HomeMy WebLinkAbout20052877.tiff ROCKY MOUNTAIN
VALUATION SPECIALISTS
September 15, 2005
Weld County Board of Commissioners
Weld County
1400 North 17th Avenue
Greeley, Colorado 80631
RE: Final Report for the 2005 Colorado Property Assessment Study
for Weld County
Rocky Mountain Valuation Specialists LLC is pleased to submit the Final Report for
the 2005 Colorado Property Assessment Study for Weld County.
This report represents the results of a two-part analysis and audit: a procedural
analysis and a statistical analysis.
The procedural analysis, when appropriate, included all classes of property and
specifically looked at how the assessor developed economic areas, confirmed and
qualified their sales, developed their time adjustments, and performed their periodic
physical property inspections. The audit also reviewed the procedures for discovering,
classifying and valuing agricultural residences and outbuildings, discovering subdivision
build-out and subdivision discounting procedures. Valuation methodology for residential
properties and commercial properties was examined. Procedures for producing mines, oil
and gas leaseholds and lands producing, producing coalmines, producing earth and stone
products, severed mineral interests, and non-producing patented mining claims were also
reviewed.
Statistical analysis was also performed, when appropriate, on vacant land, residential
properties, commercial/industrial properties, agricultural land, agricultural residences and
outbuildings, other agricultural properties and personal property.
( n711 ���� � 2005-2877
ROCKY MOUNTAIN
VALUATION SPECIALISTS
Throughout this project RMVS has remained committed to its belief that for an ad
valorem system to be successful, values must be equitable and market-driven in all parts
of Colorado. Only then is the taxpayer assured of a fair property tax.
RMVS appreciates the opportunity to be of service to the State of Colorado.
thalti,b"
Mark R. Linne MAI, CAE, ASA, CRE
Managing Director
Rocky Mountain Valuation Specialists LLC
•
ROCKY MOUNTAIN
VALUATION SPECIALISTS
2005
PROPERTY ASSESSMENT
STUDY
Weld County
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Prepared for
The Colorado Legislative Council
4
1
2005
Weld County
PROPERTY ASSESSMENT STUDY
Prepared for The Colorado Legislative Council
1
ROCKY MOUNTAIN
VALUATION SPECIALISTS
1
Weld County
Property Assessment Study
Table of Contents
Introduction
Historical Sketch of Weld County I
Ratio Analysis 3
Time Trending Verification 4
Sold/Unsold Analysis 5
6
Agricultural Land Study 8
Agricultural Land 8
Agricultural Residences 8
Agricultural Outbuildings 9
Sales Verification 9
0
Economic Area Review and Evaluation I Economic Area Narrative and Maps 1 I I
Natural Resources 11
Earth and Stone Products 12
Producing Oil and Gas Procedures 12
Vacant Land 12
Subdivision Discounting 13
Possessory Interest Properties 13
Personal Property Audit 13
1 RMVS Auditor Staff 14
Appendices 17
18
1
I
2005
Property Assessment Study
Weld County
INTRODUCTION
Beginning in 1967 and continuing through the present, the Tax Commission
and its successor, the Division of Property Taxation, have conducted a sales
valuation analysis (sales ratio study) each year. In the analysis, the sales
prices of properties are compared to their assessed valuations to determine
how well assessed valuations reflect real property values.
In 1982, the voters of Colorado approved an amendment to the State
Constitution that affected the manner in which property is assessed. This
amendment was proposed in anticipation of implementation of the 1977 level
of value during 1983.
The Amendment requires appropriate consideration of the three approaches
to value: cost, market, and income. There are two exceptions to this
requirement. Residential property is valued on market only. Agricultural
land is valued solely on the earning or productive capacity of such lands.
All property is assessed at 29% of actual value with two exceptions.
Residential property, the first exception, is assessed at its yearly determined
assessed value. Producing mines and oil and gas leaseholds are the second
exception and they are assessed at a portion of annual production.
Also, beginning in 1983, the State Board of Equalization (SBOE) was to review
assessments for conformance to the Constitution. The SBOE will order
revaluations for counties whose valuations do not reflect the proper valuation
period level of value.
2005 Weld County Property Assessment Study—Page 1
C.R.S. 39-1-104 (16)(a)(b) and (c) outlined how this was to be accomplished by
stating that during each property tax year, the Director of Research of the
Legislative Council shall contract with a private person for a valuation for
assessment study. The study shall be conducted in all counties of the State to
determine whether or not the assessor of each county has, in fact, used all
manuals, formulas, and other directives required by law to arrive at the
valuation for assessment of each and every class of real and personal property
in the county. The person conducting the study shall sample each class of
property in a statistically valid manner and the aggregate of such sampling
shall equal at least one percent of all properties in each county of the State.
The sampling shall show that the various areas, ages of buildings, economic
conditions, and uses of properties have been sampled. Such study shall be
completed and a final report of the findings and conclusions thereof shall be
submitted to the State Board of Equalization by September 15 of the year in
which the study is conducted.
The property assessment audit conducts a two-part analysis: A procedural
analysis and a statistical analysis.
The procedural analysis includes all classes of property and specifically looks
at how the assessor develops economic areas, confirms and qualifies sales,
develops time adjustments and performs and plans periodic physical property
inspections. The audit also examines the procedures for adequately
discovering, classifying and valuing agricultural residences and outbuildings,
discovering subdivision build-out and subdivision discounting procedures.
Valuation methodology for residential properties and commercial properties
is examined. Procedures for producing mines, oil and gas leaseholds and
lands producing, producing coal mines, producing earth and stone products,
severed mineral interests and non-producing patented mining claims are also
reviewed.
