JUNE 2018 | VOLUME 16 | NUMBER 5 A publication of IAAO on appraisal and appraisal management, within the property assessment industry.

PROP 13 TURNS 40 California’s iconic property tax revolt measure passed in 1978 | 8

INSIDE: CLIMATE CHANGE Its impact could be felt from many directions | 14

MARICOPA MARIJUANA Learn at the IAAO Annual Conference how one assessor’s office audits pot facilities | 20 “After developing and implementing CAMA systems for over 40 years, I know there's a need for reliable, cost-effective options. I now focus solely on improved cost models and tables for use by the entire CAMA industry” J Wayne Moore Js sssss ssssss PHD

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JUNE 2018 | VOLUME 16 | NUMBER 5 “After developing and implementing PROP 13: STILL CAMA systems for over 40 8 A DEBATE years, I know there's a need for AFTER ALL THESE YEARS reliable, cost-effective options. I now focus solely on improved cost models and tables for use by the entire CAMA industry” J Wayne Moore Js sssss ssssss PHD

The statements made or opinions expressed by au- ssss sss’ss ssskss wsss ssssssssss sssss sssbsss ss sssssssss sss ssssssss 12 22 thors in Fair+Equitable do not necessarily represent sss ssss sssssssss sss ssss ssss ss sss bsss sssssssss ssssssbsss Fss sssss sssss’s a policy position of the International Association sssssss bs�ss ssss Moore Precision Cost tabless A Q&A WITH JEFFERY PRANG CONFERENCE PLENARY ANNOUNCED of Assessing Officers. The ins and outs and ups and downs The Tuesday plenary session for the Annual Fair+Equitable is published of California’s Prop 13, from the Los Conference: Valuing big corporate HQs 10 times a year by the Angeles County Assessor’s perspective International Association sssss ssssss s sssssss sssssssss sssssssssssss sss sssssss s sssss sssssssss of Assessing Officers, 314 W. 10th Street, ssssssss ss ssssssssss ssss sss ssssssssss sss ssssssssss ssssssssss ss sss ss Kansas City, Missouri DIVISIONS COLUMNS 64105-1616. Subscrip- ssss sssss ss ssss sssssssss sssssssssss ss sss ssssssssss sss ssssss tion rate for members is 6 LEGAL 2 OVERVIEW included in annual dues. ssssssssssss sssssss ssssssss sssssss sssss ssss sssss ss sss fissss sss ssss ss Florida bill tackls divided-ownership, IAAO President Dorothy Jacks, AAS Nonmember subscrip- mixed-use high rises 4 INSIGHTS tions are $140 annually. wsss s bs�ss sssssss – ssss’s bssss ss sbjssssss ssssfisbss sssss Individual issues are National and International Press 14 Assessing $10 plus shipping and 24 IAAO EDUCATION OFFERINGS handling. Send address Global warming and the assessor’s office changes to: Membership sssssss sss’ss ssssss ss ssssss ss ssss sssssssssss ss’s ssss ss sss wss Department, International 26 Knowledge Areas 32 IAAO Absolute Association of Assessing sssss Pssssssss Csss ssbsss sss ssss bsss ssssss sssss ssss Leadership and management Chapters; Member News; Calendars Officers, 314 W 10th 34 Career Connection Street, Kansas City, 37 IAAO LIBRARY Missouri 64105-1616. Send correspondence to Subject Guide: Telecommunications towers 36 PROFILE the address above. An Interview with Quantá Crews, Senior Field Appraiser, Maricopa County Assessor’s Office IAAO.ORG

JUNE 2018 Fair+Equitable 1 + OVERVIEW

Overall, the association is in excellent financial shape, and we will continue to watch our revenues and expenses when planning our future, one that continues to look bright.

DOROTHY JACKS, AAS IAAO President

In the history of property tax appraisal, One of this year’s cutting-edge programs will be “Auditing Medical Marijuana Facilities,” and in there have been few events that can shape another article in this month’s issue we preview the industry for decades. the program and the unique issues that are not common to other industries. orty years ago this month, there was one We also review plans for the Women’s Initiative when California voters approved Proposition Luncheon at the conference. Minnesota Supreme 13 to reduce property tax rates on homes, Court Justice Anne McKeig will be the guest Fbusinesses and farms and potentially forever speaker, and I hope you will be able to attend the changed the way assessments are handled in Cal- Wednesday luncheon. ifornia to a system based on cost when sold, with Registration is fully underway for the confer- limited annual increases. ence, set for Sept. 23-26 in Minneapolis, and the While only a few of us may have been in the early-bird registration discount ends in mid-July. industry at the time and the vote only changed We expect another large attendance this year as California’s property tax system, we are all aware we have many excellent programs and events. of the significance of the decision. This month’s Besides the scheduled programs, the Minneapolis cover story revisits Prop 13 to look at the impact on Local Host Committee is putting on the annual assessors, California residents, and any potential golf tournament and is finalizing plans for a night changes to the law. out at the ballpark to watch the Minnesota Twins. Attendees of last year’s Annual Conference may Check the website for the latest details. remember that Prop 13 was the subject of one of The thought of baseball reminds me that with our emerging issues sessions, as IAAO always summer beginning, nearly half of the year is works to put on timely and cutting-edge pro- already gone! It’s been a busy year for IAAO, and grams. we are just completing another successful Prep

2 Fair+Equitable JUNE 2018 JUNE 2018 | VOLUME 16 | NUMBER 5

MAGAZINE OF THE INTERNATIONAL ASSOCIATION OF ASSESSING OFFICERS the annual budget. With close to half the year gone, we are looking PRESIDENT both at where we are financially in DOROTHY JACKS, AAS [email protected] 2018 and also planning our budgets PRESIDENT-ELECT TIM BONCOSKEY [email protected] for 2019. VICE-PRESIDENT In addition, in this issue we have AMY RASMUSSEN, RES, AAS [email protected] included the 2017 financial reports IMMEDIATE PAST-PRESIDENT to review. RANDY RIPPERGER, CAE [email protected] EXECUTIVE BOARD The continued rapid changes in PATRICK ALESANDRINI, CAE [email protected] technology mean today’s associ- RAYMOND BEATTIE JR. [email protected] ation and assessor’s office have to DANIEL CYPERT, RES [email protected] RYAN HATCH [email protected] continually reevaluate what our BRYAN KINSEY, AAS [email protected] constituents want and need and REBECCA MALMQUIST, CAE [email protected] adapt to meet those needs. L. WADE PATTERSON [email protected] SCOTT TERUYA, AAS [email protected] At the Board we are looking at VIRGINIA GINNY WHIPPLE, AAS [email protected] all areas to see where we need to WILLIAM BIRKLE, AAS [email protected] expand, and where to contract. I EDITORIAL REVIEW BOARD Minnesota Supreme Court Justice Anne McKeig imagine this process will continue RICHARD ALMY; LAUREEN BIRDSALL, CAE; PAUL will be the keynote speaker at the Women’s BIDANSET; CHUCK BLOW, CAE; LARRY J. CLARK, CAE; to be a driving factor for us and Initiative Luncheon during the IAAO Annual PETER CROSSETT; PETE DAVIS; ALAN DORNFEST, AAS; Conference. Read a brief biograhphy on page 23. organizations of all types and sizes. DAVID GINSBORG; THOMAS HAMILTON; LISA HOBART, CAE, PPS; JOHN LINDSAY; MARION JOHNSON, CAE ; Overall the association is in WENDY LAWRENCE; MICHAEL MCCORD, PH.D.; JOSH & Trial Seminar at the Universi- excellent financial shape and we MYERS; JACK PASTERNACKI, CAE; JEFF SPELMAN, CAE; ty of North Carolina. Education will continue to watch our revenues WILLIAM WADSWORTH; JOAN YOUNGMAN has always been important to our and expenses when planning our EXECUTIVE DIRECTOR members and a major focus of the future, one that continues to look RON WORTH, CAE, [email protected] Executive Board, in particular how bright. PUBLICATIONS MANAGER to deliver courses to all our mem- KEITH ROBISON [email protected] I enjoyed a visit to Quincy, Mas- bers across the country and around EDITORS sachusetts, last month attending SANDRA PATTERSON [email protected] the globe. the Northeastern Regional Associ- BARBARA SIMMONS barbsimmons4943@comcast.net We are reviewing how to expand ation of Assessing Officers Con- SUBSCRIPTIONS Subscriptions to Fair+Equitable are complimentary for the capabilities of our Professional ference. It is always a pleasure to members of the International Association of Assessing Development Department to handle spend time with our members and Officers. Nonmember subscriptions are available for $140 and support additional offerings, this was no exception. It is great to annually. For information on becoming a member, contact the potentially through more online see such successful assessor orga- Membership Director, at 816-701-8100 or membership@ courses and automating much of nizations doing the good work that iaao.org. Further information is also available at IAAO.org. the work currently handled man- we all strive to do every day. ADVERTISING For display advertisements, download individual ually. All the best to you, advertising contracts at IAAO.org in the publications menu. Advertisements appearing in Fair+Equitable are paid and do Another focus of the Board is Dorothy Jacks not imply endorsement by IAAO of the products or services advertised. EDITORIAL SUBMISSIONS Send a Word or rich text format (RTF) file of your manuscript The continued rapid changes in technology mean today’s to Keith Robison, [email protected]. A letter stating that the paper has neither been published nor is under consideration association and assessor’s office have to continually elsewhere must accompany the submission. reevaluate what our constituents want and need and REPRINTS Written permission must be obtained for reproduction or use adapt to meet those needs. of contents. EXECUTIVE OFFICES International Association of Assessing Officers 314 W 10th Street, Kansas City, Missouri 64105-1616 USA 816-701-8149 800-616-4226 816-701-8100 (fax) IAAO.org

JUNE 2018 Fair+Equitable 3 + Insights National + International Press

COMPILED BY KEITH ROBISON

MICHIGAN, UNITED STATES Escanaba continues its ‘dark store’ fight in Wisconsin Officials from Escanaba, Michigian, will be heading back to the state tax tribunal later this year to once again argue against the “dark store” assessment method, which Menards and other big-box stores favor to determine their property values, the Daily Press in Escanaba reported. Escanaba and its local Menards have been battling over the issue since 2014 when the retailer won a Michigan Tax Tribunal appeal that reduced its property value and in turn lowered tax revenues for government entities including municipal- ities, schools, colleges, and others that receive tax funding. Menards claimed the store’s value should be based on a closed and empty building, or “dark store,” and the tax tri- bunal granted the appeal, spurring more local retailers to appeal their property assessments, too. As a result of the tax tribunal ruling, Escanaba had to adjust Menards’ 2012 property value for its 166,196-square- foot building on 18 acres from $48.43 to $20 a square foot, the 2013 value from $49.54 to $21 a square foot, and the which was requesting the justices reverse CHINA 2014 value from $50.88 to $22 a square a Michigan Court of Appeals ruling that foot. favored the city earlier last year. China property tax push While the city, county, Bay College, The appeals court had ruled the state could spark sell-off public schools, and other agencies were tax tribunal “committed an error of law” Two decades after the privatization of forced to reimburse property taxes when it re-assessed the value of the local China’s housing market, the government previously paid by Menards, Escanaba Menards store and reduced the city’s tax is moving cautiously toward imposing continued to file appeals despite high assessment on the property by more than a property tax to combat a potentially legal costs. 56 percent for three years. destabilizing increase in debt. Beijing’s Escanaba is among several cities in Following the Michigan Supreme squeamishness is understandable; over a Michigan, as well as in other states, fight- Court’s denial to take on the Menards fifth of real estate investors would con- ing the “dark store” tax theory that favors appeal, the Michigan Court of Appeals sider selling if a tax were levied, a survey big-box retail stores, as well as smaller remanded the case back to the state by FT Confidential Research has found. businesses and some organizations that tax tribunal to allow the two parties to The survey of 2,000 urban consumers are seeking the same reductions in their present more testimony on the Escanaba found 57 percent of respondents who property values. Menards’ property value. own at least one vacant property would Regarding the most recent court action, — Jenny Lancour, the Daily Press rent out their unoccupied holdings, while in October the Michigan Supreme Court 22 percent said they would pay the tax refused to hear an appeal from Menards, but keep their property empty.

4 Fair+Equitable JUNE 2018 “We’ve got a big problem ahead of us,” said Kohala Councilman Tim Richards. “Everybody was working on the budget and then we have a curve ball thrown us by Madame Pele.” — Nancy Cook Lauer, West Hawaii Today

TEXAS, UNITED STATES Seven from Travis County tax assessor’s office jailed after fraud investigation Texas Department of Public Safety officials announced last week that an investigation related to alleged fradulent activities within the Travis County tax of- fice was underway, according to the Austin Lava from a fissure advances to the northeast on Kīlauea Volcano’s lower East Rift Zone. USGS photo American-Statesman. Officials identified seven people, includ- Some 21 percent said they would sell in HAWAII, UNITED STATES ing four tax office employees, who were the event of a tax, and this proportion rose Lava disaster could force arrested on various charges, including among first-tier city residents, while more engaging in organized crime, forgery, and investors in smaller cities indicated they property tax hikes bribery, the newspaper reported. would rather pay and leave their property Property tax hikes could be back on the Officials declined to provide more detail empty. table as county expenses increase even about the scope of the investigation, and After years of dragging their heels, as property values erode thanks to lava arrest affidavits detailed theft of less authorities are vacillating. Premier Li inundation in Puna, Hawaii. than $1,000 per person, and actions that Keqiang’s work report, a broad statement The decrease in taxes because of de- led to uncollected state tax for reasons of policy intentions, said the government pressed property values was estimated at yet unclear, though the reports indicated would “prudently advance legislation $1.2 million, but continued volcanic activity investigators think bribery was involved. on real estate tax.” However, it is not a during means the number could climb clos- Travis County Assessor Bruce Elfant legislative priority for the National People’s er to $6 million, county officials said. said he was “angry and sickened” by the Congress, the body charged with drawing And that’s just the property tax loss violation of the public trust and thanked up the tax, possibly out of concern for its from affected properties. the county auditor, the District Attorney’s impact on the economy. Agricultural losses over a broader geog- office, the Texas Department of Public The tax could be based on the appraisal raphy could contribute even more to the Safety, and the Department of Motor value of a property and is considered a negative revenue balance, they said. At the Vehicles “for their efforts to identify fraud solution to the skewed incentives that same time, county overtime, road con- occurring in this office and to bring these underpin China’s housing markets. But struction, and other costs are increasing. perpetrators to justice.” the government is sensitive to the risk of Two of the employees were charged a sell-off. At least one financial commen- Finance Director Deanna Sako said, with engaging in organized crime. The tator has warned that a tax would cause “There are a variety of options. All options other two are charged with forgery. the “Minsky moment” — when investor are on the table.” exuberance gives way to a sudden and Property tax rates must be set by June — The Austin-American Statesman sharp drop in asset prices. 20 and a balanced budget presented in — asia.nikkei.com time for the July 1 start of the fiscal year.

