BEFORE THE STATE BOARD OF EQUALIZATION
FOR THE STATE OF WYOMING
IN THE MATTER OF THE APPEAL OF )
THE FREMONT COUNTY ASSESSOR )
FROM A DECISION OF THE FREMONT )
COUNTY BOARD OF EQUALIZATION - 2000 ) Docket No. 2000-170
PROPERTY VALUATION (CARMICHAEL )
PROPERTY) )
___________________________________________________________________________________________________________________________
FINDINGS OF FACT,
CONCLUSION OF LAW,
DECISION AND ORDER
___________________________________________________________________________________________________________________________
APPEARANCES
Eileen Oakley, Fremont County Assessor (Assessor), by and through Terrance R. Martin,
Deputy Fremont County Attorney, Petitioner.
Carl D. and Mary L. Carmichael (Taxpayers), Respondent, appearing pro se.
DIGEST
This matter was considered by the State Board of Equalization (State Board), Edmund J.
Schmidt, Chairman, Roberta A. Coates, Vice-Chairman and Sylvia Lee Hackl, Member, on
written information, pursuant to an Amended Briefing Order dated September 21, 2001. This
matter arises from a decision of the Fremont County Board of Equalization (County Board)
concerning the 2000 valuation of property owned by Carl D. and Mary L. Carmichael
(Taxpayers). The issue is:
Was the County Board's decision on the fair cash market value of Taxpayers' property supported by substantial evidence, according to procedures required by law, and neither arbitrary, capricious, nor inconsistent with law?
In reviewing this matter, the State Board sua sponte raised one procedural
question: Is the order issued by the County Board sufficient to meet the demands of Wyo.
Stat. 16-3-110? In a Decision issued May 4, 2001, the State Board concluded the
County Board failed to issue any basic findings of fact, thus it was impossible for the
State Board to evaluate how the County Board derived the value it assigned to the
taxpayer's property. Because the State Board was unable to determine if there was
substantial evidence to support the County Board's findings, it remanded the case to the
County Board for the entry of a written decision that set forth with specificity the
findings of fact of the County Board relied upon in its decision. On September 4, 2001,
the County Board entered Specific Findings in this matter and resubmitted them to the
State Board.
JURISDICTION
Pursuant to Wyoming Statute Section 39-11-102.1(c), the State Board is mandated to
"hear appeals from county boards of equalization. . . upon application of any
interested person adversely affected." An appeal from a County Board decision must be
filed with the State Board within thirty (30) days from entry of the County Board
decision. The Assessor timely filed this appeal.
DISCUSSION
The Assessor appeals from a County Board order rejecting the 2000 tax year assessed
value as assigned by the Assessor. The original assessment notice established a market
value for the property at $287,700.00. The Taxpayers filed an appeal. After discussion
with the Taxpayers, the Assessor issued an amended assessment notice setting the market
value of the property at $277,000.00. At the County Board hearing the Taxpayers presented
a fee appraisal for financing purposes dated June 9, 1998, setting the market value at
$225,000. The Taxpayers introduced evidence that the Assessor had assigned five different
values to the property in a two year period. The County Board rejected the value of the
Assessor and set the value of the property at $225,000.00.
FINDINGS OF FACT
1. The Taxpayers appealed the Assessor's $287,700 valuation of their property located
at 6 Spring Mountain Road, Dubois, Fremont County, Wyoming, to the County Board. The
assessment notice was dated May 5, 2000, and the Statement to Contest Property Tax
Assessment was dated May 17, 2000. [County Board Record pp. 16, 23].
2. After the Taxpayers filed their Statement to Contest Property Tax Assessment, the
Assessor lowered the value of the property to $277,700. [County Board Record p.16
and County Board hearing tape].
3. The County Board held a hearing on August 1, 2000, to receive evidence about the
value of the Taxpayers' property. [County Board Record p. 14].
4. The Taxpayers introduced an independent appraisal of their property. The appraisal
was dated June 9, 1998. [County Board Record pp. 40, 41]. The Taxpayers
also attempted to introduce an independent appraisal performed in May of 2000. This
appraisal was not admitted into evidence because the Taxpayers did not provide the
appraisal in accordance with Wyoming Statute Section 39-13-109(b)(i), that is,
it was introduced less than 15 days prior to the hearing. The County Board rejected
the introduction of the appraisal. Mr. Carmichael testified and the Assessor noted in her
written testimony the value assigned by the appraiser in the 1998 appraisal was the same
value the appraiser assigned in the 2000 appraisal. [County Board hearing tape].