Statistical analysis is also performed on vacant land, residential properties,
commercial/industrial properties, agricultural land, agricultural residences
and outbuildings, other agricultural properties and personal property.
RMVS has completed the Property Assessment Study for 2005 and is pleased
to report its findings for Weld County in the following report.
2005 Weld County Property Assessment Study—Page 2
HISTORICAL SKETCH OF WELD COUNTY
Weld County, one of the original seventeen territorial counties, established in 1861,
has 4,002 square miles and, according to the 2000 census, an approximate population
of 180,936 people. The county was named for Lewis Ledyard Weld, the first secretary
of Colorado Territory.
The county seat is Greeley, named for Horace Greeley of the New York Tribune,
whose agricultural editor, Nathan C. Meeker, was so impressed with the agricultural
potential of the area that he began a publicity campaign in the paper to found a colony.
This group, known as The Union Colony, bought a town site and named it in
Greeley's honor. (William Bright, Colorado Place Names, 3rd Edition, Johnson
Books, 2004,p.184 and 78)
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2005 Weld County Property Assessment Study—Page 3
RATIO ANALYSIS
Methodology
All significant classes of properties were analyzed. Sales were collected for
each property class over the appropriate sale period, which was typically
defined as the 18-month period between January 2003 and June 2004.
Counties with less than 30 sales typically extended the sale period back up to 5
years prior to June 30, 2004 in 6-month increments. If there were still fewer
than 30 sales, supplemental appraisals were performed and treated as proxy
sales. Residential sales for all counties using this method totaled at least 30
per county. For commercial sales, the total number analyzed was allowed to
fall below 30. Although we examined grouping smaller counties by economic
region to augment commercial sale totals, we still examined each county
individually for compliance. There were no sale quantity issues for counties
requiring vacant land analysis or condominium analysis. Although it was
required that we examine the median and coefficient of dispersion for all
counties, we also calculated the weighted mean and price-related differential
for each class of property. Counties were not passed or failed by these latter
measures, but were counseled if there were anomalies noted during our
analysis. Qualified sales were based on the qualification code used by each
county, which were typically coded as either "Q" or "C." The ratio analysis
included all sales. The data was trimmed for counties with obvious outliers.
In every case, we examined the loss in data from trimming to insure that only
true outliers were excluded. Any county with a significant portion of sales
excluded by this trimming method were examined further. No county was
allowed to pass the audit if more than 5% of the sales were "lost" because of
trimming. For the largest 11 counties, the residential ratio statistics were
broken down by economic area as well.
Conclusions
For this final analysis report, the minimum acceptable statistical standards
allowed by the State Board of Equalization are:
ALLOWABLE STANDARDS RATIO GRID
Unweighted Median Coefficient of
Property Class Ratio Dispersion
Commercial/ Between .95-1.05 Less than 20.99
Industrial
Condominium Between .95-1.05 Less than 15.99
Single Family Between .95-1.05 Less than 15.99
Vacant Land Between .95-1..05 Less than 20.99
2005 Weld County Property Assessment Study—Page 4
The results found for Weld County are:
RATIO GRID
Number of Unweighted Coefficient Time
Qualified Median Price Related of Trend
Property Class Sales Ratio Differential Dispersion Analysis
Commercial/
Industrial 129 .977 1.019 7.2 Compliant
Condominium N/A N/A N/A N/A N/A
Single Family 8,964 .967 1.002 7.2 Compliant
Vacant Land 593 .966 1.026 10.9 Compliant
Econ Number of Median Price Related Coefficient of
Area Sales Differential Dispersion
2 2,533 .970 1.003 .062
3 1,972 .968 1.000 .070
4 475 .961 1.000 .105
5 83 .959 1.000 .100
6 2,094 .963 1.002 .092
7 68 .974 1.028 .116
8 41 .979 1.002 .075
9 265 .971 1.002 .069
Unspec 1,433 .969 1.004 .052
Overall 8,964 .967 1.002 .072
After applying the above described methodologies, it is concluded from the
sales ratios that Weld County is in compliance with SBOE, DPT, and Colorado
State Statute valuation guidelines.
Recommendations
None
TIME TRENDING VERIFICATION
Methodology
While we recommend that counties use the inverted ratio regression analysis
method to account for market (time) trending, some counties have used other
IAAO-approved methods, such as the weighted monthly median approach.
We are not auditing the methods used, but rather the results of the methods
used. Given this range of methodologies used to account for market trending,
we concluded that the best validation method was to examine the sale ratios
for each class across the appropriate sale period. To be specific, if a county has
considered and adjusted correctly for market trending, then the sale ratios
2005 Weld County Property Assessment Study—Page 5
should remain stable (i.e. flat) across the sale period. If a residual market
trend is detected, than the county may or may not have addressed market
trending adequately, and a further examination is warranted. This validation
methodology also considers the number of sales and the length of the sale
period. Counties with few sales across the sale period were carefully
examined to determine if the statistical results were valid.
Conclusions
After verification and analysis, it has been determined that Weld County has
complied with the statutory requirements to analyze the effects of time on
value in their county. Weld County has also satisfactorily applied the results
of their time trending analysis to arrive at the time adjusted sales price
(TASP).
Recommendations
None
SOLD/UNSOLD ANALYSIS
Methodology
Weld County was tested for the equal treatment of sold and unsold properties
to insure that "sales chasing" has not occurred. The auditors employed a
multi-step process to determine if sold and unsold properties were valued in a
consistent manner.
All qualified residential and commercial class properties were examined using
the unit value method, where the actual value per square foot was compared
between sold and unsold properties. A class was considered qualified if it met
the criteria for the ratio analysis. The median value per square foot for both
groups was compared from an appraisal and statistical perspective. If no
significant difference was indicated, then we concluded that no further testing
was warranted and that the county was in compliance in terms of sold/unsold
consistency.
