Why they taxed so much lower than you
A conversation
with Charlestown Tax Assessor Ken Swain
By Will Collette
 |
| Tennis courts owned by the Quonochontaug Central Fire District. A total of 12.72 prime acres assessed at only $89,800 |
By the way, even
though you just got your tax bill and it says it is due on August 1 - this Friday - note that
you are not delinquent until
September 1. You've got 30 days grace to make the payment.
A few weeks ago,
I
reported on the local phenomenon of fake Fire Districts. These are shoreline
neighborhoods that have managed to get chartered as fire districts even
though they have no fire houses, fire equipment or fire fighters. Two of them are in
Charlestown - the Quonochontaug Central Fire District and the Shady Harbor Fire District.
Instead of fire
services, these two Fire Districts have accumulated a lot of prime shore
property that now contain a couple of well-heads so they can supply their
neighborhoods with public drinking water, beaches, docks and moorings, tennis
courts and recreational areas. The Fire Districts also contract with Dunn’s
Corner Fire District to actually provide fire protection. They also collect
trash, maintain and plow roads and would probably walk your dog or give you a mani-pedi if you asked them. They roll all of these services and amenities up
into the Fire District Tax they charge residents.
That makes those
fire district taxes higher than, for example, those households covered by the
Charlestown Fire District. But those fire district fees - and all they include - are treated like
property tax and are deductible from state and federal income tax – other Charlestown
citizens can’t deduct their trash fees, snow-plowing, costs of maintaining
their wells, road maintenance, club memberships, mooring fees, etc. from their income taxes.
Adding to the
deal, the properties owned by Shady Harbor and Quonochontaug Central are barely being
taxed at all by the town of Charlestown. All
of Shady Harbor’s holdings are exempt from Charlestown property tax. While Quonochontaug Central does pay some Charlestown property taxes, the assessments on its
prime properties is, at least to me, shocking.
 |
| Shady Harbor Fire District's boat launch and parking - all tax exempt |
Ken and I had a
long – and for me, complicated – phone conversation. We agreed that I would
follow-up with some detailed questions and then Ken would respond on the
record and in writing, which he has done.
What follows is
the result of that exchange. Click here to read the response Ken Swain sent
back to me in its entirety.
NOTE: this is hardly the end of the story. We’ll be
looking at this issue through the coming months.
COLLETTE - Overall, you told me there were
several factors that led to what seemed to me to be very low assessments on the
properties owned by the Quonochontaug Central Fire District.
These factors included property use, buildability, constraints to sale (such as the need to get a vote of the members), the value added by the FD’s amenities to other properties owned by FD members.
Could you describe these factors, how they are calculated and how they apply specifically to such properties as those containing such things as the tennis courts, docks and other amenities?
These factors included property use, buildability, constraints to sale (such as the need to get a vote of the members), the value added by the FD’s amenities to other properties owned by FD members.
Could you describe these factors, how they are calculated and how they apply specifically to such properties as those containing such things as the tennis courts, docks and other amenities?
 |
| According to Swain, the value of all those Fire District amenities boosts the property values of the homes of Fire District members |
SWAIN: When valuing all property, there are many assessment principles that must
be reviewed, specifically in the instance of these Fire District
properties: the Principle of Highest and
Best Use; the Principle of Contribution; along with the normal considerations
such as Location, Size/Shape, and approval of Onsite Wastewater Treatment Systems and the Ease of the Transaction, as described as
follows.
Principle of Highest and Best Use – Demand for a property could depend on potential utility rather than the
utility in use. The analysis of highest and best includes:
- the nature of the surrounding neighborhood;
- the zoning ordinance which applies to that property;
- the current use of the property;
- the current use of the surrounding properties
Location –
Property values for otherwise similar properties can vary substantially due to
location. However, along with location the principles mentioned above must be
analyzed.
Size
and Shape - The
size and shape of a property can influence the value of that property. Zoning
regulations allow and limit the use of all property with the prescribed
property line set-backs delineating the useable/buildable envelope.
Onsite Wastewater Treatment Systems (OWTS) – When calculating an assessment, there is consideration given for a
property to support an OWTS. Size, shape and zoning allowances along with
water-table and proximity to other systems or wells may constrict the building
envelope or even extinguish all construction.
Ease of the Transaction - The market
value assessment of real estate is also based on the ease of its transaction. The
purchase or sale of Fire District real estate is complicated by the need for a
district vote to allow for acquisition or sale.
