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Tory Welcome
           Handouts available
                   Power Point Presentation

    Outline         Purpose tonight to give an overview of the assessing process and mention the changes from FY10 to FY11
                    This is a brief presentation of a lengthy and complex process, but you can take a copy of the presentation
                              and we encourage questions along the way as well as at the end
                    We don't have final property values at this time, but no later than mid-Dec.
                              Need to wait for DOR approval
                              Proposed values should be online with link from town's website to Vision no later than mid-November

        2           Assessors value property using a mass appraisal process. We don't spot assess each property, but use
                             a broad brush approach to setting the values. We use a computer model that captures many
                             details about each property in order to make the process as objective and accurate as possible.
                             Mass appraisal is different from fee appraisal which many property owners are familiar with,
                             such as when a bank does an appraisal for a mortgage.
                    Property values are adjusted every year values and are dependent on the market activity
                    We start by taking the arms length sales from the prior year; want to point out that assessments
                             REFLECT the market, they are not intended to indicate a current or future sale price
                    The computer model is adjusted to bring those sales to 100% of market value
                    The updated factors in the model are then applied to all properties town-wide to provide the new
                             values for all properties
                    One thing Assessors do NOT do: decide how much to raise (Twn Mtg)
                    We set the property values which are used to apportion the tax levy
                    We provide the calculation of the tax rate to the BOS, who is the board that actually votes to set the tax policies,
                              i.e., whether to shift the tax burden between classes of property

        3           Everything Assessors do must meet MA laws under DOR guidance and direction
                    We analyze the sales using many different sorts: type of property, location and size of lot, size, style, age of house
                    The DOR requires that the assessments must be w/in certain parameters around 100% of mrkt val
4   Assessors must also classify each property according to its use with the class types from the DOR
    This pie chart shows the types for FY11, which has been similar for several years
    91% of Concord's assessments is residential
    These proportions are important in relation to tax shifts that the BOS must vote on; many town have a "split"
              rate, meaning the tax rate for the CIP section is higher than the residential rate. With less than 9%
              CIP, such a shift would have to be so large in order to make any difference for a residential tax bill
              that the CIP section would see an enormous increase in their tax bills. The BOA has historically
              recommended that the BOS not do this since the majority of Concord's commercial properties are
              smaller operations and this would be a disproportionate increase for them.
    We're also required to value exempt properties, which is not shown here --
              about $800 thousand (about another 14%)

5   The actual amount needed to be raised from property taxes is called the tax levy
    The methodology used to calculate this is governed by the state
    The calculations starts with the prior year's levy limit and is limited by Prop 2-1/2
    You calculate the permitted levy with these steps; the town may raise through taxes UP TO this amount.
    How much Concord is actually below the permitted levy varies from year to year.

6   Dividing total property value into the levy, or amount town mtg voted to spend
    These are the actual #'s from last year and the estimated FY11 #'s
              Total value increases 0.3%
    Demonstrates that even if the values stay about the same, the tax rate increases
              according to how the town's budget increases
              Valuations are not set with the goal of raising or lowering taxes; the actual tax raised is determined by TM
                        and becomes the numerator in this equation and is fixed.
    Proposition 2-1/2 limits property taxes in 2 ways, how much the taxes can increase year to year and an absolute
              maximum of 2-1/2% of the Town's total valuation
              In FY10 Concord was at 1.31% of the Towns total valuation

7   This slide shows how the individual property tax is calculated
    I want to emphasize that Assessors do not value property in order to raise or increase funds for the Town.
    We value properties based on the market. Then those values are used to apportion what the Town has
    voted to raise through Town Meeting.

8   Calendar to clarify the time frames that are dictated to us by the state -- FY11 values based
            on Calendar 2009 sales w/ the ast date 1/1/10
            A note about the preliminary tax bills: they are NOT based on property values. They are based on
            the property taxes paid for the property for the prior fiscal year. A Town is allowed to add a percentage
            increase up to 21/2% based on an estimate of what the Town has voted at Town Meeting.

