Assistant county Administrator Dave Arnold joins the show to discuss Pittsylvania County's 2022 reassessment. Pittsylvania County hired Brightminds, LLC, a proven and locally-based appraisal company, in 2020 to complete the reassessment process, which is required to done every four years for localities with more than 50,000 residents. Updated valuations were recently mailed out to property owners, who have the opportunity to schedule a meeting with Brightminds' assessors between December 6 and 17.
Dave talks about the importance of the reassessment process, shares some of the high-level trends that are happening with this reassessment, and explains more about the meetings with Brightminds. You can learn more about reassessment and how to schedule a meeting at pittsylvaniacountyva.gov/reassessment
Caleb Ayers: Alright, so today I'm here with Dave Arnold, who's the Assistant County Administrator. Dave, thanks for being here.
Dave Arnold: My pleasure, Caleb.
Caleb Ayers: You're handling a lot of projects, but here to talk about reassessment and the updated property valuations that just went out last week. So, to start out, I think if you could just give us a high-level overview of what the reassessment process is and sort of why it's important.
Dave Arnold: Well, the reassessment process, first of all, it's required by law every four years for a jurisdiction or locality our size. And what essentially reassessment does is it ensures that the values that are applied to real property are calibrated and are in line with current market conditions. Real estate assessments are a means of revenue for a locality such as Pittsylvania County. That revenue goes into the county's general fund, where it can be used for a variety of different purposes such as schools, public safety and law enforcement, improving facilities, things of that sort.
Caleb Ayers: Right, and it's a point-in-time measurement, it's not an average of what the value might have been over the past four years. Reassessment is about a point-in-time measurement. So, we hired Brightminds. Tell me a little bit about Brightminds and kind of what they've been up to for the last year-plus at this point that they've been working on this project.
Dave Arnold: Sure. Well, Brightminds LLC, first of all, they're a locally based company here in the area, and they apply what I like to refer to as a technology and data-driven approach to the real estate mass appraisal process. Essentially, what that means is they are all about collecting as much data as they possibly can to support the final valuations that they arrive at. And so, when something is data-driven, it's less arbitrary. It's quantifiable, measurable, the data is empirically gathered, which means that it's gathered from, in this case, a lot of unmanned aerial vehicles and drones, also there were appraisers on the ground as well. A lot of what they've been up to over the past year is data collection. Yeah, and then they're also conducting studies such as market analysis, evaluating recent real estate sales. They want to collect all the data, and then they want to standardize how they value all properties across the county, so that means building out a data model, so to speak, with values and tables that ultimately drive the calculation of the total assessment.
Caleb Ayers: Because we're talking about 50,000 different parcels of real estate property.
Dave Arnold: That's right, approximately 50,000 tax parcels.
Caleb Ayers: Right, so that makes sense that there needs to be a strong system in place so that it's not arbitrary. You mentioned that Brightminds used aerial photography. I know they use those drones to sort of get the first sweep, and then if they saw something that didn't add up, if they saw a building that wasn't on the tax record before that, for instance, they'd go out in person to take a look at that. And I know this happened before you started working here, but we sent out an information request in a letter that went with that to property owners, I think it was in February of this year. We worded that letter very poorly, but in that letter, there was a couple of things that I was hoping we could address right now. We talked about assumptions being applied, real estate assessors needing to see the inside of homes, and then there was a questionnaire that was included. So can you talk to me about each of those three things about what assumptions are, why any real estate assessor would need to see the inside of a home for a project like this, and then the questionnaire that we sent.
Dave Arnold: What was meant by the term assumptions is that what you can determine from a, let's say, let's say a residence, you can see it from the outside, whether that's from an aerial photo or from drone collected photos, on the ground photos, just being on site outside the property, and you can gauge the condition of that residential structure, based upon what you observe from the outside. And so, one would assume or infer that the interior of that residence is comparable in condition to the exterior, but you're all... You're assuming these things. There's always the potential that a home or residence has underwent extensive renovations inside that are not in any way reflected on the outside. Conversely, you might have a structure that has deteriorated inside, has suffered some damage that is not visible or apparent from the outside, so you really just don't know unless you have the benefit of being able to empirically gauge the interior of the property. And so, I think that's what was meant there when using the term assumptions. The main point of such a letter was to try to engage the property owners, and to let them know that we really want their input and feedback in this valuation process, and I think the questionnaire was one means of making that happen.
Caleb Ayers: Yeah, and I think that's important what you're saying that there are assumptions that the inside would be similar to the outside, and that whole point of that questionnaire was to allow property owners to, if that's not the case for some reason, or if they had something that wasn't readily obvious from a picture that they could then show the assessors, and that was what we were trying to communicate. We did not communicate it well, but that was... And so, over the past nine months, we've sort of talked about this a little bit already, but what has been going on in the reassessment process? You mentioned the aerial photography, the couple other things that I think need to be addressed are the tables and then the market studies a little bit more, if possible.
Dave Arnold: Well, as you know, Caleb, we did contract this project out. I'm not a licensed appraiser myself, so I'll speak to those things as best I can. Starting with the tables. Well, what we ideally want is, going back to the term that I used a minute or two ago, data driven. We want there to be tables that are incorporated into the overall valuation process. So, for example, let's say you have an out-building and you're able to use a table that has like the different types of outbuildings that one might see, and then you run to determine like a value per square foot for that particular out-building. So, what's that out-building made of? What's the exterior materials? There are depreciation tables as well, as we want those to be, we want it all to be data-driven. Different types of land, we want there to be tables that reflect these different types of land that you might run into, whether that's pastureland, woodland, those types of things. And again, by having this all-in tables, it really creates a lot more, we believe transparency in the overall process because you can put your finger on, okay, all the values that were used to arrive at this total assessment originated in these look-up tables, you might call them. So, there's that. As far as the market study, those are just extremely important to really be able to gauge the current market conditions, and so you've got to look at it for all the different property types that you might encounter: vacant land, commercial property and residential. They've been conducting a comprehensive evaluation of market conditions as a part of this 2022 reassessment project.
