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HomeMy WebLinkAboutM091212ok EQIJ,14�� O Dave Garing Mike Smith Henry Krist 1820 Jefferson Street P.O. Box 1220 Port Townsend, WA 98368 Dave Gazing Henry Krist MINUTES September 12, 2012 Michael Smith Chairman Vice - Chairman Member Chairman Dave Garing called the meeting to order at 9:30 a.m. in the presence of Vice - Chairman Michael Smith and Member Henry Krist. APPROVAL OF MINUTES Vice - Chairman Smith moved to correct (first page, second paragraph, first sentence: delete sentence "Welcomed new member Mike Smith ") and approve the minutes of July 12, 2012. Member Krist seconded the motion which carried by a unanimous vote. ASSESSMENT CORRECTIONS AND PETITION WITHDRAWALS Member Krist moved to accept the following assessment corrections and petition withdrawals. Vice-Chairman Smith seconded the motion which carried by a unanimous vote. NAME Paul Hosea Richard & Marcia Moquin Brian Murphy Keith & Rachel Helms 3047 Dapple Way Eugene, OR 97401 APPEAL NO. PARCEL NO. BOE 12 -09 -R 965 000 325 BOE 12 -17 -R 821 355 044 BOE 12 -38 -LO 001 031 001 HEARINGS BOE: 12 -43 -R PN: 602 353 062 Keith and Rachel Helms were not present. Appraiser Charley Hough represented the Assessor's Office and was sworn in by Chairman Garing. Under appeal is the land and improvement value Phone (360)385 -9100 Fax (360)385 -9382 jeffbocc@co.jefferson.wa.us Board of Equalization Minutes — September 12, 2012 Page: 2 of property located off of Buena Vista Road, Brinnon. Currently, the property is assessed at $181,105 ($80,450 for the land and $100,655 for the improvements). The appellants estimate the value is $105,000 ($55,000 for the land and $50,000 for the improvements). On the petition form the appellants wrote the following reason for appealing the valuation of their parcel: "The building we had built is a simple pole style building concrete floors throughout, unheated except for small apartment within (576 sq. ft.). Total construction cost: S50,000.00." Appraiser Hough stated that comparable sales 1, 2 & 3 are owned by the appellants and he submitted the field sheets to show the uniformity in valuing nearby properties. The appellant's parents purchased the property in November, 2004 for $155,000 and gifted it to the appellants in December, 2006. Exhibit #8 is a printout of the appellant's building permit application for a pole building built by Sound Building Systems. The valuation was listed at $65,422 and the appellants stated on their appeal form that they estimate improvements are valued at $50,000. Appraiser Hough then reviewed comparable sale 44 (land only): Comparable Propertv 44 Parcel No.: 502 313 047 Location: Dupuis Short Plat, Lot 2 Value: $57,750 Sale Date: June, 2005 Sale Price: $45,000 Sale Date: November, 2011 Sale Price: $63,000 Vice - Chairman Smith asked what this property was used for in the past. Appraiser Hough answered that he believes lot 1 was used for a gravel pit and the property was short platted with the conditions of the placement of a water tank to fight fires and to make the road big enough to get emergency equipment to the property. This property is located above Highway 101 so there is some road noise. However, the property has an unbelievable view. He is not aware that any of the parcels have been listed for sale. In response to a request for an explanation of the reductions given to the various lots, Appraiser Hough explained that Lot 4 (comparable sale #3) was given a reduction for the cost of installation of a septic system. Lot 4 was also given a reduction for the storage tank, installed as part of the short plat requirement, because it limits the amount of usable land. Lot 3 (comparable sale #2) was given a reduction for steep topography. Lot 1 (comparable sale #1) is valued as acreage because of the gravel pit. Hearing no further testimony, Chairman Gating closed the hearing. The Board will make a determination at a later date. Board of Equalization Minutes — September 12, 2012 Page: 3 Sidney & Karla Stecker BOE: 12 -18 -LO PN: 989 600 010 3645 Cassie Drive SW Tumwater, WA 98512 Sidney and Karla Stecker were present. Appraiser Dennis Pownall represented the Assessor's Office. After explaining the hearing process Chairman Gating swore in both parties. Under appeal is the land value of property located in Prospect View Estates (Lot 10), Port Townsend. Currently, the property is assessed at $240,000 and the appellants estimate the value is $70,000. The appellants provided a letter from Karen Best, Coldwell Banker Realtor. The letter discusses comparable sales, including the appellant's property, which show that values have decreased significantly in the last year; especially raw land. The appellants purchased their property in March, 2012 for $70,000. The appellants informed the Board that a survey was performed and subsequently their property line is in dispute with the neighbors to the South. To resolve this issue will be costly. Appraiser Pownall stated that the appellants purchased their property on a bargain and sale agreement and this sale is over a year past the assessment date of January 1, 2011. At the peak of the market the property sold for $327,000 and he agrees that sale was an anomaly and does not reflect fair market value. The property is currently assessed at $240,000. The property is by far the best one