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HomeMy WebLinkAboutM021009plu J �4`s \ING.SO William S. Marlow Richard A. Broders Dave Garing 1820 Jefferson Street P.O. Box 1220 Port Townsend, WA 98368 William S. Marlow MINUTES February 10, 2009 Richard A. Braden Dave Garing Chairman Vice - Chairman Member Acting - Chairman Richard Broders called the meeting to order at 9:30 a.m. in the presence of Member Dave Garing. Chairman Marlow was not present. PETITION WITHDRAWAL Member Gazing moved to accept the withdrawal of the following petitions. Acting - Chairman Broders seconded the motion. The motion carried. APPELLANT G.W. Bandy, Inc. - G.A.B. Inc. [f 0, I , I „ Brett Bandy - G.A.B., Inc. Gary Bandy G.W. Bandy, Inc. - G.A.B. Inc. t[ „ Gary Bandy - G.A.B., Inc. G.W. Bandy, Inc. - G.A.B. Inc. Gary Bandy <( ,> G.W. Bandy, Inc. - G.A.B. Inc „ L< „ APPEAL NO. BOE 08 -154 -R BOE 08- 155 -LO BOE 08- 156 -LO BOE 08 -157 -R BOE 08 -158 -R BOE 08- 159 -LO BOE 08 -160 -R BOE 08 -161 -R BOE 08 -162 -R BOE 08 -163 -R BOE 08- 164 -LO BOE 08- 165 -LO BOE 08- 166 -LO BOE 08 -167 -R BOE 08- 168 -LO BOE 08- 169 -LO PARCEL NO. 002 273 009 002 273 010 002 273 020 002 273 019 002 342 035 002 342 039 002 273 008 002 273 023 002 342 017 002 273 003 002 342 034 002 342 026 002 342 023 002 273 018 002 273 007 002 273 005 Phone (360)385 -9100 Fax (360)385 -9382 jeffbocc&o.jefferson.wa.us Board of Equalization Minutes - February 10, 2009 Page: 2 HEARINGS Rudiger & Edelgard Bahr BOE: 08 -51 -R PN: 001 074 036 931 Jolie Way Port Townsend, WA 98368 Rudiger and Edelgard Bahr were present. Appraiser Dennis Pownall represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Under appeal is the land value only of improved property located at 931 Jolie Way, Port Townsend. Currently, the property is assessed at $445,765 ($183,360 for the land and $262,405 for the improvements). The appellants estimate the value is $355,405 ($93,000 for the land and $262,405 for the improvements). Mrs. Bahr read the following statement: "... We do not oppose the 2009 appraised value of our house; we feel the Assessor determined a fair value of our home. As to the 2009 appraised value of our land, we strongly disagree. And here is why: Point #1 Location of our property Point #2 No physical or financial help for road upkeep from the County Point #3 Comparisons and "labeled" as a non - desirable area to live Now to point #1: Our address, 931 is located at the end of Jolie Way, one mile to the main road, with the landfill and the gun club almost in our back yard. Location has a tremendous impact on the value of properties. Point #2: Our road does not receive any financial or physical maintenance from Jefferson County. Other properties get their roads repaired, debris and snow removal, overhanging trees trimmed, grass cut, have mail and school bus service. Children living next door to us have to walk one mile to catch a school bus on Hastings Avenue. The County has not even provided a street sign for our road. Point #3: Recently someone at the Assessor's office said to me: "...He cannot understand why anyone would want to live on Jolie Way." Isn't that a clear indication that properties along Jolie way are undesirable? Due to points 41, 2 and 3, it is almost impossible to make any real comparison with properties in other areas. Acreage on Hastings, McMinn, Cape George and Middlepoint is far more valuable than acreage on Jolie Way. The only real comparison one can make is what has sold in recent years along Jolie Way. Here is the information I looked up at the Assessor's office at the Courthouse, property sales on Jolie Way: Sold in 2005, 5 acres (tax lot #001071015) for $58,500. Board of Equalization Minutes - February 10, 2009 Page: 3 Sold in Jan. 2008, 7.49 acres with house in need of repair (tax lot 4001084033) for $250,000. Sold in Dec. 2008, 10 acres with an almost new 3 bedroom + 3 bath, 2,300 square foot home (tax lot 4001071016 + #001071017) for $495,000. Example: Currently our 5 acres have the proposed assessed value of $183,360. Then 10 acres equal $366,720. So if the above property sold for $495,000, then the 3 bedroom + 3 bath, 2,300 square foot home is an unrealistic bargain at $128,280. Now let us look at property values at the percentage level: We bought our property in 1990 for $24,000. In 15 years our land value has gone up $70,165, a 192% increase. The 2009 assessed property value is $183,360, that makes it a 161% increase in 4 years. 4 years ago 5 acres on Jolie Way ( 9001071015) sold for $58,500. Lets add a 59% increase that would bring the 5 acre value in 2009 to $93,000. 1 think that is more realistic than a 161% increase, especially in this downward trend of the market. We are asking you to please take another look and lower the 2009 proposed assessed land value to $93,000, for our property at 931 Jolie Way (tax lot 9001074036). Please do not tax us out of our homes." Mr. Bahr added that on their way to the hearing this morning they saw two large County trucks at Middlepoint Road; one truck was a grader and the other was a steamroller. He noted that the property owners along Jolie Way have to pay to have their private road maintained themselves, while properties owners in other areas get their roads maintained and paid for by the County. Mr. Pownall used a projector and computer to access the County's records in order to present aerial photographs of the appellant's property and comparable property sales. Not many sales of property along Jolie Way have occurred. The one mentioned by the appellant that needed repair and sold for $250,000 was in very poor condition. He noted that the property which sold for $58,500 was a transaction between family members. All the land values of property in this area are valued using the same method. The first one acre site is valued at a base rate of $125,000 and each additional acre, up to six, is valued at $12,000 per acre. Each acre over six is valued at a lesser rate, so, ten acres is not worth twice as much as five acres. Following are