Cook County Board of Review Annual Report 2022

Cook County Board of Review Annual Report 2022 1 2022 COOK COUNTY BOARD OF REVIEW Commissioner Larry R. Rogers, Jr. Commissioner Tammy Wendt Commissioner Michael M. Cabonargi ANNUAL REPORT ASSESSMENT YEAR 2021 FISCAL YEAR 2022 AN INDEPENDENT OFFICE PROVIDING FAIRNESS FOR COOK COUNTY PROPERTY TAXPAYERS

Cook County Board of Review Annual Report 2022 2 1 3 2 Chicago Orland Park Palatine Glenview Schaumburg Skokie Alsip Des Plaines Niles Northbrook Barrington Hills Tinley Park Hoffman Estates Elgin Matteson Arlington Heights Lansing Wheeling Cicero Lemont Oak Lawn Harvey Evanston Dolton Inverness Elk Grove Village Park Ridge Chicago Heights Bartlett Streamwood Wilmette Markham Calumet City Lynwood South Holland Oak Forest Burbank Homewood Glencoe Hillside Winnetka Palos Hills Riverdale Worth Morton Grove Justice Lyons Northfield Bedford Park Steger Mc Cook Summit Barrington Bellwood Lincolnwood Burnham Mount Prospect Berwyn Oak Park South Barrington Franklin Park Bridgeview Blue Island Flossmoor Rolling Meadows Park Forest Northlake Melrose Park Glenwood Sauk Village Richton Park Westchester Brookfield Palos Heights Crestwood Midlothian

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131st131st W olf Foster Elm hurst Irving Park State Sheridan State Plum Grove W estern 104th Main Crawford Lake Bartlett Central State 103rd Board of Review Districts 2012 Cook County, IL 1 - Dan Patlak 2 - Michael Cabonargi 3 - Larry R. Rogers, Jr. BOARD OF REVIEW DISTRICTS COOK COUNTY , IL BOARD OF REVIEW DISTRICTS COOK COUNTY, IL Tammy Wendt Michael Cabonargi Larry R. Rogers, Jr. 1 1 2 2 3 3 Cook County Board of Review Annual Report 2022 3 TABLE OF CONTENTS COOK COUNTY BOARD OF REVIEW RESPONSIBILITIES OFFICE WHY DOES IT MATTER TO COOK COUNTY RESIDENTS IF THE TAX BILLS GO OUT ON TIME? COOK COUNTY BOARD OF REVIEW RESPONSIBILITIES LETTER FROM COOK COUNTY BOARD OF REVIEW DIGITAL ASSESSMENT PROCESSING SYSTEM BUDGET HIGHLIGHTS EMPLOYEES AND APPEALS OPERATIONAL HIGHLIGHTS APPEALS RESULTING IN REDUCTIONS (ASSESSMENT YEARS 2008 – 2021) PTAB

APPEALS EXEMPT PROPERTIES AND THE BOR 2021 TAX YEAR OUTREACH EFFORTS When the tax bills are delayed, schools, libraries and other essential district services are forced into budget gaps. To fill those gaps, reserves may be tapped, which means that money is not earning interest, or, money is borrowed, and loan costs and interest fees are incurred at the cost of the taxpayer. The cost to local government can be in the MILLIONS OF DOLLARS. The Cook County Board of Review (formerly the Board of Tax Appeals) was created by the 89th General Assembly in 1998 under statutory changes that established a three-member Board of Commissioners elected from three electoral districts. The Cook County Board of Review (hereinafter “BOR”) is vested with quasi-judicial power to adjudicate taxpayer complaints and recommend exempt status of real property, which

includes residential, commercial, industrial, condominium property, and vacant land.

