2017 DELTA COUNTY PROPERTY ASSESSMENT STUDY
September 15, 2017 Mr. Mike Mauer Director of Research Colorado Legislative Council Room 029, State Capitol Building Denver, Colorado 80203 RE:
Final Report for the 2017 Colorado Property Assessment Study
Dear Mr. Mauer: Wildrose Appraisal Inc.-Audit Division is pleased to submit the Final Reports for the 2017 Colorado Property Assessment Study. These reports are the result of two analyses: A procedural audit and a statistical audit. The procedural audit examines all classes of property. It specifically looks at how the assessor develops economic areas, confirms and qualifies sales, develops time adjustments and performs periodic physical property inspections. The audit reviews the procedures for determining subdivision absorption and subdivision discounting. Valuation methodology is examined for residential properties and commercial properties. Procedures are reviewed for producing mines, oil and gas leaseholds and lands producing, producing coal mines, producing earth and stone products, severed mineral interests, and nonproducing patented mining claims. Statistical audits are performed on vacant land, residential properties, commercial/industrial properties and agricultural land. A statistical analysis is performed for personal property compliance on the eleven largest counties: Adams, Arapahoe, Boulder, Denver, Douglas, El Paso, Jefferson, Larimer, Mesa, Pueblo and Weld. The remaining counties receive a personal property procedural study. Wildrose Appraisal Inc. – Audit Division appreciates the opportunity to be of service to the State of Colorado. Please contact us with any questions or concerns.
Harry J. Fuller Project Manager Wildrose Appraisal Inc. – Audit Division
TABLE
OF
CONTENTS
Introduction ............................................................................................3 Regional/Historical Sketch of Delta County ......................................................4 Ratio Analysis...........................................................................................6 Time Trending Verification ..........................................................................8 Sold/Unsold Analysis .................................................................................9 Agricultural Land Study ............................................................................ 11 Agricultural Land ............................................................................................. 11 Agricultural Outbuildings ................................................................................... 12 Agricultural Land Under Improvements ................................................................... 13 Sales Verification ..................................................................................... 14 Economic Area Review and Evaluation .......................................................... 16 Natural Resources ................................................................................... 17 Earth and Stone Products .................................................................................... 17 Producing Oil and Gas ....................................................................................... 17 Vacant Land ........................................................................................... 18 Possessory Interest Properties ..................................................................... 19 Personal Property Audit ............................................................................ 20 Wildrose Auditor Staff .............................................................................. 22 Appendices ............................................................................................ 23
2017 Delta County Property Assessment Study – Page 2
INTRODUCTION
The State Board of Equalization (SBOE) reviews 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. The statutory basis for the audit is found in C.R.S. 39-1-104 (16)(a)(b) and (c). The legislative council sets forth two criteria that are the focus of the audit group: To determine whether each county assessor is applying correctly the constitutional and statutory provisions, compliance requirements of the State Board of Equalization, and the manuals published by the State Property Tax Administrator to arrive at the actual value of each class of property. To determine if each assessor is applying correctly the provisions of law to the actual values when arriving at valuations for assessment of all locally valued properties subject to the property tax. The property assessment audit conducts a twopart 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, and develops time adjustments. The audit also examines the procedures for adequately discovering, classifying and valuing agricultural outbuildings, discovering subdivision build-out and subdivision discounting procedures. Valuation methodology for vacant land, improved 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 performed on vacant land, residential properties, commercial industrial properties, agricultural land, and personal property. The statistical study results are compared with State Board of Equalization compliance requirements and the manuals published by the State Property Tax Administrator. Wildrose Audit has completed the Property Assessment Study for 2017 and is pleased to report its findings for Delta County in the following report.
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REGIONAL/HISTORICAL SKETCH DELTA COUNTY Regional Information Delta County is located in the Western Slope region of Colorado. The Western Slope of Colorado refers to the region west of the Rocky Mountains. It includes Archuleta, Delta, Dolores, Eagle, Garfield, Grand,
OF
Gunnison, Hinsdale, Jackson, La Plata, Mesa, Moffat, Montezuma, Montrose, Ouray, Pitkin, Rio Blanco, Routt, San Juan, San Miguel, and Summit counties.
