Give us a break: 'Dream house' lacks water

Wednesday, July 7, 2004

How much is water worth, if you don't have any?

How much is a house worth, if it doesn't have water?

Robert Parsons told Red Willow County commissioners Thursday morning, "You don't realize how valuable water is, until you don't have any."

Parsons and his wife, Colletta, asked commissioners, during a property valuation protest hearing July 1, to refigure the value of their rural-McCook home -- because the water well has run dry.

The house and the 12.43 acres it sits on are valued, for tax purposes, at $55,153. Robert and Colletta asked commissioners to adjust the value to $18,125.

The Parsonses are hauling water to their home -- the "dream house" they bought five years ago for their retirement years. The couple has put new siding on the cottage and installed new windows. They've taken out a low-interest loan, they told commissioners, to finance these and other energy-conscious improvements.

They couldn't sell the house, even if they wanted to, Colletta said. "Real estate agents have told us they don't know how they would sell it without water," she said.

Looking over the request from the Parsonses, Commission Chairman Earl McNutt admitted, "This will be a tough one. We all know a property has little value if it has no water."

Commissioners have until July 25 to make a decision on the Parsons case, and on the 93 other valuation protests returned to the county clerk's office by the June 30 deadline.

McNutt promised pro-testers that he and fellow commissioners Steve Downer and Leigh Hoyt would carefully consider each and every protest.

"We haven't already made up our minds," McNutt said. "The normal procedure is, we'll look at the property, if we need to, before we make a decision."

Commissioners had protest hearings scheduled on nine days through July 21.

County Assessor Sandra Kotschwar said during the first morning of protest hearings that she is required by state law to set residential values at 92-100 percent of market value.

Market value is determined by sales of similar properties.

Kotschwar said most of Red Willow County's residential valuations fall somewhere in the middle -- about 97 percent of market value.

"Our goal is to be in the middle of the percentages," Kotschwar said.

McNutt said, "If we fall below 92 percent, the state will demand we set values at 100 percent."


One McCook homeowner told commissioners his home -- with an unfinished garage and only a partially-finished basement -- is valued much higher than three of his neighbors' homes. Kotschwar said there have been few sales in the neighborhood with which to make comparisons. She did tell him, however, that one of the other homes is a modular house, rather than a stick-built house, which affects the market and resale value.

The homeowner also complained about a $19,000 increase in valuation in one year. "I don't mind paying my share," he said, "but $19,000 in one year is way too aggressive."

Another homeowner suggested a percentage cap on the increase that is allowed each year. "Why such a steep jump in one year?" he asked. "Why can't you do this over three or four years?"

Counties have little local control in matters like that, McNutt said.

Yet another McCook homeowner echoed this one-year steep-increase complaint. "This year's increase -- $11,000 -- is the second biggest increase in two years," he told commissioners.

That house may receive an adjustment, however, because the homeowner happened to mention that the addition is built on a concrete slab floor -- which normally means a deduction in value. "Things like that may slip through the cracks," McNutt said.

Kotschwar said someone from her staff would drop by to remeasure the addition and its slab floor, and make the necessary corrections to county records.

Another homeowner wrote on his protest form, "I've made no major improvements to justify this increase in valuation."

In this homeowner's case, Kotschwar justified the valuation by showing documentation of sales of similar homes in the immediate neighborhood.

Kotschwar and Commissioner Leigh Hoyt agreed that property owners often incorrectly use the term "improvements" to mean remodeling, expanding, renovating, adding onto, shingling, painting, installing new doors and/or windows.

"An 'improvement' is anything that adds to the value of the land," Hoyt said. In this tax-valuation context, the house itself is an "improvement," he said.

Kotschwar said quality and condition also affect value. She said "quality" of an improvement is determined by its construction; "condition" is determined by its care.

A spokesman for a family corporation protested the valuation of rural property southwest of McCook, saying that the ongoing serious drought has affected the price of land.

McNutt said, however, "We've had sales all across the county that indicate the value of land is not being affected by the drought."

Another rural property owner suggested that land be valued based on what it can produce, not on its market value.

Kotschwar explained there is some adjustment available by dividing rural land into soil classes -- grassland, irrigated, dryland.

One homeowner -- requesting that his property's valuation be reduced -- replied, emphatically, "No," when Hoyt asked him if he would sell his property today for the price at which it is valued.

Another homeowner complained about the valuation on the unbuildable partial lot she owns next door, but said that the 11 percent valuation increase on her home is acceptable. "We wouldn't want it valued any lower," she said, "if we decide we want to sell it."


McNutt told each protester, "We'll definitely try to be fair with you, and see what we can do."

McNutt thanked each one for coming before the board. "We appreciate you taking the time to come see us," he said.

"One thing about it," McNutt said, "if you don't file a protest, nothing will change."

McNutt said he couldn't promise that protesters would always agree with the board's decisions.

McNutt said those who are upset with a decision by the local board may appeal, for a $25 filing fee, with Nebraska's Tax Equalization Review Commission -- TERC -- in Lincoln. "Sometimes they agree with us," McNutt said. "Sometimes they don't."

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