Responsibilities of the BOR include the following: 1. Order the Assessor to revise and correct the assessed value of property; 2. Review Certificates of Error; 3. Correct factual mistakes; 4. Recommend property for tax exempt status; and 5. Defend assessment decisions for properties appealed at the Illinois Property Tax Appeal Board (PTAB). The BOR deals only with assessed valuations before equalization, not with the tax rate or the amount of the tax bill. County Building 118 N. Clark St., Room 601 Chicago, IL 60602 Ph: 312/603-5542 www.cookcountyboardofreview.com 1 1 1 1 1 1 1 1 1 1 Cook County Board of Review Annual Report 2022 4 Your Cook County Board of Review Continues to Rise to the Challenge The 2021 Assessment appeal year was one of the most challenging in the history of the Board of Review. The Board of Review received the first

re-assessed townships in February 2022, seven months late, from the Cook County Assessor’s Office. To mitigate the detrimental impact this delay would have on taxpayers, our office maximized efficiency and our staff worked 22,974 overtime hours to allow tax bills to be payable before the year end. This “all hands-on deck” approach is demonstrative of the Board of Review’s commitment to ensuring that taxpayers have an opportunity to have their appeals heard so that the Assessor’s errors can be corrected. This ensures that taxpayers pay no more than their fair share of property taxes and allows taxpayers to avail themselves of mortgage interest deduction tax advantages. We continued to support that mission by conducting over 150 community outreach seminars countywide.

At these outreach seminars the Board of Review brought its services directly into communities to educate property owners on the property tax system and how to ensure when taxpayers appealed, Assessor errors could be corrected before tax bills were issued.

Also, while our analysts were working overtime on Board of Review appeals, the Property Tax Appeal Board (PTAB) appeals continued to send prior year files for the Board of Review to defend before its agency. Fortunately, under the leadership of the Commissioners, the Board’s PTAB Defense Unit – created in 2017 – continued to defend the budgets of school districts and other local taxing bodies from unnecessary refunds. This PTAB Defense Unit consists of dedicated staff assigned to prepare evidence and represent the county at PTAB hearings where taxpayers who overpaid property taxes based upon Assessor errors in their assessments, seek refunds from the county and other taxing districts. With a half billion dollars of refunds requested through appeals at PTAB, preparing evidence and representing the taxing districts at PTAB for those cases

is a major responsibility of the Board of Review. Eliminating or mitigating exposure through reduced refunds at PTAB has a large impact on the budgets of all the taxing districts in Cook County, including the County’s budget itself. The taxpayers of every school district, city, and the whole County benefit from these savings and the Board’s PTAB defense work. The Commissioners are pleased to report the Board of Review finished adjudicating 248,899 appeals. Once again, in anticipation that our appeal volume would rise due to increased assessments across the County, we opened the Board on July 6, 2021. Opening the Board earlier allows us the additional time needed to do our part to get tax bills out on time. Unfortunately, because the Assessor’s Office was late certifying townships and transferring them to our office, the Board was not able

to begin its work until February 2022 due to data integrity issues from the Assessor’s December 2021 township transmittal. Most significantly, the Board received 71% of its work from March 24, 2022, to April 23, 2022. The Assessor’s delay in the transmission of townships to the Board coupled with the Board receiving 71% of the volume between March and April 2022 placed immense pressure on the Board of Review and other property tax stakeholders. However, the Board fulfilled its commitment to use all resources to complete its work and successfully finished its session at the beginning of October.

It is important to note the dedication of the staff at the Board of Review. To achieve the October completion, many staff members were working seven days/ fifty- sixty hours a week to ensure the Board was successful and tax bill were payable in 2022. We cannot thank the staff enough for the dedication, professionalism, and sacrifice they showed to get the job done in the most challenging circumstances. Summary Every session brings different challenges. However, despite these challenges, the Board was able to complete its session by late April for the prior decade to ensure tax bills were payable by August 1st. However, under this Assessor, this 2021 session brought unique challenges due to the Cook County Assessor’s failure to timely transmit townships to the Board of Review and the unsupported exponential increases in values of

residential and commercial properties. By receiving the initial townships five months late and then having data integrity delays, the Board of Review began this session under the most challenging circumstances.