JUNE 2018 Fair+Equitable 5 + legal Trends

BY SANDRA PATTERSON Nebraska high court adds conservation sites to exempt charitable properties

A conservation organization dedicated to the preservation intended to edu- of whooping cranes is entitled to a charitable exemption, the cate the public about Nebraska Supreme Court has ruled. whooping cranes and migratory birds, their It was the first time the issue of conservation as a charitable habitat, and conser- activity has been addressed by the state’s courts. vation practices, the The decision reverses the ruling of the Nebraska Tax Equal- court said. It also ization and Review Commission (TERC), which determined opens its property for that although the nonprofit conservation group offered myriad scientific study. educational, scientific, and recreational opportunities, it did Furthermore, the not provide “relief to the poor and distressed,” which tra- conservation organi- ditionally has been Nebraska courts’ standard for charitable zation was entitled to exemption. a charitable exemption The dispute involved six parcels along the Platte River in because its work less- central Nebraska. The parcels were dedicated to providing a ened a burden of the protected habitat for whooping cranes and other migratory state, the court said. birds. In the Nongame and Among the services the organization offered at the site Endangered Species were free public tours during crane season and educational Conservation Act, the programs for local public school students on conservation of state established a wildlife and natural habitat. The group hosted researchers and public policy to protect scientists from across the country on a weekly basis as well as endangered wildlife conducted its own research on the property. The organization and plants. Because also maintained a network of hiking trails so that the public the legislature saw could explore the property independently year-round. this conservation work as state policy, In addition, a portion of the property was leased for cat- and groups like this tle grazing. The organization claimed the grazing supported organization assist conservation efforts because it made the habitat more suitable the state in achieving for the cranes’ use. The lease payments also helped defray the its policy goal, the property’s maintenance costs. legislature must have In Nebraska, to qualify for a charitable exemption, a prop- intended for conser- erty must be owned by a charitable organization and must be vation groups to be used exclusively for a charitable purpose. A charitable orga- treated as charitable nization is defined in the statute as an organization operated organizations as long for “the mental, social, or physical benefit of the public or an as they met all the indefinite number of persons.” A charitable organization is al- other exemption crite- lowed to use its property for for-profit activities so long as the ria, the court stated. profits are spent on the organization’s work and not distribut- Finally, the lease of a portion of the property for cattle graz- ed to owners, users, employees, or other private individuals. ing did not disqualify the land from exemption, the court said, The supreme court found that the conservation group was because the monies went toward site maintenance and did not entitled to the charitable exemption because it was providing enrich any individual connected to the organization. Further, a benefit to the public similar to those expected of other char- even if the cattle grazing did not produce the conservation itable organizations. The statutory requirement of a mental benefits the organization claimed, this activity was incidental benefit, the court explained, can be interpreted as an “intel- to the group’s primary work of preserving natural habitat for lectual” benefit, which, in turn, can be defined as engaging migratory birds for the public’s benefit. in “creative literary, artistic, or scientific labor.” From the (Platte River Whooping Crane Maintenance Trust, Inc. v. Hall County Board of evidence, the organization conducts a variety of programs Equalization, Nebraska Supreme Court, No. S.-17-389, February 9, )

6 Fair+Equitable JUNE 2018 Florida bill tackles tax issues of divided-ownership mixed-use high rises

The Florida legislature has enacted new rules for assessing mixed-use high-rise buildings with separate owners for the dif- ferent uses. The legislation was drafted in response to a recent real estate development trend that shows property investors are now seeking to specialize in the individual components of mixed-use high-rise buildings rather than participate in ownership of the property as a whole. These projects, dubbed vertical subdivi- sions, typically feature various combinations of retail, office space, entertainment venues, hotels, and residences. Under the new law, each component of a multi-use building that is recorded as a separate ownership interest with the county must be assigned a separate parcel number. If a building includes a residential compo- nent, any condominium or cooperative units must be assigned their own parcel numbers. This provision mirrors how these properties are currently assessed in residential-only structures. The value of the land must be allocat- ed among the various components based on their relative share of the total building value. The land cannot be assessed separate- ly. For condominiums and cooperatives, the land value assigned to the residential area must be allocated among the various units. If a component must be sold for delin- quent taxes, the tax sale purchaser receives the same ownership interests and is subject to the same provisions as a voluntary buyer would be. The law goes into effect for the tax year.

(Florida State Legislature, 120th Regular Session, FL H 7087, signed March 23, )

JUNE 2018 Fair+Equitable 7 Houses line the beach along a boardwalk in Santa Monica, California After 40 years, Prop 13 reviews are in The verdict: It’s tax stability vs. tax fairness

BY KEITH ROBISON Officially called the Jarvis-Gann Property Tax Ini- tiative, Prop 13 was meant, its creators Howard Jarvis n June 6, 1978, 40 years ago this month, Cali- and Paul Gann said, to protect older homeowners fornia voters passed by a 2-to-1 margin what is from huge tax bills when they retired. likely the most well-known property tax law in Othe United States. Has it worked? Proposition 13, the populist tax revolt measure, Yes. Most agree the measure has done what it was limited commercial and residential property taxes to created to do. 1 percent of a property’s value at the time of purchase Susan Shelley is vice president of communications and capped any increase to a maximum of 2 percent a with the Howard Jarvis Taxpayers Association. year, no matter how much a property’s market value goes up. “Prop 13 has protected Californians from being taxed out of their own homes, which is exactly what Also under Prop 13, if property taxes are to be in- Mr. Jarvis intended,” she said. “He often said that creased, there has to be a vote by the property owners property taxes were the most unfair form of taxation affected, and it must pass by a two-thirds or greater because they are assessed without regard to ability to majority. pay. Prop 13, which is considered an untouchable po- “Proposition 13 created certainty and predictabil- litical “third rail” in California, is also credited with ity by setting the assessed value of a property at the setting off a national anti-tax revolution in the late purchase price, and limiting the annual increase in 1970s and early 1980s.

8 Fair+Equitable JUNE to skyrocket. Also, inflation would argue that’s a good thing. Given was at a historical high. the explosion in home values in the state, folks threatened with rising taxes “The people in 1978, are able to not have that be the case residential property owners, anymore.” primarily seniors or people on a fixed income, were At the same time, Prop 13 completely literally being taxed out of changed the state’s revenue stream. their homes,” Stone said. “Prop 13 revolutionized how the state “The residential proper- gets its money, how all the governments ty values five or six years in the state get their money,” Dillon before 1978 had dramati- said. “Gov. Jerry Brown has long worried cally increased. Many of us about the state’s reliance on income in local government were taxes, which is a much more volatile pushing to reduce the tax source than property taxes, which are rate to not minimize, I much more stable, and much more local. guess, but to ‘mediumize’ As it stands, the state has to backfill all the impact so people on the shortfalls in school funding.” limited income or seniors on a fixed income weren’t But because of California’s high real taxed out.” estate prices, even with Prop 13’s limits, the state’s property tax receipts per Howard Jarvis, the man capita are about average in the Unit- behind the Prop 13 ed States, ranked 21 among the 50 populist movement, states, according to the Tax Foundation, was an anti-tax Howard Jarvis’s book, written in 1979 a tax-policy nonprofit. lobbyist and a Los Angeles the assessed value to no more than 2 apartment landlord. Larry Stone said another consequence of Prop 13 was the tax cap set on com- percent. In one respect, however, Prop 13 “He managed to work up a head of mercial and industrial property. did not do what Mr. Jarvis hoped, which steam in the political environment, was to restrain the growth of govern- and Prop 13 passed,” Stone said. “It “Jarvis and Gann sold to the voters After 40 years, Prop 13 reviews are in ment.” the fact that the elderly and low-income cut property tax revenue by 50 percent overnight.” were being taxed from their homes, and UNINTENDED CONSEQUENCES they were right,” Stone said. Stone said Prop 13 caused some harm- But others say Prop 13 created a range ful things to happen. “But the Bank of America, Safeway, and Hewlett-Packard weren’t being of unintended consequences, from cre- “No. 1, the worst thing, was the limit taxed from their homes. Howard Jarvis ating huge disparities in tax bills among on annual increases across the board,” made a lot of money off his initiative neighbors living in similar houses to he said. “In California, we have one tax sold to the public as seniors being taxed disincentivizing new housing develop- rate, 1 percent. Also damaging was lim- from their homes. The savings went to ment. iting assessment increases to 2 percent. all property, but their argument only So property values for residential and An accompanying interview with Los focused on residential property. Angeles County Assessor Jeffrey Prang commercial/industrial have increased (page 12) details how Prop 13 affects over the 40 years much greater than just “Before Prop 13, 65 percent of proper- California assessors, what measures re- 2 percent. Another insidious part of it ty tax was borne by commercial prop- garding Prop 13 are coming to the state’s established a necessary two-thirds vote erty,” Stone said. “That, over 40 years, ballot, the pros and cons of the measure, to increase taxes at any level, so now all has completely flipped. Now, 35 percent and the debates about its fairness. the control belongs to one-third of the is from commercial/industrial property. voters.” And that certainly doesn’t turn over as Santa Clara County Assessor Larry rapidly has homes.” Stone said that before Prop 13, California Los Angeles Times reporter Liam Dillon and its municipalities were sitting on covers California state government. He Demand is higher than supply budget surpluses. Meanwhile, property said there are two schools of thought A report on the high cost of hous- taxes were fluctuating amid an extreme among Californians on Prop 13. ing in the state by public radio station housing shortage. “Property taxes in California are KPCC partly blamed Prop 13. Over the California’s population in the 1970s much lower than in other states, so Prop past 30 years, California simply hasn’t was booming, causing housing demand 13 has done that, and those who benefit built enough housing to keep up with

JUNE 2018 Fair+Equitable 9 the number of people who live there, the Over the past report said. decade, the analyst with the According to the KPCC report, the Cal- website found ifornia housing department estimates that 650,000 180,000 new housing units need to be properties, or 5 built each year to keep housing costs percent of prop- stable. Over the past 10 years, the state erties in the state, has averaged less than half of that. were passed down So why hasn’t California built enough without trigger- housing to keep up with demand? ing reassessment KPCC reporters found that most — and many of housing researchers agree part of the their beneficia- problem is Prop 13. They illustrated the ries have used those properties issue like this: as rentals. That Imagine you’re a city, sitting trend is expected on a huge plot of vacant land. You to grow as baby could zone that land for housing or boomers age. for commercial use, like a hotel or a Target. Your city obviously needs Another un- more housing — prices are sky high. intended conse- Easy decision, right? quence of Prop No. 13 is how it has Prop 13 has made development added to the decisions much more complicated. cost of building Because property taxes are capped, and owning new local governments have to rely on homes. With property tax rev- other revenue sources. The June 1978 cover of Newsweek That vacant land is much more enue capped, local governments have valuable to the city’s coffers if a everything from roads and street lights imposed more sales, hotel, and utility big-box retailer goes in as opposed to water and sewer systems. to a multifamily apartment taxes. They have looked to home build- building. Housing nerds call this the ers and land developers for impact fees, Neighborly disparity “fiscalization of land use.” a charge for bringing public services to the new development. Impact fees have The provision that property can be re- The California Political Review, a con- been easy to impose because they don’t assessed only when it’s sold has result- servative-leaning news site, listed some require voter approval. ed in some Californians paying much of what they call unintended negative more in taxes that what are imposed on Local governments have also in- consequences of Prop 13. similar properties in the same neigh- creased the use of Mello-Roos assess- borhoods. Local governments are missing out on ments to pay for new infrastructure, billions of dollars because of a home- a cost that’s often passed on to new Billionaire Warren Buffet used his owners exemption to Prop 13 that allows homebuyers. Mello-Roos is a special tax own situation to discuss aspects of Prop children and grandchildren to inherit district approved by two-thirds of voters 13 with the Wall Street Journal. Back in up to $1 million in property without its in the district, often in a new devel- 2003, Buffet said there was a 10-fold having to be reassessed. opment. The money is used to finance difference in property tax on two of

“Moreover, as Proposition 13 controls the taxation of commercial property as well as residential property, the regime greatly favors the commercial enterprises of the (wealthiest), placing new businesses at a substantial disadvantage.”

