MARCH 18 2008 WORKSHOP MINUTES
I I III
CITY OF VIRGINIA BEACH
A COMMUNITY FOR A LIFETIME
ITY COUNCIL
MAYOR MEYERA E. OBERNDORF, At-Large
VICE MAYOR LOUIS R. JONES, Bayside - District 4
WILLIAM R. DeSTEPH, At-Large
HARRY E. DIEZEL, Kempsville - District 2
ROBERT M DYER, Cen/erville - District I
BARBARA M HENLEY, Princess Anne - District 7
REBA S. McCLANAN Rose Hall - District 3
JOHN E. UHRIN, Beach - District 6
RON A. VILLANUEVA, At-Large
ROSEMARY WILSON, At-Large
JAMES L. WOOD, Lynnhaven -District 5
JAMES K. SPORE, City Manager
LESLIE L. LILLEY. City Attorney
RUTH HODGES FRASER, MMC, City Clerk
CITY HALL BUILDING I
2401 COURTHOUSE DRIVE
VIRGINIA BEACH, VIRGINIA 23456-8005 I
PHONE: (757) 385-4303 I
FAX: (757)385-5669
EMAIL:Ctycncl@vbgov.com
CITY COUNCIL WORKSHOP AGENDA
18 MARCH 2008
1.
CITY MANAGER'S BRIEFING
- Conference Room -
3:00 P.M.
A. RESIDENTIAL TAX ASSESSMENT EV ALUA TION AND REFINEMENT
Robert J. Gloudemans, Partner - Almy, Gloudemans, Jacobs & Denne
B. APZlICLEAR ZONE MASTER PLAN
Jack Whitney, Director - Planning Department
C. PLANNING ITEMS PENDING
Jack Whitney, Director - Planning Department
i :11
- 1 -
MINUTES
VIRGINIA BEACH CITY COUNCIL
Virginia Beach, Virginia
March 18, 2008
Mayor Meyera E. Oberndorf called to order the VIRGINIA BEACH CITY COUNCIL WORKSHOP in
the City Council Conference Room, City Hall, on Tuesday, March 18,2008, at 3:00 P.M
Council Members Present:
William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer,
Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan,
Mayor Meyera E. Oberndorf, John E. Uhrin, Ron A. Villanueva,
Rosemary Wilson and James L. Wood
Council Members Absent:
None
March 18, 2008
i II
- 2 -
CITY COUNCIL COMMENTS
Councilman Diezel referenced the correspondence of Fire Chief Steven R. Cover dated March 17, 2008,
concerning the fire incident that occurred on Monday, March 10, 2008, at 4820 Columbus Street. It is
his goal to conduct a formal post incident analysis within the next thirty (30) days. There were no lives
lost and the injuries sustained to the operating crews were minor. This is extraordinary, considering the
size and complexity of the fire. Councilman Diezel commended the operation of all parties involved.
Councilman Diezel advise this date also marked the Twelfth anniversary of the deaths of the two (2)
Chesapeake Firefighters
Mayor Oberndorf extended her grateful appreciation.
During the Development Authority meeting this morning it was announced that Economic Development
located Allied Technology, employing approximately two hundred (200), to a facility to conduct business
in Virginia Beach.
March 18, 2008
: III
- 3 -
CITY MANA GER 'S BRIEFING
APZ-l/CLEAR ZONE MASTER PLAN
3:00 P.M.
Jack Whitney, Director - Planning Department, advised the Briefing re the APZ-l CLEAR ZONE
MASTER PLAN provides general land use policy guidance regarding the future use of property located
within the Accident Potential Zone 1 and Clear Zones around NAS Oceana.
Last Fall, the Ocean a Land Use Conformity Committee directed staff to prepare a Master Plan for the
disposition and compatibility of land use surrounding Oceana in the APZ-1/ Clear Zone areas. Since that
time, there has been a tremendous amount of staff work and public involvement on the subject of
preparing this Master Plan. The Oceana Land Use Conformity Committee has reviewed same and
unanimously endorsed it. It is now in the process of public review in advance of being considered for
adoption by reference, as part of the City's Comprehensive Plan. Mr. Whitney commended Tom Pauls,
Coordinator - Comprehensive Plan, Debbie Zywna, Planning Co-ordinator, and stafffor their dedicated
efforts.
Tom Pauls referenced the five (5) Sub-Areas A-E as depicted on the General Location Map.
APZ - 1 / Clear Zones - General Location Map
Sub-Areas A-E
, p;
'l, '[',
.\..'
,,'
.,",\'
\
\
" , ~
, , ,'> ,~..,:,,~'" ,
f
egen
_OearZcnelczl
_Acddtt1tPdenlillZone1(APZ-1l
DAl:ddsrtPdenl.Zone2(APl.Z)
~~~~u.~I~e Oepartmenl of Planning September 12, 2007
THIS OOCtAJIENT IS "'TENoOED FOR GENERAL Pl.lNHI<I<J PURPOSES ONLY AU Wl'<RRANTlES. UCC AND OTHERWSE, EXPRESSED OR ....lIED.
...CWOlNG ....RRAHTIES AS TO ACOJRACV OF THE DATA 9'i0Wll HFRON ANO MERCHANTABIlITY ANO THE FITNESS FOR AI'ARTICUI..AIl: PURPOSE
ARE EXPRESSLY OISCt.ANEO ANOAll HC1DENTAl CONSEQUENTIAL OR SPECIAL OAMo\GES ARlSlNO OUT Of OR III CONNECTIOtf Y\fTH THE USE
OR PERFO-.NCE OF THE DATA SHOIo'tN ON THIS """,,PARE EXPftESSlYOlSCu.....m N4Y OETERMJNA.TION OF TOI"OoJR.I.PHYOR CONTOURS OR
NtY OEPICTION OF PHYSlCAl"'PRCNEMENTS. PROPERTY llHESOR IllJl..tolDARIES IS FOR OENERAllNFORWtlTlON ONLY AND SHALL NOT BE
USED FOR THE DESlGN.I.lOOf'ICA~.OR CQ.ISTAUCTIOM OF NPRCNEMENTS TO REAL PROPERTY OR fOR FlOOO PlAN OElERMr'UlllON
March 18, 2008
I II
- 4 -
CITY MANA GER 'S BRIEFING
APZ-l/CLEAR ZONE MASTER PLAN
PLANNING GOALS
1. Preserve existing stable residential neighborhoods within APZ-l
2. Remove, as voluntary opportunities present themselves, all non-compatible development within the
'Clear Zone'
3. Ensure that proposed non-residential uses are consistent with the City's AICUZ provisions
Overarching Principles
I Preserve existing stable residential neighborhoods
II Identify areas where opportunities exist for the voluntary reuse of land
II Consider planned public projects when evaluating the purchase and voluntary reuse of land
II Provide general design guidance for the voluntary reuse of land
II Include key stakeholders when amending the Master Plan for the area
Topic Specific Principles
I: Residential
- Avoidfragmenting the spacing of homes
Sell city-acquired property as quickly as possible to prevent blight and safeguard
ne ighborhoods
Create a "Pattern Book" that reinforces the architectural character of older
neighborhoods within this area
I: Commercial
Encourage compatible businesses to develop in a manner consistent with residential
areas
New businesses should be designed to enhance existing commercial areas
Work to attract compatible businesses to the area
II Traffic
Improve traffic flow and access to roadways
Whenever a property is converted to a different type of use, consider traffic flow
improvements
Use buffers to protect neighborhoods from major roadway impacts
II Open Space
Add open spaces, park areas, sidewalks and trail systems whenever possible
Explore assembling properties for open space within neighborhoods
Select landscaping materials that keep sight lines open, clear and uncluttered
Use substantial landscaping with trees and shrubs to buffer new compatible businesses
from stable neighborhoods
Preserve views of waterways
March 18, 2008
: III
- 5 -
CITY MANA GER 'S BRIEFING
APZ-l/CLEAR ZONE MASTER PLAN
PLANNING GOALS
Infill and Compatible Use Options
I Residential Infill
The parcel is embedded within a stable residential neighborhood and not adjacent to any
other use
The proposed residential development will not increase density within the neighborhood
The proposed design should ensure compatible mass, bulk, and height on building
alterations and new construction when considering adjacent properties
Conditions consistent with AICUZ principles, most importantly sound attenuation
Design Guidelines
8: Lot and Building characteristics
I: Landscape and Streetscape character
Criteria for Transitional Areas
II Proposed uses conform to the Oceana Land Use Conformity Program
I Change in use is achieved through conditional rezoning or conditional use application and
compliance with the design guidelines
8: Development proposals must be planned in a fashion that prevents the fragmentation of any
adjoining neighborhoods
8: Property owners requesting such change voluntarily agree to rezone their property
II Parcels of land proposed for change of use should be consolidated to allow the creation of a
unified and coherent development
March 18, 2008
I II
- 6 -
C IT Y MANA G E R 'S B R IE FIN G
APZ-l/CLEAR ZONE MASTER PLAN
March 18, 2008
I ,I
- 7 -
C IT Y MANA G E R 'S B R IE FIN G
APZ-l/CLEAR ZONE MASTER PLAN
OCEANA LAND USE CONFORMITY PROGRAM INCENTIVES
II Business Tax Rebate (ORD-2931 Sec 35.2-5)
II Fee Reimbursementsfor (ORD-2931 Sec 35.2-6)
- building code permits
- rezonings and conditional use permits
- subdivision and site plan review
- water and sewer connection
March 18, 2008
, , II
- 8 -
C IT Y MANA G E R 'S B R IE FIN G
APZ-l/CLEAR ZONE MASTER PLAN
OCEANA LAND USE CONFORMITY PROGRAM INCENTIVES
(Continued)
. Partial Exemption to Real Estate Tax (ORD-2932)
. Economic Development Investment Program Grants (ORD-2934B)
I Certain principal uses in Accident Potential Zone I now allowed where otherwise were
conditional uses in the underlying zoning district (ORD-2934)
Vested Properties
I. Sub-Areas A and B
1.1; Location and data as of August 13, 2007
1.1 Maps of 2 Sub-Areas
Related Documents
online at www.vb1!ov.com/apzl cz
I. APZ-1/Clear Zone Master Plan
. APZ-1 / CZ Use and Acquisition Plan
II City Zoning Ordinance Table 1804
. OPNAV Instructions 1l010.36B
1.1 List of Compatible Uses within APZ-1, NAICS Codes
Next Steps
Process now underway to consider adopting this Master Plan
as part of the Comprehensive Plan
II City Council - Briefing - March 18th
II City Council- Public Comment - March 25th
II City Council - Consider Final Action - April 1 st
THIS BRIEFING WAS BROUGHT FORWARD
March 18, 2008
: II
- 9 -
C IT Y MANA G E R 'S B R IE FIN G
RESIDENTIAL TAX ASSESSMENT EVALUATION AND REFINEMENT
18 March 2008
3:43 P.M.
Jerald Banagan Assessor advised, following the recommendations of the Tax Assessment Task Force in
2005, City Council decided to have a Property Tax Consultant review assessments and procedures of the
Assessors office. Management Services contracted the firm of Almy, Gloudemans, Jacobs and Deene.
Mr. Gloudemans presentedfindings on commercial assessments in 2007.
Mr. Gloudemans expressed appreciation for the great cooperation and assistance from Jerry Banagan,
Assessor, Ron Agnor, Assistant Assessor, Residential Appraisal staff: (Kim Smith, Tom Vitz, Dick
Whitaker, George Barham, Sue Cunningham), Kim Utley, Information Technology/Data Coordinator and
Ron Berkebile, Management Services.
