 Good evening, everyone. Thank you so much for coming out tonight. How do we change the volume on this? Little too loud for our small intimate group. I want to thank you guys for taking the time to come out tonight for the talk of revaluation. It's not a very sexy talk to have, but do appreciate you taking the time to come out to learn a little bit about the process and why we're doing it in the city. My name is Chris Huff. I am the city tax assessor for Portland. However, in a revaluation year, that title is known to change to public enemy number one. Before we get started, we do have some refreshments in the back, water, some cookies, and on the left table here are some brochures and some handouts. So we encourage you folks to help yourself and to take whatever it is that you need. Some of the brochures back there will probably do a better job than I can in explaining the process to you. So we are in the middle of a revaluation in the city of Portland. As of today, we're a little past the halfway point of the revaluation project. And one of the questions that we get is why? Why are we putting everybody through the stress and the uncertainty of a revaluation process? And there's three very important reasons why we're doing this process. And those three reasons are really dictated by law. Main constitution says that why the public expenses are assessed on property, a general valuation should be taken at least once, every 10 years. Does anybody know when the last revaluation was in the city of Portland? 15 years ago. 15 years ago. 2004. Oh, thank you, thank you. 2004 was the last time a revaluation was done in the city of Portland. We are well beyond that 10 year requirement. The constitution also says that taxes assessed should be done equally according to just value. Just value means market value. What is the market value of a property? And when we're assessing taxes, taxes should be assessed equally. They should be uniform. And having the last reval be 15 years ago, we are assessments currently are not equal. And we're gonna show you some statistics and some slides that illustrate that a little bit better. Main revised statutes, title 36, which is the taxation chapter of main law has two very specific standards that every municipality has to adhere to in their valuations. The first is what's called an assessment to market value ratio. And what that means is, what is your assessed value at in relation to your market value, it's your true market value. Law says that a municipality should have a minimum assessment ratio of 70% of its just value. Meaning that when you see an assessment, in a good assessment, a good process, you would be at 100%. Your assessment should reflect 100% of your market value. If it falls below 70%, the state can take administrative actions against the municipality to get their level of assessments back to 100%. Currently right now in the city, we are right at 70%. It's been 15 years since we've had a revaluation. If we didn't do the revaluation currently, next year we would fall below that minimum standard of 70%. And the second standard that state law has is what's called a quality rating. This judges how equal, how equitable, how uniform assessments are. Quality rating is a much easier way than saying what the statistical measurement of this is, and it's called a coefficient of dispersion. And very simply, a quality rating or a coefficient of dispersion measures how far apart assessments are for similar properties. The maximum rating is 20, which basically symbolizes 20%. But what that means is two properties that are similar in style and type and other attributes should not be assessed further than 20% apart from one another. And you're gonna see that our ratings in the city were at 18. We have a lot of inequity in our assessment system right now. Again, we haven't had a revaluation in 15 years. So it's reasonable to expect that we would have a low value and a high inequity rating. And the purpose of a reval is to get us back on track to 100% and get everybody assessed equally. And that's really what the goals of any revaluation is. It's to implement new values for all properties to reflect 100% of market value as of a specific date. Our revaluation process, that date will be April 1st of 2020, next April. The valuation date in the state of Maine is every April 1st. That's when your tax bill that you get each year is based on your value as of April 1st of that year. So new values from this revaluation will take effect for April 1st of 2020. And that will impact tax bills that get mailed next August, next September timeframe. Two other goals of a revaluation is to meet or exceed standards that are in place. The first standard is called USEPAP, the Uniform Standards of Professional Appraisal Practice. Any licensed appraiser anywhere in the country has to follow USEPAP standards when they do an appraisal project, when they do an appraisal report. And USEPAP very specifically has standards for municipalities in mass appraisal in how to conduct it and what the standard should be. And then also the IAAO, that's the Association of Assessing Officers, they have statistical standards that any municipalities assessment should fall in. And I'll show you that in a slide in a little bit and you'll see that we are well outside of the standards that are set here in the city. Again, 15 years since our last reval it's reasonable to expect that we would be outside of those standards and the goals of the reval are to get us back into those standards. Mass appraisal, for a municipality for valuing property for tax purposes, it's done on the principle of mass appraisal. And mass appraisal is valuing a group of properties as a given date using common data, standardized methods. We use models, we develop models based on sales and cost data to essentially develop a model and then apply that model on large groups of properties. And that requires a lot of statistical testing to make sure that those models are fair, that they're accurate, that they bring equity to differing properties. How many people have had an individual fee appraisal on their property? Maybe you've gone for a mortgage or maybe you've refinanced a mortgage and somebody's had to come out to do an appraisal. Has anybody had that process done? So if you've read that appraisal report and appraiser came out, he looked at your property, he measured your property, he jotted down the characteristics. He did a sales comparison. He looked at other similar properties in your neighborhood that recently sold as well as looked at what the cost value of your property is. How much would it cost to build the reproduction of your property? And your appraisal report will very simply show all of those different approaches and the appraisers job is to reconcile those different values from the sales comparison and the cost approaches to come up with a market value for your property as of the date of that report. Now if we all hired five different appraisers to come out to our properties to do appraisal reports, five different appraisers would have five different market values for your property. Appraisers are gonna use different sales. They're gonna look at different costs. The standards would say that if all of those appraisers were within 10% of the market value, that that's a successful project, that all of them followed standards to come within that 10%. But appraisal by definition very much is one's opinion of value. And that's why when you get an appraisal done, you may not have a value that you had on a previous appraisal from an appraiser. In mass appraisal, again, we're doing this not individually. We're developing models and applying those models over a large group of properties. So values of individual properties are not based on a sale price. Rather, models are consistently applied to large groups. That's the principle of mass appraisal. That's how any municipality for tax purposes conducts their re-evaluations and their assessments. So revaluation brings with it a lot of fears. You may have seen an op-ed that I had put in the Press Herald and I literally opened up that op-ed with, it's the single word that strikes fear in most, the most fear on property owners. And that word is revaluation. Revaluation brings with it a lot of fears of resonance and taxpayers. And the first one is, you're gonna pay more taxes. And for some folks, that certainly is true. Increases in value that you may realize as a property owner, however, do not necessarily relate to higher taxes. You may see your value increase that doesn't necessarily mean your taxes are going to increase. And we're gonna explain all that, how that is in some upcoming slides. You may have heard that in a revaluation, the way that the tax burden falls, because it's not only are we bringing values to 100% of market value, but we're redistributing that tax burden against all of those properties. And when you do that in a statistical exercise, you have a third, a third, a third. Third of the properties are gonna see their taxes go up, a third are gonna see their taxes go down, a third are gonna see their taxes stay relatively flat. Another fear is that, well, the government's gonna spend more. Well, now we have all this new value in our tax base, which means that the city is gonna raise taxes. They're gonna spend more money for the city government and for the school department. And that is not necessarily true. In a revaluation, the government, the city, will not see a single additional dollar of tax revenue generated. Well, Chris, how can that be? We're raising the value pretty drastically. How don't we raise any more taxes? So our tax, your tax bill, your millage rate is generated by