By Jeremy Schwartz
Peninsula Daily News
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City Council members voted unanimously Tuesday to approve an ordinance and resolution calling for the increase in city property tax collections, which is permitted by the state.
Chief Financial Officer Byron Olson expects the increase to generate about $42,000 more than last year.
The increase, however, will net the city only a couple thousand dollars in new property tax revenue after Nippon Paper Industries USA's successful appeal of the value the Clallam County Assessor's Office placed on new construction at Nippon's Port Angeles plant.
“We think it's somewhere in the $2,000 to $3,000 range,” Olson said Wednesday, referring to what the city will receive.
“We knew about it far enough ahead of time that we factored that in for the city's  budget planning,” Olson said.
Nippon won the appeal in June after saying last December that the value of new plant construction had been assessed too high, Assessor Pam Rushton said.
Her office valued the construction, associated mostly with the expanded biomass cogeneration plant, at about $22.3 million for 2013.
Nippon countered that the construction amounted to about $7.6 million, according to Rushton.
Real vs. personal property
The difference stemmed from the county considering most of the new construction real property, that which is connected to the ground, while Nippon considered most of it personal property, Rushton said.
“It's a difference over what is real property, the legal definition of what is real property,” Mill Manager Harold Norlund said Wednesday.
Rushton has appealed to the state Board of Tax Appeals. She was told it could be one to two years before the appeal is set for a hearing.
Olson said the 1 percent increase in collections will mean the owner of a $200,000 home in Port Angeles will pay about $5.50 more per year.
That increase is part of an estimated $38.47 more per year the same homeowner would pay in 2014 compared with this year.
The larger increase is due to an estimated hike in the city's tax levy rate so it can collect the same amount of property taxes next year, plus 1 percent more, while total property assessments decline, Olson said.
“To get the larger number from a smaller one, you have to charge a little bit more,” he said.
Olson said the total property in the city is estimated to be valued at $1.4 billion in 2014, a 4.2 percent decrease from the 2013 figure of $1.5 billion.
Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at email@example.com.