ASSESSMENT DEMONSTRATION PROGRAM
P.L. 2013 Chapter 15, N.J.S.A. 54:1-101
Monmouth County Implementation Update
League of Municipalities Conference
November 19, 2014
LEGISLATION STATEMENT
S1213 - A1591
• The real property assessment demonstration program
proposes a real property assessment system that will
remain decentralized for the purpose of creating a more
responsive and accurate assessment function that can
annually adjust to the flow of the county’s varied markets
and submarkets.
• The central premise of the demonstration program is a
collaborative effort between the County Tax Board and
municipal Assessors. The demonstration program relies on
this working relationship to address the issues of cost
effectiveness and the accurate process of assessment.
ASSESSMENT DEMONSTRATION
PROGRAM OVERVIEW
There are five (5) primary components of the program
that significantly modify the current assessment
function. They are:
1. Appeal Calendar – Municipal fiscal stabilization
2. Annual Assessment Revision – Turning off the refund
faucet – enhanced public service
3. Revision Compliance - Uniformity
4. Assessment Standardization – Uniformity, enhanced
public service, Annual Reassessment Handbook
5. Education – Uniformity, enhanced public service, Tax
Board Portal
#1 - Appeal Calendar
• The Demonstration Program modifies the timing of the appeal season and
filing requirements so that the vast majority of assessment disputes will be
settled prior to the filing of the final assessment list with the County Board of
Taxation. Modification of the calendar is intended to stabilize the currentyear fiscal standing of the municipality and reduce the cost of collection
shortfalls. (see calendar)
• Within Monmouth County for 2014 the assessments were reduced
271,680,650 through County Tax Board appeals. Based largely on the
settlement of Tax Court issues, the Assessors processed the further reduction
of 68,426,000 as “2014 Corrections of Errors”. The total change to the
assessments of the 2014 Preliminary Tax List was 340,106,650. In the “old
assessment model” the $6,841,635 in TAX DOLLARS associated with the
reduced assessment would have been “anticipated but uncollected revenue
due to loss in appeal” that would require emergency bonding with interest.
Because we have changed the calendar and placed the appeal process before
the budgetary process, Monmouth has greatly avoided the need for
emergency bonding.
ASSESSMENT DEMONSTRATION PROGRAM
The Assessment Demonstration Program restructures the Assessment Calendar to position the appeal process
before the budgetary process.
ASSESSMENT FUNCTION
CURRENT DATE
NEW DATE
Assessing Date
October 1 PTY
October 1 PTY
Revaluation Completion
Nov 1 PTY
1 week prior to November 1st
Preliminary Assessments Certified to County Board
(all towns) CTB to post all PRC to County Website
Nov 1 PTY
Revaluation Assessment Notice Mailed
(Revaluation Towns Only)
Postcards Mailed (all non-revaluation towns)
Taxpayer Review Hearings completed
(Revaluation Towns Only)
Postcards Mailed (includes all hearing revisions)
(Revaluation Towns Only)
Not prior to November 10
PTY
1-Feb
Not later than December
10 PTY
1-Feb
1-Dec
Added / Omitted Assessment Appeal Filed to CTB
On or before December 1
On or before December 1
Added / Omitted Assessment Appeal Judgment
Rendered by CTB
On or before December
31st
On or before December 31st
Tax Appeals Filed
1-Apr
15-Jan
Appeal Judgments Mailed
30-Jun
30-Apr
Tax List Filed by Assessor
10-Jan
5-May
Town Adopts Budget
31-Mar
15-May
10-Mar
25-May
Tax Rate Certified by Tax Board
20-May
31-May
Tax Bills Mailed
14-Jun
14-Jun
Tax List Finalized By Tax Board
(Equalization)
Nov 1 PTY
Nov 15 PTY
Not later than November 30
#2 - Annual Assessment Revision
The Demonstration Program provides the Assessor with both the
authority and the requirement for the annual review and revision of
all properties within the jurisdiction.
• Performing Annual Reassessments are the key to avoiding multiyear refunds. Within the ADP Assessors are no longer prevented
from changing assessments, both up and down, from one year to
the next. For the first time, the Assessor shall address future appeal
exposures through the filing of a modified and defendable
assessment in future years thereby avoiding potential reductions
and providing enhanced public service.
• The Assessor shall annually “fold in” the assessments back to
current market value.
#2 - Annual Assessment Revision
Continued
• No more Freeze Act – each year stands on its own.
• No more fractional assessments – each year taxpayers
deal with market value.
