The Swartz Report: The Value of a Second Opinion

Last week, my wife and I had the unfortunate experience of having our sewer back up into our half bathroom in the basement and into a portion of our finished basement. While insurance will cover most of the damage and inconvenience of being out of the home for multiple days, it is the follow up work and proactive measures for preventative maintenance that I found quite alarming.

Our usual service providers could not get to us over the weekend so we contracted with a large, local service who regularly advertises on television and in print.

PlumbingAfter completion of the task at hand, the technician wanted to inspect the line from the house to the street to insure there was a clear pathway. As an expert in property tax valuations and not plumbing, I watched the screen as the technician propelled his camera through the 4 inch line to the street.

During this time, he pointed out several potential issues, including a possible crack in the clay piping, roots growing where seals had eroded and probable failure of the line in the not too distant future. The two options provided; tear up the driveway and front yard to replace the entire 90 feet of sewer line (at a cost north of $30,000) or create an epoxy liner within the current line that would create a “pipe within pipe”.  This would take place internally and would not cause any (or minimal damage) to the property. The estimate for this was significantly less but still into the five digits.

“We are available to start this in 3 days. Here are options for payment – let’s get started.”

Hmmmm, not so fast, as my wife and I needed to discuss the options. How could we invest this type of money without getting a second opinion? Consumers compare prices for cars, get second opinions for surgery and physical therapy, and if you are regular readers of my blog, multiple comparisons and review of colleges. Why not plumbing?

We have engaged two additional plumbing companies to review our sewer line and offer estimates. Bottom line –  the sewer line appears to be fine but an epoxy liner may not be a bad idea as a longer term solution. Regular annual cleaning (at a cost of $100) should keep things clear for years to come.

WHAT DOES THIS HAVE TO DO WITH PROPERTY TAX APPEALS?

Counting MoneyGood question, and if you are an owner of commercial property, the idea of a second opinion should be top of mind.

If you feel your valuation is fair but are unsure, why not get a second opinion? Additionally, if you have a property that has not been challenged in several years, maybe it is time to have a fresh set of eyes on the property. Over the years, we have lost a few clients only for the sake of change. Luckily, we have increased our client base significantly over the years by offering our review, approaching a valuation with a different perspective.

For those owners of property in Iowa, Missouri and Colorado, this year is a revaluation year.

We have already seen double digit percent increases in Platte and Clay Counties (Jackson County has not issued values as of this writing). Polk County (Des Moines) has increased commercial values in excess of 7% in most areas and we’ll see what Colorado looks like when they issue their valuation in the next two weeks.

The concept of ad-valorem taxation is taxing a property “at value” and generally implies the “value in exchange” or “fair market value”. Taxpayers should pay their fair share, nothing more. Second opinions are the best way to insure you are paying your fair share.

As always, thank you for reading and sharing my blog.  I appreciate your responses and am available if you have any questions.  dswartz@swartzaai.com.

The Swartz Report: The Power of a Letter and a Postage Stamp

The Power of a Letter and StampIn today’s world of social media, emails and other methods of immediate communication, I thought it would be interesting to share a recent situation that proves telephone calls and personal meetings still have great value.

Two years ago, I sent out informational letters to owners of a certain type of property where I felt my company had certain expertise. While there was no initial response from the letter, I also did not have a plan of action for follow up. Typically, this is the end of the story, and a lesson about a strategy without follow up is not a strategy at all. That story about failure to follow through is for another day…

Recently, I received a call from a recipient of the letter who had kept it on file.

I was contacted to see if we would be interested in assisting in the review of the 2019 property tax valuations in Kansas City. Not only was I thrilled to receive the call, I was determined to not let this opportunity fizzle and proposed an in-person meeting to go over the property. However, the ownership group was located in Eastern Iowa and about six hours away from Kansas City. Undeterred, I felt this was a chance to meet in person, stop in Des Moines to meet with clients and former clients and stop and have dinner at the greatest University in the country (Go Hawkeyes!) with a high school and college friend.

What was the result?

They hired us to review their locations in three states. Additionally, an introduction was made to the owners of an adjacent property at one of their locations. After getting on the phone with the controller of the adjacent property, we determined that I had worked with his brother at CBIZ – MHM for 15 years. Not only that, the adjacent property owner has 100 locations across the country and was wondering if we would be interested in reviewing some of these as well. Hmmmmmm, sounds like a good option to me, and now a few of the properties are under our review.

But wait, there’s more.

Remember the stop in Des Moines? I contacted a former client we worked with several years ago and indicated I would be in town. I thought it would be a great chance to reconnect and just catch up on how things were going for each of us. Shortly after meeting, I received an email asking if we would be interested in proposing on work for 2019. Yesterday, we signed the deal!

A simple letter and a postage stamp I sent two years ago have turned into a review of properties in excess of 200 million dollars in value. This is a great lesson about the power of the letter and how the effort to meet in person and develop relationships can never be underestimated.

