|
Division of Risk ManagementBureau of Property, Financial, and Risk ServicesProperty Section
|
|
State agencies are requested to submit a worksheet showing all buildings under their ownership, the process by which the values of these buildings are calculated, and the resultant ACV (Actual Cash Values). This worksheet is reviewed by our office for reasonableness. If the agency’s new calculation of the ACV is different than the current value it is insured for on the Certificate of Coverage, the agency may submit a request for change of the building value. The building valuation worksheet is to be submitted on a three-year cycle. To prepare you for the next submission, we will be offering a tutorial on a new Building Valuation process. This new process will most likely differ from any method your agency may currently be using. We hope you will see it as simpler and more effective. In it, you are asked to examine your buildings and apply an established cost per-square foot to create a replacement value for your building at today’s construction costs. This square-foot cost is based on the occupancy (the actual building use) and the construction type for each building. If you are currently using a building valuation process such as Markel process, you are required to know the original construction cost of any given building in order to establish the Replacement Value. While this information is readily available to newer buildings, state agencies occupy many older buildings that may have been transferred to them with no such records. Also, these structures may have been refurbished or upgraded over the years, thus changing their value. Examining the old methods, it has been shown that a formula based on historic cost, over time, is not reliable in calculating the replacement value. This replacement value is the basis for determining the deprecated ACV that is used as the insured value. In this new building valuation methodology, we have simplified the depreciation calculation and provided a variable condition factor for which the agent doing the visual assessment can further “tune” the value of a specific building. To further simplify your submission of this information, the worksheet that the building ACV calculations are documented on uses a simple “A” x “B” x “C” x “D” format, which can be easily constructed in an Excel program and quickly transmitted to us by e-mail. To enter the tutorial for the new building valuation process, click here. To view sample building valuation worksheets for this new method, click on the items listed below.
|
