by Matie Belle Lakish
At the end of June, Saguache County Commissioners met in special session to receive training from State of Colorado Division of Property Taxation, Saguache County Project Manager, Curtis Belcher, and Saguache County Assessor, Jacquelyn Stephens. Town of Crestone residents, Town Clerk Akia Tanara and other interested citizens attended, hoping to learn about the County Board of Equalization’s role and function, and to register their concerns about the new assessment values of property, particularly in the Town of Crestone.
County Assessors are required to reassess all properties once every two years. Because of a number of issues discussed in previous Crestone Eagle issues, the state Division of Property Taxation took over the reassessment of Saguache County for the years 2012, and the beginning of 2013. Assessment notices have now been sent to property owners, and approximately 150 owners, primarily from Crestone and the Baca, appealed their assessments. The official last date to appeal was June 10. However, Assessor Stephens agreed to try to informally address concerns up until July 15, at which time the state required issues to be sent to the County Board of Equalization, so that commissioners, acting in that capacity, would have time to study the complaints. Because the commissioners are acting in the capacity of the Board of Equalization, which is authorized to hear those appeals, because two of the commissioners have recently been elected, and because this appeals panel meets so infrequently, the State Division of Property Taxation provided the special training on the Valuation Process. Hearings on the issues are scheduled for August 1 and 2, and if need be, August 5. Commissioners will meet again as the Board of County Commissioners on August 6.
Curtis Belcher said there are three approaches the Assessor uses to determine the Actual Value of property, each used for a different type of property: Cost, Income and Market. For residential and retail business property, the Market Approach, or Comparable Sales Approach, is used. The basic steps are: Compare the property to similar properties that recently sold; Inspect the subject property and comparable sales; Adjust the sales properties for characteristics that are superior or inferior to the subject; and Reconcile the adjusted sales prices to determine an indication of value.  Commercial property assessments would also consider the Potential Gross Annual Income.
The County Board of Equalization’s role is somewhat different. According to Belcher’s training handout, “Assessment deals with an individualized valuation of a certain property, while equalization, a leveling function, considers whether the particular property assessment is in balance with assessments of other similarly situated properties as a collective group within the jurisdiction.”
What has caused concern within the town is the perceived excessive valuation placed on lots zoned commercial, and the increased valuation of residential lots. It is clear that valuation in the recent past has not kept up with growth and sales in the town, and most lots have been valued much lower than market sales would suggest. However, most residents and property owners, especially those whose lots are zoned commercial, feel that $40,000 for a 50 ft. lot is excessive, and that the Assessor, acting under the state’s direction, has increased the Actual Value above true value. Objectors point to the small number of sales used to arrive at that valuation and the fact that other, lower-priced sales were not added in to achieve an average value.
County Assessor Stephens contends she also did not agree with the assessment arrived at by Mike Kerrigan of the Division of Property Taxation, Department of Local Affairs. However, Kerrigan insisted on using the three properties with a higher price tag to set values for all the other commercial lots in town.
Elaine McDowell presented an eleven-page document stating her reasons for objecting to the high assessment on commercial property. She notes that, “Use of the market approach requires a representative body of sales sufficient to set a pattern. Two sales in three years is not a pattern.” She continued, “The lack of sales is, however, indicative of the fact that there is virtually no market at this time for the sale of properties in Crestone.” She also objected to the uniform reclassification of all properties that are shown on a map as being zoned “commercial” being taxed at 29%, even though many are vacant land or residential in use. With the increase in valuation of some of these lots combined with the increase in tax rate, she fears many people, especially older residents, may be forced to sell their property because they can’t pay the taxes.
Another objection voiced is that all “commercial” lots are assessed the same, even though they have very different characteristics. Some, for instance, have limited access, ravines, or no utility access, yet are valued the same as premium locations on main thoroughfares. Akia Tanara, Crestone Town Manager, stated that a little town that was showing some sign of recovery will likely be thrown back into recession with taxation at this level.
Commissioners also expressed concern with the high valuation and asked a number of questions about their role in the equalization process. According to Belcher’s handout, after receiving from the assessor an updated list of the total assessments of real and personal properties, and a list of those who have protested, “The County Board subsequently reviews the Assessor’s valuation of all taxable property appearing in the assessment roll; directs the Assessor to supply any omissions which comes to its attention; corrects any errors made by the Assessor; and may raise, lower, or adjust any valuation appearing in the assessment roll, 39-8-102C.R.S.”
Regarding Hearings on Appeal, “A taxpayer may seek review of only the total valuation for assessment, not a portion or component of the value. In other words, even if the taxpayer agrees with the Assessor’s value of the land but disagrees with the Assessor’s value of the improvement, the value the taxpayer offers as the correct value must include the value of both the land and the improvement. The value the taxpayer offers as the correct value must appear on all real property appeals filed with the CBOE, 39-8-106(1.5) C.R.S.” The county board, which has allotted about 20 minutes per owner for the hearings, “grants or denies the petition, in whole or in part, and notifies the petitioner and the Assessor in writing.” The board has about one week to render a decision. “Each written decision should include a statement of findings and conclusions on all of the material issues of fact or law presented at the hearing and the appropriate order, relief, or denial.”
If the property owner is still dissatisfied with the assessment, he/she may appeal to the State Board of Assessment Appeals, and beyond that, to the District Court. However, no new evidence will be considered at these appeals, so evidence should be gathered and presented before the County Board of Equalization.