comparable property sales that support the current assessed value: Parcel No.: 001 071 006 (improved land) Location: 4037 Hastings Avenue W. Sale Date: July 2007 Sale Price: $430,000 Assessment: $393,510 Parcel No.: 001 074 003 (improved land) Location: 143 Lindsey Lane Sale Date: June 2004 Sale Price: $170,000 Assessment: $283,175 Board of Equalization Minutes - February 10, 2009 Page: 4 Parcel No.: 001 074 029 (improved land) Location: 155 Lindsey Lane Sale Date: September 2007 Sale Price: $299,000 Assessment: $289,910 Parcel No.: 001 074 024 (improved land) Location: 190 Lindsey Lane Sale Date: July 2007 Sale Price: $329,000 Assessment: $320,595 Parcel No.: 001 074 015 (improved land) Location: 71 Lindsey Lane Sale Date: August 2006 Sale Price: $235,000 Assessment: $229,265 Parcel No.: 992 000 002 (improved land) Location: 292 J. Popper Way Sale Date: December 2006 Sale Price: $220,000 Assessment: $207,535 Mr. Pownall also presented information on a fee appraisal that was done for parcel 4001071 019 located off of Jolie Way. The fee appraisal for this parcel indicates a value of $379,500 in August 2008. It is currently assessed at $365,000. This verifies that the assessment is fairly accurate. As far as the road maintenance issue, Mr. Pownall stated that the issue is already factored into the values because it is incorporated into the sale prices. In other words, someone is not going to purchase a lot along Jolie Way without taking that into consideration. Sales do not show any difference in value between parcels located along Jolie Way and other parcels located along County roads in the area. Mrs. Bahr acknowledged the family sale transaction, but, it still sold for $58,500. She offered another property sale from 2004 in the amount of $81,000 which had a well installed. Everyone knows how much wells cost these days. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. Board of Equalization Minutes - February 10, 2009 Page: 5 Jacques Eppich BOE: 08 -30 -R PN: 001 074 026 P.O. Box 251 Port Townsend, WA 98368 Jacques Eppich was present. Appraiser Dennis Pownall represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Under appeal is the land value only of improved property located at 756 Jolie Way, Port Townsend. Currently, the property is assessed at $390,900 ($153,120 for the land and $237,780 for the improvements). The appellant estimates the value is $330,280 ($92,500 for the land and $237,780 for the improvements). Mr. Eppich read the following statement: "I have included for your consideration, in my tax appeal folder, information which, I believe is worthy of attention relevant to real home values, versus our current tax valuation. In a time of very short duration, during which such financial institutions as, Leman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac and Washington Mutual have either completely disappeared, been nationalized or purchased for a fraction of former value, it should be apparent that this is a very different financial time from the wildly speculative real estate days of 2002 through 2006. Why this is relevant to our tax situation is simple. The boom in home prices - fueled by heavily leveraged loans, built on low or even no down payments - made it easy to forget that housing values had been remarkably stable for half a century after, WWII, rising roughly at the same page as income and inflation. Those factors are directly relevant to this appeal, because to contend that the so called comps, which the Assessor has provided, indicating the prices for which some properties sold in 2006 and 2007, should dictate the values of property from 2009 -2012 is blatantly wrong. We all know that the vast majority of people coming into Jefferson County are from other areas, principally California and other affluent portions of the Country, where the sale of their homes had given them tremendous purchasing power here. The bursting of the real estate bubble beginning as we now well know, in 2006 has affected real estate values nationwide and hence here in Jefferson County. New credit criteria for loans as well as the inability to sell currently held properties elsewhere will continue to affect sales in Jefferson County and will drive prices down, as in fact they already have. Despite the contention of the Assessor that land values continue at all time highs I have included in my file, a sample of properties which have been reduced, though not sold to date. How much further properties will drop is anyone's guess, but the major national economic prognosticators say, we have no idea yet where the bottom lies. Board of Equalization Minutes - February 10, 2009 Page: 6 An increase in my property values alone of 172 %, during a four year period should be incontrovertible proof. that this assessment is based on the speculative days of the real estate bubble, now a distant memory. Lastly, the so called comps of sales in 2006 -7 provided by the Assessor, in no way measure up to that definition, because they are not comparable to my property in many ways. My property lies up a gravel and dirt road not maintained by the County, but maintained by the residents of Jolie Way, with twice annual assessments. We have no access to either City or PUD water, rather depend on privately maintained wells and there is no access to City sewer, as we must also depend on privately maintained septic systems. Lacking these services and amenities would place our properties in a different category of desirability to the few buyers still available and would with no question affect the values adversely, compared to properties with such amenities and services. At a time of unprecedented financial turmoil nationally and world wide, much precipitated by the real estate meltdown, I would ask this Board to thoughtfully consider the evidence against levying an assessment of this monumental proportion on my property, which is out of step with historical precedent, an assessment which in its magnitude and historical absurdity poses an unfair and unjust