Nevertheless, the 2000 appraisal value could not have been used or considered at the
County Board hearing nor in the State Board's review.
5. The Taxpayers also introduced prior assessment schedules indicating that the value
for the property as set by the Assessor's office was as follows:
TAX YEAR VALUE SET
1999 (original) $346,900
1999 (1st amend) $275,900
1999 (2nd amend) $225,000
2000 (original) $287,700
2000 amended $277,000
[County Board Record pp. 15, 16].
6. The Taxpayers noted the Assessor accepted the 1998 appraisal in 1999. [County
Board Hearing Tape].
7. The Taxpayer, Carl Carmichael, testified in the County Board hearing that he built
the subject house in 1997 at a cost of $221,000. [County Board hearing tape].
8. The Taxpayer placed into evidence a June 11, 1998 appraisal prepared by Keith
Kasselder which established a value of $225,000. The County Board placed great reliance
upon the June 11, 1998, independent appraisal, eventually holding that the value of the
taxpayer's house was the same, $225,000, as was established by the independent appraiser
in 1998. [County Board Hearing tape, County Board Order].
9. At the hearing the Deputy County Assessor, Tara Berg, testified that the CAMA system
had been used to value the Taxpayers' property. The Deputy stated that in 1999, the 1998
independent appraisal submitted by Taxpayers was accepted but she had to override the CAMA
system in order to enter the value. She stated the reason she rejected a newer 2000
appraisal submitted by Taxpayers was because the appraisal was submitted within 15 days
prior to the hearing, in violation of the County Board rules. The County Board Hearing
Officer agreed and did not allow the 2000 appraisal into evidence. [County Board
hearing tape].
10. There were recent comparable sales in the area that the Deputy County Assessor
considered to be in the same neighborhood as Taxpayers, which, when compared, resulted in
a higher value than the appraisal. She also rejected the appraisal because the appraiser's
assigned value did not change from the 1998 value to the 2000 value. The Deputy also
introduced sales she considered comparable that were more recent in time to the assessment
date and that were within three miles of the Taxpayers' home. The Deputy failed to explain
why she made adjustments to the value assigned for tax year 2000 nor did she explain how
those adjustments were made. [County Board Hearing Tape and County Board Record p.
20].
11. The first assessment issued to the Taxpayers for 1999 tax year was $346,900. This
assessment was amended on June 1, 1999, to $275,900. According to the Deputy County
Assessor's testimony, as a result of the Taxpayers providing her with the 1998 private
appraisal, she further reduced the value to $225,000 by overriding the CAMA system value.
In tax year 2000, the Assessor initially assessed the value at $287,700 and subsequently
reduced the assessment a week later to $277,000 after visiting with the Taxpayers. [County
Board hearing tape, Testimony of Deputy County Assessor Tara Berg]
12. The County Board entered an Order dated September 4, 2001, entitled, "Specific
Findings." The findings of fact the County Board relied upon in support of its
original decision were as follows:
A. Total cost of property and its development was $221,000.00.
B. The inconsistency of the County assessments of the property raised doubts about their reliability. Within 13 months, the County Assessments varied by $71,000.00
The 1998 independent appraisal by a Certified Real Estate Appraiser was more in keeping with development costs, utilized both "cost approach" and "comparable sales approach" and drew upon 30 years experience in the field.
D. There was a wide disparity between the County assessment and the independent appraiser. The experience and credentials of the independent appraiser is considered more authoritative.
The 1999 assessment on which the taxes were paid was $225,000.00.
F. The 2000 certified appraisal of the property concluded a fair market value of $225,000.00. Although the appraisal document was not admitted, the values and details of the appraisal were known and so stated in the written and oral arguments of both parties.
G. The variance (increase) in assessed valuation between 1999 ($225,000) and 2000 ($277,000) as shown on State's Exhibit 2 and attached hereto is too great (23%).
[County Board Specific Findings filed September 4, 2001].
13. Any Discussion above or Conclusion of Law below which includes a finding of fact
may also be considered a Finding of Fact and, therefore, is incorporated herein by this
reference.
CONCLUSIONS OF LAW
14. The notice of appeal was timely filed and the State Board has jurisdiction to
determine this matter.
15. The County Board is an agency subject to the provisions of the Wyoming
Administrative Procedure Act. Wyoming Statute Section 16-3-110 requires an administrative
agency to issue a written decision which contains findings of fact and conclusions of law
following a contested case hearing. The findings of fact must enable a reviewing tribunal
to trace the agency's reasoning from the evidence in the record to its eventual findings
of ultimate fact and legal conclusions. Holly Sugar Corporation v. State Board of
Equalization, 839 P.2d 959, 963 (Wyo. 1992).
