Valuations outrage taxpayers

Blame it on Obama, the feds, the county commissioners, or the Pagosa Springs Town Council. Blame it on anyone or any entity who has wrecked their budget or now teeters on bankruptcy. Taxpayers can play the blame game if it makes them feel better, but the bottom line is: property values have skyrocketed again in Archuleta County, and many property owners will feel the sting, come tax time.

According to Archuleta County Assessor Keren Prior, Notices of Valuation hit mailboxes last week, and the meteoric rise in property values has caused waves of curious, befuddled and often irate tax payers to wash up at the assessor’s information counter.

“We had about 50 people come in the first day, and that doesn’t include the phone calls,” Prior said.

And while the throngs keep coming, Deputy Assessor Natosha Smith has spent hours at the information counter fielding their questions and listening to many property owners rant.

“We’ve heard it all,” Smith said. “One guy came in and said it’s because Obama got elected that values went up.”

Others, Smith said, have blamed the increases on the county’s past financial troubles, while others have blamed the town, which they say is headed toward a financial train wreck of its own.

While the blame game may prove a salve for some, the reality, according to Prior, is that values have risen based on market activity during a specific period in time — namely, Jan. 1, 2007 to June 30, 2008.

“I think there is a misconception that nothing’s selling. Homes are selling, it’s just taking longer,” Prior said.

While market data may substantiate Prior’s claim regarding a parcel’s time on the market, many property owners doubt whether the rise in values can be substantiated by actual sales data.

For example, one owner of a 1.6 acre vacant lot on Sparrow Circle in Aspen Springs, Unit 2 saw her property value leap from $11,400 in the prior year to $27,600 for the most recent assessment period.

Other owners of residential property have also seen their values jump — in some cases, in increments of hundreds of thousands of dollars — and Prior acknowledged there is little pattern to the increases.

“It’s so varied, it’s all over the board,” Prior said.

For example, and according to assessor’s data, while values of some properties skyrocketed — parts of Aspen Springs saw values jump from 73 to 141 percent over the last assessment period — the average median value for a commercial lot within the town of Pagosa Springs dropped 20 percent.

In past statements, Prior has said the Western Slope and Archuleta County have remained relatively insulated from the market downturns felt in other parts of the nation, and in her final report for the assessment period, values increased 12.89 percent county-wide.

Yet some industry professionals aren’t confident in the assessor’s data or methodology.

“I disagree with the assessor’s statement,” said Lynn Cook, a Realtor with Four Seasons Land Company Inc. “In my view, at least with my niche of the market, we’ve seen some depreciation since September 2007. It was running about 4 percent depreciation during that time, with about 9 percent overall depreciation by the end of 2008. Since then, it’s continued to depreciate about 2 percent per month.”

Regardless of whether one agrees or disagrees with Prior’s figures, Prior counters that her methodology — called the mass appraisal method — is dictated by state statute and is used by assessors across Colorado.

“We don’t create the market, we report it. People need to understand that not everything that sells goes through a Realtor,” Prior said.

Mass appraisal

According to Prior, the mass appraisal approach first involves looking at vacant land sales within each subdivision of the county. If there are no sales within a particular subdivision, vacant land sales within a similar subdivision are used to set vacant land values.

Once vacant land values are established, the next step involves determining the value of improvements. By contrast, while land is examined by subdivision, improvements are valued county-wide.

For example, the assessor’s staff looks at all sales for single family residences across the county within the assessment period, and groups those sales by category — “low,” “fair,” “average” “above average,” and

“superior.” Factors such as quality, condition and square footage play a role in determining what category a sale falls in. Then, the sales are grouped from low to high, with the median sales price setting the base value for homes within each category.

Finally, the assessor’s staff adds the vacant land value to the improved property value to determine actual value.

In short, the mass appraisal approach does not examine individual properties.

Nevertheless, and despite a defined methodology , taxpayers have the right to challenge their property’s value as reported on the Notice of Valuation. That said, taxpayers who wish to mount a challenge must follow the timetable as outlined in the documentation provided with the notice.

The protest process

Protests must be hand delivered or postmarked no later than July 1, 2009. The assessor then has until July 31, 2009, to make a decision on the protest.

If taxpayers aren’t satisfied with the assessor’s decision, they can appeal to the County Board of Equalization (CBOE). Requests for a CBOE hearing must be postmarked or delivered before Aug. 17.

Protesters not satisfied with the outcome of their CBOE hearing can take their claim to the state with a hearing before the Board of Assessment Appeals, district court, or to arbitration.

A successful protest

One’s chances for a successful protest depend on the quality of documentation presented.

For example, current comparable sales will do little good in mounting a successful appeal as values noted on the Notice of Valuation are based on sales from Jan. 1, 2007, to June 30, 2008. By contrast, a fee appraisal conducted during the assessment period may make a compelling case for a valuation change, however there are no guarantees.

In addition, Smith encouraged taxpayers to check that their property’s actual characteristics, such as square footage and classification, matches the property profile stored in the assessor’s data base. Any discrepancies between the assessor’s records and the property’s actual characteristics could render an inaccurate assessment of the property’s actual value. It is important to note however, that properties were valued for the assessment period as they existed on Jan. 1, 2009.

Taxpayers can view their property profile on the Web. Go to www.archuletacounty.org and click on “Archuleta County Assessor and Treasurer Records Search and On-Line Mapping Application” toward the bottom of the page.

Misconceptions

Despite arguably confusing verbiage on the Notice of Valuation, Smith said there are a number of key details taxpayers should note before storming into the assessor’s office outraged and irate.

“The assessor’s value is not based on the current property value and never will be,” Smith said.

The property’s current value is determined as the property existed on Jan. 1, 2009, and is based on sales during the assessment period — Jan 1, 2007, to June 30, 2008.

Second, Prior reiterated that unfortunately, today’s recession has no bearing on the value reported on the Notice of Valuation.

In fact, many taxpayers will likely not see a drop in their valuations and their property taxes until the next assessment period — Jan. 1, 2009, to June 30, 2010. Those taxes will be due in 2012, but for this year and the next, things are likely to stay the same.

Tough times ahead

Unfortunately, according to Cook, with many facing tough economic times, some Archuleta County residents won’t be able to bear the increased tax burden the Notices of Valuation foretell.

“We’ve had a significant number of calls to the office from past clients to do a comparable analysis for them. They want to be ready to list and sell their property if they can’t mount a successful protest,” Cook said.

And once they sell, chances are many will leave, or are in the process of leaving Archuleta County for greener economic pastures. See the related story on A9.

james@pagosasun.com