Potential of Broad Use of Digital Parcel Map

Potential of Broad Use of Digital Parcel Map Databases to Increase Property and Sales Tax Revenues Tract H: Communications & Professional Development Session: Business Process Change & Technology Date: Wednesday, September 1, 2004 Time: 1: 30 pm - 3: 00 pm Location: Salons A&B PRESENTED EARLIER AT IAAO URISA GIS in CAMA: Austin, TX, March 31, 2004 URISA Conference: Atlanta, GA October 15, 2003 CALGIS 2003: Palm Springs, CA March 27, 2003 Dennis H. Klein, AICP PE Boundary Solutions, Inc. Mill Valley, California September 1, 2004 ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

OUTLINE…. - THE THREE As – Digital Parcel Map Accuracy, Availability and Advantages. - DATA SHARING Policy Survey. TAX REVENUE ADVANTAGES OF BROAD USE of Digital Parcel M Data. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

BACKGROUND - GIS Location Platform - - National Street Centerline since 1980 DIME File. - Address ranges based. - Addresses displayed as latitude / longitude points. - Big breakthrough but ERROR PRONE. - Parcel Boundaries instead of Address Points. - What’s inside a parcel boundary is at an address vs. around a point in or near a parcel. - What’s at an address is inside its parcel’s boundary. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Accuracy ADDRESS POINTS Vs. PARCEL BOUNDARIES 347 Hazel Ave. Maporama 347 Hazel Avenue Mill Valley, CA Digital Parcel Boundary Map ©Boundary Solutions. August 2004 45 0’ Er ro Map Point r Map. Quest 347 Hazel Avenue PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Accuracy - Superior representation of location is not a remedy unless boundaries are accurate. - Much content produced in the last five years is highly accurate. - Latest GPS, survey control, image rectification technology. - Over 85% is within 4 -6 ft. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Accuracy Percent Parcel by Accuracy Category (60 Million Parcels) (Source: NPDP Meta. Database Records) ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Availability - Distributed across over 3000 county / township jurisdictions. digitized. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Availability Growth By Millions of Parcels Total Digital Parcel growth Is nosing over as all large counties finish their maps. Total Finished Map growth is nosing up as many smaller counties complete their maps. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

Availability - - Projected PROJECTED COVERAGE: 2010 – Assumes all counties > 20, 000 Population have a map. Total Counties: 1850 (Total Population 260 Million) Includes. Total several Jurisdictions under 20, 000 that 2. 42 have or will soon have a finished map. Parcels: 105 Million (Assumes persons/parcel) ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

DATA SHARING POLICIES ENTIRE JURISDICTION DATABAE PRICE – SAMPLE: 566 JURISDICTIONS (Source: NPDP Meta. Database Records) ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

DATA SHARING POLICIES $/PARCEL PRICE – SAMPLE: 566 JURISDICTIONS (Source: NPDP Meta. Database Records) ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

DATA SHARING POLICIES $/PARCEL PRICE – SAMPLE: 67, 000 Parcels (Source: NPDP Meta. Database Records) ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

DATA SHARING POLICIES INVISIBLE PARCELS are due to insistence on COST-RECOVERY pricing. As more jurisdictions become PUBLIC RECORDS COMPLIANT (Duplication Pricing) COST RECOVERY pricing results in a DOUBLE PROBLEM… - Little Data being sold -> Low Data Sales Revenue. - Little Data being sold -> Low use precludes MAJOR tax revenue increases from broad use. But How Does Broad Use of Digital Parcel Map Databases Increase Tax Revenues? ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

FIVE WAYS BROAD USE OF DIGITAL PARCE DATE INCREASES TAX REVENUES. - Optimized More Accurate Real Estate Transactions. - Reduced Insurance Premiums Prices. - Lower Cost Infrastructure Operations. - Long Term Improved Built Environment. - Increased Attraction of Major Economic Developmen Projects. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Transactions - Flood and other natural hazard Certification service company operations… - Certification determination done by buffering a point on a street map. - According to US Postal Service database (4 digit Zip Code extension). - Highly accurate when all properties along a street have uniform frontage. - Because this is often not the case…. 10% - 20% can fall outside parcel…. - Uneven property frontage. Flag lots and unnamed alleyways. Irregular shaped lots. Non-compliant address assignments. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Industry Operations PARCEL BOUNDARY CORRECT ADDRESS POINT ADDRESS FINDING YES Over 312 COMMENT Lake Street YES NOReporting Under Reporting 117 New Street NO NO HAZARDOUS CONDITION 117 New Street x ©Boundary Solutions. August 2004 312 Lake Street x PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Industry Operations Since exact limit of flood and other natural hazard zones is uncertain…. 50’ + buffering is a typical practice. 98% of all government sponsored digital parcel map data within 40 ft. Therefore…. Parcel layer has become a viable location platform for Natural Hazard Certification Determination. Also, ARGUABLY… More accurate and efficient real estate/financial operation will result over time in increased property values and, hence, property tax revenues. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