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Historical Information Delta County had an estimated population of approximately 30,442 people with 26.7 people per square mile, according to the U.S. Census Bureau’s 2016 estimated census data. This represents a -1.6 percent change from April 1, 2010 to July 1, 2016. Delta County is located on Colorado's western slope at the base of Grand Mesa (one of the largest flat top mountains in the world) and was created by the Colorado legislature on February 11, 1883 out of portions of central Gunnison County. The county was named for the City of Delta, which was named for its location on the delta of the Uncompahgre River. The county was primarily settled by a German populace, although many English, Irish and Mexican people brought their roots from the homeland to settle in Delta County. The city of Delta is situated just west of the Black Canyon of the Gunnison. Seven buildings downtown act as canvasses for local artists displaying murals depicting the local economy,
history and the natural surroundings. Another town symbol at the entrance to Delta is Ute Council Tree, an 85-foot cottonwood, once a gathering point for tribal discussions. Today the tree symbolizes the growing connections between Colorado Utes and the Western Slope's other residents. The Delta County Museum, housed in an old firehouse, recounts the Western Slope's cultural heritage and natural history. The butterfly exhibit contains some of the onlyknown specimens from now extinct species. The Fort Uncompahgre Living History Museum at the entrance to the 265-acre Confluence Park is staffed by authentically garbed interpreters who guide visitors through an old fur trading post. Just outside Delta is Dry Mesa Quarry, the site where archeologists first discovered Brachiosaurus and Ultrasaurus bones. This dig-in-process is open to the public. (Wikipedia.org, deltacolorado.org)
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RATIO ANALYSIS Methodology All significant classes of property were analyzed. Sales were collected for each property class over the eighteen month period from January 1, 2015 through June 20, 2016. Property classes with less than thirty sales had the sales period extended in six month increments up to an additional forty-two months. If this extended sales period did not produce the minimum thirty qualified sales, the Audit performed supplemental appraisals to reach the minimum. 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 using IAAO standards for data analysis. In every case, we examined the loss in data from trimming to ensure that only true outliers were excluded. Any county with a significant portion of sales excluded by this trimming method was 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 Ratio
Coefficient of Dispersion
Commercial/Industrial
Between .95-1.05
Less than 20.99
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
Property Class
2017 Delta County Property Assessment Study – Page 6
The results for Delta County are: Delta County Ratio Grid Property Class Commercial/Industrial
Number of Unweighted Price Qualified Median Related Sales Ratio Differential 41
0.999
Coefficient of Dispersion
Time Trend Analysis
1.106
6.8
Compliant
Condominium
N/A
N/A
N/A
N/A
N/A
Single Family
558
0.992
1.027
10.4
Compliant
Vacant Land
103
0.991
1.040
15.9
Compliant
After applying the above described methodologies, it is concluded from the sales ratios that Delta County is in compliance with
SBOE, DPT, and Colorado State Statute valuation guidelines.
Recommendations None
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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 should remain stable (i.e. flat) across the sale period. If a residual market trend is detected, then the county may or may not have addressed market
trending adequately, and a further examination is warranted. This validation method 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 Delta County has complied with the statutory requirements to analyze the effects of time on value in their county. Delta County has also satisfactorily applied the results of their time trending analysis to arrive at the time adjusted sales price (TASP).
Recommendations None
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SOLD/UNSOLD ANALYSIS Methodology Delta County was tested for the equal treatment of sold and unsold properties to ensure 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. We test the hypothesis that the assessor has valued unsold properties consistent with what is observed with the sold properties based on several units of comparison and tests. The units of comparison include the actual value per square foot and the change in value from the previous base year period to the current base year. The first test compares the actual value per square foot between sold and unsold properties by class. The median and mean value per square foot is compared and tested for any significant difference. This is tested using non-parametric methods, such as the Mann-Whitney test for differences in the distributions or medians between sold and unsold groups. It is also examined graphically and from an appraisal perspective. Data can be stratified based on location and subclass. The second test compares the difference in the median change in value from the previous base year to the current base year between sold and unsold properties by class. The same combination of non-parametric and appraisal testing is used as with the first test. A third test employing a valuation model testing a sold/unsold binary variable while controlling for property attributes such as location, size, age and other attributes. The model determines if the sold/unsold variable is statistically and empirically significant. If all three tests indicate a significant difference between sold and unsold properties for a given class, the Auditor may meet with the county to determine if sale chasing is actually occurring,
or if there are other explanations for the observed difference. If the unsold properties have a higher median value per square foot than the sold properties, or if the median change in value is greater for the unsold properties than the sold properties, the analysis is stopped and the county is concluded to be in compliance with sold and unsold guidelines. All sold and unsold properties in a given class are first tested, although properties with extreme unit values or percent changes can be trimmed to stabilize the analysis. The median is the primary comparison metric, although the mean can also be used as a comparison metric if the distribution supports that type of measure of central tendency. The first test (unit value method) is applied to both residential and commercial/industrial sold and unsold properties. The second test is applied to sold and unsold vacant land properties. The second test (change in value method) is also applied to residential or commercial sold and unsold properties if the first test results in a significant difference observed and/or tested between sold and unsold properties. The third test (valuation modeling) is used in instances where the results from the first two tests indicate a significant difference between sold and unsold properties. It can also be used when the number of sold and unsold properties is so large that the nonparametric testing is indicating a false rejection of the hypothesis that there is no difference between the sold and unsold property values. These tests were supported by both tabular and graphics presentations, along with written documentation explaining the methodology used.