— U.S. Supreme Court Justice John Stevens in dissent on Nordlinger v. Hahn (1992)

10 Fair+Equitable JUNE “In my case, I have Gann died in 1989, and Jarvis died in a $258,000 assessment 1986. on a $3 million home, which I can sell for $3 A young person’s punishment? million, buy another Stone said the tax revolt measure pits for $3 million plus 5 young against old. percent, and carry my old assessment to the “Prop 13 punishes younger people new house as long as I’m and it punishes first-time home buyers, over 55. punishing our younger folks while all us older folks enjoy the benefit.” “I’ve spent more money on tickets for Shelley counters that, saying the sporting events than I’ve property tax cap protects first-time Santa Clara County Assessor Larry Stone paid in property taxes. buyers. That’s insane. You could “Before Proposition 13 passed, the his multimillion-dollar properties in not devise a more unfair property tax Laguna Beach simply because of when statewide average property tax rate in system than we have here in California,” California was 2.67 percent, and the he bought the houses. He also said that Stone said. those property tax bills were still less assessed value rose with the market than the bill on his house in Omaha, Shelley, with the Jarvis taxpayers value,” she said. “Prop 13 cut the tax rate Nebraska. association, disagrees. on property to 1 percent. Would younger families and first-time homebuyers be “There is no disparity between neigh- Buffet added that a typical family better off today if the tax rate on prop- bors who buy their houses at the same buying a house for $300,000 in Chico, erty was 2.67 percent of the assessed time,” she said. California, would pay more in property value, with no limit on how high or how taxes than he does. “There is simply a limitation on how fast the assessed value could rise? Of “This family, because of Proposition much the assessed value of property can course not. rise in any one year. 13, has been selected to subsidize me,” “Proposition 13 protects every proper- Buffett said. “That doesn’t favor the wealthy. It ty owner in California from the day they Santa Clara County Assessor Larry protects people who are not wealthy close escrow. New homeowners have Stone illustrated the point with his own from being taxed out of their own the certainty that their tax rate will be house in Sunnyvale, California. homes by rising real estate values, an consistent and reliable and that their unpredictable factor over which they assessed value cannot rise more than 2 “I’ve owned my home since 1975, have no control. percent per year.” in the 43 years I’ve owned my home, the total property tax I’ve paid for “A property owner’s tax liability is Stone said most California politicians 43 years is about $72,000, and that’s based on the voluntary act of purchase know better than to talk about changing on a 3,000-square foot house on a and is not subject to the vagaries of the anything about Prop 13. real estate market.” 10,000-square-foot lot, a single-fam- But he said he voices his opinion on ily home. I paid $75,000 for it in 1975. But Paul Gann, Jarvis’ partner in the matter. It’s assessed at $258,000 and it’s worth working for the passage of Prop 13, later “I’m elected, and I’ve been talking about $3 million now.” acknowledged the disparity. about Prop 13 like this for 15 years,” he He said such a large discrepancy in “My only regret is there isn’t some said. “People agree with me, and they tax bills between neighbors isn’t fair. way, and I keep looking for a way, that feel guilty. But not guilty enough to give “One person in your neighborhood we can adjust this thing so my neighbor up the benefit. doesn’t pay more property tax on the can pay up to 20 times more in property “They shake their heads and say, same valued piece of property than I taxes, but dial 911 and the police and fire ‘Yeah, it’s unfair. But I like it.’ ” come at the same speed to your house pay,” Gann told the Los Angeles Times in as his. 1988. KEITH ROBISON is publications “Our kids go to the same schools, we “The reason we did that, and I can manager at IAAO. Reach him at have the same libraries, and the same remember as if it was yesterday, was [email protected] or 816-701-8135. streets … but some neighbor is paying simply because you bought a home that 20 times as much for the same public fit within your budget.” services.

JUNE 2018 Fair+Equitable 11 Prop 13: A Q+A with Los Angeles County Assessor Jeffrey Prang

Has Proposition 13 done what it was intended to do? Forty years ago when California voters approved Proposition 13, they were seek- ing property tax relief and stability from rapidly rising property taxes. The amendment to the State Constitu- tion was approved by 62.2 percent of the Los Angeles County Assessor Jeffrey Prang voters in the June 1978 primary election, and provided the promised property tax What challenges does Prop 13 create for Sales ratio studies, an important ana- relief. an assessor in California that assessors in lytical tool for most jurisdictions, have no other states don’t have to worry about? real use to us because base year values are Officially named the “People’s Initiative always initially at market value, and also to Limit Property Taxation,” the con- There are many differences between because value increases are capped at a stitutional amendment mandated that California’s property tax system and nearly maximum of 2 percent, and therefore we properties be assessed at 1 percent of all other property tax jurisdictions in the do not perform mass reappraisals. market value at the time of sale or change United States. in ownership. Our system is not based on cyclical And, unlike many jurisdictions that rely on the cost approach as a major part of All assessed values were rolled back to reappraisal, but is based on base-year their cyclical reappraisal process, this their 1975 value to establish base year as- values set at the time of a property’s approach is primarily used in my office only sessments. Proposition 13 restricted an- transfer, or when new construction occurs. for the valuation of new construction, and nual property tax increases to an inflation My office is notified of most real property much less frequently for the valuation of factor, not to exceed 2 percent per year. sales via copies of recorded deeds, and of the issuance of new construction permits special use properties. Reassessment of a property can occur directly from the 88 cities in our county. From a property appraiser’s perspective only when there is a change in ownership Fortunately, we are a “disclosure state,” so and that of a homeowner, there is simplic- or there is new construction. we usually know what the sale price was at ity in the concept of property value being As the Assessor of Los Angeles Coun- the time of transfer. either the base year value or carrying the ty, the role of my office is to administer As previously noted, after the base fair market value assigned by a change in Proposition 13 and the various additional value is set, it cannot increase more than ownership or new construction. It is also measures that implement and amend the 2 percent per year, which provides a great advantageous for all California taxpayers law. deal of predictability for property owners. to have the same understanding that the Are there unintended consequences? Senior citizens are particularly appreciative maximum increase in valuation that can Like most policy reforms that are of this feature of Proposition 13. occur is 2 percent. sweeping and significant, there have been A huge benefit to the public, but one that Have there been calls to end it? unanticipated impacts. Most observers will requires a significant level of effort from Almost from the beginning, those who point to the revenue impact of Proposition my staff, is a one-time ability for senior opposed Proposition 13 have argued 13 and the significant shift of funding from citizens to transfer their low base value on that the tax reform does not accurately local governments to the state. From the a long-held property to another property, capture the fair market value of residential perspective of property valuation, the with some restricted criteria. Without this and commercial properties in California. most obvious impact is the disparity in ability, the senior citizen would have to pay Others have raised the issue of fairness assessed value of residential properties. taxes on the current market value of the of like properties carrying vastly different What exists today, 40 years after enact- new property. assessed values, while accessing the same ment, are properties that may be situated Another difference in our procedures public services. The United State Supreme side-by-side, but with one having a value versus other jurisdictions is that assess- Court case affirmed the constitutionality tens or hundreds-of-thousands of dollars ment appeal hearings require what can of Proposition 13 in a landmark decision, less than the neighboring house. This be thought of as a standard appraisal, Nordlinger vs. Hahn. occurs because one home has not sold and performed by an individual appraiser, in Justice Harry Blackmun, wrote the ma- retains a Proposition 13 base value set order to determine and/or defend the jority opinion holding that California has a many years ago, while the adjacent home market value of a property. This level of “legitimate interest in local neighborhood has sold and now carries the updated as- individual attention to each case may seem preservation, continuity and stability” and sessment based upon market value. like an inefficient manual process, but it is that is acceptable to treat owners who required by statute and rules. have invested for some time in property

12 Fair+Equitable JUNE 2018 differently than new purchasers and that home’s market value; the new home’s lo- cludes that costs for county assessors to if property owner objects to the rules, they cation in the state; or the number of moves administer the split roll property tax system could chose not to buy. the taxpayer makes. This measure would would increase by as much as $470 million Interestingly, this case emanated from expand the existing one-time base value in the initial years following adoption. Los Angeles County where the plaintiff, transfer allowance, and would increase Beyond the fiscal impacts of the shift from Stephanie Nordlinger, sued the late former the portability of lower assessed values a system of acquisition-based to annual Assessor Kenneth P. Hahn on the grounds for senior citizens, who are often on fixed market-based assessments of commercial that Prop 13 violated the Equal Protection incomes, and fear they will not be able to and industrial properties, there are practical Clause of the 14th Amendment to the Unit- afford a big property tax increase if they sell barriers to the immediate implementation ed States Constitution. their existing home and buy another one. of the split roll change. During the tenure of L.A. Assessor Hahn, Local government, which relies on property The number of additional appraisers I worked as a special assistant assessor. tax revenues to fund local services, will like- needed, and the training of these employ- Little did I know at that time, that one day I ly be very circumspect about this proposal ees to handle the complex business audits would have the honor of serving as Asses- as it may have an impact on future revenue that will result, presents a major challenge sor of the County of Los Angeles. growth that results from property changing to California assessors responsible for hands. What are the measures headed toward property valuation under Proposition 13 or the ballot box? Another ballot measure currently being these proposed changes. Moreover, most circulated would create a “split roll” by California assessors do not have the tech- Two initiatives that would change Prop- separating residential property assessment nology to manage a split roll system. osition 13 are currently being circulated from commercial and business properties for signature gathering. If these measures Summary which are currently treated the same under receive the required number of registered Proposition 13 is the subject of an on- Proposition 13. This measure, entitled voter signatures, they will advance to an going and lively debate about the impact “The California Schools and Local Commu- upcoming state-wide election ballot for of the tax reform measure that led to a nities Funding Act of 2018,” would require consideration by California voters. Because nationwide taxpayer revolt. In California the commercial and industrial properties to be the two proposed ballot measures amend measure has been called the “third rail” of taxed based upon their market value on the state constitution, they are each re- politics making it an almost untouchable an annual or cyclical basis. This measure quired to receive 585,407 valid signatures. subject for reformers and lawmakers who exempts properties that have less than $2 The first potential change to Proposition may try to change it in a way that has an million in market value, and businesses with impact on property owners. 13 is being called the “Tax Transfer Initia- 50 or fewer employees are similarly ex- As the leader of the nation’s largest tive.” This measure would amend Prop 13 to empted. The shift to market value assess- public assessment agency, I have the allow homebuyers who are age 55 or older ment would be phased in over a number of responsibility to administer Proposition 13 or severely disabled to transfer their base years, beginning in 2020-21. year tax assessment from their prior home consistent with the wishes of the voters A recent study commissioned by the Cal- to their new home, regardless of the new who enacted this measure 40 years ago. ifornia Assessors’ Association (CAA) con-

JUNE 2018 Fair+Equitable 13 + ASSESSING

Climate change and the assessor

Let me make the point first that I am not writing to argue for or against human-induced climate change. I will leave that for the politicians and for friendly discussions over adult beverages. Instead, let’s begin by assuming the climate is changing. We know it is because it always does.

BY LARRY CLARK, CAE pinpoint estimate, so we do, even when we are not comfortable with our knowledge of the market. We he reason for starting with this premise is to are required to appraise even when the subject area move on to the question of how this affects our might be beyond our expertise. jobs as assessors. T What I am asking is that you exercise this same As assessors, we are constantly faced with courage. ambiguous situations in which we may not know all the facts, but are required to make a decision and If the climate scientists are right about their pre- arrive at a conclusion. Appraising itself is a combi- dictions, what, if any, effect will it have on the job we nation of science and art. We know that market value do as assessors? Even if we don’t immediately begin is best represented as a range of possibilities rather preparations for the changes implied in those predic- than a pinpoint dollar amount. tions, let’s at least ask some questions so that we can start formulating answers. However, our job requires us to provide that

14 Fair+Equitable JUNE The NAAO Founders: Mentors as well as What are the climate scientists predicting? threaten not only the coasts but many other parts of the country.Leaders In his book, Hot, Flat and Crowded, Thomas Friedman refers to climate change as “global weirding.” Part of his reason for From the South Dakota Department of Public Safety website: doing that is to get away from using the term “global warm- Floods continue to be a destructive natural hazard in South Da- ing” and its implication that all kota. Since 1978, fl ood insurance policy holders have parts of the earth are experi- received over $13.8 million in claim payments. encing one long summer. That The website also states: is obviously not the case, even though the average temperature Traditional insurance policies and disaster grants of the planet is increasing at an do not cover most losses, and repayment of a disaster alarming rate. The other reason loan can cost much more than a fl ood insurance for using that term is that it is policy. diffi cult to predict all the eff ects Unfortunately, it’s only after a fl ood that many of a warming planet. people discover this. Approximately 25 percent of all On the one hand, temperatures fl ood damages occur in low-risk zones, commonly may rise on the average, creating described as being outside the mapped fl ood zone. dry, hot periods. That same tem- In addition to the rising cost of fl ood insur- perature increase may cause an ance, there may be problems in the areas of increase in atmospheric moisture, construction labor and material shortages. An leading to heavy rain or snow article in the Oct. 2, 2017, issue of the Houston events. Business Journal states: Temperature increases in a A recent survey of more than 1,600 contractors given part of the country may by the Associated General Contractors of Amer- allow farmers to grow crops not ica (AGC) found that 70 percent of contractors previously available to them. are struggling to fi nd qualifi ed craft workers to Those same temperatures may hire as construction demand continues to grow. either evaporate all ground mois- It also found that 67 percent of fi rms predicted ture or bring rainfall that disrupts that hiring would continue to be hard or would be planting or harvesting. It may bring unusually heavy snow- even harder in the future. fall in areas not used to it while depriving ski resorts of fresh powder. It would not be unusual to anticipate a labor and/or con- struction material shortage in the immediate area of a natural Flooding disaster. Construction laborers will be occupied repairing their own properties, and construction materials may actually be One of the media’s favorite eff ects of climate change in- lost in the storm. volves sea level rise due to melting ice at the poles. The exact amount of rise varies with each source, but the inevitable However, disasters the size of Harvey, Irma, and Maria result is fl ooding at the coastline. This has already begun in cause a larger diversion of those resources and possibly for a some areas, with Miami Beach committed to a fi ve-year pro- longer time. In that same Oct. 2 article, the governor of Texas gram of raising streets and installing pumps at a cost of over made the point that repairs and rebuilding in Houston alone $500 million. represented the equivalent of 15 years’ worth of construction work. The contractors involved said that careful planning was The question is, though, how does fl ooding on the coast needed to avoid downtime due to lack of suffi cient material. aff ect the rest of the country? The answers vary. In a Jan. 8 article titled “8 construction trends to watch First, it is not likely that people who chose an ocean view in 2018” from the trade newsletter “ConstructionDive,” the will move far inland to avoid coastal fl ooding. However, the authors stated: impact of them owning fl ood insurance and, more impor- tantly, fi ling claims for damages may have an impact on the The construction industry will continue to contend with a limited remaining pool of fl ood insurance owners. Flood insurance supply of skilled craft workers. O� cials in various parts of the premiums are not keeping up with fl ood insurance claims, and country have used words like “dire” and “scary” to describe if, as some predict, the frequency of fl ood events increases the availability of qualified labor as younger individuals resist this situation will only worsen. construction as a career option and more baby boomers retire. However, fl ooding isn’t limited to the coasts. The Associated General Contractors of America (AGC) reported in December that November construction employment increased One of the predictions of the climate scientists is for in- to its highest level since the same month in 2008, but that this creased instances of heavy rainfall. Periods of heavy rains

JUNE Fair+Equitable 15 has resulted in a smaller pool of candidates, likely constraining future hiring efforts. These supply-and-de- mand factors have the potential of affecting real estate markets across the United States. The labor shortage has been blamed on people leaving the industry at the start of the recession and not returning. Coupled with a societal shift away from learning trades and toward academic education and the groundwork is laid for severe weather events creating longer lasting disruptions in the con- struction and real estate markets.

