IN THE MATTER OF THE

PROCEEDINGS TO EQUALIZE THE

2006 VALUATION AND ASSESSMENT

OF CLASSES OF TAXABLE PROPERTY

IN NATRONA COUNTY, WYOMING

Equalization Order No. 2006-1

THIS MATTER is before the State Board of Equalization (Board) upon submission of the 2006 Natrona County Abstract of local-assessed property. The Board, having considered said abstract; having performed statistical sales ratio studies; having reviewed said studies for conformance with the Board Rules and Wyoming statutes; having supplied the sales ratio studies to the Natrona County Assessor; having provided an opportunity for hearing in Natrona County pursuant to Wyo. Stat. Ann. §39-11-102.1(c)(ii) & (xiv); and being otherwise advised, has reached the following conclusions.

1. Under the Wyoming Constitution and state statute, the Board has a duty to insure uniform valuation of real property. Wyo. Const., art. 15, §§ 10 and 11(a) and (c); Wyo. Stat. Ann. § 39-11-102.1(c). The Board has adopted rules which incorporate standards to measure whether valuation in each county is uniform. Wyo. Stat. Ann. § 39-11-102.1(c)(xvi); Rules, Wyoming State Board of Equalization, Chapter 5. Each year, Board staff conducts a statistical review for this purpose. Rules, Wyoming State Board of Equalization, Chapter 5, §§ 4(e)-(4)(g). The review relies heavily on an analysis of relationships between current year and prior year values for each property and on recent sales.

2. A statistical tool used by the Board to evaluate appraisal uniformity is the aggregate change in market value of sold and unsold properties. The Board Rules establish a standard for the difference in the aggregate change in market value. "The aggregate change in market value of sold properties shall vary no more than 5% from the aggregate change in market value of unsold properties within a class." Rules, Wyoming State Board of Equalization, Chapter 5, § 6(a)(ii)(F). Classes of property are defined as: “residential improved, commercial improved, residential vacant, and commercial vacant.” Rules, Wyoming State Board of Equalization, Chapter 5, § 3(a)(iii). The classes of property of particular importance in this matter for 2006 are residential improved property and residential vacant property.

3. The principle behind the rule is simple. If sold and unsold properties are similarly appraised, they should experience similar changes in value over time. If there is a disparity in value changes between recently sold and unsold properties, it indicates the properties are not being appraised equally.

4. Based on the Board’s sales ratio study for this year, 2006, Natrona County has not met the standard for aggregate change for residential property. This is the fifth consecutive year in which Natrona County has not met the percent change standard for residential vacant property, and the fourth consecutive year in which Natrona County has not met the percent change standard for residential improved property. For residential vacant property, the results of the Board’s sales ratio studies since 2002 are as follows:

Year	Vacant-unsold % change	Vacant-sold % change	Difference
2002	0	35.066	35.066
2003	11.54	48.62	37.08
2004	0	9.09	9.09
2005	27.87	52.98	25.11
2006	5.71	35.81	30.1

5. For residential improved property, the results of the Board’s sales ratio studies since 2002 are as follows:

Year	Improved-unsold % change	Improved-sold % change	Difference
2002	4.15	6.38	2.23
2003	4.91	12.90	7.99
2004	5.54	15.98	10.44
2005	6.14	25.59	19.45
2006	10.20	27.46	17.26

6. Based on previous information supplied to the Board by the County Assessor, the Board is aware that sharp changes in value occur when agricultural lands change to residential lands in the course of a year. In an attempt to account for this problem, the Board adjusted its 2006 sales ratio study to exclude all properties which experienced a change in value of 300% or more. This resulted in some improvement, but did not bring Natrona County substantially closer to compliance. Those results were:

Year	Vacant-unsold	Vacant-sold	Difference
2006	5.04	24.40	19.36

Year	Improved-unsold	Improved-sold	Difference
2006	9.70	24.82	15.12

7. A review of the neighborhoods included in the Board’s sales ratio study indicates that violation of the unsold/sold standard occurs in most Natrona County neighborhoods.

8. Following the abstract reviews in 2003 and 2004, the Board directed the Natrona County Assessor to institute work practices to comply with the Board’s Rules.