What We Did
Reviewed appraisal statutes, guidelines, tables, forms and other documentation
Site visit and interviews (week of November 26)
Conducted independent statistical review of assessment accuracy and uniformity
Developed draft andfinal reports
Assessment Environment (Late 2007)
City had completed 2007-2008 revaluation: base date of 1 July 2006 and completion date
of 31 January 2007
Working on 2008-2009 reevaluation
Transitional real estate market; consideration given to later sales (after July 1)
Conversion to ProVal CAMA system (old system used for July 2008; new system for
August 2009)
Summary of Findings
Virginia statutes provide a strong basis for fair and equitable assessment
Assessment procedures are appropriate and effective
Assessments achieve high accuracy/uniformity
Department is well managed
Residential staff is highly professional and productive - understaffed
New CAMA system is significant enhancement
Various opportunities for improvement exist
March 18,2008
: II
- 10-
C IT Y MANA G E R 'S B R IE FIN G
RESIDENTIAL TAXASSESSMENT EVALUATION AND REFINEMENT
18 March 2008
Strong Statutory Basis for Accurate Values and Assessments
Assessments based on full market value (price property would bring on the open market)
Assessments are updated annually
No artificial value requirements or constraints
Mandatory rate rollback when assessments increase
Usual exemptions; relief for elderly and disabled
Public disclosure of sales prices (but Virginia law does not provide for real estate
transfer declaration)
Assessment Procedures
· Comply with professional standards
· Market-calibrated cost approach
· Appraisers review and plot sales on maps
· Valuation analyses are thorough/well-done
· Old system very cumbersome; new system has more functionality and is more efficient
· Too many neighborhoods
· Various additional opportunities exist
Mr. Gloudemans depicted a chart entitled "Sales Ratios by Property Type"
Assessment Performance
· Level of assessment between 0.95 and 1.00
-- 0.98for 07108 residential values
· Good uniformity among property groups
· Good uniformity and consistency in values among individual properties
-- average dispersion of 8%
· Good uniformity between commercial and residential properties
Budget and Staffing Conclusions
· Budget low by traditional benchmarks
-- budget per parcel
-- budget as a % of property tax revenue
· Staff relatively small by traditional measures and compared to other jurisdictions
· Staff highly productive but overly stretched
· Vulnerabilities given potential retirements and possible appeal increases
March 18, 2008
, I I
- 11 -
C IT Y MANA G E R 'S B R IE FIN G
RESIDENTIAL TAX ASSESSMENT EVALUATION AND REFINEMENT
Bud1!et and Staftin1! Benchmarks
IAAO Metropolitan Jurisdiction Council (MJC) Survey
1999
Benchmark Virginia Number Low Medium High
Beach
2005-2006
Budget as a percent 0.58 22 0.34 0.93 2.89
of total property tax
revenues
Budget per parcel $ 18.15 29 $8.84 $21.20 39.32
($)
Parcels per staff 4,231 30 1,739 2,819 6,667
Recommendations
· Seek sales disclosure form / consider mailer
Consider centralizing sales validation process and adopt sales validation codes
· Enhance analytical capabilities
additional training and pilot projects
-- add statistical analyst position
-- add GIS support position
-- provide appraisal staff direct access to data
(rather than submission of requests to ComIT)
· Continue to consider late sales
· Consolidate neighborhoods
· More comprehensively monitor time trends and determine required adjustments
· Use multi-year (time-adjusted) sales
· Consider testing direct sales approach
Consider a number of additional technical refinements (see report)
Conclusions
· Residential valuations are highly accurate and uniform (exceed professional standards)
· City has a highly experienced and capable staff
-- but staff is thinly stretched and vulnerable to
turnover/retirements or increased appeals
· The new CA.MA system represents a major improvement and brings opportunities for improved
efficiencies (many already in place)
· Assessment department should strive to enhance its data analysis capabilities
· Addition of a Statistical Analyst and GIS Specialist would be highly desirable
· Valuation procedures are sound; various technical refinements can be considered
March 18, 2008
I I I
- 12 -
C IT Y MANA G E R 'S B R IE FIN G
RESIDENTIAL TAX ASSESSMENT EVALUATION AND REFINEMENT
Councilman Dyer understood assessments were basically eighteen (18) months behind reality. Mr.
Banagan advised, for the past two (2) years, the assessment data has been brought up through
December, with the job finished in January and the assessments go into effect in July. Notices will be
mailed April Fourth.
Councilman DeSteph inquired re mandatory roll back on assessessment increases. Mr. Banagan advised
there is a state statute, if due to a reassessment, total property values increase more than 1%, there is a
roll back in the tax rate. If revenues do increase more than I%, a Public Hearing is held on the tax rate.
Councilman DeSteph inquired re the percentages of inaccuracies during the review. In the
Commonwealth of Virginia, if your house is assessedfor $500,000 and soldfor $400,000, when recorded
for the Grantor's Tax purposes, it is recorded at the higher of the two (2) rates. Mr. Gloudemans advised
this was accomplished in terms of an average error (average difference between assessment and sale
price) which was 8% average for all the residential. Sometimes, someone overpays for a property or
secures an extremely good purchase.
Mr. Banagan advised the Clerk of Circuit Court records Grantee and Grantor's taxes and as this is not
his area of expertise, he would refer to the Circuit Court for an explanation. There is a state statute which
states on the Grantor's tax, the higher of the sale price or actual value is recorded. It is the Attorney
General's opinion since assessments are at market value this can be used as a gauge of actual value. The
Grantee tax is being recorded at the sale price. The Commissioner of the Revenue is responsible for
updating the transactions on the real estate data base.
Councilman DeSteph referenced commercial property being based on the income approach. The next
bullet advised residential was based on the cost approach derived from a hybrid sales approach.
Mr. Gloudemans advised there are different rates per square foot for different quality classes. The
Assessor assigns a quality rating to a property. Those ratings are associated with certain building
features. For each of those quality classes, there is a rate per square foot used to price out the building as
if it were new. Then there are other adjustments made i.e. fireplaces, garages added, which gives the
value of the property The depreciation percentage is then applied based on the condition and age of the
property. Then, there is a separate estimate made of the land value, based on land sales. Those two
components, value of building and land are added together to provide the total estimate.
Mr. Banagan advised Mr. Gloudemans was performing his analysis on sales of commercial property. He
did not perform rent studies in Virginia Beach.
Councilman DeSteph advised Arlington utilizes the same Pro Val system as Virginia Beach. Arlington has
much more information re property contained on their site than Virginia Beach.
Mr. Banagan advised Arlington's appraisal system is Pro Val. Their Website is not a Pro Val product.
Their Website was generated in Arlington.
Mr. Banagan advised, if requested, the owners of Commercial Property must provide the Assessor's
Office with income and expense information. The only enforcement is if this information is not provided,
the owner cannot go to court and use this as evidence of a different value. There are other sources of
also getting this information. A good percentage of commercial property owners comply. Meal, room and
business license taxes of hotels are provided by the Commissioner of Revenue.
March 18, 2008
I II
- 13 -
C IT Y MANA G E R 'S B R IE FIN G
RESIDENTIAL TAX ASSESSMENT EVALUATION AND REFINEMENT
Council Lady McClanan advised citizens have advised her they do not believe they are treated fairly in
the Appeals Process and it is a waste of time.
Mr. Gloudemans believes the volume of appeals is really a function of whether the real estate market is
increasing or decreasing.
Mayor Oberndorf advised many citizens are expressing fear and frustration based on what is going on in
the economy. Many homes in their neighborhood are not selling, but even so they are anticipating an
increase in assessment.
Mr. Gloudemans advised this is not unique to Virginia Beach. The only concrete guage is the recorded
prices.
Councilman DeSteph inquired re the number of appeals last year approximately doubled from the
previous year, which were approximately 375.
Councilman DeSteph shall meet with Jerald Banagan, Real Estate Assessor, to discuss further concerns.
Council Members Wilson and Wood will sponsor the following Resolution for the City Council Session of
March 25, 2008:
Resolution to ESTABLISH a Committee to study the late payment of Real Estate Taxes
with a report to City Council within thirty (30) days of City Council's appointment.
City Council was authorized in 1965 to impose a penalty of up to 10% for taxes not paid by the due date,
as well as interest up to 10% annually on the amount of both the unpaid taxes and the penalty.
An analysis of the penalty would assist City Council in making an informed decision about whether the
penalty amount should be reduced.
March 18, 2008
I II
- 14-
CITY MANA GER 'S BRIEFING
PLANNING ITEMS PENDING
5:00 P.M.
Jack Whitney, Director of Planning, gave a brief synopsis of the Planning Items pending. The majority of
items for March 25, 2008, have been discussed, the two added were heard during the March Planning
Commission meeting.
March 25, 2008
BQI (Modification of Proffers
Kempsville District
Applicant requests a Modification of Proffers to change the dwelling unit design and to
increase the number of dwellings by nine (9) for a total of fifty-seven (57)
The purpose of the modification is to allow the developer to build a unit that will be
more marketable.
AICUZ is less than 65.
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommends denial (6-5)
No opposition
Mr. Whitney advised the style, materials and architectural quality will remain the same, the only
change is the new units will not have garages.
Public Comment on APZ-IICZ Master Plan
April 1, 2008
Nimmo Childcare (Deferred Item)
Vote on APZ-IICZ Master Plan
Ordinance to amend the Comprehensive Plan by incorporating the APZ-l/Clear Zone
Master Plan by reference
April 8, 2008
R-5R Zoning Amendment
Ordinance to amend Section 502 and to add Section 502.1 of the City Zoning Ordinance
re R-5R Residential Resort District
Mr. Whitney advised a number of citizens registered in support and opposition and there
was interest in having the matter WITHDRA WN or DEFERRED for additional work.
Councilman Wood advised he has spoken with representatives of both sides and both
indicated their preferences for DEFERRAL. This affects North Virginia Beach and
some of Shore Drive. Councilman Wood will meet with the representative groups and
advise City Council.
March 18, 2008
i I
- 15 -
C IT Y MANA G E R 'S B R IE FIN G
PLANNING ITEMS PENDING
Donna House (Conditional Use Permit)
Kempsville District
Applicant requests a Conditional Use Permit for "permanent makeup ", which is
considered to be aform of tattooing
There will be only one (1) customer at a time
All of the regulations applicable to tattooing will apply to this activity
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
Prosperity Beach, L.L.c. (Modification of Proffers)
Beach District
Applicant desires to modify the proffers of a 2006 rezoning due to the need to shift the
location of buildings shown on the proffered site plan (investigation after the 2006
rezoning found a water line traversing the site where a building was shown).
5,000 square feet of additional retail is also being added.
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
Residential Investment Properties Change of Zoning
Bayside District
Applicant requests a Change of Zoning from R-IO toA-12
Nine (9) townhouse (condominium) units will be built at d a density of 10.7 units per
acre. Surrounding area is developed at 12 to 18 units per acre
Design and materials of buildings are of high quality
AICUZ is less than 65.
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
March 18, 2008
I I I "
- 16-
CITY MANA GER 'S BRIEFING
PLANNING ITEMS PENDING
WestNeck Partners, LLC
Princess Anne District
Applicant proposes to rezone the site from AG-1 and 2 to 0-2 Office for the purpose of
developing an office complex of five (5) buildings
They will provide a wide, landscaped buffer adjacent to West Neck Road. Site will
include a trail system
Buildings are designed in a Southern Rural/Tidewater style, compatible with this area
The Historic Review Board has endorsed this application
Project is compatible with the AICUZ at this location
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
Larisa Properties, LLC (Modification of Conditions)
Rose Hall District
Applicant requests a modification of a 1981 Conditional Use Permit to allow for an
expansion of an existing car wash on the site
The applicant is currently expanding a former gas station building on the site to be used
as a self-service laundry.
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
April 22, 2008
Assisi House (Modification of Conditions)
Kempsville District
Applicant requests a modification of the existing church's Conditional Use Permit for
the purpose of constructing a residential dwelling on the site
The dwelling will house afamily of mentally disabled individuals
A Use Permit is not required for a family of this type. The application is only to modify
the Use Permit to allow a dwelling on the site
AICUZ is Less than 65
March 18, 2008
I i I
- 17 -
C IT Y MANA G E R 'S B R IE FIN G
PLANNING ITEMS PENDING
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
There was opposition
Evelyn's Wildlife Refuge (Conditional Use Permit)
Centerville District
Applicant requests a Conditional Use Permitfor Home-Based Wildlife Rehabilitation
Applicant has been a Wildlife Rehabilitator at this location for sixteen (16) years,
primarily caringfor small mammals, birds and possums
Applicant meets the standards in the Comprehensive Zoning Ordinance for this type of
wildlife rehabilitation
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
Welden field of Virginia, LLC (Subdivision: Fenwick Forest)
Centerville District (Change of Zoning)
(Overall master plan for CBN)
Applicant requests a Change of Zoning from R-5D, I-I and 0-2 to PD-h-2 (r-5D) for the
purpose of developing a residential community laid out in neo-traditional style.
There will be sixty-nine (69) single-family homes and eighty-one (81) townhomes (density
= 3.2 per acre).
