time. Trending accounts for the relative difference in the value of a dollar between two periods: Uniformity-The equality of the burden of taxation in the method of assessment. Uniform Standards of Professional Appraisal Practice-Annual publication of the Appraisal Standards Board of The Appraisal Foundation: "These Standards deal with the procedures to be followed in performing an appraisal, appraisal review, or appraisal consulting service'and the manner in which an appraisal,-appraisal review, or appraisal consulting service is communicated. . .. Standard 6 establishes requirements for the development and reporting of mass appraisals of a universe of properties for ad valorem tax purposes or any other intended use" (The Appraisal Foundation, Appraisal Standards Board 2002, Preamble, p. 6). Unit of Comparison-A property as a whole or some smaller measure of the size of the property used in the sales comparison approach to estimate a price per unit. Use Class-(l) A grouping of properties based on their use rather than, for example, their acreage or construction. (2) One of the following classes of property: single-family residential, multifamily residential, agricultural, commercial, industrial, vacant land, and institutional/exempt. December 17, 2003 Richmond Co~nty B?ard of Tax Assessors Performance Report Page 31 r .....'... (3) Any subclass refine~nt of the above-for example, townhouse, detached single-family, condominium, house on farm, and so on. Use Value-(l) The value of property in a specific use. (2) Property entirely used for a specific purpose or use that may entitle the property to be assessed at a different level than others in the jurisdiction. Examples of properties that may be assessed at use value under the statutes include agricultural land, timberland, and historical sites. USP AP-See Uniform Standards of Professional Appraisal Practice. , Valuation-(l) The process of estimating the value-market, investment, insured, or other properly defined value-of a specific parcel or parcels of real estate or of an item or items of personal property as of a given date. (2) The process or business of appraising, of making estimates of the value of some-thing. The value usually required to be estimated is market value. V aluation Date-The specific date as of which assessed values are set for purposes of property taxation. This date may also be known as the "date of finality." See also Assessment Date. Valuation Model-A representation in words or in aD equation that explaiDs the relationship between value or estimated sale price and variables representing factors of supply and demand. Value-(l) The relationship between an object desired ~d a potential owner; the characteristics of scarcity, utility, desirability, and transferability must be present for value to exist. (2) Value may also be described as the present worth of future benefits arising from the ownership of r~ or personal property. (3) The estimate sought in a valuation. (4) Any number between positive infinity and negative infinity. See aIso Market Value. Variable-An item of observation that can assume various values, for example, square feet, sales prices, or sales ratios. Variables are commonly described using measures of central tendency and dispersion. Verify-To check the accuracy of something. For example, sales data may be verified by interviewing the purchaser of the property, and data entries may be verified by check digits. December 17, 2003 Richmond County Board of Tax Assessors Performance Report ' Page 32 , Appendix B -IAAO Standard on Facilities, Computers Equipment and Supplies Approved January 2003 This standard revises and replaces the 1996 Standard on Facilities~ Computers 'Equipment, and Supplies. The assessment standards set forth herein represent a consensus. in the assessing , ' profession and have been adopted by the Executive Board 'of the International Association of Assessing Officers (IAAO). The objective of the iAAo's 'standards is to provide a systematic means by which-concerned assessing ~fficers can improve and standardize the operation oftheir offices. TheIAAO's standards are advisory in nature and the use of, or compliance with, such standards are purely voluntary. If any portion of IAAO standards isfOlmd to be in conflict with the Uniform Standards of Professional Appraisal PraCtice (USPAP) or state laws, USPAP 'and state laws shall govern. Acknowledgements At the time of the completion of this standard, the Technical Standards Subcommittee was composed of Nancy C. Tomberlin, 'chair; Sheldon Bluestem; Pamela M. Dubov, CAE; James L. Pence; Jan Vann; and Ed Crane, associate member. ' , Published by International Association of Assessing Officers 130 East R~dolph Street Suite 850 Chicago, II., 60601-6217 312/819-6100 Fax: 312/819-6149 http://www .iaao.org ISBN 0-88329-173-8 Copyright @ 2002 by the International Association of Assessing Officers All rights reserved. No part of this publication maybe reproduced in any form, in an electronic retrieval system or otherwise, without the prior' written permission of the publisher. Printed in the United States of America 1. Scope " This standard provides general recommendations on facilities, computers, equipment, and supplies needed in assessment administration. Detailed recommendations are not made, because technology changes rapidly and because the specific needs of an assessment office cannot be determined without reference to the functions and workload of that office. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 33 2. Introduction Assessment offices must have the facilities, tools, and other resources needed for cost- effective performance of the assessment function. Historically, goveriunents have allocated inadequate resources for assessment administration. Moreover, agencies sometimes receive or acquire superfluous resources or 3. Office Facilities and Furniture 3.1 Office Space Adequate office facilities should be provided. They should be dean, attractive, and sufficiently spaclous to provide coInfortable workspace for each full- and part-time employee; to serve the public; to house computers and other office equipment; and to store records, maps, forms, and supplies. The arrangement of space should encourage teamwork, promote self-esteem, minimize distracting sights 'and sounds, ,and help each' employee work efficiently. Offices should be designed to accommodate persons with disabilities. Facilities should comply with local ordinances and national1aws (such as the Americans with Disabilities Act [ADA] and Canada's Human Rights Act) enactoo to make the workplace more accessible to staff and customers. The following minimum space standards are suggested for managerial, supervisory, and , support staff: Assessor (chief assessing officer, director, and so on}-a private office, enclosed by walls or windows extending to the ceiling, of 200 square feet (18 to 19 square meters), or about 14 feet by 14 feet Management position (chief deputy assessor, head of a division in a large jurisdiction, and so on)-a private office, enclosed by walls or windows extending to the ceiling, of 170 square feet (15 to 16 square meters), or about 12 feet by 14 feet Supervisory position (head of a section, unit, or team of appraisers, mappers, analysts, technicians or clerks}-a private office or partitioned space of 150 square feet (14 square meters), or about 12 feet by 12 feet Appraisers and technical staff-private offices or at least partitioned, quiet work areas of 50 to 100 square feet (5 to 10square meters), not including aisle aIid file space, with a, desk and chair Support staff-adequate workspace, open or partitioned, to promote intended work functions and access in addition, there should be adequate aisle space, room for file storage and access, and room for training and library facilities. AB paper records give way December 17, 2003 . ,'. Richmond County Board of Tax Assessors Performance Report Page 34 , ,to electronic records, less file space will be needed. The following guide is offered to aid the layout process: Aisle space-Aisles should conform to local codes and the Americans with Disabilities Act (ADA) or other such standards for space. File and storage space-A space of 1.5 feet by 5.0 feet (0.5 by 1.5 meters), not including aisle requirements, should be provided for each standard three-drawer letter- or legal-size file cabinet. Sufficient space for storage of supplies should be provided in a convenient unobtrusive location. ' ;.'~..'. , Training and meeting space-Adequate space should be provided for training, meetings, and a library. ,) Mapping and drafting space-Adequate space should be provided for large-format scanners, plotters, copiers, and printers and for storage of large-Jormat map documents. Public service space-Such space should be sufficient to serve public needs and allow for access to and review of records utilizing public access computer terminals. There should also be provisions for counters, waiting areas, private conferences, and the like. Wall space should be available for posting such items as public notices, tax rates, jurisdiction maps, and the IAAO Code of Ethics and Standards of Professional C,onduct. The public space should reflect the size of the jurisdiction and be based on a study of actual requirements. Additional space may be necessary during reappraisals. ,Network servers and telecommunications hub-A secure place should be provided to house network servers and telecommunications equipment. PrinterslPhotocopiers- This equipment should be placed in convenient locations throughout the office. Machines that generate excessive heat, noise, or fumes should be located in a separate enclosed area with adequate ventilation. In designing an office layout or considering space needs, the services of an architect, interior designer, or person skiliedin office design may be needed. ' 3.2 Furniture An assessment office should have furniture of adequate quality, quantity, design, and size to meet the needs of current office technology. Such furniture should include, but not be limited to, desks, chairs, worktables, counters, storage cabinets, coat racks, bookshelves, and filing cabinets. The arrangement should be attractive, secure, and promote efficient use. 'Some technical functions may require specialized furniture. Data entry and computer workstation furniture should incorporate design features to reduce stress on eyes, wrists, and lower back. 3.3 Lighting December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 35 .~ 1 . "..... ~. Halls and common areas should have a minimum of 10-15 foot-candles (100-160 lumens/square meter) of illumination. Work surfaces should be provided with at least 50 foot-candles (540 lumens/square meter) of illumination. Visually difficult work can require 80-120 foot -candles (850-:1 ,300 lumens/square meter) of illumination. Lighting should be place to minimize glare and reflection on computer monitor screens and terminals. 3.4 Ventilation and Air Quality The office environment should eliminate exposure to tobacco smoke and minimize airborne chemical pollutants. Heat-dissipating electronic equipment in the automated pffice places additional demands on cooling and ventilation systems. Some computer systems may require temperature- and humidity-controlled environments to function properly. 3.5 Electrical Power Adequate electrical power ~d 'Sufficient outlets must be provided. As assessment operations grow more dependent upon electronic document storage and information processing, precautions must be taken to minimize the disruption of services or loss of work products due to electrical power problems. Considerations can range from surge- suppression devices to dedicated circuits, voltage regulators/filters/conditioners, and standby/uninterruptible power systems for computer equipment. Backup generator support may be a worthwhile investment if power interruptions are frequent and lengthy. 