MONTPELIER — Responding to steadily rising property values city officials have set the stage for Montpelier’s first reappraisal since 2010.
The work won’t start for more than a year and won’t be finished until 2023, but Assessor Stephen Twombly said Tuesday the city has positioned itself to do what he fully expects the state will order it to early next year.
Montpelier’s common level of appraisal, or CLA, now sits at 86.86 percent of fair market value and by the end of the year Twombly predicted the community-specific figure used to equalize education property taxes throughout the state will dip below the 85 percent.
That’s the threshold when deciding whether to conduct a reappraisal is no longer optional and the state steps in and orders one. It’s also a three-year average, which Twombly said likely masks the fact that property in the Capital City already is assessed at less than 85 percent of fair market value.
Property in Montpelier was assessed at 98.24 percent fair market value in the aftermath of the 2010 reappraisal and while that figure slowly eroded it still stood at 95.26 percent in 2015.
That’s when the real estate market started to heat up and Montpelier’s CLA began an accelerated decline. In 2016 it dipped to 94.2 percent, dropped to 92.31 percent in 2017 and to 89.67 percent in 2018, before hitting 86.86 percent last year.
“In 2015 it started to take off and the last two years have been wild with some homes selling for $100,000 over their assessed values,” Twombly said, noting that trend hasn’t abated.
“Clearly, we’re going to hit the (85 percent) threshold this year,” he said.
Hoping to lock in a private contractor interested in completing the work Twombly said the city put out a request for proposals that attracted three responses, but was later revised because two of the bidders wanted to start the work this year and one of them was looking to complete it in 2022.
According to Twombly, the city isn’t in that much of a rush and revised the request for proposals to specify a June 2023 completion date for the reappraisal.
The three companies resubmitted proposals, one increased its price and the city has opted to award the contract to the firm New England Municipal Consultant (NEMC) Ltd. That conducted the reappraisal in 2010.
Though NEMC’s $260,000 price was $5,000 higher than the one quoted by Vision Government Solutions of Hudson, Mass., Twombly said the Vermont-based company’s familiarity with Montpelier was a key factor in the decision to award it the contract. It wasn’t the only one. He said NEMC is familiar with the computer-assisted mass appraisal software used in Montpelier and offered extensive support through the grievance and appeals processes that are part of a reappraisal.
City councilors approved the contract award as part of their consent agenda last week, though Twombly said the details some of the details – including start time – have not yet been negotiated. NEMC, which was paid $225,000 to complete Montpelier’s last citywide reappraisal in 2010, is expected to start work on its next one either late next year or in early 2022. Either way, the reappraisal, which will adjust the values of all properties in Montpelier, is scheduled to be completed in June 2023 and the revised Grand List will be used to set the tax rate that year.
Twombly said he doubts those who own property in Montpelier will celebrate news NEMC will be back in town.
“People hate reappraisals,” he said, noting many mistakenly fear that just because their assessments go up their tax bills will too.
Some will, but, Twombly said, many – if not most – won’t.
Due to rising property values the city’s Grand List – a figure equal to 1 percent of the value of all property in the city – will increase allowing for a reduction in the tax rate. As a result properties that haven’t been materially improved since the last reappraisal could see their assessments rise based on comparable sales without experiencing a corresponding increase in their tax bills due to the reduction in the tax rate.