CHARLOTTE — The final, written report on an outside review of the highly contentious 2001 Mecklenburg County property tax revaluation of homes and business properties is now posted to the county website as a PDF file.
The report, by Wilson-based Pearson’s Appraisal Services, contains no surprises but does go into much more detail about the many flaws in the county’s revaluation process than a preliminary report that was unveiled last week by Pearson’s in a PowerPoint presentation.
It is now up the county’s Board of Commissioners, which meets Tuesday, to decide what to do with the study’s recommendations. The options could include a complete redo of the revaluation, with those who have overpaid taxes as a result of the mistakes possibly receiving refunds.
That would take an act of the state’s General Assembly. Cornelius Mayor Jeff Tarte, elected earlier this month to represent state Senate District 41, has vowed to introduce legislative enabling the county to conduct a redo.
The final report, which is 80 pages, details the findings of the preliminary report. Pearson’s goes into even more detail in a 174-page appendix of exhibits and examples of its findings. The county paid Pearson’s $254,400 to review the 2011 revaluation process.
The report finds major errors in 20 of the 52 neighborhoods that had the highest percentage increases in property values. Another 18 had minor mistakes.
That’s a roughly 72 percent error rate.
The report also says county assessors made major errors in 15, or 10 percent, of 151 other neighborhoods that Pearson’s studied at random. Five of those error-plagued neighborhoods were commercial areas.
In a third finding of Pearson’s, a study of 369 individual properties, also chosen at random, revealed that 12 percent of the revaluations contained major mistakes.
Despite the major errors — and other minor ones — the findings show that, for the most part, the 2011 revaluation was “acceptable” and carried out in accordance with North Carolina law.
Of the 369 individual properties evaluated by the study, 280 were found to be acceptable, 44 had major errors and another 45 had minor flaws. That’s a 76 percent error-free rate, with major and minor flaws accounting for the remainder.
Pearson’s representative Emmett Curl said he thought the revaluation would not have devolved into a debacle if the county’s informal appeals process for disputed values were more “customer-friendly.”
Pearson’s concluded that 70 percent of properties whose owners appealed the revaluation at the informal level received a “no change” decision. In contrast, roughly 70 percent of property owners who appealed to the county’s Board of Equalization and Review received a “reduction in value” decision.
As a result, the Pearson’s report makes broad recommendations to revamp the informal appeal process, suggesting that the county offer a “face-to-face” appeals option.
The lowest rate of revaluation errors occurred in housing developments, typically built after 1980, that have similar kinds of homes standing side by side, according to Pearson’s.
Most of the major revaluation errors, Pearson’s said, were in “heterogeneous” neighborhoods — residential, commercial or a mix of both — where structures were built in different years, in varying degrees of quality and in a variety of sizes. The most problematic neighborhoods also tended to have high land-to-building ratios and a relatively high amount of teardown/in-fill activity, according to Pearson’s.
The report also contained some general recommendations, including one that appears to fly in the face of many commercial property owners who complained that their valuations were high because the county, for the first time, used an income-based model to partially appraise commercial properties in 2011.
Pearson’s has recommended that, in the future, the county should place “greater emphasis on (the) income approach.” Curl said it is the most accurate way to calculate the market value of a commercial building.
Tony Brown can be reached at firstname.lastname@example.org, (704) 247-2912 or on Twitter at @tonymecktimes.