If either residential or commercial differences were significant using the unit
value method, or if data limitations made the comparison invalid, then the
next step was to perform a ratio analysis comparing the 2004 and 2005 actual
values for each qualified class of property. All qualified vacant land classes
were tested using this method. The sale property ratios were arrayed using a
range of 0.8 to 1.5, which theoretically excluded changes between years that
were due to other unrelated changes in the property. These ratios were also
stratified at the appropriate level of analysis. Once the percent change was
determined for each appropriate class and sub-class, the next step was to
2005 Weld County Property Assessment Study—Page 6
select the unsold sample. This sample was at least 1% of the total population
of unsold properties and excluded any sale properties. The unsold sample
was filtered based on the attributes of the sold dataset to closely correlate both
groups. The ratio analysis was then performed on the unsold properties and
stratified. The median and mean ratio distribution was then compared
between the sold and unsold group. A non-parametric test such as the Mann-
Whitney test for differences between independent samples was undertaken to
determine whether any observed differential was significant. If this test
determined that the unsold properties were treated in a manner similar to the
sold properties, it was concluded that no further testing was warranted and
that the county was in compliance.
If a class or sub-class of property was determined to be significantly different
by this method, the final step was to perform a multi-variate mass appraisal
model that developed ratio statistics from the sold properties that were then
applied to the unsold sample. This test compared the measures of central
tendency and confidence intervals for the sold properties with the unsold
property sample. If this comparison was also determined to be significantly
different, then the conclusion was that the county had treated the unsold
properties in a different manner than sold properties.
These tests were supported by both tabular and chart presentations, along
with saved sold and unsold sample files.
Conclusions
SOLD/UNSOLD RESULTS
Property Class Result
Commercial/Industrial Compliant
Condominium N/A
Single Family Compliant
Vacant Land Compliant
After applying the above described methodologies, it is concluded that Weld
County is reasonably treating its sold and unsold properties in the same
manner.
Recommendations
None
2005 Weld County Property Assessment Study—Page 7
AGRICULTURAL LAND STUDY
Agricultural Land
Methodology
County records were reviewed to determine major land categories such as
irrigated farm, dry farm, meadow hay, grazing and other lands. In addition,
county records were reviewed in order to determine if: Aerial photographs
are available and are being used; soil conservation guidelines have been used
to classify lands based on productivity; crop rotations have been documented;
typical commodities and yields have been determined; orchard lands have
been properly classified and valued; expenses reflect a ten year average and
are typical landlord expenses; grazing lands have been properly classified and
valued; the number of acres in each class and subclass has been determined;
the capitalization rate was properly applied. Also, documentation was
required for the valuation methods used and any locally developed yields,
carrying capacities, and expenses. Records were also checked to ensure that
the commodity prices and expenses, furnished by the Property Tax
Administrator (PTA), were applied properly. (See Assessor Reference Library
Volume 3 Chapter 5.)
Conclusions
An analysis of the agricultural land data indicates an acceptable appraisal of
this property type. Directives, commodity prices and expenses provided by
the PTA were properly applied. County yields compared favorably to those
published by Colorado Agricultural Statistics. Expenses used by the county
were allowable expenses and were in an acceptable range. Grazing lands
carrying capacities were in an acceptable range. The data analyzed resulted in
the following ratios:
Agricultural Land Ratio Grid
County
Number County Assessed RMVS
Abstract of Value Total Total
Code Land Class Acres Per Acre Value Value Ratio
4107 Sprinkler Irrigated 80,813 68 5,489,409 5,802,868 0.95
4117 Flood Irrigated 272,443 118 32,201,419 33,169,218 0.97
4127 Dry Farm 553,332 14 7,670,504 8,256,671 0.93
4137 Meadow Hay 15,925 39 627,331 627,331 1.00
4147 Dry Grazing 960,946 5 4,449,657 4,449,657 1.00
4167 Waste 101,553 2 167,187 167,187 1.00
Total/Avg 1,985,012 25 50,605,507 52,472,932 0.96
2005 Weld County Property Assessment Study—Page 8
Recommendations
None
Agricultural Residences
Methodology
The county analyzes single-family residential sales and uses the sales
comparison approach to value residences situated on agricultural lands.
These residences are valued in the same manner as other single-family
residences. The county used economic areas to determine the economic
locational adjustments. The county receives building permits that assist in the
discovery of new construction. Also, they strive to physically review all
agricultural residences over a five-year period.
Conclusions
A comparison of the single-family residential sales to a sample of unsold
agricultural residences indicated that agricultural residences were appraised
in the same manner as the sold single-family residential properties and that
the overall level and uniformity of appraisals of agricultural residences have
met State Board of Equalization standards. Based on this, one can conclude
that agricultural residences were valued using appropriate appraisal
procedures.
Recommendations
None
Agricultural Outbuildings
Methodology
Valuation procedures were reviewed to ensure that agricultural outbuildings
are being valued using the cost approach as provided by Marshall Valuation
Service (MVS) and that appropriate adjustments for type of construction, wall
height, design type and area/perimeter multipliers, as recommended by MVS
are being properly applied. Also, local area adjustments were reviewed to
ensure they were consistent with the recommendations of MVS and the
Property Tax Administrator (PTA). Depreciation applied to various structures
was checked to see that it also met the criteria provided by MVS. In addition
to reviewing valuation procedures, RMVS also looked at the procedures used
in the inventory of agricultural outbuildings. (See Assessor Reference Library
Volume 3 Chapter 5.)