For Example… Optimized Real Estate Operations Induced Tax In JURISDICTION Monterey County, CA Dallas County, TX, OH Parcel Count 111, 489 820, 000 Total Assessed Value $34, 700, 000 $163, 000, 000 Increased Real Estate Property Values 1% 1% Property Tax Rate %1. 10 %2. 4 POTENTIAL TOTAL INCREASED REVENUES $3, 539, 400 $39, 168, 000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices Large insurance companies and all others served by Insurance Service Office (ISO). Rates set by bufferering lat/long address points to determine if property is in … - ©Boundary Solutions. August 2004 Wild Fire Zone Flood Zones High Crime Zone Faults, Tsunami, Seismic Zone Subsidence / Landslide Zone Which Fire District Others PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices Manual examination impractical. Findings depends exclusively on “machine readings”. Underlying uncertainty is “written off” and. . . Passed on to the consumer by being added to the premium price. This accuracy problem is eliminated by replacing Address Points with Parcel Boundaries. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices ERROR FREE Parcel Based Location Platform Insurance Premium RESULTING MEASUREMENTS Used to Generate Accurate Insurance Ratings Rate Processing WILD FIRE P 1 FAULT S P 2 CLOSE TO SHORE P 1 ©Boundary Solutions. August 2004 P 2 P 1 SEISMIC ZONES P 2 HIGH CRIME AREAS P 1 P 2 FIRE DISTRICTS P 1 P 2 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices Assuming normal market influences, increased accuracy of parcel boundaries over buffered address points results in up to a 15% reduction in premium prices. Broad use results in data sponsor being subject to major insurance savings. Also, ARGUABLY… Money not spent on insurance is spent locally, increasing sales tax revenues. Insurance savings enhances location desirability, real estate values and tax base. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

For Example… Lower Insurance Premium Induced Tax Inc JURISDICTION Monterey County, CA Dallas County, TX, OH Parcel Count 111, 489 820, 000 Total Assessed $34, 700, 000 Premium Price / Value Assessed Value Ratio 1% 1% $163, 000, 000 Greater Accuracy Induced Premium Reduct. 12% Savings Spent on Sales Tax Items 80% 12% 80% Sales Tax Rate 7. 25% POTENTIAL INCREASED SALES TAX $2, 415, 000 $12, 925, 000 8. 25% BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Optimized Lower Cost Infrastructure Operations. Private sector utility service areas can cover many counties. Traditionally, their land bases have been planimetric maps of Pavement edges. Other Land Features. For the first time, many counties in their service areas have completed parcel maps. Utilities have a growing interest to add an “intelligent” parcel boundary -layer. Greater detail to expedite facility planning, design, maintenance and operation. Improved emergency response from more accurate address location. Tightened billing by reconciling customer records with corresponding address. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Optimized Electric/Gas/Telephone Utility Operations TOGETHER, these benefits yield - Lower operation cost and increased service quality. - Assure competent service without rate increases… - EVEN DECREASES. - ARGUABLY, disposable income not spent on utility bills is spent locally on other stuff - Pumping up Sales Tax. - - And making the community a more desirable “location” - Pumping up real estate prices and hence, property tax base. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

