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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.
The next cycle submission period will begin
July 1, 2003. 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.
Temporary Building Report Link (Adobe 5.0 pdf file)
Permanent Building Report Link (Adobe 5.0 pdf file)
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