2005 Weld County Property Assessment Study—Page 9
Conclusions
A sample of agricultural outbuildings was selected and physically reviewed
by RMVS. The sample selected contained at least ten schedules with a
minimum of fifty buildings. Values were developed by RMVS using MVS and
these values were compared to the values developed by the county. The
result of the sample selected provides a median ratio of .9605. This is within
the guidelines established by the SBOE.
Recommendations
None
SALES VERIFICATION
According to Colorado Revised Statutes:
A representative body of sales is required when considering the market
approach to appraisal.
(8) In any case in which sales prices of comparable properties within any class
or subclass are utilized when considering the market approach to appraisal in
the determination of actual value of any taxable property, the following
limitations and conditions shall apply:
(a)(I) Use of the market approach shall require a representative body of sales,
including sales by a lender or government, sufficient to set a pattern, and
appraisals shall reflect due consideration of the degree of comparability of
sales, including the extent of similarities and dissimilarities among properties
that are compared for assessment purposes. In order to obtain a reasonable
sample and to reduce sudden price changes or fluctuations, all sales shall be
included in the sample that reasonably reflect a true or typical sales price
during the period specified in section 39-1-104 (10.2). Sales of personal
property exempt pursuant to the provisions of sections 39-3-102, 39-3-103, and
39-3-119 to 39-3-122 shall not be included in any such sample.
(b) Each such sale included in the sample shall be coded to indicate a typical,
negotiated sale, as screened and verified by the assessor.
39-1-103, C.R.S.
The assessor is required to use sales of real property only in the valuation
process.
2005 Weld County Property Assessment Study—Page 10
(8)(f) Such true and typical sales shall include only those sales which have
been determined on an individual basis to reflect the selling price of the real
property only or which have been adjusted on an individual basis to reflect
the selling price of the real property only.
39-1-103, C.R.S.
Part of the Property Assessment Study is the sales verification analysis. RMVS
has used the above-cited statutes as a guide in our study of the county's
procedures and practices for verifying sales.
RMVS has conducted a study of the sales verification procedures in 2005 for
Weld County. This study was performed by checking selected sales listed as
verified by the county for the 2005 valuation period. Specifically, RMVS
selected 45 sales listed as verified but unqualified.
Of the 45 sales checked, 36 gave reasons that were clear and supportable. The
remaining 9 sales had insufficient documentation.
Conclusions
Weld County appears to be doing an adequate job of verifying their sales. It is
noted that the county should take care to adequately document their reasons
for disqualifying a sale.
ECONOMIC AREA REVIEW AND EVALUATION
Economic Area Narrative and Maps
Methodology
Weld County has submitted a written narrative describing the economic areas
that make up the county's market areas. Weld County has also submitted a
map illustrating these areas. Each of these narratives have been read and
analyzed for logic and appraisal sensibility. The maps were also compared to
the narrative for consistency between the written description and the map.
Conclusions
After review and analysis, it has been determined that Weld County has
adequately identified homogeneous areas comprised of smaller
neighborhoods. Each economic area defined is equally subject to a set of
economic forces that impact the value of the properties within that geographic
area and this has been adequately addressed. Each economic area defined
adequately delineates an area that will give "similar values for similar
properties in similar areas."
2005 Weld County Property Assessment Study—Page 11
Recommendations
None.
NATURAL RESOURCES
Earth and Stone Products
Methodology
Under the guidelines of the Assessor's Reference Library (ARL), Volume 3,
Natural Resource Valuation Procedures, the income approach was the
primary method applied to find value for production of earth and stone
products. The number of tons was multiplied by an economic location factor
that represented the landlord's royalty. The landlord's share was multiplied
by a recommended Hoskold factor to determine the actual value. The
Hoskold factor was determined by the life of the reserves, or the lease. The
value was primarily based on two variables; life and tonnage. The operator
determines these since there is no other means to obtain production data
through any state or private agency.
Conclusions
Weld County has applied the correct formulas and state guidelines to earth
and stone production.
Recommendations
None
Producing Oil and Gas Procedures
Methodology
The Colorado Revised Statues (CRS) in Article 39, Section 7, and the Assessor's
Reference Library (ARL), Volume 3 were the basis for valuing the production
of gas property. For gas, the gross volume of thousand cubic feet (MCF) sold
was multiplied by the current average field price per unit sold. For Oil, the
gross volume of barrels sold was multiplied by the current average field price
per unit sold. Any federal, state or local government ownership (royalty) was
deducted from the gross value sold to arrive at actual value.
Conclusions
Weld County valued oil and gas production using acceptable appraisal
procedures.
2005 Weld County Property Assessment Study—Page 12
Recommendations
None
VACANT LAND
Subdivision Discounting
In 2005 subdivisions were reviewed and discounted pursuant to the Colorado
Revised Statutes in Article 39-1-103 (14). Discounting procedures were
applied to all subdivisions where less than 80 percent of all sites were sold,
using present worth method. The market approach was applied where more
than 80 percent of the subdivision sites were sold. Questionnaires were
mailed to all developers to obtain information regarding expense data for each
subdivision. An absorption period was estimated for each subdivision that
was discounted. Subdivision land with structures was appraised at full
market value. In 2005, Weld County is applying the recommended
methodology in ARL Volume 3 Chapter 4 page 7 in their subdivision
discounting.
Conclusions
Weld County has implemented proper procedures to adequately estimate
value and expenses for subdivisions. Weld County is also correctly applying
the subdivision discounting procedures to qualifying subdivisions.
