BAY MINETTE – With an anticipated $154 million in property tax revenue generated this year in Baldwin County, an increase of $35 million from last year, Revenue Commissioner Phil Nix is expecting about 5,000 appeals from home and property owners who believe they may have been overappraised, causing a hike in their ad valorem taxes. 

“We encourage them to appeal, and if they don’t appeal we’re assuming their (appraised) value is correct,” Nix said in an interview Wednesday.  “The taxes are driven by the (appraised) value” that the county revenue department adjusts according to residential and commercial sales from Oct. 1, 2005 to Sept. 30, 2006, which establishes fair market value – the appraised amount on the valuation notice received by residents – this tax year. 

Nix said that his department has achieved what is called equalization, a statistic which shows that appraised values this year are matching last year’s sales data. 

According to guidelines set by the Alabama Department of Revenue, county revenue commissioners must achieve practically dead aim at equaling their appraisal estimates to the fair market value of all parcels – home and / or building(s) – throughout the county. 

The range is 98 to 102 percent for equalization, meaning that some parcels may be undervalued or overvalued, but otherwise the appraisal average is equal to fair market value. 

Of the 135,000 parcels appraised by the revenue department, a few parcels may be way outside that range, but the overall average is the goal, and the county is at 98 percent, according to Nix. 

“The whole purpose of the (valuation) notice…that we sent out is that…based on what we see, this is what we…determined,” he said.  “If it’s not, let us know, we’ll go back” and compare the sales data to the appraised value to determine if an appeal is justified. 

Quite a few residents, however, are outright shocked with the appraisal notices that were delivered to their mailboxes August 1, and some feel as though the county revenue department made grievous errors by overvaluing their parcel which, they said, can be proved otherwise by checking comparable sales in their neighborhoods. 

Massey Lambard, a homeowner in Bay Forest Estates, a subdivision that lines the shores of Wolf Bay, said in an interview Tuesday that the appraised value of his waterfront property increased from $231,400 - last year’s appraised value - to $694,100 this year for a 1.1 acre lot.  

But, the residence – or building appraisal which includes all structures a respective property contains including garages, pools, enclosed porches, among others – only increased $200. 

“Land is a little bit more arbitrary…(and) to me is much more subjective,” Lambard said, who worked for a private company that performed contract appraisals for the Jefferson County revenue department. 

“It’s totally unreasonable and unheard of for a piece of property to triple in a twelve month period unless you struck gold or found oil,” he said. 

Bay Forest Estates residents Christopher Hayne and Clarence Mosely also said their property values spiked similar to Massey’s while their building appraisals changed insignificantly, according to interviews held Tuesday. 

Mosely, Hayne and Massey cited 5 sales in Bay Forest - on their street - during the time period used by the revenue department that revealed an average sales price of $561,000, well-below the county appraisals which are reflecting values of about $700,000 in the subdivision. 

“According to your valuation notice, the appraised value of my home increased by over 200 percent from last year,” Massey wrote in a letter to Nix.  “Just doing the math on my own home, that would indicate an increase in value of about 36 percent for the year.”

Twin Bridge Estates, a subdivision located off County Road 20 near Foley, also experienced similar spikes in land appraisals compared to the residences. 

Joy Wilson, a former real estate broker in Michigan for 18 years, said her property value jumped $54,000 while her residence increased only $3,000 – nearly a $57,000 difference from last year’s appraisal.

Her ad valorem taxes will increase along with others who received appraisal hikes with the amount varying depending on municipal, county and school millage rates.

“I don’t understand how my property value could go from $27,000 for a half acre of property in 2006 to $81,000 when there have been 7-half-acre lots sold in Twin Bridge Estates during the valuation period for a median price of $43,750,” Wilson noted, adding that this year was the largest spike in her taxes since she moved into her home 10 years ago.

Bill Funk and his son Scott are partners of Gulf Winds Realty and Development, a real estate firm that handles residential and commercial properties. 

“Everybody I talk to is just up in arms about this,” Bill Funk said.  “There is no rhyme or reason to how they are coming up with these numbers.” 

Scott Funk provides broker price opinions to lenders to determine fair market value in anticipation of foreclosures, a practice that requires a close eye on sales data derived from sources including the multiple listing service (MLS), a website maintained by the Baldwin County Association of Realtors, which tracks past and current sales trends. 

When a home is sold, the final sales figure is entered into the MLS database, which enables realtors and appraisers, including the county revenue department, to gauge the market. 

Scott Funk said the MLS is “highly accurate” in determining the real estate market’s pulse, whether up or down, in the county, a municipality, or a particular subdivision. 

And he has found “gross discrepancies in a negative fashion and a positive fashion” regarding the revenue department’s appraisals this year compared to the MLS.   

Two homes sold for $149,000 in Sweet Gum Village, a subdivision in Foley, but were later underappraised by the county at $129,000, he said. 

“It’s kind of like they are picking straws out of a hat,” Scott Funk noted, adding that “it’s a real mess” and “it’s grossly inaccurate from the county’s perspective.”

Nix said he expects some inconsistencies since the revenue department performs what is called mass appraisals, a practice implemented throughout the state, which do not take into account individual homes and properties.     

The public “probably thinks we do individual appraisals on all the properties, which is an impossible task in a county this size, so we do what we call mass appraisal, and in order to do mass, we basically take sales that we can gather,” Nix said, noting that county appraisers used “a little over 6,000 sales county-wide…comparing the sales to our (appraised) values.”

When the revenue department began the process of determining appraisals for this year, Nix said that sales data from Oct. 1, 2005 to Sept. 30, 2006, which he said is obtained from the MLS and probate and revenue records, showed that last year’s appraisals were undervalued and needed to be mostly increased county-wide in order to achieve this year’s market value, meeting equalization of fair market value to appraised value.

“We’re at 98 percent market value and I almost bet you that we are for the most part of the majority of the folks in the county we’re right on market value,” Nix said. 

Part II, in Wednesday’s Onlooker, will explore the county revenue department’s mass appraisal process, revealing the intricacies of what is causing spikes in appraised values, including a factoring system (multiplier) that adjusts neighborhoods or “geo-neighborhoods” appraisals across the board.  The article will also explain the spike in some land appraisals due to the factor.