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HomeMy WebLinkAbout2005 05-17 Pre Meridian City Pre-Council Meetina Mav 17. 2005 The Meridian City Pre-Council meeting was called to order at 6:30 P.M. on Tuesday, May 17, 2005 by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, Shaun Wardle and Charlie Rountree. Staff Present: Bill Nary and Will Berg. Item 1. Roll-call Attendance: Roll call. ~ Shaun Wardle --LChristine Donnell ~ Charlie Rountree ~Keith Bird ~ MayorTammydeWeerd Item 2. Adoption of the Agenda: Bird: Mr. President. Wardle: Mr. Bird. Bird: I move we adopt the agenda as published. Donnell: Second. Wardle: It's been moved and seconded to adopt the agenda. All in favor? ALL AYES. MOTION CARRIED. Item 3. Update of the Assessment for the City Of Meridian by Robert McQuade, Ada County Assessor: McQuade: I can't believe it's been a whole year since I have been here, but I am back and it's nice to see Councilman Donnell. I was telling her just a few minutes ago, she likes my presentations so much she has gone from the school board to the City Councilman, maybe it will be Ada County Commissioner next, who knows. Mr. President, Council members, just wanted to stop by and tell you that we are wrapping up our assessment for 2005 and we are going to be sending out over 160,000 assessment notices on the 2ih of May. That is going to be the Friday before the three-day weekend. Just a brief history - why I am here? This started years ago. Boise City and other municipalities would be calling in May asking for market values so they could be putting their budgets together and we have just decided to formalize it by doing this and I think it is pretty valuable. I know it's valuable for me and I hope it is of a value to you. I have got some really Meridian City Pre-Council May 17, 2005 Page2of6 fun things to give you tonight and I think you will appreciate it and anyone who misses this presentation, there are going to be sorry when they see what you get. Well, the good news is is your new construction value is up. The numbers are staggering on a percentage basis. The bad news is your growth rate is just phenomenal. It just seems to be accelerating from one year to the next. As I was looking through these numbers I just thought what are these people going to do. How can we address these growth issues and I am glad it is your problem and not mine. I am chasing values, not what you are trying to deal with. I have just a few preliminaries before I get started and that is I am going out on a limb, these numbers are preliminary. I was looking at the historical numbers that I have given and where they actually end up. These will be about 2 percent high when all is said and done. After we send the notices out we are going to be getting phone calls. We will be lowering values. You know it's not often do people call and say that we have under valued our property and we need to raise it. There will be delayed exemptions there. Some exemptions in the mill right now that when the Commissioners have had a chance to act on that that will reduce the taxable value. Of course the Board of Equalization will see values reduced there and also the operating property is not included in this and the operating property - those are the assessed values that the tax commission puts together of utility property. That would be pipelines, wires, any property owned to a or by a utility such as Qwest or AT&T, the gas company, water companies. There is a distinction between appraisal, reappraisal and physical inspection, just want to make sure that that is clear. We re-appraise every parcel every year because we have to be at market value, if we didn't reappraise, the we would be dropping behind (inaudible). There have been some cases where we have done that in some areas and that really was a problem in years past. That really is not a problem any more to us. But, a physical inspection, this is the one that we have to go out and look at 20 percent of the parcels every year. The appraisal will take the packet, look to see if there are any physical changes, if so they will make those changes in the file. In the reappraisal, the areas where there have been physical inspections, those values tend to go up a little bit. We have done something else this year that we really have not done before and that is we have added a local cost modifier. We have two classes of property that we have done that to that is worth noting, class 4, now those are parceled houses where you would have lament countertop, vinyl windows, two by four exterior walls - just your typical basic house, the eight foot ceilings - those have been indexed by 6 percent. We raise those out six percent and then the appraisers will go back to see if there was any additional work that needed to be done with that. Let me have the class 5 - that's going to be maybe marble counter tops, wood windows, the 9,10,11 & 12 foot ceilings - those were indexed up by 8 percent. I have got just a couple of handouts here to get us started. The reappraisal area - first if you look in the low left hand corner, which should say Meridian Reappraisal, 2005 - this one right here that has the pink on it. These were the re-appraisal areas in Meridian. The dark line, by the way, that is the area of impact, but the pink areas, those are the reappraisal areas and if you will look some of those