Recommendations
None
POSSESSORY INTEREST PROPERTIES
Possessory interest property discovery and valuation is described in the
Assessor's Reference Library (ARL) Volume 3 section 7 pages 71 through 104
in accordance with the requirements of 39-1-103 (17)(a) (II) C.R.S. Possessory
Interest is defined by the Property Tax Administrator's Publication ARL
Volume 3, Section 7.79: A private property interest in government-owned
property or the right to the occupancy and use of any benefit in government-
owned property that has been granted under lease, permit, license,
concession, contract, or other agreement. This county under audit has been
reviewed for their procedures and adherence to guidelines when assessing
and valuing possessory interest properties. The county under audit has also
2005 Weld County Property Assessment Study—Page 13
been queried as to their confidence that the possessory interest properties
have been discovered and placed on the tax rolls.
Conclusion
Weld County has implemented a discovery process to place possessory
interest properties on the roll. Weld County also is correctly and consistently
applying the correct procedures and valuation methods in the valuation of
possesssory interest properties.
Recommendations
None
PERSONAL PROPERTY AUDIT
Weld County was studied for its procedural compliance with the personal
property assessment outlined in the Assessor's Reference Library (ARL)
Volume 5, and in the State Board of Equalization (SBOE) requirements for the
assessment of personal property. The SBOE requirements are outlined as
follows:
Use ARL Volume 5 including current discovery, classification, and
documentation procedures, and including current economic lives table, cost
factor tables, depreciation table, and level of value adjustment factor table.
The personal property audit standards narrative must be in place and current.
A listing of businesses that have been audited by the assessor within the
twelve-month period reflected in the plan is given to the auditor. The audited
businesses must be in conformity with those described in the plan.
Aggregate ratio will be determined solely from the personal property accounts
that have been physically inspected. The minimum assessment sample is one
percent or ten schedules, whichever is greater, and the maximum assessment
audit sample is 100 schedules.
For the counties having over 50,000 population, RMVS selected a sample of all
personal property schedules to determine whether the assessor is correctly
applying the provisions of law and manuals of the Property Tax
Administrator in arriving at the assessment levels of such property. This
sample was selected from the personal property schedules audited by the
assessor. In no event was the sample selected by the contractor less than 30
schedules. The counties to be included in this study are Adams, Arapahoe,
Boulder, Denver, Douglas, El Paso, Jefferson, Larimer, Mesa, Pueblo, and
Weld. All other counties received a procedural study.
2005 Weld County Property Assessment Study—Page 14
Weld County is compliant with the guidelines set forth in ARL Volume 5
regarding discovery procedures, using the following methods to discover
personal property accounts in the county:
• Public Record Documents
• Chamber of Commerce/Economic Development Contacts
• Local Telephone Directories, Newspapers or Other Local Publications
• Personal Observation or Word of Mouth
• Questionnaires, Letters and/or Phone Calls to Buyer, Seller and/or
Realtor
The county uses the Division of Property Taxation (DPT) recommended
classification and documentation procedures. The DPT's recommended cost
factor tables, depreciation tables and level of value adjustment factor tables
are also used.
Weld County submitted their personal property written audit plan and was
current for the 2005 valuation period. The number and listing of businesses
audited was also submitted and was in conformance with the written audit
plan. The following audit triggers were used by the county to select accounts
to be audited:
• Businesses in a selected area
• Accounts with obvious discrepancies
• New businesses filing for the first time
• Incomplete or inconsistent declarations
• Accounts with omitted property
• Same business type or use
• Businesses with no deletions or additions for 2 or more years
• Non-filing Accounts - Best Information Available
• Accounts close to the $2,500 actual value exemption status
• Accounts protested with substantial disagreement
RMVS selected a sample of all personal property schedules to determine
whether the assessor is correctly applying the provisions of law and manuals
of the Property Tax Administrator in arriving at the assessment levels of such
property. This sample was selected from the personal property schedules
audited by the assessor.
Weld County's median ratio is 1.03. This is in compliance with the State
Board of Equalization (SBOE) compliance requirements which range from .90
to 1.10 with no COD requirements.
2005 Weld County Property Assessment Study—Page 15
Conclusions
Weld County has employed adequate discovery, classification,
documentation, valuation, and auditing procedures for their personal
property assessment and is in statistical compliance with SBOE requirements.
Recommendations
None
2005 Weld County Property Assessment Study—Page 16
RMVS AUDITOR STAFF
Mark Linne, MAI, CAE,ASA, CRE, Corporate Managing Director of RMVS
Stephen M. Snyder, CAE, RMVS, Director of Audit
Suzanne J. Howard,Audit Administrative Manager for RMVS
M. Steven Kane, Chief Statistician for RMVS,Audit Division
Jim Parks,PhD,Audit Statistical Analyst for RMVS
James Gresham,Audit Chief Data Analyst for RMVS
Garth Thimgan, CAE, General Audit Support and Consultant for RMVS
Helen D. Powszukiewicz, General Audit Support Administrative Assistant
Carl W. Ross,Agricultural Coordinator and Supervisor for RMVS
Cathie E. Ross,Agricultural Audit Administrative Assistant
2005 Weld County Property Assessment Study-Page 17
APPENDICES
2005 Weld County Property Assessment Study—Page 18
ROCKY MOUNTAIN
VALUATION SPECIALISTS
STATISTICAL ANALYSIS FOR WELD COUNTY
2005
I. OVERVIEW
Weld County is located in northeastern Colorado. The county has a total of 108,911
parcels, according to the land file submitted by the county assessor's office. The
following table provides a breakdown of property classes covered in this preliminary
analysis:
Property Class Distribution
70,000
60,000
50,000
40,000
30,000 •4,404
20,000
5,171
10,000 1
5,934
0 c,402
Vacant Land Residential Commllnd Other
The vacant land class of properties was dominated by residential land. Residential lots
(coded 100) accounted for 75% of all parcels, no other subclass accounted for more than
20% of the total.
For residential improved properties, single family properties accounted for 85% of all
residential properties. No sub-class breakdowns were indicated.