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Sold/Unsold Results Property Class
Results Compliant
Commercial/Industrial
N/A
Condominium Single Family
Compliant
Vacant Land
Compliant
Conclusions
Recommendations
After applying the above described methodologies, it is concluded that Delta County is reasonably treating its sold and unsold properties in the same manner.
None
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AGRICULTURAL LAND STUDY Acres By Subclass
Value By Subclass
Agricultural Land 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 have 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:
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Delta County Agricultural Land Ratio Grid Abstract Code
Land Class
4117
Flood
4137
Meadow Hay
4147
Grazing
4157
Orchard
4167
Waste
Total/Avg
Number Of Acres 57,259
County County WRA Value Assessed Total Per Acre Total Value Value 216.43 12,392,687 12,163,786
Ratio 1.02
9,185
117.29
1,077,339
1,077,339
1.00
162,868
5.37
874,567
874,567
1.00
2,599
321.19
834,777
834,777
1.00
25,899
2.22
57,544
57,544
1.00
59.10 15,236,913 15,008,013
1.02
257,810
Recommendations None
Agricultural Outbuildings
Methodology Data was collected and reviewed to determine if the guidelines found in the Assessor’s Reference Library (ARL) Volume 3, pages 5.74 through 5.77 were being followed.
Property Taxation for the valuation of agricultural outbuildings.
Recommendations None
Conclusions Delta County has substantially complied with the procedures provided by the Division of
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Agricultural Land Under Improvements
Methodology Data was collected and reviewed to determine if the guidelines found in the Assessor’s Reference Library (ARL) Volume 3, pages 5.19 and 5.20 were being followed.
Conclusions Delta County has used the following methods to discover land under a residential improvement on a farm or ranch that is determined to be not integral under 39-1-102, C.R.S.:
Questionnaires Field Inspections Phone Interviews In-Person Interviews with Owners/Tenants Written Correspondence other than Questionnaire Personal Knowledge of Occupants at Assessment Date Aerial Photography/Pictometry
Delta County has used the following methods to discover the land area under a residential improvement that is determined to be not integral under 39-1-102, C.R.S.:
Property Record Card Analysis Questionnaires Field Inspections Phone Interviews In-Person Interviews with Owners/Tenants Written Correspondence other than Questionnaire Personal Knowledge of Occupants at Assessment Date Aerial Photography/Pictometry
Delta County has substantially complied with the procedures provided by the Division of Property Taxation for the valuation of land under residential improvements that may or may not be integral to an agricultural operation.
Recommendations None
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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 39-3102, 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. (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. WRA has used the above-cited statutes as a guide in our study of the county’s procedures and practices for verifying sales. WRA reviewed the sales verification procedures in 2017 for Delta County. This study was conducted by checking selected sales from the master sales list for the current valuation period. Specifically WRA selected 89 sales listed as unqualified. All of the sales in the unqualified sales sample had reasons that were clear and supportable. For residential, commercial, and vacant land sales with considerations over $500, the contractor has examined and reported the ratio of qualified sales to total sales by class and performed the following analyses of unqualified sales: The contractor has examined the manner in which sales have been classified as qualified or unqualified, including a listing of each step in the sales verification process, any adjustment procedures, and the county official responsible for making the final decision on qualification. When less than 50 percent of sales are qualified in any of the three property classes (residential, commercial, and vacant land), the contractor analyzed the reasons for disqualifying sales in any subclass that constitutes at least 20 percent of the class, either by number of properties or by value, from the prior year. The contractor has
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reviewed with the assessor any analysis indicating that sales data are inadequate, fail to reflect typical properties, or have been disqualified for insufficient cause. In addition, the contractor has reviewed the disqualified sales by assigned code. If there appears to be any inconsistency in the coding, the contractor has conducted further analysis to determine if the sales included in that code have been assigned appropriately. If 50 percent or more of the sales are qualified, the contractor has reviewed a statistically significant sample of unqualified sales, excluding sales that were disqualified for obvious reasons.
The following subclasses were analyzed for Delta County: 2112 Merchandising 2130 Special Purpose 2212 Merchandising 2230 Special Purpose 3115 Manufacturing/Processing 3215 Manufacturing/Processing
Conclusions Delta County appears to be doing a good job of verifying their sales. WRA agreed with the county’s reason for disqualifying each of the sales selected in the sample. There are no recommendations or suggestions.