areas, there are quite a bit of fairly dense population. These are the areas where Meridian City Pre-Council May 17, 2005 Page 3 016 we probably will get some calls this year. That's the reappraisal area. Let's go to the next one. This is the most interesting one. This is just amazing. This is the growth for the 2005 tax year - it really tells you a lot and that is not only what is going on historically, but where we are headed in the next couple of years. If you look at the legend, the cross hatch the black ones, those are the new subs for 2005. Those are going on the rolls this year. If you see the lighter hatch marks those are subs for next year and the real light areas, those are where we have preliminary subs. So, this just tells me that there has been phenomenal growth over here and there is going to be phenomenal growth next year. In fact, I am going to be using this in my office for planning on the appraisal to make sure we get the allocation correct on that. We are going to talk about market values and taxable value. Market value we need to make a real strong distinction here, market value is what we typically think a house would sell for. But, we have the taxable value. That is the market value less any exemptions. That would be a residential property with it assessed at $150,000 - (inaudible) $50,000 homeowners' exemption the taxable value is only going to be $1,000. These handouts by the way, were done by Sheldon Bluestein here. He is our land records supervisor and I know he has done a lot of work with the City of Meridian. He is the supervisor of our GIS and Land Records Department. (Inaudible ----------------------------------) and I noticed everybody was just madly trying to scribble numbers down and that does (inaudible) a lot easier for a lot of us. All right, the total market value in Meridian is $4.1 billion. That's up 29 percent over 2004. Last year, I remember, it was a whopping 18 percent, so this just shows what's going on over in the City of Meridian. The taxable value, again that is market value, that's the exemption, that's $3.4 billion and that is at 31 percent over 2004. Again, 2004 to 2003 was 19 percent. Taxable value is 80 percent - 82 percent of the total value. Residential parcel count is 21,840. That is up almost 21 percent. That is a 12 percent increase in residential parcels over the earlier year. At 10 percent, I think that is doubling in every seven years, something like that. If you are getting investment vet at a rate of return like that you would be doing very well. Market value is $2.9 billion - it is up 29 percent compared to 20 percent increase last year. This next number, the 5.6 percent meeting increase for existing property, do you see that on the chart there, residential property? I guess it's increased in essence - 5.6 is the (inaudible). To me that is probably one of the most important numbers because that is the person who has lived in a house three, four or five years or longer. They can expect to see the - the middle person is going to see their value go up 5.6 percent. Last year the (inaudible) increase over Meridian was 1.6 percent and this is throughout the county, we are looking at increases like this. They are more 4.5 percent. It's a much stronger market over here in Meridian, in fact, I had a meeting with our appraisers this morning and one of them a very experienced appraiser, she was a fee appraiser and one of our staff appraisers, she had commented that this is the hottest housing market she has ever seen in her life. Let's look at the commercial. Parcel count is 3,000 - that's up 10 percent over last year. Market value is $1.2 billion and that's up 28 percent over the last year. 2004 over 2003 was a 13 percent increase, so again, it's just Meridian City Pre-Councii May 17, 2005 Page4016 seems to be accelerating what's going on over here in Meridian. I am sure that's not a surprise to you at all. I want to talk about new construction for a minute and these percentages are staggering. I was giving the same presentation to the Meridian School Board the other day and their numbers were not nearly as impressive as these. There are about 150 people in the audience and when I was giving these percentages, you could just hear the people gasping. New construction, why is that important? Because that is how much your property tax budget can grow - the 3 percent growth, but also you get the value of new construction times last year's levies. So, that really is important to you. Market value, new construction, $495 million, that's 146 percent increase over last year's $201 million. By the way of comparison, 2004 to 2003, that year was an 11 percent increase. Residential you have 1,870 new parcels compared to 1,138 parcels last year - that's $230 million - that's up 104 percent over last year's $113 million. Commercial, 83 new parcels. Now that would be real and personal property. Last year you had 56 parcels. So, that 83 is a 48 percent increase. Commercial, new construction is a $93 million compared to last year's $33 million - up 180 percent. New subs change of status - and by way, speaking of new subs and change of status, there were 7,000 new lots that came on line in Ada County last year. $171 million - 212 percent increase over last year's 55 percent that's new subs and change of status. Now these numbers really are big numbers and there