There are other impacts of gasoline if flooding became chronic. Recently, Prof. Richard Seager, using of coastal flooding as well. Shipping may Gasoline prices have an impact on every data from a number of sources, veri- be disrupted as ports are forced to adjust industry that depends in part on trans- fied the existence of this demarcation. to the changing coastline. This will have portation, which is most of them. Asses- His contribution to this concept was a a negative effect not only on the ship- sors depend on vehicles to get them into determination that the line had moved ping industry but also on every industry the field to inspect properties. eastward approximately 140 miles. The that depends on foreign commerce. map shown above is a rough approxima- Gas prices were up this spring partly tion of the original line and where it has Think about farmers in the Midwest because OPEC has kept production low, moved. whose crops are ultimately shipped which more than offset the increase in overseas. The domino effect of disrup- production in the United States. Spring Those living west of that line can ex- tions in shipping may have a downward is also the time of year when refineries pect less precipitation than those living influence on agricultural land values. perform annual maintenance in antici- east of that line. Those results are al- As with every other industry, failure to pation of the summer driving/vacation ready being felt in places like Colorado, market a product naturally depresses season. In other words, the price of where Boulder and adjoining counties values. gasoline, like every other commodi- recently sued Exxon Mobile and Suncor Another disruption we witnessed ty, responds to changes in supply and oil companies seeking damages result- when Hurricane Harvey made landfall demand. ing from lack of sufficient snowfall. The article announcing the lawsuit went on was in oil refining. This excerpt from Whether that supply is controlled by to say, the Sept. 5, 2017, issue of Oilprice.Com reduced production or is disrupted by tells why: forces of nature, the result is an increase In Colorado, climate change is far from a Houston is the central hub for the energy in prices at the pump. distant threat. Colorado is one of the fast- est-warming states in the country, which industry in the U.S. It is important for oil Moisture patterns and refined product imports and exports, has contributed to hotter year-round it is an important storage area for oil and Coastal flooding is not the only result temperatures. refined products, and much of the Strate- of climate change. Parts of the rest of In the spring and summer, warm tem- gic Petroleum Reserve is close by. the country are experiencing higher peratures can lead to heatwaves and There is also some onshore oil produc- moisture levels while others are drying. more dangerous wildfires. In the winter, tion in the general area, and quite a bit The Eastern United States has tended warm temperatures mean less snow in of offshore production. But perhaps most to experience more and heavier rain- a state that depends on reliable snow- importantly, the five largest oil refineries fall while the West and Southwest have fall. This season, snowpack throughout in the U.S. are on the Texas and Louisiana experienced less moisture and even long the state was just 72 percent of average, Gulf Coast, and the two largest refiner- periods of drought. which means problems for everything ies in the country are in the vicinity of from seasonal tourism to water runoff for In the 1800s, geologist John Wesley Houston. agricultural communities. Powell conceptualized what he referred The oil industry was able to quickly to as the 100th meridian. This was a For states like Colorado that de- bounce back from this single event, but north-south line that bisected the Unit- pend on winter sports for part of their imagine what would happen to the price ed States into wet and dry regions. revenue, the idea of a drying climate is

16 Fair+Equitable JUNE 2018 depressing to the local economy. This volved in the real estate industry, should some time off work. One or both of them lawsuit may fail like the many others be aware of the effects of climate change. may require training. Any of these things filed by coastal cities, but it doesn’t Any force that changes supply or demand may interrupt the schedule and must change the fact that Coloradoans will will have an impact on values set for tax therefore be considered during planning. face a decidedly different future without purposes. More to the point of this article, inclem- snow. ent weather may interfere with field There are, however, some consider- work. Another set of maps that illustrate the ations that directly affect the assessor’s changes in the climate are those show- office. As stated earlier, a shutdown of As the temperature increases, there ing changes in the U.S. Department of oil refineries that causes an increase in will be fewer days when field work is Agriculture hardiness zones. According gasoline prices will negatively impact hampered by subfreezing temperatures. to the USDA website, the hardiness zone budgets. Assessors need to travel to the That has not been a significant problem “map is based on the average annual field to inspect property. The price of since most jurisdictions plan field work minimum winter temperature, divided gas will affect how much of that activity during the warmer months of the year. into 10-degree F zones.” The zones have can be carried on in a given year under a More often, the problem is either high crept upward over time. given set of budget constraints. temperatures or rain. These 100 meridian and hardiness zone More broadly, the ever-changing cli- Each office has to set its own defini- changes represent both promise and mate and its effects on weather patterns tion of inclement weather, answering the threat to the agricultural industry. Lon- will directly affect planning. Embedded question, when do we allow staff in the ger frost-free periods may allow farmers in the formula for calculating staff needs field? Most offices don’t consider field to plant different crops. For example, a is an assumption that broad weather work during periods of snow or rain, but farmer in North Dakota was quoted in a patterns can be predicted. For example, what about temperature? When is it too 2013 news story: staff may plan to perform field work hot or too cold? between June and the first of September. “Corn and soybeans were just experimen- The same climate change that provides They rely on there being sufficient tem- tal crops until the late 1980s,” Podoll says. more frost-free days to support grow- perate days to achieve production goals. Now the state looks much more like Iowa ing different crops may also bring more than the Dakotas of Podoll’s childhood. The formula we use in our planning is high-temperature days. It may actually That is in part due to longer growing sea- relatively simple. Production (or number change the season for field work, length- sons that allow farmers to take advantage of parcels) is equal to the number of staff ening it or even moving it within the of late-maturing crops, notably corn, dedicated to a given process multiplied calendar year. which yield more than their short-season by the result of multiplying the number Keep in mind, assessment offices are counterparts. of days available for that process by the governed by a tax calendar that is set by rate of production. Laura Edwards, South Dakota State someone else. Longer periods of frost- University climatologist, says the same P = S × (R × T) free days are not helpful to the assessor changes of warmer, wetter weather and a if the hottest days fall in the middle of where longer growing season have happened in that time set by the tax calendar for field South Dakota as well, which has helped P = production (number of parcels) work. corn and soybeans dominate the land- S = number of staff Climate change has the potential to scape (Dakotafire Media, April 22, 2013). R = rate of production cause tremendous disruption in our Depending on your source, it takes society, and that disruption is not limited from 2,500 to 4,000 gallons of water to T = time, usually in days, to conduct to our coastlines. The real-estate market produce one bushel of corn. So while the process will be affected from several directions climate change has allowed farmers in Given two staff members who can and those of us who deal with it will have South Dakota to switch to corn, that collect property characteristic data on to adjust. same condition may render that change 10 parcels per day and 40 working days Assessors have a responsibility to keep unsustainable over the long run. In other allotted are for this project, their total up with that market. words, the climate change that allows production is calculated as follows: the production of corn may dry up the We can do so by either trying to stay water supply that supports that produc- Production = 2 × (10 × 40) ahead of what is happening or trying to tion. Production = 2 × 400 = 800 catch up once it has happened. According to the USDA, corn and soy- For this simple example we assumed beans brought over $4 billion of revenue LARRY CLARK, CAE, two months of four weeks to accomplish is IAAO Director of to the state in 2017, which caused it to be this project. There are (7 × 8) 56 days in Strategic Initiatives. ranked sixth in the United States. Any that time period, but we automatically threat to that income stream is a threat exclude weekend days from government to the economy of the state. work. That leaves (8 × 5) 40 days. Office operations There are considerations other than weekend days. For example, a holiday Most of what has been presented so may occur during that time period. One far relates to all parts of the economy. of the two staff persons may be ill or take Certainly assessors, or anyone else in-

JUNE 2018 Fair+Equitable 17 IAAO property valuation standards

IAAO has developed a set of standards, written to guide assessment officials in the creation, implementation, and advancement of efficient land and property tax administration systems. Standard on Contracting Beginning in 1976 with the Standard on Equipment, Facilities, Supplies, and Procedures and the Standard on for Assessment Services Assessment Maps ad Parcel Identifiers, the number of IAAO standards has expanded to 13 covering a wide This standard was last addressed in 2008 and is currently range of topics including contracting for assessment under review. As the scope makes clear, “This standard describes services, valuing contaminated property, and the and makes recommendations on the development, awarding, and most popular, Standard on Ratio Studies. monitoring of contracts for assessment services.” This standard is useful for any assessment jurisdiction con- In the past few issues and in the coming months, templating a contract for outside services. It provides guidance Fair+Equitable will carry a brief article describing the for every phase of the contracting process from the request for contents of the existing standards, all of which are proposals (RFP) through to project completion. available for download from the IAAO website. The requirements for the RFP emphasize the need for the assessor to know exactly what is desired under the contract. The RFP states those desires in specific terms covering every aspect of the project from timelines to personnel and performance stan- dards that will be used. This standard provides a structure for the contract that follows the approach begun in the RFP. The emphasis from the beginning to the end of the process is on describing in the detail the expec- tations of the assessment jurisdiction. Therefore, the contract terms do not surprise anyone, because they were introduced in the RFP. The methods and means of monitoring the contract perfor- mance are introduced in the RFP and detailed in the contract. They are described in the standard in an easy-to-follow format that should be adaptable to many types of contracting situations. The standard devotes one section to special considerations for specific types of service. For example, it suggests the type of quality control that might be implemented in a data collection contract.

IAAO standards under review and exposed for comment

IAAO maintains technical standards that reflect the official exposuredraft. position of IAAO on various topics related to property tax All comments on this draft should be sent to Larry Clark administration, property tax policy, and valuation of property at IAAO headquarters at [email protected] by July 1. Comments including mass appraisal and related disciplines. These will be reviewed by the task force members before the final standards are adopted by the IAAO Executive Board. standard is submitted to the Executive Board. Several standards had been updated in the past few years; IAAO assessment standards represent a consensus in the however, the Standard on Valuation of Personal Property was last assessment profession and are intended to guide property tax updated in 2005. assessment officials, tax policy analysts, and administrators. As part of a process to keep IAAO standards up-to-date, The objective of IAAO standards is to provide a systematic President Dorothy Jacks created a task force headed by Lisa means by which assessing officers can improve and Hobart to review and update that standard as needed. The standardize the operation of their offices. IAAO standards are product of their efforts has been exposed for comment advisory in nature, and the use of, or compliance with, these may be accessed through the IAAO website under About\ standards is purely voluntary. Executive Board\Exposure Drafts or by going to www.iaao.org/

18 Fair+Equitable JUNE 2018 First set of governing documents ready for exposure and comment

BY GREG McHENRY, AAS In addition to the Amended and “The new versions bring IAAO inline Restated Articles of Incorporation, the with current law and practices and pro- The Governance Committee has com- Governance Committee is working on vide clarity on how IAAO is run,” said pleted reviewing and revising the fi rst developing a combined constitution and Past President Randy Ripperger, chair of group of IAAO governing documents, by-laws document. the Governance Committee. “The doc- and the new Amended and Restated uments were drafted with the thought Once approved by the IAAO Executive Articles of Incorporation for the organi- of say it once, say it clearly, and say it in Board for exposure, the document will zation have been exposed for comment. the right place.” be made available to members for review Members may download the draft and comment. Following a review of comments version of the document from the IAAO received during the exposure periods, The updates to the documents were website at www.iaao.org/exposuredraft, the Executive Board may vote to place prompted by suggestions by IAAO’s legal or use the link on the home page under the documents on the election ballot for counsel and an independent professional What’s New. approval, set for Nov. 1-15. consultant on parliamentary matters Comments on the Amended and Re- who was engaged by the Executive The Town Hall session at the Annual stated Articles of Incorporation should Board in 2017, following a review of the Conference in Minneapolis to review be sent to [email protected] no later existing IAAO Constitution, Procedural the changes to the documents has been than July 12. Rules, and Bylaws. moved to 1:30 p.m. Monday, Sept. 24. The Amended Articles of Incorpora- The review found several items in the The Town Hall session will provide an tion modernize the original incorpo- three documents that were duplicative, explanation of what changes are pro- ration document created in 1936 and in confl ict, or no longer necessary. posed and why they are necessary and amended in 1959. answer member’s questions.

Call for Proposals GIS/CAMA 2019 Conference February 25-28, 2019 • Portland, OR

Call for Workshop Proposals - Due August 1, 2018 Do you enjoy teaching/presenting? Want to help transfer knowledge to the greater GIS/CAMA community? The 2019 Conference Planning Committee is soliciting educational content and instructors for full-day and half- day conference workshops. Conference workshops are scheduled on Monday, February 25 and attendance at one workshop is included with full conference registration. Suggested topics are provided online.