taxable value of the overall city and what the budget says needs to be raised by property taxes to fund the budget. So currently, the city is in the fiscal year 20 budget. That's the budget that we're under right now. In our FY20 budget, it called for raising $186 million in property taxes. That funds about 50% of the overall municipal budget for the city. So about half of the budget is raised through property taxes. And again, for FY20, that amount was $186 million. That's what council voted on for the budget to raise for the FY20 budget. Now our total taxable assessed value in the city as a whole for FY20 was $7.9 billion. That's what, if you added everybody's individual assessments up, you'd come up with a total of $7.9 billion in change. So you take $186 million that the budget calls for to be raised in property taxes. You divide that by the overall value, the $7.9 billion, and you come up with a tax rate of $23.31. And everybody paid the same millage rate for FY20. Your assessment is times $23.31 per every $1,000 of assessment, and that's what generates your tax bill. That $186 million doesn't change. The city still needs that $186 million to fund the budget. But let's say in that same scenario that the taxable value is now $12 billion. The same $186 million still needs to be raised, but now the valuation is $12 billion. That would lower the millage rate down to approximately $15 and 40 some cents. I'm doing the math there correctly. As values go up, the millage rate goes down to an equal relation. So again, revaluation does not add additional dollar to the city budget or to the city coffers, but it does redistribute that tax burden. If you own a rental property, certainly a fear is you may have a loss of tenants. Any expenses increases that I'm gonna see as a landlord, I may need to pass that on to my tenants and that may not be suitable for the tenants and they may leave. Or may have to think about selling property. Of course, nobody wants to see those things happen, but these are all common fears when it comes to revaluation. But again, revaluation in itself is a revenue neutral process. As the taxable assessment increases, the tax rate will decrease. So in this example, we show here a taxable increase of 40%. Now how does this affect you as an individual property owner? So let's say that after the revaluation, and again, I'm just hypothetically using a 40% number, let's say that the overall value increase in the entire city is 40% after the revaluation. But for you, on your individual property, your value also increased, but your value only increased by 38%, not 40%. Well, you would see a 2% tax decrease in that scenario. Let's say that your individual value went up 42% and the overall value for the city was 40%, and that scenario you would see a 2% tax increase. So it really is dependent upon what is your increase in value from the revaluation compared to the city's overall value. But again, as the taxable rate goes up, the taxable value goes up, the tax rate decreases, and it very much redistributes the tax burden. What does that mean? This is what tax equalization is in a nutshell that this slide demonstrates. So the last revaluation, 2004, Mrs. Smith and Mrs. Jones had very similar properties, and they were both assessed at $100,000, and that's currently their assessment today, $100,000, based on our millage rate of $23.31 for every $1,000 of value. Both Mrs. Smith and Mrs. Jones would each pay $2,331, and the city would collect from both Mrs. Smith and Mrs. Jones $4,662. Now we're after, we've done a revaluation process, and assessments have changed. Good news, Mrs. Smith and Mrs. Jones have both seen an increase in their value. Their investment has increased in value, but they've increased at different rates. Mrs. Smith is in a different part of town than what Mrs. Jones is in. She's in a neighborhood that has seen values rise at a different rate than what Mrs. Jones' neighborhood has seen. Maybe Mrs. Smith has done some maintenance over some upgrades on her property that Mrs. Jones didn't. After the reval, Mrs. Smith's value is $300,000. Mrs. Jones, again, also sees an increase in value, but her increase goes to $150,000. When we redistribute that tax burden, the city still raises the same $4,662. That doesn't change. What does change is how that burden is applied to Mrs. Smith and Mrs. Jones. Up until the revaluation, Mrs. Jones essentially was paying $770,000 too much in taxes. Mrs. Smith was paying $702,000 less in taxes. The revaluation redistributes that tax burden so that everybody is paying their fair share. Nobody should pay more or less than their fair share of taxes. When we get so far outside of a revaluation, this is exactly the scenario that happens. This is the scenario that's gonna play out. And a lot of different neighborhoods in this revaluation process. A lot of our assessed values that are in place today are values that were assigned in the last revaluation in 2004. So there's certain phases of revaluation, different phases of a revaluation. We started this revaluation back in January with the data collection process and sketch verification process. We have Tyler Technologies, who is our consultant for doing our revaluation. And that leads me to forget that I totally forgot to introduce our representative from Tyler here. Real quick, I'd like to introduce Gint Gruby. Gint is our overall project manager for the revaluation from Tyler. Gint has been with Tyler for over 30 years. He's run revaluations in multiple municipalities. And I do apologize for skipping right over that introduction when we started again. But back in January, we sent some of our assessment office data to Tyler to really start some of that data collection process. And we're gonna go over some of the things that have been done up to this point. Data mailers, how many people, how many folks here received a data mailer from our office to verify characteristics of your property? We sent those out to almost 18,000 residences. We asked you to correct any data on them and send them back commercial property owners, got what's called an income and expense statement so that we could see what their rents are, what their expenses are. And that's all part of the data collection process. We're through data collection and we are very much entrenched in our data analysis phase right now. In data analysis, we are looking at all of those data mailers. We got almost 11,000 of those data mailers returned to us, almost a 60% rate of return, which is phenomenal. We can't thank you guys enough for sending those back to us. But now we've gotta go in and make those data changes. We have to review those data changes and analyze them to see what has changed. We're constantly looking at sales. The backbone of any revaluation process, the backbone of any valuation process in general is sales. And we're looking at sales back to 2017, back to April 1st of 2017. We're analyzing every sale in the city to extract data out of that so we can generate models to apply them for this revaluation. That process will take us right up to about April. And in April of 2020, that starts the notice and informal hearing process of the revaluation. So in April of 2020, you folks are gonna get a new notice that's gonna have your old value, what your old assessed value was and what your new assessed value will be. What we won't necessarily know at that time is what the new milligrate is gonna be. By that point in time, we won't know what the FY21 budget is gonna call for from the council budget process. And we know that the value will change because of the informal hearing process. Every homeowner has the full right and opportunity to come in and talk to us in the informal hearing process. There's gonna be some changes made throughout that process, which is gonna affect the overall valuation from the beginning of the process. So by the end of July of 2020 into August, once we know what the new valuation is, once all the hearings are held and we know what the new valuation is and based on what the budget is, then we can determine what that milligrate is gonna be. However, you will still be able to estimate, potentially be able to estimate what your tax change may be. Again, using the ratio that we showed on our previous slide that if the overall city value goes up 40%, well, we can take the current milligrate and we can estimate that down by 40%. Apply that to your new value and that will give you a very rough estimate of what your new tax liability may be. Now, we'll put some instructions and we'll put some of this onto those notices so that you aren't left up to your own devices and we'll do our best to help bridge that gap to give that data to you folks until an actual milligrate is formally set that you can then apply to your new value to determine exactly what your tax liability will be. But we will do our best to help you estimate to the best of our ability at that point in time. So when we did data collection in this process, there's a lot of processes, key processes that we used, historically in a revaluation and has anybody been through revaluation in the city of Portland before as a resident? So the last one was done in 2004, the one before that was in the early 1990s. But historically, revaluation is a lot of labor, a lot of boots on the ground that go to each and every single property. They knock on the door, they will interview the property owner to ask them, can you tell me what you have inside? How many bedrooms? How many bathrooms? They'll actually take a tape measure and measure the outside of the structure to get measurements and a sketch. And while that person's there, they'll take a picture of the property and then they move on