16. This decision is based upon the findings of fact subsequently submitted by the
County Board to the State Board on September 4, 2001, after the decision had been remanded
back to the County Board for entry of a written decision with specific findings of fact.
17. Our inquiry is limited to whether the decision of the County Board reversing the
County Assessor's 2000 assessed value of $277,000 and establishing a value of $225,000 is:
(a) arbitrary, capricious and an abuse of discretion or otherwise not in accordance with
law; (b) in excess or statutory jurisdiction or authority; (c) without observation of
procedures required by law; or (d) unsupported by substantial evidence. Rules, Wyoming
State Board of Equalization, Chapter 3, 9.
18. In considering the issue of substantial evidence, the question is whether there is
evidence of record to be reasonably relied upon in coming to the conclusion reached by the
County Board. As a reviewing body, we will not substitute our judgment for findings
reasonably supported by evidence in the County Board record. Sage Club, Inc. v.
Employment Sec. Comm'n., 601 P. 2d 1306 (Wyo. 1979). While substantial evidence may
be less than the weight of the evidence, it cannot be clearly contrary to the overwhelming
weight of the evidence. As many courts have stated, "It is more than a mere scintilla
of evidence or suspicion of a fact to be established." Mountain Fuel Supply
Company v. Public Service Commission of Wyoming, 662 P. 2d 878, 882 (Wyo. 1983). See
also: Squillace v. Wyoming State Employees' and Officials' Group Insurance Board of
Administration, 933 P. 2d 488, 490-491 (Wyo. 1997).
19. The lack of substantial evidence on the record in this matter compels this Board to
restate the guidelines for determining whether or not a County Assessor's assessment has
reached fair cash market value. It is hoped that these principles will be used by county
assessors, county boards of equalization and taxpayers who may consider challenging their
assessments in the future:
A. Wyoming Statute Section 39-11-102 (c)(xv) establishes that the Department of Revenue, (Department), has the duty to prescribe the system of establishing the fair market value of all property valued for property taxation to ensure that all property within a class is uniformly valued.
B. The Department has promulgated rules which prescribe several methods of property appraisal. Rules, Wyoming Department of Revenue, Chapter 9, 6. Some of the appraisal techniques that may be used by a county assessor include the sales comparison approach and the cost approach. Specifically, the Department has provided for the use of a CAMA system (Computer Assisted Mass Appraisal) to be used by county assessors to value taxable property assessed at the local level for ad valorem tax purposes. Because of the large number of properties that an Assessor must value every year, it is virtually impossible for a county assessor to physically inspect each and every property within his/her county and appraise each property separately. CAMA systems, which are used extensively throughout this country for mass appraisal purposes, were developed as a reasonable alternative to individual property appraisals, which are practically impossible and cost prohibitive.
C. If an Assessor utilizes one of the appraisal methods prescribed by the Department, in this case the CAMA system, and uses the method correctly, then presumably the assessor has valued the property uniformly and correctly. The CAMA system has been held by the Wyoming Supreme Court to conform to the equal and uniform taxation requirements of the Wyoming Constitution. Gray v. Wyoming State Board of Equalization, 896 P.2d 1347 (Wyo. 1995).
D. The fact that a county assessor is a public official gives rise to the oft stated presumption that a public officer, acting in his or her official capacity, is presumed to act with knowledge of what he or she is doing and of the material facts upon which his/her official action is predicated. 29 Am. Jur. 2d, 203. However, this is a rebuttable presumption which means that it can be overturned upon a showing of sufficient proof. An assessor's valuation is presumed valid, accurate and correct, a presumption which survives until overturned by credible evidence. Basin Electric Power Coop. V. Dept. Of Revenue, 970 P.2d 841, 851 (Wyo. 1998). A mere difference of opinion as to value is not sufficient to overturn this presumption. Id. It follows then that when an assessor acts in his or her official capacity, the valuation is presumed to have been performed properly, and the taxpayer has the burden of proving the impropriety of the assessment. In other words, the taxpayer must offer evidence on the record that the county assessor failed to assess the property in a manner consistent with the directives of the Department . Teton Valley Ranch v. State Board of Equalization, 735 P.2d 107, 113, (Wyo. 1987).
E. In working with the presumption of correctness in favor of an assessor, the County Board generally should consider a two-part process. First, the County Board should decide whether there is enough evidence to overcome the presumption. If it determines that the taxpayer has introduced sufficient evidence to overcome the presumption, then the burden shifts to the assessor to indicate how the property was valued and the County Board should then require the assessor to show the basis for the assessment, allowing the taxpayer an opportunity to cross-examine the assessor and rebut the evidence presented.
