***Monday, July 11, 2016, at 9:00 a.m., Commissioners met in regular session with Chairman Dan Dinning, Commissioner LeAlan Pinkerton, Commissioner Walt Kirby, Clerk Glenda Poston, and Deputy Clerk Michelle Rohrwasser.
Blue Sky Broadcasting News Reporter Mike Brown was in attendance of the meetings off and on throughout the day.
Commissioners gave the opening invocation and said the Pledge of Allegiance.
Road and Bridge Department Superintendent Clint Kimball joined the meeting to give his departmental report. Mr. Kimball presented a written report. Mr. Kimball spoke of chipsealing work. Those present discussed paving the fairgrounds parking lot as that is something Mr. Kimball would like to get done as soon as possible. Mr. Kimball spoke of how the work at the fairgrounds will be a good plan for drainage long term.
Mr. Kimball said he has been working on an agreement with the Idaho Transportation Department pertaining to sand storage sites in the Naples area and the other site at the junction of Highway 1 and Highway 95. Chairman Dinning asked if a loader will be needed at each location and Mr. Kimball said yes, but he thinks he has enough equipment for that.
Chairman Dinning mentioned the upcoming Idaho Transportation Department (ITD) District One meeting and he said he thinks the McArthur Lake project needs to be discussed at this meeting. Mr. Kimball said another project to discuss is the Highway 95 Bridge at Naples as the sufficiency rating is diminishing. The Highway 95 Bridge is a problem for the Idaho Transportation Department (ITD); not the county, but the bridge across the Burlington Northern Santa Fe (BNSF) crossing is the county’s issue so Mr. Kimball suggested working together with ITD on these two bridges. The bridge on Highway 95 was built in 1974 and having this bridge closed down would cause a lot of issues. If ITD could help the county with its bridge, it could help out a lot of people. Mr. Kimball spoke of being invited to Jerome Idaho to take a look at a prefabricated base for bridges.
Mr. Brown left the meeting.
9:19 a.m., Commissioner Kirby moved to go into execute session pursuant to Idaho Code 74-206(1)b, to consider the evaluation, dismissal or disciplining of, or to hear complaints or charges brought against, a public officer, employee, staff member or individual agent, or public school student. Commissioner Pinkerton second. Commissioners voted as follows: Chairman Dinning “aye”, Commissioner Pinkerton “aye”, and Commissioner Kirby “aye”. Motion passed unanimously. 9:33 a.m., the executive session was tabled until after Commissioners’ meeting with Public Defender Lynn Brooks.
9:33 a.m., Public Defender Lynn Brooks joined the meeting to discuss a grant application for county public defense. Attorney Brooks said the grant is for new funds that have not been appropriated before and the county decides what these funds would be used for specifically under the umbrella of public defense. Attorney Brooks said she didn’t see in the application where it specifically asked what awarded monies were going to be used for such as office space, etc. Chairman Dinning said he thought the question implied how the funds would be used to bring the system into compliance, etc. Attorney Brooks wanted to know if Commissioners will be taking advantage of this application. Any county that is not in compliance will be awarded funds if they apply for the grant. Attorney Brooks said she noticed one of the questions pertained to having an office, but Boundary County doesn’t have just one single public defender or a public defense office as the county has three public contractors who don’t operate the same way. The application is due in August and Attorney Brooks offered to help out if need be to get it submitted. Chairman Dinning said the county plans on applying for this grant and at this point he doesn’t think help is needed.
The meeting with Attorney Brooks ended at 9:43 a.m.
9:46 a.m., Commissioners resumed their executive session with Mr. Kimball. The executive session ended at 10:00 a.m. No action was taken.
The meeting with Mr. Kimball ended at 10:00 a.m.
Deputy Assessor Tracy Golder, Appraisers Teri Cushman and Ben Harris, and Treasurer Sue Larson joined the meeting.
10:00 a.m., Commissioner Pinkerton moved to recess as the Board of Boundary County Commissioners and convene as the Board of Equalization. Commissioner Kirby second. Motion passed unanimously.
Commissioners held a Board of Equalization appeal hearing for parcel #RPM0740001006AA owned by Harry Hahn. Present were: Chairman Dan Dinning, Commissioner LeAlan Pinkerton, Commissioner Walt Kirby, Clerk Glenda Poston, Deputy Clerk Michelle Rohrwasser, Deputy Assessor Tracy Golder, Appraisers Teri Cushman and Ben Harris, and Treasurer Sue Larson. Appellant Harry Hahn and his representative, son Douglas Hahn who spoke on Harry Hahn’s behalf, participated via telephone. The Assessor’s Office presented one exhibit marked “County Assessor Exhibit #1” consisting of 15 pages. The appellant did not submit any exhibits. The appeal hearing was recorded.
Chairman Dinning reviewed the Board of Equalization appeal procedures and administered the oath to those giving testimony.
Chairman Dinning asked the appellant for his statement. Douglas Hahn said he had listed his concerns in his original letter. The business that had been operating at this location was operated by Deborah Hayes and it failed and closed up approximately three years ago. Commissioners took a moment to read Douglas Hahn’s letter listing his concerns. Douglas Hahn informed Commissioners that there was a typo in his letter in which the word “on” should have read “no”. It was stated that the Assessor’s Office has also received this letter and had no questions for Douglas Hahn.