3.6 Safety and Security The facility should be designed to maintain orderly control of the operation and reduce the vulnerability of the staff or facility to acts of abuse and violence. Customer access should be restricted to specified areas and separated from staff work areas. Emergency exits should be adequate and clearly marked, evacuation diagrams should be prominently displayed throughout the facility, and evacuation drills should be,performed periodically. Identification badges, key/magnetic entry cards, and/or metal detectors should be considered for large offices with heavy customer traffic. Exterior lighting of the building and grounds should be designed.to deter theft and provide security for customers and staff who may use the facility after dark. Automated assessment offices house many valuable pieces of equipment, such as cameras, video recorders, and computers. The value of data stored on such equipment often exceeds the cost of replacing it. The facility should be designed to incorporate security measures and systems to guard against losses from theft, vandalism, terrorism, fire, and natural disaster. 4. Office Equipment 4.1 Office Machines An assessment office should have office machines in quantities and with capabilities sufficient to meet the needs of the office. In addition to computers (which are discussed in section 5), such equipment would include, but not be limited to, the following: December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 36 . , . Photocopy machines-Useful features include speed, auto-feed, collation, reduction and enlargement, automatic stapling, and two-sided copy capabilities. Scanning and micrographic equipment---:..By storing images of documents and records,on microfilm or magnetic or optical media, it is possible to make better use of office space, speed the retrieval of stored information, and enhance security. Consult state or , provincial1aw for relevant standards on imaging and to deterinine if images are accepted as an archival medium. Mailing machine-In addition to speeding mailing operations, postage meters help , control postage expenses. , Typewriters and dictating equipment-This category of equipment has become less prominent in assessment offices because most of the functions can now be performed on basic computer systems. However, typewriters are still useful for completing short forms, , preparing labels, or addressing envelopes. ' Calculators-These instruments must be provided for appraisers and other staff who frequently perform mathematiCal calculations. Several types of calculators may be needed, to handle specialized tasks. such as income analysis or statistical studies. Facsimile (fax) machines-Useful features include automatic answering, automatic redial, gray-scale scanning, delayed transmission, data compression, automatic image reduction, activity journal, adjustable resolution, broadcast capability, and memory-to- memory transmission. Printers-Most computerized offices should have a variety of printers available. Some tasks require speed, whereas others dill for high-quality text or specialized output, such as color images or large-scale maps. The assessment office should also have access to printing and binding facilities for high-volume jobs. For larger jurisdictions, it may be cost-effective to maintain such facilities in house..' Multifunction machines-Machines exist to perform photocopying, scanning, faxing, printing, inserting, and mailing functions~ 4.2 Field Inspection Equipment An assessment office sho~d possess the following kinds of equipment for collecting data: ' Accurately prepared and maintained parcel identification maps-These maps should be designed to help the field staff locate property. (See Standard on Cadastral Maps and Parcel Identifiers [IAAO 1988; undergoing revision].) Measuring instrument(s)-Tapes ofvariotIs materials, lengths, and units of measure are used to measure buildings and other improvements. Electronic/optical/sonic instruments December 17, 2003 Richmond County Board of Tax Assessors Performance Report~ Page 37 "," . " .; # ,-. and mechanical instruments can be useful for some measurements but may not meet accuracy requirements. Various scales are helpful in preparing more accurate and legible sketches. Calculators-Inexpensive, hand-held units can be practical for fieldwork because such units have a short life span when subjected to rough handling and harsh environmental conditions outdoors. Motor vehicles-An alternative to providing vehicles is to reimburse personnel for the use of privately owned vehicles. Jurisdictions with large expanses of open or rugged country should have access to utility, all-terrain, or special-purpose vehicles for fieldwork. Vehicles should bear proper identification. Official identification cards--Ident~cation must be provided to staff that participate in field work. Such identification should include at a minimum a laminated, ciip-on,photo identification badge. Business cards should ,also be available to appraisers and staff. Specialized equipment-Some field assignments may require a laptop, notebook, pen- based computer, or personal digital assistant (PDA). Various cameras (still, instant, video, or digital) may be employed to capture a pictorial image of the property. Global positioning system (GPS) location devices can be useful for field staff that work in large rural jurisdictions. Microcasette recorders are useful for taking notes during property inspections. Miscellaneous field equipment~Such equipment includes road maps, communication equipment such as cellular telephones and pagers, flashlights, clipboards, first -aid kits, personal security devices, dog repellent, hard hats, earplugs, safety glasses and shoes, and luggage carts for transporting files and equipment to and from the field. 4.3 Mapping Equipment It is essential that an assessment office have a complete and continuously updated set of cadastral maps. The need for mapping equipment in an assessment office willyary from jurisdiction to jurisdiction, depending on whether mapping is done in house or by another agency. For information on equipment to prepare and maintain cadastral maps, see Standard on Cadastral Maps and Parcel Identifiers (IAAO 1988; undergoing revision). Many jurisdictions make effective use of computer-assisted drafting (CAD), automated mapping, or geographic information systems (GIS), which involve specialized equipment such as plotters, digitizers, and customized computer workstations. 