9. In 2005, the Board went further than a work practices recommendation. Representatives of the Board and the Department of Revenue visited the County Assessor’s office in Casper, and toured Natrona County Neighborhood 100. Following that visit, the County Assessor adopted a six-point plan as set out in a letter to Wade Hall, Wyoming Department of Revenue Property Tax Division Administrator, dated October 5, 2005:

2. Create new neighborhoods for mid-high properties, predominantly on the east and south sides of Casper.

3. Review all models ensuring the coefficients are properly identifying components contributing to value.

5. Reviewing the need to “split” neighborhoods where age, size, and style are extremely different.

10. The Board’s annual abstract review meeting for Natrona County was held at the Board offices, Herschler Building, in Cheyenne on June 29, 2006. In attendance at the meeting, in addition to Alan B. Minier, Chairman, Thomas R. Satterfield, Vice-Chairman, Thomas D. Roberts, Board Member, Wendy J. Soto, Executive Secretary, L.A. Romsa, Principal Statistician, and Gayle R. Stewart, Staff Attorney were Susan DeWitt, Natrona County Assessor, Kay Music, Deputy Natrona County Assessor, Cathy Killean, Natrona County Commissioner, William Harden, Natrona County Attorney, and Ken Uhrich and Wade Hall from the Wyoming Department of Revenue. The Board’s statistical analysis and sales ratio studies were discussed in detail. The Natrona County Assessor affirmatively stated she had no objection to the underlying data nor to the statistical analysis as presented by the Board.

11. In an effort to gain insights by review of the data available, the Board considered the same Neighborhood 100 that the Board’s Vice-Chairman and Principal Statistician visited last year. One report sorted the properties in the neighborhood by percentage change in value from last year to this year. Two things were immediately apparent in this twelve-page report, which lists the 646 properties in Neighborhood 100.

[a] First, 2005 sales of residential improved property were clearly associated with the highest rates of valuation change. Of the twenty-three improved properties with the highest valuation change, there was sale information for fourteen. There were only two other sales for the remainder of Neighborhood 100. On its face, the Neighborhood 100 data testifies to the proposition that sold properties experience greater valuation changes than unsold properties. We acknowledge that the correlation between a recent sale value and current market value is not precise. Only one of the fourteen sales coincided precisely with the current year market value.

[b] Second, almost all vacant residential lands received no change in value from last year to this year. If the market is rising rapidly, a representation the County Assessor has consistently made to the Board, it is hard to justify why vacant lands should generally be immune from valuation adjustment. As a check on this perception, the Board looked at a smaller Neighborhood, 445, and saw the same phenomenon.

12. The Board also considered Neighborhood 320, where the correlation between increases in value and 2005 sales was not as pronounced, although all four properties with a valuation change in excess of 100% were properties sold in 2005. Statistically, however, Neighborhood 320 supports the same concern reflected in the county-wide analysis.

WHEREFORE, the Wyoming State Board of Equalization concludes an equalization action is necessary in order to bring into compliance, as much as possible, the 2006 fair market values in Natrona County with the 5% aggregate change in market value standard set forth by Rules, Wyoming State Board of Equalization, Chapter 5, § 6(a)(ii)(F), and to insure constitutional uniformity of valuation;

IT IS THEREFORE HEREBY ORDERED, pursuant to Wyo. Stat. Ann. §39-11-102.1(c)(ii) & (xiv) and Rules, Wyoming State Board of Equalization, Chapter 5, §6(a)(ii)(F) and §7(a)(i)(B) & (a)(ii)(c), the Natrona County Board of Equalization shall take the necessary action to immediately effectuate the following:

[a] Increase by 15% the 2006 fair market value of all unsold vacant residential property.

[b] Increase by 10% the 2006 fair market value of all unsold improved residential property.

[c] An “unsold property” is any property which was not the subject of a valid sale between January 1, 2005, and December 31, 2005. A valid sale is any sale which was not identified by the Natrona County Assessor as invalid under Rules, Wyoming State Board of Equalization, Chapter 6, §§ 6(c)(i) through (c)(ix).

[d] Provide to the Wyoming Department of Revenue, immediately after the increases in fair market values have been effected, a computer download from the Natrona County CAMA system of all 2006 assessment data for analysis by the Board and certification of 2006 values for tax levy purposes.

[e] Mailed notice of the equalized values to property owners is not required but is within the discretion of the Assessor. Under the Wyoming Public Records Act, Wyo Stat. Ann. § 16-4-201 et seq., property owners have the right to review all public records, including equalized values and property characteristic information, in the office of the Natrona County Assessor under reasonable requirements and restrictions established by the Assessor to prevent unnecessary interference with the regular discharge of the duties of the office.

[f] The equalized county valuation, as corrected pursuant to this order, shall be the valuation basis in Natrona County for all tax levies. The Natrona County Board of Commissioners shall suspend calculation of mill levies until the equalized Natrona County valuation is certified by the Board.

[g] Nothing in this order is intended to create or modify private rights or procedures available to the public unless expressly stated or otherwise provided by law.