Chairman Dinning asked for the prior year’s valuation. Commissioner Pinkerton said last year the building’s value was $93,310 and the value of the land was $37,050 for a total of $130,360. Chairman Dinning asked when the building sold. Douglas Hahn said last month and the only reason it sold was because the price was reduced in order to help pay for demolishing the building, which the buyer is doing right now. Douglas Hahn said he is asking Commissioners to look at the three years when Deborah Hayes stopped paying the taxes. Ms. Hayes had been paying an amount of tax on a building that was nowhere near worth what was being taxed. Douglas Hahn said since he has had to pay all the back taxes, he is asking the county to reduce the value to what the property was really worth such as reducing both this year and last year to what the property is really worth, which is nothing. Chairman Dinning asked if the property had been sold to an individual, then repossessed. Douglas Hahn said they ended up loaning Ms. Hayes the money, but she never paid anything so they got the property back, deeded in lieu of foreclosure, which occurred on March 26, 2015. Chairman Dinning said he sees that prior to that the property was in another individual’s name. Douglas Hahn said yes, but they never paid any taxes so he paid the taxes, almost $10,000, to avoid foreclosure. Douglas Hahn said in reviewing everything, the taxes were very high. Chairman Dinning said for clarification that the Hahns are asking for a reduction of this year’s value as well as a reduction of the prior years’ values going three years back. Douglas Hahn said yes. Chairman Dinning said Idaho Code states that unless there is a proven error, the county has no ability to fix anything in the current year and the county doesn’t have the ability to go back beyond the current year. Chairman Dinning said the county has had many people ask that question over the years and Commissioners cannot go back more than the current year to adjust anything, as per Idaho Code, so realistically, Douglas Hahn is asking to reduce the current assessment and to recoup money going back years and the county cannot address that. The current year’s value is what can be addressed today, according to Chairman Dinning. Douglas Hahn asked about a hardship case. Chairman Dinning said the taxes on the property have been paid. Douglas Hahn said he had to pay the taxes in order to avoid the county repossessing or foreclosing the property. Chairman Dinning said this Board of Equalization was established by Idaho Code to address valuations and they cannot address the part he is asking them to.
Douglas Hahn added that as far as he is concerned he and his father never got paid in this horrible situation, there was a terrible abuse of management of business, the people didn’t know what they were doing and they didn’t say “hey, this property is not worth this” as his letter states, so the business was abandoned as the location was poor. Douglas Hahn said maybe 40 years ago the location was good but now the property is not good for any business. There is nothing but logs trucks going up and down the road. The building is basically for tearing down, according to Douglas Hahn. Chairman Dinning said the county cannot address back taxes, but can address this current valuation of the appraisal. Douglas Hahn said the business is being torn down so it is nothing but a piece of land that should have not been valued more than $30,000, if that, considering where it is and its use.
Chairman Dinning asked if the appraiser wished to make a statement. Mr. Golder read his letter into the record as follows: “regarding parcel number RP0740001006AA, the building that sits on this 0.33 acre lot within the city limits of Moyie Springs, Idaho has a sign on that that reads “Moyie Club and Café” which identifies the location of the business and the type of business regardless of whether it is in operation or for sale. The land and improvements are valued as commercial and have been treated the same as all other commercial properties in Boundary County. In 2015 the land was valued at $37,050 and the bar/tavern was valued at $93,310 for a total assessed value of $130,360. On October 22, 2015, I inspected the property for the 2016 revaluation cycle. The land remained valued at $37,050 and the bar/tavern was depreciated for effective age and condition by $7,390 to the current value of $85,920 for a total assessed value of $122,970. The building has been valued as a bar for many years. A bar is the last known use and the last verifiable marketed use of the subject property. The last reported sale was for $125,000 in 2009 as a bar. The last verifiable listing for the subject property was for $165,000 in November 2010, as a bar. However, it was not reported as to how many days the property was on the market. It is common and typical in Boundary County to have commercial properties stay on the market for long periods of time until the right buyer comes along. In my conversation with Mr. Douglas Hahn he disclosed that the property was in escrow, but that it had not recently been listed. I revisited the property to verify that the building, amenities and the sign had not been removed. To date the Assessor’s Office has never received information on any listings or documentation to support Mr. Douglas Hahn’s value opinion of $0 for the building and $30,000 total for his father, Mr. Harry Hahn’s, property. To Mr. Douglas Hahn’s point that The Moyie Club failed and closed three years ago, there has not been an assessment value challenged on this property in the previous three years. The only thing that seems to have changed is the ownership to Idaho Forest Group on June 27, 2016, Instrument #267526. In closing, The Moyie Club and Café is an enduring, recognizable and historic bar/tavern, which has not been recently listed. Consequently, the opinion on this appraiser is that the business has not been adequately market tested to challenge the last known listing of $165,000 or the appraised value of $122,970. At this time we would ask the Board of Equalization to sustain the Assessor’s Office values.”