Project will be part of a larger mixed-use development called "The Villages of
Blenheim"
AICUZ is Less than 65
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (10-1)
No opposition
March 18, 2008
I I
- 18 -
C IT Y MANA G E R 'S B R IE FIN G
PLANNING ITEMS PENDING
Argold Dam Neck, LLC
Princess Anne District
Applicant requests a Change of Zoning form AG-2 and R-15 to R-7.5 for the purpose of
developing one hundred thirteen (113) single-family dwellings
Homes will have 2,000 to 2,400 square feet offloor area
Proposed density is 3.5 units per acre. Surrounding area ranges from 2.2 to 3.5 units per
acre
AICUZ is Less than 65
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
There was opposition
Mill Dam Associates, LLC (Subdivision Variance)
Bayside District
Applicant requests a Subdivision Variance to lot width
Applicant desires to subdivide an exiting 1. 34-acr parcel intofour (4) lots, ranging
in sizefrom 10,928 square feet to 22,828 square feet
The existing parcel has only 40 feet of frontage on a public street (50 foot per lot is
required.)
AICUZ is Less than 65
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
There was opposition
Kathleen Renfro (Conditional Use Permit)
Princess Anne District
Applicant requests a Conditional Use Permit for horse riding lessons
The site is currently developed with a house, horse barn and a horse-riding ring.
Applicant has eight (8) horses
Lessons will be conducted during the day for beginning-level riders
There are will be no employees
There will be no shows on the site
March 18, 2008
I I II II
- 19 -
C IT Y MANA G E R 'S B R IE FIN G
PLANNING ITEMS PENDING
Evaluation and Recommendation
Planning Staff recommends approval
Planning Commission recommended approval (11-0)
No opposition (Consent Agenda)
March 18, 2008
I I II ji
- 20-
CITY MANA GER 'S ITEMS
STRUCTURE FOR FY 2009 BUDGET WORKSHOPS
The City Manager distributed correspondence re the Structure of FY 2009 Budget Workshops and
requested this be discussed during the City Council Session of March 25, 2008.
Said correspondence is hereby made a part of the record.
BY CONSENSUS, City Council ADJOURNED THE CITY COUNCIL WORKSHOP at 5:50 P.M.
March 18, 2008
I I II
City e>f -V-irgirria Beach
OFFICE OF THE CITY MANAGER
(757) 385-4242
FAX (757) 427-5626
TTY 711
VBgov.com
MUNICIPAL CENTER
BUILDING 1
2401 COURTHOUSE DRIVE
VIRGINIA BEACH, VA 23546-9001
March 27, 2008
The Honorable Meyera E. Oberndorf, Mayor
Members of City Council
Subject: Assessment Process Review
Dear Mayor and Council Members:
On March 18, 2008, Mr. Robert Gloudemans, from Almy, Gloudemans, Jacobs, &
Denne, presented the findings of the residential reassessment process review.
Enclosed is a bound version of the final report. We apologize for the late delivery.
Sincerely,
.
~re
City Manager
JKS/rdb
Enclosures (1)
c: Jerry Banagan, City Real Estate Assessor
Catheryn Whitesell, Director of Management Services
''l
I'
FINAL REPORT
,
ASSESSMENT PROCESS REVIEW
RESIDENTIAL REASSESSMENT PROCESSES
,F
Prepared for
THE CITY OF VmGINIA BEACH
DEPARTMENT OF MANAGEMENT SERVICES
By
ALMY, GLOUDEMANS, JACOBS & DENNE
Property Taxation and Assessment Consultants
7630 North 10th Avenue
Phoenix, Arizona 85021
w
January 28, 2008
Alroy, Gloudemans, Jacobs & Denne . ., .
Final Report - Review of Residential Reassessment Processes, CIty of Vzrgznla Beach
I'
..
Contents
Acknowledgments..... .......................... .......... ......... ........ ............................ ...... ........ ........ .............. iii
Executive Summary ........................... ....................... ....... ........ ....................... ...... ................ ......... iv
1. Introduction .................. ................... .......... ...... ....................... ........... ................... ................... 1
1.1 Assignment ....... ........................... ........ ............ ................ ........... .................................... 1
1.2 Setting........................................................................................................................ ..... 1
2. Resources, Staffing, and Management.... ..................................... ........... .......... ......... ............. 4
2.1 Current Resources............ ............................................ .......... ..................... ............ ........ 4
2.2 Current Workloads......... ........................... .................................. .................. ....... ........... 4
2.3 Evaluation of Needs .............. ........ ...... .............. ............ ..................... ............. ................ 5
2.4 Management............. ............... ..... ................................. ............... .............................. ..... 8
2.5 GIS............... ...... ........... ................ ........... .................................... ......................... .......... 9
3. Valuation Methods and Techniques...................................................................................... 11
3.1 Background and System Conversion ............................................................................ 11
3.2 Data Collection and Sales Analysis .............................................................................. 12
3.3 Single-Family Residential Valuation ............................................................................ 13
3.3.1 Old System..................................................................... ................. ........ .... .......... 13
3.3.2 New System.......... ................................ ...................... ........................ ............. ..... 14
3.3.3 Land Valuation...... .... ............ ....... ...... ......... ........ ............... ................... ................ 14
3.3.4 Improvement Valuation ........................................................................................ 14
3 .4 Hi-Rise Condominiums.......... ................. ......... ..................................... ....................... 15
3.5 Comparable Sales Module ............................................................................................ 16
3.6 Multiple Regression Analysis ....................................................................................... 16
4. Sales Ratio Study Performance Analysis.............................................................................. 18
5. Conclusions and Recommendations ................................ ..................................................... 29
5.1 Conclusions.............................. ..... ........................ ............. ........................ ......... .......... 29
5.2 Recommendations... ............ ...................... ....... ............................. ....................... ......... 29
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
11
I I II
ACKNOWLEDGMENTS
Almy, Gloudemans, Jacobs & Denne (AGJD) benefited greatly from the cooperation of the City
of Virginia Beach in its review of the residential reassessment processes employed by the office
of the Real Estate Assessor (hereafter, "the assessor"). Weare especially grateful for the com-
plete cooperation of the assessor, J.D. ("Jerry") Banagan and the assistant assessor, Ronald
("Ron") Agnor. We thank Kim Utley for her help in supplying the data and documents we re-
quested. Our review would not have been possible without the frank and professional assistance
from the residential real estate appraisal staff, including the following appraiser supervisors and
senior assessors: Kim Smith, Tom Vitz, Dick Whitaker, George Barham, and Sue Cunningham.
Additionally, we would like to thank Debbie Apple of the assessor's office and Susan O'Neill of
the GIS center.
We also wish to acknowledge the assistance of Ron Berkebile of the Department of Management
Service.
AGJD's study team was headed by Robert Gloudemans, and its members included Richard Almy
and Robert Denne.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
111
j
EXECUTIVE SUMMARY
The City of Virginia Beach contracted with the firm of Almy, Gloudemans, Jacobs & Denne
(AGJD) for an independent, objective review of both commercial and residential reassessment
procedures. This report presents the findings of our residential review. It is based on interviews
and observations made during 28-30 November 2007. In preparation for our visit, we reviewed
property assessment statutes, forms, manuals, and other relevant documentation. We also ana-
lyzed data proved by the City in a "ratio study", the standard method used to evaluate the accura-
cy and equity of residential property values. (The report of our review of commercial reassess-
ment processes was submitted on 12 March 2007. That report also examined the setting for real
estate assessment in Virginia and some aspects of the management of the assessor's office in
more detail than this report does.)
The law requires the assessor to value real estate annually at 100 percent of its fair market value,
a challenging task in active real estate markets, but one that ensures a high degree of real estate
tax equity. We find that the Real Estate Assessment Office does a credible, effective job of va-
luing residential properties at fair market value levels. The office is fortunate to have strong lea-
dership and an experienced, well-qualified residential staff that effectively employs acceptable
valuation methods. Residential values closely track the market and exhibit good uniformity
among properties. Our ratio study analyses revealed good uniformity in assessment levels be-
tween commercial and residential property, so that each component of the real estate tax base is
paying its fair share of the total.
At the same time, it is important to note that residential reassessment processes are in transition
from those that were possible under the previous mainframe computer-assisted mass appraisal
(CAMA) system to those that are possible under the newly installed Pro Val CAMA system.
There are a number of opportunities for additional improvements or refmements, some of which
the office already recognizes. We summarize some of the more significant opportunities below.
· Workload and Staffing. Relative to the number of properties that must be valued and the
number of annual events that affect the workload (such as new construction), the apprais-
al staff is comparatively small. The staff currently is keeping abreast of its annual work,
which is all the more remarkable in view of the comparatively labor-intensive nature of
field inspections and the current processes required for confirming and analyzing sales
and for updating value estimates. The current staff size does not allow the staff to re-
inspect all properties periodically, as professional standards recommend, which would
help ensure that all are accurately described. The staffs current success partly is a result
of a comparatively small number of appeals, a fortunate circumstance that could be jeo-
pardized by the downturn in the property market. We think it prudent, therefore, for the
city to consider augmenting both the number and skills of the assessor's staff. We also
recommend that a current information technology policy of not allowing the assessor's
office direct access to the real estate database to extract selected data for analysis be re-
considered, as such a policy inevitably impinges on the efficiency and effectiveness of
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
iv
the appraisers' work and on the assessor's ability to respond to inquiries from stakehold-
ers like city council in a timely fashion.
. Management. The assessor's office appears well managed. It certainly is meeting its
goals of efficiently completing annual reassessments with a minimal number of appeals.
The number of appeals is approximates 0.2 percent of the total number of properties,
about 1/10th of a typical rate. At the same time, the costs of assessment administration, as
a percentage of total real estate tax revenues, is about 0.6 percent, which is about half the
expected percentage. This is achieved by having an average workload, expressed as the
number of parcels per employee of the assessor's office, of 4,200 parcels, when work-
loads typically are in the range of2,500 to 3,000. The office's compact organization al-
lows the assessor to evaluate and coordinate annual reassessment recommendations so
that all categories of property are valued equitably. The assessor's office also does a
credible job of communicating assessments, the assessment process, and other relevant
information through a variety of media, including personal contact, printed materials, and
the city's website, on which we found the neighborhood reports to be particularly exem-
plary.
. Valuation procedures. We separately examined the procedures used to appraise land,
residences, and high-rise condominiums. As indicated above, we believe that the ap-
praisal staff has the requisite skills and that professionally acceptable appraisal methods
are being used. Specifically, the staff continuously monitors sales prices and construction
costs and annually attempts to ensure that each year's reassessment is between 95 percent
and 100 percent of the then-current market levels (bearing in mind that taxes are assessed
in the following year). We did, however, identify a few areas in which procedural im-
provements could be made.
· Valuation performance. To verify our procedural evaluation, we made a separate, indus-
try-standard "sales ratio study." Sales ratio studies are based on the premise that open-
market, arm's-length sales of fee-simple interests in real property represent the best evi-
dence of market values. In our ratio study, we compared the appraisals of residential
properties that were sold recently to their sales prices. Three of the main things of inter-
est in a sales ratio study are (1) the typical ratio of appraisals (assessments) to sales pric-
es, as indicated by a measure of central tendency, such as the median; (2) the uniformity
of individual ratios (that is, how closely they cluster about the typical ratio), which is in-
dicated by a statistic known as the "coefficient of dispersion"; and (3) other patterns of
non-uniformity (a statistic known as the "price-related differential" is used to determine
whether low-value and high-value properties are assessed at equal fractions of market
value). We confirmed that median ratios generally were within the target range. Equally
important, coefficients of dispersion generally were less than the 10-15 percent that the
profession considers acceptable in the appraisal of residential properties. We checked for
the possibility that a number of common problems might affect the accuracy and equity
of residential assessments, but found nothing of significance. We also noted that with the
new CAMA system, the assessor's office is now in a position to make better use of ratio
studies as an internal diagnostic tool. In conjunction with this, we recommend that use be
made of a questionnaire designed to help determine whether each sale meets the criteria
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
v
of a usable sale (ideally, such a declaration would be required when a deed was record-
ed).
. Information technology andfuture enhancements in performance. In RACS, the City of
Virginia Beach is making a major investment in technology. As noted, the assessor's of-
fice benefits from the new CAMA system. Further improvements in the accuracy of ap-
praisals will require greater use of both statistical and spatial data analyses. This implies
that the city should make necessary further modest investments in software and in train-
ing, as well as ensuring that the assessor's office has easy access to specialists in using
the city's geographic information system (GIS).