Recommendations None
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ECONOMIC AREA REVIEW EVALUATION Methodology Delta County has submitted a written narrative describing the economic areas that make up the county’s market areas. Delta 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
AND
identified homogeneous economic 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.”
Recommendations None
After review and analysis, it has been determined that Delta County has adequately
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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 applied to determine value for production of earth and stone products. The number of tons was multiplied by an economic royalty rate determined by the Division of Property Taxation to determine income. The income was multiplied by a recommended Hoskold factor to determine the actual value. The Hoskold factor is determined by the life of the reserves or the lease. Value is 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 The County has applied the correct formulas and state guidelines to earth and stone production.
Recommendations None
Producing Oil and Gas Methodology Assessors Reference Library (ARL) Volume 3, Chapter 6: Valuation of Natural Resources STATUTORY REFERENCES Section § 39-1-103, C.R.S., specifies that producing oil or gas leaseholds and lands are valued according to article 7 of title 39, C.R.S.
Actual value determined - when. (2) The valuation for assessment of leaseholds and lands producing oil or gas shall be determined as provided in article 7 of this title. § 39-1-103, C.R.S. Article 7 covers the listing, valuation, and assessment of producing oil and gas leaseholds and lands. Valuation: Valuation for assessment. (1) Except as provided in subsection (2) of this section, on the basis of the information contained in such statement, the assessor shall value such oil and gas leaseholds and lands for assessment, as real property, at an amount equal to eighty-seven and one-half percent of: (a) The selling price of the oil or gas sold there from during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year; (b) The selling price of oil or gas sold in the same field area for oil or gas transported from the premises which is not sold during the preceding calendar year, after excluding the selling price of all oil or gas delivered to the United States government or any agency thereof, the state of Colorado or any agency thereof, or any political subdivision of the state as royalty during the preceding calendar year. § 39-7-102, C.R.S.
Conclusions The county applied approved appraisal procedures in the valuation of oil and gas.
Recommendations None
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VACANT LAND Subdivision Discounting Subdivisions were reviewed in 2017 in Delta County. The review showed that subdivisions were 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 the present worth method. The market approach was applied where 80 percent or more of the subdivision sites were sold. An absorption period was estimated for each subdivision that was discounted. An appropriate discount rate was
developed using the summation method. Subdivision land with structures was appraised at full market value.
Conclusions Delta County has implemented proper procedures to adequately estimate absorption periods, discount rates, and lot values for qualifying subdivisions.
Recommendations None
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POSSESSORY INTEREST PROPERTIES Possessory Interest Possessory interest property discovery and valuation is described in the Assessor’s Reference Library (ARL) Volume 3 section 7 in accordance with the requirements of Chapter 39-1-103 (17)(a) (II) C.R.S. Possessory Interest is defined by the Property Tax Administrator’s Publication ARL Volume 3, Chapter 7: 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.
commercial possessory interest properties. The county has also been queried as to their confidence that the possessory interest properties have been discovered and placed on the tax rolls.
Delta County has been reviewed for their procedures and adherence to guidelines when assessing and valuing agricultural and
None
Conclusions Delta County has implemented a discovery process to place possessory interest properties on the roll. They have also correctly and consistently applied the correct procedures and valuation methods in the valuation of possessory interest properties.
Recommendations
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PERSONAL PROPERTY AUDIT Delta 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 requires that counties use ARL Volume 5, including current discovery, classification, documentation procedures, 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 100,000 population, WRA 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.
Delta 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 MLS Listing and/or Sold Books Chamber of Commerce/Economic Development Contacts Local Telephone Directories, Newspapers or Other Local Publications Personal Observation, Physical Canvassing 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. Delta County submitted their personal property written audit plan and was current for the 2017 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 Accounts with greater than 10% change Incomplete or inconsistent declarations Accounts with omitted property Same business type or use
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Businesses with no deletions or additions for 2 or more years Non-filing Accounts - Best Information Available Accounts close to the $7,400 actual value exemption status Lowest or highest quartile of value per square foot Accounts protested with substantial disagreement
Conclusions Delta 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
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WILDROSE AUDITOR STAFF Harry J. Fuller, Audit Project Manager Suzanne Howard, Audit Administrative Manager Steve Kane, Audit Statistician Carl W. Ross, Agricultural/Natural Resource Analyst J. Andrew Rodriguez, Field Analyst
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APPENDICES
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STATISTICAL COMPLIANCE REPORT FOR DELTA COUNTY 2017 I. OVERVIEW Delta County is located in western Colorado. The county has a total of 18,646 real property parcels, according to data submitted by the county assessor’s office in 2017. The following provides a breakdown of property classes for this county:
The vacant land class of properties was dominated by residential land. Residential lots (coded 100 and 1112) accounted for 46.8% of all vacant land parcels, followed by mobile home lots (1135) at 20.6%. For residential improved properties, single family properties accounted for 97.7% of all residential properties. Commercial and industrial properties represented a much smaller proportion of property classes in comparison. Commercial/industrial sales accounted for 4.0% of all such properties in this county.