4.4 Telephones and Communication Lines The office should have an adequate number of lines to ensure that an open line is available for both incoming and outgoing calls. Each employee should have ready access to a phone. Speakerphones and conference calling features are recommended. Reappraisal projects, heightened public awareness of issues, or seasonal variations in December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 38 workload may require phone banks with queuing and messaging capabilities. The linkage of computers with telecommunication systems has made electronic mail (email) and voice mail practical for even the small office. Computerized call rquting can also be helpful, but messages and menu selections should be kept as short as possible. The data flow and information exchange activity in a computerized assessment office can place additional demands on the telecommunications system. Frequent use of fax machines, downloading of data from the field, access to online information services, and employment of te!ecommuting options can significantly increase the need for more and higher quality lines. Several options often are available when faster and more reliable data transmission is required. 5. Computers Computers are a critical part of the assessment function. Assessment offices must recogniie that computer technology is changing rapidly. They should, therefore, frequently evaluate the adequacy of their systems and attempt to maintain systems at the current state of the art. 5.1 Importance of Computers ' Every assessment office requires adequate computer support. Computers greatly reduce the time required for such routine operations as production of the assessment roll, time and production reporting, and valuation calculations. Computers expand analytical capabilities, make possible the use of advanced mass appraisal teChniques, and generally improve the accuracy and ,equity of valuations. Hence, computers increase both the effectiveness and efficiency of the assessment office. The reasonable costs, technical, advances, and improvements in ease of use make computers,a necessity in the modem assessment office. There are two basic aspects to any computer system: hardware and software. A fundamental under-standing Of hardware and software will help the assessor appreciate the role of computers in the assessment process and make informed decisions about their acquisition and use. The office should choose the software first. Choosing hardware first may limit th~ kinds of application software that can be used. The operating system and the application software should be reviewed frequently-at least annually-for compatibility and expectation of future support. Both the operating system and application software upgrades should be backed up when installed and after any upgrades. Appropriate measures for system security should be taken (see section 5.4.9). 5.2 Hardware, Computer hardware consists of the central processing unit (CPU) and the various peripheral units, including mass storage devices, keyboards, monitors, printers, and plotters. ' 5.2.1 Categories of Computer Hardware There are three general categories of computer hardware: mainframe computers, minicomputers, and microcomputers. Larger jurisdictions often require either a mainframe or minicomputer system to satisfy their storage and' processing needs. The microcomputer will typically play an important role in every office, regardless of size. December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 39 . - '. ~..-. 5.2.1.1 Computer Trends The newer generations of computers' with powerful processing capabilities are now assuming a much larger role in the assessment office. In general, professional staff involved in research, analysis, model building, or valuation review should have desktop access to computers. Microcomputers are relatively inexpensive and offer much more tlexibilityand independence to the user than larger computers. Most of smaller jurisdictions can satisfy therr data processing needs using microcomputers. Many larger offices are now augmenting or replacing their mainframe and minicomputer systems by linking microcomputers together to form a local area network (LAN) or a wide area network (WAN). MIcrocomputers are becoming the primary platform for runnirig assessment-related programs, whereas the mainframe or minicomputer has begunto assume the role of a file-server, often using the desktop or portable microcomputers as "clients" in a "client-server" network configuration. 5.2.1.2 Computer Configurations ' Many software manufacturers will offer one version of their program to operate, for example, with a Windows-based operating system and another to operate on the Apple Macintosh (Mac). Although new microprocessor chip designs allow for more cross- platform compatibility, the additional translation steps needed to permit software developed for one operating system to operate on another can slow down processing and give rise to other unexpected problems. 5.2.2 Computer Peripherals Devices that attach to the computer and perform functions to send, "receive, display, and store data are referred to as peripherals. The assessment office should have enough computer peripherals to provide adequate data entry, storage, retrieval, and,backup capabilities; printer support; and graphics. The system should provide direct or online access to files, allowing the user to retrieve data almost instantly. 5.3 Software Computer software consists of the programs that interact with the user. These programs help manage the database" aid in the valuation process, prepare assessment notices, generate reports, produce maps, and provide other output. Software should also be acquired that allows the use of the Internet and worldwideweb for use in researching web resources and for communicating with taxpayers, other officials, and peers. There are three basic categories of computer software: operating system software, utility software, and application software. The operating system is generally supplied with the computer and manages overall operation of the system, including file maintenance and cornmumcations between the processor and peripherals. Several types of operating systems have become standard in the industry, and care should be taken to choose one that will support the desired applicatiqn software. Operating system software performs such routine functions as sorting, copying, and merging files and managing the simultaneous operation of multiple peripheral devices. ' December 17, 2003 ... .... Richmond County Board of Tax Assessors Performance Report Page 40 -....