Douglas Hahn said he 100% disagrees with most of what Mr. Golder said, which he believes is common sense. All you have to do is look at it. The place is abandoned. The place is junk and nobody wants it, according to Douglas Hahn. There is no listing for it. Douglas Hahn said there has never been a listing that he knows of. He has never heard of the value consisting of $165,000; it is invalid.
Chairman Dinning asked where the listing of $165,000 came from. Mr. Golder said that information was obtained from the internet. Chairman Dinning said the property was listed at $165,000 at one point, which was year 2010 as listed in the exhibit. Douglas Hahn said that was a long time ago. The person gave up on selling it and abandoned the business and the building. It’s common sense. It’s worthless. Douglas Hahn asked why Mr. Golder is coming up with this information. Douglas Hahn questioned what the sign on the building has to do with this and he added that the business has been abandoned for three years. There has been no power or water and it is an abandoned building. Harry Hahn said it is an empty shell. People have broken into this building and there might have been homeless people sleeping in it, according to Douglas Hahn. How can you put a value on it anywhere near what Mr. Golder has come up with? It is definitely not a business, it is an abandoned building. The signs were provided by the beverage companies just like the sign that has been there for approximately 30 or 40 years. The business has been gone over three years ago. It’s a horrible location and it is doomed to fail, according to Douglas Hahn. How the county can make it a viable business and tax for it blows his mind.
Chairman Dinning informed Douglas Hahn that he has the ability to provide a rebuttal. Property owner, Harry Hahn said he is thankful that his son is helping him with these negotiations as he is 93 years old and it is impossible for him to be involved in this negotiation. Harry Hahn said he was raised in Missoula, Montana so he is not a big city person, but he did work for the Boeing Company for 35 years and retired as a Boeing contracts auditor for the Boeing Electronics Company. Harry Hahn said in all of the contracts he wrote for customers, such as the United States Air Force, he had to include the statement that the price was fair and reasonable and that is the key to his appeal, that the price is fair and reasonable. Harry Hahn said he doesn’t know any other way to arrive at a fair and reasonable price than to come up with a fair market price. That fair market price would be indicated by the sales price from a month ago when the property sold. That would be the fair market price, the sales price. The letter that Douglas Hahn wrote to the county states that the county assesses this property at $85,000 and the purchaser bought the property for approximately $35,000. Harry Hahn said his appeal is let’s be fair and reasonable. This value of $85,000 is obviously completely out of the ballpark. Harry Hahn said that is all he is asking, to get this done and come up with a fair and reasonable price. Chairman Dinning thanked Harry Hahn for his comments. Harry Hahn made the suggestion to verify the sales prices and he suggested that his son tell Commissioners the name and phone number of the person at the lumber company and also the name of the person at the title company that he worked with who helped with the sale of the property. Harry Hahn said that is all he can come up with, let’s come up with a fair and reasonable price.
Doug Hahn said they need Commissioners help as they are taking a huge, huge, huge loss on all of this and the assessment is totally out of line. Douglas Hahn said he cannot believe Mr. Golder came up with what he did. What the heck does a sign have to do with anything? Douglas Hahn said he needs some help. What Mr. Golder said makes no sense. Chairman Dinning asked what the sales price was for the whole parcel. Douglas Hahn said it was about $35,000 less fees. Douglas Hahn said he has the information right here and offered Chairman Dinning the name of Kirsten Madden at Century 21 Four Seasons. Chairman Dinning said without Douglas Hahn’s authorization, the title company won’t release any information. Douglas Hahn said it is $37,500, less fees. Douglas Hahn said he thinks the sale was final at the end of last month, just before the appeal.
Chairman Dinning said he wanted to reiterate a few matters. The Board of Equalization is just addressing valuation for the 2016 tax year, from last October to this October. The county has not even established levy rates and the budget has not been passed so Commissioners cannot address prior years that Mr. Hahn has paid so he wanted to clear that up up front. Douglas Hahn asked who he can contact at the state or federal government in order to get money back from an incorrect assessment. Chairman Dinning said he doesn’t know, but that he will read something to Mr. Hahn’s benefit.
Chairman Dinning said unless the county had made an error and Mr. Hahn has proven some things differently, the Board of Equalization doesn’t have the ability, legally, to go back on valuations and back taxes. Douglas Hahn said he didn’t know of any errors because he wasn’t involved. Chairman Dinning said the county has the current valuation, which Mr. Hahn has appealed so the Board of Equalization has the ability to address that today. Chairman Dinning asked if there was further testimony from either party. Mr. Golder said he had nothing to add in addition to his statement other than the valuation was based on the fact that there wasn’t a listing to go buy to disprove. Douglas Hahn said he doesn’t understand what Mr. Golder is talking about pertaining to listings. Commissioner Pinkerton informed Douglas Hahn that he was interrupting. Mr. Hahn said it is what the property sold for. The listing was obviously ignored because nobody would pay anywhere near that. Douglas Hahn said the property was worth what is sold for and not a penny more. Harry Hahn said that is the fair market price. Douglas Hahn said he doesn’t know where the county is coming from calling it a business. It was a failed business over three years ago. The sign has nothing to do with it; the fact that it has no power, no water, and it was actually never paid for when it was in business. They probably cut these services off. It’s an empty shell and it’s being torn down. Chairman Dinning said we have allowed Mr. Hahn to speak and we need to allow the Assessor to speak and this is to be done in an orderly manner. Commissioners paused the hearing to allow Commissioner Pinkerton to return to the meeting. Harry Hahn said the fair market price is the sale price. That is what it’s worth. That is what somebody will pay for it. The price was lowered as they had to pay for tearing it down.