Caleb Ayers: As I mentioned earlier, the updated property values went out to property owners around November 19th is when those were mailed out. So can you give me a high-level picture of how property values as a whole have shifted in the county since the 2018 reassessment.
Dave Arnold: County-wide, we saw approximately a 20% increase in the total assessed value. That's looking at if you took the sum of the 2018 assessments and compared it to the sum of 2022, the difference there is about a 20% increase. A lot of this is due to market conditions. The real estate market across the country has really seen what you might call a perfect storm recently. You know the supply of inventory has declined largely due to the pandemic, and people just weren't putting their homes on the market as much. The inventory was down, there was a higher demand because there were still folks that wanted to buy homes, but they had less inventory to choose from. A lot of times when this happens, developers and contractors simply increase the supply by building new homes and structures that therefore boost to supply back up, and then the supply and demand are back to more or less an equilibrium. However, during the pandemic, the cost of goods and materials has also increased, which has strained the potential for new construction, so the local market has really seen the same impact, is what the country has seen. And so ultimately that's led to an increase in home prices, and if you look at sale values and market, how the market's done, real estate has been selling much higher, and it's on par with this approximately 20% increase that we're seeing here at Pittsylvania County.
Caleb Ayers: Right, and obviously that's a big part of it, is the increase in prices and market value due to what's happening across the country, but then also any new development that happened, whether it be commercial or residential, any new development that happened in the last four years that would also contribute to the increase because those weren't on the books in 2018. Obviously, I think it's important, we take a second now to, I guess, re-explain the process. So, someone owns a house, the assessed value is, let's say it's 100,000, then the tax rate, the real estate tax rate would be applied to that and they would pay... Our current tax rate, $.62 cents for every $100. So, they would then pay $620 for that $100,000 home. This 20% increase does not mean that every property owner's taxes are going up 20%, right? Can you talk about that?
Dave Arnold: Individual properties have gone up maybe more than that 20%, certainly less than that 20%, or some values may have gone down from where they were in 2018, that's certainly possible as well.
Caleb Ayers: Right. And then the tax rate is the 62 cents, right now is 62 cents for every $100 in value. The Board of Supervisors has the opportunity to set a new tax rate in an early 2022 with these updated property values in mind. They're the ones who have the power to set the tax rate. This reassessment process impacts the property values, but not the tax rate, which the board will then come and set early next year. And one of the things that I think is cool about this process, the way that we're doing it this year, is in a couple of weeks starting December 6th through December 17th, there will be opportunities for any property owner to visit with Brightminds, to sit down with Brightminds, their appraisers, and talk about their assessment. So, talk to me a little bit about that process and why having an opportunity like that is important.
Dave Arnold: Well, we think, one, it's a great opportunity for property owners to hear from the appraisers that actually value their property. It's an informative session for starters. So, we say informal, and that's just because the next step is more of a formal thing with the Board of Equalization, which those are actually court-appointed members. This is informal from the standpoint that it's just meeting directly with Brightminds LLC and their appraisers. What we've set up as a two-week period of time where in-person meetings can be held at the Pittsylvania County Community Center, as well as if a property owner would just rather meet from the comfort of their home virtually, then it's my understanding that Brightminds will facilitate that as well. And I think they've blocked off like 15-minute blocks of time for each meeting.
Caleb Ayers: Right, that makes sense. So that will be at the Community Center. As you said, December 6th through the 17th. They'll be there from 8:30 to 4:30, Monday through Friday of during that time period, and I believe on December 9th, they'll actually be there until 7:30. They will accept walk-ins, however, if there's already appointments happening, then there could be some wait time, so we encourage everyone who's interested to schedule an appointment. You can find information about how to do that on our website, you can either do it by phone or via email, and you can find that information at Pittsylvaniacountyva.gov/reassessment. I think that's pretty much all of that I was hoping to talk with you about today, Dave. Pretty much, that's where we are in the process. We have those updated values that have been sent to property owners, and at this point, there's the time to meet with Brightminds, and then next year potentially if needed, property owners can appeal to the Board of Equalization. At this point, the actual tax burden is unknown because the Board has the opportunity to set the new tax rate in 2022. Any actual tax increase or decrease, we don't know what that is. At this time only know what the new property values are, and even those aren't official yet. But do you think there's anything else that it's important that people take away from this or anything else that you really think people should know?
Dave Arnold: We've covered it fairly well. I think the main thing is to... To just think of your property as really an investment. What Brightminds has been doing is to try to arrive at reassess values that reflect 100% of the market value, so if you were to sell the property, what would be a reasonable sale price. That's what those values are supposed to indicate. So we encourage property owners to also speak with other real estate professionals to gauge market conditions, and while we have these appeals hearings in the early part of December, those are a great opportunity for just any property owner who has questions or has concerns about how their property was valued, let's go ahead and set up a time for those folks to meet with Brightminds and go ahead and see if just a sit down and getting some information out there on how the valuation was arrived at. So that means Brightminds sharing their property valuation worksheets, sharing the aerials, things of that sort. Yeah, hopefully that just casts light on the matter and property owners will be able to see that what is currently proposed as my re-assessed value is in line with market conditions and it's all data-driven and everything adds up, so to speak.
Caleb Ayers: Dave, I appreciate you being here. Thanks.
Dave Arnold: My pleasure. Thanks, Caleb.