1992-03-23 Regular Meeting - Laserfiche WebLink

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. e With this in mind, I went back to the primary reason for the process. It is my understanding that the purpose of using the "prime" rate was to speed up the process of determining a sales value and to provide an escape for small properties where potentially the cost of the appraisal would be greater than the value of the property. The other concern is the time it takes to get a rate from HCAD. Recently, I had five properties to get rates for. I faxed them to HCAD on January 16, 1992. After several calls of inquiry, I finally received the values on February 6, 1992, which was three weeks later. If one of the objects of using HCAD to provide a "prime" rate for the property is to render an accurate mechanism of determining the value of the property without having the proposed buyer obtain a property value appraisal, I suggest that we utilize values that are on the published tax rolls. Using the published values on the tax rolls has several merits, including, the values are available to the general public and do not appear to come out of the air as some of the prime rates do, the values are easily obtainable by staff and would greatly enhance our project turn around time, and the values are supposed to represent some sort of market value. For the same five properties that it took HCAD three weeks to calculate, I calculated in less than one hour. The process I followed for each property was to look up all surrounding properties that touch the property being requested to be sold. I obtained a weighted average of the properties on a square footage basis. This is what I found. Total value of properties being sold at the prime sq. ft. rate $39,859.33 Total prime sq. ft. rate times the 150% factor. 59,788.50 Total value of properties being sold at published sq. ft. rate 35,910.72 If the City were to utilize the published tax roll rate, for the above five properties, the markup factor needed to obtain the same revenues as provided by the current method of prime rate times 150% would be 167%. I would recommend that the City use a factor of 175%. The City or the proposed purchaser would still be able to obtain a private appraisal (at purchasers cost) if they so desired. While the ordinance is open, there are two additional areas that need to be addressed. A statement should be entered that would order the deposit of the funds into the General Capital Improvement Fund. These sales of property are a loss of a City asset. They are not properties that are held by the City for resale at a gain. A loss of a City asset should be reinvested into the City in another Capital Asset and not be used in ordinary maintenance and operations.