Valuation Issues Team Minutes
Wednesday, November 29, 2006
12:30 - 3:45 p.m.
16 Sheridan Ave. , Albany, NY
Present: Rosalie Fahey, Colleen Adamec, Walter Smead, Jim Gonyo, Dave Hastings, George Michaud, Jeff Jordan, Bob Aiken, Matt Riordan, Tara Hoffman, Sheryl Klewicki
Absent: Mario Arevalo, Edye McCarthy, Mary Baush
Special Guest: Mark Twentyman
Alternative Methods of Real Property Valuation of Agricultural and Rural Vacant Parcels
Bob handed out a packet on the history of this issue including RPTAC minutes, correspondence to legislators, and the Cornell University proposal.
George stated that the issue will be discussed at the next NYSAC meeting. There may be an official opinion on the proposal from the County Directors after this meeting.
Mark Twentyman provided a synopsis of the origins of the proposal and the history of events leading up to the present. The concept of benchmark farms and the usefulness of such a concept was discussed, along with the funding of such a proposal and funding the annual updating of the data. Mark felt that the money for any project would have to come from targeted funds from the Division of Budget.
A general discussion on agricultural valuation ensued. Jim discussed his relationship with the local Farm Bureau office and what a valuable resource they are with his farm valuation issues. Tara suggested that, absent any movement on the Cornell University proposal, a form could be developed with key inventory data elements for all farm sales and a database be built to be shared statewide.
The team recognizes the difficulties with farm valuation, but at this point is unsure how to proceed. The consensus was to wait for the County Directors to meet and resolve any issues they might have with the benchmark farm concept and wait to see if anything is forthcoming in the next budget process.
The issue came up at the joint Equalization Team/ VIT meeting that capitalization rate information should be made available on the ORPS website. Bob handed out printed pages from the ORPS website regarding the Investment Set Codes and the latest quarterly capitalization rate survey from Rynne, Murphy and Associates. The ORPS website has a link to the Rynne, Murphy site as well as two other subscription based capitalization rate sources. The team felt that this information would satisfy the request but that the issue may be more of a lack of letting the users that the information was available. The team came up with a few solutions to the issue including, highlighting the 2007 Investment Set Code Report in the "What's New" section of the ORPS website, placing a notice in the Valuation Standard when the 2007 Set Codes are prepared, and putting a notice on List Serve that the new Set Codes are ready.
Major Type B
The ORPS Trending methodology and the use of sales and income to develop trends and the shortcomings of each approach was discussed. The issue of sales validation and scrubbing and their importance in developing an accurate trend was brought up. Bob mentioned that a trend can be developed using income data and that Ulster County has used this method the last 2 years and the trends have been accepted by ORPS.
The issue of using old lease information was brought up. Bob said that if it is currently valid it can be used, but you just can't automatically accept it. An adjustment would have to be made to the lease information in some way to be used for trending.
Bob provided handouts and reviewed the B and C Trending Methodologies highlighting the direct and differential methods. This type of trending alleviated an earlier concern regarding the inclusion of 411's in the previous trending process. For the 2007 Full Value Measurement (FVM), two approaches, Differential and Direct, are used to compute trend estimates for the Major Type B and Major Type C classes. In both approaches, trends are developed and applied by use group strata. These strata, within the commercial and vacant major types, are as follows:
2007 FVM - Property Class Stratification - Major Type B, Commercial
|Use Group||Property Class Codes|
|Lodging||414, 415, 417 and 418|
|Eating / Drinking||420, 421, 422, 423, 424, 425 and 426|
|Large Retail||450, 451, 452, 453, 454 and 455|
|Small Retail||480, 481, 482, 483, 484, 485 and 486|
|Bank / Office||460, 461, 462, 463, 464 and 465|
|Warehouse||440, 441, 442, 443, 444, 445, 446, 447, 448 and 449|
|Car Sales / Service||431, 432 and 433|
|General Commercial Use||400, 410, 416, 430, 434, 435, 436, 437, 438, 439, 470, 471, 472, 473, 474, 475, 500's and 600's|
2007 FVM - Property Class Stratification - Major Type C, Vacant/Farm/Forest
|Use Group||Property Class Codes|
|Small Vacant Lots||310, 311, 312 and 314|
|Waterfront Vacant Lots||313 and 316|
|Commercial / Industrial Vacant Land||330, 331, 340, 341 and 350|
|Large Tracts (General Vacant Use)||300, 315, 320, 321, 322 and 323|
|Forest Land||900, 910, 911, 912, 920, 940, 942, 960, 962, 963, 970, 971 and 972|
Marshall and Swift
Matt gave a brief status on the Marshall and Swift contract and the request to all users of RPS for input regarding additional structure codes, data definitions, and building models.
Bob discussed what he was going to report out to RPTAC at the next meeting regarding the status of any issues from the joint Equalization Team/ VIT meeting and clarify how issues are disseminated to the VIT. The importance of attendance at the VIT meetings will also be discussed.