right to the next property next door. With 24,000 parcels in the city like we have, that's a lot of people and that takes a lot of time to do that. There's newer technology available that allows us to not use such a labor-intensive process and that's what we brought to this revaluation project. And I'll explain how we did some of that. We took new street-level imagery. We did new ortho and oblique imagery so that we can verify sketch referencing. We digitized some older documents that the city's had in the assessment process. So we'll start with street-level imagery. Right now, if you go to your property record card and take a look at it, you're gonna see a picture of your property. We maintain a photo of every property in the city. But a lot of those photos are older. They were taken in 2004 in the last revaluation. Now, as appraisers in the assessment office when we go out to visit properties because a new permit was taken out or in no addition, we will update a photo and we'll add that photo to the property record card. But we have a lot of photos that are still based from the last revaluation in 2004. We simply haven't visited all 24,000 of those properties in the last 15 years. So we did new street-level imagery. But instead of having a person on the ground with a camera going take it, we essentially used a van with a camera mounted in the back. I shouldn't say we, Tyler, this is a product that Tyler provided. You may have seen this van back in the summer driving around blocks, taking pictures. And this is what they were doing this project for was so that we have all new updated street-level imagery for this revaluation process. In addition, we did new ortho, new aerial imagery of the city. This should be a pretty familiar look at a map. Anybody that goes to Google Maps, Apple Maps, Bing Maps, this is what you're looking at. You're looking at an aerial overview. But an ortho, ortho means top-down, bird's-eye view. But when you look at an ortho image, what is this building? How tall is this building? What are the dimensions of this building? One of the things that we did when we had new imagery taken was called oblique photos. And that's photo that's done at an angle. And when you use oblique imagery, you get a photo like this on a 30-degree angle. Now you can very easily tell that this is the central fire station on Congress Street. You can see that this is a two-story building. The aerial imagery that we had taken for this project is survey grade, meaning that we can use digital measuring tools right within this program to measure any building. And the measurements are accurate to within six inches because they're survey grade accuracy. This eliminates the need for a small force of labor to go out and have to manually measure each and every property. We can do this all through digital technology pretty quickly, much more rapidly than what it would take of, again, boots on the ground to go out and measure all of these properties. Not only does an oblique image show you just one side of a building, it shows you all four sides of a building. Yes? That's a question. Are you saying you took brand new photos or you sourced new photos from existing? No, we had brand new imagery taken for the entire city. No, this was all done in May of 2018 that we had this aerial imagery photograph. Not just for purposes of this revaluation, but as you can imagine, this type of imagery is very useful to many city departments. Public works, fire and police love this imagery. It's very useful for a lot of different departments. Planning, you can use this to do 3D modeling when a new project comes to fruition. But it is new imagery that was taken for purposes of this revaluation. And again, what it does is save the labor and the manpower needed to go and do all this stuff on one site for each property. Oblique imagery, again, allows you to see all the different sides of a building. We can see exactly what's on the exterior all the way around the building. So another process that we brought with our data collection was sketch verification. In every revaluation that's been done, as I said, appraisers or data collectors have been out to a property and they measure the property. They take a tape measure and go around the property and measure. And they develop a sketch. They draw a sketch on a property record card. And we have sketches of properties back to the 1950s in our office. We have property record cards back to the 1950s revaluation in our office. And they're full of sketches. All of these sketches over the years have been incorporated into our computerized assessment system that we use in the city in the assessor's office. And what Tyler did was they were able to take these sketches. They extracted them out of our database. They scaled them and overlaid them over top of that aerial imagery that we took. And essentially using a computer algorithm flag all the properties where the sketch outline maybe doesn't match the building underneath. If a part of a building came out past the sketch line, the sketch boundary, or if the sketch boundary didn't capture the entire building, it was able to flag for any anomalies. And without having to send somebody to measure, we knew exactly the sketches across 24,000 properties that we needed to go out and re-measure and re-verify. So Tyler analyzed about 18,000 structures in the city using this technology. And 13% of them, roughly 2,200, had an anomaly that we needed to go out and field visit to field measure to correct something with the sketch. And that work happened over the summer. We had some appraisers that visited all 2,200 of those properties. Some of them may have come to your house. You may have gotten a yellow card in the door that said, hey, I knocked on the door. Nobody was here. I measured your property today or I was here for the purpose of the re-val. And fixed all of the sketches that this analysis detected. Finally, we scanned a lot of old documents. In our office, we maintain property record cards back to the 1950s. And they get used a lot. People come in and do research all the time. And these are cards that are filled out in pencil that have been in and out of file cabinets since they were created, since the 50s. We maintain the 50s, the 80s, and the 90s property record cards in our office. To preserve these cards, what we did was we digitally scan them so that they're available electronically. And we will make these electronically to the public. We get a lot of folks that come in that want to pull old property record cards to see what was there, what existed in 1950 on this property. Now we'll make this available that you can come to the property assessor's website to do a property search and you'll see these cards for properties. Over 70,000 of these property record cards were scanned as part of this process. So now that we have all of this information from data collection, we can start to verify and we kind of have a complete record now of that property. We can review multiple data sets. We can verify all the property characteristics. We have a street level image. We have a sketch. We have the oblique imagery that we can see all sides. We have the data mailers that you sent back. They are also scanned and available digitally. And now we can start to look and see what data do we need to change on this property. We can essentially confirm all building attributes and outbuildings. That was our data collection process that started in January and pretty much just finished up in October. So again, we're doing all of this. All of this data helps us to come up with very reliable, very accurate models in the process of determining what is a market value of a property. But before we can do that, we probably should define what is market value? What are we solving for exactly? What does market value mean? And right out of the dictionary, textbook definition of market value is defined as the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably assuming the price is not affected by undue stimulus. Notice that it says the most probable price that a property would bring, not the highest price that a property would bring, but the most probable price. How do you determine the most probable price? You're looking at a lot of different sales of similar properties, essentially to come up with a range to determine what is a good market value for any particular neighborhood or group of homes in a neighborhood. And when we look at sales, again, we're going back to April 1st of 2017 and looking at every sale that occurred in the city. Over 5,500 sales of property have happened in the city since April 1st of 2017. But not all of those sales are good sales to use for statistical purposes of a revaluation. We really want sales that are what's known as an arms length transaction. And what does that mean? These five criteria have to be met in order to use a sale in a sales ratio study. Again, buyer and seller are typically motivated, everybody is well-informed and well-advised, acting in their own best interests. A property's been exposed on the open market. Payment for that property is made in terms of cash or comparable financial arrangement, which essentially means a mortgage. What that means is we are eliminating or anything that's not an arms length transaction. If it is a short sale, if it is a sale between inter-family or inter-corporations, if it's an estate sale or foreclosure sale, the sale price, there's no reason it's sold for triple what it should have sold for. Or it's sold for three times less the amount it should have sold for. It's an outlier. We will not include those sales as part of the sales ratio. We want true arms length transactions. That is how that is the