burden, as assessment which at this time and place is just plain wrong." Mr. Pownall stated that the appellant has not presented any comparable property sales or evidence in support of his appeal. Mr. Pownall presented two comparable property sales in the area, noting that there were no sales of property along Jolie Way that were similar in size to the appellanf s property. He presented the following comparable property sales in support of the assessment. Parcel No.: 001 074 015 (improved land) Location: 71 Lindsey Lane Sale Date: August 2006 Sale Price: $235,000 Assessment: $229,265 Parcel No.: 992 000 002 (improved land) Location: 292 J. Popper Way Sale Date: December 2006 Sale Price: $220,000 Assessment: $207,535 Board of Equalization Minutes - February 10, 2009 Page: 7 While the following sales are not in the same location as the appellant's property, they are similar in size to the appellant's property Parcel No.: 001 051 016 (improved land) Location: 479 Jacob Miller Road Sale Date: May 2008 Sale Price: $475,000 Assessment: $459,825 Parcel No.: 001 054 021 (improved land) Location: 2061 Hastings Avenue W. Sale Date: July 2008 Sale Price: $475,000 Assessment: $466,700 Parcel No.: 001 171 027 (improved land) Location: 390 Arcadia West Sale Date: June 2008 Sale Price: $172,500 Assessment: $171,830 Mr. Eppich discussed these "so called" comparable sales with his Realtor who stated that "comps" have to be comparable property in a comparable area. There could be a smaller waterview parcel in Port Townsend that might sell for $900,000. That is not a "comp ". It's about location, location, location. The Assessor's "comps" are not necessarily "comps" in his area. He provided evidence from his Realtor that shows Real Estate prices are going down. He noted that the current assessments are based on past sales, so property owners are being penalized by having to pay higher taxes for the next four years because of what people foolishly paid for property in 2006 and 2007 during the "Real Estate bubble". Properties are not selling for those same prices. He questioned whether the Assessor would reduce property values during the next revaluation cycle if sale prices continue to drop? He asked if the properties in the area that is scheduled to be revalued this year will be based on 2007 or 2008 sales? Will there be an increase in value for those properties? Mr. Pownall explained that the revaluation of properties in the assessment cycle for this year will be established based on the appraiser's best estimation of value as of January 1, 2009. Therefore, if the Real Estate market has decreased substantially since 2008, then those property owners could get a low or no assessment, Mr. Eppich asked? And yet, the same market conditions affect his property and other properties in last year's assessment cycle, but, because sales took place in 2007 they have to pay taxes on a higher value for the next four years? Mr. Pownall answered that is correct. Mr. Eppich feels that argument is fatuous. Board of Equalization Minutes - February 10, 2009 Page: 8 Mr. Pownall agrees that the value of Mr. Eppich's property is different in 2009 than what it was in 2008. But, State law requires property be assessed at 100% of its fair market value as of the assessment date. Property in Jefferson County is assessed once every four years. The assessment date of Mr. Eppich's property is January 1, 2008. Mr. Eppich believes the values should be based on the current market. He hopes the Board takes this into consideration, because we are talking about people's lives; people who live on fixed incomes and will have to the pay the increased taxes for 2009 and 4 years hence. Mr. Pownall explained how property assessments, levy rates and the budget relate to each other. As long as all property is assessed equitably the tax distribution will also be fair and equitable. Mr. Eppich replied that he has no problem paying for services for schools, library, fire and police protection. His point is that the four year revaluation cycle does not allow for an equitable tax distribution, because, sales have decreased so dramatically. He and other owners of property in the 2008 revaluation area are paying a larger share than other areas of the County, because, their properties were valued based on sales that occurred during better market conditions. It is blatantly unfair. Historically, property values have not increased 172% in four years, and particularly, properties along Jolie Way have not increased that much. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. Stanley & Yvonne Pawelek BOE: 08 -39 -LO PN: 001 063 006 10602 Sherwood Drive SW Lakewood, WA 98498 Stanley and Yvonne Pawelek were present along with their Realtor Jan Marquardt. Appraiser Dennis Pownall represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Under appeal is the land value of property located at 543 Porter Lane, Port Townsend. Currently, the property is assessed at $518,970 (land only). The appellant did not provide an estimate of value. Mr. Pawelek stated that their appeal is based on three factors. 1. Their property has mitigating features they believe support a re- evaluation 2. The current assessment is based on sales and conditions found during the height of the "Real Estate" bubble 3. Realities of the current market and economic conditions Board of Equalization Minutes - February 10, 2009 Page: 9 In terms of mitigating features, Mr. Pownall conceded that the property is "different and unique ". Included with the petition to the Board were two letters (one from a local Realtor, Jan Marquardt and one from the appellants) outlining these peculiar features of the parcel and are summarized as follows: - Fish and Wildlife considerations of a possible seasonal stream - Landslide hazard possibilities on the bluff - Shoreline protection mandates of 150 feet set back under consideration that in essence eliminates their 80 feet of waterfront - Ravine has an impact on site selection - Eagle issues may impact building - Possible