For Example… Lower Utility Bill Induced Tax Revenue Inc JURISDICTION Monterey County, CA Dallas County, TX, OH Parcel Count 111, 489 820, 000 Total Assessed Value $34, 700, 000 $163, 000, 000 Potential Utility Bill Reduction 5% 5% Average Annual Utility Bill Per Parcel $4, 500. 00 $5, 000. 00 Utility Bill Savings Spent on Sale Tax Items 80% Tax Rate 7. 25% POTENTIAL SALES TAX INCREASE $12, 177, 000 80% 8. 25% $1, 455, 000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. All atrocious, hideously incompatible developments have one thing in common. They all received a majority vote at city council / county board of supervisors. How do really bad projects get approved? A long standing political reality - - to get reelected, you have to… “Dance with the one who brung ‘ya. ” ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. When partner is community groups and watchdogs, little chance of bad projects. When main partner are development interests, bad projects will happen. There is nothing wrong with this picture. This balance of power is just the way it is. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. Easily available GIS data Databases changes this picture. Best of all, does not challenge the way it is. But tips the process just the same. Typical out-of-time and out-of-money developer rushes about pursuing their interest - - maximizing profits. Far more concerned about having three votes than whether it makes sense. Classic result: wrong use, wrong site, wrong configuration. Spewing out traffic and waste in all the wrong places. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. The difference the data makes… Same time required to physically attain a copy of a deed description, same developer can turn on their computers and reference not only the parcel(s) description but… Surrounding use patterns Relative assessed value Relative age Use code / zoning Block level demographic/ economic characteristics Traffic intensity General plan designations Natural and manmade hazards Flora and fauna And more ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. When spatial data is common enough, it becomes commonly used. Without even meaning to, the same developer decides to: - DO NOTHING - - lure of cheap land offset by early recognition of excessive costs. - Spatially query entire region to find more amenable (profitable) site. - Check for incompatible conditions and configures projected accordingly. - Uses better understanding of neighborhood to optimize use and configuration. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Long Term Improved Built Environment. Ironically, the more spatial data is used, The more pressure by development community on elected officials for the d to be OK. The more elected officials make sure GIS department has enough budget ge the job done. AND ARGUABLY, The more the built environment improves, the more - The community becomes a more desirable “location”. -- Pumping up real estate prices and the tax base. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Increased Attraction of Major Economic Development Pr Rappatoni Corporation is implementing parcel boundary based Multiple Listing Services. FARES just purchased Market. Lynx to do the same. About 20 Metros already linked to digital county databases. Subscriber in New York can browse for “dream parcels” where there is coverage. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS Increased Attraction of Major Economic Development Pr If your jurisdiction is in one of these systems, you can be seen. When constraint is high (price, restrictive use) the Jurisdiction is “invisible”. How much more is the GIS budget protected when… Recently attracted out-of-state major (even “green”) economic development projects can be cited rather than last year’s data sales revenues. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

For Example… Attracted Capital Project Generated Tax In JURISDICTION Monterey County, CA Dallas County, TX, OH Parcel Count 111, 489 820, 000 Total Assessed Value $34, 700, 000 $163, 000, 000 Ratio Additional Capital Projects / Tax Base 1% 1% Potential Increase in Property Tax 1, 010, 000 Property Tax Rate $347, 000 %1. 10 POTENTIAL TOTAL INCREASED REVENUES $39, 168, 000 %2. 4 $3, 530, 000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

PUBLIC INTEREST BENEFITS CONCLUSION TOTAL POTENTIAL INCREASED SALES AND PROPERTY TAX REVENUE FROM BROAD PRIVATE SECTOR DIGITAL PARCEL MAP DATABASES INCREASED TAX REVENUES MONTEREY, CA OPTIMIZED REAL ESTATE OPERATIONS INDUCED PROPERTY TAX INCREASE $3, 539400 $39, 168, 000 LOWER INSURANCE PREMIUM INDUCED SALES TAX INCREASE $2, 415, 120$12, 925. 440 LOWER UTILITY BILL INDUCED SALES TAX INCREASE $1, 455, 000 $12, 177, 000 IMPROVED BUILT ENVIRONMENT QUALITY INDUCED PROPERTY TAX INCREASE $3, 539400 $39, 168, 000 OUT-OF-TOWN FINANCED DEVELOPMENT INDUCED PROPERTY TAX INCREASE $3, 539400 $39, 168, 000 BUT ALL THIS is possible ONLY IF digital Parcel is 5 years – more further out) % TOTAL ASSESSED PROPERTYMap VALUE data (After About %0. 042 %0. 087 priced LOW ENOUGH for BROAD USE. ANNUAL TOTAL INCREASED TAX REVENUE INCREASE $14, 488, 000 $142, 600, 000 ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

CONCLUSION…. What’s in it for the Assessor? By adding “Data Management” to your appraisal mission, not to make money off the data, but to expedite its BROAD USE, benefits the Assessor in two ways… o Increased Sales Tax Revenues o Increased Property Tax Revenues ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE

CONCLUSION…. This presentation has communicated to you the sources and potential magnitude of future revenue increases induced from BROAD USE of digital parcel map databases. It is up to you to figure out how to direct the portion you need to operate the Assessor’s office in general and the Mapping Division in particular. One thing is for certain, BROAD USE of digital parcel map data is far more interesting than CONSTRAINED USE. ©Boundary Solutions. August 2004 PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCE