CITY OF CENTER LINE

ASSESSING DEPARTMENT

 

Please be reminded that the following information is a tool to help you reach a better understanding of the Assessment process and how it affects you.  If you should have any questions or would like to explore the subject further, please contact the Assessing Department directly at (586) 757-6800, Monday thru Friday 8:30 a.m to 5:00 p.m., and we will gladly assist you.

Each year the City Assessor is responsible for verifying the information on all building permits. This involves the physical inspection and measurement of the property where the work has been completed. This is an important step in the assessment process.
 
During the summer of 2007, every property will be visited and the exterior property information will be checked and verified against the information as listed in the assessment records. This is an important step in the determination of accurate records.
 
As a property owner, it is important for you verify your assessment records. It is important that the assessment records are accurate and that all properties are treated uniformly. If you would like to view you assessment records, please call me @ 586-757-6800, ext 268, and make an appointment to examine the process used in establishing assessments.

The Assessing Department consists of the City Assessor who is certified as a Level Three Assessor from the State Assessors Board.  The Assessor’s responsibility is the discovery, listing, and valuation of all properties within the assessing jurisdiction.  The primary purpose of the Assessing Department is to estimate the fair market value, or “true cash value”, of all real and personal properties located within the City of Center Line.

 

The Assessing Department does not create value.  Rather, value is created by economic forces in the market of buyers and sellers.  The Assessor has the responsibility to study the transactions of the market and to appraise all property in accordance with market trends.  The Assessing Department also keeps track of ownership changes, maintains maps of parcel boundaries, maintains legal descriptions for all land, and prepares sketches of all buildings summarizing their characteristics.

 

General Definitions of Assessing Terminology

Within the context of the Assessing Department and its related activities, it is helpful to have a familiarity of major terms and concepts relevant to property tax administration. The following is a listing of pertinent definitions:

 

Property Types

The assessment roll consists of property located throughout the taxing jurisdiction.  There are two main categories - real property and personal property.  Real property consists of permanent physical structures and the land on which they stand.  Personal property consists of business assets used in connection with commercial or industrial enterprises.

 

Property Classes

The two types of property - real and personal - are further subdivided into several property classes.  The following are a few examples of each for reference:

 

Real property in Center Line includes:

Residential (houses, vacant lots, duplexes, condominiums)

Commercial (office buildings, restaurants, apartment buildings, retail stores)

Industrial (manufacturing facilities, engineering facilities)

Exempt (churches, government buildings, schools)

 

Personal property in Center Line includes but is not limited to the following examples:

Commercial (copy machines, restaurant ovens, cash registers)

Industrial (stamping machines, grinding machines)

Utility (electric poles and lines, gas mains, cable wires)

 

Proposal A

Proposal A was a dramatic ballot initiative passed by the voters of the state of Michigan on March 15, 1994.  Proposal A significantly changed the administration process for assessments while preserving the traditional method of calculating assessed values.  In contrast to prior practice, tax billings are now computed by means of multiplying the taxable value by the authorized millage rate.  In addition, Proposal A changed the school funding process, which is now funded by the State, primarily from an increase of the general sales tax from 4% to 6%.  However, a Hold-Harmless millage can be instituted by a majority of the voters of the community to supplement additional funding to the school district (The residents of the City of Center Line voted in a Hold Harmless millage in the current amount of 17.5778 Mills, for the Center Line School District on 9/21/2004 which will expire on 6/30/2016.

 

Hold Harmless

 Proposal A established a statewide allowance of $5,000 per pupil with formalized annual increases.  School districts with a higher operating cost per pupil than what is mandated by the state, are able to hold themselves harmless by continuing to tax homestead property.  A hold-harmless millage can only be instituted if it is passed by a majority vote of the residents of the community, as reflected in the prior paragraph.    

 

State Equalized Value (S.E.V.) or Assessed Value (A.V.)

