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HomeMy WebLinkAboutM092298 1820 Jefferson Street PO Box 1220 Port Townsend, WA 98368 James A. DeLeo, District 1 William S. Marlow, District 2 Richard A. Broders, District 3 JEFFERSON COUNTY BOARD OF EQUALIZATION MINUTES SEPTEMBER 22, 1998 Richard A. Broders William S. Marlow James A. DeLeo Chairman Vice-Chairman Member Chairman Richard A. Broders called the meeting to order at 9:30 a.m. in the presence of Vice-Chairman William S. Marlow and Member James A, DeLeo. DISCUSSION OF HEAL TH DEPARTMENT POLICIES Environmental Health Director Larry Fay was present in response to a letter written by Chairman Broders regarding the effects of Health Department policies on fair market value of property. Chairman Broders summarized his letter by stating that the Board of Equalization is requesting clarification of Health Department policies which prohibit or limit expansions of existing dwelling units. Larry Fay eXplained that each case is unique. An expansion would not be permitted for property which contains a non-conforming septic system (ie. systems which do not meet requirements for size, vertical separation, distance from a well, etc.). Maintenance such as replacing the roof or siding, and some interior remodeling is allowed if the septic system is functional. Questions arise regarding what is allowable if a property owner upgrades a septic system, and the system is still non-conforming even with the upgrades. Strictly from a regulatory standpoint, if a system is non-conforming, no expansion is allowed. However, the Health Department has some latitude in dealing with expansions, Regulations defme expansion as an increase in plumbing, bedrooms, or anything which results in increased occupancy of a house. The Health Department also makes judgements about building additions which would likely increase the waste water volume or change the characteristics of the waste water. Mr. Fay stated that the Health Department tries to be flexible, but they also must adhere to some threshold. Discussion ensued regarding actual and hypothetical situations; the waiver process; and various types of septic systems. Mr. Fay stated that situations of property vary throughout Jefferson County, and each situation must be dealt with on a case by case basis. Phone (360)385,9100/ 1-800-831-2678 Fax (360)385,9382 jeffbocC@co.jefferson.wa.us BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22, 1998 Page 2 HEARINGS Otto & Rose Johnson 1477 Gardiner Beach Road Sequim, W A 98382-8712 BOE: 98-45-R PN: 002331030 Mr. and Mrs. Johnson were present. Appraiser Peter Schuck represented the Assessor's office. After explaining the hearing process Chairman Broders swore them in. The property under appeal consists of a home located on approximately 2.5 acres at 1477 Gardiner Beach Road in Sequim, Mr. Johnson stated he feels the current assessment is unrealistic based on actual costs and comparable sales which he presented with his petition. The appellants are requesting the current assessment be reduced from $109,475 ($41,000 for the land and $68,475 for the improvements) to $80,000 ($40,000 for the land and $40,000 for the improvements). Mr. Schuck stated that Mr. Johnson made some legitimate points. He explained that the house was valued as "average +" construction, which is the lowest grade he uses to value new construction. Mr. Schuck stated that he is willing to stipulate to a reduced value by using the lower grade of "average" construction. Making this adjustment would decrease the valuation by approximately $4,000. Based on comparable sales, he believes the property would sell for more than the appellant's estimated value of $80,000. Discussion ensued regarding comparable sales. Mr. Johnson stated that he does not agree with the Assessor's representative. After hearing the testimony of both parties the Board concurred to conduct an inspection of the property and make a determination at a later date. Brian & Nena Dunn 1120 Lovell Avenue NW Bainbridge Island, W A 98110 BOE: 98-40-R PN: 701185009 Mr. Dunn was present, Appraiser Peter Schuck represented the Assessor's office. After explaining the hearing process Chairman Broders swore them in, The property under appeal consists of a manufactured home located on approximately 635 acres at 1227 E. Quilcene Road in Quilcene. Mr. Dunn stated that all of his testimony is included in the information submitted with his petition (ie. appraisal, landslide investigation report, repair costs, photographs, etc.) The appellants feel that the current assessment of$161,895 ($67,670 for the land and $94,225 for the improvements) is too high and a more realistic value would be $120,000 ($30,000 for the land and $90,000 for the improvements). Mr. Schuck stated that he visited the property with Mr. Dunn and confirmed that the property has been impacted by slides and it also has fractures. A