Call for Presentation Proposals - Due October 15, 2018 The education program is developed by reviewing submissions received through the Call for Presentations. The 2019 Conference Planning Committee welcomes the submission of individual papers, complete sessions, panels, and lightning talks. All abstracts will be reviewed and considered for the educational program. Suggested topics are provided online.

For suggested topics and submission forms, go to www.urisa.org/giscamacall

JUNE 2018 Fair+Equitable 19 + 2018 iaao conference

Conference preview: Maricopa marijuana ccording to Governing magazine, 30 states and the District of Columbia Vendor contracted for audits have passed laws legalizing marijuana in some form, opening the door At the same time, the office contracted to new opportunities and challenges for assessors in valuing an industry with a vendor, Tax Management Athat has in the past operated largely in the shadows. Associates, to audit medical marijuana businesses Marijuana is a divisive topic in Arizona. Thus, a concerted effort was undertaken to ensure the accuracy of The state legalized medical marijuana to find, identify, and value the personal the estimates in 2010 with a mere 50.1 percent of the property of medical marijuana businesses. of value for vote but more recently, in 2016, rejected A total of 108 businesses were identi- business that did recreational marijuana. After the Arizona fied in the jurisdiction, and the assessor’s not self-report Medical Marijuana Act passed in 2010, it office worked closely with the Arizona for tax years still took until April 2011 for lawsuits chal- Department of Revenue in compiling a 2016, 2015, and lenging the act to be dropped and for rules reasonable estimate of the value of their 2014. to be established for medical marijuana personal property. facilities to begin to operate. Since the beginning of this contract, the vendor has nearly completed The first medical marijuana dispensa- Compliance campaign 13 audits for the three prior years, while ry opened Dec. 6, 2012, and by 2015 the developed almost 80 other audits are ongoing. number of dispensaries had grown to 95. In August 2017, Assessor Paul Petersen Despite their initial noncompliance, Bringing the marijuana industry hosted a press conference to bring this many medical marijuana businesses are issue of noncompliance to light and to onto tax rolls open to working with the vendor to review inform both the media and the industry of their books. Some marijuana industry Amid this growth, while touring one of the businesses’ legal obligation to report leaders even welcomed the press coverage these facilities in 2016, Maricopa Coun- their property. of these events as an opportunity to ty Assessor Paul Petersen realized that Recognizing that some businesses may showcase their contributions to society as many in the industry were not reporting have legitimately not known about their taxpayers. their personal property in compliance with obligations, the office committed to work However, challenges remain, including Arizona law. with businesses that reported their prop- the difficulty in finding marijuana busi- In Arizona, both real erty during the appeal cycle but stressed nesses in the first place. Many businesses and personal property is that it would audit businesses that failed rent their spaces, and sometimes the ven- taxable, and personal to do so. dor has found up to four address changes property is reported to In addition, staff members conducted for a business in a single year. Multiple the county assessors meetings with industry groups such as the entities can run out of a single site, which by individual businesses. Arizona Dispensaries’ Association and the complicates efforts if the businesses are Research by the Marijuana Industry Trade Group to help not compliant with auditors. assessor’s office found that business owners file appeals and also file • To learn more about this growing op- there was not an applicable property tax self-reports in . portunity as the medical marijuana indus- exemption for medical marijuana busi- This campaign resulted in the addition try blooms, don’t miss “Auditing Medical nesses, and no reports had been received of about $1.1 million of assessed taxes in Marijuana Facilities” at the 84th Annual from the businesses in 2016 and the first Maricopa County. Conference on Assessment Administration half of 2017. Sept. 23-26 in Minneapolis.

20 Fair+Equitable JUNE 2018 Greetings from Minneapolis!

Spring is finally here in Minneapolis, and Things to do Loring Park to the picturesque Mississippi the city is buzzing with energy and activity. River to catch the sunset on the skyline Get ready to walk, dance, shop, run, and in Northeast. Get the high score at an The Local Host Task Force, along with cheer all day long. Explore Minneapolis the all-night pinball bar in Lyn Lake. Enjoy an staff at IAAO Headquarters and the Meet way it was meant to be explored, through incredible Ethiopian meal in Cedar-River- Minneapolis staff, are working together to multiple outfit changes. Throw on that side, all without ever leaving the city limits. provide you an exceptional Annual Confer- jersey and cheer on your favorite sports This is what living and exploring Minneap- ence experience in September. teams. Bring your purple dancing shoes olis is all about. Be sure to check out the golf registration and find your way to the world-famous for the annual IAAO Golf Outing, sched- First Avenue. Realize you’re going to need Food and drink uled at Rush Creek Golf Club, one of the more outfits? Don’t worry. We have tax- region’s premier courses. September is a free clothing. Where global flavors meet Ferris wheel beautiful time to be on the links in Minne- cocktails. The innovative Minneapolis sota with fresh air and beautiful foliage. Events food and drink scene is ready to impress – whatever your tastes. Whether it’s the Continue to check the conference web- If there is one thing this city knows, it’s famous Juicy Lucy cheese-filled burger site for additional activities such as tickets how to keep a calendar full all year long. at Matt’s, a signature Old Fashioned at to the Minnesota Twins versus Detroit There are May Day parades, colorful Pride Parlour, fine dining at its finest at Spoon Tigers game at 7:10 Tuesday night. celebrations, improv festivals, and season- and Stable, try- We can’t wait to show you why Minne- al beer celebrations. We are an extremely ing to choose sota is the PREMIER state in the upper active community of artists, creators, between Midwest! musicians, foodies, dancers, runners and 18 ethnic bikers — a community of doers who can’t — The Local Host Task Force restaurants stand the thought of missing out. With and food something always going on, we’re con- About Minneapolis vendors at fident you’ll find something to keep you Meet Minneapolis, the biggest underes- the Midtown busy. timated place in the north. Global Market or A dramatic riverfront skyline, three pro- Hotels two scoops of artis- A famous Jucy Lucy fessional sports stadiums within 1.3 miles, anal ice cream at Milkjam so much art you’re literally surrounded by The best rooms you’ll barely stay in. Hip Creamery. We just ask that it and a theater on almost every corner. A and historic. All suites. Family friendly. you bring your appetite. culture committed to perfecting the craft World-class restaurants. Cool cocktail of the brewing, the best park system in the bars. Minneapolis and surrounding area Getting around hotels are more than just places to stay. nation, and a foodie paradise where you In Minneapolis, you’ll never be far from They’re the hottest social scenes in the can get Nordic cuisine for breakfast, Ethi- where you need to be — literally. We pride city right in the middle of the action. opian for lunch and this thing called a “Jucy ourselves having a compact downtown, They’re close to everywhere you’ll want to Lucy” for dinner — and oh yeah, cocktails so no matter where you are and want to be. Check in — then check it all out. on a Ferris wheel. go, we have the options to get you there A place to bring your dancing shoes and Neighborhoods quickly and easily. We have an award-win- party at festivals all year round, enjoy ning transit system with light rail and four gorgeous seasons surrounded by 13 Uptown. Downtown. Dinkytown. buses, taxis, Uber, Lyft and bike rentals on lakes, the Mississippi River, and a water- Funkytown. Explore neighborhoods as the streets with dedicated bike lanes all fall. Meet friendly locals who can’t wait to unique as their names. We love living over the city. Our personal favorite way to show you why they love living here. here, and we can’t wait to show you why. get around is two feet. Stroll from the iconic Sculpture Garden by

JUNE 2018 Fair+Equitable 21 TIM WILMATH is the Chief Tuesday’s plenary: Valuing Appraiser with the Palm Beach Property big corporate headquarters Appraiser’s Office and holds This presentation will review some of the more interesting the MAI and and prominent corporate headquarters around the United SRA designa- tions from the States, including Facebook, Best Buy, Google, and Apple Appraisal Institute. He is also a State Certified General he Tuesday plenary session for the · What features are typical for large Real Estate Appraiser, a licensed real IAAO Annual Conference has been corporate headquarters and large estate broker, and a licensed General Tset. single-occupant office buildings? Appraisal Instructor. The session will cover the valuation · Should assessors base the value of a Tim has written several property of corporate headquarters and large fully-occupied corporate headquarter tax-related articles and was the re- single-occupant corporate campuses. property on the existing use or some cipient of the IAAO Bernard L. Barnard future use under a multi-tenant sce- Outstanding Technical Essay Award for Large single-occupant office build- nario? the “Mass Appraisal of Hotels” (2006); ings and corporate headquarters exist in the John C. Donehoo Essay Award for almost every jurisdiction. · If the goal is fee simple valuation, should the assessor value the property the “Brief History of Intangibles in Ad It will be presented by Tim Wilmath, as if it was vacant or occupied? Valorem Taxation” (2015); the John C. MAI, SRA, Palm Beach County, Florida, · Are sale-leasebacks acceptable com- Donehoo Essay Award for “Thinking from 8 to 9 a.m. Sept. 25. parables for these properties? Outside the Big-Box” (2016); and the Often, these are some of the largest Bernard L. Barnard Outstanding Tech- · Does LEED certification matter for nical Essay Award for “Understanding buildings in a jurisdiction. Because of these properties? their size and high assessments, they Intangible Assets.” are often appealed, and assessors must This presentation will also review He has been involved in appraising wrestle with many interesting topics. some of the more interesting and prom- for 30 years and ad valorem assess- inent corporate headquarters around the ments for 20 years. He has testified as Some of the common questions as- United States, including Facebook, Best an expert witness at appeal hearings, sessors face when valuing these large Buy, Google, and Apple. circuit court, and federal court. Tim include the following: has worked for assessor offices and as These buildings contain some of · Do super-large single-occupant office a property tax consultant. the most interesting architecture and buildings and corporate headquarters features and make great examples for He is a Florida native and a U.S. Navy inherently contain functional obsoles- how to address some of the common veteran. He has been married to his cence because of their large size and appraisal and assessment challenges. wife Yvette for 33 years, and they have special features? two daughters, Kim and Carly.

22 Fair+Equitable JUNE 2018 Friends of Associate Members seeking donations for State Supreme Court Justice to speak conference raffle and auction at Women’s Initiative Luncheon Donations to the auction and raffle are a great way to support IAAO. Minnesota Supreme Court Justice Anne McKeig It provides an opportunity for individual members, chapters, affiliates, will be the keynote speaker at the Women’s Initiative and exhibitors to promote themselves to a wide variety of movers and Luncheon on Wednesday, Sept. 26, at the IAAO Annual shakers in our industry. Conference. Consider items unique to your state or make a splash and draw great Before her appointment to the Supreme Court, deal of attention to your business* with something that will draw lots McKeig served as a Hennepin County District Judge. of interest. Gov. Tim Pawlenty appointed her to the District Though the ideas are unlimited, here are some suggestions: Court in February 2008. • Fitness trackers As District Judge, McKeig worked for one year in • Ipads or tablets the Criminal Division, then for several years in Family • E-readers Court. From 2013 to 2016, she was Presiding Judge of Family Court. From 1992 to 2008, she served as • Smart speakers Assistant Hennepin County Attorney. She was in court • High-quality jewelry daily, representing the county in child protection mat- • Designer bags ters and in cases governed by the Indian Child Welfare • Vacation home rentals/time share usage Act. • Wine and food baskets representative of your area As an attorney and judge, McKeig has been a na- tional leader in developing protocols and programs for child protection and Indian Child Welfare. Please direct any questions to JoAnn Pierson at JoAnn.Pierson@ryan. com. She has also collaborated on practices to address child custody, domestic violence, sexual abuse, and *Note: Registered vendors can advertise their businesses and the equal access to justice. She has been an adjunct donation they made by placing business cards around the donation. It’s professor at Mitchell Hamline Law School, where she a great way to draw attention to your product or service. helped develop a curriculum for child abuse and the law. McKeig earned her B.A. at the College of St. Cath- erine in 1989 and her J.D. from Hamline University School of Law in 1992. She grew up on the Leech Lake Indian Reservation. She is a descendant of the White Earth Nation and the first American Indian to serve on the Minnesota Supreme Court. McKeig had a great childhood in a family with her construction worker father, her highly educated mother, and four siblings. She is married and the proud mother of five children. — justicemckeig.org