2005 Statistical Report: WELD COUNTY Page 1
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VALUATION SPECIALISTS
Commercial and industrial properties represented a smaller proportion of property classes
in comparison.
II. SALES FILE
The following sale analyses were based on the requirements of the 2005 Property
Assessment Study, based on information provided by the Weld County Assessor's
Office. There were 15,161 sales in the file; of these, 9,968 were qualified sales by the
county. Further data reductions will be described in each property class section.
III. RESIDENTIAL SALES RESULTS
The following steps were taken to analyze the appropriate residential sale dataset for
Weld County:
Steps Results
I. Selected sales coded as "Q" 9,968 Sales
2. Selected improved sales (Status ="I") 9,143 Sales
3. Selected sale with subclass codes 1212 to 1230 8,964 Sales
The 8,964 sales were analyzed using the required measurements for the level of
assessment, as well as for the quality of the assessment, as follows:
OVERALL Ratio Statistics for CURRTOT/TASP
Median .967
Price Related Differential 1.002
Coefficient of Dispersion .072
2005 Statistical Report: WELD COUNTY Page 2
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Econ Number of Median Price Related Coefficient of
Area Sales Differential Dispersion
2 2,533 .970 1.003 .062
3 1,972 .968 1.000 .070
4 475 .961 1.000 .105
5 83 .959 1.000 .100
6 2,094 .963 1.002 .092
7 68 .974 1.028 .116
8 41 .979 1.002 .075
9 265 .971 1.002 .069
Unspec 1,433 .969 1.004 .052
Overall 8,964 .967 1.002 .072
The above ratios are in compliance with the standards set forth by the Colorado State
Board of Equalization (SBOE) for the overall sales. The following graphical exhibits
describe further the sales ratio distribution for all of these properties:
RESIDENTIAL SALE RATIO ANALYSIS
3,000
2,500
a 2,000
u
c
v
Q 1,500
IA-
1,000
500
Mean=0.9677
Std.Dev.=0.
0 10132
0.00 0.50 1.00 1.50 2.00 2.50 N=8,964
sale ratio
2005 Statistical Report: WELD COUNTY Page 3
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Sale Ratio by Sale Price- Residential Properties
2.50—
•
2.00—
1.50—
its
a_
R 1.00
N •�
0.50— •
0.00— II
1 1 I I I I
0.00 1000000.00 2000000.00 3000000.00 4000000.00 5000000.0(
saleprice
The above graphs indicate that the distribution of the sale ratios was within state
mandated limits, and that there were no significant price related differential issues.
Residential Market Trend Analysis
To determine if market trending was adequately accounted for by the assessor when
analyzing the residential dataset, we regressed the sale ratios across the 18-month sale
period. The following analysis, broken down by economic area, indicates that there were
no significant market trend factors present in the sale ratios:
2005 Statistical Report: WELD COUNTY Page 4
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Coefficient&
Unstandardized Standardized
Coefficients Coefficients
econarea Model B Std. Error Beta t Sig.
1 (Constant) .956 .004 240.582 .000
saleperiod .001 .000 .077 1.815 .070
0 1 (Constant) .974 .005 189.678 .000
saleperiod .000 .001 -.019 -.550 .582
2 1 (Constant) .970 .003 321.177 .000
saleperiod .000 .000 .015 .780 .436
3 1 (Constant) .973 .004 258.136 .000
saleperiod -.001 .000 -.047 -2.084 .037
4 1 (Constant) .953 .012 79.839 .000
saleperiod .000 .001 -.013 -.274 .784
5 1 (Constant) .984 .029 33.451 .000
saleperiod -.004 .003 -.137 -1.248 .215
6 1 (Constant) .965 .005 176.871 .000
saleperiod .000 .001 .009 .415 .678
7 1 (Constant) .929 .038 24.682 .000
saleperiod .004 .004 .139 1.142 .258
8 1 (Constant) .987 .032 30.697 .000
saleperiod -.001 .004 -.033 -.207 .837
9 1 (Constant) .969 .011 86.635 .000
saleperiod .000 .001 .026 .424 .672
a. Dependent Variable: saleratio
Sold/Unsold Analysis
In terms of the consistent treatment of residential sold and unsold properties, we
compared the median actual value per square foot for both groups. The following
indicates that overall, Weld County has valued sold and unsold residential properties in a
consistent manner:
No. of Median Mean Act
Group Props Act Val/SF Val/SF Min Max
Unsold 45,025 $125 $123 $25 $481
Sold 8,136 $128 $128 $28 $297
Total 53,161 $126 $124 $25 $481
2005 Statistical Report: WELD COUNTY Page 5
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VALUATION SPECIALISTS IV. COMMERCIAL/INDUSTRIAL SALES RESULTS
The following steps were taken to analyze the appropriate commercial and industrial sale
dataset for Weld County:
Steps Results
1. Selected sales coded as "Q" 9,968 Sales
2. Selected improved sales (Status ="I") 9,143 Sales
3. Selected sale with subclass codes 2000 to 3999 129 Sales
129 sales were analyzed using the required measurements for the level of assessment, as
well as for the quality of the assessment.
Median .977
Price Related Differential 1.019
Coefficient of Dispersion .072
The above ratios are in compliance with the standards set forth by the Colorado State
Board of Equalization (SBOE) for the overall sales. The following graphical exhibits
describe further the sales ratio distribution for all of these properties:
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Sale Ratio by Sale Price- Commercial Properties
1.40— •
1.20— •
tit
•
t •
too— M• A 1 co.
•
•
To 0.80— 10.