F. This Board regularly reviews appeals from county boards of equalization involving the value set by a county assessor. Time and again taxpayers have introduced into evidence only a differing opinion of what they believe the value of the property should be. "A mere difference of opinion as to value is not sufficient to overcome the Assessor's presumption of validity." J. Ray McDermott & Company, Inc. v. Hudson, 370 P.2d 364, 370 (Wyo. 1962). Taxpayers and county boards of equalization would do well to pay heed to the guidelines suggested by the Wyoming Supreme Court in Gray v. Wyoming State Board of Equalization, 896 P.2d 856, 862 (Wyo. 1995). "The fact Petitioner has a difference of opinion as to the value of the property is not sufficient to demonstrate the assessor's value is in error, or the county board of equalization decision lacks substantial evidentiary basis. Petitioner offered no credible evidence to demonstrate the use of the cost method or the CAMA system employed by the county assessor and the valuations derived therefrom were erroneous."
20. We now turn to the specific findings upon which the County Board relied upon in
support of its decision to reverse the Assessor. The taxpayers testified they built their
house in 1997 at a cost of $221,000. Evidence of what it cost to build the house is not
particularly relevant when utilizing the sales comparison approach. It is obvious that the
County Board based its decision, in part, upon this evidence. What it cost the taxpayers
to build the house is not, however, substantial evidence on which to base a finding of
fair market value. The Supreme Court determined an assessor was not bound to utilize the
purchase price of a property in lieu of the CAMA system appraisal. Gray v. Wyoming
State Board of Equalization, 896 P.2d 1347 (Wyo. 1995). It logically follows that an
assessor is not bound to utilize the cost of construction of a property in lieu of the
CAMA system appraisal.
21. One of the fundamental principals of the sales comparison approach to value is that
it must be reflective of the actions of buyers and sellers in the marketplace. The subject
property and sold properties are analyzed for comparability with one another. The
appraiser must make time adjustments to value based on how recent the
sales of comparables are to the subject property. The further removed in time the sale of
a comparable is from the sale of the subject property, the less value it has as an
indicator of current market value. Property Assessment Valuation, 2d Edition,
International Association of Assessing Officers, 1996, Chapter 6, pp. 97-113. The
Deputy County Assessor was correct in questioning the reliability of the June 11, 1998,
independent appraisal when there were more recent comparable sales available in the CAMA
system.
22. The sales dates for the comparables used by the independent appraiser were March,
1998, January, 1998 and October, 1997, respectively 21 months, 23 months and 26 months
removed from the lien date of January 1, 2000. By comparison, the Deputy Assessor used
comparables with sales dates of August, 1999, March, 1999 and September, 1999. Even the
independent appraiser stated in his appraisal narrative, "Good clean houses sell in a
short time, 3-6 months." The 1998 independent appraisal introduced by the taxpayers
was clearly outdated and not reflective of recent actions of buyers and sellers in the
marketplace.
23. The County Board also expressed its misgivings with the fact that the Assessor set
numerous inconsistent and wide-ranging values over a two year period. [County
Board Specific Findings #2] The fact that an assessor reduces the value of her
assessment after discussions with the taxpayer is, in our view, an indication that the
assessor is working with the taxpayer to establish a fair market value and she should be
encouraged to do so. In most circumstances, those reductions in value should not be
considered as evidence of an Assessor's inconsistent assessment practices and held against
her. However, in this instance, the Deputy County Assessor never explained how or why she
overrode the CAMA system to arrive at her ultimate value. Large adjustments to value, left
unexplained, might well have caused the County Board to place more credence in the 1998
appraisal, which did clearly convey the adjustments to value between the subject property
and the comparable sales. Therefore it is reasonable to conclude the County Board found
the independent appraisal to be the best evidence of value.
24. The County Board Opinion indicated the County Board believed the independent
appraiser's value was more accurate due to the fact that it was closer to the actual costs
of construction; it used both a "cost approach" and a "comparable sales
approach," and it drew upon Mr. Kasselder's thirty years of field experience. [County
Board Specific Findings #3 and #4]. Also the County Board believed it was
significant that the 1999 value was set at $225,000 and thought the increase of 23% from
1999 to 2000 to be too great [County Board Specific Findings #5 and #7].
None of this evidence, standing on its own merit, is sufficient to support the County
Board findings, however, it is sufficient to rebut the presumption of correctness afforded
the Assessor's valuation. If the Assessor utilizes the CAMA system, which is a valuation
methodology approved by the Department, she should be able to explain how the comparable
sales she used affected the value and the adjustments she made.
