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2002 Jefferson County
Property Assessment Study

Prepared for Colorado Legislative Council
Thos. Y. Pickett & Company, Inc.
Denver, Colorado

THOS. Y. PICKETT & COMPANY

September 15, 2002

Mr. Charles S. Brown
Director of Research
Colorado Legislative Council
State Capitol Building - Room 029
Denver, Colorado 80203

Dear Mr. Brown:

Thos. Y. Pickett & Company, Inc., has completed the 2002 Property Assessment Study in Jefferson County. This Final Report documents the results and associated recommendations of the analysis and procedural verifications.

The statistical analysis has been conducted in complete accordance with the following procedures: the Request for Credentials and Proposals to Conduct a Colorado Property Assessment Study, dated July 21, 2000; Contract Encumbrance Number 02000000005, dated December 11, 2001; and the current Standards on Ratio Studies approved and published by the International Association of Assessing Officers in July 1999.

Respectfully submitted,
THOS. Y. PICKETT & COMPANY, INC.
John Whitley

Colorado ClubBuilding -  4155 East Jewell Avenue, Suite 809
Denver, Colorado 80222-4512 Phone 303-691-9986 - FAX 303-757-4898 

This final report presents the results of Thos.Y.Pickett & Company, Inc.'s comparison study of assessed values to qualified sales, the associated procedural verifications, and the required analysis on the other specified classes and/or subclasses of property in Jefferson County, Colorado. This study was conducted pursuant to Colorado Revised Statutes Sections 39-1-104, governing valuation for assessment.

2002 Property Assessment Study
Jefferson County

Introduction

Thos. Y. Pickett & Company, Inc., has concluded the Property Assessment Study for each of the 64 counties within the State of Colorado. The Study was conducted pursuant to the provisions of the Constitution of Colorado and the Colorado Revised Statutes [CRS] Sections 39-1-104, governing valuation for assessment. The fundamental objective of the 2002 study was to ascertain that each county assessor complied with Colorado's mandated guidelines in valuing all applicable classes of property.

By addressing the research through a ratio study and the associated statistical analysis, Thos. Y. Pickett & Company, Inc., compared assessed values to qualified sales transactions within Jefferson County. When qualified sales did not meet sample size requirements, appraisal ratios were calculated. The prevailing level of ratio (or global level of assessment), measured by its median value, and the variability of the ratio, measured by the coefficient of dispersion (COD), were then compared to the benchmarks established by the Colorado State Board of Equalization.

When individual parcel ratios for a particular property class are arrayed by numerical value, the value of the ratio that lies in the middle of the array is defined as the median ratio, which is a measure of central tendency (half of the ratios are greater than the median ratio and half are less). A parcel appraised at its market value will have a ratio value of 1.00. The coefficient of dispersion is the measure of an individual parcel ratio deviation from the median. The deviation indicates how uniformly the assessor is valuing parcels.

The Colorado State Board of Equalization (SBOE) has established the following median standards that all county assessors are required to achieve:

Summary Results of Sold Parcel Analysis

This report presents the analysis and associated conclusions with regard to property valuations within Jefferson County for the 2002 tax year. By law, these valuations are based on the tax status date of June 30, 2000.

The results of the analysis are summarized in the tables below, "Summary Results of Sold Parcel Analysis," and "Summary Results of Sold Parcel Analysis by Economic Area" (if applicable). The complete analysis, including frequency distributions of ratios by class, plots of 2002 assessed value versus the sales price, ratio results, and stratification of results in single-family class has been appended to this report.

Summary Results of Sold Parcel Analysis

Summary Results Of Sold Parcels by Economic Area

Conclusions

The sales ratio analysis for the property classes analyzed in Jefferson County indicates that the median ratios and their associated coefficients of dispersion are within the benchmarks established by the SBOE. No significant differences between the change in assessed value for sold parcels and the change in assessed value for comparable unsold parcels in any classes were identified.

Recommendations

None.