In spite of the Assessor’s failure to timely complete his assessments of Cook County properties and transmit townships those assessments to the Board of Review, the Commissioners and staff were committed to complete our work and ensure that the property tax bill delay caused by the Assessor did not ultimately impact taxpayers beyond their property tax liability. We achieved our goal and successfully completed the session while defending PTAB and executing our other duties. 2021 ASSESSMENT YEAR ANNUAL REPORT LETTER FROM COMMISSIONERS TAMMY WENDT COMMISSIONER LARRY ROGERS JR. COMMISSIONER MICHAEL CABONARGI COMMISSIONER Cook County Board of Review Annual Report 2022 5 • The Assessor failed to implement its “future state” Tyler modules in “parallel” with the fully functioning “legacy” Cook County Property Tax mainframe as required by the

2015 Tyler contract1, recommended by Cook County Bureau of Technology2 and contrary to industry “best practices.” • The Cook County Assessor failed to initially transmit “Building Permit” assessment data for 20 of the 38 townships after certifying and transmitting the data to the Cook County Board of Review. This failure to transmit the bulding permit data directly impacted key characteristics of properties, such as the age and size of many residential improvements situated in Cook County. • The Cook County Assessor changed “detail” data of parcels after it no longer posessed jurisdiction over parcels and had already certified and transmitted the townships to the Cook County Board of Review.

The changes made to the data by the Cook County Assessor after it no longer possesses jurisdiction, included “occupancy” factors, “building permit” data and related characteristics data. Per statute, if the Cook County Assessor discovers a “mistake” or “error” other than a “mistake or error of judgment post certification and transmission of the assessment roll data to the Cook County Board of Review, the only remedy available to the Cook County Assessor is the “Certificate of Correction.” See 35 ILCS 200/14-10 (2022).

In addition, “an internal Cook County Assessor policy document described the justification for a “Certificate of Correction” as to correct “an error due to keypunch, or factual error, and the B/R is still open for that specific town, a Certificate of Correction can be used to correct the problem even if an appeal has not been filed at the Board.” 3 • The noted “detail data” issues plagued the entire Cook County Board of Review 2021 tax session due to the obvious uncertainty and lack of confidence in the accuracy of the Cook County Assessor data which directly impacted the Cook County Board of Review’s valuation processes. Also, on occasion, the data would change in between the first and second reviews of the file causing the entire file to need to be reset to achieve consistent data for all analysts to use on any given property. THE COOK

COUNTY ASSESSOR’S IMPLEMENTATION OF THE TYLER PROJECT DEL AYED THE 2021 TAX YEAR 2ND INSTALLMENT TAX BI LLS The Cook County Boar d of Review opened the 2021 tax year Appeal session on July 6, 2021.

Unfortunately, because the Assessor had not completed and transmitted his assessment of any Cook County properties until December 2021 and the 1st City of Chicago township until February 2022, there was an unprecedented delay which drastically affected the schedule for all property tax stakeholders.

The Assessor’s delay resulted in the Cook County Board of Review not finalizing its work until 466 days later on or about October 9, 2022.

During the 2021 Session, the Cook County Board of Review adjudicated 248,899 complaints that comprised 537,618 parcels (“PINs”), all of which alleged errors in the assessment of their properties. The 2021 tax year session included a 12% increase in Commercial complaints when compared to the last reassessment of the City of Chicago for the 2018 tax year. The unsupported substantial increases in Commercial/Industrial assessments by the Assessor, (particularly, during a global pandemic) that ranged from 33% in Hyde Park township to 115% in West Chicago township this significant increase and nearly 9,000 hearing requests for reassessed City of Chicago properties. However, the fact that the 2021 session spanned 466 days can be traced back to the Assessor’s decision not to implement its Tyler application pursuant to the 2015 IPTS contract,