salt water intrusion concerns regarding well location - Zoning restrictions rendered this property a single building site - Numerous improvements in the comparable sales used by the Assessor that are not present on our property (i.e. water, electricity, cleared building site, etc.) The Assessor's office provided 5 comparable property sales. One sold in December 2005 Three sold in the first part of 2007 (one in May and two in August) just prior to the market downturn in August 2007. One parcel on Jacob Miller Road (4.99 acres) is a level parcel with city water and electricity, septic permit, etc. It sold in May 2007 for $263,000 to a Real Estate Agent who relisted it for $279,000. Eventually it sold in August 2008 for $249,000 ($14,000 less which is an indication of the market downturn). The fifth comparable was actually a listing on 313 Porter Lane. This listing itself states "...parcel has everything you need to get a building permit: Survey, geology report, soil engineering, eagle management plan, type 1 land use permit and Site Preliminary Advance Approval Determination (SPAAD). It was put on the market July 7, 2007 and is still on the market. There is another listing on Porter Lane, 333 Porter Lane Listed April 26, 2006 Undergone 3 price changes $535K to $459K to $399K Finally pulled off the market on January 30, 2008 Porter Lane properties were smaller parcels (313 was 3.2 acres and 333 was 2.75 acres) But all (including our property) are single building sites But unlike these other two sites, our property has none of the improvements the others possess Assessor indicates a portion of our property is "improved land" (a building site) when in fact there is no such site. (Building site code reads improved "3" instead of unimproved "4 "). Assessed value of this non - existent site is $143,750 which is approximately 28% of the proposed assessed value Board of Equalization Minutes - February 10, 2009 Page: 10 Letter from Northwest MLS dated January 22, 2009 - The slowdown in housing started in August 2007 - The "mortgage meltdown" was exemplified by the sharp drop in the dollar volume and number of properties sold - Only two counties (Grant and Okanogan) reported slight gains in the year to year sales - All other counties experienced declines ranging from 2.2% for Cowlitz County to 11 % in Jefferson County Port Townsend Vacant Land 2. Seaview Drive list $397K -sold $320K) Current market and economic realities - 1 in 10 mortgages are in foreclosure or delinquency - Rate of foreclosures has tripled from 2 years ago (1.3% vs. 3 + %) - Federal Reserve interest rate is down to 0% yet credit and lending is still virtually frozen - Unemployment rate recently quoted is at 7.6 %. When 1.1% is added for discouraged workers no longer looking and the 4.7% of people working part-time not by choice - the total is actually 12 +% - The demise of Washington Mutual - The Stock Market in the toilet The Country in recession Obama just stated yesterday that "we are in a full blown crises ". Their property assessment more than doubled from four years ago which seems unrealistic considering the current economy. Mr. Pownall stated that the appellant's property is unique due to the fact that it is the only 12+ acre parcel in the County with only 80 feet of waterfront. The reason for this is that only a corner (80 feet) of the appellant's property borders the waterfront. Because of the property's uniqueness, it makes valuing it challenging. He is unable to value the property using the method based on waterfront footage because the value would be too low. He is also unable to value the property as non - waterfront because it is not strictly acreage property. The property has the characteristics of waterfront property without actually being waterfront property. While it can be compared to properties around it, it is not similar to any properties around it. Therefore, Mr. Pownall created the following methodology: He valued the 80 feet of waterfront at $3,000 per front foot with a 15% increase adjustment for quality; he gave it a base site value of $125,000 with a 15% increase adjustment for quality; and he valued the remaining acreage at $11,000 per acre. Properties Days on Days on Year Sold Market Waterfront Market 2006 54 131 0 2007 41 214 1 44 (Claremont $275K with improvements) 2008 32 114 2 72 & 186 (1. List $30K - sold $5K 2. Seaview Drive list $397K -sold $320K) Current market and economic realities - 1 in 10 mortgages are in foreclosure or delinquency - Rate of foreclosures has tripled from 2 years ago (1.3% vs. 3 + %) - Federal Reserve interest rate is down to 0% yet credit and lending is still virtually frozen - Unemployment rate recently quoted is at 7.6 %. When 1.1% is added for discouraged workers no longer looking and the 4.7% of people working part-time not by choice - the total is actually 12 +% - The demise of Washington Mutual - The Stock Market in the toilet The Country in recession Obama just stated yesterday that "we are in a full blown crises ". Their property assessment more than doubled from four years ago which seems unrealistic considering the current economy. Mr. Pownall stated that the appellant's property is unique due to the fact that it is the only 12+ acre parcel in the County with only 80 feet of waterfront. The reason for this is that only a corner (80 feet) of the appellant's property borders the waterfront. Because of the property's uniqueness, it makes valuing it challenging. He is unable to value the property using the method based on waterfront footage because the value would be too low. He is also unable to value the property as non - waterfront because it is not strictly acreage property. The property has the characteristics of waterfront property without actually being waterfront property. While it can be compared to properties around it, it is not similar to any properties around it. Therefore, Mr. Pownall created the following methodology: He valued the 80 feet of waterfront at $3,000 per front foot with a 15% increase