Floods lower property values, tax revenue

After the waters receded last September in what would become the second most expensive flood in Colorado history, Larimer and Boulder counties saw $420 million in property value evaporate.

Boulder County was hardest hit, losing $320 million in value, while Larimer County lost $100 million.

Property owners in both counties will experience lower tax bills this year as a result of last year’s flood. County governments will a see decline in tax revenues as well, with Boulder forecasting a loss of nearly $575,000 and Larimer estimating an overall decline of $700,000 to $1 million.

Although both counties are experiencing a strong rebound in construction activity, most of the gains were wiped out by flood-related losses. Boulder County for 2013 saw virtually no increase as a result of the floods, according to county Assessor Jerry Roberts.

“With the new construction increases for this year, we have resulted in a flat assessment for the year,” Roberts said via email. “In other words, the gains we’d normally see from new construction, remodels, etc. were offset from the losses of the flood, resulting in a .002 percent increase.”

According to Larimer County Chief Deputy Assessor Alexis Smith, two separate assessments were conducted in affected counties statewide. The first was initiated immediately after the rains stopped to determine the state of properties and how much they were affected by the flood. The adjusted values by the initial assessment were used by property owners for their 2013 tax filings. Because property values decreased, taxes owed on demolished properties plummeted, affecting the total amount received by the county.

“For 2014, our review was based on a number of factors from access to recovery time,” Smith said in an email. “We recognize that these properties are not in the same set of circumstance as they were prior to the flood.”

The value reductions depended on the severity of the impact to specific property. Many residential and commercial properties saw reductions in value of less than $10,000, while others saw values drop by more than $25,000, said Smith.

“We did an initial damage assessment in September and October of last year to determine the damage at that point and which buildings were ‘destroyed,’ ” Smith said in an email interview. “Our staff conducted additional reviews in these areas to determine the state of the properties on Jan. 1, 2014.”

For destroyed and severely damaged properties, adjustments were figured for the 2013 tax year, according to Larimer County. These adjustments were only for properties where the structure was destroyed or damaged to the point of demolition. These adjustments impact the property tax bill that is payable in 2014 because property taxes are paid in arrears. Boulder County followed the same protocol to determine value and tax reduction numbers.

“These numbers are loss of property value for property tax assessment purposes only,” Roberts said. “They are based on methodologies that come from state statutes and do not represent current time periods and only reflect taxable property. The numbers are prior to our official pre-certification, so it can vary some based on a lot of things including the appeal period.”

Despite decreases in valuations from flood-affected areas, both Larimer and Boulder counties report an increase in values for 2014 in growth and construction. Smith said Larimer County is expecting values to increase more than $635 million even with the flood adjustments, primarily because of new activity in the Fort Collins and Loveland areas. Roberts reported a much smaller increase of $107,164 in assessed value for Boulder County.

Broomfield County reported no change in property value assessment.

The Weld County assessor’s office was unable to provide assessment data by BizWest’s deadline.

Although assessments have been carried out, values may change based on new information or property owner appeals. The definitive effect on total losses and property values remains to be confirmed.

“These are very preliminary numbers,” Smith said. “It is really hard to say what the final impact to some of these authorities will be.”

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