best way to define a range of market value in any ratios. So again, out of 5,500 sales that we analyzed, less than half of them are being used for our sales ratios. And we do this to look at, again, market value. How do we come to market that? There are three general approaches to market value. If any appraiser uses, anybody that's seen an appraisal report for a property, you'll see these three approaches discussed in your appraisal report. An appraiser has to look at all three of these approaches. They have to derive the value using all three of these approaches. And then their job is to reconcile these values to come up with one market value for a property. So these approaches are the cost approach. Cost approach is market value derived by determining the cost required to construct a replacement of a property and then deducting after depreciation. Then you have your sales approach, your market approach. And that is very simply comparing recently sold properties with similar type, similar style, similar characteristics. You may value adjustments for any differences. If two properties are essentially the same, one has two full bathrooms, this one only has a bathroom and a half. You would make an adjustment in a sales comparison approach for that half of an hour. The final approach is called the income approach. This is really used in commercial valuation where residential properties where rent is being paid in. For most residential properties, the income approach is the least used approach unless, again, the house or the home is being rented out. But essentially, in an income approach, market value is derived by valuing the present work of the future benefits of ownership for having that income produced properly. Earlier this month, we had one of these forms for commercial property owners right here in this room. And the income approach was the only approach that was discussed in that form. I'm not going to spend any time today in the residential form talking about the income approach. We're going to focus mostly on the cost and the sales market approach. Those are the two most widely used in the residential properties and two that we're relying on suddenly in the revaluation of the work. So what is cost approach? Cost approach is a very simple formula. Replacing the cost to less depreciation, adding in the land value, get you a market value. So how do we come up with these numbers when we do a cost approach? When we look at replacing the cost new, there are a number of national cost valuation guides that are available. We use the most widely known one, the most common one, which is called Marshall and Swift cost manual. Marshall and Swift develop so-called manuals for appraisers to do a cost analysis and cost approach like this. Insurance companies use Marshall and Swift to determine insurable rates, depreciation rates, and Marshall and Swift will come up with depreciation rates. Took this Marshall and Swift cost manual, it's like a thousand pages, and it goes over every facet of construction. Down to shingles and siding and different types of siding and plywood that can be used in construction. But at its base, I just pulled some data right out of the Marshall and Swift manual for this slide. If we look at a single family dwelling that's rated a good quality, Marshall and Swift assigns a base rate of 135 dollars for that single family property. The last update of Marshall and Swift was in August of 2018, that's what that date means. And then we look at coming up with what that value is today. And we do that by two different multipliers. The first is what Marshall and Swift calls a current multiplier. And that essentially takes a period in time of today versus when this data was obtained in August of 2018. So essentially the current multiplier says since August of 2018 to today, that base rate has gone out by 2%, one point up to 2%. So a 2% increase in the cost of construction since August of 2018 in a single family. The other thing that Marshall and Swift does is it looks at local markets. And if you go to Marshall and Swift you will literally find a page for Portland Main for every state, markets in every state. And they have local multipliers based on data that they get from builders and construction companies to formulate this data. And for a single family good quality, how important there's a multiplier of 0.99. So essentially we take a 135 applied multipliers and we come up with a composite final rate of 136.32. And you can see I put some other right out of the Marshall and Swift guideline. But this is essentially just valuing shell of a property. We're not taking into account anything inside the property. No outbuildings or garages. This is essentially the value of a shell of a single family property to be. This is the basis of coming to determining what the replacement costs new. Then we have the factor in depreciation. Appreciation is measured by three criteria. Physical depreciation, functional depreciation, external depreciation. Physical depreciation really is deterioration. Lawson value due to normal wear and tear of a property. The first depreciation measurement is age. How old is your property? Obviously a house bill of 1,900 has a vastly different depreciation value than a house in the 2000s. Normal wear and tear, the firm maintenance, those things would affect physical depreciation of a property. Functional obsolescence is a lawson value due to the inability of the structure to perform adequately. The best example or the example I like to use for this, you have a single family home that's for sale. It's five bedrooms, five big bedrooms. But there's only one for man. In today's day and age, that's not a desire of property for most people. If you're looking at a home that requires five bedrooms, you're thinking that your needs are gonna be for more than just one for a bed. So the fact that a property may have five bedrooms or one for a bed, it's gonna affect its market value. It's not gonna sell for the same that a home with two and a half baths would sell for if it had five bedrooms. So there's a depreciation factor that goes into that to measure what is the lawson value for having that functional obsolescence. Another example I'll use is in older homes, sometimes you may have two bedrooms that are connected with each other that requires you to walk through one bedroom to get to the other bedroom. You don't have necessarily a hallway with a door to access that other bedroom. Well, there's functional obsolescence in that because when somebody's looking for a house today, they're looking for, no, that's not what they're looking for. So there's an impact to market value on that. And that's measured by depreciation. Economic obsolescence and external obsolescence, if you have a property and all of a sudden next door to you, a new fast food rush is built. And then on the other side of you, a convenience store is built. That's absolutely gonna impact the value of your property that's sitting in between these. That's an external obsolescence. There's external depreciation. But that and your value, your market value is affected by those two things occurring. And we need to be able to measure that by some level of depreciation as it relates to your market value of that amount. So we have a replacement cost note. We subtract that out of your depreciation. Now we have to add in the land value. Importantly, the method used for land value is what's called the baseline. And essentially what that means is in any neighborhood, there's a baseline rate. The example I'm using here is there's an 8,000 square foot base lot, the rate of land is 10 dollars per square foot, so that 8,000 square foot base lot now means $80,000 right off the bat. You then have an adjustment rate to that. And what that means is incremental or decrement. You increase that base rate for anything over 8,000 square feet and you decrease that adjustment rate for anything less than 10 for 8,000 square feet. So an example I have here for a 10,000 square foot lot, we start with our 8,000 square foot base lot value, $80,000. We use the incremental value, 2,000 additional square feet and $5 a square foot adds an additional $10,000. So that 10,000 square foot lot value is $90,000. On the flip side of that, looking at 6,000 square foot lot, now we're subtracting out the 2,000 square feet from the base lot and we come up to a value of $70,000. Base lots in every neighborhood is different. Again, based on sales, based on sales analysis, modeling of specific neighborhoods. This is a method that's used to value lots of land in the US. Yes. What happens if your land has, it goes down into a gullet and it has the odd one trails? So our commas, I'm going to keep calling it our commas system. Commas stands for computer assisted massive raising. That is a software appraisal system that we use to value property. And there are descriptors for land that mention topography. Is it flat? Is it below the stream? Is it above the stream? Is it hilly? Is it rolling? So is there a slope that a property has into it? We would identify that there's a slope and it would be an appropriate adjustment made to reflect. Maybe you don't have a level, maybe you don't have a lot. Those are characteristics that are determined again and all of the data analysis that we're doing with mapping and just data from prior evaluations where that data was a discussion. So our cost analysis, our cost approach to value, 2,000 square foot house, we use our replacement cost for more than one split, $180 a square foot, 2,000 square feet with a value of $360,000. We factor in depreciation that comes to a level of 25%. So we said track out $90,000. That gives us a building value of $270,000. Remember when you look at your tax bill, when you look at your assessment, it's made up of two parts, building value and your land value. And that's your total assessed value. So we have our building value, replace the cost smooth, less appreciation. Now we add in the value of our land and that gives us the market value. That is a very clean, very simple cost approach to the land value. Next we'll go to the sales comparison, a market approach. And this is when we start to look at its 5,500 sales of property throughout the city. This map that's on the screen here, this is assessment neighborhoods. The models that we do get applied to different assessment neighborhoods. Now assessment neighborhoods are different than the geopolitical neighborhoods that we may be familiar with. Voting districts, we all live in a voting district, district one through five. We're a neighborhood boundary, river team, back cove neighborhood, Deering Center, East Deering. Assessment galleries include, assessment neighborhoods include some of those geopolitical, but the galleries are very much based on styles of similar type properties and in every revaluation, assessment neighborhood maps change based on sales. This is the map that was put in place in 2004 based on sales analysis that was done. And we will be making some changes to these different neighborhoods and then based on the sales data that we're extracting in this sales approach. Out of this area of, this is residential properties in the city, our sales ratio study back in April 1st of 2017 came up with 1,400 verified and valid sales. Now we start to look at those sales to say, what is that ratio? What is the ratio of assessment to market map? And how equitable were these sales? And when we did that data for this review now, we came up with again 1,402 sales back to April 1st of 2017 and those sales reflect that we have a ratio of 70%. So current assessments of those properties of those properties that are sold are only indicating 70% of the market map. More importantly, we can see that the quality rating, which again is that coefficient of dispersion is 18. Almost at that standard of 20 that the state wants us to be under. And that shows us that out of those 1,400 sales, they're not very equitable between our assessed values between those sales. We look at our islands. And our islands, we had 84 verified sales. And that's gave us an average ratio. We looked at those sales, we had an average ratio of 84%. Little unusual for our islands. Anybody that's been around for the last couple of evaluations knows that the islands experienced some of the largest increases in property values. So much so that we had an island back in the 90s that seceded from the city of Portland because they were so agreed by the change in their value. What this shows us is that over the last 15 years, the value of island properties had dropped a lot. We're at 84% of value. There is some inequity in those sales, but they held their value. And the islands actually are the highest ratio of any neighborhood, of any sector of the city. It's definitely unusual for island residents and spec island residents to see increases in values that may not necessarily have a relate to an increase in that. We looked at the condos as a whole back to April 1st of 2017. We have a lot of condos in the city, I'm sure you're aware, out of 876 condo sales, we have an average ratio of 68%, meaning that their assessments are not reflective of their true market value. Remember the state standard is 70% in our condo segment. We're below that state standard. Quality rating is 14, so again, what we're saying, a common theme in this, we have a lot of inequity in our assessments as is to be expected when it's been 15 years from the retaliation. This chart is a star plot of all of the verified sales that we looked at back to April 1st of 2017. And we see a trend line that is sloping down to negative trend line. And essentially this shows us exactly the inequity that we have in our system. Not only are we inequitable between similar type properties, we have an equity amongst different values problems, different prices properties. We have what's called a regressive assessment right now in the city of Fort Worth, and this shows that higher priced properties are assessed at lower values than what lower priced properties are assessed for. Okay, I'll say that again. This is regressive. Higher priced properties are currently assessed at lower rates than lower priced properties. That should not be. Everybody should be assessed equally. That's the goal of a reevaluation is to bring equity to our assessments. So when we look at our sales ratio testing that we've done up to this point, we have our assessment ratio. Again, assessment to sale to market ratio. Currently our value for the city of Fort Worth is at 70. The state says that it will require to have a minimum or the minimum standard at 70%. You don't wanna fall below that minimum standard. The IAAO standard says we should be between 90 and 110% without doing the reevaluation. When you fall below the state standards, we're already well outside the IAAO standard. That's one of the reasons why we're doing the reevaluation is to get back to 100% of market value. Our coefficient of dispersion, again, how inequitable are our assessments? IAAO standards say we should have a coefficient of dispersion of 15 or less. State law, the state of name, the guideline, the standard for municipalities is no more than a maximum of 20, no higher than 20. Currently the city of Fort LeMore, 18, we have a lot of it in our assessed values. These last two, price-related differential and price-related bias, go back to show us the relationship between lower price and higher price problems. Now there's no state standard for a price-related differential or a price-related bias, but the IAAO does have standards, and we are outside of the standards because what we're seeing is our assessments are biased towards higher price problems because they are not assessed at the same level as the lower price problems. And right here is the statistical measure to show us that. And with these two columns we're showing us right here is essentially this standard. So what are the goals for this revaluation? Particularly the city of Fort LeM 2019 revaluation. What are our goals? Well we want to implement new values for all properties to reflect 100% of market value. We want to get everybody up to 100% of the market value as of April 1st of 2020. And we want to secure a more equitable distribution of the tax burden. Everybody should be assessed equally. Properties should be assessed to the same standards, to the same levels. Internally in the assessment office, we're also taking this revaluation to update and modernize some of our systems and our procedures. So I showed you some of the aerial imagery that we did and how we are able to measure properties now. We don't have to physically go visit every single property every time we need to measure. We can pull up those aerials and we can do the pretty accurate measurements of the properties from those aerial images. But last time our assessment system that we use was updated, was back in 2010. So with this revaluation, we'll get updates. Fresh updates, the latest of our data, the assessment software that we use. This, one of the things that newer software allows for is more regression analysis. More looking at sales, more looking at data. A lot quicker than what you can do with say Excel. And what this will allow for, one of our biggest goals in this is to allow for smaller value changes to be made on a more frequent basis. No more of these large-scale, decaying revaluation processes that drastically increase or change values. We can do this much more efficiently as we go along by looking and extracting out all of the data that we have on market sales. So we're updating our software systems to be able to do. Again, the goal here is to come to 100% market value. But when we do that, we need to make sure that we have four things. We need to make sure that the models that we're creating, the data that we're looking at, that when we apply this, that these models are reliable. These models are gonna go into our assessment system and they're gonna stay there for quite a, for some time. Models that we have down on our assessment system were developed in 2004, the last revaluation. So when we're making new models for a new revaluation, we need to make sure that those models are reliable. We need to meet the statistical testings and statistical standards. We need to be accurate. We need to get our data as accurate as possible. We do that with some of the technology that we're using in this revaluation. The aerial imagery, the street level photos that we're taking, the data mails that we sent to you guys to help us correct some of the data on properties. The more accurate our data is, the more accurate our models, the more reliable our models are. We wanna make sure that our models and the values of replacing are valid and accurate. Again, no one should pay more or less in their fair share. And in order to do that, we have to be equitable. And as we can see, we have a lot of inequity in our current assessment system. So what does this all mean for you? What does this all mean to you? Well, that prepares you for your upcoming others. In April, you're going to get a new value that starts the informal hearing process. In the last revaluation, roughly 3,000 informal hearings were held of folks. Our plan for informal hearings for this revaluation is not to make everybody come down to city hall. We'll have hearing sites set up in different places in the city to make it a little bit