Board of Equalization upholds County Assessors recommendations

Kimball County saw no changes to land valuation following protests, according to state statute.

A packed room opened the 8:30 am meeting of the Kimball County Board of Equalization (BOE) on Monday, July 25 concerning the 2016 property valuation protests. The meeting was considered to be the finalization of the protests and that is exactly what it was to the confusion and frustration of the public. No valuations were changed by the BOE as they accepted every land value recommendation by County Assessor Sherry Winstrom.

After a call to order and normal business to start the meeting had taken place, Kimball County Commissioner, Tim Nolting read a letter he wrote to the public concerning the responsibility of the BOE. In that letter he specifically stated that, “it is the responsibility of this board, the Board of Equalization, to insure that property values in the county are equalized, according to the statues of the State of Nebraska”. He goes on to explain that according to Ruth Sorenson, Property Tax Administrator of the Nebraska Department of Revenue, Property and Assessment Division, Kimball County’s residential and commercial real property does not meet generally accepted mass appraisal practices. Agricultural land, however, does meet the accepted mass appraisal practices. It is the rural residential home sites and improvement values that do not meet the state mandated range of property valuation and need to be increased from $5,243 to $10,000 (per first acre home site) and all improvements would be increased by 5% according to state statue. In his statement, Nolting expressed that he had spent quite a bit of time reviewing both the information supplied by protestors as well as the state statues concerning equalization of property valuation. He also talked with representatives of the Tax Equalization Review Commission, our local state Property Assessment liaison and others in regards to all information available to him. It is his understanding that if the BOE were to accept and adopt any of the protested valuations suggested by the protestors, then the county wide land valuations would not be equal for all residents. Therefore, equalization needed to be completed to be in compliance with state regulations.

Nolting agreed that the changes determined by the state have caused many people to protest the valuations and suggested that although there is legally nothing that can be done locally to change the state valuation statues, that he supports the public in contacting the state legislature about tax reform.

However, if a Kimball County land owner were to find any factual mistakes proving that their valuations were created inaccurately and are not within the state range of tax percentages, then that land owner could bring the information to the BOE for review and correction.

Winstrom then read from the Mass Appraisal of Real Property booklet that explains both single and mass appraisals use the same statistical information and based on the same principles. Winstrom defended herself saying “the statement that sales are not verified were untrue”, she then provided copies of the questionnaires submitted by buyers and sellers of the 83 sales from the past three years. These sales were determined by the type of sale, were verified by the Department of Revenue and checked with the assessor’s records.

She then handed the BOE two large spreadsheets for the sales in the area explaining that those reports would show how the valuations are arrived at in Kimball County. When asked if the information was available to the public, Winstrom remarked, “it is a cut and paste, is what it is”.

“It is statistics that I use to determine my value,” she said. The board accepted the reports.

Justin Newell Hesser, attorney for Dray, Dyekman, Reed & Healey of Cheyenne, Wyo., who represented eight parties that constituted 67 of the 79 protested property valuations, asked about the procedure that the meeting would be taking, especially concerning that the assessor had presented evidence. He then asked if the tax payers would have the same opportunity.

Engstrom suggested that the reports Winstrom presented were only to clarify how she arrived at her valuations. “She just wanted to show us that she had these records for us to look at,” although it was unclear who she meant the records to be available to whether that was the public or just the board.

“All the evidence was presented when we had the protests,” said Engstrom.

Hesser expressed concerns that the BOE may not be following due process or providing a fair hearing. He asked if the tax payers would have a chance for rebuttal or to produce evidence supporting their claims. Matt Turman, legal council for the BOE explained that the public would be allowed to comment however they were not allowed to produce any more evidence as the hearings were closed now and this was the finalization meeting.

Hesser again voiced his concerns that the board only consider what had been provided at the hearings before making their decisions.

He went on to express that he understood there were equalization issues but that “the protests are also about over valuation.” He insisted that the true issue here was that over valuation and equalization were two separate issues. He asked the board, “how would a tax payer ever win?”

He went on to explain that the board had plenty of competent evidence from appraisals to consider the over valuation of property.

“It is my understanding that this board does not have the authority to change values that are outside of the parameters of the state of Nebraska’s valuation,” Nolting said to the visible shock of those in attendance.

Not giving up, Hesser suggested that the board’s duty is to put the valuations at actual value.

“What you seem to be saying is that a tax payer would never win,” he argued. Hesser added that case law and statue states that it must be at actual value and value is defined but is not always based on sales.

Turman asked if that was the end of public comment.

Hesser asked that the tax payers be allowed to give rebuttal and comment before decision were made.