recommendation of the Bureau of Technology, and industry “best practices.” 2021 implementation of its Tyler application caused significant data integration and integrity issues for the Board due to its dependency on Assessor assessment roll data. Despite the Board’s July 6, 2021, opening, it did not receive the first townships from the Assessor until December 2021 and due to the aforementioned data integrity issue, analytical work did not commence until February of 2022. The first hearings began March 21, 2022. In addition, from March 24th to April 23rd , the Assessor transmitted 1,323,581 of the total 1.863,980 parcels situated in Cook County or 71% of the Board’s total workload. Thus, backloading the Board ‘s schedule with the highest number of parcels, as well as, presenting the Board with the City reassessment and its complex

valuation issues. It is important to note that the delayed finalization of the Board’s 2021 tax year session, caused by the Assessor’s failure to timely transmit townships to the Board, also delayed the timely distribution of over $16 billion in real estate tax revenue to Cook County cities, towns, villages as well as fire, police, library and school districts. Another impact of the Assessor’s delay was that some taxing bodies were forced to seek “tax anticipation notes.” In addition, a number of taxing bodies have bond payments due December 2022; therefore, without distribution in December, the noted payments would potentially be “late.” Also, this ‘timeliness” issue presented a critical potential federal income tax issue for all Cook County residents.

Specifically, if the 2021 tax bills are not paid in the 2022 calendar year, taxpayers could forfeit taking a deduction for their federal income tax filings for “settled” state and local taxes, costing residents thousands of dollars in deductions. Causes for and the Impact of the Delayed 2021 2nd Installment Tax Bill 1 2015 Cook County Bureau of Technology and Tyler Technologies, inc. (Contract No. 1490-13787)(4.11 “Go-Live and Rollout Support.”) 2 Finance and Technology and Innovation Committees Joint Meeting, April 25, 2022. 3 Office of the Independent Inspector General, Quarterly Report, 3rd Quarter 2022 (October 14, 2022). Cook County Board of Review Annual Report 2022 6 • The PTAB and Circuit Court refund exposure will directly increase due to the delayed distribution of over $16 billion in real estate tax revenue, the additional

staffing resources demanded of all members of the Cook County Property Tax Group (Cook County Assessor, Cook County Board of Review, Clerk and Treasurer) and Cook County Bureau of Technology which also includes overtime compensation, the probable increased Cook County Board of Review “error rate” due to the expedited and compressed 2021 schedule and combined with the substantial 2021 Cook County Assessor. • For City of Chicago condominium properties, the Cook County Assessor failed to comply with the Illinois Condominium Property Act which requires the Cook County Assessor to assess condominiums while applying the “owner’s corresponding percentage of ownership in the common elements as a tract, and not upon the property as a whole.” (765 ILCS 605/10a)(2022).

The Cook County Assessor’s failure to comply with the Illinois Condominium Property Act directly resulted in inconsistent underlying market values or “reproduction cost” values when, per the “Condo Act,” there should be one (“1) underlying market for the entire building with each individual unit prorated or assessed per its ownership interest. » In some instances, it appears that the percentage of interest (POI) values, as established in the subject’s Condo Declaration, were not used to allocate the fair market value (FMV) when tcondominiums were re-assessed. » The reproduction cost issue presented significant valuation issues at the Cook County Board of Review which included forcing condo analysts to manually enter reproduction costs line by line for multiple PIN condo complaints which can range from 6 to over 1,000 lines. This

additional manual work directly impacted Condo analysis workflow. » The Cook County Board of Review addressed the reproduction cost issue by continuing to apply its historical valuation methodology for residential condominiums based on recent sales and their corresponding POI in the building when establishing the overall FMV. » In addition, in the interest of equity and to ensure the accurate allocation of the FMV for the subject, the Cook County Board of Review also continued its practice of using the POI for each unit as established by the subject’s Condo Declaration. » Due to theoccasional varying Reproduction Costs found in the same building, the Cook County Board of Review’s methodology of relying on the POI when allocating the FMV may have resulted in assessment decreases for some units and assessment increases for other units

within the subject building while maintaining the underlying FMV. » To ensure the equitable allocation of the FMV, and not compound the Reproduction Cost errorscaused by the Cook County Assessor, the Cook County Board of Review may have issued increases, when deemed appropriate, to accurately allocate the FMV throughout the building based on the per unit POI as established in the Condo Declaration. › This enabled the Cook County Board of Review to reach its two primary goals when valuing condominiums; › Established an accurate overall FMV with a singular reproduction cost for the entire condominium building; and › Equitably allocated that FMV for the subject based on individual unit’s percentage of interest as established in the Condo Declaration. » Cook County Board of Review Reproduction Cost “Repro” Condo Tool › In addition, the Cook