Chairman Dinning said since Commissioner Pinkerton joined the meeting, we will allow the Assessor to finish his comments and we will wait until the end of these comments so Commissioners can ask questions of the Assessor. Chairman Dinning said Commissioners would then allow Mr. Hahn to make a statement and in the meantime Commissioners would ask Mr. Hahn not to interrupt. Mr. Golder said he wanted to state the Assessor’s Office doesn’t have verifiable information that there has been any listing that would challenge the price, and one sales price doesn’t make the market. It doesn’t mean that is the maximum value the property would have generated; it just means that is what the property sold for. Whether they marketed it or not, he was told the Hahns did not so if there was a listing, the Assessor’s Office was not presented with it. Commissioners had no questions for Mr. Golder.
Douglas Hahn said as far as concerns about listings, they were previous listings that had expired because the business never sold. Douglas Hahn said he personally called and marketed the building himself for what he got out of it. The only offer he got was the offer he sold it for and that included giving a lot of value away to tear it down. Douglas Hahn said he says that as he is concerned the amount he listed it for is the amount he sold it for. Douglas Hahn said that information can be verified by calling Chris Pease at the mill. Douglas Hahn said $165,000 is just bunk. Chairman Dinning asked Douglas Hahn how much value he thinks he gave away to tear the building down. Doug Hahn said over $10,000. Chairman Dinning asked if Mr. Hahn said any more he would like to say as if he doesn’t, Commissioners will close the appeal hearing and take in no more testimony from anyone so Commissioners can discuss matters. Douglas Hahn said he is asking the Board to take a look at his point of view. Douglas Hahn said they got stuck with this property, it has not been properly assessed for years and years and years, and it certainly isn’t worth what the county is assessing it at now, guaranteed by the fact that nobody would pay more than he sold it for, which included tearing the building down. Douglas Hahn questioned how a building that was torn down be assessed for $85,000, and he added that he had to pay an extra $10,000 to get rid of it. Douglas Hahn said he is not sure Mr. Golder is on the same page. Chairman Dinning said Mr. Golder doesn’t have to be on the same page as he just provides information as to how he arrived at the value and that is something for the Board of Equalization to decide on. Douglas Hahn said he totally disagrees with Mr. Golder’s assessment 100%. Harry Hahn said he wants to arrive at a fair and reasonable price. To him arriving at that price is dictated by the current sale price and that is it.
There being no further testimony, Commissioners closed the hearing to public comment. Chairman Dinning said Commissioners will try to reach a decision or sustain or change the Assessor’s valuation before the session is concluded and that notification to the Hahns would be by certified mail. If the Hahns disagree with the Board of Equalization’s decision, they have the right to appeal the decision to the Idaho State Board of Tax Appeals. Commissioners will provide the instructions and forms for this appeal process along with the written decision.
Chairman Dinning called for discussion amongst the board. Chairman Dinning said Commissioners have no ability to address any prior matter so we are looking at the current value. If the building has been torn down, the new owner can come in and say it is no longer there and request a change. The Board does have the sales price including the tear down value of approximately $47,500. Chairman Dinning said that value is after the date the appraisal was done so there is the ability for the Board to adjust that valuation or to sustain the Assessor valuation, at the value that is being appealed, which is $122,970. Chairman Dinning said he is quite sure there will be a reduction in value for the new property owner according to what was heard today, and the building will be gone from the property. Commissioner Pinkerton said that doesn’t have anything to do with this hearing; only for use in the future. Commissioner Pinkerton said what the Board needs to review is what was the property under the current taxing amount? We’re dealing with the current information, and although the building was not being used for several years, it had been used for years and years as a bar and restaurant that had been successful over the years. That is not saying the value of the building was perfect, but with everything the appraiser had to work with, he can understand how the appraiser came up with that value. Just because the building is currently vacant and hasn’t been used for a few years it doesn’t change what the building had been used for; a bar and restaurant. Commissioner Pinkerton said he had been in this building in the past and he can understand how there may be some discord of how it was valued, based on what he knew of the building. Commissioner Pinkerton said he doesn’t know if the Hahns had ever been in it themselves and when that might have been. It is unfortunate the property was going to be foreclosed on and that the business failed, but that is not the appraiser’s fault.
Commissioner Kirby said it is hard to say that the taxpayers will pick up the tab for the poor management of the previous renter, or business connection. The taxes were levied, but not paid for years and years. Had the owners of the building destroyed it eight months ago, they would probably have gotten a different tax. If the property owner had the building taken down, the county would have something to work with. It is just an unfortunate calendar issue. There was a building and the appraisers looked at the records and did their job so he doesn’t think the Assessor’s Office made an error. Commissioner Kirby said everyone did what they were supposed to do except for the previous manager who let the matter get out of hand and probably misled the Hahns over the years, but that is not his business. They could have said the building is not worth anything and gotten rid of it, according to Commissioner Kirby.