•
•
• •
0.60— ••
• `
0.40—
1 I 1 I 1 I 1
$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000
1671
saleprice
SaleRatio
Commercial Market Trend Analysis
The assessor did not apply a market trend factor to the commercial sales, based on our
analysis of the commercial and industrial sale data. Our sale ratio analysis verified this
conclusion, as follows:
Coefficient&
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .945 .017 55.812 .000
saleperiod .001 .002 .058 .651 .516
a. Dependent Variable: SaleRatio
2005 Statistical Report: WELD COUNTY Page 7
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Sold/Unsold Analysis
In terms of the consistent treatment of commercial/industrial sold and unsold properties,
we used the same comparison methodology used for residential properties. The
following indicates that commercial and industrial sold properties were not valued
significantly greater than unsold properties. In fact, in several subclasses, unsold
properties were valued at a greater level.
Report
BaseValue
abstrimp Sold N Median Mean Minimum Maximum
2212 Unsold 242 77.9863 94.8511 50.03 287.77
Sold 12 65.2267 70.2216 50.90 120.00
Total 254 76.4521 93.6875 50.03 287.77
2215 Unsold 15 63.5295 64.8342 53.38 82.32
Sold 2 67.8602 67.8602 58.20 77.52
Total 17 63.5295 65.1902 53.38 82.32
2220 Unsold 232 81.6149 94.0585 51.01 276.49
Sold 14 115.0000 104.1065 61.99 135.00
Total 246 82.1452 94.6303 51.01 276.49
2225 Unsold 14 103.1915 116.4859 65.64 204.29
Total 14 103.1915 116.4859 65.64 204.29
2230 Unsold 341 96.3734 107.4093 50.53 288.50
Sold 13 85.0000 99.6361 53.98 163.64
Total 354 95.2731 107.1238 50.53 288.50
2235 Unsold 40 75.1805 94.1087 50.10 238.59
Sold 3 75.4550 75.5744 72.00 79.27
Total 43 75.4550 92.8156 50.10 238.59
3212 Unsold 11 65.0000 69.0858 50.60 104.52
Total 11 65.0000 69.0858 50.60 104.52
3215 Unsold 18 64.3966 74.1176 50.78 115.66
Sold 1 60.0000 60.0000 60.00 60.00
Total 19 62.4299 73.3746 50.78 115.66
Total Unsold 913 85.0000 98.4269 50.03 288.50
Sold 45 77.5157 89.2859 50.90 163.64
Total 958 84.9814 97.9976 50.03 288.50
Based on the above analysis, we conclude that the Weld County Assessor has valued sold
and unsold commercial/industrial properties in a consistent manner.
2005 Statistical Report: WELD COUNTY Page 8
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V. VACANT LAND SALE RESULTS
Steps Results
1. Selected sales coded as "Q" 9,968 Sales
2. Selected improved sales (Status ="V") 825 Sales
3. Selected sales with abstract codes less than 4000 752 Sales
4. Selected sales with Previous Improvement Value =0 593 Sales
The 593 vacant land sales were analyzed using the required measurements for the level of
assessment, as well as for the quality of the assessment. The following ratio analysis
indicates the results:
Ratio Statistics for NEWCURT0/TASP
Median .966
Price Related Differential 1.026
Coefficient of Dispersion .109
The above table indicates that the vacant land ratios are in compliance with the standards
set forth by the Colorado State Board of Equalization (SBOE) for the overall sales. The
following histogram and scatter plot describe the sales ratio distribution for all of these
properties:
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VACANT LAND SALE RATIO ANALYSIS
140-
120-
100-
N.
aC
80—
J
v
m is-
40 60_
-,
20—
Mean=0.9345
Std.Dev.=0.
0 14959
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 N=593
SaleRatio
2005 Statistical Report: WELD COUNTY Page 10
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Sale Ratio by Sale Price- Vacant Land Properties
1.40-
1.20— •
1.00— •• •• •
•••
0.80— •• •
•rC
yTi 0.60- t
0.40— 0
0.20-
0.00— «
I I I I
$0 $1,000,000 $2,000,000 $3,000,000
netprice
Vacant Land Market Trend Analysis
To verify that market trending was not present in the vacant land sale data, we again
relied on the sale ratio regression model. The following indicates that overall there was
no significant market trend factor:
Coefficient?