JUNE Fair+Equitable 23 IAAO educational offerings, on the map Course 100 - Understanding Real Property Course 354 - Multiple Regression Analysis for Appraisal For more IAAO course information, Real Property Val. Aug. 21-22, Vermont (Fairlee) go to www.iaao.org/coursecalendarmap July 23-24, Idaho (Boise) Course 101 - Fundamentals of Real Property Course 400 - Assessment Administration Appraisal Course 171 - Standards of Professional Practice July 16-20, New Mexico (Las Cruces) July 16-20, New Mexico (Las Cruces) and Ethics July 16-20, Kansas (Topeka) July 23-27, Idaho (Boise) Nov. 5, Texas (Houston) July 23-27, Idaho (Boise) July 30-Aug. 3, Indiana (Fort Wayne) Course 191 - National USPAP Update Aug. 13-17, Kansas (Wichita) Aug. 27-31, Alabama (Foley) Oct. 3, Texas (Houston) Sept. 10-14, Indiana (Valparaiso) Sept. 10-14, Ontario (Pickering) Course 201 - Appraisal of Land Sept. 10-14, Wyoming (Cheyenne) Oct. 1-5, Wyoming (Casper) June 25-29, Florida (Orlando) Oct. 29-Nov. 2, Texas (Austin) Oct. 29-Nov. 2, Indiana (Columbus) July 23-27, Idaho (Boise) Dec. 3-7, Indiana (Indianapolis) Nov. 12-16, Texas (Houston) July 30-Aug. 3, Kansas (Wichita) Course 402 - Tax Policy Course 102 - Income Approach to Valuation Aug. 6-10, Wyoming (Cheyenne) Sept. 17-21, Texas (Austin) June 18-22, Oklahoma (Tulsa) Oct. 22-26, Texas (Waco) Oct. 22-26, Texas (Austin) June 25-29, Indiana (Indianapolis) Course 300 - Fundamentals of Mass Appraisal Course 500 - Assessment of Personal Property July 9-13, 2013, Kansas (Wichita) July 16-20, New Mexico (Las Cruces) July 16-20, New Mexico (Las Cruces) July 9-13, Tennessee (Mt. Juliet) July 23-27, Idaho (Boise) July 23-27, Missouri (Ozark) July 16-20, New Mexico (Las Cruces) July 23-27, Kansas (Kansas City) Aug. 6-10, Tennessee (Mt. Juliet) Aug. 6-10, Florida (Lake Mary) Aug. 6-10, Ohio (North Canton) Aug. 6-10, Arkansas (Little Rock) Course 501 - Personal Property Auditing - Basic Aug. 6-10, Florida (Lake Mary) to Advanced Aug. 13-17, Indiana (Columbus) Aug. 13-17, Florida (West Palm Beach) Oct. 15-19, Wyoming (Cheyenne) Aug. 27-31, Minnesota (Chanhassen) Sept. 10-14, Iowa (Clive) Aug. 27-31, Wyoming (Casper) Course 600 - Principles and Techniques of Cadas- Sept. 17-21, Arkansas (Little Rock) tral Mapping Oct. 1-5, Vermont (White River Junction) Oct. 15-19, Texas (Austin) June 25-29, Arkansas (Little Rock) Oct. 8-12, Indiana (Ft. Wayne) Oct. 22-26, Indiana (Columbus) July 16-20, New Mexico (Las Cruces) Nov. 12-16, Georgia (Pine Mountain) Nov. 26-30, Indiana (Indianapolis) Aug. 6-10, Florida (Lake Mary) Nov. 12-16, Ontario (Hamilton) Nov. 26-30, Texas (El Paso) Dec. 3-7, Texas (Houston) Course 601 - Cadastral Mapping: Methods & Course 311 - Residential Modeling Concepts Applications Dec. 3-7, Ohio (Moraine) July 30-Aug. 4, Tennessee (Mt. Juliet) Aug. 13-17, Arkansas (Little Rock) Course 112 - Income Approach to Valuation II Sept. 10-14, Texas (Denton) Course 650 - Cadastral Mapping July 23-27, Idaho (Boise) Oct. 22-26, Vermont (Rutland) July 23-24, Idaho (Boise) Oct. 15-19, New Hampshire (Concord) Nov. 12-16, Wisconsin (Wauwatosa) Oct. 22-26, Tennessee (Mt. Juliet) Course 651 - GIS for Assessors Course 331 - Mass Appraisal Practices and July 25-26, Idaho (Boise) Course 151 - National USPAP Procedures Course 850 - CAE Case Study Review June 18-20, Louisiana (Baton Rouge) July 16-20, Kansas (Wichita) Oct. 10-12, Texas (Austin) June 20-22, Louisiana (Baton Rouge) Oct. 1-5, Massachusetts (Andover) Aug. 27-29, Indiana (Indianapolis) Course 851 - RES Case Study Review Course 332 - Modeling Concepts Sept. 4-6, Tennessee (Mt. Juliet) Sept. 18-20, Texas (Houston) Aug. 6-10, Florida (Lake Mary) Oct. 1-2, Texas (Houston) Course 991 - Understanding and Using Compara- Sept. 10-14, Kansas (Topeka) Nov. 6-8, Indiana (Columbus) ble Transactions Course 333 - Residential Model Building Course 158 - Highest and Best Use July 12, Utah (Salt Lake City) Oct. 8-12, Texas (Houston) Oct. 8-9, Texas (Austin) Sept. 7, Vermont (Essex Junction) Nov. 26-30, New Hampshire (Concord)

24 Fair+Equitable JUNE State property tax legislative action in 2018

BY MIKE ARDIS board of taxation to annually review the real property values in each municipality in ith the legislative season closing the county. in many states, here’s a brief re- view of some of the actions that New York Wtook place during at the state level in the United States. Many bills A bill in New York (S07411) that would were introduced that deal with proper- have created New York state property tax ty tax assessment legislation, and the assessment procedures study commission following are bills that passed or were of to provide the governor and the legisla- interest. ture with a blueprint for reforming the real property tax system and assessment Maryland process in the state of New York was In Maryland, the state House and Senate introduced and later referred to the local passed HB1660 requiring the Department government committee. of Assessments and Taxation to include in an assessment record for real property Virginia a note describing any reduction in an as- HB 1495 was recently signed by the sessment resulting from a certain order or The Wisconsin State Capitol in Madison governor. The bill provides that if a taxpay- decision and, under certain circumstances, er applies to the commissioner of the reve- the specific reason for the reduction; ap- as railroads for property consisting of land nue or other official performing the duties plying certain provisions of law that relate and buildings and under a depreciation imposed on commissioners for relief from to the authority of the department during a schedule for all other forms of property, as a real property tax assessment before the reassessment of property after an appeal described in the act. expiration of the board of equalization’s to certain appeals filed with a supervisor of term, if the term of the board of equaliza- assessments on or after Oct. 1, 2014, but New Jersey tion expires before a final determination still pending a final decision. A bill (S2033) in New Jersey to authorize on such application for relief, and if the taxpayer advises the circuit court that he Michigan a vote for a state constitutional convention to reform the system of property taxation wishes to appeal the determination to the HB6049 and SB1025 were introduced was sent to committee. This bill would board of equalization, then the circuit court in May which would address minimum implement many of the recommendations may reappoint the board of equalization to standards for assessing districts. of the New Jersey Property Tax Conven- hear and act on such appeal. According to a release from the Michi- tion Task Force. It provides for convening a gan governor’s office, “the two property state constitutional convention for the sole Wisconsin tax reform bills would update property purpose of reforming the system of prop- In Wisconsin, SB 292 and AB 386, which assessing laws to specify minimum quality erty taxation in this state. The bill would dealt with the dark store issue, failed standards that every city, township or have placed the question before the voters to pass, despite apparent support, as county assessing office must meet. The in November. legislative leadership didn’t bring the bills change is intended to improve taxpayer A separate bill, A3859, the “Technol- to the floor for votes. In the State Sen- and local government fairness by providing ogy-Based Real Property Assessment ate, a Democratic amendment to another transparent and consistent assessments.” Transition Act,” was also referred to the lo- bill that would have addressed property The bills require jurisdictions to meet cal government committee. The bill would assessments for big-box retailers was IAAO standards regarding staffing levels, have revised the process of real property rejected as it was ruled the amendment however IAAO has limited requirements in assessment into a process that includes wasn’t germane to the bill. the Standards on Mass Appraisal and the the use of modern technology in every Municipalities had complained about Fundamentals of Mass Appraisal textbook. municipality, statutory revisions to the laws related to a 2008 Supreme Court de- IAAO in 2014 published results of a survey assessment calendar, a mandatory dis- cision involving a Madison Walgreens store on staffing in assessment offices. trict-wide annual reassessment require- that allows big-box retailers to lower their ment to set real property assessments at property taxes by basing assessments on Missouri true value, the internal inspection of recent nearby vacant buildings. Bills to close the In Missouri, SB 768, which deals with property sales as evidenced by the filing of so-called “dark-store loophole” were intro- property tax assessment of telephone the deed with the county and the charging duced last year. companies, was passed by the House and of an inspection fee to cover the cost Wisconsin also considered, but did not Senate, but has not been signed into law. thereof to be paid at the time the deed is pass, SB 158 and AB211, which would The bill allows that, beginning Jan. 1, 2019, filed, and a mandatory 10-year cycle of have reviewed a property owner’s right telephone companies can make a one-time internal inspections of all real property in to refuse entry into his or her home for election of whether to have their property every municipality in the state. assessment purposes and separately set assessed in the same manner as railroads, Another bill (S205) referred to a com- conditions for appearing before the board as in current law, or in the same manner mittee would have required each county of review.

JUNE 2018 Fair+Equitable 25 + Knowledge Areas Leadership and management:

Can one survive without the other? BY KEVIN PRINE, RES, AAS The terms leadership and management are used … . Forgiveness carries with it a show of compassion, a key trait of leadership. interchangeably all too often. The perception is that if a Confident leaders create an environment person is in a management role, then he or she must for forgiveness, recognizing the big- possess a certain level of leadership qualities. ger picture and paving the path toward meeting the goals and objectives of the institution. (Bick 2017) Similarly, if someone is identified by … [L]eadership is both innate and learned. his or her peers to be a leader in the It can be a developed skill—just like skiing This strong stance on forgiveness workplace, department, division, and so or playing the piano. Although every- provides insight to a trait that isn’t on, is it then assumed that this person is one has different levels of talent, we all typically recognized or thought of when in management? What is the difference? can learn to lead—and leadership is the describing a leader. But these types of Is there one? essence of mentorship.” (Sozzi ) attributes are what constitute a lead- er—character traits that go above and In order to determine how these two There are two ways in which one be- beyond the standard traits of an individ- character traits compare and contrast comes a leader. Formally, a leader is ap- ual. and whether they can operate separate- pointed by his or her superiors (typically ly, let’s take a closer look at what defines a board, locality, legislature, govern- Leaders are very self-aware. They leadership and management. ing body, and the like) to a position of know more about their own strengths leadership. It can be debated whether he and weaknesses than most and seek to What is leadership? or she is a leader at this point or merely better themselves and improve their appointed to a position of manage- weakness more than others. Dee Hock, Merriam-Webster defines leadership as ment. “To the extent that a leader gains CEO Emeritus of Visa International, follows: acceptance beyond this formal position, wrote, “If you look to lead, invest at 1. the office or position of a leader it must be gained from or granted by least 40 percent of your time managing yourself—your ethics, character, princi- 2. capacity to lead the group” (Gortner, Nichols, and Ball 2007). Informally, an individual can ples, purpose, motivation and conduct” 3. the act or an instance of leading become a “leader without position,” but (Pater 2014). (Merriam-Webster, 2018a) that must be a position that is identified and recognized by others. What is management? Definition no. 2 is the best in terms of Merriam-Webster defines management defining leadership in the workplace and Stodgill argues that an individual is usu- as follows: society, but it lacks depth and analysis. ally given leadership status because his or There is an infinite amount of qualities her behaviors arouse expectations in group 1. the act or art of managing: the a leader can possess; honesty, integrity, members that lead them to believe that he conducting or supervising of something focus, confidence, respect, care, disci- or she, rather than some other member, will (such as a business) pline, and motivation are just a few. serve them more usefully (Gortner, Nich- ols, and Ball 2007). 2. judicious use of means to One defining characteristic of a leader accomplish an end is his or her impact on others. This is One quality not typically considered 3. the collective body of those who demonstrated in a variety of ways. Many for a leader is forgiveness. Forgiveness manage or direct an enterprise (Merri- leaders develop other leaders or, at a in the workplace is a rare character trait am-Webster, 2018b ) minimum, give rise to the quality and that can demonstrate what it means to talent of those around them. “Lead- be a leader: Managers are difficult to describe ers have a direct effect on employees’ People need to know that when they because various organizations and in- well-being and performance” (Corner- make mistakes, they will be given the dividuals have differing perspectives on stone 2014). Not everyone is cut out to be opportunity and the tools to overcome managers. “The definition of manage- a leader, but it doesn’t mean they cannot those mistakes. Forgiveness restores hope ment is to exercise executive, adminis- develop leadership attributes. and productivity in the workplace. To not trative, and supervisory direction of a forgive creates separation and distance group or organization” (Bargau 2015).

“If you look to lead, invest at least 40 percent of your time managing yourself — your ethics, character, principles, purpose, motivation and conduct.” — Dee Hock, CEO Emeritus of Visa International

JUNE 2018 Fair+Equitable 27 Many see managers as mid-level roles technical and verbal capacities, and high among managers at the same level to that facilitate a need from subordinates intelligence (Limbare 2012) help develop differ and even cause conflict or con- to administrators; however, the man- and improve an effective manager. fusion on the correct practices, proce- ager position can be at a lower level, Skills are different from traits or char- dures, and order of operations within mid-level, or top of the organizational acteristics in that they are the ability to the organization. Sometimes manage- chart. use one’s knowledge and competencies ment styles can oppose or conflict with one another, for example, autocratic and Management positions are formulat- to accomplish a set of objectives (Bargau democratic styles. ed by appointment. The manager’s title 2015). Managers “…exercise an autocratic typically contains references to man- According to Fleming, management agement or a superior role. management style by ignoring prefer- has four functions: planning, organiz- ences of their team members. Equality Management, in its essence, can readily ing, direction, and controlling (French concerns have no significant impact on be defined as overseeing a well-known 2014). Leaders may have roles in these management styles” (Kocher, Pogrebna, set of processes designed to assist an functions as well; however, managers and Sutter 2013). This strategy works organization to predictably do what it is operate as these being their primary well in many environments: military required to do and what it believes it is responsibilities. boot camp, police academy, and the like. known to do well (Bick 2017). Variety of management styles It is also effective in other environments Management personnel need to be with the right manager and right subor- highly skilled in their craft and well There are numerous management dinates; however, utilized in the wrong educated on the processes, procedures, styles in the workplace that can vary organization, it can have a negative and production of their team, depart- based upon the manager, the depart- effect on production and morale. ment, and organization. Skills such ment, and/or the organization. It is Conversely, democratic managers as the ability to make rapid decisions, not uncommon for management styles allow for advice from their subordinates