reduction in the land value of20% was offered to Mr. Dunn, who rejected that offer as he feels the obsolescence factor or cost to cure exceeds the difference of 20%. Mr. Schuck feels that determining an adequate amount for adjusting the value is purely subjective. He believes 20% is fair. BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22,1998 Page 3 Mr. Dunn stated that the landslide investigation report was prepared by Northwestern Territories, Inc. In August he hired them to conduct a follow up investigation and do a preliminary assessment of slide remedies (With no objection by the Assessor's representative, the report was allowed into the record for the Board's review). The report quantifies the total damage and the costs to repair the damage. Mr. Dunn said that there are two parcels involved, but, he is only contesting the value of one. The appellants had an appraisal done in July 1997 indicating a value of $142,000. In August of 1997 the appellants purchased the property for $162,500. He explained that they paid more than the appraised value of the property because it met their needs perfectly. Basically, there are two valuation issues. The fair market value of the property in January 1998 (prior to the land slide), and the amount of adjustment to the value of the property after the land slide occurred. It may be that only the latter of the two issues is pertinent, however, he feels that the valuation established in January 1998 should have been based on the appraisal amount, not the amount they chose to pay for it. It is not fair that the County arbitrarily valued the property according to the purchase price rather than what was indicated in an actual detailed appraisaL He proposes that they split the difference which would mean an assessment of approximately $152,000. Then from that figure they can work on an adjustment for the slide impacts. Mr. Schuck explained that property in Jefferson County is valued at 100% of fair market value. When the appellants purchased the property for $162,500, they set fair market value. They had an appraisal indicating a lesser value of$142,000, and yet the appellants still paid more. This appears to be an "arms-length transaction" (a transaction between a willing buyer and a willing seller). Mr. Dunn argued that he was willing to pay more than the appraised amount, however, out often potential buyers, how many would be willing to pay more than the appraised value? He does not feel that their purchase sets market value. In regard to the issue of the land slide, Mr. Dunn stated that he has provided information which documents the cost to repair the physical damage. The Board reviewed the photographs submitted. Discussion ensued regarding the damage and the estimate for repairs. Mr. Dunn said that they have spent approximately $8,000 to make some repairs and he described what has been completed. Chairman Broders stated that as repairs are made, the value of the property is restored. Mr. Dunn stated that even after all the repairs are made there are no guarantees that land slides on the property will not occur. After hearing the testimony of both parties, the Board concurred to conduct an inspection of the property and make a determination at a later date. William H. Harrison 3537 Green Tree Drive SE Port Orchard, W A 98366 BOE: 98-17-R PN: 980100322 Mr. Harrison was not present. Appraiser Dennis Pownall represented the Assessor's office and was sworn in by Chairman Broders. The property under appeal is a lot located in the Olympic Canal Addition in Brinnon. As stated on the petition the appeal is based on the following: 1) Inadequate water system; 2) Mobile homes BOARD OF EQUALIZATION MINUTES. SEPTEMBER 22,1998 Page 4 traditionally decrease in value; 3) Mud flat in front of parcel limiting boating and other activities to high tide only; and 4) A 59.6% increase in value in one year is very unfair. The current assessment is $141,655 ($89,600 for the land and $52,055 for the improvements). The appellant's estimate of value is $105,000 ($55,000 for the land and $50,000 for the improvements). Mr. Pownall stated that the value of this property significantly increased from the last time it was valued. The increase was based on sales of similar properties in the area. He used a valuation of$I,500 per front foot which is consistent with other waterfront parcels. After reviewing all the information submitted and hearing the testimony of Mr. Pownall, the Board concurred to conduct an inspection of the property and make a determination at a later date. Paul Walkley 1303540'. Avenue S. Tukwila, W A 98168 BOE: 98-46-R PN: 901272 006 Mr. Walkley was not present. Appraiser Robert Shold represented the Assessor's office and was sworn in by Chairman Broders. The property under appeal consists of approximately 7.19 acres located off of Naylor Creek Road in Chimacum. In a letter attached to the