Providence Committee on Finance-Tuesday, March 4, 2025-5:30 PM

Good evening. My name is Helen Anthony. I'm the chair on the committee of the committee on finance. I'm trying to order a regular meeting on Tuesday, 03/04/2025 at 05:38PM. Madam of birth, would you please call the roll?

Chairwoman Anthony. Present. Vice Chairman Taylor?

Here.

Councilor Antwerp? Here. Councilwoman Graves?

Graves? Yeah.

Councilor Sanchez. Sorry. We

have five present. We have a quorum.

Thank you very much. I'd also like to recognize and thank them for coming. We have councilor Espinal, councilor Peterson, councilor Royas, counselor Don Salves, counselor Vargas. We have madam auditor Costa. We have Ken Cheverini from the city solicitor's office.

We have our policy director with us this evening and also Carissa and Donna. Thank you very much as always for all the information for So noted. Okay. And when I have question, you can just read item number one.

Discussion and presentation relative to state mandated statistical revaluation process and the assessment of properties in the city of Providence. The following has been invited. Michael Tarela, MAIASA, VP of appraisal operations, vision, governance solutions. Wonderful. And I

think we have a whole team here. Thank you, Mr. Torello, who, like, leads online. And we have a whole team to swear in. So I don't but we swear everyone in.

Can you hear me?

Yes. Thank you. Thank you so much, everyone. Oh, and did we get mister Terrello online? Yes.

Yeah. I'm right here. Mike Terrello

with the

head of government solutions.

Okay. Great. Does it who would like to take a seat at the end of the table while we we listen to Mr. Torell? Okay.

Oh, wonderful. And, we do have a presentation. So I would like to mark the presentation for the special commission for taxation and revenue office of the tax assessor dated October 2023 as exhibit number one. Do you have the most Second. Seconded.

Motion made by councilor Andrew Bogd, seconded by council Graves. All in favor? Aye. Aye. All opposed.

We also have a vision government solutions document entitled Providence reevaluation fiscal year 2025. Document update date, 03/04/2025. I'd like to mark this as exhibit two. May I have a motion? So moved.

Second. Motion made by Oates for Ingersoll, seconded by Johnson Graves. All in favor? Aye. Aye.

All opposed. And I think that's what we have still got.

And I think I will turn it over to Luis for then, mister Terrello.

Yes. So madam chair, who's bringing the management council this evening, we'll and ask that the representative to commission to go to us, Basically, provide information with that orientation on the process known as evaluation. This is a process that is conducted once every three years. Just for the record, the document presented at the presentation, especially, the The assessment, so I think that this week document should be entered direct, but it's far back as October 2023 during that event of which I was remembering this was passed by the committee, and it did explain that process. So I wanted to be clear that as early as we hear it some months ago, we have to be put on record as to how that process does work and any recommendations.

So with that, we built that vision with the lead this evening by discussing what they've determined to be from the eval, including friends and information that is now part of the public sphere, you know, in that. Points have been made. Folks have been busy with the. And then at that point, I think they're available in particular. Representative, assessor's office can answer questions associated with what they can answer on evaluation.

That is fine. Thank you.

So with that, mister Torello, can take it away, and we'll be

Mr. Torello, thank you for joining us. I'm sorry you're not well.

Yeah. I'm a little off today, but I I'm fine and just a little sore in the sense of driving and everything. But, that's okay. We'll go through this, and I'll try to explain things as well as we can and answer any questions that I can.

Thank you.

Alright. Thank you for accommodating me. Thank you, everyone, for having us. Again, I'm Mike Torello with Vision Government Solutions. I'm the vice president of the appraisal division.

And I think it was mentioned earlier, pretty well that there was a document there that kind of explains the general process of what we do. This was a statistical update. So in this case, we did inspect all the sales and permits, and we did a a review external review, drive by review of all the properties. The purpose of that is to gather all the information, make it as accurate as possible to be able to then have accurate data as we start to do our analysis, of the city looking at all the different classes of properties. So this analysis is basically considering the three approaches to value, which is the sales that would occur, cons looking at new construction and construction costs as a support of the sales, and then for the commercials and industrials and the mixed use and apartments, gathering, market information for the income approach.

So this consists of gathering gross rental, market rental, not necessarily contract, but what's current in the market for this year for rates and rents, gathering, vacancies, rates, expense ratios, and then determining cap capitalization rates. Once we determine our net net operating income, we use a capitalization rate to capitalize that income flow to a present value. So that's the other third approach. So depending on the type of property, we'll consider various data as we go through and look at this information. So that was the process that we did.