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .933 .010 96.293 .000
saleperiod .000 .001 .011 .264 .792
a. Dependent Variable: SaleRatio
Sold/Unsold Analysis
In terms of the consistent treatment of vacant land sold and unsold properties, we
examined the change in value between 2004 and 2005 for vacant land property values
2005 Statistical Report: WELD COUNTY Page 11
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VALUATION SPECIALISTS
between these two groups. The following table and graph compares the 2004 and 2005
actual values for these properties in Weld County, grouped by sold and unsold properties
and subdivision:
Report
percentchange
subdivnum I Sold N Median Mean Minimum Maximum
1A0202 Unsold 7 1.0000 1.0000 1.00 1.00
Sold 6 1.0000 1.0000 1.00 1.00
Total 13 1.0000 1.0000 1.00 1.00
1A0244 Unsold 190 1.0000 1.0000 1.00 1.00
Sold 15 1.0000 1.0000 1.00 1.00
Total 205 1.0000 1.0000 1.00 1.00
1A0310 Unsold 21 1.0000 1.0000 1.00 1.00
Sold 8 1.0000 1.0000 1.00 1.00
Total 29 1.0000 1.0000 1.00 1.00
1A0311 Unsold 29 1.0000 1.0000 1.00 1.00
Sold 15 1.0000 1.0000 1.00 1.00
Total 44 1.0000 1.0000 1.00 1.00
1A0336 Unsold 9 1.0000 1.0000 1.00 1.00
Sold 28 1.0000 1.0250 1.00 1.40
Total 37 1.0000 1.0189 1.00 1.40
1A0357 Unsold 56 1.0900 1.0868 1.00 1.09
Sold 21 1.0900 1.0900 1.09 1.09
Total 77 1.0900 1.0877 1.00 1.09
1A0548 Unsold 47 1.0000 1.0000 1.00 1.00
Sold 7 1.0000 1.0000 1.00 1.00
Total 54 1.0000 1.0000 1.00 1.00
1A0585 Unsold 63 1.0000 1.0000 1.00 1.00
Sold 17 1.0000 1.0000 1.00 1.00
Total 80 1.0000 1.0000 1.00 1.00
1A0618 Unsold 10 1.0000 1.0000 1.00 1.00
Sold 10 1.0000 1.0000 1.00 1.00
Total 20 1.0000 1.0000 1.00 1.00
1A0635 Unsold 259 1.0000 1.0000 1.00 1.00
Sold 22 1.0000 1.0000 1.00 1.00
Total 281 1.0000 1.0000 1.00 1.00
260517 Unsold 27 1.1368 1.0963 1.00 1.14
Sold 23 1.1368 1.1368 1.14 1.14
Total 50 1.1368 1.1149 1.00 1.14
260520 Unsold 27 1.0000 1.0000 1.00 1.00
Sold 7 1.0000 1.0000 1.00 1.00
Total 34 1.0000 1.0000 1.00 1.00
2005 Statistical Report: WELD COUNTY Page 12
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2B0530 Unsold 32 1.1489 1.1489 1.15 1.15
Sold 7 1.1489 1.1489 1.15 1.15
Total 39 1.1489 1.1489 1.15 1.15
2C0798 Unsold 13 1.0000 1.0000 1.00 1.00
Sold 10 1.0714 1.1198 1.00 1.38
Total 23 1.0000 1.0521 1.00 1.38
2C0804 Unsold 62 1.0000 1.0000 1.00 1.00
Sold 6 1.0000 1.0000 1.00 1.00
Total 68 1.0000 1.0000 1.00 1.00
2C0805 Unsold 77 1.1667 1.1602 1.00 1.17
Sold 7 1.1667 1.1667 1.17 1.17
Total 84 1.1667 1.1607 1.00 1.17
2C0815 Unsold 3 1.0000 1.0000 1.00 1.00
Sold 6 1.0000 1.0000 1.00 1.00
Total 9 1.0000 1.0000 1.00 1.00
2C0820 Unsold 19 1.4900 1.3095 1.00 1.49
Sold 27 1.4900 1.4900 1.49 1.49
Total 46 1.4900 1.4154 1.00 1.49
2D0885 Unsold 46 1.0000 1.0000 1.00 1.00
Sold 9 1.0000 1.0000 1.00 1.00
Total 55 1.0000 1.0000 1.00 1.00
2D0887 Unsold 31 1.0000 1.0000 1.00 1.00
Sold 8 1.0000 1.0000 1.00 1.00
Total 39 1.0000 1.0000 1.00 1.00
360655 Unsold 39 1.0000 1.0000 1.00 1.00
Sold 6 1.0000 1.0000 1.00 1.00
Total 45 1.0000 1.0000 1.00 1.00
4D0115 Unsold 30 1.0000 1.0000 1.00 1.00
Sold 8 1.0000 1.0000 1.00 1.00
Total 38 1.0000 1.0000 1.00 1.00
4G0906 Unsold 3 1.0000 1.0000 1.00 1.00
Sold 6 1.0000 1.0000 1.00 1.00
Total 9 1.0000 1.0000 1.00 1.00
Total Unsold 1100 1.0000 1.0277 1.00 1.49
Sold 279 1.0000 1.0802 1.00 1.49
Total 1379 1.0000 1.0383 1.00 1.49
We included only subdivisions with at least six sales. Based on an analysis of individual
subdivisions, the percent change was similar or identical between sold and unsold
properties; we therefore concluded that the Weld County Assessor has valued sold and
unsold vacant land properties in a consistent manner.
2005 Statistical Report: WELD COUNTY Page 13
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VALUATION SPECIALISTS
VI. AGRICULTURAL IMPROVEMENTS ANALYSIS
The final statistical verification concerned the assigned actual values for agricultural
residential improvements. We compared the actual value per square foot rate for this
group and compared it to rates assigned to residential single family improvements in
Weld County.
The following indicates that both groups were valued in essentially the same manner:
Descriptives
abstrimp Statistic Std. Error
ValueSF 1212 Mean 845.8477 44.46267
95% Confidence Lower Bound 758.7003
Interval for Mean Upper Bound
932.9951
5%Trimmed Mean 99.8145
Median 99.6414
Variance 1E+008
Std. Deviation 9753.857
Minimum .00
Maximum 449634.0
Range 449634.00
Interquartile Range 26.87
Skewness 17.468 .011
Kurtosis 402.327 .022
4277 Mean 1581.7744 469.06732
95% Confidence Lower Bound 661.2527
Interval for Mean Upper Bound
2502.2961
5%Trimmed Mean 105.8107
Median 101.7137
Variance 2E+008
Std. Deviation 14503.21
Minimum .00
Maximum 216103.0
Range 216103.00
Interquartile Range 58.92
Skewness 11.588 .079
Kurtosis 146.150 .158
2005 Statistical Report: WELD COUNTY Page 14
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VALUATION SPECIALISTS
VII. CONCLUSIONS
Based on this 2005 audit statistical analysis, residential, commercial/industrial, vacant
land and agricultural residential properties were in compliance with state guidelines.
This included sale ratio compliance, time trend validation, and agricultural residential
valuation consistency.
2005 Statistical Report: WELD COUNTY Page 15
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