more convenient for folks that may be off peninsular, folks that maybe are on the island. But again, everybody has the right to appeal their new value. Keep in mind that when you do appeal, you're appealing the value, new value. So we want you guys to bring in recent appraisals, cost estimates, maybe if you have a recent addition or some type of construction, that's the type of data that you wanna bring in with you when you're appealing your value. If you come into an appeal and you tell the Tyler folks, my taxes are just too high. Chances are they're gonna have a pretty neutral reaction to that. What you're appealing is the value of your property, not necessarily, if you don't like the tax rate, that process is essentially, talk to your city counselor, be involved in the budget process. The budget process is what sets the tax rate. The assessment process is what sets the value that that millage rate is applied. I hope today has helped you or I hope this presentation helped you understand the revaluation process and different methods that are used in the revaluation. And also, again, I hope you prepare for appearance at a place. The last thing I wanna talk about, this is another common question that we get after, why are we doing a revaluation? Is there a tax rate? Is there any tax rate programs available? And there are a number of different tax rate programs available to the residents. The biggest one is that everybody's probably mostly familiar with is the Homestead Extension Program. If you're going to a property for at least 12 months and your property is your primary residence, it's not a second home, it's not a vacation, it's your primary residence, you qualify for the Homestead Extension in May. Importantly, 8,740 properties are enrolled and approved for homes in our current budget, year of fiscal year of 2020. Every property received $16,800 in exemption. And that related to about $391 in change in direct tax relief realized in your tax code. Now, on April 1st of 2020, that value's gonna go up, but the state legislature increased that exemption to $25,000 in exemption. If you're not in Homestead, you definitely wanna make sure that you get enrolled in Homestead. I'll show you a website where you can go and check that. You can also call the Assessment Office and also verify for me whether or not you're in Homestead. You can also look at your tax code. And if you see a number of $16,800 in the exemption column in your tax code, you wanna enroll in receiving the Homestead. It's a one-time application. Once you've enrolled or approved, you stay in Homestead. You don't have to apply here until the property is no longer for primary residence. The other thing happening with Homestead, the legislature in the last session approved tax relief in the form of rebate or refund checks. Every property owner in the state of Maine, who is currently enrolled in Homestead, in January is gonna receive a check of a little over $100 out of the state in tax relief. We hope that that's a program that continues throughout. Hopefully the value of that will increase. But any relief is good. But if you're not enrolled in Homestead, you will not see the benefit of getting that check from the state. So that's another important reason to make sure that you're enrolled in Homestead. The state also offers a veteran's exemption, qualifying a veteran 62 years of older or a veteran that is receiving 100% disability from the VA will qualify for a veteran's exemption. In certain cases, a surviving staffer veteran, a minor child with a veteran, a widowed parent of a veteran, may also qualify for the state's veteran exemption. The state has a blind exemption for any homeowner who's legally blind and locally, Portland has a tax relief program specifically for seniors called Peace Step Program for Portland Senior Tax Equity Program. It's available to qualify homeowners and renters. You must be 62 years older to qualify. You have to receive the main property tax clearance credit. That's a credit that when you do your state income tax, when you file your annual 1040 NE form with the state name, if you qualify and if you receive a refund or a credit under that program at the state, the city will match that dollar for dollar. So if you receive a credit of $500 under the state property tax clearance credit, your application process will require you to show that you receive that credit and then the city will essentially match that dollar for dollar and they will issue you a check for that same amount you received from the state. The application period for that every year is March 15th through May 15th. Applications are available online. They are available in the city assessor's office. They're available in the city treasury office. Applications are available for this every January. This is an application that you do need to fill out every year and very much is dependent upon verifying that you are qualified. But if you get the property tax clearance credit, if you know you get that from the state and you're over 62, you definitely wanna apply for this because again, the city's gonna match what you receive from the state of the dollar for dollar. That is all that I have for you this evening. A couple of important websites, revaluedportland.me, that is the website that we have specifically for the revaluation. Notices of meetings like this are on there. There's a bunch of different information on there. We've sent brochures to properties back in April. We've sent data mailers out. Examples of all those are located online. We have a number of videos to explain the revaluation process. Again, there's videos we're professionally done and do a heck of a lot better job than what I can do up here. Portlandassessors.com, that's the website to look at your property. You can go to Portlandassessors.com, you can put in your address or your parcel ID number and you can see what your current assessment is. You can see if you're receiving a homestead exemption. You can see all the characteristics that you have on the property. Finally, the Portland website, localmain.gov, lots of information there. You can see your property tax bill there. You can go to any of the city departments there. This phone number is 748763. That's a phone number that we have established specifically for the revaluation. It's a revaluation helpline. That phone is staffed by somebody during the day. Any questions that you have, any discussions that you want to have, that's the phone number. Again, when notices do go out of the new values that we start in the formal process, we'll have instructions there on what you will need to do to schedule an appeal hearing. And remember, if you think your value's too low, we want to hear that too. So please come on in until we hear you. That is what we can do when we hear that as well. With that, that is all I have for you this evening. Again, we appreciate you and thank you for taking the time to come out. Monday night, I know there's various other city meetings happening tonight. I appreciate that you took the time to come to this one. And with that, I would love to start and help answer any questions that anybody may have. Yes? I have a question that you were going into this morning. I'm just curious to see how your process is going to danger. But I was curious about, we were talking about the sale for that equation. Yes. So, let's just have them say, there are houses in your name for a minute. A lot of them have been sold lately. Much more than what they're covered in your house, but they're getting a lot more losing points. Yes, and your assessment doesn't reflect that. So, what I'm kind of curious is, you see pictures, you see databases, you see forms. But from a real estate point of view, the houses that were sold for a lot more money, they had more bathroom. Absolutely. There were forms. Absolutely. The heating system put in. Absolutely. So how do you factor in those? So, several different ways we do that. Number one, we have access to all the permits at the city issues. And the bread and butter of kind of what the Assessor's Office does from year to year in between the evaluations is taking all those permits and we go out and visit all of those projects and any given year to determine why was this permit taken out? Is the improvement that's being made on this permit, does it affect the value of the assessed value? But you don't need, let's say, the heating system. You don't need the permit to get it in the boiler, get it in the water. Well, how would you know that? There are some things where we wouldn't know that. So, other ways that we determine that, we simply ask the property. We ask part of that data manual. We may look at a listing online to see what was replaced. You have certainly lots of different red websites, real-word.com, redfin.com, the MLS listings. We talk to brokers, we talk to real estate agents, we talk to buyer and sellers. When the data mailers that went out, there was a, on the back page of the data mailer, there was a section that said, if you recently purchased this property, if you purchased it after January 1st of 17, tell us a little bit about the sale. Was this a monthly transaction? Have you made any improvements? Have you updated anything? Was anything updated before you purchased it? So we look at all of that data and we do our best to make educated decision based on the data that's available to us. Admittedly, there are sometimes there's data that we just don't have and we don't know. So, say you have one make, you know, you have Main Street. You have each ratio of one Main Street. But by Main Street, they didn't sell their house. It was in a sale before. So, remember that sales ratio study that I