2017 REAPPRAISAL COST PROJECTIONS FOR HAMILTON COUNTY CITIES
Municipality Parcel Count Cost*
Chattanooga 75,088 $557,152
Walden 1,029 $7,635
Collegedale 2,900 $21,518
East Ridge 8,410 $62,402
Ridgeside 193 $1,432
Lookout Mountain 975 $7,234
Lakesite 864 $6,410
Red Bank 5,054 $37,500
Signal Mountain 3,509 $26,036
Soddy-Daisy 6,112 $45,351
*Cost is based on a calculation of $7.42 per parcel.
Source: Hamilton County Assessor of Property
The 10 cities in Hamilton County could be on the hook for a combined $772,674 in unexpected reappraisal costs if the county decides to begin enforcing a 27-year-old state law.
At $557,000, Chattanooga stands to take the largest hit.
County Property Assessor Marty Haynes said he broke the news to the municipalities' mayors last week. The assessor appraises all properties in the county, including those inside the cities, for tax purposes.
State law says cities should help pay for the quadrennial reappraisals, but Hamilton County's cities haven't been charged their share for nearly three decades. The next reappraisal is scheduled for 2017.
"This is not the way you want to spend your first 100 days in office, when you have to sit down with all 10 mayors and tell them, 'You owe us this money,'" Haynes said in a phone interview.
On Friday, Chattanooga Mayor Andy Berke met with his fellow mayors to discuss the matter. State law allows the county to forgo cities' share, and that's been the case here, Berke said.
"For decades, the city and county have agreed not to assess this fee because the county already has a duty to appraise every property," Berke told the Times Free Press in an email. "The request for almost $600,000 effectively raises taxes on every city resident while they receive nothing additional in return. If necessary, we are always happy to enter into a written agreement formalizing what has been done before."
Haynes said he learned Hamilton County was not complying with state law when he took state training courses for his job. Haynes was elected in August to replace Bill Bennett, who retired.
Haynes has projected the 2017 reappraisal will cost his office $2.28 million, including $2.1 million in salaries and $151,917 in operational expenses.
Cities' shares are calculated on a formula that bills $7.42 for each parcel of property within the city. East Ridge, with 8,410 parcels, comes in a distant second to Chattanooga's 75,088 parcels. The assessor estimates its bill at $62,400. Ridgeside, the smallest municipality with only 193 parcels, could pay $1,432.
The reappraisal fees would go into the county's general fund, Haynes said.
Tennessee's Division of Property Assessments does not track which counties share appraisal costs with their cities, spokesman John Dunn said in an email. However, the department believes the practice of billing cities "is the norm rather than the exception."
Dunn confirmed Shelby County bills its cities, while Nashville/Davidson and Sullivan county officials told the Times Free Press they do not. Knox County officials did not respond to an enquiry Friday.
Closer to home, Bradley County assessor Stanley Thompson said the county does bill Cleveland and Charleston for reappraisals.
Municipalities other than Chattanooga are pushing back against unbudgeted reappraisal expenses.
The Small Cities Coalition of Hamilton County, which includes Collegedale, East Ridge, Lakesite, Lookout Mountain, Red Bank and Soddy-Daisy, issued a statement on the matter.
"We appreciated Assessor Haynes meeting with Coalition members and informing us of his intentions, which we strongly oppose," spokesman Davis Lundy said in an email. "We understand he is doing what he was told to do by the comptroller's office, but that doesn't make it right."
Coalition member cities said their residents already pay for reappraisal costs through their county property taxes, just like residents who live in unincorporated areas of Hamilton County.
"Our budgets are tight and our taxpayers do not deserve to have more state or county fees directed their way," Lundy said.
Similar sentiments bubbled up outside the coalition.
"The [reappraisal] process would take place regardless of the existence of a municipal boundary," Signal Mountain City Manager Boyd Veal said Thursday.
Signal Mountain's projected $26,000 reappraisal bill for 3,500 properties is a lot of money, especially when it has not been budgeted, Veal said.
Haynes said he understands the opposition.
"They are doing their job of protecting their city finances," he said.
The municipalities also don't like Haynes' long-term plan to bill them for off-year appraisal work prior to the 2021 countywide reappraisal.
Haynes said appraisal work is done throughout the four-year cycle and includes collecting data on new construction and additions to existing structures. That information is then included in the next reappraisal.
The cost to Chattanooga would be $832,773, according to projections. East Ridge would have to pay $93,272 and Ridgeside would pay $2,140. About 40 percent of the costs would be generated in the three years before the 2021 reappraisal.
The Small Cities Coalition of Hamilton County strongly opposed the off-year cost-sharing.
"Coalition members do not believe the statute even suggests that the assessor can start charging cities for reappraisal costs during off years, which is what is proposed," Lundy said. "This idea increases our costs for the 2021 reappraisal by more than 60 percent."
The Hamilton County Commission does not need to approve Haynes' plan, although commissioners could vote to waive cost-sharing or arrange other agreements with the cities.
Haynes said he plans to formally present the plan to the commission early next year, and has spoken to most of its members in recent weeks.
As for Friday, several commissioners said they don't have enough information to make a decision yet.
"I've seen a concept, but not details," Commissioner Greg Martin said. "I'm withholding judgment until I have an opportunity to review the plan."
Commission Vice Chairman Randy Fairbanks and Commissioner Joe Graham echoed Martin's comments, saying they looked forward to speaking with Soddy-Daisy and Lookout Mountain, respectively, to get a better understanding in the near future.
Commissioner Warren Mackey described the issue as a "double-edged sword."
"As I understand it, it's the law," Commission Chairman Chester Bankston said.
Commissioners Jim Fields and Sabrena Smedley could not be reached for comment.
Haynes said he has not had a chance to discuss the matter with commissioners Greg Beck and Tim Boyd.
Lundy said the small cities group will be lobbying commissioners against the plan.
"We will also talk with our state legislators about abolishing this unfair law," Lundy said. "The county has never enforced this statute in the 27 years since it was passed so it is pretty clear that the county has an unspoken agreement not to force these fees on taxpayers in our municipalities."
Contact staff writer Paul Leach at 423-757-6481 or firstname.lastname@example.org. Follow him on Twitter @pleach_tfp.