PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Potential of a Parcel-polygon Spatial Database to Increase Property and Sales Tax Revenues Tract H: Communications & Professional Development Session: Business Process Change & Technology Date: Wednesday, September 1, 2004 Time: 1:30pm - 3:00pm 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

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust THE THREE A s – Digital Parcel Map A ccuracy, A vailability and A dvantages. - DATA SHARING Policy Survey. -TAX REVENUE ADVANTAGES OF BROAD USE of Digital Parcel Map Data. OUTLINE….

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust 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. BACKGROUND

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 ADDRESS POINTS 347 Hazel Ave. Maporama MapQuest Map Point 347 Hazel Avenue Digital Parcel Boundary Map Vs. PARCEL BOUNDARIES 347 Hazel Avenue Mill Valley, CA Accuracy 450’ Error

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust 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. Accuracy

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Percent Parcel by Accuracy Category (60 Million Parcels) (Source: NPDP MetaData Database Records) Accuracy

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust Distributed across over 3000 county / township jurisdictions. - Of the 120 Million Parcels in the USA, over 75 Million are now digitized. Availability

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 PROJECTED COVERAGE: 2010 – Assumes all counties > 20,000 Population have a map. Total Counties: 1850 (Total Population 260 Million) Total Parcels: 105 Million (Assumes 2.42 persons/parcel) Includes several Jurisdictions under 20,000 that have or will soon have a finished map. Availability - - Projected

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 DATA SHARING POLICIES ENTIRE JURISDICTION DATABAE PRICE – SAMPLE: 566 JURISDICTIONS (Source: NPDP MetaData Database Records)

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 DATA SHARING POLICIES $/PARCEL PRICE – SAMPLE: 566 JURISDICTIONS (Source: NPDP MetaData Database Records)

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 DATA SHARING POLICIES $/PARCEL PRICE – SAMPLE: 67,000,000 Parcels (Source: NPDP MetaData Database Records)

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. DATA SHARING POLICIES But How Does Broad Use of Digital Parcel Map Databases Increase Tax Revenues?

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

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 -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. PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Transactions

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 HAZARDOUS CONDITION PARCEL BOUNDARY CORRECT ADDRESS POINT ADDRESS POINT ADDRESS FINDING FINDING FINDING COMMENT 117 New Street NO NO 117 New Street NO Under Reporting YES Over Reporting x 312 Lake Street YES YES 312 Lake Street x PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Industry Operations

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Optimized More Accurate Real Estate Industry Operations

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. For Example… Optimized Real Estate Operations Induced Tax Increase JURISDICTIONMonterey County, CADallas County, TX, OH Parcel Count 111, ,000 Total Assessed Value $34,700,000,000 $163,000,000,000

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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 … -Wild Fire Zone -Flood Zones -High Crime Zone -Faults, Tsunami, Seismic Zone -Subsidence / Landslide Zone -Which Fire District -Others PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 WILD FIREFAULTSSEISMIC ZONES CLOSE TO SHOREHIGH CRIME AREASFIRE DISTRICTS ERROR FREE Parcel Based Location Platform Insurance Premium Rate Processing P1P1 P1P1 P1P1 P1P1 P1P1 P1P1 RESULTING MEASUREMENTS Used to Generate Accurate Insurance Ratings P2P2 P2P2 P2P2 P2P2 P2P2 P2P2 PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Reduced Insurance Premiums Prices

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Premium Price / Assessed Value Ratio1%1% Greater Accuracy Induced Premium Reduct. 12%12% Savings Spent on Sales Tax Items 80%80% Sales Tax Rate7.25%8.25% POTENTIAL INCREASED SALES TAX $2,415,000$12,925,000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. For Example… Lower Insurance Premium Induced Tax Increase JURISDICTIONMonterey County, CADallas County, TX, OH Parcel Count 111, ,000 Total Assessed Value $34,700,000,000 $163,000,000,000

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Potential Utility Bill Reduction 5%5% Average Annual Utility Bill Per Parcel $4, $5, Utility Bill Savings Spent on Sale Tax Items 80%80% Tax Rate7.25%8.25% POTENTIAL SALES TAX INCREASE $1,455,000 $12,177,000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. For Example… Lower Utility Bill Induced Tax Revenue Increases JURISDICTIONMonterey County, CADallas County, TX, OH Parcel Count 111, ,000 Total Assessed Value $34,700,000,000 $163,000,000,000

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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.” PUBLIC INTEREST BENEFITS Long Term Improved Built Environment.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Long Term Improved Built Environment.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Long Term Improved Built Environment.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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 data to be OK. The more elected officials make sure GIS department has enough budget get 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Quality Induced Property Value Increase 1%1% Property Tax Rate %1.10 %2.4 POTENTIAL TOTAL INCREASED REVENUES $3,539,000$39,168,000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. For Example… Improved Built Environment Induced Tax Increase JURISDICTIONMonterey County, CADallas County, TX, OH Parcel Count 111, ,000 Total Assessed Value $34,700,000,000 $163,000,000,000

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 PUBLIC INTEREST BENEFITS Increased Attraction of Major Economic Development Projects Rappatoni Corporation is implementing parcel boundary based Multiple Listing Services. FARES just purchased MarketLynx 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.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. PUBLIC INTEREST BENEFITS Increased Attraction of Major Economic Development Projects

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 Ratio Additional Capital Projects / Tax Base 1%1% Potential Increase in Property Tax $347,000,000 1,010,000,000 Property Tax Rate%1.10 %2.4 POTENTIAL TOTAL INCREASED REVENUES $3,530,000 $39,168,000 BUT THIS is possible ONLY IF digital data is priced LOW ENOUGH for BROAD USE. For Example… Attracted Capital Project Generated Tax Increase JURISDICTIONMonterey County, CADallas County, TX, OH Parcel Count 111, ,000 Total Assessed Value $34,700,000,000 $163,000,000,000

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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 DALLAS, TX OPTIMIZED REAL ESTATE OPERATIONS INDUCED PROPERTY TAX INCREASE $3, $39,168,000 LOWER INSURANCE PREMIUM INDUCED SALES TAX INCREASE $2,415,120$12, LOWER UTILITY BILL INDUCED SALES TAX INCREASE $1,455,000 $12,177,000 IMPROVED BUILT ENVIRONMENT QUALITY INDUCED PROPERTY TAX INCREASE $3, $39,168,000 OUT-OF-TOWN FINANCED DEVELOPMENT INDUCED PROPERTY TAX INCREASE $3, $39,168,000 ANNUAL TOTAL INCREASED TAX REVENUE INCREASE $14,488,000 $142,600,000 % TOTAL ASSESSED PROPERTY VALUE (After About 5 years – more further out) %0.042%0.087 BUT ALL THIS is possible ONLY IF digital Parcel Map data is priced LOW ENOUGH for BROAD USE.

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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… oIncreased Sales Tax Revenues oIncreased Property Tax Revenues CONCLUSION….

PUBLIC INTEREST ADVANTAGES OF BROAD PRIVATE SECTOR USE OF DIGITAL PARCEL MAP Databases ©Boundary SolutionsAugust2004 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. CONCLUSION….