Chairman Dinning said at this point, even though the property sold after the assessment, for this hearing is there any compelling evidence, other than latter sales price that would allow the Board to reduce the assessment? Commissioner Kirby said he doesn’t know. Chairman Dinning questioned if it would only be assessed at that value for a six month period.
Commissioner Pinkerton said even though he would like to side with the Hahns understanding the building is in rough shape, as recent as year 2009 if it sold for $125,000, he would have to assume the property would still sell for that, unless they were to tear it down, so he needs to uphold the Assessor’s value as it stands today as it stood when it was appraised. Commissioner Kirby added that he cannot find any errors made. Commissioner Kirby said he came to the conclusion from a different point of view, but the appraiser didn’t make a mistake.
Commissioner Kirby moved to sustain the Assessor’s valuation for parcel #RPM0740001006AA owned by Harry Hahn. Commissioner Pinkerton second. Motion passed unanimously.
Chairman Dinning informed Douglas Hahn and Harry Hahn that Commissioners would send them a certified letter containing the Board of Equalization’s decision along with information for the process to appeal the decision to the State Board of Tax Appeals. Douglas Hahn said the sale price of $125,000 was not for the building and land only; it was also for the business and price of the liquor licenses. A majority of the price was the business; not the building and property. Douglas Hahn said because the sale price was $125,000 you would think it was the building and land, but it wasn’t, it was for the business.
Chairman Dinning said Commissioners have closed the hearing and will forward their decision and instructions for the appeal process to the Hahns.
The Board of Equalization appeal hearing for parcel #RPM0740001006AA owned by Harry Hahn ended at 10:50 a.m.
Commissioners took a 10 minute recess.
11:00 a.m., Property owner Ervin Madson and his son, Eric Madson joined the meeting.
Commissioners held a Board of Equalization appeal hearing for parcels #RP61N01E133011A, RP61N01E130011A, and RP61N01E132410A owned by Ervin Madson, Madson Family Limited Partnership. Present were: Chairman Dan Dinning, Commissioner LeAlan Pinkerton, Commissioner Walt Kirby, Clerk Glenda Poston, Deputy Clerk Michelle Rohrwasser, Deputy Assessor Tracy Golder, Appraisers Teri Cushman and Ben Harris, and appellants Ervin Madson and his son, Eric Madson. The Assessor’s Office presented one exhibit marked “County Assessor Exhibit #1” consisting of 19 pages. The appellant did not submit any exhibits. The appeal hearing was recorded.
Chairman Dinning reviewed the Board of Equalization appeal procedures and administered the oath to those giving testimony.
Chairman Dinning asked the appellant to provide an opening statement. Ervin Madson briefly spoke of his taxes. Ervin Madson said valuation is part of this, but his taxes have increased. For year 2012 the taxes were $10,300, in year 2015 they were $14,394. Ervin Madson said he received the notice that his valuation had increased approximately $52,000, and he knows that it doesn’t mean it is that much tax, but if it is like the things they hear from Washington D.C., that we don’t know what this is until we try it; until it gets out there and we use it. Ervin Madson said he is afraid of those things because his value increased approximately $52,000 so that means the mill rate can increase on that amount. Ervin Madson and it doesn’t mean it will increase, but if it can, it will. Valuation is an issue, but the bottom line are the additional taxes on the ground that haven’t had any increase in income for several years. Ervin Madson said he has a bunch of land in the conservation reserve program (CRP) and it has actually cost him money over the last few years because he has had to replant. If you have to replant, the government pays you for half, but if you’ve replanted once, that means you have used up the CRP payment. So that is what has been in place here, according to Ervin Madson.
Ervin Madson said the other end of it is that the trees are worth practically nothing. You can sell the trees, but at a lot less than cost. Ervin Madson said he doesn’t know how to go about it, but he needs some kind of help on his taxes. Chairman Dinning asked if the appraisers had any questions at this point. Mr. Harris said no.
Chairman Dinning said the assessed valuation was a part of Commissioners packet of information and is what he is guessing Ervin Madson is appealing. One parcel has approximately 317 acres in the Ag and Forestland, Bare categories and there must have a house on it. Chairman Dinning asked Ervin Madson if he was appealing his total valuation or just Ag valuation. Ervin Madson said he is appealing his total valuation, but he doesn’t care where it can be applied.
Commissioners reviewed information before them. Chairman Dinning said in the case of the first parcel, on the first page, identified as RP61N01E130011, the Ag value increased a little under $19,000 for the Dry Ag, the Forestland, Bare and the Homesite categories remained the same, the house value increased $5,000, and the outbuildings increased $10,000. With the increase of $3,000 in the homeowner’s exemption, this is the parcel that had an increase of $31,000 overall. Chairman Dinning said Commissioners are tasked with having the specifics, as per Idaho Code, of what Ervin Madson is appealing. Chairman Dinning said he understands from the thought of, “I don’t like the valuation, it’s too high,” but Commissioners need to know exactly what is being appealed. Ervin Madson said that won’t work and today is the last day. Chairman Dinning said Commissioners can help Ervin Madson through this.