2017 Statistical Report: DELTA COUNTY
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II. DATA FILES The following sales analyses were based on the requirements of the 2017 Colorado Property Assessment Study. Information was provided by the Delta Assessor’s Office in April 2017. The data included all 5 property record files as specified by the Auditor. III. RESIDENTIAL SALES RESULTS There were 558 qualified residential sales within the 18-month sale period ending June 30, 2016. The sales ratio analysis results were as follows: Median Price Related Differential Coefficient of Dispersion
0.992 1.027 10.4
The above ratio statistics were in compliance with the standards set forth by the Colorado State Board of Equalization (SBOE) for the overall residential sales. The following graphs describe further the sales ratio distribution for these properties:
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The above graphs indicate that the distribution of the sale ratios was within state mandated limits. No sales were trimmed. Residential Market Trend Analysis We next analyzed the residential dataset using the 18-month sale period for any residual market trending, with the following results: Coefficientsa Model 1
(Constant)
Unstandardized Coefficients B Std. Error .975 .013
SalePeriod .002 a. Dependent Variable: salesratio
.001
2017 Statistical Report: DELTA COUNTY
Standardized Coefficients Beta .060
t 75.034
Sig. .000
1.417
.157
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With no significant statistical trend evident in the sales ratio data, the above analysis indicated that the assessor has adequately addressed market trending in the valuation of residential properties. Sold/Unsold Analysis In terms of the valuation consistency between sold and unsold residential properties, we compared the median actual value per square foot for 2017 between each group, as follows: Report VALSF sold UNSOLD SOLD
N 8,569 545
Median $92 $107
Mean $97 $109
Because there was a gap between sold and unsold residential properties using this metric, we next compared the median and mean change in actual value from taxable years 2016 to 2017 for sold and unsold residential properties, as follows:
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Report DIFF sold UNSOLD SOLD
N 8,680 558
Median 1.05 1.08
Mean 1.09 1.12
Report DIFF ECONAREA 1.00 2.00 3.00
sold UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD
N 4340 330 2053 135 1986 84
Median 1.04 1.06 1.01 1.07 1.08 1.13
Mean 1.07 1.11 1.10 1.12 1.11 1.16
The above results indicate some remaining difference between sold and unsold residential properties, although further analysis indicated that sold properties were smaller and of superior overall quality as compared to unsold residential properties. We therefore concluded that sold and unsold properties were valued in a consistent manner when these attributes were considered. IV. COMMERCIAL/INDUSTRIAL SALE RESULTS There were 41 qualified commercial and industrial sales, spanning the 42 month period ending June 30, 2016. The sales ratio analysis resulted in the following ratio statistics: Median Price Related Differential Coefficient of Dispersion
0.999 1.106 6.8
The above tables indicate that the Delta County commercial/industrial sale ratios were in compliance with the SBOE standards. The following histogram and scatter plot describe the sales ratio distribution further:
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2017 Statistical Report: DELTA COUNTY
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Commercial Market Trend Analysis The 41 commercial/industrial sales were next analyzed by subclass for any residual market trending, examining the sale ratios across the 42-month sale period with the following results: Coefficientsa Model 1
(Constant)
Unstandardized Coefficients B Std. Error 1.010 .032
SalePeriod .000 a. Dependent Variable: salesratio
.001
Standardized Coefficients Beta -.016
t 32.000
Sig. .000
-.103
.919
The market trend results indicated no significant residual sales ratio trend in the commercial/industrial data. We therefore concluded that the assessor adequately considered market trending in their valuation of commercial and industrial properties.
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Sold/Unsold Analysis We compared the 2017 median actual value per square feet between sold and unsold commercial/industrial properties to determine if the assessor was valuing each group consistently, as follows: Report VALSF sold UNSOLD SOLD
N 698 37
Median $62 $57
Mean $71 $71
Report VALSF ABSTRIMP 2212.00 2220.00 2230.00 2235.00 2245.00 3212.00 3215.00
sold UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD UNSOLD SOLD
N 170 7 101 9 178 11 55 4 27 2 4 1 39 2
Median $56 $56 $75 $84 $66 $74 $22 $39 $93 $106 $35 $31 $31 $37
Mean $61 $69 $81 $95 $84 $75 $23 $38 $101 $106 $35 $31 $36 $37
Based on the above results, we concluded that the Delta County assessor was valuing sold and unsold commercial properties consistently.
