NPTR: Alert #154: Point – Counter Point: Village League versus Washoe County Manager

[Wayne Fischer]

*Point – Counter Point
Village League versus Washoe County Manager*

ALERT: #154
DATE: December 29, 2007
TO: Incline Village & Crystal Bay Property Owners
FROM: Village League Tax Revolt Committee

*Dear Incline Village & Crystal Bay Property Tax Protesters,*

Following is an open letter (counter point) written in response to a 
letter (point) from the Washoe County Manager, Katy Singlaub to an 
Incline Village property taxpayer.

After reading both the counter point and point letters, you might want 
to send or email Katy your own letter letting her know how you feel 
about the management of the Assessor’s Office.

*Katy Singlaub*
Washoe County Manager
1001 E. 9th Street
Reno, NV 89512
775-328-2000
ksinglaub at washoecounty.us

*Wayne Fischer*
Village League Webmaster

*Counter Point*

*OPEN LETTER TO WASHOE COUNTY MANAGER KATY SINGLAUB*

Dear Ms. Singlaub:

Michale Ellerman kindly provided me with a copy of your letter to her 
regarding residential property taxes at Incline Village.  Your letter 
contains numerous errors as well as misleading omissions which compel me 
to write you.   I invite you to check my facts with anyone, including 
Assessor Wilson.

First, it is seriously misleading to tell Ms. Ellerman that the 
“assessment notice” she received from the Washoe County Assessor’s 
Office is just for her “information and reference.”  Although it may not 
increase her tax bill in the coming year more than the Legislature’s 3% 
tax cap, that assessment notice establishes the value of her property 
for ad valorem purposes.  The 3% tax cap is not constitutionally 
mandated and could be removed by the Legislature in the future.  In that 
event, if Ms. Ellerman has not challenged the valuation set forth in the 
just received assessment notice in upcoming hearings before the County 
Board of Equalization, the County will be the first to claim that she 
“sat on her hands” and is forever barred from any such challenge.  
Unless the Court finds an exception, where “the County Manager herself 
told me it was for information purposes only,” Ms. Ellerman will find 
herself paying taxes based on a value established by this year’s 
assessment notice.

Furthermore, in justifying the failure of the Assessor’s 2008-2009 
valuations to reflect declining market conditions, you advise Ms. 
Ellerman that “[s]ince State regulation specifies that assessment 
methods utilize the past three years worth of comparable housing sales 
information, the 2008-2009 assessments included 2004 housing market 
data,” further noting that “2004 was still part of the unprecedented 
housing boom that the entire country experienced and, therefore, most 
properties in Washoe County continued to see an increase in their 
assessments this fiscal year.”  Your reference to comparable housing 
sales information is erroneous.  The correct reference should be to 
comparable vacant land sales.  More important than that mistake, 
however, is your failure and omission to state that the Washoe County 
Assessor is going back five years to obtain sales information, but ONLY 
for Incline Village/Crystal Bay properties!  Using your own logic, the 
obvious result of singling out Incline Village and Crystal Bay for five 
years of comparable sales is that Incline Village/Crystal Bay property 
valuations will be more heavily influenced than other properties in 
Washoe County by the housing boom years of 2000 to 2003.   

Your argument about sales ratio studies is also both inaccurate and 
misleading.  In truth, identically priced residential properties had tax 
valuations in the valley that were approximately half of the amount of 
the valuations assigned to the Village property.   The discrepancies are 
even greater when Incline Village/Crystal Bay properties are compared 
with Tahoe properties located in Douglas County.

Your description of the “Bakst” case and the Nevada Supreme Court’s 
decision in that case also leaves a false impression.  You describe the 
property owners as claiming that “some” of the Washoe County Assessor’s 
property valuation methods were unconstitutional and that the Supreme 
Court found that “four” of those methods were indeed unconstitutional, 
leaving the implication that the Court validated other methods used by 
the Washoe County Assessor.  In truth, the “Bakst” property owners 
challenged only four of the Assessor’s methods and all four of the 
challenged methods were found unconstitutional on grounds that 
effectively invalidated other methods used by the Assessor as well.  The 
Supreme Court made no finding, express or implied, supporting any method 
used by the Washoe County Assessor to appraise residential real property 
at Incline Village and Crystal Bay for ad valorem tax purposes. 

You also advise Ms. Ellerman that “all four of the affected 
methodologies [found unconstitutional in “Bakst”] have since been 
revised and approved by the Nevada Tax Commission.”  Again, the truth is 
otherwise.  The four methodologies specifically invalidated in “Bakst” 
were:

(1) a dollar amount classification system to value a property’s view
(2) a similar “rock” classification system
(3) “paired sales analysis” and
(4) the use of “teardowns” as comparable “vacant” land sales. 

The valuation regulations were revised by the Tax Commission BEFORE the 
“Bakst” decision not afterwards.  When they were revised,, and as they 
currently stand, there is NO “view” classification system, NO rock 
classification system, NO use of “paired sales” analysis and NO use of 
“teardowns” as comparable vacant land sales.  If you question my 
statements, please read Nevada Administrative Code §361.118 and 
§361.119.  Assessor Wilson will confirm to you that those are the two 
regulations adopted by the Tax Commission for the valuation of the land 
portion of residential property. 

Under Nevada statute, which existed before the “Bakst” decision and 
which remain-unchanged, attributes of real property such as view or 
geographic features must be considered in valuing the property if 
appropriate.  No Incline Village property owner has ever suggested that 
a property’s “view” or its geographic features or other attributes 
should NOT be considered. The Supreme Court found the taxpayers’ 
objections to a view “classification” system, rock “classification” 
system or other classification system were well-taken and no such 
valuation methodology had been authorized by the Tax Commission, either 
before or after the “Bakst” decision by the Court.