In summary, we conclude that, while there are opportunities for improvement, the office of the
real estate assessor currently does a credible, effective job of valuing residential properties at fair
market value levels. Residential values closely track the market and exhibit good uniformity
among properties. This achievement can be attributed to a well-planned and managed residential
appraisal program, use of acceptable valuation methods, and a skilled and experienced staff.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
vi
1. INTRODUCTION
1.1 Assignment
The City of Virginia Beach asked Almy, Gloudemans, Jacobs & Denne (AGJD), property taxa-
tion and assessment consultants, to review the reassessment processes employed by the City Real
Estate Assessor. The review was made in two phases. In the first, we examined commercial
reassessment processes. See our report, "Assessment Process Review: Commercial Reassess-
ment Processes," dated March 12,2007. The commercial report examined the setting and man-
agement practices of the assessor's office in more detail than this report does. This report focus-
es on residential reassessment processes. It also reexamines staffing requirements in the light of
residential appraisal workloads and changes in business processes associated with the new Reve-
nue, Assessment, and Collection system (RACS). In addition, it evaluates ProVal, the new com-
puter-assisted mass appraisal (CAMA) system that is a component ofRACS.
The residential reassessment review drew on our earlier visit to Virginia Beach and on a more
recent visit to the City's offices in 28-30 November 2007. During that visit we interviewed
management and residential appraisal staff; we reviewed developments since our last visit; and
evaluated assessment procedures for residential properties. We also reviewed progress in the
conversion from the former CAMA system to Pro Val, the new system. In preparation for our
visit we reviewed property assessment statutes, forms, manuals, and other relevant documenta-
tion. We also have had the opportunity to analyze data provided by the City and undertake "ratio
studies" used to evaluate the accuracy and equity of residential property values. Prior to leaving
the City we presented a verbal summary of our preliminary findings.
This report contains our complete fmdings and recommendations. Below we briefly touch on the
legal and institutional setting for real estate assessment. Section 2 discusses resource needs,
staffing, and management. Section 3 discusses residential valuation procedures and methods and
the new ProVal CAMA system. Section 4 presents our ratio study analyses. Section 5 summa-
rizes our conclusions and recommendations.
1.2 Setting
In recent years, residential property values in the City of Virginia Beach (as with other parts of
the Hampton Roads region and other parts of the nation) have risen rapidly. 1 With the current
downturn in residential housing prices nationally, the future in Virginia Beach is unclear, but
there are indications that the overall market is softening, particularly in the upper end of the mar-
ket.
As mandated by law, real property in Virginia Beach is reassessed annually at current market
value. Annual assessments are to be completed by 31 January and become effective the follow-
I For descriptions of the recent vibrancy of the residential market. see John L. Knapp, "Virginia's Real Property
Tax," a paper presented at V ACO- VMI Property Tax Symposium, Richmond, Virginia, May 25, 2005. Also see
Knapp, "How the Housing Boom Affects Virginia's Real Estate Taxes," The Virginia News Letter, vol. 81, no. 5,
October 2005.
ing 1 July, which is the assessment date for the next fiscal year. The assessment roll (land book)
currently in effect for fiscal year 2007-2008 has a base assessment date of 1 July 2007. The val-
ues in this land book were based on market evidence for the period, 1 July 2005 through 30 June
2006, with some consideration given to later sales where possible. The city code also provides
for quarterly supplementary assessments for physical changes? The assessor currently is work-
ing on 2008-2009 assessments, which are to be completed by 31 January 2008.
The assessor receives information about real estate transfers from the clerk of the circuit court
via the commissioner of revenue. 3 Sales prices are inferred from the amount of recordation tax
paid; there is no requirement that the parties to a transfer complete a declaration giving the parti-
culars of the sales. As a backup, the office also has access to sales records in the local multiple
listing service (MLS). Information on building permits is received from the Permits and Inspec-
tions Department. As mentioned in our commercial report, Virginia cities and counties should
lobby for a sales disclosure law, mandating the disclosure of selected sales information at time of
sale. In the absence of such a declaration the City should consider adopting a sales confirmation
mailer to confirm the price paid and help ascertain the circumstances of the sale and whether any
significant non-realty components were included.
The new Revenue, Assessment and Collection System (RACS) integrates the records and
processes of the Real Estate Assessor, the Commissioner of Revenue, and the Treasurer4. The
GRM system of Manatron is a major part of this system. As discussed in section 3, the assessor
heavily utilizes the current version of the ProVal CAMA system (also by Manatron) in its opera-
tions. The City's Communications and Information Technology Department ("ComIT") is the
custodian ofRACS, and RACS users rely on ComIT for crucial support. The Center for Geospa-
tial Information Services, a part of ComIT, provides geographic information system (GIS) sup-
port.
To protect the integrity ofthe database and control use of system resources, ComIT requires that
its personnel perform any job that involves more than read-only access to the RACS database,
such as producing non-standard reports or obtaining file extracts. Offsetting the advantages of
ComIT's policy are the costs they impose on users. Having to prepare job requests ("heat tick-
ets") and wait for them to be carried out can delay work and frustrate clients like members of the
city council. Even more frustrating is receiving something other than what was requested or ex-
pected, thereby necessitating additional costs and delays. If experience in other jurisdictions is
any guide, the current policy could eventually result in workarounds that involve the creation of
parallel databases that would have the effect of degrading the value of the RACS database. It
should be possible to erect system safeguards and protocols that would make a client like the as-
sessor responsible for the integrity of the data it collects and that would allow it unfettered access
to those data for analysis and reporting.
As noted in our commercial review, taxpayers may challenge their assessment first to the asses-
sor, second to the board of equalization, and third to the circuit court. Appeals to the assessor are
2 These assessments would be effective on the first of October, January, and April.
3 The commissioner also processes ownership and map changes, initiates sales records, and extends taxes.
4 While approximately 30 other cities and counties in Virginia use Pro Val, Virginia Beach is the first to obtain GRM
(Roanoke also plans to do so).
Almy, Gloudemans, Jacobs & Denne 2
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
informal. Regarding appeals to the board of equalization, the Virginia code (' 58.1-3379(C))
provides:
"The burden of proof shall be upon a taxpayer seeking relief to show that the
property in question is valued at more than its fair market value, that the assess-
ment is not uniform in its application, or that the assessment is otherwise not
equalized. In order to receive relief, the taxpayer must produce substantial evi-
dence that the valuation determined by the assessor is erroneous and was not ar-
rived at in accordance with generally accepted appraisal practice. Mistakes of
fact, including computation, that affect the assessment shall be deemed not to be
in accordance with generally accepted appraisal practice."
Recently, the City of Virginia Beach has enjoyed a remarkably low volume of appeals. Al-
though it is dangerous to ascribe that fortunate circumstance to specific factors, the generally ac-
curate and defensible assessments and the evident professionalism of the appraisal staffundoub-
tedly contribute. The assessor notes that appeals increase when the market slows. There already
is evidence that that is happening.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
3
2. RESOURCES, STAFFING, AND MANAGEMENT
2.1 Current Resources
The resources allocated to assessment administration are an indication of political support for
accurate and equitable assessments. Of course, the nature of the assessment workload affects
resource requirements. How the assessor utilizes available resources is essential to operational
efficiency and effectiveness, and property tax systems must be well managed if public accep-
tance is to be secured.
Funding for the Office of the Real Estate Assessor in the 2007-2008 fiscal year is $2,838,696.
The total complement is thirty-five. We note with approval the upgrading of a clerical position
to a "business application specialist." The incumbent in the position is crucial to the office's
successful use of its IT resources. This person serves as a communications bridge between the
assessor's office and ComITo While the assessor is requesting additional positions, city budget
goals would dictate a staff reduction of three full-time equivalent (FTE) positions. As discussed
below, we believe a strong case can be made for increasing the assessment staff; reducing it like-
ly would be extremely detrimental.
The residential appraisal staff totals seventeen, with one appraiser serving as an office-wide
CAMA system specialist. There are three residential supervisors and thirteen appraisers respon-
sible for field inspections and for developing and maintaining Microsoft Excel-based neighbor-
hood base rate models. The supervisors nominally are responsible for sets of council districts
with approximately equal parcel counts. Even though each supervisor has a team of appraisers
associated with him or her, the appraisers are not truly subordinate to the supervisor. They work
more as roving teams, as they are assigned neighborhoods throughout the city in order to give
them more-or-Iess equal work assignments in terms of number of parcels and valuation chal-
lenges. Assignments are revised annually.
The assessor's office has access to the IT resources provided by ComIT, although as previously
mentioned we believe that current polices render those resources less useful than they could be.
The office benefits from the data it receives from the Commissioner of Revenue and from the
Permits and Inspections Department. A citywide 311 call center, which became operational in
September 2007, has reduced call volume and the time spent responding to simple inquiries. The
office has the use of ten city-owned automobiles and nine mobile telephones.
2.2 Current Workloads
Statistics on parcel counts and statistics on transactions and events such as sales, new construc-
tion and renovations, exemption applications and appeals provide an indication of workloads.
Market trends obviously affect workloads. Currently, the total number of taxable parcels ofland
in Virginia Beach is approaching 150,000. There are more than 141,000 residential parcels
(commercial parcels constitute almost 5 percent of the total or about 8,200). The rate of growth
has been fairly stable since 1991 at about 1,600 parcels (1 percent) per year. In 2006, about
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
4
I' ,i II
1,500 residential units were added (single-family residences, condominiums, townhouses, and
duplexes). There were 3,000 residential building additions. In addition to inventorying and va-
luing new construction, the residential appraisal staffhad 16,000 sales to review. The sales cul-
minate in updated valuation models, and there are about 1,100 residential neighborhoods (which
we, consider excessive as discussed in section 3). Nearly two-thirds of all appeals to the assessor
are residential appeals, so an annual appeal workload of 400 or more can be anticipated.
There is an important time dimension to appraisal work. The deadlines associated with finishing
annual assessments by 31 January and quarterly supplemental assessments require physical field
inspections of new construction in the run up to the deadlines. The ProVal system allows the
assessor to work on multiple annual land books simultaneously, which allows for a more effi-
cient use of staff resources.
2.3 Evaluation of Needs
Assessors' offices typically do not engage in cost accounting, particularly with respect to how
staff members utilize their time, and many do not compile relevant workload statistics. Although
the City of Virginia Beach does not compile data on time utilization, the assessor's office does
compile useful workload statistics.
Table 2-1 provides a pro forma estimate of staffing needs (full-time equivalent positions or
FTEs). The assumed workload statistics (column 2) are based on available workload statistics.
The productivity rates (column 3) are notional and are based on rates achieved or believed to be
achievable in other jurisdictions. The days of work estimates (column 4) simply are the work-
load estimate divided by the productivity rate. The indicated FTE need (column 5) is based on
an assumed work year of 220 days. Better figures on workloads and productivity rates that re-
flect actual achievements in Virginia could be used to refine the estimate. Nevertheless, the es-
timates reveal concerns about the adequacy of staffing in a number of areas. The line captioned
"Executive & technical support" shows a need of five positions where only three exist now. The
additional positions are a statistical analyst and a GIS analyst. In addition, the activities identi-
fied as "field data verification" are not now carried out because available staff must spend their
time on higher priority activities associated with adding new property to the rolls and carrying
out annual reassessments. However, professional standards recommend that properties be in-
spected periodically. On the other hand, the number of residential valuation models that need to
be recalibrated every year could be substantially less than the 1,100 (one per neighborhood)
completed in the past, particularly ifour recommended statistical analyst position were created
and staffed.