2017 Statistical Report: DELTA COUNTY
Page 31
V. VACANT LAND SALE RESULTS There were 103 qualified vacant land sales for the 18-month sale period ending June 30, 2016, with the following results: Median Price Related Differential Coefficient of Dispersion
0.991 1.040 15.9
The above table indicates that the Delta County vacant land sale ratios were in compliance with the SBOE standards. The following histogram and scatter plot describe the sales ratio distribution further:
2017 Statistical Report: DELTA COUNTY
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Vacant Land Market Trend Analysis The 103 vacant land sales were next analyzed, examining the sale ratios across the 18-month sale period with the following results: Coefficientsa Model 1
(Constant)
Unstandardized Coefficients B Std. Error .917 .044
SalePeriod .008 a. Dependent Variable: salesratio
.005
2017 Statistical Report: DELTA COUNTY
Standardized Coefficients Beta .163
t 20.743
Sig. .000
1.655
.101
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The market trend results indicated no statistically significant trend. We concur that no market trend adjustments were warranted for properties in this class for Delta County. Sold/Unsold Analysis We compared the median change in actual value between taxable years 2016 and 2017 for vacant land properties to determine if sold and unsold properties were valued consistently, as follows: Report DIFF sold UNSOLD SOLD
N 2527 92
Median 1.00 1.00
2017 Statistical Report: DELTA COUNTY
Mean 1.01 1.03
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The above results indicated that sold and unsold vacant land properties were valued consistently overall. 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 Delta County. The following indicates that agricultural residential improvements were valued in a manner similar to the single family residential improvements in this county overall and broken down by economic area: Report IMPVALSF ABSTRIMP 1212.00 4277.00
N 8,969 1,849
Median $67.44 $76.36
Mean $69.47 $80.63
Report IMPVALSF ECONAREA 1.00 2.00 3.00
ABSTRIMP 1212 4277 1212 4277 1212 4277
N 4534 63 2162 416 2017 1351
Median $62.95 $60.19 $78.04 $76.33 $70.50 $77.14
Mean $65.48 $68.52 $75.98 $77.20 $72.55 $82.26
VII. CONCLUSIONS Based on this statistical analysis, there were no significant compliance issues concluded for Delta County as of the date of this report.
2017 Statistical Report: DELTA COUNTY
Page 35
STATISTICAL ABSTRACT Residential
Commercial/Industrial
Vacant Land
2017 Statistical Report: DELTA COUNTY
Page 36
Residential Median Ratio Stratification Sale Price Case Processing Summary
Overall Excluded
Count 1 6 75 137 138 142 57 1 1 558 0
Total
558
SPRec
LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $200K to $300K $300K to $500K $500K to $750K Over $1,000K
Percent 0.2% 1.1% 13.4% 24.6% 24.7% 25.4% 10.2% 0.2% 0.2% 100.0%
Ratio Statistics for CURRTOT / TASP Group LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $200K to $300K $300K to $500K $500K to $750K Over $1,000K Overall
Median 2.240 1.360 1.024 .989 .975 .993 .968 .951 .685 .992
Price Related Differential 1.000 .975 1.009 .999 1.001 1.000 1.001 1.000 1.000 1.027
Coefficient of Dispersion .000 .169 .136 .096 .094 .093 .065 .000 .000 .104
Coefficient of Variation Median Centered . 26.2% 20.6% 13.8% 13.7% 13.7% 9.4% . . 16.2%
Subclass Case Processing Summary
Overall Excluded
Count 7 545 6 558 0
Total
558
ABSTRIMP
.00 1212.00 1230.00
Percent 1.3% 97.7% 1.1% 100.0%
2017 Delta County Property Assessment Study – Page 37
Ratio Statistics for CURRTOT / TASP Group .00 1212.00 1230.00 Overall