Finally, I am offended by your patronizing suggestion that the 
“complexity” of the system makes it difficult to explain to ordinary 
citizens.  In truth, the system is pretty simple.  The complexity comes 
due to the efforts of the bureaucrats at both the county and state 
levels to increase government funding by attempting to create a “market 
value” system in contravention of the legislatively mandated “taxable 
value” system.  

Never even having met you, I am certainly not accusing you of 
intentionally providing misleading and inaccurate information to Ms. 
Ellerman.  It is evident, however, that, if it is not intentional, then 
you, as well, are being misled and are not being provided an accurate 
understanding of these ongoing property tax disputes.  I would be happy 
to discuss any of the above with you in person at your convenience. 

Very truly yours,

*Maryanne Ingemanson,* President
Village League to Save Incline Assets, Inc

*Point*

*WASHOE COUNTY*
“Dedicated to Excellence in Public Service”

OFFICE OF THE COUNTY MANAGER
1001 E. 9th Street
P.O. Box 11130 Reno
Nevada 89520-0027
Phone: (775) 326-2000
Fax: (775) 326-2037
www.co.washoe.nv.us

December 10, 2007

Mr. Michale Ellerman
P.O. Box 3477
Incline Village, NY 89450

Dear Mr. Ellerman,

Congressman Dean Heller forwarded your letter to me and I will try to 
address the issues that you have raised.

You are correct in stating that the Nevada Legislature implemented a 3% 
cap on property taxes for residential properties during the 2005 
session. That cap has been implemented by counties across the state, 
including Washoe County. This legislatively authorized property tax cap 
applies to the tax bill the property owner pays, not the assessed value 
of the property, which is determined by State law and the real estate 
market, respectively. You will be receiving an assessment notice showing 
the assessed value of your land and building from Washoe County Assessor 
Josh Wilson this week. The assessment notice is for your information and 
reference; do not confuse this with the property tax bill that you will 
receive from Treasurer Bill Berrum. The tax bill will increase no more 
than 3% on your primary residence, in keeping with the 
Legislatively-mandated 3% increase cap.

While we are all painfully aware of the national and local housing 
market situation, the outlook in Washoe County is considerably brighter 
than in other parts of the country. Since State regulation specifies 
that assessment methods utilize the past three years worth of comparable 
housing sales information, the 2008-09 assessments included 2004 housing 
market data. Of course, 2004 was still part of the unprecedented housing 
boom that this country and county experienced and, therefore, most 
properties in Washoe County continued to see an increase in their 
assessments this fiscal year.

In the Incline Village market, the fact is that housing and land values 
in general continue to see real valuation increases. For example, during 
the last physical reappraisal of Incline Village in 2002 for the 2003-04 
fiscal year, the median selling price of a single family home was 
$712,800 while the current 2007 median sale price is $1,200,000. This 
median sale price is up from $1,083,000 in 2006 while the median prices 
in the valley declined from $365,500 in 2006 to $326,000 in 2007. As 
measured by a sales ratio study (taxable value J sale price) assessment 
levels in Incline Village are similar to the valley (prior to any mass 
rollback of Incline), however the tax bills are substantially higher. 
Property taxes in Nevada are an "ad valorem" tax, simply put, it's a tax 
on value.

Finally I want to assure you that the Nevada Supreme Court decision you 
refer to in your correspondence (known as the Bakst et al case) was 
indeed implemented by Washoe County. The lawsuit was filed by 17 Incline 
Village property owners representing 18 parcels claiming that some of 
the Washoe County Assessor's property valuation methods were 
unconstitutional. The County's position was upheld by both the Washoe 
County Board of Equalization and the State Board of Equalization, but 
overturned by the District Court and, ultimately, the Nevada Supreme 
Court. The Supreme Court found that four of the county's methodologies 
were unconstitutional because they were inconsistent with methodologies 
used in other parts of Washoe County and the rest of the state, and had 
not been codified in regulation by the Nevada Tax Commission. Because 
the State Department of Taxation was the body that endorsed our 
methodology, they have agreed to review methodologies used by assessors 
throughout the state and provide guidance. All four of the affected 
methodologies have since been revised and approved by the Nevada Tax 
Commission.

Shortly after the decision was rendered, Washoe County refunded all 17 
property owners a total of approximately $80,000 which included interest 
as directed by the Nevada Supreme Court The refunds represented the 
difference between taxes paid by those individuals on their 2003/04 
property values minus the taxes paid on their 2002/03 values. The 
average refund for each of the 17 property owners was slightly under 
$5~OOO. At this time, however, there are several other lawsuits 
involving Incline Village property owners that Washoe County is awaiting 
decisions on.

I do appreciate your taking the time to v/rite to Congressman Heller 
with your concerns and also understand that the complexity of the issue 
makes it difficult to explain sometimes.  Josh Wilson, our Washoe County 
Assessor, invites citizens to contact him directly if they have any 
questions about the assessment of their property; he can be reached at 
328-2200 or at jgwilson at washoecounty.us

Sincerely,

*Katy Singlaub*
Washoe County Manager

Cc:  US Congressman Dean Heller
        Washoe County Assessor Josh Wilson


/WASHOE COUNTY IS AN EQUAL OPPORTUNITY EMPLOYERS
PRINTED ON RECYCLED PAPER/

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