The State Equalized Value or Assessed Value for a property represents 50% of its estimated fair market value.  Twenty-four month sales studies are performed by the County Equalization Department to determine the total assessment increase by class (residential, commercial, industrial, personal).  Upon completion of county equalization, the Michigan State Tax Commission uses the same procedures to equalize each class of property in each of the 83 counties in the state.  The local assessor’s responsibility is to spread appropriately the class increase among all the various areas of the city, as determined by analysis of sales within each area. In Center Line, for instance, there are four residential sections, which is further broken down by year built.  Each of theses sections is separately analyzed and receives an adjustment according to what the sales analysis dictates.  Subsequent to the processes of county and state equalization, the Assessed Value becomes the State Equalized Value.  In most contexts, Assessed Value and State Equalized Value are used in an interchangeable sense.

 

Capped Value

Capped Value is a new term that was introduced with the inception of Proposal A.  Capped Value is computed as: (the prior years Taxable Value - losses) x (the lower of 1.05 or the Consumer Price Index factor) + additions.  The CPI factor is synonymous with the rate of inflation and is determined by the Michigan State Tax Commission for use by all assessing departments within the state.  The result of the formula is to limit the capped value from increasing by more than the lesser of 5% or the rate of inflation, unless an addition to value has been added or there has been a transfer of ownership in the preceding calendar year.   

 

Taxable Value

Taxable Value, for a given year, is the lower of that year’s State Equalized Value or that years capped value (see above).  Taxable Value is the number which is of key interest to residents and property owners.  The essential significance of this is that a Taxable Value generally may not increase by more than 5% in a given year, unless there was an addition to value or a transfer of ownership had occurred.

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The following example utilizes the figures for the 2007 Assessing season for the City of Center Line (The S.E.V. & Capped Value figures does not represent an actual parcel of land).

 

Given:                         Sales study analysis indicates that an increase of  1.008% to residential parcels is warranted due to the current market value outlined in the 24 month sales study.

 

The 2007 Consumer Price index that will be utilized for 2007 is 3.7%

 

2006 SEV:                                           $50,000                         

2006 Capped Value:                            $45,000           therefore,

 

Problem:                                 2007 SEV:       $50,400

                                                            ($50,000 x 1.0008 = $50,400 - 2007SEV)

 

2007 Capped Value:    $46,665

($45,000 x 1.037 (CPI) - 0 (losses) + 0 (additions) = $46,665 - 2007Capped Value)

 

2007 Taxable Value:  $46,665

(the lesser of capped value/assessed value)

 

“Uncapping the Taxable Value”

Another important provision of Proposal A is the concept of “uncapping the taxable value.”  The spread between the Assessed Value and Taxable Value may increase substantially over time, particularly with economic conditions of a low inflation and strong real estate sales.  When a property has sold, within the assessment year following the transfer of ownership, the Taxable Value and the Assessed Value are set to the same number.  It is entirely possible for a situation to exist where identical houses on the same street may have dramatically different tax bills, resulting from one house having been recently sold and one which has been owned for several years.

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Assessment Appeal Process

Every taxpayer has the right to appeal there assessment.  The first level of appeal is directed to the assessor.  Many “appeals” are simply misunderstandings or misinterpretations of fact which can be resolved effectively in the office.  The next level of appeal is to the Board of Review.  The Board of Review is comprised of three members and one alternate, which who are all knowledgeable residents of the community.  When you receive your notice of assessment in the mail during the end of February, it will include upon it the dates, and times the board will be meeting.  The Board begins meeting on the Tuesday following the first Monday of March every year.  Meetings are informal and are usually held in the conference room at City Hall.  Applicants that appear before the Board of Review should be aware that the burden of proof is upon them as the appellant to substantiate their claim of over-assessment.  This can be addressed by presenting information such as photographs, appraisals, and listings of comparable sales to the board.  The next level of appeal must be made by June 30^th to the Michigan Tax Tribunal.  The MTT is a quasi-judicial body that provides a structured, semi-formal court setting in front of a hearing referee.  In rare cases, appeals may proceed to the Michigan Court of Appeals.