in the area and he gave the lot a superior site adjustment of 35 %. Appraiser Pownall recommended removing the superior site adjustment and reducing the value to $184,000. He agrees that the appellants got a great deal, however the purchase price does not reflect fair market value. In answer to a question by the appellant, Appraiser Pownall replied that the appellant's property is the only property receiving the superior site adjustment. Member Krist asked who the seller of the property was? The appellants replied the property was sold by the bank and was on the market for approximately one (1) year. The appellants provided comparable property sales that occurred after the assessment date and for properties not located in the immediate vicinity. Chairman Gating would like to continue this hearing to allow the appellants to research and submit comparable sales from 2010 -2011 in the immediate area. Member Krist asked about the boundary line issue with the neighbor and what effect it would have on the market value. The appellants responded that a neighbor is alleging that the property line encroaches 10 feet onto their property. The neighbor has already paid a significant amount to another property owner to settle a boundary line dispute. It is important because the 10 feet of land is waterfront footage which adds the most value. Chairman Garing stated that there is a large discrepancy between the appellant and the Assessor's values. The Board concurred that both parties research and provide comparable sales that occurred in 2010 -2011 in the immediate area. Board of Equalization Minutes — September 12, 2012 Page: 4 The hearing is continued to a later date. Tim Morris P.O. Box 1177 Orem, UT 84059 BOE: 12 -20 -LO PN: 021321036 Tim Morris was not present. Appraiser John Pray represented the Assessor's Office and was sworn in by Chairman Gating. Under appeal is the land value of property located off of Griffiths Point Road, Nordland. Currently, the property is assessed at $202,000 and the appellant estimates the value is $150,000. On the petition form the appellant wrote the following reason for appealing the valuation of his parcel: "The Assessor's value has never reflected recent market downturn, no recent sales reflects downturn. Assessor used improved property to assess vacant ground." The appellant faxed additional information to be included as part of his evidence. With permission from the Assessor's representative copies were provided to the Board. Appraiser Pray informed the Board that the appellant owns waterfront property located on Marrowstone Island. He provided three comparable property sales; one land only sale and two improved land sales. The same waterfront rate was used. The appellant disputes the land only comparable property sale provided by the Assessor's representative stating that the sale occurred three (3) years ago. Appraiser Pray clarified that the land only sale occurred approximately 13 months prior to the assessment date of January 1, 2011. Hearing no further testimony, Chairman Gating closed the hearing. The Board will make a determination at a later date. NEW BUSINESS REVIEW: Request to Equalize all Similar Jefferson County Quarry Properties; David Armitage, Requester Mr. Armitage reviewed the supporting documents he provided to the Board prior to this review. He feels the Assessor is not using the proper methodology in determining the value of quarries in Jefferson County. There have not been any comparable property sales of a working quarry. WAC 458 -07 -030 goes to great lengths to define true and fair market value. It should be a value that a willing seller and a willing buyer agree to. In June Mr. Armitage submitted a letter and in that letter he stated that the Assessor has the "Mason Quarry" valued at $152,000 and that quarry stands to generate approximately $350,000 to $450,000 each year for the next 10 years. The Assessor does not consider income when valuing quarries. If you were the landowner and you have the potential to receive $3.5 million to $4 million over the next 10 years would you sell it for $152,000? Mr. Armitage stated he would not. In September, Mr. Armitage submitted an appraisal of Miles Sand and Gravel that was generated Board of Equalization Minutes — September 12, 2012 Page: 5 as part of the Washington State Department of Transportation selling the right of access to Miles Sand and Gravel. The 3`a party appraiser valued that quarry at $5 million and this quarry stands to make $450,000 per year over the next 26 years. Using his own figures, Mr. Armitage believes that the Jefferson County Assessor has valued the Miles Sand and Gravel quarry at $400,000. Is this reasonable? He doesn't feel that the values determined by Jefferson County for quarries are reasonable. It becomes a burden on taxpayers if property owners are not paying their fair share. Mr. Armitage would like to see the "Discounted Cash Flow" method used to determine fair market value. The methodology currently used by the Assessor is losing money for the County. Member Krist asked where Mr. Armitage got all the data he provided, specifically for the quarries? Mr. Armitage replied that the Mason Quarry provided their own data; the Miles Sand and Gravel came from the Washington State Department of Transportation; the Iron Mountain Quarry information came from a minerals