= Utility software performs hardware and application software perfonns the actual ,functions required by the user. Mass ~ppraisal work, which includes assessment administration, database management, valuation modeling, and reporting functions, is often performed by a specialized set of application programs referred to as computer- assisted mass appraisal (CAMA) systems. Mapping support has also become automated through computer-assisted drafting (CAD) and geographic information system (GIS) software. At the highest level of sophistication, attribute data from the CAMA application can be brought together with spatial data from the GISto perform complex analytical tasks. The assessment office should have a variety of application software packages available to perform such routine functions-as word processing, spreadsheet analysis, statistical testing, database queries, graphics presentations, and project planning. 'Word processing and desktop publishing software should be used to maintain manuals, prepare reports and ,form letters, and produce routine correspondence. Spreadsheet software,can be used to develop and test simple models and assist with fuiancial and economic analysis. Although spreadsheet programs can perform many statistical functions, standalone statistical packages typically offer more powerful evaluation tools and better graphic capabilities. Database applications can be employed,to develop sllllill or temporary files for analysis or valuation modeling performed outside,oftheCAMA system. Graphics software can produce specialized plots" graphs, and charts. Project planning software can be helpful in scheduling field work, monitoring reappraisal programs, tracking implementation of new procedures, and the like. Application software to produce correspondence (triggered by events or deadlines) that incorporates dat~ merged from various files may also be higWy productive. Two basic kinds of application software are available, custom and generic (general purpose). 5.3.1 Custom Software Custom software is designed to perform specific tasks, identified by the jurisdiction, and can be specifically tailored to the user's requirements. Most CAMA software packages fall in this category. The data screens and processing logic can often be customized to reflect actual or desired practices, and the prompts and help information can be tailored to reflect local terminology and convention.' After completing the purchase or license tequirements, the jurisdiction should retain access to the program "source code," which is the program as written in a programming language, and before conversion to machine code. This means that other programmers conversant in that programmirig language may be able to modify the program to reflect changing requirements. Once the program is compiled to machine code (the code in which programs are executed), program modifications are virtually impossible. The major disadvantages of custom software are the time and expense of writing and testing the programs. Particular attention must be paid to ensuring that user,requirements are clearly conveyed to programmers and reflected in the end product, which should not December 17, 2003 Richmond County B,?ard of Tax Assessors Performance Report Page 41 :;"'""--'; be accepted until proper testing has been completed. Future modifications to programs, even those of a minor nature, can involve system administrator approval and can be a time-consuming, costly, and rigorous job. (See Standard on Contracting forAssessment ServiCes [lAAO 2002].) 5.3.2 Generic Software An alternative to custom software is generic software, of which there are two major types: vertical software, which is written for a specific industry, and horizontal software, which is written for particular applications regardless of industry. Examples of the latter include database, spreadsheet, word processing, Although the actual instruction code within these programs cannot be J;llodified, they typically permit the user to create a , variety of customized templates, files, and documents that can be processed. These are often referred to as commercial off-the-shelf software (COTS) packages. VerticaJ. generic software provides a system for assessment administration that can be placed in operation quickly. Usually this type of software will require modification to fit a jurisdiction's specific needs. Such software is, available through iridependent software houses, mass-appraisal services companies,' and mass appraisal software companies. Some companies may be persuaded to add customized features to their packages. In considering such a system. the assessor should evaluate the extent to which the software meets the agency's needs, how modifications will be accomplished (if available), the vendor's commitment to continued support of the software, whether the source code can be obtained, and a number of other issues (see section 5.4). In general, the assessment office should prepare a report that includes' a discussion of the existing system. a system requirements definition (SRD), a request for info~tion (RFI) document, or request for proposals (RFP) that details the agency's requirements and concerns, and a system implementation timetable (if possible). (See Standard on Contracting for Assessment Services [lAAO 2002].) Horizontal generic software is more flexible, permitting the user to define file structures, relational table layout, input and output procedures, including form or format, and reports. Assessment offices with expertise in such