COMMISSIONERS MINUTES                                July 8, 2009


The Elmore County Commissioners met in special session on the above date in the Commissioners room, basement of the Elmore County Courthouse, 150 South 4th East, Mountain Home, Idaho.

Present at the meeting were Chairman Larry Rose, Commissioners Arlie Shaw and Connie Cruser. Also present was Civil Attorney Buzz Grant, Deputy Clerk Barbara Steele, Assessor Jo Gridley, Chief Appraiser Jody Soboslai and Appraiser Michelle Boothe.

The special session is being held to meet as a Board of Equalization to review appeals on assessment notices.

The County Commissioners resumed as a Board of Equalization.

Dennis Laib, King Hill, appeared to discuss his appeal on four parcels. Mr. Laib stated he owned Three Island Storage in Glenns Ferry. The first parcel that was discussed was RPB0049012007A. Mr. Laib stated a portion of the land is waste land. Assessor Gridley stated most land in Glenns Ferry is assessed by front footage. Mr. Laib wants the land on this parcel to be the same as the land values on B0099026007AA and B0099026011AA. The parcel Mr. Laib is appealing has 225 front feet and the two parcels on the south side of 1st Avenue only have 100 front feet. Since the property is contiguous with RPB0049012016AA, a discount of 20% was given off the base cost per front foot on both parcels and corrected notices were generated. Parcel B00490012007A dropped by $3,875 so the land is now valued at $28,675. Parcel B0049012016A lowered $55.00 and is currently assessed at $222. After the corrections were made the Assessor’s Office feels Mr. Laib has been treated fairly and equitably. Mr. Laib stated the land was unusable. Discussion followed on the size/shape of the property.

The second appeal was on parcel RPB0099026007A and parcel RPB00990260011A. Assessor Gridley stated the concern on the appeal form is the amount of Mr. Laib’s income that goes towards taxes. Mr. Laib did not request a change to the value of these parcels. These parcels are Mr. Laib’s self storage units and those units are being appraised using the income approach. The value of the storage units on these parcels has stayed the same since 2007. A discount of 20% was given off the base cost per front foot on both parcels and corrected notices were generated. Parcel B0099026007A dropped by $3,700 so the land is now valued at $14,800. Parcel B0099026011A lowered $3,700 and is currently assessed at $14,800. After the corrections were made the Assessor’s office feels Mr. Laib has been treated fairly and equitably. Dennis Laib stated he received a capitalization value on his business and property from a friend that is an appraiser. Assessor Gridley explained how the business is assessed. Mr. Laib questioned the solid waste fee.

The next appeal was on parcel number RPB05S10E314878. The appeal has been withdrawn by Mr. Laib.

Mr. Greg Heinrich, consulting appraiser working for the State Tax Commission, joined the meeting.

The next appeal was by North Park Limited Partnership. Linda Burns, 4110 Eaton, Caldwell, Idaho, 83706 appeared and stated she was the Asset Manager for North Park Number 1 and North Park Number 2. The parcels numbers being appealed are RPA0076000077C and RPA0076000078A. Ms. Burns stated the increases on the assessments are 48% and 31%. Ms. Burns stated their income is subject to the Section 42 tax credit and the rent is set by the U.S. Government. Civil Attorney Grant asked Ms. Burns about the restricted rents. Ms. Burns reviewed the schedule of restricted rents. Assessor Gridley spoke on behalf of both parcels stating Greg Heinrich, a consulting appraiser working for the State Tax Commission, scheduled a meeting with the Assessors office on May 20, 2009 to work on the new Section 42 Low-Income Housing spreadsheet. Unfortunately the Assessor’s office had already sent the County’s data to BDS so they could generate the 2009 assessment notices; so a corrected notice had to be sent out on both parcels. All three approaches were considered to calculate the assessed value of North Park Limited Partnership, as required by Idaho Code 63-205A. The Marshall and Swift Cost Manual was used to determine the cost approach. A financial statement provided to the State Tax Commission by the owner was used to figure the income approach. State Tax Commission consulting appraiser manager, Scott Erwin, updated the market approach with sales he had received of Section 42 Low-Income Properties. The three methods were given a weighed value, however the focus is on the income approach. The improvement value using the weighted method would be $1,286,658 for North Park Limited Partnership and $932,988 for North Park II Limited Partnership. The Assessor’s Office chose to place 100% of the weight on the income approach with an improvement value of $1,188,635 for North Park Limited Partnership and $847,614 for North Park II Limited Partnership. This method was agreed upon by both State Tax Commission and Industry and is currently endorsed by Idaho Legislatures, who enacted a new statute for 2009; Idaho Code 63-205A. The Assessor’s Office feels they have treated North Park Limited Partnership I & II fairly and equitably.