28 Fair+Equitable JUNE 2018 and try to make decisions based upon a are distinctly different. John Kotter rational, intelligent decisions and to team approach (Kocher, Pogrebna, and developed a structure for determining navigate social relationships successful- Sutter 2013). differences between leadership and ly” (Bick 2017). management: This approach works much better in Management can exist and progress team environments in which all mem- without leadership. If a manager is Kotter argued that leaders and bers of the team or department are able status quo and does not need to alter the managers have tasks that are to have an input and collaborate togeth- course of processes or think outside the almost opposite in nature. He felt er in order to determine the best solu- box for organizational improvement, that management works towards tions. This can involve work processes, it certainly is possible for he or she to order and stability. Management personnel, budgets, salaries, or other be an effective manager while lack- does this because order will lead managerial decisions that can benefit by ing leadership. Management without to consistency, and consistency having more than one perspective. innovation, vision, and other leadership to smooth and efficient running qualities can potentially lead to a set of operations—a goal of manage- Micromanagement stagnant processes and an unenlighten- ment. Conversely, Kotter purported ing culture. Micromanagers feel the need to that leadership strove to deliver overstep their responsibilities and be in- constructive change and move- Leadership can also exist without volved with all subordinates’ operations. ment in organizations. He argued management. As discussed previous- “The manager is unable to perform ef- that successful leaders would seek ly, management is typically a position fectively in his position, usually because ‘continual adaptive change’ with appointed by superiors in the workplace. of a lack of education, deficient knowl- a goal of continuously improving Leadership is a quality that is given by edge/skills/abilities, or an unwillingness organizations for success. Kotter those who follow or believe in the leader. to perform” (French 2014). “Leaders mi- felt that leaders should aspire to It is about influencing and motivating cromanage in large part because they do continually improve organizations others to follow. It would be very rare to not trust others to perform their tasks so that they would have a greater see a business card or an email signa- sufficiently well or to make the correct chance of survival in a continually ture with the term “leader” as part of a decisions” (Dental Abstracts 2016). For adapting business environment person’s position or title. the most part, there is a negative stigma and those that stay static will not Being a leader without being in a that comes with being labeled a “micro- succeed. Kotter was a strong sup- management position can be very manager.” porter of both leaders and man- challenging; however, if the person is a agers in organizations however, Managers assert that many subordi- true leader, he or she will find ways to arguing that both were necessary nates need to be micromanaged in order overcome that. His or her persistence to an organization that runs effec- to accomplish the tasks and responsi- and ability to overcome will trump the tively. A sense that can be gained bilities assigned to them. Unfortunately, barriers to the vision and direction for from an academic study by Kotter even this argument can place the blame themselves and their organization. back on the managers: is that managers make the vision of leaders work. For example, lead- Superiors who recognize leaders who I have long observed the second you need ers provide a sense of direction, are below them on the organizational to micromanage someone you have made reviewing the big picture and then flowchart may be threatened by a leader a hiring mistake. Overcome this common creating a vision. Managers take who brings fresh ideas or innovations workplace dilemma by hiring, referring, this vision and direction, commit to an organization that challenges the or becoming a disciplined, talented, and to it, and then establish timelines status quo. If and when that is the case, committed individual of distinction. and agendas and secure resources that manager lacks leadership. (Waldron 2016) to deliver on this vision. Manag- Leadership welcomes ideas from all The manager is ultimately responsible ers make it happen, according to and encourages others to strive for the for subordinates and their performance. Kotter. (Bargau 2015) bigger and better. Leadership under- If managers point the finger at the So the question still remains, Can stands that if an individual contrib- lack of productivity of their assignees, management or leadership survive utes to the greater good of the group, then they ultimately have three fingers without the other? The simple answer to then everyone succeeds. Good leaders pointing back at them. this question is yes; however, the goal of recognize others with that potential, take them under their wing, and mentor Together or separate? any successful manager or leader should not be to separate these. Effective man- them for greater leadership roles either The terms leadership and manage- agers need to have leadership traits and within their organization or beyond. ment are used interchangeably, but as characteristics. Essentially, this was one of the many noted in these examples, they are not “The most prized attribute in either reasons behind creating the IAAO Under the same. They have similarities and position requires the ability to make 40 Leadership Lab. Many individuals can overlap in certain aspects, but they in the assessment industry possess

JUNE 2018 Fair+Equitable 29 leadership qualities ed. Belmont, CA: Thomson Wadsworth. and visions for their International Association of offi ces and the profes- Assessing Officers (IAAO). . sion, but they may not “IAAO U40 Leadership Lab.” have the managerial https://www.iaao.org/wcm/ Membership/Under_40_ platform upon which Leadership_Lab_/wcm/ to implement those Membership_Content/U40. aspx?hkey=91e4fddf-ee9d- ideas. The U40 Lead- 4c71-925e-c4885226108a ership Lab provides (accessed May 1, ). an avenue for current Kocher, M. G., Pogrebna, and future leaders to G., and Sutter, M. 2013. ”Other-regarding preferences collaborate for a better and management styles.” IAAO and assessment Journal of Economic Behavior industry both now and & Organization 88: 109–132. https://www.sciencedirect. in the future. The U40 com/science/article/pii/ Mission Statement is, S016726811300005X (ac- cessed April 20, ). “Young professionals Limbare, S. 2012. “Leadership cultivating innovation, Styles & Conflict Management embracing change and Styles of Executives.” Indian contributing to the Journal of Industrial Relations 48(1): 172–180. http://www. conversation” (IAAO ). jstor.org.proxy.lib.odu.edu/ stable/23509775. Public service Merriam-Webster. 20108a “Leadership.” https://www. Do the characteris- merriam-webster.com/dictio- tics of leadership and nary/lead (accessed April 20, ). management relate dif- one that can generate and empower new Merriam-Webster. 2018b. “Management.” https://www.merriam-webster.com/ ferently in the public sector than in the leaders at all levels and inspire a new dictionary/ management (accessed April 20, ). private sector? For the most part, they generation of professionals to a calling in Musgrave, A.W., Jr. 2014. “Management vs. lead- do not. The public sector can benefi t public service. (Musgrave 2014) ership in the public sector.” Public Manager 43(3): 56–59. http://proxy.lib.odu.edu/login?url=https:// from leadership in management roles Management can exist without lead- search-proquest-com.proxy.lib.odu.edu/ the same as the private sector. In fact, docview/1561467591?accountid=12967. ership. Leadership can exist without the public sector probably needs it more Pater, R. 2014. “Creating safety leaders: Part 2 management. But in order for either because it is in the public’s eye and has building three levels of leadership.” Professional to succeed, both are a necessity. With Safety 59(2): 22–24. http://proxy.lib.odu.edu/log- to maintain a higher level of respon- the change in workplace dynamics and in?url=https://search-proquest-com.proxy.lib.odu. sibility and integrity and because the edu/docview/1517909137?accountid=12967. people being challenged to do more with public sector exists to serve. Sozzi, R.V. . “Leadership: The Essence of Being a Men- less, the work processes and the results tor.” Leader to Leader. doi:10.1002/ltl.20366 Also, the public sector has a stigma of the manager will complement the Waldron, D.J. 2016. “Interview for greatness: 4 com- of maintaining the status quo. Many in people-leading and vision of the leader. mon traits of successful team members.” Personal Excellence Essentials 10. http://proxy.lib.odu.edu / the public sector are familiar with the Both are necessary for achievement and login?url=https://search-proquest-com.proxy.lib.odu. phrase “that’s the way we’ve always triumph in the organization. edu/docview/ 1954798157?accountid=12967 done it.” Unfortunately, it is the way References many governments operate, and because KEVIN PRINE is a Real Estate Apprais- of the steadily increasing retirements in Bârgau, M. 2015. “Leadership Versus Management.” al Supervisor in Chesapeake, Virginia. the public sector, now more than ever an Romanian Economic and Business Review 10(2): He has been with the organization for 197–204. http://proxy.lib.odu.edu/login?url=https:// four years and has been in the mass inspiring new wave of management and search-proquest-com.proxy.lib.odu.edu/ appraisal profession since 2009. He leadership needs to be willing and ready docview/1700066847?accountid=12967. is also a licensed appraiser in Virginia to improve government and revitalize its Bick, R. 2017. “Leadership and Management: What Is It, since 2004. He earned his bachelor’s degree in finance from Old Dominion operations. According to Musgrave, Which Are You, and Are They Truly Interchangeable?” Fair & Equitable 15(3): 12–20. University and is pursuing his master’s degree in public administration. He is Cornerstone. 2014. “Employee Engagement: It’s actu- the Treasurer of the Virginia Associ- ally all about your leaders.” Cornerstone OnDemand. With public trust in government at a ation of Assessing Officers and has Dental Abstracts. 2016. “Overcoming the desire to mi- chaired several committees for the low ebb and agencies struggling to do cromanage.” Dental Abstracts 61(6): 289. ISSN 0011- organization. He received the Most more with less, there has never been a 8486. https://doi.org/10.1016/j.denabs.2016.07.013. Valuable Member award from VAAO in greater need for leadership at all levels French, C. 2014. “Getting It Just Right: Don’t Micro- 2015 and the Emerging Professionals manage.” Fire Engineering 167(11): 67–72. award from IAAO in 2017. Prine lives of government. We need a new paradigm in Chesapeake with his wife, Stacie, for rethinking government management, Gortner, H.F., Nichols, K.L., and Ball, C. 2007. Organi- and two children, Carson, 5, and zation Theory: A Public and Nonprofit Perspective, 3rd Payton, 1.

30 Fair+Equitable JUNE 2018 Enhance your valuation procedures using what you already have!

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F+E-PCS-paul.indd 1 5/11/2018 1:40:50 PM + IAAO absolute FCIAAO celebrates another record year BY TRACY S. DRAKE, CAE, ASA, RES, Above: FIAAO Tony AAS, CFE Hodge Educational FCIAAO PRESIDENT, 2017-2018 Award winners from Pinellas County. he Florida Chapter of IAAO (FCIAOO) wrapped up its 31st Annual Confer- At left: Participants gear up for their turn Tence and Business Meeting in April. in the photo booth. The three-day conference, at the Embassy Suites Orlando Lake Buena Vista South in central Florida, set new confer- ence records with 372 attendees, including 31 elected property appraisers and 48 vendors. Before the conference, IAAO Workshop 151 Uniform Standards of Professional Appraisal Practice and One-Day Forum 991 Understanding and Using Comparable Transactions was offered and was well received. and $500 check are presented to new Drake, and an election of the proposed The conference started with a general designees. 2018-2019 Executive Board. session that included acknowledgment Based on the number of members who After the new board was installed by of chapter members elected or appointed earned this recognition, the chapter is David Johnson (Seminole County), incom- to serve IAAO, welcome comments from optimistic about its chances to earn the ing President Katie Grasso offered her Katrina Scarborough (Osceola County), Virginia Cup for the eighth time (another remarks and thrilled some lucky door-prize followed by an update from Past Chapter record) at the IAAO Annual Conference in winners. President and current IAAO President Minneapolis. Attendees enjoyed a banquet dinner, the Dorothy Jacks. Will Shepherd provided an The chapter typically coordinates extra- always-popular photo booth, and dancing informative and head-scratching presen- curricular activities to promote fellowship at the President’s Party with entertain- tation on the property appraisers’ legal and networking. Therefore, shuttle buses ment provided by DJ T Drizzle. responsibility and right to access private were provided to transport conference at- property, and a legal update was provided tendees to Disney Springs (formerly known Final day by Gaylord “Jay” Wood. as Downtown Disney), which is an outdoor The conferenced concluded on the third shopping, dining, and entertainment com- day, but not before a legislative update by Tony Hodge Educational Award plex at the Walt Disney World Resort. crowd-favorite Loren Levy, who serves Wednesday’s presentations concluded as General Counsel for the Property with acknowledgment of chapter members Educational sessions Appraisers’ Association of Florida and an who received 2017 IAAO Awards, a review The chapter has several standing com- assessment roll submission update by the of recent changes to the IAAO designation mittees charged with creating an exciting Florida Department of Revenue. and education programs, and recognition and relevant track of educational sessions. The ever-changing ad valorem tax of 28 new IAAO professional designees The tracks at this conference consisted of system in Florida is complicated so these with the Tony Hodge Educational Award real property, exemptions, and informa- presentations are well attended. (a new record). This award is named for a tion technology/geographic information In 2017, the chapter began donating to a past president who worked tirelessly pro- systems. The Tangible Personal Property local charity in the conference host county. moting IAAO education and encouraging Steering Committee hosts a three-day This year, our beneficiary was Help Now of people to pursue IAAO designations. seminar in January to better coincide with Osceola, which is a temporary safe shelter The Tony Hodge Educational Award is assessment year duties. for survivors of domestic abuse facing im- granted to FCIAAO members who earned Thursday evening’s program featured a minent danger and supports individuals as an IAAO professional designation since the networking reception, the annual business they establish violence-free living. Almost previous annual conference. A certificate meeting presided over by President Tracy $1,800 was donated along with toiletries.