Agricultural Land Study

Findings

• The agricultural land in Jefferson County was classified before a soil survey was published. A soil survey is now available for the county.
• Aerial photos are in the assessor's office.
• The land classification is broad without adequate detail to accurately reflect variations in productivity between parcels. There is one class of land for the Irrigated Farm, Dry Farm and Meadow Hay. There are no sub classes under these major land classes.
• Grazing land is appropriately classified by carrying capacity with the aid of SCS Range Site Maps and Range Site Descriptions.
• Meadow Hay ten-year averages need to be based on Irrigated Other Hay not on Non-irrigated All Hay
• The lease terms used accurately reflect land use in the county.
• Crop yields as a percentage of the ten-year county average reported by the Colorado Agricultural Statistics Service as: Dry Land Wheat 110%, Irrigated All Hay 105%. There are limited acres of Wheat and Irrigated Hay and an accurate reporting system is questionable. Jefferson county used data from Adams County, but not weighted averages.
• Commodity prices, expense items, and capitalization rate specified by the DPT were properly used, except baling expense. The county used $6.25 per ton verse $6.24 per ton.
• Crop expenses are a ten-year average but appear to be substantially lower than adjacent counties.
• One percent of each land class was physical inspected with the majority of parcels conforming to county appraisal records, although present records do not actually reflect individual parcel differences in all classes.

Suggestions

• Due to limited available data, develop a ten-year average for crop expenses and yields, utilizing data from regional and adjacent counties. A weighted adjacent count's average would be appropriate.
• Compare Irrigated Land and Dry Land values with adjoining counties.
• Use Irrigated Other Hay to calculate ten-year average Meadow Hay.
• Implement above suggestions into a comprehensive long-range valuation plan and document as such.

Recommendations

None.

Agricultural Outbuilding and Residence Study

Jefferson County is exempt from this portion of the Property Assessment Study.

Personal Property Study

Thos. Y. Pickett & Company, Inc., conducted a procedural study on the overall approach to personal property in Jefferson County. The study was executed in compliance with the provisions of Article X, Section 3(2)(a) of the Colorado Constitution and CRS Section 39-1-104(16).

Procedural Verification

In accordance with ARL Volume 5, Jefferson County has an established discovery process for personal property.

The time frame established for the 2002 audit was January through December 2002. Scheduled were selected for audit based on the following criteria:

• Non-filing or "Best Information Available" assessments.
• Omitted property discovered.
• Incomplete or inconsistent declarations.
• No additions or deletions for three years.
• Accounts with discrepancies from prior audits.
• Same business type or use.
• Lease buyouts which are incorrect or not reported.
• B.O.E or B.A.A. order or finding.

A random selection of schedules was identified for statistical analysis. Present worth established by Jefferson County was compared to present worth developed by Thos. Y. Pickett & Company,Inc. Specific items valued by techniques other than cost trending and depreciation were excluded from the ratio analysis.

Jefferson County used the indices, depreciation schedules, economic life, and level of value adjustment factors recommended in ARL Volume 5.

Statistical and Procedural Analysis Results

The ratio study on the randomly selected parcels indicated a median appraisal ratio of 100.2%. Therefore, the overall level of appraisal was in compliance with the current standard adopted by the State Board of Equalization.

The procedures employed by Jefferson County are in compliance with current guidelines and policies defined by the Division of Property Taxation, including the required plan to audit an appropriate number of personal property schedules each year.

Recommendations

None

Sales Verification

Jefferson County maintains master sales, verified sales and qualified sales lists. Lists are maintained on a daily basis. The verification process of all sales is supplemented with a letter or phone call when TD 1000's are incomplete.

The sales list development evaluation includes a random sample of qualified and unqualified sales pursuant to state requirements. Vacant land, single family and commercial sales fall within accepted requirements.

Economic Area Evaluation

Jefferson County has identified the variables which influence property values of specific neighborhoods and has adequately documented the conclusions reached. The county has also mapped the economic areas and can readily identify the economic area for each property.

Subdivision Discounting

Jefferson County has developed marketing areas for vacant land parcels and has defined these areas by divisions and filings.

Questionnaires were mailed by the county to subdividers to gather information necessary for discounting. The county has documented its discounting procedures on each subdivision as well as the development of its discount rate of 15.00 percent. Subdivided land with improvements and vacant lots in subdivisions where at least 80% of the lots have been sold were appraised at market value.

Recommendations

None.

Natural Resource Study

Thos. Y. Pickett & Company, Inc., conducted a study in Jefferson County that included various relevant natural resource elements.

Earth or Stone Procedures

The Colorado Revised Statutes, Article 39, Section 6, and the ARL, Volume 3, provide the guidelines in appraising natural resource property. While all three approaches to value should be considered, the income approach is the most widely used in the valuation of earth or stone. Production and life of the leases were provided by the operator. There are no other sources available to document production. The economic location factor was applied to the gross tons extracted to determine the landlord's royalty. The landlord's royalty was multiplied by a recommended Hoskold Factor to find the actual value. The Hoskold Factor was calculated using the life of the reserves.

Conclusions

The guidelines set forth by the natural resource valuation procedures were followed in determining these values.

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