is going to be an important implication that we can talk about in just a minute here. Urban renewal is 41 million compared to last year's 20 million. That's over a 100 percent increase. Here is another number I think you should really think about and that is the tax burden, is who is paying the tax? Commercial or residential? This is really becoming an important point of contention in the legislature and the taxpayers. Residential pays 63 percent of the property tax here in Meridian compared to commercial's 37 percent. Last year, residential paid 59 percent, so there is a shift over to the residential property. Commercial paid 41 percent, so why is this important (inaudible) us getting into the tax policy issues - I want to talk about it for just a couple of minutes. In January as we were having our elected officials conference, Bruce Newcomb the president of the Idaho House of Representatives, was just giving a presentation and he was not talking about property taxes, he was talking about something else, but he said you could always tell when an issues time has come and that is by the number of bills that have been introduced into the legislature. Well, I want to show you something. Years past, I keep a notebook of property tax bills - when the legislature is going on we usually have about 12 bills that I am following. This year, these tabs, each represent a bill. I don't know if you can see that, that's 24 tax bills. Bills that were introduced in to the legislature that deal with property taxes, so I think we have seen the time has arrived for property tax change. How it's going to change? I don't know. There is going to be an interim committee (inaudible) in the legislature to study property tax issues and I think that's really going to be addressing the residential property owners' interests if you will. I was really emphasizing the tax burden, the shift because in 1983 when the one percent or the current 50/50 what that finally ended up being, when that was put into place and got trashed in 1983 it was about 50/50, well Meridian City Pre-Council May 17, 2005 Page 5 016 today throughout the state it's a 60/40 - residential properties are now paying throughout the state, 60 percent of the property tax bill and they are really feeling that there is a group up in north Idaho (inaudible------) they are going to try and get a property tax initiative on the ballot next year and that is going to be a fairly draconian effort and that would be - property taxes would be capped very similar to those in California. There is a whole list of approaches of dealing with the property tax issues and increase in homeowner's exemption limit's on budgets, so if property tax policy, I think, we are really going to see some changes the next year. I just want to wrap things up by telling you as you know that the growth has been very strong over here in the residential and the commercial real estate market. Unbelievable new construction market. I just want to put a pitch in for property tax because it is going to be coming under fire, but property tax is a really critical component of that three-legged stool that we have here in Idaho. Several years back when we saw the recession and feeling the reflects of the session, we had a tax increase on the sales tax side - there were cutbacks at the state level. I for one would not want to see cutbacks on funding to the Fire Department, to me it just wouldn't be acceptable for them to say the average time is going from three to five minutes, especially if my mother is lying on the floor with that heart attach, I want that three minute response time. So, the property tax component really brings stability to very important services. With that, I would be happy to answer any questions. Wardle: Thank you, I would like to welcome Councilman Rountree to the meeting as well. Rountree: Glad to be here. Wardle: Thank you very much, Mr. McQuade for a wonderful presentation. Any questions Council? Bird: I have none. I just want to thank him for the nice job he does every year. McQuade: That was kind of you to say that. I enjoy coming over and seeing you. I don't get a chance to have a lot of contact, but- Donnell: Mr. President. Wardle: I, too, have no questions, but it just always amazes Bob that you really do enjoy this, do you? McQuade: Well, I will up until the 27111 when we send out the assessment. Donnell: I did notice that you did that on a three-day weekend. That's very smart. Meridian City Pre-Council May 17, 2005 Page 6 016 McQuade: You know, if I was really smart I would have a conference schedule the following week, but I am not that smart. Donnell: You do a great job Bob, thank you. Wardle: Thank you very much. It appears that Meridian's new construction, again, is holding strong and increasing our values within the city. So, thank you very much for your diligent efforts and a wonderful presentation and thank you to your staff as well and the hard work that they did. McQuade: We will be back next year. Wardle: Council, that brings us to the end of our agenda. If there is no further business, I would entertain a motion to adjourn. Donnell: So moved. Bird: Second. Wardle: It's been moved and seconded to adjourn the meeting. All in favor, say aye. ALL AYES. MOTION CARRIED. MEETING ADJOURNED AT 6:51 P.M. (TAPE ON FILE OF THESE PROCEEDINGS) APPROVED: 6 / 7 / O!) DATE APPROVED