software (which does not imply a 'knowledge ofprograrnming) can adapt it for . property (data) file maintenance . market research and analysis . valuation modeling and processing . many other aspeCts of assessment operations Horizontal generic software's major advantages are that it is inexpensive and flexible. However, it requires considerable customization to local procedures and requirements, including the development of system documentation. A minimum of two persons should understand the system. at least_from the user's perspective, so that backup resources are available if necessary. December 17, 2003 ... .;. Richmond County Board of Tax Assessors Performance Report Page 42 ; wi 5.4 Selecting a Computer System , Before considering the purchase of a computer system, an assessment office should conduct an in-depth analysis of the current business processes (inputs, work-flows, and outputs). A detailed description ofthe office's needs and requirements to improve the process can then be prepared by comparing the existing processes to the desired processes using the automated system. A jurisdiction that does not have the in-house experiiserequired to conduct suchan evaluation should obtain outside assistance. The develppment of performance specifications embodied in an RFP is reco~nded. (See Standard on Contracting for Assessment Services [IAAO 2002J.) The evaluation should be concerned with the extent to which available software meets the jurisdiction's required functions and procedures. Special emphasis may be placed on system integration if' desired by the jurisdiction. System integration means having several functions related to assessment incorporated into the overall system design. A few of the related functions that may be integrated are . Land records . Mapping . ' GIS . Tax collection . ,Funding disbursements The point of contact between these potentially related functions and the assessment process is often referred to as an "interface." An additional and helpful consideration is to compare the data elements recorded on the existing field card or data-collection card to the data requirements of the desired (CAMA) system. The data collected has to match the system requirements or the system has to be designed 'or modified to use the desired data elements~ When st?lecting a computer system a decision should be made either (1) to , change the existing process to meet the requirements of the automated system or (2) to ' design the system to automate existing practices. In reality, the outcome is usually somewhere in between. Some additional key issues related'to hardware and other concerns are outlined below. 5.4.1 Memory and Storage: Computer systems record information using two basic media: operating (cirsystem) , memory and auxiliary (or peripheral) storage. System niemory takes the form of very fast electronic chips (referred to as random access memory [RAM]) that reside within the computer. Valuation, mapping, and graphics-based programs can demand many millions of bytes of memory to perform efficiently on a computer. The computer should be configured with memory sufficient to meet recommended requirements of the most demanding software application loaded on the system. Secondary storage may be internal or external to the computer and t3Ices the form of magnetic tapes, floppy disks, hard disk drives (or an array of disks), and magneto-optical and CD-ROM drives. If the computer is intended for a CAMA applicatiori,',~arefulpJanning is required to ensure adequate space will be available to hold the property characteristics data for all parcels, particularly, digitized documents and photographic images Automated mapping and GIS applications December 17, 2003 , Richmond County B~ard of Tax Assessors Performance Report Page 43 .~ ~ ~V'" .;,!,.., can demand significantly more disk space. Enough secondary storage is needed to support the current data files and software applications and allow for future expansion. 5.4.2 Processing Speed The computer system should be able to perform calculations and input/output processing at speeds that do not hinder research, development, and timely data retrieval. Growth should be planned for so that added terminals and other peripherals do-not make the system slow and unresponsive. In general, computer users should obtain the most current system architecture (generation of memory chip and data bus design) and fastest processing speed (measured in megahertz) that they can afford. This recommendation is particularly important if the computer will be used for applications involving valuation modeling, imaging, CAD, or GIS. For routine data entry and file m3.intenan,ce ' applications, the recommended response time between an operator pressing a key to signify that a transaction is complete and the system signaling its readiness to accept the next transaction should be neady imperceptible. 5.4.3 Computer Monitors and Graphics Display Cards Computers are taking on more,expanded roles in the area of mapping, GIS, and imaging. The selection of monitors and graphics cards has consequently become an important .consideration. Monitors with large screens and with fast, high-resolution graphics cards are essential. Dual monitor configurations that allow dedicating one, screen to maps, images, and graphics, and a second screen to data are desirable. Other considerations in monitor selection include compliarice with the MPR-ll (Swedish) standard that places limits on electromagnetic radiation. Electrical energy conservation standards must be met to earn the EP A Energy Star (USA), rating. TheTCO (Swedish) standard is the most stringent and comprehensive. It demands more restrictive limits on electromagnetic radiation and also addresses energy conservation" ergonomics, electrical and fire safety, environmentally responsible manufacturing processes, and recycling r.equirements. 5.4.4 Expandability It should be easy to upgrade the computer system with additional memory data storage capacity and peripherals to support future enhancements. Leasing rather than purchasing the hardware can provide greater flexibility in this regard. In any case, it is important that the software be convertible to new hardware without major disruptions. In the rapidly changing computer environment, it may not be prudent to upgrade a machine that is more than two or three years old. 