PORT TOWNSEND — Jefferson County’s assessor expects to hear some noise when his office sends out property tax assessment revaluation notices next August for the city of Port Townsend, just as he did after assessments for Chimacum and Port Ludlow came out earlier this year.
The Port Townsend notices, which will be for 2010 taxes, will show average increases of 20 percent to 25 percent, Jack Westerman III said.
“They’re going to say ‘Jack, you are out of your mind,'” said Westerman, who at 30 years in elected office is the state’s longest-standing county assessor.
This year, following assessments of the Chimacum School District — which includes the unincorporated Port Ludlow resort community — 173 appeals were filed with the county Board of Equalization.
The area saw the steepest rise in the county’s assessed taxable valuation between 1996 and 2007, approaching a total of $2.2 billion, compared with about $770 million in 1996, county figures show.
Probably half of that is in new construction, Westerman said.
The countywide taxable value has more than doubled since 1997 to 4.7 billion in 2007, Westerman said, with about half of that being new construction.
“Port Ludlow is an area that has more turnover with so many retirees,” Westerman explained.
Then there was the spike in Port Ludlow residential construction during 2005-2006 that glutted the market.
“My biggest problem right now for me is the areas in Port Ludlow,” he said.
Property owners there will have to wait until 2011 for their next revaluation period in the county’s four-year cycle.
He admits to feeling sorry for those Ludlow homeowners stuck with market-peak values, but he said by law he cannot revalue property outside the four-year cycle.
The current Jefferson County revaluation plan follows a four year cycle without statistical off-year updating.
This means that the county is divided into four areas with all properties in each area being revalued once every four years.
For a given property, the assessed value used for tax purposes does not change during the three years between inspections — although the tax amounts may change because of levy rate changes — except that any new construction is to be added to the assessment rolls annually.
Even when the Hood Canal Bridge sank in 1979, Westerman said, “You didn’t see values or sales decline in Ludlow.”
This year, Westerman’s office put together data for the Port Townsend revaluation cycle. The cycle is from January 2005 to January 2009.
“If you bought at the peak of the market in late ’06 your value hasn’t done much but go down 15 percent,” he said.
That, however, followed two years that each had 20 percent market-value increases in Port Townsend, he said.
Westerman points out that although Port Townsend-area homes sales have dramatically slowed since 2006, prices have not necessarily declined at the same pace.
In fact, he said, many are selling for more than their 2005 assessed value.
For example, Westerman said, an uptown Port Townsend home with a county assessed value of $290,000 in 2005 recently sold for $615,000.
Westerman produced documentation that shows his office’s assessed values from July 11, 2008, to mid-September were under sale prices by as much as 35 percent at the low end, and by 99.2 percent at most for the Port Townsend School District revaluation area, which includes Cape George, Kala Point, Discovery Bay and the West End.
“There are fewer transactions to make decisions on, which makes it a little more difficult for anyone involved . . . It’s a tough time to figure out your fair market value,” Westerman said.
In the four-year cycle, the Brinnon-Quilcene school districts, the smallest of the four revaluation districts, will follow Port Townsend. The other two areas are the Chimacum School District, which includes the North and South Port Ludlow Bay areas, and the Port Townsend School District excluding the city of Port Townsend and including both West Jefferson County and that portion of Gardiner that is not within the Sequim School District.
There are 29,000 taxable properties in Jefferson County, and the state requirement is that any given property be reinspected and revalued at least once every four years, or once every six years if a county statistically updates values during the off years.
Westerman supports going from four to six districts on an annual revaluation cycle, such as in Clallam and other larger counties statewide, which he said would be more in line with the Washington Department of Revenue’s system.
Jefferson is one of 18 counties on four-year revaluation cycles, with 18 counties on an annual and the remainder on two- or three-year cycles.
Westerman calls it “a good news, bad news story. Everyone’s feeling some pain,” although East Jefferson County is in better shape than other areas of California and Florida, where housing booms have gone bust and mortgage foreclosures are soaring.
Westerman said more taxpayers are protesting their assessed valuations, but “it’s what you would expect.”
The 173 appeals filed in 2008 were fewer than those filed in 2007 — 225 — but far more than the 61 filed in 2006.
Of those filed this year, 41were sustained, five were overruled, 18 were withdrawn, 22 were corrected and 87 are pending.
Of the 225 filed in 2007, 108 were sustained, 26 overruled, 41 withdrawn and 50 corrected.
In 2006, the 61 appeals saw 27 sustained, 19 overruled, six withdrawn and nine corrected.
Assessment notices are sent out in August, and property owners have 30 days to appeal after they receive their revaluation notices.
A hearing time and date is set, with hearings scheduled through the fall months.
Appeals forms are available at the county administrator’s office on the ground floor of Jefferson County Courthouse, 1820 Jefferson St.
Appeals are made to the three-member Board of Equalization, appointed by Jefferson County commissioners.
For more information, phone 360-385-9100.
Port Townsend-Jefferson County Editor Jeff Chew can be reached at 360-385-2335 or at email@example.com.