petition the appellant states, "My property was reduced in size from 8.22 acres to 7.19 acres around March or April of this year '98. I cannot understand why the value would go up so much with this reduction of property. This property also went through a property line adjustment, which put all the acres under one tax number. Could you redetermine the land value under these new conditions." A map and legal description of the property was also included. Currently the property assessment is $19,880 ($18,380 for the land and $1,500 for the improvements). The appellant estimates the value of the property to be $17,576 ($16,076 for the land and $1,500 for the improvements). Mr. Shold explained that the property did not decrease in size. In March 1998 the previous owner had a boundary line adjustment (BLA) done which increased the property from 5 acres to 7.19 acres. Due to processing time the change of value was not made until June 1998. In the interim (May 1998) the appellant purchased the property (7.19 acres) for $15,203. The previous assessed valuation in 1995 for the original five acres was $16,300. Mr. Shold doesn't understand why the appellant is requesting a value more than his purchase price. At the close of the hearing the Board concurred to conduct an inspection of the property and make a determination at a later date. Rocky Brook Hydroelectric, L.P. Dell Keehn 11225 SE 6'., Suite 100 Bellevue, W A 98004 BOE: 98-36-C PN: 602 282 004 Mr. Keehn was present on behalf of Rocky Brook Hydroelectric. Representing the Assessor's office was Appraiser Bob Shold. Chairman Broders explained the hearing process and swore them in, The property under appeal is a hydroelectric plant located on approximately 9.8 acres in Brinnon. Mr. Keehn stated that Rocky Brook Hydroelectric, is a small hydroelectric facility about the size of a two-car garage. He explained how the plant operates. It was built in 1984 at a cost of$I,OOO,OOO +. Over the first ten years of operation they BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22, 1998 Page 5 had a contract for power with the City of Seattle. Since the termination of that contract in 1996, Rocky Brook has only been able to generate $.02 (two cents) per kilowatt. He noted that all wholesale energy rates for power have gone down over the last 10 years. Submitted with the petition were 1996 and 1997 tax returns as well as a cash flow projection report for next 20 years. According to the projections and the tax returns the company is in the negative and will continue to lose money unless energy rates increase. The only reason the plant is still operating is because it is subsidized by the partnership. As there are other investors involved they have a vested interest in maintaining the partnership. The operator of the plant has been there for 13 years and agreed to a decrease in salary I 1/2 years ago to help out. The partnership would never be able to replace him at the current salary. Mr. Keehn stated that they have cut costs where ever possible and he feels that using the cash flow analysis to value the property is reasonable, however, the analysis indicates a negative cash flow or zero value. He proposes valuing the facility based on what it would be worth as scrap material. The current assessment is $543,670 ($32,400 for the land and $511,270 for the improvements). Mr. Keehn estimates the value to be $50,000 ($32,400 for the land and $17,600 for the improvements). Mr. Shold stated that the Department of Revenue had originally valued this property and the Assessor's office was expecting some assistance with responding to this appeal. He explained that the current valuation of the property was determined by the Board of Equalization as a result of an appeal filed in 1994 by Rocky Brook Hydroelectric. The method the Board used to value the property was fair considering the information which was available at that time. The Department of Revenue did not provide an advisory appraisal this year. After further discussion the Board concurred to conduct an inspection of the property and make a determination at a later date. Gerald & Sandra Williams 21210 SE 286 Place Kent, W A 98042 BOE: 98-18-R PN: 932101402 Mr. and Mrs. Williams were present. Appraiser Dennis Pownall represented the Assessor's office. After explaining the hearing process Chairman Broders swore them in. The property under appeal consists of a .56 acre lot located in Brinnon. Mr. Williams stated that their property is being assessed as an improved residential site. The appellants contend that the property is not improved as it does not have permanent electrical connections, or potable water. It would cost approximately $15,000 to bring in electricity and another $12,000- $15,000 to drill a well as potable water is 300-350 feet deep. There is a generator on the property they use when camping and a storage tank in which they collect