County Board of Review committed considerable IT, Administrative, and Analytical resources to develop, test, and implement a valuation application to assist the Cook County Board of Review to fairly and accurately value Condo properties based on the sales evidence and more importantly, pursuant to the Condo Act. › This Excel based application considers a “Target Market” value determined by the analyst based on the sales approach.

The “Target Market Value,” determines whether the individual “reproduction costs” are either a “decrease” or “increase.” • Backloading of the Cook County Board of Review Schedule » The Cook County Assessor transmitted 71% of the parcel volume to the Cook County Board of Review from March 24th to April 23rd 2022. See Cook County Assessor 2021 Tax Year Publication Dates Townships (18) and related Parcel volume (1,323,581) (71% of all Cook County parcels) (1,863,980)) › In sum, in a 30-day time span, the Cook County Board of Review assumed jurisdiction over 71% of all parcels situated in Cook County.

» The Re-assessment of the City of Chicago represented over 52% of the 1.8M plus parcels located in Cook County.

› Seven (7) City Triennial Townships represented 858,884 total parcels. 2021 CCAO Filing Volume versus 2021 CCBOR Filing Volume Group 1 5,868 vs 8,541 (+46%) Group 2 2,437 vs 4,423 (+81%) Group 3 11,592 vs 18,787 (+62%) Group 4 23,273 vs 26,977 (+16%) Group 5 9,490 vs 16,480 (+71%) Group 6 6,510 vs 10,937 (+67.5%) Group 7 18,683 vs 27,170 (+45%) Group 8 26,967 vs 40,175 (+49%) Group 9 24,123 vs 39,772 (+64%) Group 10 40,512 vs 55,147 (+36%) TOTAL 169,455 vs 248,899 (+47%) Cook County Board of Review Annual Report 2022 7 THE COOK COUNTY BOARD OF REVIEW’S ROLE IN THE IPTS PROJECT Background The 2015 assessment appeal year (2015-16) marked the culmination of four (4) years of preparation a re-engineering of the Cook County Board of Review’s (hereinafter “Board”) operations from a 100% paper-based process to a 100% digital workflow.

Against the background of significant increases in appeals volume, the 2015 session marked a monumental advance in efficiency at the Board, leading the way in County government with the launch its “enterprise content management” (“ECM”) application, Digital Appeals Processing System (hereinafter “DAPS”) which leverages OnBase software. It should be noted that the Board went live with DAPS during the reassessment of the City of Chicago which, at that time, yielded a historical number of complaints filed at the Board. DAPS provided the Board an unprecedented ability to track and process complaints; achieve greater transparency; enhance the access and ease of use for taxpayers; improve overall management; and save over two million pieces of paper. In addition, DAPS allowed taxpayers to electronically to submit evidence via its portal instead of in person or via the mail.

The complaints and related valuation evidence is accessible by the taxpayer via the DAPS portal. This historic change in the appeals processing system was a blueprint that captures how to make significant changes in a cost-effective manner in a relatively short period of time.

With the streamlined system in place, the Board adjudicated a then record number of complaints without increasing staff and timely finalizing its session which allowed a July mailing of the 2nd Installment tax bill.

The July mailing of the 2nd Installment tax bill assures an uninterrupted revenue stream for local education, police and fire protection and multiple other local services and projects. The Cook County Board of Review’s analytical workflow is NOT a mainframe process The Cook County Board of Review’s analytical workflow has never been a mainframe-based process, however, it does solely depend upon mainframe assessment roll data created and transmitted by the Assessor.