Revaluation
2005
The City of Bath has contracted with the firm, Cole Layer Trumble Co., to assist the City Assessor in performing a full city-wide property revaluation. Cole Layer Trumble Co. has successfully assisted the City with revaluations in 1965, 1976, and 1994.
In an effort to keep the public informed, three informational meetings were held in June. The meetings were well attended and generated lots of pertinent questions and answers. A summary of those discussions follows:
Q: With the Palesky ballot initiative being voted on in November, why revalue? If passed, wouldn't it require the valuations to be rolled back to 1996?
A: The Maine Constitution requires all property to be assessed equally according to value. The Maine Supreme Court has issued an opinion that the part of the Palesky proposal that would roll back and freeze values is likely to be struck down as being in conflict with this provision of the Maine Constitution. For more information on the Palesky proposal from a municipal perspective, go to the Maine Municipal Association website.
Q: What is a Revaluation?
A: Revaluation, also referred to as Equalization, is a process of reviewing and updating all property values in the community to reflect their current market value. The updated values become the basis for tax assessment.
Q: Property values have gone up a lot. What will the community do with all of the new tax dollars generated?
A: Revaluations don't raise any new tax dollars, and are intended to be revenue neutral. The total city-wide increase in valuation allows the mill rate to drop in proportion. For example, if the total value of a city were $500,000,000 before a revaluation and the budgetary tax requirement was $12,500,000 the tax rate is calculated by simply dividing $500,000,000 into $12,500,000 which yields a tax rate of .025. If the total city valuation after the revaluation was $750,000,000 then the same $12,500,000 could be raised with a mill rate of .01667. (500,000,000 X .025 = $12,500,000 and 750,000,000 X .01667 = $12,500,000)
In this example, if your house were valued at $100,000 prior to revaluation, applying a mill rate of .025 would yield a tax bill of $2500. If the value was $150,000 after revaluation, applying the mill rate of .01667 yields the same tax amount: $2500.
Q: Does that mean everyone's tax remains the same?
A: No, even though the overall amount of tax raised is the same, some property owners will see an increase in taxes and others a decrease as the result of the revaluation. Whether or not an individual property's tax burden is increased as a result of revaluation depends on how much the new valuation differs from the current one. Those properties that see valuation increases that are greater than the overall average are the ones whose tax will increase, those that increase less than the average will see a decrease in tax burden.
Q: What about Bath Iron Works? Are they to be revalued as well?
A: Yes, Bath Iron Works will be valued by a specialist sub-contracted by Cole Layer Trumble Co. Additionally, there is a provision in the Tax Increment Financing agreement with BIW that mandates that the base value of the shipyard is to increase in proportion to the overall increase in the rest of the City during any city-wide revaluation. This means that the share of non-tif tax revenue paid by BIW will at least remain the same.
Q: Why is Revaluation needed?
A: Periodic revaluations are needed to meet the legal requirement that all property be assessed equally in proportion to the property's market value. Over time, property values change. In some cases it is because the property has been improved (or deteriorated) and in other cases it is simply a reflection of a changing real estate market.
Q: How is the market value of property determined?
A: A revaluation, or mass appraisal, is different than the kind of fee appraisal that you have done when you buy or re-finance your home, though the result should be the same, a fair estimate of the market value of the property. A mass appraisal can be divided into several steps: data collection, market analysis, valuation, review, notification and hearings, final review and valuation.
Data collection will begin in July with representatives from Cole Layer Trumble Co. visiting every property in Bath. The data collector will take exterior measurements as well as inspect the interior of each property. If no adult is at home, the assessor's office will contact the home owner to set up an appointment to do the interior inspection. Promptly replying to the request for an inspection appointment will greatly enhance the efficiency and effectiveness of the project.
It is important to note that the data collector is not an appraiser and is not involved in setting the value. His or her job is to accurately detail the data that the appraiser will use later in determining value. Data collectors will be wearing a picture I.D. and their cars will be registered with the Bath Police Department. A background check will be done on all data collectors hired for the Bath revaluation.
The market analysis phase of the project will be accomplished with experienced appraisers working in conjunction with the City Assessor. Particular attention will be focused on all of the properties that have sold in Bath over the last 2 years. In addition, an analysis of building construction costs, as well as income and expenses on commercial rental properties will be undertaken.
Focusing on the properties that have sold, a set of valuation guidelines will be developed that take into account pertinent factors that effect the value of property. In the next step, these value factors are applied to all properties yielding a preliminary value. With these preliminary values in hand, an experienced appraiser will look at each property again and make any adjustments that are necessary.
After the field review, notification of the new valuation will be sent to all property owners in Bath. At this point, property owners will have the opportunity to schedule an appointment to review the new valuation with an appraiser. The focus of these review hearings will be to determine whether or not the new valuation is an accurate estimate of the fair market value. Homeowners that disagree with the value assigned, are encouraged to bring evidence to support their case. This might include sales information, real estate listings, or a recent appraisal of the property. We anticipate that the valuation notices will go out sometime in May of 2005
Q: My property has a great view of the river. Does that affect my assessment?
A: Our job is to fairly estimate the market value. We consider all pertinent factors, and anyone in real estate will tell you that "Location, Location, Location" is very important in determining value. The answer is yes.
Q: Why should I let the data collector in to inspect my home?
A: Of coarse, you are not required to let the data collector into your home. It is, however, in everyone's best interest to have all properties viewed. This will insure equitable assessments and avoid the need to make assumptions about interior factors.
Q: When will the new valuations go into effect?
A: The new valuations will be in effect for the tax bills that are sent out in September 2005.
Have a question that's not answered here? Feel free to call the Assessor's Office at 443-8336. or e-mail it to pmateosian@cityofbath.com
For general information on the property tax, see the Homeowner's Guide to Property Tax on the Maine Municipal Association website.