• No more Chapter 123 – if the assessment is proven to
be $1 off, then it gets adjusted. (we no longer have to
protect the municipality by providing a 1/3 margin of
error.)
• No more large assessment changes after revaluation –
each year assessments are adjusted based on recent
market evidence – expectation of 1%-3% up or down
each year by neighborhood and class.
Annual Qualified Reassessments and
5-Year Internal Inspections
• To improve the accuracy of the annual assessments the current model of
"10-year revaluations“ will be replaced by “Annual Qualified
Reassessments supported by “5-year internal inspection” contracts.
• Revaluation service is comprised of inspection, valuation and appealdefense. Under the new "annual qualified reassessment" model the
assessor will be responsible for valuation and appeal defense.
• Each municipality will enter into a 5-year contract (3 years with 2, 1-year
options) for the "internal inspections of 20% of all line items". This service
will presumably be offered by the current revaluation firms. Every 5 years
100% of the properties will be internally inspected which is twice that of
the current revaluation model.
• The assessors annual qualified reassessment, supported by the outside
internal inspection model, is intended to be a permanent and sustainable
replacement for all future revaluations.
5-Year, 20% Internal Inspection Savings
Estimate
A
B
C
D
Total
Monmouth
County
Parcel Count
20% Internal
Inspections
Per Year
Countywide
Annual
Maintenance
Cost
10-Year Cost
of 2,
5-Year
Inspection
Cycles
(A x 20%)
(B x $21)
(C x 10 years)
($21 per inspection)
249,212
49,842
1,046,682
E
F
10-Year Cost of
Estimated
Revaluation Countywide 10Year Savings
on Maintenance
(A x $70)
(D - E)
($70 per line is
statewide average)
10,466,820
17,444,840
($6,978,020)
On average, Revaluations cost $70 per line and the proposed system costs $42 per line.
By performing the valuation and the appeal defense components of the revaluation
model, the municipal Assessor saves the Taxpayers $6,978,020 over 10 years.
#3 - Revision Compliance
• The Demonstration Program provides the power to compel
the implementation of revaluation, reassessment,
compliance plan, and maintenance programs. By providing
the ability to expedite the implementation of the
revaluation process there will be greater precision in the
timely assignment of individual tax liabilities putting an
end to the protracted over/under payment of taxes.
• The authority to compel facilitates the implementation plan
for annual reassessments.
• In accordance with the State-approved implementation
schedule, all Monmouth County towns will be performing
annual reassessment supported by 5-year internal
inspection programs in the year 2018.
#3 - Revision Compliance
Continued
The Tax Board must shepherd the transition of the municipal Tax
Lists from varying ratios of “assessed-to-market values”, to all towns
submitting annual reassessments to 100% of market value.
Towns transition through 3 distinct “states of Tax List submission” as
they go through the 5-year implementation process; they are:
1.
2.
3.
Revise to Ratio: Review 100% of parcels, revise assessments both up and down in accordance with current market evidence, to
the Directors Ratio (this is for all towns in year 1 and continued by
any town that has a revaluation pending for future years)
Revaluation Implementation: Submission of final revaluation by
outside firm.
Revise to Market Value: Review 100% of parcels, revise
assessments - both up and down in accordance with current
market evidence, to 100% market value.
MONMOUTH COUNTY IMPLEMENTATION SUMMARY
TRANSITION TO ANNUAL REASSESSMENTS
REVALUATION IMPLEMENTATION
Assessment
Function
Action
2014
Towns
Revaluation
Annual
Reassessment
to Ratio
2015
Parcels
Parcels
Towns
2017
Parcels
Towns
2018
Parcels
Parcels
9,751
11
30,078
8
44,665
6
50
239,766
14
60,754
6
16,089
0
28
158,685
39
188,763
47
233,428
53
249,517
53
249,517
53
249,517
53
249,517
53
249,517
53
249,517
16,089
Towns
3
Annual
Reassessment
to MV
Annual Totals
Towns
2016
0
0
MONMOUTH COUNTY IMPLEMENTATION SUMMARY
TRANSITION TO ANNUAL REASSESSMENTS
20% INTERNAL INSPECTION IMPLEMENTATION
Assessment
Function
Action
2014
Towns
Total Parcels
Within
Towns
20% Annual
Internal
Inspection*
28
2015
Parcels
158,685
Towns
39
2016
Parcels
Towns
188,763
31,737
37,753
*"Total Parcels" x .2 = number of parcels to be inspected annually
100% of parcels internally inspected every 5 years.