showed, and we have 1,400 verified sales that we're using. Well, that's great for those 1,400 properties, but there's 22,000 other properties that didn't sell. And that is essentially exactly what a sales ratio study is intended to do, looking at recent sales to extract data to create a model that then you place that mount model over the other groups of properties that happen. So that's mass appraisal in a nutshell. Because we can't go do an individual appraisal report each and every single property. We have to do it by the mass appraisal approach. I hope that explains your... Well, I'm just concerned that if you go to a bunch of houses who have made significant improvements and then you have some who haven't, are the people who haven't made those improvements going to increase because you're basing it on that? So, they're suddenly going to get an increase because their value has increased, but they should not get an increase to the same level that the ones with the additions or renovations have done, simply because they would have more appreciation in something that isn't updated versus the ones that are. Now, again, you're very much right. That's contingent on us knowing that the other properties have had improvements done to them. And we feel that we do a pretty good job over the year of looking at our apartments and knowing what happens in that process. Yes, some things do slip through the cracks when we find it. We certainly make adjustments as needed. But permit data is a big part of what we do day-in, day-out basis in the assessor's office. Just add also, man, that when you receive your notice, if you think your property is assessed too high in relation to other properties on your street, give us a call. Come on in. We'll talk about it when you have to say it in consideration. Absolutely. If we update along, we want to make sure that our data is correct so that you have a fair and equitable amount. The informal hearings, they very are sitting down face-to-face meetings to talk about how does your property derive, what data characteristics, what data points do we have for your property. And that's why I say, if you have a recent appraisal, where you have construction costs or anything, bring all that stuff with the appeal here. We want to see what we have. We want to review it today if we need to make changes and certify it well. Yes? As you know, we've had a lot of demolition, especially on Muncho and Hill, and a lot of these massive, enormous blocks of condos that have gone up for sale at very, very high prices. Many of those are being sold to second homes and seasonal residents that are yet those of us that live up there full-time and have for a number of years. How are we being affected by these people who aren't even So a lot of those sales, I would say, again, it's been doing this for 30 years, he has essentially ripped his hair out over looking at sales studies on Muncho and Hill. There are so many sales in there that simply don't make sense. There are so many outlier sales up there. The fact that people are paying $500,000 for a 3,000 square foot block is insane. And then on top of that, they're building an $800,000 structure on top of that. In a sales ratio study, you're always eliminating your outliers. You're taking kind of the central meat of a sales ratio study, you're getting rid of your loads, you're getting rid of your extreme highs. And in that process, a lot of those real crazy sales are kind of invalidated. They're not used to about the sales. But there are certainly a number of sales on Muncho and Hill where we can show that there are arms and length transactions. It's not just somebody purchasing it because they want to tear down this whole line and construct it in 1950 and then build something new. However, those sales do go into a sales ratio model. And the value of Muncho and Hill is vastly different today. And it was back in 2004. And it is based on arms length transactions of sales. And when we see sales up there of a 1,200 square foot branch for $450,000 when there's a bunch of those sales, that essentially becomes the market. Now, again. So we're going to end up having to pay the price for all of that, aren't we? You're certainly going to see. I am not going to sugar-grade you anyway. We were told that we then are just sitting around. That's all that's going on in Muncho and Hill. That is a lie. I lived there for 16 years. And that's all that's going on in Muncho. I did a little work on my house. I've had neighbors that done tiny bits of work on it. Everything else is a condo or something. If you don't park in your driveway, somebody will build a house in it. It's ridiculous. So basically, we're all going to take the brunt of that, even though we've lived there for all this time. And then again, I'll say that we also own our houses and turn them into condos. All we can do now is really make some money. I think we're going to live, but you know, that's fine. You know, an increase in value does not necessarily relate to an increase in taxes. But a lot of folks are going to see an increase in their value. And there is no doubt about it. That is not just Muncho and Hill. The peninsula has a whole. The ratio of the assessment to more value ratio is a lot lower on the peninsula than it is in the rest of the city. But we also have the issue with the Muncho and Hill, I know there's been at least over 40 affordable housing units that have been driven off the Hill because of this building. So there's very little much less and less and less rent up there. How is this going to affect? I happen to own my home, my condo. I also own another condo in the same building because my condo, we couldn't stand anyone who lived up to it. So we just bought it. I try to keep that as something reasonable. But I was going to tell you, if what happens to me, what you're saying is going to happen, how am I supposed to keep that reasonable? Even if I have a place that I try to keep reasonable, I won't be able to do it because of the property. I completely understand that the deal of the market is very much driven by what is happening but isn't it a bubble? I mean, is this not a bubble? You think this is going to continue? I think any market, any city is a bubble. I mean, we've all seen it. Listen, there's ebbs and flows in any market. I've been saying this for the past two years. What is going to happen when WECS is done and everything else at the base of the Hill, Muncho Hill is done and it's February and you can't clear the snow? Eventually people are not going to want to live in these condos and you're going to reassess our taxes that were going to be stowed. Eventually that data is going to bear itself out and market data, right? The value starts to come down or people aren't paying the price that they're going to pay and we're going to see that in market data and assessment adjustments are going to be made. Again, we're working here. Yeah. Well, I'm going to give you a bit of an explanation. One of the goals of this reevaluation is not to do these long-term, decade-long reevaluation processes. We can get, with newer technology, we can react a lot faster than market data we're seeing and the goal of this reeval with new software that we're getting is to do smaller value changes and more frequent increments. Whether that value change, whether that smaller value change is up or down, we want to be able to do them smaller and more frequent intervals and waiting 10 or 15 years to do a large-scale evaluation process. The market may, we may see a market crashing in the next couple of years. We are not going to wait till a reevaluation to go through and adjust assessments across the city. I'm able to react to that as market data shows that that is happening. Yes, yes. Do you give an example of, excuse me over here, one-third, one-third, one-third, can you give an example of one of the one-thirds that goes down? What, sure, something that's not, well, so any example that I use, this is a million dollar end over here, that's the way I kind of write it, was the million dollar condos on your dock. On your dock. Diagram. It showed 25 million dollar and they're coming from his neighborhood, I guess. I'm not from that neighborhood. But where is, you know, one-third, one-third, one-third. We obviously know where the one-third, where's the two, the one in the middle and the one going down? So that, with that diagram shows that our higher priced properties are assessed at a lower rate, a lower property. So in the scenario that you're saying, they would be some of the one-third that would go up. That would go up. We would bring them back to an equal level. They should be affected more drastically, being on that end of the. So on the other end, where all the dots were on the lower end, that would be the one-third going down, at least, excuse me. If you, if I can go back to, I apologize for using one-byte for all this. But I'm going to go back to the tax there on the slide, because I think this illustrates the, I think this illustrates the best. In that scenario, in this scenario, Mrs. Smith was in the one-third that went up. Mrs. Jones was in the one-third that went down. But at that same point, I just did the math here a little while ago. Mrs. Smith got a 33.3% increase per tax that is transferred to one-up. $777. Yeah, that is one-third. That's a huge amount. You nailed some of us. We're only using two properties for the basis of that. It's right, you and me understand. So I understand. I'm just trying to change. Mrs. Smith, my taxes just went up by a third. Right. That's a lot. That is a lot. That is a lot. Mrs. Jones is quite happy with it. There's one down. Yes. There's a factor here that has been discussed