It also should be noted that the estimated staffing requirement of forty in table 2-1 is consistent
with the benchmark data presented in table 2-2 (which is the same as table 3-1 in our commercial
review). The analysis above ignores administration ofland-use assessments, and it does not take
into account probable increases in homestead exemption workloads.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
5
II Ii II
Table 2-1: Evaluation of Staffing Needs
Position/activity Assumed Productivity Days of Indicated staffing Actual
Workload rate/day work needed (FTEs) staffing
(1) (2) (3) (4) (5) (6)
Executive / management 7.0 5
Real Estate Assessor 1.0
Assistant Real Estate Assessor 1.0
Executive & technical support 5.0
Real Estate Clerical Operations 6.1 8
Deeds processed 22,000 50 440 2.0
Map changes processed 600 30 20 0.1
Permits logged 4,700 50 94 0.4
Homestead exemptions 5,000 50 100 0.5
Other exemptions 3,000 20 150 0.7
Customer service 1,500 50 30 1.0
Appeals logged 400 20 20 0.1
Other support (file updates) 0 100 0 0.0
Notices reviewed/mailed 145,500 500 291 1.3
Non-residential property appraisal 5.2 5
Screen sales 1,000 20.0 50 0.2
Inspect sales 1,000 15.0 67 0.3
I&E questionnaires 3,600 15.0 240 1.1
. Modeling buildinglQA 30 0.5 60 0.3
New work (permits) 200 2.0 100 0.5
Change reviews 7,900 25.0 316 1.4
Field data verification 1,400 12.5 112 0.5
Appeals 100 0.5 200 0.9
Residential property appraisal 17.7 17
Screen sales 10,500 30.0 350 1.6
Inspect sales 10,500 15.0 700 3.2
Modeling buildinglQA 50 0.5 100 0.5
New work (permits) 4,500 8.0 563 2.6
Change reviews 133,200 100.0 1,332 6.1
Field data verification 28,400 35.0 811 3.7
Appeals 300 10.0 30 0.1
Sub-total 35.9 35.0
Overhead Number Hours
of staff per year 3.7 0.0
Professional development 23 20.0 457 2.1
Other 36 10.0 359 1.6
Total 39.6 35.0
Almy, Gloudemans, Jacobs & Denne 6
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
I'" II
Table 2-2: Budget and Staffing Benchmarks
Virginia IAAO Metropolitan Jurisdiction Council (MJC) Survey, 1999
Benchmark Beach, 2005-
2006 Number Low Median High
Budget as a percent of total 0.58 22 0.34 0.93 2.89
property tax revenues
Budget per parcel ($) 18.15 29 8.84 21.20 39.32
Parcels per staff 4,231 30 1,739 2,819 6,667
Source: "1999 Major Assessment Jurisdiction Survey," Cook County Assessor's Office
In principle, values of the first benchmark (assessment expenditures as a percentage of property
tax revenues) should be minimized so that the funds available for other government services are
maximized while at the same time providing sufficient funding for effective assessment adminis-
tration. Determining an optimal level of funding obviously requires judgment. At typical levels
of property taxation in the U.S., it is generally believed that between 1.0 and 1.5 percent of prop-
erty tax revenue is needed for effective assessment administration. As can be seen, Virginia
Beach is considerably outside that range, and only two ofthe responding districts had lower ra-
tios than Virginia Beach (one was a very large, high tax district, and the other probably served
only part of a county that included a major city with a separate assessor's office). On the other
hand, the Commissioner of Revenue and the GIS center process real estate transfers and mapping
changes, which would be the responsibility of many assessors' offices.
The factors just mentioned also pertain to the other two benchmarks. Probable increases in costs
since 1999 complicate interpretation of the second benchmark (budget per parcel). In any event,
eleven of the responding districts had lower (1999) expenditures per parcel, while eighteen had
higher. Regarding the third benchmark (parcels per staff member), a comparatively low number
indicates (everything else being equal) a light workload, while a large number indicates a heavy
workload. In comparison to the median of2,819 parcels per staff member in the 1999 MJC sur-
vey, several earlier IAAO studies have suggested that 2,500 parcels per staff member is typical
overall, while larger districts (like Virginia Beach) typically had about 3,500 parcels per staff
member. In any event, only four districts had higher workloads than Virginia Beach (and two of
those clearly represented unusual circumstances).
No (long-term) deficiencies were noted in office facilities. Reportedly, pairs of appraisers share
a city-owned vehicle for a week, which certainly presents a scheduling challenge and may result
in suboptimal use of appraisal resources.
We conclude that, while the assessor's office operates efficiently, we believe that it is under-
funded and under-staffed. An argument for increased funding and staffing would be more com-
pelling if it were accompanied by an increase in the tax base. Unfortunately, such a claim cannot
be documented. However, experiences in other jurisdictions suggest that frequent re-inspections
do discover un-assessed and erroneously classified property. More accurate appraisals, in addi-
tion to reducing tax mis-payments, would allow the assessor's office to raise its target assess-
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
7
ment ratio slightly, which would increase the tax base. More importantly, the risk of losing as-
sessed value through the appeal process would be reduced.
There are several staffing needs. As emphasized in section 3, we continue to recommend a sta-
tistical analyst position. Such a specialist is needed to maintain appraiser productivity while not
requiring each appraiser to develop multivariate mass appraisal model building skills and sophis-
ticated ratio study analyses. Having such an analyst will be needed to take advantage of the ca-
pabilities of the next version 7.10 of Pro Val, when it is released.
Second we recommend that, unless the Center for Geospatial Information Services itself is
sufficiently staffed to provide effective support to the assessor's office, a GIS analyst position be
created within the assessor's office. Recent developments in the city's GIS system have
apparently robbed the assessor's office of mapping resources because earlier routines of
generating maps no longer work. Neither the GIS center nor the assessor's office has sufficient
staff to remedy the problem. Maps are crucial to mass appraisal processes, and the current
situation cannot be endured. Appraisers are forced to rely on suboptimal paper maps and
manually annotate them. Although such a tedious approach helps appraisers get a feel for the
spatial pattern in sales prices, GIS could speed the process, and geostatistical analyses could
reveal patterns that cannot be spotted currently. We believe meeting GIS needs should be made
a priority item.
2.4 Management
The City of Virginia Beach is fortunate in having strong leadership in the assessor's office and in
having an experienced staff of appraisers. It also is fortunate in having two Pro V al experts.
Nevertheless, there are some general professional development needs that need to be met if ca-
pabilities of the CAMA system and the City's GIS system are to be effectively used.
A general challenge is increasing the appraisers' understanding of, and support for, the im-
provements in processes that the ProVal system makes possible. Happily, management recog-
nizes this and has begun to inculcate in the appraisal staff a sense of ownership of the values
produced by the system. Blaming the system for any problems is not acceptable; solutions to
problems must be found. Not all residential supervisors are considered to have strong mass ap-
praisal and leadership skills, and two are nearing retirement age. There is a feeling among some
of the appraisal staff that they have excess work because they rather than the clerical staff now
do data entry. They also enter the sketches on new properties. Although current skills vary,
most of the appraisal staff also would benefit from additional mass appraisal skills. Over and
above general mass appraisal skills, the assessor's office also would benefit from the statistical
and GIS analyst positions recommended above.
As noted in our commercial review, the assessor's office has a general policy and procedures
manual. In addition, a new "business processes" document has been prepared in conjunction
with the implementation of the Pro Val system. As part of standard operating procedures, current
land value rates are displayed on large-scale maps of each neighborhood, along with recent sales.
The Excel worksheets that are used to develop base rates provide consistency and documentation
both of the input data and the results of market analyses. In addition, summary sheets are pre-
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
8
pared that document new base rates and adjustment factors. Managers review these work prod-
ucts and help ensure consistency in process and results.
We also conclude that assessment procedures and results are adequately communicated to tax-
payers and others. More information is provided about residential appraisal procedures than on
commercial procedures, and the district neighborhood sales analyses are especially valuable.
2.5 GIS
Virginia Beach is fortunate to have the vast majority of the data resources required for the effec-
tive use of geographic information in assessment administration, although recent developments
seem to have constituted a step or two backward in regard to their effective use for assessment
purposes.
The city's geographic information system (GIS) is based on a combination of the GeoMedia
products from Intergraph, (originally used by the assessor's office for production efficiency pur-
poses) and the somewhat more widely used ArcGIS system from ESRI (used by the city for all
other purposes). In practice, the assessor's data changes are propagated into the ESRI system
approximately weekly. Thus for analytical purposes either system could be used, and advantage
can easily be taken of the somewhat greater availability oftools targeting the ESRI customer
base. Among such tools is Parcel Analyst, a useful software tool, licensed by the city, for devel-
oping statistical summaries of data extracted through spatial queries. Staff has yet to be trained
on the tool. Finally, it should be noted that the assessor's data are indexed by a "GeoPIN,"
which facilitates the development of custom software and the effective use of general-purpose
statistical software, inasmuch as the identifier itself embeds the X - Y (east-west, north-south) po-
sition of each parcel. Capturing and maintaining the data necessary to support a GIS constitutes
the overwhelming majority of the cost of a GIS, an investment the city has made, to its great cre-
dit. In comparison to such infrastructure costs, the marginal costs of taking advantage of its ca-
pabilities for analytical purposes, or extending those capabilities, are minimal, although care
must be taken to avoid conflicts that impose losses of functionality.
In recent years the assessor's office reports the loss of some of the functional benefits that ac-
crued to it from GIS. In particular, the assessor's office made substantial and effective use of
large-format, large-scale maps of selected areas on which were plotted, either automatically or
by hand, a wide variety of statistical information such as sales prices and their ratios when com-
pared to the parcels' square footage, front footage, assessment, or the like. Such resources are no
longer easily generated due to changed interfaces and losses of trained personnel. As a conse-
quence, previously generated maps are being updated through hand annotations. This practice
both makes the process more subject to catastrophic loss and, more importantly, constrains the
kinds of analyses that can be undertaken.
We also note that using annotated or choropleth (shaded or patterned) maps to support human
inferences about the spatial distribution of trends in real estate values makes human analytical
efforts more efficient, but imposes a substantial burden on personnel to perform such analyses.
Best practices in this regard automate the analytical task further so that such spatial interpolation
techniques as kriging (geographic interpolation), inverse distance weighting, and geographically
9
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
I " II
weighted regression can be brought to bear in estimating land values, total values, or both.
However, such analyses require still more knowledge and skills.
In any case, we recommend that the training and personnel issues underlying the diminished
ability of the assessor's office to undertake spatial analyses be addressed at the earliest opportu-
nity, along with software compatibility issues, if any. We also recommend that the possibility of
implementing modem geostatistical techniques in the appraisal process be given serious consid-
eration. Providing for the GIS analytical position mentioned earlier would greatly help to ad-
dress these needs.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
10
3. VALUATION METHODS AND TECHNIQUES
In this section we summarize and evaluate the City's current methods and procedures for valuing
residential properties relative to accepted best practices as set forth in the IAAO Standard on
Mass Appraisal of Real Property (2002) and the IAAO textbooks, Property Appraisal and As-
sessment Administration (1990) and Mass Appraisal of Real Property (1999).
Section 3.1 discusses recent market trend, system conversion, and neighborhoods. Section 3.2
reviews practices and needs in data collection and sales analysis. Section 3.3 describes and
makes recommendations regarding single-family residential valuation, including townhouses and
condos ofless than four stories. Section 3.4 focuses on high-rise condos. Section 3.5 discusses
the ProVal comparable sales module, and section 3.6 introduces the potential for MRA mode1-
mg.
3.1 Background and System Conversion
After years of sustained and substantial increases, the Virginia Beach residential market has fi-
nally slowed and in some cases reversed direction. Aside from the most expensive luxury
homes, which can attract high prices regardless of the economic cycle, newer, upper value homes
with prices of, say, $450,000 and above have declined in value, some as much as 10% or more.
At the other end of the market, older, lower value homes, many of which were built in the 1960s
and sell in the $200,000 to $250,000 range, continued to move up in value in 2007, many in the
range of 5% to 10%. Mid range homes generally held their own or increased marginally. High
rise condominiums generally stayed even in value.
To its credit, the City made a number of reductions to 2007/2008 values to reflect market de-
clines based on an analysis of "late" sales, namely those that occurred after the base valuation
date of June 30, 2006 (sales as late as OctoberlNovember were analyzed). These reductions,
which totaled approximately $150 million, resulted in more realistic values and undoubtedly re-
duced the number of appeals filed. We encourage the City to continue to make similar adjust-
ments to reflect market declines after the traditional cutoff date in future years as well.
While the number of appeals filed for 2007/2008 values was up from recent years, the number of
filings (less than 700) remained very modest compared to similar sized jurisdictions elsewhere.
As noted, the City recently completed a major conversion of a legacy CAMA system to the most
recent version of Pro V al. Although all electronic data and sketches have been converted to the
new system, data entry of other legacy data continues. This work is scheduled for completion in
February 2008, leaving the City in a strong position to update values more efficiently. The work
for the 2007/2008 assessments was done almost exclusively on the old system, while that for the
2008/2009 assessments is being done largely on the new system.