Once we got all the information in, we would go through and gather sales for the residentials over the last year, but we would also look at the 23 sales for trending and what's happening. And then we would look at these sales in many various ways. The purpose is to make everything as equitable as possible. So there's a lot of things we look at. We look at the style of the property, colonial, cape, office building.

We look at the full group class of those categories within them, single family, two family. We will look at things based on their building size. We'll look at things based on their lot size. We'll look at things based on geographical neighborhoods. Those are designated based on, geographical areas and housing stock.

We'll also look at, price quartiles, which are basically high end properties or high sale properties, lower sales properties. The idea is to look at all these variables to determine value in an equitable and, market value price or, in this case, assessment. So the first document that we have, the first page, is the overview of the sales median sale prices for the residential single family, two family, three family, four family, and condos identifying the median price for the '24 period compared to the '21 period. We we thought we would show you basically what was the increase back then for these classes of properties to the increases now. Over the past eight to ten years, there's been a very strong market, with low interest rates.

They're up a little bit now, but, they've been relatively low. There's been, a lot of demand. So one thing that's happened over the last year, year and a half or so, is that interest rates have gone up. So if you look at the document, you'll see that the number of sales last time single families was the 118 should be a 100 817, and now it's 530. So that's quite a variance.

But

what

has happened is this has dropped a lot due to more demand than supply. And one of the big changes over the last couple of years that are slowly starting to stabilize the value is that the interest rates being higher, people still wanted to buy homes, but a lot of people did not wanna sell their homes because they had a very low mortgage. And to then sell it, they'd have to go back out into the market and get a higher number. So that still kept the market strong because there was less sales. So it's kind of a balance where it slowed down a little bit because of the interest rates, but the volume of the sales also made it still competitive.

So you can see from this chart that it was, single families. Medium price is $425,000, and then the median price from last time is 304. So for this sales space, the percent increase change for this group of properties was as seen in the right hand column, 40% for the single families. Two families, 56. Three families, 60.

Four families, 58. Condos are 21. Variances are similar to last time other than the four families having a much larger increase now. The volume, obviously, for the sales was almost half. So that, again, that pushes up the value.

So this is just kind of a nice starting point to show you, where we're at last time, what we were dealing with with increases last time, where we are now, and where we're dealing with increases now. So, Shannon, do you want me to just keep talking or answer questions later? Or

I think probably we want to hear what you have to say. Yes. If you wouldn't mind moving through the data and you all my counselors have questions. So, yes, if you would please continue.

Okay. So the next, data that we have on the next page deals with, more detail now. We we just looked at the classes. Now we're looking at, the median sale prices, and the change from the previous median sales ratio based on these prices that we've adjusted them. So the building type, obviously, are the various types of properties in the community, anything from bungalow, capes, colonials, custom homes to four families, five families, and so forth.

And in there are the counts of the sales, the median sale prices for them. And then when we start the job, we're at a certain assessment level. We compared those sale prices to those assessment ratios based on assessment sales that we have excuse me, assessment that we have now. So you can see, like, for bungalow, it was at 72%, cape 69, colonial 76, conventional 69. Our goal was to get these properties close to market value, and the ratios are to the right.

Usually, the assessor will identify what percentage of market value we'd like to be at. We're in the 95% range of the market values. See the previous COD. COD means coefficient of dispersion. Dispersion.

What that means is that's the variances of the sales to the midpoint, the midpoint being the 95. That's that bell curve that's everyone's always seen where in school, the higher the bell curve, the closer everything is, so the lower the COD. The wider the, COD, the less consistent it is. Over time, as the market changes and the properties get adjusted and so forth and have permits and everything, the the, COD from last based on the sales and the assessments are higher. But once we go through and look through all the variances, look at all the different types of properties at different levels, the we get the current CODs at a much lower level.

Underneath, in most cases, they need to be based on I, double a, o standards for the nation for the singles in the 10 or lower for the two families, the three families, 12 and lower for the commercials, 15, and for vacant land, 20. So in this case, you can see that most of them are on the, lower end with now that they've been adjusted for all the variables that we look at when we do the values. Okay. So now we're gonna look at we've looked at the sales. We've seen the percent changes.

We've seen where we were. We see where where we are now. And now we can show you something overall increases in assessment by the class for all properties within that class. So, based on that, they will be somewhat similar to what's on the sales, but the sales may be slightly different in their percentage increases because they may not encompass all of the types of properties that are in the single family class, so they may be slightly different in their percentage increases. This is the end result of all of our rates and tables that we put into the system, and then we go in and have these, old to new changes from the last time.