adjustment for quality; he gave it a base site value of $125,000 with a 15% increase adjustment for quality; and he valued the remaining acreage at $11,000 per acre. Board of Equalization Minutes - February 10, 2009 Page: 11 Ms. Marquardt asked if he factored in the ravine on the property? Mr. Pownall replied that no other factors were included. He noted that the ravine on the property actually enhances the potential view quality by eliminating the possibility of anyone building in front of them. Mr. Pawelek stated that the house constructed on their neighbor's property to the left of their property, does obstruct the view from where they would have to build on their property. Ms. Marquardt added that most of the homes built on properties in that area were constructed as close as possible to the waterfront bluff in order to take advantage of the best view possible. Because of the ravine on the Pawelek's property, they will be forced to build much further back from the bluff which will not enhance their view, but, will hinder their view. Mr. Pownall stated that he doesn't know exactly how every aspect of the property affects the value, but, he believes $518,970 is a fair value for the property. Mrs. Pawelek asked why a portion of the value is categorized as improved "3" when none of their property is improved? Mr. Pownall explained that the number should have been a "4" for unimproved, however, those codes do not affect the overall value. Mrs. Pawelek asked why the value has doubled? Mr. Pownall replied that the value was based on sales of other properties in the area. Mrs. Pawelek asked if property values will go down in four years if the Real Estate market continues to decline? Mr. Pownall answered that he cannot predict what will happen in the fixture, however, if sale prices go down, then the property values which are based on sales, will also go down. Basically, it will depend on sales prices in the future. Mr. Pawelek stated that the comparable sales used to value their property were property sales that occurred at the height of the market. He feels there should be some consideration for the downturn in the market that has happened since that time. Mr. Pownall explained that the State mandates that the Assessor's office value property at 100% of its fair market value as of a specific assessment date. The assessment date for this property is January 1, 2008. The Real Estate market has dropped since that time and the property may not have the same value today as it had on January 1, 2008. But, by law he must value it as of the assessment date, based on sales that occurred at or around that time. Mr. Pawelek stated that he feels the assessment should reflect a reduction in value for the cost to develop the property which is impacted by eagle issues, the ravine, possible salt water intrusion, etc. At the end of the allotted hearing time, Member Garing asked if the hearing could be continued to a later time in order for the Board to take further testimony and ask questions? Acting - Chairman Broders stated he would also like to continue the hearing to a later time. The Board and all parties agreed to continue the hearing later today at 1:00 p.m. Acting - Chairman Broders recessed the hearing. The Board will reconvene for this case at 1:00 p.m. Board of Equalization Minutes - February 10, 2009 Page: 12 Michael I & Brenda C. Smith BOE: 08 -43 -LO PN: 970 600 005 Trustees for Lindsi C. Smith Rev. Trust 2010 E. Lindberg Road Port Angeles, WA 98362 Brenda Smith was present. Appraiser Dennis Pownall represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Under appeal is a 2.3 acre parcel known as "Lot E" in Mat's Long Plat located between Lindsey Lane and J. Popper Way, Port Townsend. Currently, the property is assessed at $116,110 (land only). The appellants estimate the value is $53,200. Mrs. Smith stated that the comparable property sales used by the Assessor's office to value their property are not comparable as they all have improvements /structures on the property while their property is vacant land with no utilities other than an outdated septic system. The Assessor's comparable properties are located in the same area, but other than that there are no comparisons. She noted that their parcel is an irregular shape because they had previously owned an adjacent parcel and had planned to consolidate the two parcels. The "pan handle" portion of this property does not add much value to the parcel, nor does it serve as access from Lindsey Lane since the parcel is accessed off of J. Popper Way. Potential well restrictions will make it difficult and more expensive to develop the property. This impacts the value from a sellers perspective. Mr. Pownall stated that the comparable property sales listed by the appellants on their petition are too old to be of any use. He presented the following comparable property sales that he used as a basis for value and which occurred closer to the assessment date of January 1, 2008. Parcel No.: 992 000 002 (improved land) Location: 292 J. Popper Way Sale Date: December 2006 Sale Price: $220,000 Assessment: $207,535 Parcel No.: 001 074 015 (improved land) Location: 71 Lindsey Lane Sale Date: August 2006 Sale Price: $235,000 Assessment: $229,265 Two other comparable property sales of larger parcels in the area were also included to show the increase in land values in the area. Board of Equalization Minutes - February 10, 2009 Page: 13 Acting - Chairman Broders asked why the appellants' property, which has no utilities other than an outdated septic system, includes the same $10,000 utility assessment as the comparable properties which are developed with buildings and have full utilities including water, power and septic? Mr. Pownall replied that $10,000 is the value the Assessor's office uses to value utilities for all property in the County. Acting - Chairman Broders asked Mrs. Smith when the septic system was installed on their property? Mrs. Smith replied that it was installed approximately 20 years ago, adding that it would not meet today's standards and would most likely need to be upgraded. Mr. Pownall noted that the property is receiving a reduction of 25% due to its proximity to the gravel pit located on the other side of J. Popper Way. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. Lawrence G. Scoville BOE: 08 -174 -E PN: 975 600 106 308 `E' Street Port Townsend, WA 98368 Lawrence G. Scoville was present. Assessor's Technician Jami Trafton represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. This appeal is based on the denial of a Senior Citizen and Disabled Persons Exemption by the Assessor's office for 2008. Mr. Scoville explained that the disposable income limit in order to qualify for the Senior Citizen Exemption Program is $35,000. His disposable income limit was determined by the Assessor's office as being over the limit due to $12,000 in capital gains he reported on his federal income taxes. Mr. Scoville stated that he invested in a Limited Partnership 20 years ago. The Partnership reported capital gains which in turn added $12,000 to his disposable income, however, the capital gains that were reported are not funds that are accessible to him. He submitted a letter from his accountant explaining his income in more detail and stating that while the capital gains must be reported for tax purposes, it is not income that was distributed by the Partnership to the partners. Therefore, the amount of $12,000 is a legal fiction. He believes the current national economic crisis is the result of toxic investments. He has a toxic investment which is distorting this judgement. In May of last year he received an offer to sell his investment share of the partnership for $355. He called the controlling investment company and was told there is no present valuation of this partnership. The K -1 form on which the capital gains were reported for this partnership shows an actual net value of (negative) - $4,000. There is no way he is ever going to get $12,000 in capital gains from this partnership. To make matters worse, he has lost his Senior Citizen Exemption because of it. He realizes the Assessor's representative Ms. Trafton and her colleagues in Olympia have researched past cases with similar issues. But, as far as he can determine from the information he received from the Assessor's office, there are no cases setting legal precedent. Ms. Trafton has done a good job and her Board of Equalization Minutes - February 10, 2009 Page: 14 determination is correct according to the law as it stands. However, he would like to see an actual legal precedent to support the denial of his Senior Citizen Exemption based on unrealized capital gains which are legal fiction. He knows local governments are hurting for money, as are citizens and retirees. We need to work it out somehow. If he and other individuals with similar issues are penalized with poor laws for too long, then the County will incur more expenses by having to take care of those citizens who will have to sell their land. He is just asking for some fairness. Ms. Trafton explained that State law does not differentiate between whether or not property owners have access to their reported capital gains. It specifically states that all capital gains are to be considered disposable income with the only exception being monies from the sale of a property owner's primary residence which are reinvested in another primary residence. That is the only gain that does not have to be accounted for. She reviewed this matter with staff at the State Department of Revenue who came to the same conclusion that all capital gains must be considered disposable income regardless of accessibility. Ms. Trafton stated she is bound by the State law as it currently exists. Perhaps Mr. Scoville should take his issue to the legislature to try to get the law changed to accommodate these types of circumstances. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. At 1:00 p.m. Acting - Chairman Broders reconvened the hearing of Stanley and Yvonne Pawelek in the presence of Member Dave Gating. Stanley & Yvonne Pawelek BOE: 08 -39 -LO PN: 001 063 006 10602 Sherwood Drive SW Lakewood, WA 98498 Stanley and Yvonne Pawelek and their Realtor Jan Marquardt were present. Appraiser Dennis Pownall represented the Assessor's office. All parties were previously sworn in by Acting - Chairman Broders. Mr. Pownall explained that the value of the property would be much higher if he had used the same methodology as the parcels on either side of the appellants' property. He reviewed the following comparable properties in support of the assessed value. Parcel No.: 001 061 006 (bare land) Location: 396 Haada Laas Road Sale Date: December 2005 Sale Price: $551,000 Assessment: $741,300 ($591,300 land /$150,000 improvements) Mr. and Mrs. Pawelek stated that this parcel has much more water frontage than their parcel has. Board of Equalization Minutes - February 10, 2009 Page: 15 Parcel No.: 001 063 008 (bare land) Location: 313 Porter Lane Sale Date: March 2006 Sale Price: $545,000 Assessment: $509,280 Parcel No.: 001 053 021 (bare land) Location: Off of Hastings Avenue Sale Date: May 2007 Sale Price: $185,000 Assessment: $184,550 Parcel No.: 001 053 002 (bare land) Location: No assigned address (Off of East Middlepoint Road) Sale Date: August 2007 Sale Price: $164,000 Assessment: $158,650 Parcel No.: 001 054 005 (bare land) Location: 91 Jacob Miller Road Sale Date: August 2008 Sale Price: $249,000 Assessment: $241,065 Mr. Pownall reviewed the comparable sales presented by the appellant which are located miles away from the appellants' property near Cape George and Discovery Bay. He has no objection to the one comparable sale they presented which is located off of Rainshadow Drive at the end of N. Jacob Miller Road. It was an outstanding sale and there are no others like it. However, it is not evidence of market value, because it is the only sale of its kind. Discussion ensued regarding the valuation method used to assess the property. Ms. Marquardt