COLLETTE - The “value added” concept –
that a property might receive a low assessment if it adds to the value of
surrounding properties – is an interesting one. Is it applied elsewhere in
Charlestown and, if so, could you give some examples?
SWAIN: Once again, the Principle of Contribution is also applied to open space
common land associated with cluster subdivisions. The following is a list of
those properties:
Map
|
Lot
|
Lot Cut
|
Location
|
Acres
|
4
|
69
|
5
|
WEST BEACH ROAD-COMMON LAND
|
21.90
|
7
|
6
|
6
|
OLD POST ROAD-COMMON LAND
|
0.22
|
13
|
34
|
A
|
JOSEPHINE DRIVE-COMMON LAND
|
12.06
|
13
|
34
|
B
|
KENDALL COURT-COMMON LAND
|
0.35
|
14
|
96
|
SEA VIEW DRIVE -COMMON LAND
|
190.00
|
|
16
|
214
|
HEALEY BROOK DRIVE-COMMON LAND
|
33.99
|
|
20
|
204
|
5
|
OAK HOLLOW LANE-COMMON LAND
|
9.94
|
21
|
26
|
2
|
BURLINGAME DR -COMMON LAND
|
31.95
|
21
|
26
|
27
|
BURLINGAME ESTATES-COMMON LAND
|
7.75
|
23
|
1
|
4
|
HONEY LOCUST DR-COMMON LAND
|
7.24
|
23
|
16
|
1
|
AUBURN DRIVE - COMMON LAND
|
23.54
|
23
|
16
|
2
|
AUBURN DRIVE - COMMON LAND
|
46.11
|
23
|
29
|
BLACK POND ROAD-COMMON SPA
|
60.49
|
|
23
|
30
|
ACORN VALLEY WAY-COMMON LAND
|
11.40
|
|
23
|
98
|
CRESTWOOD LANE - COMMON LA
|
25.16
|
|
25
|
32
|
TIMBER RIDGE - COMMON LAND
|
16.40
|
|
25
|
51
|
TIMBER RIDGE - COMMON LAND
|
11.65
|
|
28
|
22
|
8
|
EDWARDS LANE-COMMON LAND
|
2.92
|
29
|
1
|
10
|
CEDAR MEADOWS ROAD-COMMON LAND
|
29.00
|
There is a zero dollar assessment applied to these open space common land
parcels. However, the assessments applied to the “new” subdivision lots
associated with each of these recorded cluster subdivisions are derived by the
mass appraisal process for establishing fair market value assessments. The
values set within these neighborhoods have a consideration for this open space
as an amenity.
This same concept is used when valuing condominium land. The land itself
has no value as it is either common land or limited common land that is
directly associated with each unit owner’s use and established in the actual
sale prices, and then corresponding assessments.
 |
| If you live near a quarry with renewed activity, like Copar- Armetta, youmight catch a break on taxes. |
COLLETTE - The converse of value added
would be value subtracted. I know that during the Whalerock hearings there was
some mention of factors that sometimes cause a temporary drop in property
values such as churches, schools, etc. although the testimony was that, except
for schools, the decline in sales prices tends to diminish over time.
How about other features, such as proximity to one of Charlestown’s quarries?
Or the Charlestown folks living across from the Copar Quarry in Bradford? Do these properties have lower assessments due to the quarries and are the quarries accordingly given higher assessments?
How about other features, such as proximity to one of Charlestown’s quarries?
Or the Charlestown folks living across from the Copar Quarry in Bradford? Do these properties have lower assessments due to the quarries and are the quarries accordingly given higher assessments?
SWAIN: LOCATION of any property is the primary basis of land value. All of the
factors you listed above could create a market perception of desirability or
un-desirability. These factors may be considered an amenity to one buyer or a
detriment to another, (i.e. a school, playground or shopping center).
 |
| BUT if you live near a pit that's been active a while, like this one Swain refers to, there has been a "stabilization effect on surrounding property values," according to Swain. This is the 2nd largest quarry in Charlestown on Route One owned by South County Sand & Gravel |
There is an active gravel bank located along the south side of US Route 1
which is within a mix of small commercial properties and residential
properties. This gravel bank has operated for many years, creating a
stabilization effect on surrounding property values.
So, once again, the sales within the real estate market define assessment
values wherever their location may be.
COLLETTE - I know that surrounding sales
prices are an important factor in the assessments. Does the presence of
distressed properties also impact assessments?
For example, former State Rep candidate Tina Jackson has a house on Skaggerak that seems to have a very high assessment [$274,100] for what it is (0.45 acres way north of One), plus there is at least one other home on the street in foreclosure proceedings.
