ROCKLAND — The City Council informally agreed Monday night to have the administration seek proposals from companies for a revaluation of properties.

But city officials stressed that the public will be kept abreast of the process and no decision on a revaluation will occur until there is public input.

Assessor Kerry Leichtman said revaluation is another word for equalization. The city hired KRT Appraisal to do a market adjustment in 2020 which saw dramatic increases for some neighborhoods, particularly in the South End.

“For KRT’s work, the timing was unfortunate. They finished just as real estate prices were taking off. It almost invalidated itself right away,” Leichtman said of the assessment figures done by KRT.

Leichtman said that in 2020, the assessed values the city had on single-family properties were 92 percent of the market value. By 2021, that median assessed value was at 74 percent of market value and in 2022 it has dropped to 62 percent.

If the city’s assessments are not within 90 percent, homeowners will not get the full value of their homestead exemptions or veteran exemptions. In addition, the city can only tax personal property at that lower percent which means the city will lose tax revenues and the tax rate will have to increase. The greatest amount of personal property is held by large businesses, particularly manufacturers such as Dupont. That would mean they would pay less than what their equipment is worth.

“Another term for revaluation is equalization,” Leichtman said.

The Maine Constitution says that property shall be assessed at its “just value.” The state points out that courts interpreted “just value” to mean fair market value, or in other words, “what the property is worth.” A property’s worth is commonly looked at as “what a willing buyer would pay a willing seller” for a particular piece of property.

He said the more desirable areas where sale prices have increased more will not being taxed sufficiently and other property owners are picking up that deficiency.

Resident William Lewis said he has done an analysis of properties and found significant inconsistencies in the assessments the city has on properties and their values. He pointed out one example as a five-unit residential building at 23 Maple St. that is assessed at $283,000 but sold last month for $1,150,000. He said if the city were to adequately assess that property, the owners would pay $21,000 more in property taxes each year.

Lewis pointed out the last adjustment of values did not include an interior inspection of properties.

Leichtman said a full revaluation would include the interior and exterior inspections as well as a market analysis.

The city administration said it would seek proposals from companies. Leichtman said Camden is undertaking one that should be done for April 1, 2024, and Rockport for one that should be done by April 1, 2025. Rockland could consider the same company with the work possibly being done by April 1, 2024.

Mayor Louise MacLellan-Ruf said it appears that there are major discrepancies in current assessments.

Councilor Adam Lachman said the city needs to keep residents informed and educate them about the process.

Leichtman said the city will not be committed to a revaluation until an agreement is signed with a company.

The last full revaluation in Rockland was done in 2005 when the city hired Vision Appraisal. That revaluation included interior inspections of properties as well as exterior viewings and market analyses.

The neighborhoods that felt the brunt of those increases were Dodge Mountain, Bog Road, Waldo Avenue and Samoset Road. Those homes saw their valuations skyrocket 50 to 100 percent. The 2005 revaluation was the first full revaluation Rockland did in 29 years.

The revaluation itself does not increase property taxes on a property but may shift the distribution of the tax commitment. Properties whose values increase more than the citywide average increase would see increased taxes. Those properties that increase less than the city average could see a reduction in taxes.

The general rule of thumb is that one third of properties will pay more in taxes after the valuations are changed, one third will see little change, and one third will pay less.