Median .775 .992 1.006 .992
Price Related Differential 1.036 1.017 1.154 1.027
Coefficient of Dispersion .132 .100 .264 .104
Coefficient of Variation Median Centered 20.7% 15.1% 56.1% 16.2%
Age Case Processing Summary
Overall Excluded
Count 13 47 40 60 165 224 9 558 0
Total
558
AgeRec
0 Over 100 75 to 100 50 to 75 25 to 50 5 to 25 5 or Newer
Percent 2.3% 8.4% 7.2% 10.8% 29.6% 40.1% 1.6% 100.0%
Ratio Statistics for CURRTOT / TASP Group 0 Over 100 75 to 100 50 to 75 25 to 50 5 to 25 5 or Newer Overall
Median .805 .958 1.020 .969 .987 .995 1.004 .992
Price Related Differential 1.276 1.053 1.046 1.022 1.017 1.009 .997 1.027
Coefficient of Dispersion .295 .150 .150 .112 .114 .069 .020 .104
Coefficient of Variation Median Centered 55.8% 21.9% 23.3% 16.2% 15.2% 11.0% 2.9% 16.2%
Improved Area Case Processing Summary
Overall Excluded
Count 13 59 182 173 112 19 558 0
Total
558
ImpSFRec
0 500 to 1,000 sf 1,000 to 1,500 sf 1,500 to 2,000 sf 2,000 to 3,000 sf 3,000 sf or Higher
2017 Statistical Report: DELTA COUNTY
Percent 2.3% 10.6% 32.6% 31.0% 20.1% 3.4% 100.0%
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Ratio Statistics for CURRTOT / TASP Group 0 500 to 1,000 sf 1,000 to 1,500 sf 1,500 to 2,000 sf 2,000 to 3,000 sf 3,000 sf or Higher Overall
Median .805 .972 .978 .995 .998 1.011 .992
Price Related Differential 1.276 1.047 1.025 1.028 1.011 1.013 1.027
Coefficient of Dispersion .295 .137 .101 .109 .066 .085 .104
Coefficient of Variation Median Centered 55.8% 18.8% 15.0% 16.7% 10.1% 13.8% 16.2%
Improvement Quality Case Processing Summary
Overall Excluded
Count 14 507 22 2 545 13
Total
558
QUALITY
2 3 4 5
Percent 2.6% 93.0% 4.0% 0.4% 100.0%
Ratio Statistics for CURRTOT / TASP Group 2 3 4 5 Overall
Median 1.020 .992 .980 .883 .992
Price Related Differential 1.030 1.016 1.001 .985 1.017
Coefficient of Dispersion .109 .102 .040 .077 .100
Coefficient of Variation Median Centered 15.2% 15.3% 6.3% 10.9% 15.1%
Improvement Condition Case Processing Summary
Overall Excluded
Count 2 2 3 7 1 3 18 540
Total
558
CONDITION
6 7 8 9 10 11
Percent 11.1% 11.1% 16.7% 38.9% 5.6% 16.7% 100.0%
2017 Statistical Report: DELTA COUNTY
Page 39
Ratio Statistics for CURRTOT / TASP Group 6 7 8 9 10 11 Overall
Median .944 .952 1.005 1.015 1.062 1.025 1.020
Price Related Differential 1.012 1.065 1.145 .972 1.000 1.110 1.051
Coefficient of Dispersion .114 .143 .228 .107 .000 .126 .130
Coefficient of Variation Median Centered 16.1% 20.2% 47.5% 14.9% . 19.9% 20.4%
Commercial Median Ratio Stratification Sale Price Case Processing Summary
Overall Excluded
Count 1 6 9 5 6 6 5 3 41 0
Total
41
SPRec
LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $200K to $300K $300K to $500K Over $1,000K
Percent 2.4% 14.6% 22.0% 12.2% 14.6% 14.6% 12.2% 7.3% 100.0%
Ratio Statistics for CURRTOT / TASP Group LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $200K to $300K $300K to $500K Over $1,000K Overall
Median .941 1.035 1.002 .999 1.013 .942 .992 .889 .999
Price Related Differential 1.000 .986 1.003 1.001 1.000 1.007 1.002 1.062 1.106
2017 Statistical Report: DELTA COUNTY
Coefficient of Dispersion .000 .122 .063 .024 .033 .051 .028 .094 .068
Coefficient of Variation Median Centered . 20.6% 8.1% 3.2% 4.8% 9.5% 3.5% 14.2% 10.8%
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Subclass Case Processing Summary
Overall Excluded
Count 4 1 7 9 11 4 2 1 2 41 0
Total
41
ABSTRIMP
.00 1212.00 2212.00 2220.00 2230.00 2235.00 2245.00 3212.00 3215.00
Percent 9.8% 2.4% 17.1% 22.0% 26.8% 9.8% 4.9% 2.4% 4.9% 100.0%