noted that the Assessor's comparable property sale listed as parcel #001 063 008 which sold in March 2006, was put back on the market in July 2006 and it has yet to sell. Mr. Pownall noted that it sold for $545,000 in March 2006 and presently it is on the market for more than it sold for. It is currently assessed at only $509,000. Ms. Marquardt added that the comparable property also has a well, a geotech report, soils testing, engineering testing, an eagle management plan, survey, type I land use permit and a SPAAD, to determine that it is a buildable lot. It is currently on the market for $595,000. The Pawelek's property does not have all those things. Acting - Chairman Broders asked if the comparable property had all those things before or after it sold in March 2006 for $545,000? Mr. Pownall stated those applications were made after the purchase of the property. Board of Equalization Minutes - February 10, 2009 Page: 16 Member Gating asked if the Pawelek's have legal access off of Porter Lane. Mr. Pawelek replied yes, they have an access easement. Their property is at the end of Porter Lane which stops at the boundary of their property. Member Gazing asked Mr. Pownall if the Pawelek's property warrants a reduction in value for topography? Mr. Pownall replied that he did not make negative adjustments for topography to any parcel in the area because they all have the same topographical problems which are incorporated into the sales prices. Acting - Chairman Broders asked Mr. Pownall to explain the positive adjustment of 15% which is applied to the value of the appellants' property for site quality? Mr. Pownall responded that he is attempting to value the parcel equitably among the parcels around it. The value is not in the 80 feet of waterfront, nor is it in the residual acreage. It is a combination of the two features. The acreage of this property has the potential for a magnificent water view and therefore, has a greater value than the average acreage parcel which has no water view. It is a better parcel, a unique parcel, which is why it was given a 15% increase in value. Discussion ensued regarding the 4 -year revaluation cycle and how assessments and levy rates relate to the budget. Member Garing asked the Pawelek's what is their estimate of value for the property? Mr. Pawelek replied they feel the property is worth somewhere between $300,000 to $500,000. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. James P. & JoAnne C. Barr BOE: 08 -91 -R PN: 940 800 073 3590 Cape George Road Port Townsend, WA 98368 James P. and JoAnne C. Barr were present. Appraiser Charley Hough represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Under appeal is the land and improvement value of property located off at 3590 Cape George Road, Port Townsend. Currently, the property is assessed at $203,640 ($53,750 for the land and $149,890 for the improvements). The appellants estimate the value is $139,835 ($26,870 for the land and $112,965 for the improvements). Mr. Barr presented with his petition a newspaper article that discussed the closing of the Ford Dealership, and a letter to the editor stating that the Assessor's office is using an outdated formula to value property. It seems ridiculous to increase taxes in the current state of the economy. There are 31 homes for sale in the area where he lives. They have made no improvements to their property to warrant the increase in value of their property. They don't see any reason at all to raise the taxes. Board of Equalization Minutes - February 10, 2009 Page: 17 Mr. Hough explained that he is required by State law to value property at 100% of its true and fair market value. He presented information which included a map and field sheets of the appellants's property and six comparable property sales that were used in the valuation process. Also presented were the Real Estate Excise Tax Affidavits for each sale and a drawing and photo of the improvements on the appellants' property and on the comparable property sales 91 through #4. Comparable property sales 45 and #6 were bare land sales. Comparable Property #1 Parcel No.: 940 800 071 (improved land) Location: 20 Ridge Drive Sale Date: February 2005 Sale Price: $125,500 Assessment: $141,745 ($53,750 land/$87,995 improvements) Comparable Property 92 Parcel No.: 940 800 047 (improved land) Location: 93 Pine Drive Sale Date: August 2005 Sale Price: $189,000 Assessment: $188,910 ($90,000 land/$98,910 improvements) Comparable Property #3 Parcel No.: 940 800 002 (improved land) Location: 83 Ridge Drive Sale Date: March 2007 Sale Price: $251,500 Assessment: $246,405 ($110,000 land/$136,405 improvements) Comparable Property #4 Parcel No.: 940 800 035 (improved land) Location: 170 Pine Drive Sale Date: January 2006 Sale Price: $195,000 Assessment: $181,920 ($90,000 land/$91,920 improvements) Comparable Property 45 - Double Sale (Sold twice during four -year revaluation period) Parcel No.: 940 800 056 (bare land) Location: No assigned address (Cape George Village, Division 4, Lot 57) Sale Date: June 2005 Sale Price: $37,500 2" Sale Date: September 2007 2 °d Sale Price: $117,500 Assessment: $110,000 Board of Equalization Minutes - February 10, 2009 Page: 18 Comparable Property #6 - Triple Sale (Sold three times during four -year revaluation period) Parcel No.: 940 800 063 (bare land) Location: 61 Alder Drive Sale Date: September 2005 Sale Price: $55,000 2nd Sale Date: November 2005 2nd Sale Price: $83,600 Quit Claim Date: September 2006 Quit Claim sale: $10.00 (gift) 3`d Sale Date: March 2007 3rd Sale Price: $119,000 Assessment: $110,000 Mr. Barr commented on the Assessor's comparable property #6 stating that the owners of that parcel did purchase it for $119,000, however, since that time the owners have been made of aware of the restrictions on the lot which severely limits what size of house they can build and where it can be situated on the lot. Mrs. Barr added that the lot does not have the same value as it once had. Mr. Barr stated that he realizes the County