Chairman Dinning said parcel RP61N01E133011, shows an increase in the Dry Ag category amounting to a little less than $6,000 and there was an increase in value for the outbuildings. For the property ending #2410, there was an increase in the Ag category of a little more than $10,000, Forestland’s value and the homesite stayed the same, there was an increase of a little more than $3,000 in the building value, and there looks to be an increase in value of $1,400 for outbuildings. Chairman Dinning said as he sees it, the majority of increase is in the Dry Ag land category. Chairman Dinning asked if that is what the Madsons want to specifically address. Ervin Madson said sure, absolutely.
Chairman Dinning asked for the appraiser to provide a statement. Mr. Harris read his statement (Page 7, County Assessor Exhibit #1) into the record as follows: parcel RP61N01E130011A is 318 acres with an increase of $18,660 for the Ag land and $12,555 for the improvements. Total increase is $31,215. Parcel RP61N01E133011A is 68.37 acres with an increase of $5,780 for the Ag land and $280 for the improvements. Total increase is $6,060. Parcel RP61N01E132410A is 159 acres with an increase of $10,870 for the Ag land and $4,010 for the improvements. Total increase is $14,880. In summary, improvements increased a total of $16,845 while the Ag land increased a total of $35,310. It should be noted that the forestland, homesite, and amenity values did not change. Mr. Madson stated in his appeal that his value increased by a total of $52,155 while his income has gone down. Basically, two things happened. First, the value of his income producing land has increased while his revenue has declined. Mr. Madson’s concern is understandable, but it actually does occasionally happen. In the agricultural land income valuation formula, annual crop prices are a component, but the law specifies that a five year average of the crop prices be used. Accordingly, the current average can be above last year’s levels. The purpose of this is to minimize the effect of spikes in the market. For comparison, land values without the Ag Exemption would be in excess of $3,000 per acre.
Second, the value of all of Mr. Madson’s structures increased by 5%. The annual market level test, or ratio study, conducted by the Idaho State Tax Commission revealed that our improved properties were below the required 90% of the market level. The decision was made to increase the value of all structures in the county by 5% in order to be in compliance with Idaho law (IC 63-315, Rule 315). It should be noted that in general, when market increases are implemented in mass, the tax rates must be reduced to prevent over collection. In short, market adjustments in mass will not generally cause an increase in an individual’s tax bill. Mr. Madson’s property is valued in the same manner as other agricultural properties and is presumed correct. Accordingly, the Assessor’s Office respectfully requests that the Board sustain the current values.
Mr. Harris said the next page (Page 8, County Assessor Exhibit #1) consists of the formula used to determine Ag land values. Chairman Dinning said to understand that a lot of the basis for valuation is something that is out the Assessor’s control as it is something determined by the State Tax Commission and he asked Mr. Harris to elaborate on that. Mr. Harris said for the crop prices, the five year average price is provided by the Idaho State Tax Commission for typical crops produced, and they do that by surveying publically available data from various sources, including the annual crop summary published by the Idaho Ag Statistics Service. The Potential Yield is based on the Boundary County Soil Survey completed by the US Department of Agriculture and interpreted by the Idaho State Tax Commission. Soil types are determined by the Department of Natural Resources. The Capitalization Rate is developed by putting two components together. The first component is the five year average Farm System Interest Rate from the Spokane Exchange, which is provided by the Idaho State Tax Commission, and the second component is the local tax component or levy rate, which is then added to the interest rate to form the capitalization rate.
Chairman Dinning said capitalization, by statute, the Ag value is determined by a formula set out by the State of Idaho Tax Commission, and they have provided the Assessor’s Office with the figures to use for every part of the formula. Chairman Dinning said it appears the rotation factors are provided by the State Tax Commission, the five year average for crop prices is provided by the Tax Commission, and the potential yield is based upon the soil survey and that is also interpreted by the Tax Commission.
Chairman Dinning asked if using the capitalization rate is the determining factor for the valuation of Ag land. Mr. Harris said that was correct. Market value, what the property may sell for, is nowhere in this valuation. Chairman Dinning said in one of the pieces of information the State Tax Commission had indicated that Boundary County was below the 90% level on the residential category or was it improvements in general? Mr. Harris said it was the improvements on the residential side; just the improvements. Chairman Dinning said so Boundary County, by Idaho Code, had to increase those values in order to fall above that 90% of what they determined the values should be, countywide.
Commissioners asked the Madsons if they had any questions of the Assessor. Ervin Madson said it is the same with Obamacare in that it is shoved down your throat. The Tax Commission has mandated certain things that we have to go by, but the fact that his income has goes down and taxes have gone up doesn’t justify that. Ervin Madson said for instance, the CRP doesn’t equate to wheat, barley, or oat. These crops have been a fairly good commodity for the last few years, according to Ervin Madson. Eric Madson said trees are not even a factor in the crop prices, and Ervin Madson said he would like trees to be a factor because that is what his business is. Eric Madson said at what point does it become necessary to remove people from their properties as that is basically what this ends up being? Eric Madson said we may have to start selling off a part of their properties because ultimately when you think about potential income, just look at the potential income of the people around here. Eric Madson said they are paying $14,000 in taxes per year and he questioned if Commissioners knew how much that takes right out of their income. Eric Madson said if he had to work anywhere else, look at how much that would take out of his paycheck in just having to pay these taxes. The farm receipts aren’t even covering this any longer. Eric Madson said it used to be 20 years ago when the total tax bill was $8,000 or less. It was doable, but now it is $14,000 and it never decreases, even in poor times. It is a shame. Eric Madson said his dad has no income except for social security so how do you make up for these increases with that kind of revenue? Ervin Madson said when he was 18 years old he said it was nice to his have property, but at some point he will be taxed out of it and he is not that far off.