A major problem common to both the old and new system is the over-abundance of neighbor-
hoods, which generally correspond to subdivisions. Currently there are approximately 1,000
neighborhoods, many with too few parcels and sales for meaningful analysis, especially with re-
11
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
cent declines in the number of sales being recorded. This is a particular problem in the Pro V al
systems because ProVal's valuation tables are neighborhood-driven. With few sales to work
with, assessors cannot reliably determine market adjustment factors and the like (see section 3.2
below). We strongly recommend that the City restructure its neighborhoods to ensure that there
are adequate sales available for market analysis. As a rule of thumb, we believe that neighbor-
hoods should be sufficiently large to generate at least 15 and desirably 30 sales per year.
3.2 Data Collection and Sales Analysis
As noted earlier, conversion of data to the new ProVa1 system should be entirely complete by
February 2008. Although the conversion took longer than expected and there were some prob-
lems (common for such projects), it appears to have been successful and places the Assessor's
office in a much better position to take advantage of the new system's efficiencies going for-
ward.
Pro V al is sketch-driven in that areas are calculated from measurements and building component
codes, and area measurements drive valuation rates. Except for high-rise condos, appraisers
complete sketches of all new residential construction as part of field inspections. Appraisers de-
scribe the Pro V al sketching tool as more difficult than in the old system but equally efficient af-
ter one gets over the learning curve. A major difference is that in the old system each floor of a
multiple story building was sketched, whereas in the new system one only sketches the ground
floor and assigns codes to vertical sections. In tract subdivisions, sketches of standard models
can be selected and modified as necessary.
The strong real estate market and record numbers of sales, new construction, and remodeling ac-
tivity through at least 2006 (coupled with the relative staffing shortages noted in 2.3 above) have
made it difficult for the office to keep up with all the activity. The office has been able to make
inspections of building permits, sales, and appeals where required5. Contrary to best practice,
however, it has been unable to conduct periodic reinspections of all properties on a rotating basis
(e.g., every 4-6 years). However, the office does have Pictometry (multiple oblique aerial pho-
tos that permit one to view building details with reasonable accuracy), which has been used in
data review of selected areas. The office also plans to obtain Pictometry's automatic change de-
tection technology, which will highlight physical additions (or destruction) to property.
As in many other jurisdictions, renovations pose a special problem. Although they are not used
in value calculations, ProVal does provide for the capture of type, year, and amount (value) of
renovations. Appraisers are instructed to adjust effective age and not grade or condition unless
special circumstances call for doing so. We find this policy reasonable and conducive to consis-
tency.
5 Building permits are still maintained on the mainframe. Permits are downloaded to an Access file and printed. A
clerk culls them to eliminate those that do not call for field work, sorts them between commercial and residential and
by district, and places them in neighborhood folders with a copy of the site plan for field inspection. ProVal provides
some workflow management support. A record is kept of the permit record number, the GeoPIN, the permit type
and date, the person assigned to work the permit, and other relevant events.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
12
As described in our commercial report, the Commissioner of Revenue works sales first. The
Commissioner assigns a transaction code and determines the consideration amount from the
transfer tax stamps if it is not stated on the deed. Previously the Assessor's office held sales in
the mainframe until appraisers worked a neighborhood, at which time they determined the validi-
ty of sales in the neighborhood for appraisal purposes. Now appraisers are provided with a list of
all sales not yet worked in their neighborhoods every two weeks and instructed to validate those
sales before the next list is generated. Keeping sales validations current in this manner should
make it possible to generate earlier statistics on market trends and contemporary assessment le-
vels.
Since the current version of Pro Val does not have a standalone sales file, sales data are added to
property records. This can be problematic in that property data could change after the sale (e.g.,
the case of a room addition), which creates a mismatch between the sale price and property data.
For practical purposes, however, this danger is minimal since appraisers are likely to be aware of
the situation and could disqualify the sale. The next version of Pro Val will purportedly have a
standalone sales file that captures property characteristics at time of sale and thus address this
issue, which will also make it more feasible to use multiple years of sales in appraisal analyses.
Formerly appraisers simply assigned a code of "V" (valid) or "I" (invalid) to a sale with no do-
cumentation of backup for their determinations. Fortunately, the Pro Val system supports the as-
signment of sale validation codes indicating the reason a sale is considered invalid. We strongly
recommend that the office take full advantage of this feature. We were also glad to learn that
plans call for making MLS printouts (including pictures) for appraisers to use in sales validation.
While it is good for appraisers to validate sales, we are somewhat concerned with the wide dis-
semination of this function with each appraiser working the sales from the neighborhoods for
which they are responsible. To maintain consistency and evenness in the process, we would pre-
fer to see a small group of appraisers responsible for at least initially validating sales and assign-
ing appropriate validation codes.
3.3 Single-Family Residential Valuation
3.3.1 Old System
The old system of residential valuation was extremely labor-intensive. Appraisers would plot
sales on maps and work with spreadsheets of sales sorted by neighborhood, year built range,
grade, condition, and stories. Vacant land sales were also listed for each neighborhood. Land
and building rates would be manipulated to produce overall sales ratios near 95 percent. Valua-
tion rates for thousands of combinations of these parameters were updated each year, often based
on interpolation and judgment due to inadequate sales. Appraisers posted the new valuation
rates to separate tables and entered new site values individually for each parcel. While the system
produced accurate values in terms of sales ratio statistics, it was time-consuming and inefficient.
Its success depended critically on good judgment, and the lack of sales for an individual stratum
could lead to sizeable changes in values from one year to the next, although percent changes in
values were also monitored.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
13
3.3.2 New System
Assessments for 2007-2008 will be based on a hybrid of the old system and the new system
(ProVaI7.9). As will be seen, it automates the bulk of the annual update process. The system
has an attractive master screen displaying ownership, valuation, and assessment information, the
building sketch, and the most recent photo. From there the user can display any memos on the
property and navigate to other screens and functions. Of course, only authorized users can modi-
fy valuation tables and parameters. Users can generate a number of pre formatted Crystal reports
for which they can specify desired parameters (e.g., sale date range for a sales ratio report), but
cannot modify report formats ("heat tickets" must be submitted to IT for this purpose).
3.3.3 Land Valuation
The Pro Val land valuation system is neighborhood-driven. For each neighborhood, appraisers
specify "land types" (e.g., residential lot, farmland, swamp, or forest) and land valuation me-
thods (e.g., site value, front foot, or size range). Most residential land was appraised on a site
value basis in the old system and converted to land type "lot" in the new system. Parcels with
multiple land types (e.g., a home site plus farm land) can be assigned multiple land lines. Golf
courses were converted to two land lines: one for the standard land type ofthe neighborhood
and a second for the golf course increment. "Additional" percentage adjustments in the old sys-
tem (termed "assessment-land percent") were assigned influence code "4" (shape/size adjust-
ment) in the new system with the same percentage adjustments applied and any accompanying
explanatory notes converted to "memos" in ProVal.
While we have no major quarrels with these land valuation procedures, we recommend that
managers and senior staff strive to keep the system straightforward and highly automated, so that
land values can be easily updated. Land type should not be used to code site features (e.g., traf-
fic or view), which in turn should be assigned site influence codes with corresponding adjust-
ments that can be modified for entire neighborhoods as needed. Wherever possible, only single
land lines should be used (the case of golf course land comes to mind).
3.3.4 Improvement Valuation
Pro Val provides users with updated Marshall & Swift costs. The updates come as an Access file,
which the City copies and saves as a new file. The updates contain base rates and rates for dwel-
ling exterior features, patios, porches, and garages, but not miscellaneous interior, exterior, and
yard improvements, for which the City must maintain its own rates (and are not overridden by
the updates). Rates for items with similar costs can be assigned to "groups" so that the user need
only maintain a single rate.
The ProVal system allows users to adjust base improvement values in several ways. One way is
through the "house type" factor tables. Each such table has pre-assigned numbers (beginning
with 11, 12, 14, ...) and corresponding user-assigned factors (e.g., 0.90 or 1.15). Each table has
a number and is assigned to one or more neighborhoods. For now, the City has been assigning
them the number of the neighborhood to which they apply. Although the factors are table-driven
and can thus be easily changed, house type codes (11, 12, etc.) must be assigned and maintained
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
14
at the individual parcel level and remain permanent until changed ore removed. If ComIT would
allow it, the office could write update scripts to apply batch updates.
House type factors override neighborhood factors and other adjustment factors that refine im-
provement values. For example, if a neighborhood is assigned a neighborhood factor of 1.10 and
some parcels in the neighborhood are assigned house type factors of 14, which we will assume
implies a house type factor of 1.15, parcels in the neighborhood without a house type factor
would receive a factor of 1.10, while parcels with the house type factor of 14 would receive a
factor of 1.15. This has the implication that one cannot update a neighborhood by changing its
neighborhood factor by the desired percentage, since the update will only affect parcels without
house type factors. Instead, one would have to individually modify the house type factors to af-
fect the desired change. We find this process cumbersome.
Fortunately, Virginia Beach has not yet assigned many house type factors. Pro Val also provides
the ability to apply relative desirability factors to individual parcels. Although these should only
be applied on an exception basis, we would think that neighborhood factors6 in conjunction with
relative desirability factors should be largely capable of fine-tuning improvement values generat-
ed by valuation tables for location influences. As a minimum, we recommend that the City care-
fully consider how it plans to reconcile and update neighborhood, house type, and relative desi-
rability factors in future years.
Annual updates also contain depreciation tables, which are tied to condition ratings in the Pro V al
system (about 80% of Virginia Beach residences are assigned "normal" condition ratings). We
were glad to note that the City bases its condition ratings on effective age relative to actual age,
so that, for example, a new home is coded as being in average (not good) condition and an older
home in typical condition receives only typical depreciation for its age.
Depreciation table updates override existing tables, so that users that customize their tables must
reestablish them each year. While it will thus involve some extra effort, we recommend that the
City conduct its own studies to derive deprecation factors from the local market. Experience has
shown that the "one size fits all" approach to deprecation seldom works as rates of depreciation
can vary drastically among and within jurisdictions depending on local market forces.
Economic and functional obsolescence is assigned on an individual parcel basis and is adequate-
ly supported in the Pro V al system.
3.4 Hi-Rise Condominiums
Like other residential properties, hi-rise condos (defined as condo projects with more than four
stories) are formally appraised on the cost approach, although the values are rooted in sales anal-
ysis. Each project is generally assigned to a separate neighborhood and a separate Pro V al model
is created for each. A condo association master record contains building data. Condo unit
records contain details of each unit (floor level, size, view, balconies, associated parking, etc.).
6 House type factors apply to improvements (only). Separate neighborhood factors can be applied to land and build-
ing values.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
15
Valuation begins by analyzing sales in a project to determine the typical unit value, which is then
multiplied by the number of units to estimate total project value. An estimate of land value made
during "artery" studies (which were described in our commercial review) is divided by number
of units to obtain estimated land value per unit, which is subtracted from total value per unit to
obtain building residuals. hnprovement models are then calibrated to yield required building
values.
3.5 Comparable Sales Module
Like most CAMA systems, Pro Val has a comparable sales module, although Virginia Beach has
yet to use it. The user assigns points to selection characteristics, which include land size and var-
ious improvement characteristics (users can add several additional features to the default list).
The algorithm searches the subject neighborhood for the best comparables based on the assigned
points and returns the five best comps (several additional neighborhoods can be specified if de-
sired). Optionally, the algorithm will search unsold as well as sold properties. Search parame-
ters can be saved and the profiles reused.
The ProVal comparable sales module is typical of several others in the industry. It will find the
best comparables given the selected parameters and points, but is suboptimal in terms of para me-
ter selection and cumbersome in terms of weighting the parameters, as points are in various units
corresponding to the units in which the parameters are coded (square feet, years, number of bed-
rooms, garage stalls, etc.) rather than true percentages. Further, once selected, comparables are
not adjusted for sale date or differences from the subject property. This is not to say that the
comparable sales module is not useful, but rather to put it in perspective and note that the City
may find opportunities to enhance its capabilities in this area.
3.6 Multiple Regression Analysis
Many larger jurisdictions like Virginia Beach use an automated version of the direct sales com-
parison approach based on multiple regression analysis (MRA) for residential property. Unfor-
tunately, ProVal currently does not support such an approach. We note, however, that Manatron,
the owner of Pro Val, recently acquired Sigma Systems, based in Buffalo, New York, which does
support MRA and which also has a much more sophisticated comparable sales program that ad-
dresses all the shortcomings of the Pro Val approach noted above. A number of Sigma's current
clients (including Salt Lake City and Cape Town, South Africa) are current users ofMRA.