needs money, but, to increase their property value by $63,800 is ridiculous. They have made no improvements to their property and they have hardly any view due to tree growth. Mr. Hough explained how he valued the property and stated that there has been a lot of sales activity in Cape George over the last four years. The current assessment of the appellants' property is reflective of market value as of the assessment date of January 1, 2008. Mr. Barr rebutted that according to a local Realtor there has been very little sales activity in the area. Hearing no further testimony, Acting - Chairman Broilers closed the hearing. The Board will make a determination at a later date. Linda Mattos & Chris Hanson ROE: 08- 129 -LO PN: 001 174 021 141 Nelsons Landing Road Port Townsend, WA 98368 08 -130 -R 001 174 016 Chris Hanson was present. Appraiser Dennis Pownall represented the Assessor's office. Acting - Chairman Broders explained the hearing process and swore in both parties. Linda Mattos arrived shortly after the meeting began and was also sworn in by Acting - Chairman Broders. Under appeal is the value of one bare land parcel and one improved parcel located at 141 Nelsons Landing Road, Port Townsend. Following is the current assessment and the appellant's estimate of value for the parcels under appeal: Parcel No. Current Assessed Value Appellant's Estimate of Value 001 174 021 $66,600 (bare land) $49,800 001 174 016 292,430 ($127,000 land/$165,410 imps.) $176,000 ($50,000land/$126,000 imps.) Board of Equalization Minutes - February 10, 2009 Page: 19 In reference to the improved parcel, Mr. Hanson stated the increase in their assessed valuation is not in line with other properties in the area. They believe the market value of property has not gone up, but, is actually the same as the previously assessed value. Two comparable property sales were presented. One is located in Cape George off of Saddle Drive. It has more amenities and is worth more than their property. The other property has an older house like they have and is located off of Rhody Drive in Chimacum. Comparing the values of those properties to their property shows that their value is a little high. He questioned if the Assessor's office considers their two individual parcels linked just because they are adjacent to each other? Does the value of one parcel affect the value of the other? The bare land parcel also seems to be overvalued based on other properties they researched. The information they received from the Assessor's office that was used as a basis for their valuation included two sales of property in the area with mobile homes. Mr. Hanson stated they do not have a mobile home, they have a house built on their property. He doesn't understand how those sales correlate in any way, shape or form to their property. He doesn't feel that the Assessor's office adequately supplied them with information about how their property was valued. Mr. Pownall reviewed the comparable sales that were used to determine the land value. The following comparable property is located directly across the street from the appellants' property and is the most comparable in size to their improved parcel no. 001 174 016. These sales were used to show the appellants how much land and mobile homes in the area have sold for. Parcel No.: 001 174 020 (Improved land) Location: 150 Nelsons Landing Road Sale Date: October 2007 Sale Price: $220,000 Assessment: $215,370 ($156,600 land/$58,770 improvements) The appellants' land is valued less than this comparable. Following are the other comparable property sales in the area that were used as a basis for value. Parcel No.: 001 171 027 (improved land) Location: 390 Arcadia West Sale Date: June 2008 Sale Price: $172,500 Assessment: $171,830 ($154,680 land /$17,150 improvements) Parcel No.: 001 181 029 (improved land) Location: 164 Crutcher Road Sale Date: May 2008 Sale Price: $325,000 Assessment: $318,020 ($192,600land/$125,420) These are outstanding land amounts that people are paying for these properties. Board of Equalization Minutes - February 10, 2009 Page: 20 In answer to Mr. Hanson's question about the value of the two parcels affecting one another and whether or not they are linked in some way, Mr. Pownall explained that the bare land parcel is receiving a 50% reduction in value due to topography issues which may prevent the parcel from being developed. The bare land parcel is simply valued as an extension of the improved parcel, however, as far as he knows the parcels are not legally bound together. Mr. Pownall added that the comparable property sale located off of Saddle Drive that was presented by the appellants sold in December 2008 for $282,500. That property is currently assessed at $279,500. The assessed value is below the sale price. The other property located in Chimacum sold in September 2008 for $210,000. It is currently assessed at $197,300 which again, is below the sale price. Mr. Hanson stated that the point they were trying to make with these two comparable property sales is to show that the values are not equitable. He realizes that the Assessor's office does not have a crystal ball to predict Real Estate prices, but, the Assessor is supposed to assess property at 100% of its true and fair market value. Due to economic conditions, the true and fair market value of property in our community is not the same today as it once had been. Mrs. Hanson asked for clarification that the parcels are separate from one another? Mr. Pownall replied yes, and added that they could be sold separately. Hearing no further testimony, Acting - Chairman Broders closed the hearing. The Board will make a determination at a later date. Member Gazing moved to adjourn the meeting until 9:30 a.m. Tuesday, February 17, 2009. Acting - Chairman Broders seconded the motion. The motion carried. ATTEST: I Erin Lundgren, Clerk of the Bard JEFFERSON COUNTY BOARD OF EQUALIZATION (Excused Absence) William S. Marlow, Chairman Richard A. Broders, Vice - Chairman Dave Garing, Member