rain water to use for washing. They have permission to cross a neighboring parcel to get to their property and there is no improved access. Additionally, there is no septic system on the property, just a holding tank which they pump when it is full. A wood stove is their only source of heat. Mr. Williams stated that three years ago they paid $22,000 for the property which included a structure on the property. After the appellants added vinyl siding and a roof, they discovered that the previous owner did not have a building permit for the structure, thereby, violating regulations. The current assessment is $76,600 ($29,400 for the land and $47,200 for the improvements). The appellants estimate the value to be $26,860 ($2,860 for the land and $24,000 for the improvements). Mr. Pownall stated that he valued the land based on the appellants' purchase price and sales of comparable property in the area, He agreed that the access to the property is poor and that there is no record of a building permit. He valued the improvements as new construction as it appears to be a new house. Due to the poor BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22, 1998 Page 6 location he adjusted the value with an obsolescence factor of -25%. Mr. Pownall is waiting to hear from the Permit Center as to the current status of the building in regard to permitting. As there is not much information available on the building, the true market value is unknown, Mr. Williams stated that they paid $22,000 for the land and the structure, not knowing that the structure was not permitted. The only improvements made to the structure was to add siding and a roof, which makes it look new. After hearing the testimony of both parties the Board concurred to conduct an inspection of the property and make a determination at a later date. APPROVAL OF THE MINUTES Vice-Chairman Marlow moved to approve the minutes of August 5, 6, 7, & 25,1998 as presented. Member DeLeo seconded the motion which carried by a unanimous vote. REQUEST FOR RECONVENING Stanley T. Messer submitted a "Request for Reconvening" based on the condition being met pursuant to WAC 458-14-127 RECONVENED BOARDS-AUTHORITY (l)(c) which states Boards of Equalization may reconvene on their own authority to hear requests or appeals concerning the current assessment year when the request or appeal is filed with the Board by April 30 of the tax year immediately following the Board's regularly convened session and when a bona fide purchaser or contract buyer of record has acquired an interest in real property subsequent to the fIrst day of July and on or before December 31 of the assessment year and the sale price was less than ninety percent of the assessed value. Vice-Chairman Marlow moved to approve the reconvening request. Member DeLeo seconded the motion which carried by a unanimous vote. The hearing was scheduled for October 13, 1998. HEAJUNGS.CONTINUED George and Sharon Wilson 26214 SE 252nd Street Ravensdale, W A 98051 BOE: 98-26-LO 98-27-LO 98-28-LO PN: 701174001 701174014 701163001 Mr. and Mrs, Wilson were not present. Appraiser Peter Schuck represented the Assessor's office and was sworn in by Chairman Broders. The property under appeal consists of three (3) residential parcels located off of Piper Road in Quilcene. The appellant's petition states that the property is impacted by an Eagle Management Plan and that they were told that the plan would give them a large tax reduction. In a letter submitted with the petition it states that the eagle nest is on parcel701174 001 and the protected area includes a 200' shoreline buffer, plus an area 350' to the south, 450' southwest, and 600' to the west of the tree in which the nest is located. The area within 1,200' of the nest is known as the "NO HUMAN ACTIVITY CONDITIONED AREA". Human activity is restricted between January 1 and August 15 of each year. Restricted activities include, but are not limited to, home construction, land clearing, road building, timber harvest, aircraft use, and the use of chemicals, fIreworks and off-road vehicles. The appellants had been given BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22, 1998 Page 7 a reduced tax rate, but it was removed this year as the Assessor's office did not have the Eagle Management Plan on file. The current assessments are as follows: $270,640 for parcel 701 174 001; $65,175 for parcel 701 174014; and $550 for parcel 701 163001. The appellants did not provide estimates of value. Mr. Schuck stated that he took off the 50% reduction. After the appellant's property went through a boundary line adjustment the 50% reduction for restrictions was only made to one ofthe parcels. He presented a map which outlines the critical slope areas; the 200' shoreline setback; and the environmentally sensitive areas due to the eagles nest. The appellants are working on the road, without any permits. This work is