DAVENPORT CITY AND SCOTT COUNTY ASSESSOR OFFICES DRAFT CONSOLIDATION PLAN

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1 DAVENPORT CITY AND SCOTT COUNTY ASSESSOR OFFICES DRAFT CONSOLIDATION PLAN REQUESTED BY DAVENPORT CITY CONFERENCE BOARD AUGUST 2013

2 Study Overview The Mayor of Davenport requested that a working group of staff from the City, County, and Davenport School District develop a draft plan for the consolidation of the City and County Assessor Offices. The staff group was formed in May and have worked together to review the current staffing, budget, and programs of the two offices along with comparisons of other large county offices both consolidated and separate. The group developed average cost by parcel, population, and assessed value as well as average number of employees and type of job classes. The previous two studies done in 2002 and 2006 by PVM Consulting also were reviewed. The charge from the Mayor was a plan to consolidate the offices and not an analysis of the cost benefit of a consolidation. (Letter included for reference.) With that in mind, staff reviewed current impediments to consolidation that would have to be overcome and the timing of actions to make a clear path for consolidation. The City Assessor has announced her retirement in August of The State law requires the Examining Board to request a list of eligible applicants to fill the vacancy within seven days of that vacancy. The consolidation legislation should occur prior to the City Assessor vacancy. The County Assessor term ends December 31, 2015; therefore, he will be able to implement the consolidation after merger. A smooth transition would require that both Assessors create one FY15 budget that would allow for the consolidation in August. Both Assessors have significant fund balances; however most of these dollars are pledged to projects for assessment software or hiring outside appraisers for update work. The unaudited County Assessor fund balance at June 30, 2013 is $1,079,915. The unaudited City Assessor fund balance at June 30, 2012 is $443,378. CASH AND FUND BALANCE 6/30/13 Cash 6/30/13 Fund Balance 6/30/12 Cash 6/30/12 Fund Balance County Assessor 1,125,340 1,079,915 1,142,419 1,073,205 Davenport Assessor 525, , , ,376 $ 1,650,622 $ 1,523,293 $ 1,383,378 $ 1,233,581 The FY14 budget of the City Assessor resulted in a property tax asking of $1,508,459 including the utility tax replacement dollars. That FY14 levy is $ The County Assessor s budget resulted in a property tax asking of $985,000 and a levy rate of $ The FY14 tax asking is lower than the FY 14 budget due to the use of accumulated fund balance for outside assessment work. Combining property tax dollars levied over all taxable property in the County for FY14 results in a combined levy rate of $ A goal of the consolidation should be to save enough dollars that the combined rate is not higher than the previous rate for the County

3 Assessor alone. The resulting decrease in the City Assessor levy would reduce taxes for a median Davenport homeowner by approximately $5 and a $250,000 small business by $22. Meeting that goal would require a reduction of costs between $350,000 and $400,000. Utility Replacement and Property Tax Dollars Tax Levy Combined Utility Replacement and Property Tax Dollars Tax Levy Adjusted FY 2014 Utility Replacement and Property Tax Dollars Tax Levy Goal Savings County Assessor Davenport Assessor Consolidated Assessor $ 985, N/A N/A $ 1,508, N/A N/A $ 2,493,459 $ 2,493, $ 2,112, $ (380,849) Comparison with Other Counties Below is a summary review of budgets, levies, and staffing for the five largest counties in Iowa for FY13. FY13 numbers were used in this analysis as comparison information for FY14 was not yet available. In the cases of Linn and Johnson Counties, each has a separate city assessor similar to the current arrangement in Davenport.

4 In order to create a more apples-to-apples comparison, this chart attempts to combine the FY13 funding levels of the Davenport City and Scott County Assessor s Offices to analyze how the cost of the assessment function in the entire county compares to that of the largest five counties in Iowa. Even at current funding levels, a merged assessor s office is above average in efficiency for this group. If nothing were reduced by combining these offices, the new assessor s office would be in line with large Iowa counties. Combined City and County Assessors Average of Iowa s Five Largest Counties FY 2013 Levy Rate City = $ / County = $ $ Budget per $100K Valuation $19.08 $21.36 Budget per 100 Population $1, $1, Budget per 100 Parcels $2, $3, % of Commercial Properties 7.01% 6.37% Comparison Between Offices When considering merging the Davenport City and Scott County Assessor s Offices, it is important to consider what is fundamentally different and similar about the two organizations so that proper planning and thought can be given to addressing potential issues down the road. Similarities Both offices have converted to the Vanguard Software system and in the case of the City Assessor have budgeted for the commercial base conversion, which will provide a basic platform for combining valuations. An opportunity to reduce consolidation costs may be available by transitioning future revaluations into Vanguard as they are completed. Both the City and County Assessor s Offices utilize a Board of Review for appeals. A Board of Review can be maintained in Davenport if the offices are consolidated. Differences The Davenport City Assessor s Office utilizes an in-house work force to complete assessments. The Scott County Assessor s Office utilizes a contract with an outside firm to provide the majority of its assessments. Davenport City Assessor s Office employees are on a different pay scale than Scott County Assessor s Office employees. Davenport City Assessor s Office employees participate in the City s benefit plan, which would change if the office were merged with Scott County.

5 Cost Savings of Merger The following goals have been identified as major goals if the two offices are merged. Maintain the Scott County Assessor s Office levy rate, which is lower than the Davenport City Assessor s Office levy rate. Reduce operating costs by approximately $400,000 in order to maintain a consistent Scott County Assessor s Office levy rate. Merging the offices together will ultimately result in staffing changes. While it is not the function of this report to advise what the staffing will be for a merged assessor s office, below is an example of how staffing could be structured to obtain significant operational savings. Combined City and County Employees Example Staffing in Consolidated Office Assessor 2 1 Chief Deputy 2 1 Second Deputy 1 0 Deputy 1 2 Appraiser 6 9 Office Coordinator 0 1 Office Administrator 1 0 Admin Appraiser Coordinator 1 0 Chief Clerk 1 1 Clerk Total While staffing levels would remain fairly constant, it is likely that the contract for outside appraisals could be significantly reduced and/or eliminated. The total annual budgeted amount for those contracts is approximately $500,000. The County Assessor Office s Second Deputy is retiring in FY14 prior to a merged budget. To smooth the consolidation this position should be held vacant until the merger. The combined office functions should be further analyzed to assure that through some basic process changes and reassignment of duties that all of the administrative functions are being met. Also the two Assessors should map out a process and timeline to change to more in house assessment work to significantly reducing the requirement of outside contracts. This change will create the savings needed to accomplish the levy rate goal.

6 Plan Implementation The FY15 budget is due no later than January 1, 2014 by law. It would be reasonable to expect that a combined budget could take 60 to 90 days to prepare. In order to begin that process the City of Davenport would need to vote on resolution which would state its intention to eliminate the City Assessor Office on July 1, The resolution should further address the need to collaborate with the County Assessor on the merger and to pledge the fund balance of the City Assessor Office for payouts and merger expenses. The resolution also should state that it is not the intention of the merger to increase taxes on the other jurisdictions but the City would work with the other local governments to assure that the goals of flat county levy rate can be maintain for FY15 and FY16. After those budgets, the levy rate would be a factor of revenue available to meet the budget needs of the merged office. That resolution should be approved not later than the end of September 2013 to follow the timeline suggested.

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