overlay application. When asked what he is requesting the Board of Equalization to do, Mr. Armitage stated that under WAC 458.07.030(5) the Assessor can request data from the landowners regarding the income and he would like to see that happen. Mr. Armitage had concerns about whether or not certain quarries qualified for the Forest Land program and brought those concerns to Assessor Westerman who has removed two commercial quarries (Miles Sand and Gravel and Shine Quarry). Iron Mountain Quarry will be removed once it is permitted. The law specifies what the Assessor is allowed and not allowed to do. In determining fair market value, the Assessor needs to use comparable sales, replacement cost or discounted cash flow. Mr. Armitage said the Assessor does not have comparable sales. In response to Mr. Armitage's request to be informed of the Board of Equalization's decision whether or not to proceed with the request to equalize Jefferson County quarries, Chairman Gazing replied that Mr. Armitage will be given written notification of the Board's decision. Assessor Jack Westerman joined the meeting along with staff members Sherrie Shold, Lauralee Kiesel and Robert Shold. He stated that in the appearance of fairness he has not had any contact with Mr. Armitage or members of his group or any of the property owners involved in this request. He did receive and respond to an email from Mr. Armitage informing him that per the appearance of fairness doctrine he would be unable to assist with Mr. Armitage's request. Assessor Westerman stated that in the State of Washington all property is valued at 100% of fair market value unless an exemption is granted. Their office uses a cost approach, not an income approach. The only income approach that he is aware of in Jefferson County is the Port Townsend Paper Mill which is valued by the Washington State Department of Revenue. If the Board decides to equalize they will have a hard time finding comparable property sales to determine fair market value. The Assessor's Office uses a cost approach that is adjusted to market place for commercial, Board of Equalization Minutes — September 12, 2012 Page: 6 industrial and residential. They are all treated equitably In the case of the Port Ludlow area, all residential properties were given a 35% market modifier for improvements. The Kala Point area was given that same adjustment. Jefferson County quarries are not receiving the 35% adjustment. Prior to this review, Assessor Westerman provided a packet of information to the Clerk of the Board who made copies for the Board and for Mr. Armitage. In that packet is the "Measuring Real Property Appraisal Performance in Washington's Property Tax System for 2009" performed by the Washington State Department of Revenue in 2010 which is the most recent study. Jefferson County is at the top of that study for percent of properties with ratios within 15% of median ratio and for median percentage deviation. During his 35 year tenure, Assessor Westerman has only asked the Board of Equalization to equalize property twice and in those two instances he has provided all the market information. It is necessary to have comparable sales. Mr. Armitage has only provided assessments and each quarry varies dramatically. The Assessor's Office provided data on four (4) commercial quarries that include: Miles Sand and Gravel (flea Fred Hill); Mason Sand and Gravel (aka Shine Quarry); Hard Rock (located in Gardiner); and Penny Creek Quarry (located in Quilcene). A composite was provided for each quarry. Assessor Westerman stated that mineral rights are not assessed in Jefferson County, nor are they assessed in Mason, Kitsap, Clallam or Grays Harbor Counties. None of those Counties use an income approach for quarries which makes all of the Counties uniform in how they assess their quarries. However, Jefferson and Kitsap Counties are the only Counties that have removed all the commercial quarries from the Designated Forest Land Program. Chairman Gating asked why the commercial quarries were removed from the exemption program in Jefferson County and not in all the other Counties? Assessor Westerman replied that Mr. Armitage was very instrumental in making that happen. He brought to the Assessor's Office information that showed that commercial quarries didn't qualify for the exemption. Assessor Westerman contacted the Department of Revenue and encouraged them to contact other Washington Counties about removing that exemption. EXECUTIVE SESSION: Scheduled from Noon to 12:30 p.m. with the Assessor, Lead Commercial Appraiser, Lead Assessor Technician III, Assessor Technician III and the Clerk of the Board of Equalization regarding personal property. This exemption is outlined in the Open Public Meetings Act RC W 84.40.340(1). The actual period of time the Board met in Executive Session on this topic was from 12:05 p.m. to 12:30 p.m. At the conclusion of the Executive Session the meeting returned to open session and no action was taken. Board of Equalization Minutes — September 12, 2012 Page: 7 Vice - Chairman Smith moved to adjourn the meeting at 12:40 p.m. until 11:00 a.m. on September 27, 2012. Member Krist seconded the motion which carried by a unanimous vote. ATT T: Leslie R. Locke, Clerk of�oard JEFFERSON COUNTY OARD OF QUALIZATION Jok 1W Dave Garij Mike Srh&,- Vice- C-haairr Henry Krist, Member