Turman said that it was an open meeting, “and of course they can make public comment” but not from an evidentiary standpoint. He explained that this was an open hearing and that public comment was on the agenda and that anyone could make a public comment, that the whole point of the meeting was to engage the public.

Hesser asked if this was “what you are deciding are protest hearings. Hearings involve evidence by each side that has to be produced in a fair way in accordance with procedural due process. The tax payer produces evidence, if the accessor then produces evidence the tax payer gets an opportunity for rebuttal. If the tax payer produces evidence and the assessor does not present you with evidence all you have to consider is what the tax payer presents.”

“Ultimately you’re going to have to make a decision and there’s going to be a report. That report shall have attached to it (and explain) that basis of the board’s decision is made, and if that’s arbitrary or unreasonable in any way it can be appealed of course as Mr. Nolting explained,” Hesser said, “and I would note that the review for arbitrariness is if you disregard facts or circumstances without some basis that would lead a reasonable person to the same conclusion. You must consider the evidence the tax payers submitted. The appraisals, the over valuations, otherwise your decision will be arbitrary.”

Sheila Newell questioned whether or not the board had closed the hearings last Wednesday. Engstrom replied that they had and County Clerk Cathy Sibal explained that there would be no reason to leave it open.

Newell said, “If you closed the hearings on Wednesday you have listened to the tax payers, because you closed it the assessor has no basis for providing her valuation because the meeting was closed. It’s a procedure matter and I believe in all honesty the tax payers request must be voted on and accepted because you closed the hearing. The hearing has to have both parties.”

Turman asked again, “Are there any other public comment?”

“I’m a tax payer protesting here and from what I’m hearing the tax payer has no right. We come to you the Board of Equalization and ask for adjustment of values. If you have no right or can’t change this, we’ve wasted our time,” Larry Darnell said. “We came here to see if you’d look at this fairly and make a decision on it, but what we’re hearing is that you can’t make a decision on it, you can’t change it. I don’t think that the tax payer is represented here.”

Nolting said, “It is my understanding that we cannot change it, it is that we have parameters that we have to make that decision in.”

Dave Schnell asked, “Where do they come up with the parameters? If they are sending only your guy’s valuation obviously that skews where they are coming up with guidelines. So you’re telling me, no matter what we do in this county, the state sets guidelines without our input.”

Discussion continued concerning where the valuations come from and how they are attained, how they are inaccurately representing the true valuation which makes the guidelines to the equalization inaccurate. Nolting suggested that the values are attained by sales however several in the public stated that the sales were wrong due to misrepresentation of the types of land sold. Schnell stated that they actually had evidence supporting that.

Engstrom asked if there was any other comments from the public.

Hesser asked the chairman, “When you make the decisions today you have to identify what evidence you have before you. My understanding is that you have the tax payers evidence. You have other evidence, I don’t know when you heard it, maybe you heard it in an unlawful meeting, but it appears that you have evidence before you, competent evidence of over valuation and it certainly needs to be addressed and each one of them...”

Engstrom interjected, “We will do that and we will move on make a statement that unlawful meeting… I will not abide by that statement. Okay, Sherry, next item please.”

William Gross of Gross Wilkenson Ranch said, “It seems that the evidence is skewed. The evidence given by Sheila (Newell), that that is skewed. Our tax rate is skewed.”

The meeting then immediately proceeded into the reading and accepting off all recommendations by the assessor to the 2016 valuation protests. After several valuations had been read, Hesser interjected.

“Have you considered all the information provided by the tax payer? Why are all these people here? Did they come here to listen to you say that (you) accept the recommendation, not discuss the evidence that was presented? Look at these people, they came here today to hear you deliberate and decide an appeal in a protest. This is not right,” Hesser said. “They should have an opportunity to speak. Let’s ignore that. They came here to hear you decide cases today and this is how you’re going to decide cases? Nothing more arbitrary than that. Decide it, talk about it.”

Nolting said, “We listened to the arguments presented at the hearing and we told each tax payer at the hearing that we would give our decision, based on the information provided. That information has been reviewed by the County Assessor and the Board of Equalization recognizes her recommendations.

As County Commissioner Nolting had expressed in his statement, the BOE believed they had no other avenue than to equalize the valuations and therefore accept all of the recommendations of the Assessor at this time.

Larry Brower, previous Kimball County Commissioner agreed that, in his opinion, the current County Commissioners are doing their jobs legally and accurately.

The majority of the public in attendance had come to the meeting expecting the BOE to hear their comments before making any decisions to each and every one of the protested valuations. That is not how the meeting went however, as protests were heard the week prior and this most current meeting was a finalization of those.