Ellis County will lose about 50% of its oil valuation from the ongoing sharp decline in world oil prices and the COVID-19 economic downturn.
That drop will be reflected in the county’s 2021 oil values, according to Ellis County Appraiser Lisa Ree.
"Oil prices are down, affecting the economy. COVID-19 is affecting the economy," Ree told Ellis County Commissioners Monday evening during their regularly scheduled meeting at the Ellis County Administrative Center, 718 Main. "The effect of those two current events, what they will have on the local market, will not be for this year. We’ll review that as the year goes, and that will be reflected in the 2021 values."
"Any idea on dollar-wise what that’ll be?" asked County Commissioner Dean Haselhorst.
"We had roughly $32 million assessed last year, for 2019," Ree said. "So I’m projecting $13-or-$14 million assessed."
As a result, the county’s 2021 budget will probably lose an estimated $500,000 in revenue that normally would be available, Ree said.
"Of course that’s really too soon to know for sure," she said. "We’re not halfway through yet trying to assess those values."
The county has about 1,500 oil leases, she said.
With oil typically a big source of revenue for the county, oil prices have been adjusted downward by the Kansas Department of Revenue Division of Property Valuation. The Kansas crude oil price schedule, provided to help county appraisers establish market value for oil and gas leases, has adjusted its price of oil from a high end of $46 a barrel down to $23 a barrel, Ree said.
Things aren’t so grim for 2020, Ree indicated. The 2020 valuation numbers reflect the values of property as of Jan. 1, before the deep oil downturn and COVID-19.
Those valuation notices are arriving this week in Ellis County residents’ mailboxes. While not a tax statement, the valuations are an early indicator of the taxes residents can expect to owe the county and other taxing entities.
For 2020 there was an overall increase in property valuation of roughly $39 million, about 1.5% over last year, she said.
That equates to an increase of $6.1 million in assessed valuation.
About $20.8 million of the increase was new construction and remodeling, which is actually a decrease from 2019.
"In the last three or four years, our area has seen a large increase in ag use, agricultural land values," Ree told the commissioners. "We were told to expect that for another one to two years. However this year, ag values in the county have remained roughly the same. We saw a decrease in the average land value for dry crop, but pastureland has gone up. Basically it’s been a wash."
For the county’s real property owners receiving their statements this week, about 43% saw either no change, or a decrease, of their valuation, Ree said.
The rest, 57%, saw an increase.
The typical increase for homes was a little over 3%, she said, and for commercial as well.
"The commercial, we have about $6 million worth of new construction and remodeling," Ree said.
Real property owners have until May 1 to contact Ree’s office to appeal their values in hopes of lowering their tax bill.
"We’ve had a couple calls already, concerning the current events and how it’s affecting the value," she said. "That’s why I want to stress that it’s as of Jan. 1st."
Gov. Laura Kelly’s stay-at-home order will affect Appraiser’s Office deadlines, Ree indicated, because she’s delaying state-mandated property inspections.
"We may have a bunch of work bombarding us at one time once the stay-at-home order is done," she said.
Informal appeal hearings will not be held in-person, as in the past, Ree said, but over the phone instead.
"We need to do a physical interior inspection," she said. "We’ll hold off as long as possible. Hopefully when things get somewhat back to normal, we’ll be able to hold those. We have to have all those informal hearings completed by May 15."
State-mandated reinspections are also effected.
"We are required to physically inspect a sixth of the county every year. Typically we start that process now, in April," Ree said. "With the stay-at-home order, even though we are exempt from that, I don’t feel it’s good public relations to be knocking on people’s doors and asking about their interior, or walking around the house. So we’re going to delay that process until a later time."
She can request extensions, she said, because the state has told counties they will be a little lax on some deadlines.
"Our goal is to strive to meet those deadlines as best we can," Ree said. "If we don’t, that affects other offices. If we don’t make the June 1st certification of values to the Clerk, that affects her abstract process in notifying the taxing entities of potential values."
Ree’s office must notify oil operators of their oil valuations by May 1, and in the last few years she’s asked for a week extension. That will likely be the case again this year, she said.
Also delayed are property measurements required 30 days after a deed is filed involving a monetary transaction.
"With the stay-at-home order I don’t think that’s good practice to be doing that," she said.
Still on track, however, is notification to personal property owners of their values by the required May 1 deadline.
All the numbers are preliminary, Ree said.
"We’ve go to go through our field process. They’ll be final when we certify June 1st, hopefully June 1st," she said. "Some of our operations may be stalled for awhile. At this time we’re all still working our regular hours, but we’ll see how it goes."