It seems to me that Jackson has at least as many constraints to sale (given multiple foreclosure and tax lien problems) as does Quonochontaug FD. How do you compare these factors, let’s say using Jackson’s house versus one of the Quonochontaug FD properties as an example?
For example, former State Rep candidate Tina Jackson has a house on Skaggerak that seems to have a very high assessment [$274,100] for what it is (0.45 acres way north of One), plus there is at least one other home on the street in foreclosure proceedings.
It seems to me that Jackson has at least as many constraints to sale (given multiple foreclosure and tax lien problems) as does Quonochontaug FD. How do you compare these factors, let’s say using Jackson’s house versus one of the Quonochontaug FD properties as an example?
SWAIN: As previously mentioned, location has an extreme effect on market values.
In the case of foreclosures it is necessary to determine the commonality or
frequency of these sales. Charlestown
has some foreclosed property sales but they are not common, and the real estate
sales within these neighborhoods have not shown a measurable affect caused by
the foreclosure.
As to the property located at 75 Skagerrak Road, the current owner is Fremont
Home Loan Trust and the Town’s real estate taxes appear to be current.
COLLETTE - When we spoke, I noted the
comparison between the 2.5 acre vacant R3A lot my wife and I own compared to
the 2.5 acre vacant R3A lot owned by Quonochontaug Central. I asked you how my lot,
north of one, could be assessed at more than 6 times as much as the comparable Quonochontaug Central lot. [Our vacant R3A 2.5 acre lot on the moraine north of One is assessed at $142,200 while the Quonnie Fire District R3A 2.5 acre lot is assessed at only $23,200]. Could you please elaborate for the record?
SWAIN: In the revaluation process,
estimating land value is a separate step accomplished by applying the sales
comparison technique, adjusting for size, utility, zoning and location. When few sales are
available or when the value indications produced through sales comparison
require substantiation, other procedures may be used to value land. The
following are examples of these procedures:
- Sales comparison — Sales of similar, vacant parcels are analyzed, compared, and adjusted to provide a value indication for the land being assessed.
- Proportional Relationship — Relating a site to a known standard site. The difference can be expressed as a percentage, price per square foot or price per acreage.
- Land Residual Technique — The land residual approach is used when the value of the building(s) is known or can be readily determined and determination of land value is needed... A common example of this would be in the case of a new building where it could be assumed that the cost of construction equals the value of the building. Synonymous with this is the technique of Extraction – where the land value is estimated by subtracting the estimated value of the depreciated improvements from the known sale price of the property.
In the assessment realm, as shown by
my response to your first question and the information supplied above, there is
no direct comparison between your vacant buildable lot and the parcel owned by
Quonochontaug Central Beach Fire District due to ownership rights and utility
of each property.
COLLETTE - Throughout our conversation, it
seemed to me that you have quite a lot of discretion over how much properties
are actually assessed. Could you describe how much discretion you do have and
how much of the assessment has some fixed formula?
SWAIN: Conversely, I believe I have very little “discretion”. The real estate sales
that occur during intervening years of each revaluation process establish
general values throughout the community. As the Assessor, I must use accepted
assessment valuation modeling techniques to establish a value for all
properties, based on the finite number of sales.
Fortunately, Charlestown is a community that does not lack real estate
sales. Some revaluation periods offer a vast number of sales throughout the
community and other periods, based on economics, have fewer sales but neither
situation has negatively affected any revaluation process in Charlestown as
there have always been an adequate number of sales for the necessary assessment
modeling studies.
To further your review of assessment principles and practices I would
refer you to the following publications:
Gloudemans, Robert J.
|
Mass Appraisal of Real Property
|
Chicago:
|
International Association of Assessing Officers, 1999
|
Gloudemans, Robert J.
Almy, Richard
|
Fundamentals of Mass Appraisal
|
Kansas City:
|
International Association of Assessing Officers, 2011
|
Eckert, Joseph K., Ph.D.
Gloudemans, Robert J.
Almy, Richard
|
Property Appraisal and Assessment Administration
|
Chicago:
|
International Association of Assessing Officers, 1990
|
Ange, Diane M., CAE
Gilliam, Roger L., CAE
Hobart, Lisa A., CAE
Linne, Mark R., CAE
Tegarden, Thomas K, CAE
Thimgan, Garth E., CAE
Thimgan, James R.
|
Property Assessment Valuation
|
Kansas City:
|
International Association of Assessing Officers, 2010
|