Ratio Statistics for CURRTOT / TASP Group .00 1212.00 2212.00 2220.00 2230.00 2235.00 2245.00 3212.00 3215.00 Overall
Median 1.003 .962 1.022 .999 1.002 1.028 .957 .958 .958 .999
Price Related Differential .993 1.000 1.251 1.005 1.040 1.119 .998 1.000 .972 1.106
Coefficient of Dispersion .027 .000 .093 .060 .085 .056 .008 .000 .045 .068
Coefficient of Variation Median Centered 4.0% . 15.3% 7.6% 15.2% 8.9% 1.1% . 6.3% 10.8%
Age Case Processing Summary
Overall Excluded
Count 7 9 3 10 5 6 1 41 0
Total
41
AgeRec
0 Over 100 75 to 100 50 to 75 25 to 50 5 to 25 5 or Newer
Percent 17.1% 22.0% 7.3% 24.4% 12.2% 14.6% 2.4% 100.0%
2017 Statistical Report: DELTA COUNTY
Page 41
Ratio Statistics for CURRTOT / TASP Group 0 Over 100 75 to 100 50 to 75 25 to 50 5 to 25 5 or Newer Overall
Median .994 1.022 1.018 .991 .962 1.028 .749 .999
Price Related Differential .998 1.025 1.041 .988 1.070 1.064 1.000 1.106
Coefficient of Dispersion .033 .066 .065 .043 .117 .058 .000 .068
Coefficient of Variation Median Centered 4.5% 10.3% 10.0% 6.1% 24.8% 8.8% . 10.8%
Improved Area Case Processing Summary
Overall Excluded
Count 4 2 4 5 4 6 16 41 0
Total
41
ImpSFRec
0 LE 500 sf 500 to 1,000 sf 1,000 to 1,500 sf 1,500 to 2,000 sf 2,000 to 3,000 sf 3,000 sf or Higher
Percent 9.8% 4.9% 9.8% 12.2% 9.8% 14.6% 39.0% 100.0%
Ratio Statistics for CURRTOT / TASP Group 0 LE 500 sf 500 to 1,000 sf 1,000 to 1,500 sf 1,500 to 2,000 sf 2,000 to 3,000 sf 3,000 sf or Higher Overall
Median 1.003 .935 .988 1.037 .971 1.020 .973 .999
Price Related Differential .993 1.007 .994 1.035 1.068 1.031 1.097 1.106
2017 Statistical Report: DELTA COUNTY
Coefficient of Dispersion .027 .016 .027 .077 .156 .056 .061 .068
Coefficient of Variation Median Centered 4.0% 2.3% 3.8% 12.6% 28.0% 8.2% 8.8% 10.8%
Page 42
Improvement Quality Case Processing Summary
Overall Excluded
Count 1 4 32 37 4
Total
41
QUALITY
1 2 3
Percent 2.7% 10.8% 86.5% 100.0%
Ratio Statistics for CURRTOT / TASP Group 1 2 3 Overall
Median .962 1.018 .997 .999
Price Related Differential 1.000 .997 1.118 1.110
Coefficient of Dispersion .000 .027 .080 .073
Coefficient of Variation Median Centered . 3.3% 12.2% 11.4%
Vacant Land Median Ratio Stratification Sale Price Case Processing Summary
Overall Excluded
Count 18 28 40 12 3 2 103 0
Total
103
SPRec
LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $300K to $500K
Percent 17.5% 27.2% 38.8% 11.7% 2.9% 1.9% 100.0%
Ratio Statistics for CURRLND / TASP Group LT $25K $25K to $50K $50K to $100K $100K to $150K $150K to $200K $300K to $500K Overall
Median .949 1.000 .983 .996 .918 .719 .991
Price Related Differential 1.000 1.005 1.002 .999 1.000 .993 1.040
2017 Statistical Report: DELTA COUNTY
Coefficient of Dispersion .249 .181 .113 .125 .061 .388 .159
Coefficient of Variation Median Centered 35.3% 27.3% 18.5% 18.6% 12.9% 54.9% 24.6%
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Subclass Case Processing Summary
Overall Excluded
Count 1 44 5 1 7 7 5 3 17 13 103 0
Total
103
ABSTRLND
.00 100.00 200.00 300.00 520.00 530.00 540.00 550.00 1112.00 1135.00
Percent 1.0% 42.7% 4.9% 1.0% 6.8% 6.8% 4.9% 2.9% 16.5% 12.6% 100.0%
Ratio Statistics for CURRLND / TASP Group .00 100.00 200.00 300.00 520.00 530.00 540.00 550.00 1112.00 1135.00 Overall
Median .000 1.000 .998 .843 .991 .857 .889 1.040 1.000 .949 .991
Price Related Differential . 1.027 .988 1.000 .975 1.035 1.298 1.152 1.005 1.020 1.040
Coefficient of Dispersion . .110 .022 .000 .228 .127 .242 .319 .180 .169 .159
2017 Statistical Report: DELTA COUNTY
Coefficient of Variation Median Centered . 16.2% 3.6% . 32.2% 18.9% 33.1% 59.2% 24.3% 23.7% 24.6%
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