causing areas to slough both to the south and into the critical slopes area. The vast majority of the three parcels is high-bank waterfront with little to no access to the beach. Mr. Schuck explained how he valued each parcel and presented sales of comparable property in the area. He noted that even with the Eagle Management Plan the appellants are allowed to build. There are just restrictions on what time of year construction can take place. Sales of property with Eagle Management Plans are occurring regardless of the restrictions. At the close of the hearing the Board concurred to conduct an inspection of the property and make a determination at a later date, Robert & Shirley Rogers 3532 Isle Royale Drive Las Vegas, NY 89122 BOE: 98-31-LO PN: 983401201 George Anderson, Attorney at Law, represented Mr. and Mrs. Rogers who were not present. Appraiser Dennis Pownall was present on behalf of the Assessor's office. After explaining the hearing process Chairman Broders swore them in. The property under appeal is a lot located at lOW, Maple Street in Port Ludlow. Mr. Anderson stated that the appellants purchased the property on the representation that the lot was buildable. They paid $32,000 for the lot only to find out that it is only permitted for recreational vehicle (RV) use. There is a septic tank and a drain field on the property which was installed prior to permitting requirements, and due to the current minimum land area requirements, there is no way in which a septic system can be designed or installed on the property to allow them to build. After failing at their attempt to get their money back, the appellants took the sellers to court for misrepresentation. In preparation for the trial they had the property appraised which indicated a value of$6,150, One ofthe findings of the Court was that fair market value be set at $6,150. Mr. Anderson presented copies of the appraisal and the Findings, Conclusions and Judgement. The current land value is $23,500. The appellants feel $6,150 represents fair market value. Mr, Pownall presented extensive documentation to support his case, He explained that he attended a portion of the trial and stated that he believes that the value determined by the visiting Judge is flawed due to a fee appraisal which was submitted as evidence. The appraisal did not allow for adjustment of value due to water view and existing septic system, and contained numerous errors and omissions. This coupled with an inadequate presentation oflots with these two amenities produced a misrepresentative figure. Mr. Pownall discussed in detail the sales of comparable property which he submitted, as well as those submitted by Mr. Anderson, He noted that the appellants' representative Mr. Anderson also owns property and has sold property in the immediate area. The appellants' lot sold in 1986 for $7,000, it sold in 1990 for $17,000 and in 1996 for $32,000. It is currently assessed as a $25,000 single lot view site, less 30% (due to being a single lot), plus $6,000 for site improvements for a total valuation of $23,500. The greatest valued amenities of the appellants' lot are water view with a protected view corridor and a grandfathered septic system for R.V. use. Characteristics which adversely affect the appellants' lot value are septic limitations and wetness in the lower portion of the lot along Paradise Bay Road. The fee appraisal submitted by the appellants does not directly BOARD OF EQUALIZATION MINUTES - SEPTEMBER 22,1998 Page 8 assign a value to any of these assets or liabilities and the sales of comparable property they presented exhibit few similar characteristics. Due to the errors and omissions in the fee appraisal its usefulness is questionable as an indicator of the market value of the appellants' lot In conclusion, Mr. Pownall suggested a valuation adjustment to $17,200 as the lot is unbuildable. Mr. Anderson commented on the testimony given by Mr. Pownall and clarified some points on the property which he purchased. He stated that his clients made a significant effort in trying to find an approved septic system for their lot, however, the water problems are too extensive. He believes that reducing the value to $17,200 is not an adequate adjustment. Even the use of the lot as an RV. site is limited. The appellants are not allowed to live full-time in an R.V. on the lot, as the existing septic system would not support extensive use. Perhaps there were some defects in the fee appraisal, but regardless, the value is still closer to $6,150. After hearing the testimony of both parties, the Board concurred to conduct an inspection of the property and make a determination at a later date. Meeting adjourned. Attest: /1. IL ~ Gtl-r). ~, ^--- ~. Lundgren, Cler ofthe ~ JEFFERSON COUNTY BOARD OF EQUALIZATION t;lJ U.4--- Richard A. Broders, Chairman L-- William S. Marlow, Vice-Chairman C\-~ a)P~ Jri;es A. DeLeo, Member