9   What our analysis says is that for CY09, sales prices for SFR in Concord seemed pretty stable
    Concord has historically and continues to be less subject to economic volatility than most other locations
    However, since it appears that real estate values in 2009 are relatively flat, the BOA continues to adjust
              this year's values slightly lower than 100% of market
    This slide also shows some of the other sources of revenue to the Town that influence the actual tax rate
10   These median sale prices demonstrate the stability here in Concord from the prior year to this year.
             Note that these are based on the sample of sales that happen and do not represent a statistical
             analysis of all assessments, so their variance year to year may not agree with the variance in
             assessments year to year.

11   These are the final statistics for FY11 for Concord that are submitted to the DOR.
     ASR & COD

12   The major change this year affected the land valuation component. One of the stratifications used in the sales
               analysis is location; the factors that reflect the different multipliers for location we call market area factors.
               Standard practice is for the market area with the factor of 1 be where the median price is closest to the
               Town's overall median. Over time the MA's have shifted so the area that had that median price had a
               multiplier of 1.28. Therefore, all the factors were adjusted to reflect the shift in that scale, and the land
               curve (the price/sq. ft. for the primary lot, curved to reflect the fact that the smaller the lot the higher the
               price/sq. ft.) was adjusted accordingly. In most cases these shifts offset each other and there was very
               little affect on the valuation of the primary land line.
     As always, there were some minor shifts of properties from one market area to another.
     A site index is another factor that is available to use on the land reflecting an additional adjustment for something
               about a property that is different from the overall market area. An example is a discount if a property
               abuts a railroad or an add-on for a waterfront property. These are used sparingly and must always
               have market support for such an adjustment.
     In the FY08 revaluation Concord was told by the DOR that our excess land rate seemed too high, although they
               could not prove that our number was incorrect. Wanting excess land rates to be consistently low across the
               Commonwealth has been a common directive from the DOR throughout the in recent years. If the DOR does
               approve of something in your valuation methodology, they will withhold approval of your values and therefore
               prevent setting the tax rate, forcing the town to issue another preliminary bill in the third quarter. This is not a
               good situation for many reasons. In that light, the Assessors lowered the excess land rate this year in
               preparation for the revaluation in FY12.
     Another pet peeve of the DOR is using more than one rate (cost/sq. ft. or cost/acre) unless there is concrete support in
               the market for such a rate. For this reason the BOA has tried to eliminate the use of what had been called a
               "wetlands" rate. We've actually been studying this particular issue for years and anecdotally not been able to
               see market support for such a reduced rate.
     With any changes in any year, the goal is to get to the correct value.
               Reasons for changes in valuation of a property from year to year:
                           new construction, renovation or addition reviewed by the assessors as a result of a building permit
                           (this is by far the most common cause of an increase in assessed value);
                           parcel splits or combinations, and changes in parcel use;
                           data updates as a result of the town-wide cyclical inspection process that is continually being carried out
                           by the Board;
                           correction of prior errors or omissions that may have existed in the property listing;
                           sales analysis that may have changed the weightings of one or more of the various factors contributing
                           to the determination of value, such as location, size, and style.
    13       This graph demonstrates how the land curve works. It shows the relationship between the cost per square foot and
                      the total value of the building lot. Although the cost/sq. ft. increases as the size of the lot decreases, the
                      overall value of the lot increases as the size increases

CONTACTS Call, email or stop by anytime.
         Much reference material available in our office as well as on the web, and staff members will be glad to help in person
                  or over the phone
         MORE ON WEB IN NEXT MONTH: CY09 Sales by next week

APPENDIX     Lots more info in the appendix
   16        Assessors’ Duties -- Part of Financial Team of the Town
   17        Definitions
   18        Interim Year
   19        Sample Land Values FY10 to FY11
                       % change varies slightly from location to location, but land only approx 50% of value, so affect on ttl only half
    20       Site Indices /Condition Factors
             % Change Histogram
    21                 SFR: 65% less than 3% increase or a decrease
    22                 Res Condos:
    23                 Vacant Land:
   24-25     Property Record Card
    26       CAMA Cost Formula
    27       Interpretation of Cost Formula
             FACTORS AND ASRs
    28       MA
    29       Style
    31       Size Adjustment Factor
    32       Depreciation
    33       Valuation versus Tax Bill

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