Oh and Carl, (my buddy in Iowa City) I’ll buy the next dinner as well! Looking forward to it.

The Swartz Report: Valuation Notices and Go Time

This weekend, my family is all together to celebrate my Aunt’s 90th birthday. As we get older, we certainly appreciate these opportunities and cherish the our times for good reasons; birthdays, weddings,  etc. When I was much younger, it always felt like we were getting together for events and I thought, “do we have to see everyone, again?” Of course, I wasn’t serious but I didn’t have the correct perspective on the importance of these celebrations.

Now, with kids on the east coast and nieces, nephews and other family members scattered across the country, we circle the calendar for these celebrations where we can meet, tell stories and hear of great tales. Such is the case this weekend. Congratulations, Aunt Kay, we are so happy to be a part of the weekend.

Don and Family Don and Family Don and Family

My wife and I always say we work hard so we can play hard to be able to attend such events. Well, now it’s that time of year to work hard!

Go TimeValuation Notices

  • Valuation notices were just issued this week in Johnson County, Kansas and the remainder of the counties will be issuing their notices at the end of the month.
  • Colorado, Iowa and Missouri have the opportunity to reassess real estate in 2019 for the next 2 years. It is safe to assume valuations are not decreasing.
  • Additionally, business personal property filing deadlines are quickly approaching with Michigan, New Mexico, Missouri, Oklahoma, Texas and Colorado.
  • Include our railcar filings for the first time since acquiring Indurante & Associates, Inc. and it is truly GO TIME.

I wouldn’t have it any other way and feel good knowing we have the experienced staff that has gone through the process several times over the years.

Below I have listed a few upcoming deadlines that may have relevance to you if you own property in these states.

State                Personal Property Deadline           Real Estate Deadline

Kansas            March 15                                             March 13 – (commercial) Johnson Cty | March 31 – remaining KS Counties

Missouri         March 1                                                3rd Monday in June

Oklahoma      March 15                                             Generally in June

Iowa                Not applicable – Exempt                 April 30

Colorado        April 15                                               May 31

Nebraska       May 1                                                   June 30

Arkansas       May 1                                                   Varies

I listed these deadlines last year and found this to be helpful for many of the readers.

We welcome the opportunity to represent your interests and look forward to working with our clients for another appeal season. Thank you for continuing to put your trust in Swartz + Associates.

The Swartz Report: Two Important Lessons from the KC Chamber Small Business Council Meeting

Don_Swartz 2Post written by Donald Swartz, President and Principal at Swartz + Associates, Inc. | Lover of Chiefs, Royals and golf | Avid “Cruiser” | Poker Enthusiast

I recently attended the quarterly Kansas City Chamber of Commerce Small Business Council meeting.

Matt Condon, the current Chairman of the Board of the Chamber, spoke to us about the aspects of running a small business. During his presentation, there were two concepts I wrote down that stood out.

The first comment was a simple sentence.  “Culture eats strategy for lunch.”

Wow, how simple and how powerful is that?  For the next few minutes, I really didn’t listen to what he was saying because I was grasping this comment.

I immediately thought, “Have I been wasting my time with office planning meetings?  What about the strategic marketing 3 – 5 year plan and where we want to be as a company?”

I wouldn’t say panic settled in, but I kept thinking about this sentence and wondering if I was missing the boat?  “Culture eats strategy for lunch”, “Culture east strategy for lunch”…

The second concept which stayed with me throughout the remainder of Matt’s talk focused on the necessity of all employees to share and believe in your vision of what your company is doing.

If they don’t believe in the work product…if they aren’t working to reach the common goal…then they aren’t a fit for your company. They may be good workers and have the right skill set, but they may just not be the right employee for your company.

company cultureOn the drive back to my office and throughout the rest of the week, I repeatedly asked myself how this applied to my company.

Are we on the same page at work?

Have I created a good culture and work environment?

Does everyone share the vision and/or have they been a part of determining the vision?

Upon reflection, I feel good about where we are and where we’re going. Our culture is collaborative.

Everyone is free to speak their opinion (and they usually do).

Everyone has a responsibility to make the company better.

And everyone certainly believes in the product.

When all of these things are in place, the culture does, in fact, eat strategy for lunch.

All that said, we must continue to be strategic in our business plan. If the culture is great but we lose sight of the vision and the plan for the future, we will spin our wheels and ultimately not be successful. Without the vision and plan, culture and morale will decline and employees will ultimately not feel a part of the success. This is definitely a delicate balance.

The takeaway: I’m fully on board with creating and maintaining the best culture to allow our employees to succeed. It has truly allowed us to be successful as we start our fifth year in business. But I’m also mindful of continuing to build and implement our strategy and vision.

I’m appreciative of my employees, my clients, my family and my Advisory Board. They have allowed our company to flourish in the last four years of business.

I look forward to the next four (and more!) and will do everything I can to maintain the culture that has allowed us to succeed.