Chairman Dinning said formally to follow the process, do the Madsons wish to make a statement. Eric Madson said just to repeat his prior statement. No one else present had any questions. Chairman Dinning asked if the Assessor’s Office would like to offer a rebuttal. Mr. Harris had no questions for Commissioners. Mr. Golder said he doesn’t want to be unsympathetic, but on the soil types and the valuation for good land, the value actually did decrease. It was very minimal, but it did drop from $1,751 to $1,746 and he just wanted to point that out. Medium, poor, and very poor soil types did increase, according to Mr. Golder.
Chairman Dinning said in this process this is where he closes the hearing to further statements. No one had any more comments. Chairman Dinning closed the hearing to further public testimony and comment, reviewed the appeal procedures, and then called for discussion amongst Commissioners.
Commissioner Kirby said Ervin Madson mentioned their taxes or values are based on a formula listing wheat, barley, timothy hay, alfalfa, oats, and grazing, none of which they are doing on their property as they are working with trees. Commissioner Kirby said it is strange that Idaho has a lot of tree farmers, but they are being taxed as wheat so what should they get taxed as? Commissioner Kirby said back in the day when they were growing wheat they were taxed on that and he wonders how that works out as they are considerably different in value.
Commissioner Pinkerton questioned if this practice would qualify for a timber exemption if the Madsons applied for it, since they are raising trees on it now rather than farming. This is agricultural land, but if they applied for a forest exemption, would they qualify? Chairman Dinning opened the hearing back up to public comment to have the ability to ask questions again.
Mr. Harris said Teri Cushman is the County’s Ag and timber appraiser so she could maybe answer that better than he could. Commissioner Pinkerton said not that this would change anything for the current year, but he would like to know what could be done for the future. Ms. Cushman said for the forest exemption you need timber producing trees and typically in nursery stock that wouldn’t be the case. Commissioner Pinkerton said so then it is still considered agriculture. Ms. Cushman said it is still considered nursery stock; an agricultural crop other than timber. Ervin Madson said it has been inferred to that we needs to have a classification for nursery stock instead of wheat, barley, and oats. Eric Madson said with CRP land they are pushing his family into total reforestation on the front of the property. Mr. Madson said that might come back in because it is timber producing. Ms. Cushman said if the Madson’s are stocking the property, it certainly would qualify. Ervin Madson said he is being made to stock the property. Commissioner Pinkerton said to receive that exemption it requires a forester to have a management plan in place. Ervin Madson said he does have a plan in place. Eric Madson questioned if having the plan provides a significant savings in taxes. Commissioner Pinkerton said in looking at bare land, the value didn’t increase for Forestland, Bare. Commissioner Pinkerton referenced parcel ending #133011A, and said the Forestland, Bare consist of 3 acres, and both this year’s value and last year’s value is $310. The Dry Ag land value increased considerably. Commissioner Pinkerton said that is just some thought for Ervin Madson, understanding that doesn’t have any bearing on this year’s valuation. Ervin Madson said he understands. Commissioner Pinkerton said it is the same thing with parcel ending #0011A, the valuation stayed the same although that is not saying it won’t change the next year. Eric Madson said the Ag land trend is approximately $1,000 per acre. If you take Forestland and divide that by 40 that is $140 per acre so that is significant.
Commissioner Pinkerton said in understanding the rules, he doesn’t see that an error has been made. Everybody in the county and state has to live with this same formula. Eric Madson said they are trying to live within the cumulative effects of the increased taxes over the years and it’s starting to become a real burden. Commissioner Pinkerton said he understands.
Commissioners closed the hearing to further public testimony.
Chairman Dinning said valid points have been brought up in this discussion. Chairman Dinning said we are all taxpayers as well and we face situations similar to this as it pertains to what the county is mandated to provide. Commissioners don’t like raising taxes. The county ends up having to provide services at the state level. Even as it pertains to the new healthcare system, the county pays tax on that, which is approximately $20,000 per year just because, and even though he doesn’t agree with it, it is mandated. Chairman Dinning said Commissioners understand the dilemma the Assessors’ Office will face if they don’t work with the state as the State Tax Commission will just come in and impose it. Chairman Dinning informed the Madsons that they will have the opportunity to appeal the Board of Equalization’s decision and have a hearing before the State Board of Tax Appeals to address specific concerns about value.