'When designing a LAN or WAN; future growth of the office and/or users should be considered in the design. There are limits to the number of _ workstations a system can support. 5.4.5 Selecting a Computer System The computer industry has, been evolving rapidly. Processor designs now undergo several upgrades every year. New and more powerful peripherals are iDtroduced every week. It is not within the scope of this standard to present a minimum configuration. Although a premium price is often attached to new processor designs, assessors should consider, purchasing the most advanced technology available. A number of computer publications closely track changes in the industry. These periodicals often provide a balanced set of system recommendations and equipment reviews for demanding business applications. December 17,2003 ,iJ ..~ Richmond County Board of Tax Assessors Performance Report Page 44 ; .,<! 5.4.6 Transferability The computer system should be capable of exchanging data and programs with other computer systems with minimal difficulty. For example, it may be important for an assessor's system to be able to communicate directly with the state's or province's computer system and, possibly, with the computer systems of other assessment jurisdictions and government agencies. In mainframe and minicomputer systems, the ability to download or upload data to and from microcomputers' makes research and analysis much easier. This function can be an integral part ofLANs and WANs. (See section 5.4.9 for security required.) 5.4.7 Compatibility When acquiring a new system, select the software first and then the hardware. Hardware' and software must be compatible-the hardware must be capable of running the software. Be careful to choose software that will not limit the hardware selection to a single manufacturer, because this will limit purchase options and future upgrades. (See section 5.4.) It is also essential to select computers and peripherals that are compatible. 5:4.8 System Documentation and Support , The computer system, particularly the, application programs, must be well documented and supported. ' When purchasing application software, make certain complete documentation is provided. Provisions should be made for user training, maintenance, incorporation of any new software releases, and program modifications required by changes in user needs. Computer documentation varies in quality, and potential users should seek information on the completeness and quality of documentation. Product reviews published in trade publications are often helpful in evaluating s1,lpport and service for both hardware and soft-ware. , A manufacturer's warranty provisions and service record and the availability of online help are of utmost importance. Assistance with using application programs can often be obtained from user groups and computer clubs or online discussion groups accessed through electronic bulletin board services. ' ' 5.4.9 Security and Backup The system must provide for security to prevent unauthorized or unintentional damage or loss of data and programs. This will include password protection, write protection (in which designated users have "inquiry only" access to the system), and regular backup of files and programs. Computer viruses, which can corrupt system functions or destroy an entire database, should be a high-priority concern. Protection measures should be in place to scan for viruses before any file or program is loaded on the system Additional levels of security and backup control are required on systems that allow users to perform data up-loads from other computers. If systems are connected by telecommunications to outside networks, a firewall is necessary. December 17, 2003 Richmond County Board of Tax Assessors Performance Report, Page 45 -.... .- . ':.-. ;;.. Backup options include a variety of compact tape formats, high-capacity diskettes, optical disks, and other devices. Additional backup options may be available in a network environment. Backups should include the operating system (and subsequent upgrades) and all application software, as well as data files. One copy of the backup should remain in house and another be taken off site. 5.4.10 File Structure and Database Design A file structure in which all commonly used data items appear to be in a single logical file improves research and analysis, as well as program modifications, and results in more efficient processing. This is the relational database concept; its implementation hides from the user the complexity of what are probably multiple physical files linked by common data elements. This technique is used to ensure that any given fact is recorded only once in the database, which reduces the risk of inconsistencies arising. Programmer productivity is increased because files can be redefined and augmented as necessary. This makes it possible to add new capabilities, such as including digitized documents and photographic images (often referred to as objects), to a system without,modifying existing programs. New database designs that ,incorporate object/relational features are rapidly evolving to handle the additional demands of managing' electronic images and documents. 5.4.11 Query and Report Writing The system should provide query and report-writing capabilities, in which the user can easily select a given subset of the records and generate customized reports. Such capabilities are, in turn, improved by a database file structure. 5.4.12 Modular Design and Ease of Use It is important that the software be well designed and easy to use. A modular design structure, in which the programming is divided into logical subsets, is helpful in this regard, as is good documentation. Software can be menu driven, command driven, or both. Menu-driven software is easier to learn, but experien~ed users often find command- driven software quicker and more convenient. The system should have "help" keys, or their equivalent, which provide online help in interpreting error messages and in choosing among menu options. 