at all in any of the discussions I've heard is the overall valuation of the city. In other words, the tax base with all the construction of all these $700 million condo units, the tax base has to have gone up. Oh, it has. And so our tax base, and I don't have the slide with me, our tax base goes up roughly anywhere between 1% to 2% a year. Historically, over the last six or seven years, our taxable assessed value does increase every year. It doesn't increase at the rate that the market has increased. But it does increase. It has increased. So wouldn't that bring the military down? It would if we're not generating new... If the budget doesn't increase, if the budget stays the same, then yes, you're essentially correct. The tax rate would stay flat where it could potentially go down as new value comes on. But if you look historically at the last several budgets, the amount raised through property taxes has substantially increased. This year it was $186 million needed. The year before last, it was $177 million needed. So just in one year, the budget increased substantially. So that was one of the reasons why council put a 4% increase in our taxes. That's why our military went from $22.48 last year to $23.31 last year. And what about revenue sharing from the state? We got kind of slammed by a yellow line, and we didn't like it. Did that ever change? So revenue sharing has changed. Portland is seeing substantial increase in its revenue sharing. That will be discussed in the budget process when the year's numbers come to light. So what the state does with each municipality every year, the state does their own sales analysis based on the sales that happen in the jurisdiction. And the state with each municipality comes up with what they call the state equalized valuation. And it's that number. It's not the municipality's actual taxable value. It's what the state says your taxable value should be. That's the number that determines revenue sharing or education subsidy is going to be. That number is used in a lot of different forms. It was determined revenue sharing. And as that value goes up, the revenue sharing and the education subsidy comes down as that value goes up. So what comes next? How would the commercial end of this work out? Or how is it working out? So as a ratio, commercial overalls ratio is 59%. That's where the commercial revaluation, the project manager doing the commercial side of the revaluation, he presented this earlier this month to commercial property owners and his statistical testing, or the statistical test, 59% in that statistical testing for the commercial. 59% assessment to market value. So it means overall, we're going to have more, possibly more than the residential? Absolutely. And that will probably make the value of the city go up on your state funding also? It would. Because I asked my neighbor that it's for sale. And it's for sale for probably $300,000 more than what it sold for three years ago. Do we know why? Have they made improvements? Have they done any more? I don't know why. Does that impact? So when that sale comes through, whatever the final sale price is on that, we're going to review that sale to see does it meet those five criteria to be listed on our sale ratio and study that for an arms link transaction. And we would determine why it sold for that much. And this is a massive price, not an individual fee appraisal. So we realize that people get good deals and some people overpay for their properties. What we're looking at is the media. We're not looking for the top end. So we're necessarily looking for that. Right. And if you could ask anything you want for a property, it's hopeful. Is that anything you think it would be? Yes. Hopefully an informed buyer will set the value of that property. And we have a saying in the mass appraisal business. Okay. One sale doesn't equal a market. We consider all the sales. So even if there's only one sale on your street, we're going to go to other areas around your house to consider a true value of what we call it. Market value is very different than the cost of the sale price. Thank you. Yes. Can you talk a little bit more about undue stimulus and how you determine whether something is truly impacting the value of the property in the environment, something that's nearby? So do you have any specific example to... Well, it doesn't make sense. There's quite a lot of speculation, but it's part of values going through the roof. There are a lot of factors that are influencing the values. And so how do you determine whether approximately to some of those areas... So in some areas of measure, in that regard, certainly it might impact it because there's social services down the street. Sometimes those things don't come out in sales ratio study. Sometimes we have to use our best judgment to determine what is a fair depreciation to apply to maybe these couple of blocks or to a particular segment. There's no real... We're not going to open up the marshmallows with value, but I'd say, oh, you live in this proximity to... Here's what an inappropriate rate of depreciation is. We really do look at values of similar properties that have sold nearby to determine... to extract the appropriate depreciation. And that's sort of a unique area in that way because it's the opposite issue, because we're totally at the very few residential homes. In fact, I think there's like about 20 single-minute homes and there's not a lot of one-to-one comparison. Right. And in mass appraisal, again, we make models and we apply those models over large group of homes. And if you think that there's something with your property that isn't valued correctly or something should be considered, that's why we ask you, we implore you, please come into an informal field to tell us about it. We want to hear from you. I think you're saying, you know, you think yours is different to other people's increases or decreases. How do you actually determine that at home and see if you can go on... How do you compare that to other changes in the past? So, assessed values are... Everybody's assessed value is... Well, everybody's assessed value is public information. It's part of the tax roll, it's on the city website for property search. You can certainly look at... Exactly. You can certainly look at other properties to determine if you're being assessed equitably in relation to other properties. The state law essentially says that if we're within 10% of your market value, that it is essentially... It's about an assessment. If your assessment is within 10% of its market value, it's about an assessment. The other question I have is on the part of... More or less, AT&T for as it has on those past year loans. Yeah. And so on the new year, just as through bedrooms. Correct. So you don't necessarily know that... You're depreciating... A lot of your depreciation is coming from the fact... AT&T. For sure. But it doesn't specify, you know, when you have a holiday, whether that's the one you passed or just as through bedrooms. So, you know, we just know the dance, okay, because that's through bedrooms, but is that something that would correct if it's worth correcting? We would. If we were, if we could... We would certainly correct that if we had that information. You would consider it... You would consider it. You would... At this point, you have to do it through here. You know, not necessarily saying, hey, I filled this up differently, or how do you... Well, I would say when you get your notice, see if you think it's a fair assessment compared to other houses in your neighborhood. Maybe it is, but if it isn't, it was a call. Yeah. I still think it's going to be hard to determine the fact based on surrounding factors, but therefore, we'll see. A lot of nuances in the answer plays out. It's not like we're coming after your property to do a single appraisal. We have outside influences. I know a lot of people put us in influence by rock-roll and all the releases. I mean, hopefully it's going to be taken care of, but I know it's been quite an issue to batten and batten with this. Again, the only way to determine that is we see a substantial drop in market values pre-rock-roll with the cost. I don't know if you're going to see that. Yes? With the cost approach in the case of reconstruction and innovation, if you give a value of, say, $500,000, I go ahead and go to other states and say, well, I've built this for $250,000. How much do you actually weigh that? So, certainly, every situation is unique. It is something that we would certainly consider it. I don't know without looking specifically at what the termination would be, but we would certainly consider anything you would bring in and have this look at. Yes? When is it too late to sort of appeal maybe the information that's come back on the audit for your property? Because at this point in time, I know that some of the records could I also realize that after the deadline on the particular piece, I'd get back to you. So, if you haven't sent the data mail we're in yet, we're still playing a time. We are actively going through, again, almost $11,000 that will return to us. We're making changes. If you have yet to send it in, get it to us. Please send it to us. There is no time where it would be too late. If you've sent that to us after you've gotten a new value notice, we would make those changes if you didn't get your data mail and there were changes if we needed to correct the inaccuracies in your property record. After you got your tax code, you brought it to our pension that we had incorrect data from your property that may affect the value. We would certainly take a look at that and if an adjustment was warranted, we would make that adjustment.