25. Unfortunately, while our review of the County Board record indicates that much of
the evidence the County Board based its decision on was not the kind of evidence one would
like to base a finding of fair market value, we also found the Assessor's presentation of
evidence to be lacking in how she arrived at her value. Therefore we must conclude that
the introduction of the independent 1998 appraisal, which used outdated sales comparables,
was nevertheless adequate evidence of value which overcame the Assessor's presumption of
correctness. The burden thus shifted to the Assessor to indicate how the property was
valued. The Assessor correctly pointed out that the sales comparables she used to value
the property were more recent in time than those used in the 1998 appraisal, however, she
failed to specify how the comparables she used were representative of the property being
valued. There was no explanation of any kind as to how the initial value of $287,700 was
arrived at, nor any explanation of why she reduced the value to $277,000.
24. The automated CAMA system used in Fremont County is the CLT (Cole-Layer-Trumble
system). This system calculates the value of properties using replacement costs, or the
costs of using current materials, design, and standards. The CAMA system uses replacement
costs provided by a national costing service which are plugged into the system and which
form the starting point for the cost estimate process. The Assessor then uses the
comparable sales values that are constantly entered into the system to make upward or
downward adjustments to the value. In this instance, the Assessor did not explain how the
value was derived. It is not sufficient to introduce the CAMA worksheet into evidence
without some reasonable explanation of the many decisions the Assessor made in entering
data or the selection of valuation factors that she used. There is no evidence of how the
market adjustments were made other than to say that the sales comparables used were newer
and hence better than the comparables used by the independent appraiser. The CAMA
worksheet is insufficient evidence to meet the Assessor's burden of production without an
explanation of how it was used to determine value. If the Assessor chooses to override the
CAMA system value, as was done in this instance, it must be
explained and justified. Absent that, the Board finds that the County Board was justified
in placing some probative value in the 1998 independent appraisal and the inconsistencies
they found in the value set by the Assessor. "Substantial evidence is a term of art,
best described as relevant evidence that a reasonable mind can accept as adequate to
support an agency's conclusion." Sidwell v. State Worker's Compensation Division,
977 P.2d 60, 63 (Wyo. 1999). Hence, the County Board's decision was supported by
substantial evidence and was neither arbitrary, capricious, or inconsistent with the law.
27. Finally, we wish to qualify an inaccurate statement made by the Deputy County
Attorney in his Reply Brief regarding the use of sales ratios and the level of appraisal.
By regulation, the petitioner then has to check the fair market valuation of this residential property by checking the level of appraisal to see if it is between 95% and 105%. See Rules, Chapter 5, Section 6, Wyoming State Board of Equalization. In this case the levels in the Respondent's neighborhood were within the 95% threshold thus verifying the Petitioner's valuation of the Respondent's property.
[Petitioner's Reply Brief, p. 4]
What the Deputy County Attorney was referring to are the State Board of Equalization's
standards and procedures which are used by the Board to annually measure whether each
county is in compliance with the fair market value standard and if measures should be
taken to reduce inequitable assessment bias. The "95% to 105%" range the Deputy
County Attorney was referring to is the "Confidence Level," which means one can
be 95% confident that the median ratio of appraised values to market values fall within
the indicated range. This is a test utilized by the State Board on a statewide
basis to gauge assessment bias from one county to another. It is incorrect to
utilize this measurement tool on a local, neighborhood-by-neighborhood basis, as a
definitive test to verify an assessor's determination of fair market value. It may well
serve as a tool in assisting an assessor in checking his or her values but by no means
should it be represented as a definitive measurement tool which confirms that an
individual property has been assessed at fair cash market value.
THIS SPACE INTENTIONALLY LEFT BLANK
ORDER
IT IS THEREFORE HEREBY ORDERED: The decision of the Fremont County
Board of Equalization reversing the Fremont County Assessor's 2000 estimate of fair market
value for the taxpayer's property and establishing the value at $225,000 is hereby affirmed.
Pursuant to Wyo. Stat. 16-3-114 and Rule 12, Wyoming Rules of Appellate
Procedure, any person aggrieved or adversely affected in fact by
this decision may seek judicial review in the appropriate district court by filing a
petition for review within 30 days of the date of this decision.
DATED this 18th day of April, 2002.
STATE BOARD OF EQUALIZATION
Edmund J. Schmidt, Chairman
Roberta A. Coates, Vice-Chairman
Sylvia Lee Hackl, Member
ATTEST:
Jana R. Fitzgerald, Executive Assistant