5.4.13 User Involvement It is important that users understand, the system's objectives, become involved in the decision-making process, contribute to the design, and be committed to the system. Employees who will use the system should be involved inthe review and acquisition process. They should be assured at the outset that the computer is their tool and can increase their productivity and professionalism. Learning and creativity should be encouraged. The office environment may influence the placement of computer equipment. 5.4.14 Training and Documentation An ongoing training plan is essential. Computer software and hardware are of little, benefit if users lack the skills to use them efficiently. Training and , documentation, December 17, 2003 .z. ~"..;.A . :r Richmond County Board of Tax Assessors Performance Report Page 46 critical to success and productivity, are resource intensive and require ongoing investments. 6. Reference Materials Reference materials are needed in an assessment office to promote compliance with laws and regulations, uniformity in operations and procedures, and adherence to generally 'accepted assessment principles and practices. The following kinds of materials should be kept current and readily available. 6~1 Standards of Practice Written standards of practice should be prepared in such areas as personal conduct, collection of property data, codirig of information for data processing, and completion of any form that is not self-explanatory. The amount of detail will vary with the nature of the operation and the size of the office. The standards of practice may incorporate or be contained in laws, regulations (such as the Uniform Standards of Professional Appraisal Practice [Appraisal Foundation 2002; updated annually]), policy memoranda, procedural manuals, appraisal manuals and schedules, standard treatises on property appraisal and taxation (see section 6.2), and forms (see section 8). ' 6.2 Professional Library, Every assessment office should have a comprehensive professional library that contains the information employees ,need to perform their duties and to keep abreast of, developments. The library should contain applicable property tax laws and regulations; a complete set of IAAO standards; current treatises, monographs, periodicals, and reports; and other publications, manuals, and schedules dealing with assessment and appraisal principles and practices, real property market developments, real estate finance, building construction, management, supervision, urban planning, architecture, mapping, GIS, statistics, data processing, and general property appraisal. The library should also be the repository for equipment manuals and software documentation. Space should be provided to house and use these materials. An individual should be responsible for cataloging all material in the library and for keeping accurate records of loans. 7. Supplies Every assessment office should have enough general office supplies on hand. One person should be responsible for inventory and ordering of supplies, and a systematic program of ordering should be developed. 8. Forms An assessment office should always have standard forms available on demand. Computerized offices can store many of these documents electronically and produce them for customers as needed. One individual should be responsible for inventory, ordering, and distribution if special forms are needed. Examples of such forms include, but would not be limited to, the following: December 17, 2003 Richmond County Board of Tax Assessors Performance Report Page 47 ~t..: "- ...~:;. Data collection fonns- These are designed to be used in the field for recording or verifying property characteristics data and then to become the primary data entry (system input) document. Assessment roll fonns-"7'These provide for such basic data as property ownership, legal description, and assessed value. ' , Property appraisal fonns- These are used as the primary paper record for all appraiSals and should provide for recording pertinent information on the identification, description, and valuation of a property. Assessment notices-These are used to inform the property owner of the assessed value and may include estimates of taxes and other information required by statute. Exemption applications-These are used to gather data necessary for establishing the taxable status of property ,and/or taxpayer. Appeal, tax relief, and abatement applications-These are usoo by property owners who wish to appeal their assessments, have their assessments reviewed, or have their taxes reduced or abated. Other preferential assessment applications-These are used to gather data necessary in establishing eligibility for current use assessment or land-productivity value and for other legal forms of preferential assessment. Personal property reporting fonns- These are used by businesses and individuals who own taxable personal property to render situs, taxable status, cost, and other information about assets located in the assessment jurisdiction on the lien date. Operating property and utility property reporting fonns- These are used by operating property or utility property companies to furnish the assessment office with the information needed to identify and value such property. Sale, cost, income and expense, and property characteristics questionnaires-These are used to collect or verify information from property owners. As needs and requirements change, forms should be evaluated and, when necessary, modified. References The Appraisal Foundation. 2002 (updated annually). Uniform standards of professional appraisal practice. Washington, DC: The Appraisal Foundation. ' International Association of Assessing Officers (lAAO). 1988 (undergoing revision). Standard oncadastral maps and parcel identifiers. Chicago: IAAO. ' International Association of Assessing Officers (lAAO). 2002. Standard on contracting for assessment services. Chicago: lAAO. December 17,2003