47
2017
Parcels
233,428
46,686
Towns
53
2018
Parcels
249,517
49,903
Towns
53
Parcels
249,517
49,903
#3 - Revision Compliance
•
•
•
•
•
As part of the Year-2 submission of the Preliminary Tax List the Tax Board
and a team of Assessors developed a standardized way of reviewing each
list for 2015. The criteria, which will be refined each year in line with
advancements in technology and education, was a high-level review of the
following characteristics:
Review of Land Assessment Changes: an indicator that the Assessor
recalibrated the VCS based on subject sales – keeping uniformity within
the VCS.
Review of Class 4 Assessment Changes: A failure to move all segments of
the ratable base in accordance with evidence will undermine inter-class
uniformity and cause an unintended shift in the tax levy assignment
Review of the treatment of recent sales as compared to other changes:
address spot assessing. (See Ratio Scatter Diagram)
Review of quantity of total changes: Expectations are different in a town
revising from 100% to 100% as compared to a town moving from 80% to
100% or a town revising to the Director’s ratio.
Review of expected ratio change compared to actual change: Expectations
are different in a town revising from 100% to 100% as compared to a town
moving from 80% to 100% or a town revising to the Director’s ratio.
#3 - Revision Compliance
Continued
#4 - Assessment Standardization
• The Demonstration Program provides for enhanced system
administration by requiring that all municipalities within the County utilize
the same property assessment software (MODIV/CAMA system).
• By adopting a single computerized costing environment we are now
positioned to have a common controlling textbook and discussion that
does not require alternative subtext to accommodate other systems.
• System standardization has permitted the development of Monmouth
County’s ADP Handbook for Annual Reassessments which shall be revised
and expanded annually to incorporate the incremental advancement of
appraisal techniques and technology.
• System standardization has permitted the fixed integration of new
software tools such as the Tax Board Portal with the County’s
Microsystems software.
ADP Handbook for Annual
Reassessments
Introduction
• The intention of this text is to serve as a basic guide in
support of your municipal reassessment as required
under the Real Property Assessment Demonstration
Program. While the assessor’s knowledge of the local
markets is at the center of the reassessment, proper
utilization of Microsystems and available technology
will play fundamental roles in your success and
accuracy. It is essential for this guide to be considered
as a whole, rather than in parts. Following only certain
steps will result in an incomplete and non-uniform
submission of the tax list.
ADP Handbook for Annual
Reassessments - Continued
VCS Review
• The delineation of neighborhoods and assigning of VCS’s is arguably the
most important aspect of the ADP. The VCS takes on a new roll in our
system. It may no longer conform to zoning delineations or be an easy
way to value an outlier within a neighborhood. Simply put, a VCS is now
the identifier of a specific market. Each specific market will need a unique
VCS. The same formula may be used in a different market however; it will
require a separate VCS. In the event the two markets appreciate or
depreciate at different rates, alterations could easily be identified and
revised in subsequent years if coded properly.
• Improvement values will marginally change annually as we update our
depreciation and costing tables. The land value will take into consideration
the major and/or minor fluctuation to the overall market value. A
comprehensive yearly review and revision of your current VCS structure is
essential to the success of your annual reassessment.
• IMPORTANT: You must review your VCS structure after a revaluation as the
Company performing the revaluation is not setting up your VCS structure
for annual revision.
ADP Handbook for Annual
Reassessments - Continued
CAMA Data Management
• The management of your CAMA is essential, as the accuracy of value
depends on the reliability of the data. Furthermore, the CAMA to saleprice ratio will be used as the catalyst for making global changes. It is
crucial that these ratios are uniform and that flat adds, appeal judgments
and data errors are corrected. If only a portion of the data is repaired, the
entire analysis may be flawed.
• IMPORTANT: A review of the flat added field prior to clearing the data is
necessary. Many municipalities have relied on this field a great degree in
the past. Due to the multiple functions this field has held (addeds, appeal
judgments, value gaps, etc.), it is important the field is properly reviewed
and revised. In response to our needs, Microsystems has produced a
robust Global Update Reassessment Menu. This menu allows the Assessor
to create spreadsheets that identify flat adds, market, land and
deprecation adjustments. It also provides the user with the ability to make
global changes as needed. A review of the H-Codes utilized for Hurricane
Sandy is also needed. The H-Code assigned to a property is a “Hard Edit”
and will be removed if the improvement value is changed.
Standardization and Technology Details
Work Product and Delivery
• Transparency – Posting of public documents under the
OPRS website. http://oprs.co.monmouth.nj.us
• Municipal Tax Map Maintenance shared services
agreement
• Tax Board Portal development and expansion of graphical
and statistical analysis software and Class 4 Valuation tools.
Integration with Monmouth County GIS and Google Maps
Engine.
https://taxboardportal.co.monmouth.nj.us
• Incremental development of Microsystems functions and
integration with external technology tools.
• Expansion of the Online Appeals Portal
https://secure.njappealonline.com
#5 - Education
• Underlying the Demonstration Program is a series of
advancements in appraisal practices and procedures
which necessitate additional educational requirements
that, in fact, double the State’s present requirements
for Assessors and likewise apply to County Tax Board
Commissioners and the Administrator within the
Demonstration County.
• To position the local assessor with the tools to perform
the annual reassessments the Tax Board must enhance
the assessors' current capabilities through education in
valuation principals, mass appraisal and technology.
TAX BOARD PORTAL – VCS and Sales Mapping
TAX BOARD PORTAL – VCS Mapping
TAX BOARD PORTAL – Sales Mapping
Demonstration Program Summary
• Working collaboratively within Monmouth County and by creating
and nurturing partnerships with Burlington County, the Division of
Taxation and with other forward- thinking assessment and
technology professionals; we have accessed the knowledge and
insight of a broad professional skill set. Over time, this mutually
beneficial conjunction will produce an effect greater than the sum
of any individual effort.
• By incrementally employing technology and applying advanced
assessment administration techniques, we will elevate the
performance and role of the Assessment Function within the State
of New Jersey.
• Our collective target is to reduce the cost of the Assessment
Function by addressing all systemic cost-drivers while enhancing
service to the public.
N.J.S.A. Const. Art. 8, § 1, ¶ 1
•
Township practice of increasing assessed value only of homes sold in township and leaving value of other homes undisturbed constituted a “spot
assessment” in violation of New Jersey Constitution's uniformity clause. Township of West Milford v. Van Decker, 120 N.J. 354, 576 A.2d 881 (1990).
•
The phrase “true value” means the price which the assessor believes can be obtained for the property, in money, at a fair sale. National Bank of N.J.
v. Middlesex County Bd. of Taxation, 26 N.J. Misc. 249, 59 A.2d 270 (1948)
•
Dominant principle of the constitutional mandate that property is to be assessed for taxation under general laws and uniform rule and that all realty
assessed and taxed locally or by State for allotment in payment to taxing districts shall be assessed according to the same standard of value and
taxed at the general tax rate of the taxing district in which the property is situated for use of such district is equality of treatment and burden.
Delaware, L. & W. R. Co. v. Neeld, 23 N.J. 561, 130 A.2d 6 (1957).
•
Where it is impossible to secure both standards of true value and uniformity and equality of valuation required by law in regard to assessment of
property for taxation purposes, uniformity and equality required by law is to be preferred as the just and ultimate purpose of the law. Delaware, L. &
W. R. Co. v. Neeld, 23 N.J. 561, 130 A.2d 6 (1957).
•
Essential purpose of revaluation of all properties within a district is to achieve tax equalization among members of taxing district and among
municipalities in same county. Cold Indian Springs Corp. v. Ocean Tp., 154 N.J.Super. 75, 380 A.2d 1178 (L.1977), affirmed 161 N.J.Super. 586, 392
A.2d 175, certification granted 78 N.J. 410, 396 A.2d 596, affirmed 81 N.J. 502, 410 A.2d 652.
•
In equalization of assessments, where it is not possible to attain a uniformity and equality together with absolute true value, equality and uniformity
are to be preferred at the expense of true value. Berkeley Heights Tp. v. Division of Tax Appeals, Dept. of Treasury, 68 N.J.Super. 364, 172 A.2d 453
(A.D.1961), certification denied 36 N.J. 138, 174 A.2d 923. Taxation 2621
•
•
In equalization of assessments, absolute quality is an impossibility, and even if some inequality should result, it is not sufficient to make the action
taken by the county board arbitrary or unreasonable, and principle by which the court is guided is the constitutional mandate that property shall be
uniformly assessed. Berkeley Heights Tp. v. Division of Tax Appeals, Dept. of Treasury, 68 N.J.Super. 364, 172 A.2d 453 (A.D.1961),
A selling price is a guiding indicium of fair value for purpose of tax assessment and ordinarily is merely evidential, though it may become controlling,
subject to limitation that determination of fair value properly involves the weighing and appraising of all component factors and circumstances.
Hackensack Water Co. v. Division of Tax Appeals, 2 N.J. 157, 65 A.2d 828 (1949).