CHARTER TOWNSHIP OF RAISIN

5525 Occidental Hwy

Tecumseh, MI 49286

Phone (517) 423-3162 Fax (517) 423-6732

www.raisintownship.com

Supervisor: Carl F Wagner       E-Mail: supervisor@raisintownship.com

To:       Charter Township of Raisin

Subj:    Response to concerns of commercial property value increase

Date:    June 9, 2009

From:   Dave Powell, Assessor

What was stated at the June 8th, 2009 Board meeting by Mr. Schilz is partially correct. The sales study was done from 2003 to 2005 because we didn’t have any sales in the period of 2006 and 2007. The part about making adjustments was also true; if you go further back than the current 24 month period you do need to make adjustments for the economic condition at the time the sales study is done whether in the positive or negative.

The history of doing this re-assessment started when a local business that had a10 acre parcel and a building decided to split his property and sell his business. When the split was done and the values were assigned the assessed value for the 8 acres of vacant land came to $3200 per acre, which I considered too low. I talked to the Equalization Department and they agreed that value was way out of line and needed to be adjusted. I did a sales study and determined that there were no sales for the 24 month sales period, so I called the Equalization Department to inquire what period of time they would be comfortable with as far as a sales study goes and was told that I could go back to 2003. I was reminded at that time that I would have to make adjustments for the economic conditions which I was already aware of.

After the sales study was completed, the value of per acre commercial came out to $76,984, which needed to be adjusted for the economy, I decided to lower it to $50,000 per acre. I built a land table starting with the $50,000 figure for the first acre and going from there. The Equalization Department reviewed the table and suggested that the value was to low and should be raised, I decided to us a 20% reduction in value for economic conditions so the land table was revised using the $61,300 figure. The $61,300 is just for the first acre, as the amount of acreage goes up the price per acre is reduced example; a 1.5 acre parcel is valued at $50,050 per acre, a 2 acre parcel is $43,346, a 5 acre parcel is $27,414 per acre and so on. Mr. Schilz has 4.59 acres and his true cash value works out to $28,570 per acre. The reduction used was twice as much as the percent of lost in value the township has had in residential properties for the last two years, and we didn’t have a loss in value prior to that. The $61,300 per acre value is the true cash value of the property not the state equalized value, which is half of the true cash value. I would also like to say that no commercial property had their taxable value increased because of the increase in land values; the only increase from the commercial re-assessment we completed last year was if something new was found to be on the property at the time of re-assessment.  

I agree that this was a bad time to do a re-assessment, the re-assessment should have been done at the time of the sales in 2003 and 2004, but as the Board knows it had to be done to be in compliance with the State regulation. I have kept the Board abreast of what was going on during this process, I have also kept the County Equalization Department informed with what I was doing and followed any suggestions offered by both units. I follow the State Tax Commission guide lines while doing the sales study and reduced the true cash value of the results of the sales study by a fair amount based of the reduction in value of the rest of the Township.

I talked to Marty Marshall this morning and inquired about his conversation with Mr. Schilz and was informed that he had told Mr. Schilz that he knew about the study and had reviewed it. He informed Mr. Schilz that it was done correctly and believed the values to be correct. He also informed Mr. Schilz that when the Equalization Department re-assessed the City of Adrian they also had to go to 2003 and 2004 to get sales of apartment building in the City to set their value, and they had to made adjustments for the economic conditions.

Sincerely

Dave Powell

Assessor