City real estate values show rise since 2010

WINCHESTER — Assessed real estate valuations in the city increased slightly in 2012, breaking a four-year trend of falling values.

That’s good news for property owners and school system officials, who now are in a position to potentially move forward with the construction of a new John Kerr Elementary School far sooner than expected.

Data from Winchester’s biennial reassessment indicates that the city’s housing stock was valued at a combined $1.63 billion in 2012. That’s up slightly from the $1.6 billion in assessed residential value reported in 2010.

The story was similar for commercial valuations. The city’s commercial properties were valued at $1.14 billion, up from $1.1 billion two years ago.

Those numbers combined place the value of the city’s real estate at $2.77 billion, up $70 million from 2010.

“It appears that things are leveling off a little bit,” said Celeste Broadstreet, assistant finance director and real estate administrator.

Broadstreet said residential values rose slightly in some parts of the city and dropped slightly in other areas, while the commercial sales in 2012 supported relatively flat valuations.

Though the increase in property values was slight, City Manager Dale Iman said it is a positive local sign that mirrors national trends after years of declining values.

“I’m optimistic that we have a bright future,” he said, “and this helps to confirm that. I don’t think we’ll see huge growth in the real estate market over the next couple of years, but I think values will be on a steady incline.”

The value of commercial properties surprised city officials, who were projecting a 3 percent decline.

“That shows that we have a strong retail and commercial market,” Iman said.

The better-than-expected real estate values — combined with a decrease in the city’s debt service accomplished by refinancing bonds totaling almost $30 million — have put the city government in a position to issue bonds for a new John Kerr Elementary about a year sooner than expected, the city manager confirmed.

He told City Council and School Board members at a joint meeting Tuesday night that it appeared as though city leaders would be in a position to issue the bonds as early as this spring. That was verified Wednesday in a meeting with the city’s financial advisers.

Iman said at the meeting that it likely would be in the city’s best interest to issue the bonds as soon as possible to take advantage of low interest rates. Winchester can borrow money now at interest rates of less than 3 percent.

“We have the capacity at this point to move forward because of the various steps we’ve taken,” he said. “The question of whether to move forward is up to City Council.

“The School Board is reviewing the site options and will be making a recommendation as to which site or sites might be most appropriate for John Kerr.”

While the values of city real estate are known, the amount property owners will pay in taxes isn’t. The council still must set the tax rate for this year, and that likely will not occur until April.

Last year’s rate of 95 cents per each $100 of assessed value was set in April. It represented a 9-cent increase over the 2011 rate and provided $2.4 million in extra revenue for city government operations.

If the council were to decide to keep the rate at 95 cents again this year, it would amount to a tax increase and a public hearing would be required. But if the board lowered the rate to provide about the same $23.55 million in real estate tax revenue that it billed in 2012, no public hearing would be required.

Iman said he is preparing a budget that calls for about the same amount of real estate tax revenues in 2013 as were billed in 2012.

“I don’t expect that council has any appetite for increasing the tax rate this year,” he said. “I don’t see a tax increase in the cards as far as property taxes.”

Some city rates or fees might increase for 2013, though. During last year’s strategic-planning process, it was decided that all of the city’s rates and fees would be reviewed to determine if adjustments were necessary.

If any fees are raised, the action would likely provide slightly more revenue than in previous years. However, a slight increase won’t be enough to cover department requests.

“This will be a tough budget year,” Iman said. “We’re getting a lot of requests for funding and we’re not going to be able to accommodate everyone, unfortunately.”

Finance Director Mary Blowe said the revenue-neutral rate is being calculated and should be presented to the City Council at its Feb. 26 work session.

Programs are available to provide real estate tax relief for homeowners 65 or older or permanently disabled who meet income limits and other filing requirements. Completed applications must be received by April 1, and homeowners must file annually.

For more information, call the commissioner of the revenue’s office at 540-667-1815. Forms for the programs can be found online at winchesterva.gov/crev.

— Contact Vic Bradshaw at vbradshaw@winchesterstar.com