SL 362 Project Update Refunds and Discoveries Presented to Mecklenburg Board of County Commissioners July 1, 2014

Proverb for the Day

Juggling Chainsaws is not a long-term professional career option……..

– Ken Joyner 2

MecklenburgCountyNC.gov

Juggling Chainsaws is not a long term career

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MecklenburgCountyNC.gov

CAMA/Appraisal is a perfect science?

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MecklenburgCountyNC.gov

Additional Proverb for the Day

This stuff is really hard….

– Ken Joyner 5

MecklenburgCountyNC.gov

SL 362 Revaluation Review Project   What is SL 362?

 Enacted in July 2013  Section 1 identifies the counties that are  required to follow SL 362 Section 2 identifies the requirements of • SL 362 (i) Conduct a reappraisal within 18 • months (ii) have a qualified appraisal company conduct a review of all values in the county by neighborhood Option chosen by Mecklenburg County  (ii) Pearson Appraisal Services M e c k l e n b u r g C o u n t y N C . g o v 6

SL 362 Revaluation Review Project Refunds  SL 362, Section 2 (1) Adj. to parcels with errors that resulted in the parcels having a significantly overstated value  Refunds for SL362  Statutory changes  Software changes  Procedural changes M e c k l e n b u r g C o u n t y N C . g o v 7

SL 362 Revaluation Review Project Refunds  SL 362, Section 2 (1) Adj. to parcels with errors that resulted in the parcels having a significantly overstated value  Process Timeline  After BOCC approval, notices are mailed  30 days to appeal (we allow some extra  time for mail to arrive) If no appeal, refund process begins (add ’l 30 – 45 days) M e c k l e n b u r g C o u n t y N C . g o v 8

SL 362 Revaluation Review Project Refunds  Who gets the refund?

 The owner of record on the date the taxes are paid.

 What is the interest rate paid on the refunds?

 5%  How many have been mailed to date?

 As of September 24th,

83,762

 How many refunds have been generated by SL 362 to date?

 As of September 24 th there are

161,530

 Historical refunds counts (annually)  2010-11  2011-12  2012-13  630 5,568 5,406 2013-14 (SL 362 only to date) 161,530 M e c k l e n b u r g C o u n t y N C . g o v 9

SL 362 Revaluation Review Project Refunds  What is the total amount refunded to date?

 As of September 24 th ,

$9,162,391.12 including interest

 What is the total amount of refunds remaining?

 As of September 24 th ,

$8,673,148.95 including interest Month Approved Total Processed October 2013 November 2013 December 2013 January 2014 February 2014 March 2014 April 2014 May 2014 June 2014 July 2014 August 2014 September 2014 Totals

195 6,063 3,745 13,882 13,503 10,441 16,253 16,154 19,021 21,150 20,362 20,761 161,530 195 6,050 3,554 11,488 11,360 7,703 9,437 10,619 11,883 11,454 83,743 M e c k l e n b u r g C o u n t y N C . g o v 10

SL 362 Revaluation Review Project Refunds   Automation process beginning to catch up with the project needs As of Sept 24 th CAO has processed 84% of the refunds Refunds Processed Total Jan - April 21 5,599 April 22 - June 13 16,882 June 14 - June 27 June 28 - Sept 24 19,264 41,998 Total 83,743 M e c k l e n b u r g C o u n t y N C . g o v 11

SL 362 Revaluation Review Project Discoveries  SL 362, Section 2 (2) Adj. to parcels with errors that resulted in the parcels having a significantly understated value  Discoveries for SL362  Statutory changes   Software changes Procedural changes M e c k l e n b u r g C o u n t y N C . g o v 12

SL 362 Revaluation Review Project Discoveries  How many discovery bills have been generated by SL 362?

 As of September 24 th , 34,073  What is the dollar amount of discovery bills?

 The total of all discovery bills to date is estimated  at over $5,000,000 Note that there is no penalty included on discovery bills for the 2011-2014 years M e c k l e n b u r g C o u n t y N C . g o v 13

SL 362 Revaluation Review Project Discoveries  Who is responsible for the discovery bills?

 Current owner of record  Why the current owner?

 NCGS 105-312 (d) directs the assessor to mail to current owner. Effectively it is because the tax lien goes with the property.  Like refunds the volume of discovery bills is a significant increase over previous years.

 Last year we did 1,373 discoveries M e c k l e n b u r g C o u n t y N C . g o v 14

SL 362 Revaluation Review Project Appeals BER and PTC Issues    PTC appeals in 2013 – over 2,300 parcels PTC appeals in 2014 – 124 parcels remaining (now under 100 cases) BER appeals for SL362 – over 1,863 to date M e c k l e n b u r g C o u n t y N C . g o v 15

SL 362 Revaluation Review Project Appeals Financial Issues    Appeals were not included in the original scope of work for Pearson Appraisal Services Original contract is for $3,892,000 We have added $ to the contract to pay for the appeals  Based upon PTC cases worked (approx. 2,000), current appeals (1,863 unique parcels), and estimates for the remainder of the project M e c k l e n b u r g C o u n t y N C . g o v 16

SL 362 Revaluation Review Project Lessons Learned

REAPPRAISAL

   Field Canvassing is important  2011 Reappraisal – Publically discussed that it had been 17 years since last visited  You must physically walk your properties to ensure accuracy  IAAO Standards state once every six years Don’t rely items that are not completed  Appeals module wasn’t ready Communication is crucial  No response speaks volumes, just not the message you want conveyed M e c k l e n b u r g C o u n t y N C . g o v 17

SL 362 Revaluation Review Project Lessons Learned

SESSION LAW 2013-362

   No one cares that it hasn’t ever been done before  Refunds  Start-up periods Everyone wants their property to be completed early in the process  18 month project with18 monthly reports Communication is crucial  Citizens  Elected Officials   County Administration Media   Contractor CAMA/Software provider M e c k l e n b u r g C o u n t y N C . g o v 18

SL 362 Revaluation Review Project Lessons Learned

SESSION LAW 2013-362

   Multiple Years bring on new issues and problems  Data Entry/Notices  Refunds  Appeals Workflow/Business Processes are going to change  Think about the process prior to starting  Determine who is going to handle what processes  Include you CAMA/software provider Refunds  Manage expectations  Proactively work with Legislature on minimum refund amount M e c k l e n b u r g C o u n t y N C . g o v 19

SL 362 Revaluation Review Project Lessons Learned

SESSION LAW 2013-362

    Define role and chain of command with the contractor  You do not want line staff making decisions on the fly Space was a big issue for us  40 50 contractor’s for 18+ months Know the contract and who is responsible for each item  Cost can escalate quickly You will not think of everything  Stay ready for change  If it happens once it will happen again M e c k l e n b u r g C o u n t y N C . g o v 20