While we see no compelling reason for Virginia Beach to implement MRA in the near term, we
recommend that the City monitor developments with the Sigma acquisition and the anticipated
addition ofMRA and an enhanced comparable sales module in version 7.10 of the ProVal suite.
When the opportunity is ripe, we recommend that the City implement the method on a pilot ba-
SIS.
We also note that it may be possible to use MRA to help calibrate existing valuation tables.
Pro V aI's largest client, Snohomish County, Washington (county immediately north of Seattle
and King County), currently uses MRA for this purpose. The County has successfully replicated
16
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
the ProVal residential cost engine with SPSS, a third party statistical package. ''Nonlinear'' (also
known as "hybrid") MRA is used to derive market-indicated base rates, depreciation rates, and
neighborhood adjustments from recent sales. The results help inform the corresponding parame-
ters that are entered into the ProVal improvement valuation tables.
As indicated in section 2.3, we strongly recommend that the City add a statistical analyst posi-
tion. The position would be responsible for conducting quantitative market analyses in support
of annual revaluations and for developing an MRA capability in the Assessor's office. Part of
these responsibilities will be uncovering and leveraging the analytical capabilities in current and
future releases of Pro Val, as well as complementing them where appropriate with a third party
statistical package.
A final recommendation we make with respect to valuation methods and techniques is that the
office begin explicitly tracking time trends and entering them into Pro V al tables provided for this
purpose. In addition to helping keep abreast of the market, time adjusted sales prices can be im-
portant in appraisal analyses and permit appraisers to consider a longer period of sales, which
can be especially important when the volume of sales declines. Time adjusted sales prices can
also be used in comparable sales analyses and sales ratio studies (as we do in section 4 below).
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
17
4. SALES RATIO STUDY PERFORMANCE ANALYSIS
Ratio studies are the chief means by which assessment performance is measured. The primary
guideline on how to perform such studies is the Standard on Ratio Studies (IAAO, 2007 or its
predecessor, 1999). Although Virginia Beach makes good use of ratio study statistics during re-
valuation work, the City and the state generally have traditionally prepared only summary studies
and not afforded much attention to the guidance the IAAO standard offers. The most often
quoted statistics relating to the performance of the Virginia Beach Assessor's office are the re-
markably low numbers of assessment appeals. The incidence of appeals in Virginia Beach has in
fact remained admirably low in recent years, although with the recent changes in the economy
the incidence of appeals can be expected to grow. Appeal statistics, however, can fail to illumi-
nate the assessment situation under a variety of circumstances, so ratio statistics are essential to
consider.
We were pleased to see that the new Pro V al system greatly expands the capability of the asses-
sor's office to conduct ratio analyses through its so-called Value Calibration Analysis option.
Since the in-place assessments had been developed using the prior system, however, we con-
ducted our own analyses of the quality of those assessments. The standard statistics from such
analyses of the categories of residential properties used in Virginia Beach, presented in Table 4-
1, indicated no overall problems.
Table 4-1: Standard Ratio Study Statistics for Residential Property
Assessments for 2007 Compared to Time Adjusted Sales from 2005-2007
95% Confidence Interval for Price Related Coefficient of
Group Median Median Differential Dispersion
Upper
Lower Bound Bound Count
Urban SF, Vacant Residential Land 0.92 0.87 0.95 1.05 0.18 145
Urban SF, Residence 0.98 0.98 0.98 1.02 0.09 11,083
Urban SF, Outbuildings Only 0.92 0.79 1.05 1.02 0.14 15
Urban SF, Townhouse 0.96 0.96 0.97 1.01 0.08 3,986
Urban SF, Low Rise Condominium 0.98 0.98 0.99 1.01 0.07 4,078
Urban SF, High Rise Condominium 1.02 0.99 1.03 1.00 0.08 396
Urban SF, Duplex 0.92 0.85 0.98 1.04 0.14 76
Urban SF, House and Garage Apmt 1.13 0.75 1.27 1.05 0.15 5
Urban SF, House and Apartment 1.05 0.86 1.21 1.04 0.13 11
Urban SF, Historic House 0.56 1.00 1
Suburban SF, Vacant Resid Land 0.93 0.74 1.06 1.03 0.27 35
Suburban SF, Residence 0.99 0.96 1.02 1.04 0.12 147
Suburban SF, Outbuildings Only 0.98 0.77 1.20 1.08 0.22 2
Overall 0.98 0.98 0.98 1.01 0.08 19,980
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
18
For readers unfamiliar with these statistics, the median ratio is the middle ratio when there is an
odd number of sales (or the average of the two middle-most ratios when there is an even num-
ber). The 95 percent confidence interval displays the range of ratios within which one can be 95
percent confident that the true population median lies. The confidence intervals about the me-
dian assessment ratio provide information on whether any observed differences between the me-
dian and its target level (0.95 to 1.00 in Virginia Beach) are likely to have stemmed from sam-
pling variability alone in the absence of a failure to achieve, in the aggregate, the target level of
assessment. The price-related differential (pRD), which should be between 0.98 and 1.03, indi-
cates whether there is any suggestion of price-related biases in the assessment errors. If the PRD
is below 0.98, high-value properties tend to be assessed at a higher ratio of market value than
low-value properties. When the PRD is greater than 1.03, the opposite pattern, which is more
common in practice, prevails. Such assessments are said to be regressive. The coefficient of
dispersion (COD), which should be under 15 for residential properties, measures the relative
tightness of the clustering of assessments about their target market value; in a sense it is the av-
erage percentage error of the assessments relative to market value.
There is a slight suggestion that residential vacant land (first line in Table 1) may be under as-
sessed, possibly more so for more valuable parcels than for less valuable ones, but the evidence
is not strong enough to reach that conclusion reliably. As can be seen in the table, the upper
bound for the confidence interval for vacant land easily falls within five percentage points of the
overall median ratio on the bottom line (0.98). Thus the standards of the IAAO guidelines are
easily met. The same is true for all other (apparent) failures of median ratios to fall within 5% of
the overall median ratio as called for by best-practices guidelines; the inherent variability of
small samples precludes any deficiency conclusions since the observed findings could well have
arisen by chance alone.
In addition to city-wide, overall analyses, we looked for any patterns that might suggest prob-
lems with particular subsets of the residential assessments. Analyses by neighborhoods, al-
though commonly done in other contexts, were infeasible here due to the extraordinary number
of neighborhoods in the city and the consequent paucity of sales in most of them, leaving too few
for statistical reliability. This issue was addressed several ways. First, we plotted all the ratios
geographically, as illustrated in figure 4-1, and looked for patterns, but found nothing of signific-
ance. We also prepared plots of ratios by district as illustrated in figure 4-2. Finally, we plotted
neighborhoods within district (not reproduced here) to see if there were patterns different from
those likely to have arisen by chance alone. We found nothing of significance.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
19
Figure 4-1: Sales Ratios Plotted Geographically
1 (blue) indicates lower ratios, 3 (green) middle ratios, and 5 (red) highest ratios
*.f- "
"Iff: ..~ _ .~"~ior~
f_~ ,~,..,,~ if..l".~~ i:~~
51 of" i;. .~ _ ~ ~. _ _~_
tl>...1,1""~ .,' \
'If. ", x'~'.('...... . ,,,o\.,'~. '.
'"#:f c_ - ~"~1:J<' \' - " > ~ Il.-J ,,'"t .>1, .:'
( ..' ~ ,,-'Of-". "/~" ~\_, A.t "'. ~4...
.LL ...-i" ~,.;' 1'" ~\ .,' '" 'l>" - ~.' "_:~.' st_
,,~ -l~ "h-1 ". -~ tf.~. ~ ,,'1' ~".H" \.. It
.. t ~\.r '. t~. _ ;', 't- i~. ~~~ :l't. ., I :f
~. Ji' ''iI~'' ,";'. . ...' \,. .~., , '\i
<.ui ," - _" - " _ i- ,.' _ .LlJi . ~- .. 'c'
. ,'t.' . . ~T, '......:. ",~ '.'. . '''.''';'.'11 'II, . ,I '. .~,
;'t'''. llo;., ,,". ..r."~~~~1I"1:~~"~-'.\~. _.~"'~
. l' ~ t.. ".'1.:_
i..'~" .i~ OJ .2..;...... ...,.~.
.... . I,...,... "ft'
;1... !" "_
.,. '1'~1 ...
".. .4.
I ~ ~~
III
C
~
o
Z
.s
4
'3
~2
.1
~
;.
~I
,r.
'~t
~
1??oo
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
4
"
111
,,~..... .
I,', '
~r .
"~.".:"
'-<<
::$', .' ,,:
~~ . ..1l11 <
..
.
"
'.
. ,'.
. .
.
.
2000
4000
600ll
800Il
fasting
20
Figure 4-2: Box Plot of Sales Ratios by District
1.80
* *
* ..
.. ,. ..
1.60 I '"
... ... .. f ;
t i I ... .
I I t
I I ,.
I
1,40
,.
0
g ~
1.2 0
Q.
~ 6
a: t54 48 14 n
~ 1.00 49
'W'
0 9
0 0 0
0 0 a ...
,60 8 0 ...
t 0 ...
... ,. 0 ..
.. .. .. ;
...
...
.. ...
.40 ..
*'
10 20 30 40 50 51 60 70 75
DistNum
In Figure 4-2, and in all box plots, ratios of assessments to time-adjusted sales prices are plotted
on the vertical axis and the other variable, in this case the district number, is plotted horizontally.
The shaded boxes enclose the central fifty percent of the data, the inter-quartile range (IQR),
with the tops and bottoms indicating the upper and lower quartiles and the horizontal black lines
within the boxes indicating the medians. The numbers near the median indicate the number of
sales in the stratum or subgroup. The vertical lines indicate the range of data that would not be
considered to be either outliers, defined as observations at least 1.5 times the IQR beyond the
nearer quartile, or extremes, defined as observations at least 3.0 times the IQR from the nearer
quartile. Outliers are plotted as open circles and extremes as asterisks. As the box plots readily
indicate, all the districts have very nearly the same median and comparatively little dispersion
about those medians. It might also be noted that the degree of dispersion is approximately uni-
form across the districts.
As noted above, the assessments analyzed here are for fiscal year 2007-2008, which has a base
assessment date of 1 July 2006, and are based on market evidence generally collected between 1
July 2005 and 30 June 2006. For the analyses reported here, sales from an augmented time win-
dow were used: 1 July 2005 to 30 June 2007, with sales adjusted for time to eliminate any dis-
21
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
torting effects that may have arisen from using the extended time frame. As with our previous
report for commercial property, for sales validation purposes we relied on two layers of sales re-
view conducted by the City: the screening performed by the office of the Commissioner of Rev-
enue and the further validation performed hy appraisers during the revaluation process.
In addition to examining sales ratios by location, we also conducted a series of analyses in which
we compared ratios against key property characteristics: year built, building size, lot size, zon-
ing, number of stories, construction grade, physical condition, property type, and value range.
The balance of this section contains graphical results from those analyses. In each case, one
would hope to see no significant difference in assessment levels across the range of these charac-
teristics. For example, small, mid-size, and large homes should all be assessed near the overall
city-wide median (0.98). Systematic differences would indicate a problem in valuation sche-
dules (e.g., a failure to account for differences in building costs or popularity among small and
large homes).
Figure 4-3 contains "scatter plots" of sales ratios according to the year in which a residence was
built. The left-hand plot displays the full range of ages since the 18th century and the right-hand
plot examines houses built since 1950. Each dot in the plots locates the ratio of a single sale. As
can be seen from the left-hand plot, very few houses in Virginia Beach were built before 1950.
The lines in the graph are the best fit (regression) line and its 95% confidence limits. As can be
seen most clearly in the right-hand graph, assessment ratios remain closely centered near the
city-wide median ratio of 0.98 regardless of year built, indicated good uniformity between newer
and older homes (this further implies that the City's depreciation tables are working well).
Figure 4-4 examines ratios by improvement size and indicates good uniformity between smaller
and larger homes. Figures 4-5 and 4-6 contain similar scatter plots of sales ratios against lot size.