32 Fair+Equitable JUNE 2018 MEMBER NEWS New Designates

AAS CAE RES ASSESSMENT ADMINISTRATION CERTIFIED ASSESSMENT EVALUATOR RESIDENTIAL EVALUATION SPECIALIST SPECIALIST

CHRIS CONNELLY, CAE, GREGORY C. CHAMPAGNE DIONNE C. HARNISH, Deputy Chief Appraiser JR., RES, Appraisal Director AAS, Director, Valuation for the Williamson Central with the St. Charles Parish Services for the Monroe Appraisal District in Texas, Assessor’s Office, has earned County (Florida) Property has earned the Certified the Residential Evaluation Appraiser, recently earned Assessment Evaluator Specialist designation. Mr. the Assessment Adminis- designation. Mr. Connelly has served with Champagne has served this office for five tration Specialist designation. Ms. Harnish the district for 18 years, eight years in his years, three of which in his current position. has worked in the appraisal profession for present position. He holds a bachelor’s He holds a Bachelor of Science in aviation and 16 years, serving six years in this office and degree in exercise and sports science from a Master of Arts in industrial/organizational two years in her present position. She holds Southwest Texas State University and is a psychology from Louisiana Tech University. a Bachelor of Business Administration in Registered Professional Appraiser through He is a Certified Louisiana Deputy Assessor management and human resources from the Texas Department of Licensing and through the Louisiana Assessor’s Association. Florida International University. She be- Regulation. came a Florida State-Certified Residential DIEGO ESPINOZA, RES, Appraiser in 2004 and earned the Certified SAMUEL AARON MOORE, Market Analysis Assistant Florida Evaluator (CFE) designation from the CAE, Residential Appraisal Supervisor for the Hidalgo Florida Department of Revenue in 2013. Manager for the Williamson County (Texas) Appraisal Central Appraisal District in District, recently earned the MELODY KIKKERT, RES, Texas, has earned the Certi- Residential Evaluation Spe- AAS, Valuation Analyst for fied Assessment Evaluator cialist designation. Mr. Espinoza has served the Hillsborough County designation. Mr. Moore has served with the with the county for seven years, six months in (Florida) Property Ap- district for nine years, three in his present his present position. He is a Registered Pro- praiser’s Office, recently position. He holds a Bachelor of Arts degree fessional Appraiser (RPA) and the first in his earned both the Residential in psychology from Texas A&M Univer- office to pursue and earn an IAAO designation. Evaluation Specialist and the Assessment sity-Corpus Christi and is a Registered Administration Specialist designations. Ms. Professional Appraiser through the Texas JULIE-ANN FRANK, RES, Kikkert has worked in assessment for 10 Department of Licensing and Regulation. Internal Auditor with Property years, serving Hillsborough County for one Valuation Services Corpora- and one-half years, with one year in her JUSTIN STANLEY, CAE, RES, tion (PVSC) in Nova Scotia, present position. She has been a Level III Appraiser III with the City earned the Residential Eval- Certified Assessor-Appraiser with the State of Hampton Office of the uation Specialist designation. of Indiana since 2010. Assessor of Real Estate, Ms. Frank has been in assessment for 22 recently earned the Certi- years, 20 of which with PVSC, serving two WENDY M. SAPP, AAS, Tax fied Assessment Evaluator years in her present position. She began her Roll Compliance Coordinator designation. Mr. Stanley has worked in ap- career as a fee appraiser candidate before with the Alachua County praisal for nine years, with four years with joining PVSC. (Florida) Property Apprais- the City of Hampton and one and one-half er, recently earned the in his present position. He received his Res- DARREN MARSH, RES, Assessment Administration idential Evaluation Specialist designation in Assessor with Property Specialist designation. Ms. Sapp has been November. Valuation Services Corpora- with Alachua County for almost 18 years, tion (PVSC) in Nova Scotia, with almost 15 of those years serving in has earned the Residential this position. She holds an Associate in Sci- Evaluation Specialist desig- ence in computer science technology from nation. Mr. Marsh has been in the appraisal Santa Fe College, Gainesville, Florida. She is profession for 19 years, serving PVSC for a Certified Florida Evaluator (CFE) with the twelve years. He holds an IT programmer/ Florida Department of Revenue. analyst business diploma from the College of the North Atlantic, Grand Falls-Windsor, Newfoundland, and an appraisal assessment technology diploma from Cabot Institute of Applied Arts and Technology, St. John’s, Newfoundland.

JUNE 2018 Fair+Equitable 33 RAE MACDONALD, RES, ANDREW WILLSEY, RES, Assessor with Property Assessor with Proper- Valuation Services Cor- ty Valuation Services Birkle named poration (PVSC) in Nova Corporation (PVSC) in Scotia, recently earned Nova Scotia, has earned the Residential Evaluation the Residential Evaluation to Board Specialist designation. Mr. MacDonald has Specialist designation. Mr. Willsey has been with PVSC for 12 years, seven in his served with PVSC for nine years. He is William A. Birkle, AAS of Tyler present position. He holds a Bachelor of working to earn a Bachelor of Business Technologies in Indianapolis has been Arts degree from Saint Mary’s University Administration from Memorial University named to the IAAO Executive Board and a Bachelor of Education from Mount in Newfoundland. to complete the Saint Vincent University. unexpired term of + Lou Newman, who KEN MCKINNON, RES, Career Connection recently left the Assessor with Property board. Mr. Birkle’s Valuation Services Cor- term will conclude poration (PVSC) in Nova COMMERCIAL REAL at the end of 2018. Scotia, recently earned the Residential Evaluation ESTATE APPRAISER Mr. Birkle has Specialist designation. Mr. Mckinnon has ANALYST I, II & III been with Tyler been with PVSC for 10 years, eight of since 2007, serv- those as Assessor. He began his career Orange County (Fla.) ing as an Appraisal Project Supervisor. there as an in-field data collector before Previously he served as Elected Asses- assuming his present position. DESCRIPTION sor–Warren Township in Marion Coun- ty, Indian from 2002–06, Chief Deputy Involves the valuation of commer- MARIE G. MURPHY, RES, Assessor–Warren Township from cial real estate for ad valorem purposes Assessor with Property 1996–2001, and was Deputy Assessor– through the application of standard Valuation Services Corpo- Warren Township from 1992–95. appraisal techniques, including the sales ration (PVSC) in Nova Sco- comparison, income and cost approaches. He received his AAS Designation in tia, earned the Residential 2001 and has served as a member of Evaluation Specialist How to apply the IAAO Communications, Member designation. Ms. Murphy has worked for Services, Scholarship, and Local Host Please visit our website at www. PVSC for 13 years, serving one and one- committees. half years in her present position. She is ocpafl.org or contact 407-836-5032 for a member of the Nova Scotia, Canada, more information. We offer a competitive chapter of IAAO. salary and excellent benefits. An Equal Opportunity Employer. T. JUSTIN WALSH, RES,  EVENTS Senior Appraiser/Tech Requirements Leader for Lake Coun- Level I: Bachelor’s degree from four- • Executive Board Meeting ty, Florida, earned the year college or university required in Busi- July 13–14 Residential Evaluation ness Administration, Real Estate, Finance, Vancouver, Canada Specialist designation. Accounting, or Economics and one year of • 84th Annual Conference on Mr. Walsh has served Lake County for 12 relevant experience. Assessment Administration years, three of those years in his present Level II: Same as Level I with a mini- Sept. 23–26 position. He holds an Associate in Arts mum of four years minimum in Appraisal Minneapolis degree from Lake-Sumter State College or Assessment experience. • Fall Leadership Days and the Certified Florida Evaluator (CFE) Oct. 19–20 designation from the Florida Department Level III: Same as Level I & II with a Kansas City, Missouri of Revenue. minimum of eight years appraisal or assessment experience, 2 years minimum • Executive Board Meeting assessment experience, and CFE designa- Nov. 16–17 tion required. Charlottesville, Virginia • https://iaao-jobs.careerwebsite.com/ • 39th Annual Legal Seminar job/commercial-real-estate-apprais- Dec. 13–14 er-analyst-i-ii-iii/39943030/ Chicago

34 Fair+Equitable JUNE 2018 In Good Company New look, new content, new opportunities

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world. Ninety percent of our membership, work directly for and with 1/30/18 4:36 PM government jurisdictions in an assessment/appraisal capacity.

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STOP RACING AGAINST THE CLOCK. FIND CHANGE ® IMAGERY. IN SECONDS WITH PICTOMETRY www.eagleview.com/changedetection See the new online version at www.iaao.org/fairandequitable + profile

Some of the misconceptions about what I do might be someone thinking that as an appraiser I’m just going out to properties and measuring homes, and it’s a lot more than that.

QUANTÁ CREWS Senior Field Appraiser, Maricopa County Assessor’s Office [email protected]

y name is Quantá Crews, and I’m a member is the education and learning about senior field appraiser with the Maricopa the new trends in my field. That has definitely MCounty Assessor’s Office. This is my helped me in my job as an appraiser and also as IAAO story. vice president of our local IAAO chapter. Watch Quantá’s I am a senior field appraiser with the Maricopa “My IAAO Story” County Assessor’s Office in Phoenix, Arizona. What do you feel is the biggest on IAAO’s You- As a senior field appraiser, I am responsible for misconception about what assessors do? Tube channel at valuing all of the properties in my designated Some of the misconceptions about what I do www.iaao.org/ area; this includes residential, commercial, might be someone thinking that as an appraiser myIAAOstory. A industrial and all types of mixed use property. I’m just going out to properties and measuring new story will be homes, and it’s a lot more than that. available in each What is the biggest challenge for you We’re the groundwork, the grassroots if you issue. If you would lately? will, for our field. We talk to homeowners and to like to contribute In my position the biggest challenge that families renting properties. We talk to busi- your IAAO story I face is addressing the economic boom that ness owners, and we educate them on our tax for publication, we’re currently experiencing in Phoenix. I’m system and how they’re affected and how our please contact constantly going out and reviewing permits and property values affect them in their lives and Tammy Brown at work that’s on new construction and it’s a lot of their families. [email protected]. work right now. There are things going on in my area all the What would you tell someone thinking time and it’s busy, focusing on time manage- about joining IAAO? ment making sure that I’m able to address all If you’re debating about joining the IAAO the things that are going on. as an active member, I would tell you to make whatever sacrifices you need to in order to be a How has being an IAAO member benefited member. It will pay itself off in the long run, and you? you will learn and be a better professional as a The biggest benefit of the many as an IAAO result of being a member.

36 Fair+Equitable JUNE 2018 + IAAO library

IAAO Library Subject Guide: Telecommunication towers

BY THE IAAO LIBRARY Impact of cell phone towers on elecommunication towers house prices in residential neigh- All the IAAO Library Subject Guides include all types of structures borhoods, by Sandy Bond and Ko- have been updated to reflect that transmit any commu- Kang Wang. The Appraisal Journal, 2005, 73 (3) 256-277. current resources. Access the full Tnication signal such as radio and TV broadcasting, emergency Impact of proximity to cell phone list of Subject Guides at medical services (EMS), microwave, towers on residential property val- global positioning satellite (GPS), ues, by Olga Filippova and Michael www.iaao.org/resourses. and cellular phone antennas and Rehm. International Journal of Housing towers. Markets and Analysis, 2011, 4 (3), 244- There are two aspects to consider 267. 2001, 19 (4), 1-3, 5, 11. when using the resources on this Monumental change: Wireless Valuation of independently owned guide. The fi rst is the valuation of technology moves from audacity to and operated communications tow- telecommunication towers, and the accessory, by Gary J. McCabe. Fair & ers & sites for property tax apprais- second is the impact of telecommu- Equitable, 2003, 1 (3), 8-10, 12-13. als, by Gary J. McCabe. Presented nication towers on property values. Technological obsolescence of at the 68th Annual International Both types of resources are inter- personal property in the telecom- Conference on Assessment Adminis- mingled below. munications industry, by Ian Carr tration, 2002. and David Schneider. Presented at Valuation of wireless commu- Articles & Books in the the 78th Annual International Con- nication towers, by Gary McCabe. LibraryLink Catalog ference on Assessment Administra- Presented at the 68th Annual Inter- HEATHER national Conference on Assessment STEEL, MLS, (Log in to download the tion, 2012. is IAAO full text or to request from Telecom valuation: Administration, 2002. Research Librarian the library) Metro Vancouver’s expe- Wireless communications: Local and Library Cell phone towers and rience, by Renato Jadrijev. valuation, on-site inventory, and Manager. house prices in New Canadian Property Valua- replacement cost new estimates, by Zealand: Economic e� ects tion, 2016, 60 (4), 10-13. Gregory Popham. Fair & Equitable, and policy implications, Telecommunications 2015, 13 (9), 15-17. by Olga Filippova and Mi- infrastructure properties, Websites chael Rehm. International by Judson H. Clendan- Journal of Housing, 2014, 7 iel. The Appraisal Journal, Average lease rates in the top 10 (1), 18-29. 2005, 73 (3), 278-287. cities, by Ken Schmidt www.steelintheair.com/cell-tower- Cell phone towers do Towers, turbines, and lease-rates/ not a� ect property values, transmission lines: Im- by Richard A. Forsten, pacts on property value, Valuation of towers and associ- Wendie C. Stabler, and by Sally Sims, Peter Dent, ated real property, by the New York Olufunke O. Fagbami. and Sandy Bond. Wi- State Offi ce of Real Property Services Probate and Property, 2016, ley-Blackwell, 2013. www.tax.ny.gov/pdf/publications/ 30 (3), 10-15. orpts/celltowers.pdf Trends in the taxa- Cost of convenience: Telecommunications Industry tion of tower assets: Can estimating the impact of Association (TIA) sets the standard this be real? By Peter communication antennas on tower construction. W. Hladek and Todd W. on residential proper- www.tiaonline.org/about-tia Heinrichs. Presented at ty values, by Stephen the 71st Annual Inter- L. Locke and Glenn C. national Conference on Blomquist. Land Economics, The online version of this Assessment Administra- 2016, 92 (1), 131-147. tion, 2005. subject guide has more E� ect of distance to cell than 30 resources and can be phone towers on house Valuation of communi- prices in Florida, by Sandy cation towers using sale downloaded Bond. The Appraisal Jour- data, by Andrew G. Le- at www.iaao.org/resources nal, 2007, 75 (4), 362-374. may. Assessor’s Exchange, INDEPENDENT AUDITORS’ REPORT

Executive Board International Association of Assessing Officers Kansas City, Missouri

We have audited the accompanying consolidated financial statements of International Association of Assessing Officers and Subsidiary (a nonprofit organization), which comprise the consolidated statements of financial position as of December 31, 2017 and 2016, and the related consolidated statements of activities and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of International Association of Assessing Officers and Subsidiary as of December 31, 2017 and 2016, and the changes in their net assets and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

April 12, 2018 Kansas City, Missouri

4520 Madison Avenue, Suite G, Kansas City, Missouri 64111 • 816-531-2822 • EmerickCPA.com

38 Fair+Equitable JUNE 2018 JUNE 2018 Fair+Equitable 39 40 Fair+Equitable JUNE 2018 NEED A HAND?

STOP RACING AGAINST THE CLOCK. FIND CHANGE IN SECONDS WITH PICTOMETRY® IMAGERY. www.eagleview.com/changedetection International Association of Assessing Officers 314 w. 10th St. Kansas City, Missouri 64105-1616

42 Fair+Equitable JUNE 2018