|David Shaw (left) and William V. White, John Burgiss and Michael Pollock|
The Forsyth County Board of Equalization and Review approved the recommendation to make blanket changes to 51 properties at the recommendation of county Tax Assessor John Burgiss. Many of the properties are larger and newer homes located either on Cumberland Road or nearby. Burgiss said staff determined that three sales in 2012 and 2011 that had been used to set values for the neighborhood were not representative of the houses recommended for adjustment.
The 51 properties affected by the blanket change include homes owned by Jim Shaw, a retired tire dealership franchisee and nonprofit executive who is Mayor Allen Joines' reelection co-chair and the widow of the late Judge Roland Hayes. The previous valuations assigned to the properties represented a 71.2 percent decrease from 2009, while the new valuations reduce the blow to a loss of only 39.4 percent.
"These are extremely large changes," board member William V. White said. "They're based on lack of sales. I guess the concern is, what other neighborhoods do we have the same situation that we're not going to know until we receive the appeals and it's too late to do anything about the remainder of the properties?"
Burgiss said staff looked intently at 14 neighborhoods where residents expressed concern about severe drops in valuation and was still open to making further changes.
"May I suggest a potentially radical action to go further into that?" White continued. "Whenever there's so few sales, there's a situation where those sales may not reflect values even though even though all rules say that they do. What about the concept of asking the appraisers in the field the question of, 'Do you think that this work adequately reflects the values out there, notwithstanding the methodology that we use?' The answer is either a yes or a no. If it's a no, then I suggest going back again and looking at the neighborhood, do what you can, and maybe you can expand the number of sales used outside the neighborhood."
The changes made today follow a decision last week by the board to restore more than a $1 million in values resulting from individual appeals in several east-side neighborhoods that were flagged for review because of community outcry, including Monticello Park, Dreamland Park, Castleshire, Slater Park and Shalimar/Salem Village.
White publicly urged property owners to continue to file appeals through the statutory deadline of June 28 so that the board can get a sense of whether further blanket changes are needed.
"I think what the board is looking for is by the 28th to have a comfort level that a) the right methodology was used, b) in your judgement that's the best we could do with it, and then c) we've gotten the word out about the opportunity for individuals to bring an appeal to us," White said. "That even if they don't plan to be present, it forces the assessor's office to take another look at the property. So their individual properties will be examined even further.... I just want to on the 28th say that Forsyth County, the tax assessor's office and the board have done everything they could possibly do to ensure that every citizen had the right to appeal and we've gotten it as good as we possibly could do it in a less sale than desirable environment."
The staff also addressed the findings of an investigation conducted by YES! Weekly and Camel City Dispatch into the tax revaluation.
Real Estate Division Manager John Potter noted that the investigation raised questions about roughly a dozen sales out of 750 sales reviewed in 55 neighborhoods, and that the staff concurred that six of the transactions were either counted, or in one case discounted, in error. The 750 some sales reviewed in the investigation covered only a portion of the 14,000 qualified sales across the county.
"That's six out of 750 — less than 1 percent," Potter said. "We feel that's a pretty good accuracy score."
Staff acknowledged that the disqualified sales that were used in comp lists to set values for neighborhoods included transactions between family members, sales involving churches and foreclosures.
Appraisal Manager Michael Pollock said he used a methodology known as "trended sales ratios," which compares sale amounts to the 2013 valuation with adjustments made for observed market trends, to determine if the errors would have affected the neighborhood values. In all six cases, with the exception of one that he characterized as a judgment call, Pollock said the errors had no material effect on valuations.
In a neighborhood the tax administration calls Anderleigh, but many residents consider Konnoak Hills, Pollock said removing an incorrectly qualified foreclosure sale reduced the sales ratio from 0.97 to 0.94, where 1.00 is the ideal.
"Generally, we like to be .95 to 1.05 in our sales ratios, but in taking a look at that, that was a 5 percent appealed neighborhood," Pollock said. "Looking at it more, I didn't think I could justify making a change. That's my opinion."
Pollock said that adding an improperly excluded sale in the Cameron Park neighborhood (also known as East Winston) had the effect of changing the trended sales ration from 0.995 to 0.990, and was too small to warrant any changes.
The investigation by YES! Weekly and Camel City Dispatch estimated that the exclusion of the sale reduced values in the neighborhood by about 6 percent. The investigation used a methodology of comparing sales to 2009 valuations and pegging changes to the median value to reach that conclusion.
White alluded to two sales flagged by the investigation involving the use of transactions recorded on quit-claim deeds, which the tax administration deemed to be legitimate for the purpose of building sales comps.
"I have a possible concern about quit-claim deeds," White said. "Notwithstanding what the [NC Department of Revenue] says, I think you have to go all the way to the bottom of a quit-claim deed. You usually can't do it with just the deed."
Pollock said staff concurs, and that in the two cases brought to its attention assessors believe that they reflected true market values and 100 percent interest in the property being transferred.
Burgiss reiterated staff's position that the errors had no material effect on valuations for the neighborhoods.
"The one that potentially comes the closest to that is Anderleigh, and that does put us at an assessment level of 94 percent," he said. "We do like to be between 95 and 105 percent. That's the comfort level — that's the range that we like to be in. Certainly, 94 is not 95, so we can understand the question: Was that enough of a change to warrant a change in the neighborhood? There's 400 properties in that neighborhood. The one neighborhood we did bring, we were asking for pretty big changes on those properties. If we were to look at something like Anderleigh that would be very minor."