The left-hand plot of figure 4-5 displays the full range of lot areas; the right-hand plot is of a
lesser range. Figure 4-6 displays ratios for the most common lot sizes. Again, the patterns indi-
cate good uniformity.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
22
,.
1~
...
S
~L
Figure 4-3: Plots of Sales Ratios by the Year in which Houses Were Built
un.ar Regression w...
1.00
1.75
1.50
1L1.2S
!2
i
00
1950 1960 1970 1960 1990 2000 2010
vrSullt
Figure 4-4: Plot of Sales Ratios by Size of House
Unear Regression w,..
o
o
R Sq Lileor . 0.003
8000
1??oo
1.<0
o
e
o
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
@
o
C) R Sq Linear . 0.005
o
1150 1800 1850 1900 1950 2DOO 2050
YrBullt
1.80
1.60
1,40
1.20
Q.
~
Ii 1.00
<
.80
.60
0
,4
0
o
o
o
2000
6000
4000
FinSize
o
o
<b
Untar Regres!ilon w,..
R Sq UlOar' 0.004
23
1.80
1.
1
...
~
....
~,.00
.<0
1,20
a..
U)
0<
t-
o: 1 .00
U)
0<
Figure 4-5: Two Plots of Sales Ratios by Lot Size
Unl!iaf Regression w...
.<0 0
Unear Regressl...
o
o
o 0
o
o
Sq u.ear . 1 .sne-8
o SOOOO 10??oo 150000 200000 250000 300000
Ar...GRM
Figure 4-6: Plot of Sales Ratios by Most Common Lot Sizes
1.80
Linear Regressi...
1.60
R Sq Linear = 3.399E-4
1.40
ce
o
o
o
.80
o
<0000
~o 0 c900
~ 0 0
o
.60
o~o .d(l 0
0' 0 0
o 0
o
.40
o
20000
40000
6??oo
80000 100000
AreaGRM
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
24
Returning to the use of box plots, we examined patterns in sales ratios according to zoning code
(figure 4-7) and according to number of stories and construction grade (figure 4-8). Appropriate-
ly, the pattern of ratios by zoning code revealed no causes for concern, as also is the case with
number of stories. Similarly, the grade (or quality) of the improvement revealed no biases, al-
though typical properties were easier to appraise as indicated by their lower dispersion (more
compressed box heights).
Figure 4-7: Plot of Sales Ratios by Zoning Code
...
~
~,
<> .
<> <>
e
<>
<>
<>
i .
, !
. i
.
. .
. . .
; 8 <>
fl El g
8 ~.,. i 0 0
<> 3
H .,~., ~ 't t
I
<> .
<> "
.
I
<>
>>
,jJ
e
ft <>
~ <>
<>
tI
II <>
8
<>
<>
8
<>
g
. <>
<>
o
<> .
1 2 3 4
to 11 12 13 14 15 ,. 1 18 1& ~ ~ ~ n ~
ZonCede
Figure 4-8: Plots of Sales Ratios by Number of Stories (Left) & Construction Grade (Right)
>0,
".. ...."'" ......g+
-......
.......
25
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
As suggested in figure 4-9 below, one area of some minor concern is that appraisers may have
over-reacted to departures from average physical condition, assessing those in poorer condition
too low and those in good condition too high. The presence of a real problem in this regard is far
from established, however, due to both the small number of properties involved and the possibili-
ty of alternative causes for the phenomena, such as sales of property made in contemplation of a
change in use.
Figure 4-9: Plot of Sales Ratios by Physical Condition Category
1.80
1,
I
o
1.40
1.20
.80
a.
II)
~
a:
~ 1.00
Figure 4-10 is a box plot of sales ratios by the same property categories as is table 4-1. Again,
no problems are apparent aside from those categories with too few sales to draw reliable conclu-
SIons.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
26
1,80
Figure 4-10: Plot of Sales Ratios by Property Category
o
o
o
o
"
o
..
t
i
8
8
o
o
o
j
3
. 5
.J a
'" "
'" "
..
.lll l/l !!
I i f ."I ."I ."I
, l I t I
I (') I 1
i f 11
! ~
1 1 II.
l
Class
Finally, we explored potential disparities in the treatment of lower vs. higher valued properties
by plotting assessment ratios against market values. Since there is a known statistical problem
that arises when comparing ratios to one of the terms of the ratio (either assessed values or sales
prices), it is inadvisable to plot either assessments or sales prices on the horizontal axis. The best
solution to this problem devised to date is to estimate market value as an average of the two for
each property, which is the practice adopted here. As can be seen from the plots, any suggestion
that higher value properties may be under-assessed derives from a very limited number of sales.
Taking successively smaller ranges of property values as the domain for analysis, as was done in
the plots in figure 4-11, quickly eliminates any suspicion of price-related biases.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
27
Figure 4-11: Plots of Sales Ratios against Market Value
1.110
Unear Regresston w...
"
Unur Regression w...
1
A.
~
11I:1
:!
"
o
o
1.
~o
o
o
1
A.
!
~I,
o
o
RSqU-.O.l101
o 0
RSqU--4274E..
o lOOlXXJO _ 300000O 400000O 500000O 600000O
EstMklVal
SllllOOO 1000ooo .5OOllOO 2OOOIlOO
Es1Mk\VaJ
In summary, the performance of the assessor's office on residential assessments for 2007 appears
to have conformed well to best practices as codified in the IAAO Standard on Ratio Studies.
Procedurally, we are pleased to note that the software available to the assessor to monitor ap-
praisal performance has recently been substantially improved with the introduction of the Pro V al
system. That system, however, is not natively capable of producing the graphical displays in-
cluded above. The IAAO standard notes that graphical presentations constitute important tools
for both analytical and communications purposes. Accordingly we suggest, as a matter of less
than urgent priority, that consideration be given to acquiring software to enhance the ability of
the office to undertake such statistical and graphical analyses. In view of the ability of Pro V al to
export the necessary data readily, such an upgrade should be a low-cost, high-value proposition.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
28
5. CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions
Enumerated below are the main conclusions of our review of the residential reassessment
processes in use in the City of Virginia Beach.
1. Residential assessments in Virginia Beach are based on acceptable methods, and they
meet professional standards for level of assessment and uniformity of assessments.
2. Credit for the above is due to the strong leadership provided by the assessor and by skills
and experience of the appraisal staff.
3. Based on the comparatively low number of appeals, there appears to be good public ac-
ceptance of assessments in Virginia Beach. Factors that contribute to this fortunate situa-
tion doubtless include the professionalism of the assessor's office, the good communica-
tion of information about property price trends and assessments, the recent strength of the
real estate market, and comparatively low effective tax rates.
4. As the assessor's office fully recognizes, there are no grounds for complacency. A wider
downturn in property prices will put pressure on the office to meet its legal and policy
mandates. A large increase in the number of appeals will be difficult to manage and
could jeopardize the tax base. There will be pressure to increase property tax rates. With
its current level of staffing, the office is unable to take sufficient steps to ensure that all
assessable property is accurately described, and property that is not accurately described
cannot be accurately appraised. An increase in appeals and in the number of applications
for residential property tax relief will place further strains on the staff.
5. We believe that the office is understaffed. However, the new computer-assisted mass ap-
praisal system (pro Val) offers opportunities for greater effectiveness, although realizing
the system's potential will require increasing the mass appraisal skills possessed by the
assessor's office.
6. Our recommendations identify areas where we believe appraisal effectiveness and effi-
ciency could be improved.
5.2 Recommendations
Enumerated below are our main recommendations for strengthening the residential reassessment
processes used by the assessor's office. It should be noted that the assessor's office recognizes
and has begun to implement improvements in a number of areas.
1. Sales disclosure declaration. The City of Virginia Beach (in conjunction with other Vir-
ginia counties and cities) should lobby for a legal requirement that, in connection with
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
29
paying the recordation tax, real estate sellers and buyers be required to complete and file
a real estate transfer declaration. The purpose of the declaration would be to provide as-
sessors and the Department of Taxation with information needed to determine whether a
sale is usable for appraisal or for ratio study purposes. It would require disclosure of the
particulars of each sale.
2. Sales confirmation form. In the meantime, the real estate assessor should develop a ques-
tionnaire to be used as necessary in sales confirmation and screening efforts.
3. Database access. The current requirement of ComIT that the assessor's office must pre-
pare job requests to extract, analyze, and prepare customized reports needlessly frustrates
and delays legitimate and essential operations and should be reconsidered. It should be
possible to erect system safeguards and protocols that would make the assessor's office
responsible for the integrity of the data it collects while allowing it unfettered access to
that data for analysis and reporting.
4. Staffing. We recommend that the two specialist positions recommended below (see rec-
ommendations 5 and 13) be created and that the appraisal staff be augmented by at least
two positions so that data can be maintained accurately.
5. GIS enhancements and analyst. Attention should be given to developing meaningful GIS
capabilities in the Assessor's office, including the retention of a GIS analyst capable of
conducting GIS mapping and spatial analyses for the support of the appraisal staff and
management. We also contemplate that this individual would be potentially capable of
undertaking or supporting geostatistical valuation analyses.
6. Late sales. In soft markets the Assessor's office should continue to consider late sales in
setting valuation rates and factors. This works to the benefit of all concerned and should
reduce the number of appeals that could otherwise be expected.
7. Sales validation. Sales validation codes (rather than a simple code of valid or invalid)
documenting the reason for rejection should be assigned to sales during the validation
process. To promote consistency, we recommend that the Assessor consider designating
a small group to validate sales as they are received from the Commissioner of Revenue.
This would also facilitate earlier studies of market trends and assessment levels.
8. Neighborhoods. To bolster sample sizes and enhance valuation stability, we recommend
that the City consolidate existing residential neighborhoods into larger areas. As a gener-
al rule, neighborhoods should be sufficiently large to generate at least 15 and preferably
30 sales per year.
9. Land valuation. Managers should ensure that the system be kept straightforward with all
key adjustments tabularized, so that they can be easily monitored and updated. Multiple
land lines should be avoided if possible.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
30
10. House type factors. House type factors offer a way of applying factors to subsets of
properties within neighborhoods in the Pro Val system. However, relative desirability
factors already provide this capability on an individual parcel basis and house type fac-
tors override neighborhood factors. While the City did not use house type factors in the
2008/2009 revaluation, we recommend that it carefully consider their role going forward,
so that, if applied, house type factors will be supported by adequate sales and work in
harmony with other valuation factors.
11. Depreciation analysis. Rather than rely on universal depreciation tables provided by
Pro Val, we recommend that City staff derive depreciation factors entered into Pro V a1
tables from local sales analyses. This can be done by graphing percent good factors (im-
provement residuals divided by RCN) against effective age, or from MRA models when
available.
12. Multiple regression analysis. While we see no compelling need for the City to implement
MRA at the present time, we recommend that it keep abreast of the technique and moni-
tor probable enhancements of this nature to Pro Val as a result of the Sigma acquisition.
In particular, we see MRA as the most logical valuation method for townhouses and con-
dominiums with potential application to detached residential properties as well.
13. Statistical analyst. Related to the recommendation above, we strongly recommend that
the City retain a statistical analyst to conduct MRA analyses and leverage analytical tools
in the new Pro V al system and future releases thereto, which we expect to incorporate
greatly expanded market modeling, comparable sales analysis, and ratio study capabili-
ties.
14. Mass appraisal training. As the assessor's office recognizes, fully benefiting from the
capabilities of the Pro V al system requires that all appraisers have certain new mass ap-
praisal skills, and desirably they would have a basic understanding ofMRA so that its
analytical powers and their ~xperience could be effectively harnessed.
15. Time trend analysis. We recommend that the City begin conducting time trend analyses
by major property types and market areas using standard techniques described in the
IAAO literature. Such analyses will provide early feedback on market trends. Also,
time-adjustments permit appraisers to expand the sales analysis period (and thus augment
sample sizes) and can be highly useful in sales ratio studies and comparables sales ana-
lyses.
16. Statistical software package. As a low priority item at the present time, we recommend
that the City obtain a third party statistical package (e.g., SPSS) to conduct statistical ana-
lyses, including charts and graphs depicting market trends and sales ratio patterns. This
recommendation would complement the statistical analyst position recommended above
and become more relevant at that point. Future enhancements to the Pro V al system may
also address this need, although we suspect only partially so.
Almy, Gloudemans, Jacobs & Denne
Final Report - Review of Residential Reassessment Processes, City of Virginia Beach
31