Commissioner Pinkerton said he understands how the Madsons feel, but cannot see where the Assessor’s Office could have done anything differently provided the guideline they have to live with. Commissioner Pinkerton said without errors Commissioners are unable to change values. Ervin Madson questioned if this pertains to this year. Commissioners said yes. Commissioner Pinkerton informed Ervin Madson that he can go forward and make any appropriate changes, but that is outside of this year. Commissioner Pinkerton said he doesn’t see any errors and without any errors, Commissioners are not able to change the valuation. Ervin Madson said he is not worried about it that much and he added that he has been living with ObamaCare for a year or two now, but that doesn’t bother him as much as the need to get the tax bill down. Mr. Madson said he is 80 years old and he cannot put another business together to support the tax bill that he has.
Commissioner Pinkerton moved to sustain the Assessor’s values for parcels #RP61N01E133011A, RP61N01E130011A, and RP61N01E132410A owned by Ervin Madson, Madson Family Limited Partnership. Commissioner Kirby second. Motion passed unanimously.
The Board of Equalization appeal hearing for parcels #RP61N01E133011A, RP61N01E130011A, and RP61N01E132410A owned by Ervin Madson, Madson Family Limited Partnership ended.
Mr. Golder presented Commissioners with additional Board of Equalization matters to address.
Commissioner Pinkerton moved to reduce Category 37 value to $96,280 and to reduce Category 32 value to $910 for parcel #RP00097002005AA as the aerial estimation was corrected after the exterior inspection. Commissioner Kirby second. Motion passed unanimously.
Commissioner Pinkerton moved to reduce the value of parcel #RP63N02E027660A by $94,984 to $275,646 as the property is not yet sold, therefore the 2015 value plus the countywide 5% increase on improvements are still valid until the 2017 inspection or until the property is sold. Commissioner Kirby second. Motion passed unanimously.
Commissioner Pinkerton moved to reduce the value of parcel #RP62N02E161700A to $0 and change the category to Category 81 as the county has purchased the property. Commissioner Kirby second. Motion passed unanimously.
11:40 a.m., Commissioner Kirby moved to adjourn as the Board of Equalization and reconvene as the Board of Boundary County Commissioners. Commissioner Pinkerton second. Motion passed unanimously.
Commissioners discussed increasing the refundable cleaning/damage deposit for use of Memorial Hall. More and more people are using this room, but not all groups are cleaning up after their use, including 4H. The deposit for all other facilities is $100 so the deposit for Memorial Hall will also be increased to meet that amount. Clerk Poston said this information needs to be conveyed to Fair Board Secretary Sandy Kerstiens. Commissioner Pinkerton briefly mentioned having concerns.
Commissioner Kirby moved to increase the cleaning/damage deposit from $50 to $100 for all users of Memorial Hall, except for the veteran organizations. Commissioner Pinkerton second. Motion passed unanimously.
Commissioner Pinkerton moved to sign the Certificate of Residency for Aaliyah Zarate and Shawna Dlug. Commissioner Kirby second. Motion passed unanimously.
Commissioner Kirby moved to have Attorney Michael Waldrup draft the next public defender contract. Commissioner Pinkerton second. Motion passed unanimously.
Commissioners discussed matters pertaining to public defenders and stated there is no public defender vacancy in Boundary County.
Chairman Dinning said one question for Commissioners pertaining to the armory was if the county had plans to use the armory for an emergency operation center (EOC). Chairman Dinning said Commissioners would like to have a long term lease before implementing an EOC. Commissioner Pinkerton said an EOC would be one of the potential uses for that building.
Commissioner Pinkerton moved to approve the pre-commercial thinning contractors list as provided by Panhandle Area Council. Commissioner Kirby second. Motion passed unanimously.
Commissioners reviewed claims for payment. Fund totals are as follows:
Current Expense $ 169,341.47
Road & Bridge 25,258.12
Airport 3,143.58
District Court 7,002.27
Justice Fund 43,113.47
911 Funds 724.89
Indigent & Charity 215.28
Parks and Recreation 10,399.65
Animal Damage Control 5,000.00
Revaluation 1,170.76
Solid Waste 53,318.25
Tort 99,427.00
Veterans Memorial 310.90
Weeds 714.69
Restorium 13,421.41
Waterways 185.02
Grant, Selkirk Coop Weed Mgmt 3,338.95
Grant, Boat Safety 360.00
Grant, Emergency Communication 22,279.26
Grants, Fire Mitigation 705.00
TOTAL $459,429.97
Trusts
Auditor’s Trust $ 775.84
Driver’s License Trust 8,994.00
Magistrate Trust 26,139.24
Indigent Reimbursements 6,420.96
Motor Vehicle Trust 132,277.06
Sheriff’s Trust Fund 154.60
TOTAL $174,761.70
GRAND TOTAL $634,191.67
Citizens are invited to inspect detailed records on file in the Courthouse (individual claims & Commissioners’ allowance & warrant register record 2015-2016).
12:08 p.m., Chief Deputy Clerk Tracie Isaac joined the meeting at Commissioners’ request to discuss a job description.
Commissioner Pinkerton moved to approve the adjustment of the administrative manager position to a grade 13. Commissioner Kirby second. Motion passed unanimously.
There being no further business, the meeting adjourned at 12:53 p.m.
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DAN R. DINNING, Chairman
Attest:
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GLENDA POSTON, Clerk
By: Michelle Rohrwasser, Deputy Clerk