Property inspections delayed

By MARCIA NELESEN ( Contact )   Friday, April 17, 2009
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What is a revaluation?


A revaluation is intended to assess properties at full market value. The resulting values are the basis for property tax billing—the greater the value, the higher the property tax bill.

The state requires property be assessed at between 90 percent and 110 percent of fair market value at least once every five years.

A preliminary number from the Department of Revenue shows Janesville is at 83 to 84 percent of fair market value, so even the recent downturn in the housing market did not push Janesville into compliance. Property values appreciated about 20 percent between 2002 and 2008, said Richard Haviza, assessment operations manager.

"Even though we're beginning to see declining property values, at least on the sales side, they haven't declined that dramatically locally," Haviza said.

He stressed that a revaluation is "revenue neutral."

"The assessments are the distribution tool, so it really doesn't matter if it is in an appreciating economy or a depreciating economy," Haviza said.

— Staff will ask the Janesville City Council to delay a planned revaluation and to reconsider whether the city should conduct individual property inspections.

Property inspections were scheduled to begin late last winter or early this spring at an estimated cost of $800,000 to $1.5 million. Richard Haviza, assessment operations manager, said the cost likely has increased.

The city was last revalued in 2002, when some angry residents claimed the results were inequitable and gathered enough signatures to touch off a state investigation of the process. The state gave the city high marks but said it could improve its communication with the public.

Two years later, a referendum was defeated that would have changed the city's form of government to a mayoral system. Experts then said such movements typically grow from unhappiness over revaluations.

The city was last in compliance with state regulations in 2004, and staff initially thought the revaluation had to be completed in 2009 for the 2010 tax role, Haviza said. Taxes are based on the value of the property on Jan. 1.

But staff has since learned that a revaluation could be done in 2010 for the 2011 tax roll.

And the process of the state telling a municipality to get back into compliance could extend the deadline another three to five years, Haviza said.

In October, Haviza told council members the city must revalue this year or be out of compliance with state rules. At that time, the council supported individual property inspections.

The city last did individual property inspections in 1996 and 1997 for the 1998 assessment role.

But to save money, the council might want to reconsider inspecting every property, Haviza said. The city has about 21,000 residential parcels and 1,300 to 1,400 commercial parcels. Haviza did not yet know how much money the city could save.

Instead of mass property inspections, the city could do a market revaluation. As is normal practice, some properties would be inspected—new buildings, buildings for which building permits were issued and buildings recently sold. But values for most properties would be set based, for example, on property type, location and the sale prices of comparable properties. Staff likely would conduct curbside reviews to verify data, he said.

The issue likely will go to the council in May.

"We've gotten to the point where it didn't make any sense to go to the current council but wait until after the election to talk to the new council," Haviza said.

If the council chooses to go ahead with individual inspections, they would begin in late summer or early fall, Haviza said.

reader COMMENTS
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(7)
rooster
Apr 18, 2009 at 6:45 p.m.
Suggest removal

the city gets into our wallets, houses and business. i love freedom.

unknowncomic
Apr 17, 2009 at 9:06 p.m.
Suggest removal

You guys know you do not have to let them in your house?

ja67
Apr 17, 2009 at 1:03 p.m.
Suggest removal

It's only fair to inspect all residental homes and commercial. And just inspecting the outside does not tell what the homes real value is. Each inspector should be able to enter the home. This is the only fair way of deciding on fair market value. Sometimes they over estimate the value by looking around the property.

prevention
Apr 17, 2009 at 12:29 p.m.
Suggest removal

Really? Everyone's wonderful and compliant Jville may be out of compliance with the State? Yet another wake up call for Jville!

Also, living in the extended 4th Ward (and loving it!), the mayoral/alderperson city government would benefit the most for the growth of the city....

C'mon, Jville, get with the times and reality!

janesvillean
Apr 17, 2009 at 11:07 a.m.
Suggest removal

It's a really difficult time to tell what to do. Home prices in the county overall in Q4 2008 had fallen around 15% from their peak in 2006, and are probably falling more if you account for the spring thaw in sales here with a lot of distress sales such as foreclosures.
http://www.wra.org/Consumer_Resources/ab...
.
But it's not clear if prices will fall further by next year (probably will) and by how much, and after that, how long that new price point will be stable (I would guess several years, personally, if we have an L-shaped recovery in housing nationally, and depressed employment in Rock County continuing after GM's departure).
.
Anyway, my guesstimate is that the tax base would increase by about 5-8% whether this is done this year or next, leaning higher if it's this year.

normalcitizen
Apr 17, 2009 at 11:03 a.m.
Suggest removal

That would be nice if the taxes went down. It is my guess that, after reading this article, our taxes and valuations won't change much. Wait until we start to feel the FULL effect of GM closing. Can you begin to imagine what our property values are going to be then? (We won't feel the FULL effect until they are done with unemployment/school, etc. *sigh*

Brewernut
Apr 17, 2009 at 10:43 a.m.
Suggest removal

Maybe this would be a good time to do this. Get the property values more in line. My house is assessed at 45,000 more than the Fair Market Value and even that is more than it would sell for.

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