Ms. Burns stated she is not questioning the calculation of the assessment, she is asking to phase in the increase at a slower rate and would just like a little relief . Chairman Rose asked about the court case that initiated the new statute that was passed. Mr. Heinrich explained the new law and discussion followed on the issue. Ms. Burns explained other current appeals at different Counties she had filed. Ms. Burns explained the rent schedule she gave to the Board. Ms. Burns thanked the Board for their time.

The next appeal was from Michael Jones, parcel number RP01S04E038410. Michael Jones, Meridian, Idaho, was present. Mr. Jones stated he feels his property is not worth the assessed value, it has increased too much over the years and is land locked. Ms. Soboslai stated Mr. Jones has an 80 acre parcel that is currently not devoted to agriculture, and does not qualify for the Agriculture exemption. The only category this parcel qualifies for is category 18, “Other Rural Land” which is a category that the value is determined by market value. Idaho Statute says sales used to determine 2009 market value shall be arm’s length, market value property sales occurring between the months of October 1, 2007 to September 30, 2008. Our ratio study for this area did not indicate any adjustment was warranted at this time. Our bare land ratio turned out to be 73% which is well below the 90 to 110 which is the acceptable levels allowed by state code, but because we had a smaller sample, we chose to leave the land alone for this year. The last land sale of 80 acres close to this area was parcel number RP01S04E25210A. It sold April, 2006 for $160,158. The largest bare land sale in this ratio study time frame was 11.740 acres in size and it sold December, 2007 for $164,000. Mr. Jones’s parcel is currently assessed for $149,396. The Assessor’s Office feels Mr. Jones has been fairly and equitably treated for the 2009 assessment year.

The Board requested from Mr. Jones information from the Title Company regarding the property being land locked. Mr. Jones stated he would get that information to the Assessor’s Office.

Motion by Rose to recess for lunch, motion died for lack of second.

Motion by Rose, second by Cruser, to recess as a Board of Equalization and convene as a Board of Commissioners.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

The Growth and Development Department and hiring a new Director was discussed.

Motion by Cruser, second by Rose, to recess for lunch.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

Motion by Rose, second by Cruser, to recess as a Board of Commissioners and reconvene as a Board of Equalization.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

The next appeal heard was from John Falk Oppenheimer and Jane Oppenheimer Blatteis. Mr. Oppenheimer and Ms. Blatteis emailed stating they will be unable to attend but sincerely hope that you will give due credit to the exhibits we submitted with our June 11th letter. The June 11th letter reads: Dear Assessor Gridley, We have received the Assessment notice dated May 27, 2009, and we strongly believe the assessed value of $166,203.00 you have placed on the property is way too high. Please consider that this property has no practical use for anyone or any concern. The rest of the letter explains that the property is close to Mountain Home Air Force Base, is not good for residential use, is in the flight path of the air base, they have been trying to sell the property for over 12 years, and have tried to donate the land to a charity, but it was rejected. Based upon that information we beg your consideration to lowering the assessed value to below $50,000.00. Ms. Soboslai stated the Oppenheimer property is located close to the Mountain Home Air Base front gate. This parcel is included in Location Code #3, and raised by 5% based on Market. After evaluating 23 sales the mean came in at 82% which is below the 90%-110% that is considered to be in compliance with Idaho Code. The Assessor’s Office chose to trend all residential, commercial, and other rural land categories by a 5% increase. After the Assessor’s Office increase, this brought the mean in at 85%. In the past the Assessors Office has given this parcel a 10% decrease in value due to the proximity of the ammo dump and Airbase. The assessment notice was amended to reflect more of a decrease for a total of 25%. This lowered their assessed value by $27,701, bringing the total assessed value to $138,502, less than what it was assessed for in 2008. Discussion followed on what uses are allowed on the property.

Dave Mickelson, representing Elk Valley Ranch, Inc., Pine, Idaho, appeared appealing three properties, RP002490010490, RP002490010400 and RP002490010530. Mr. Mickelson stated the Assessor’s office can pick and choose what sales they want to use and throw out. Mr. Mickelson stated the land in Elk Valley Ranch is not worth what it is assessed at as a few lots have sold for approximately $50,000.00. The high taxes are affecting sales of the property. The taxes are unfair. Ms. Soboslai stated Elk Valley Ranch Inc. is appealing three vacant lots in the Amended Elk Valley subdivision. Lot 40, Block 1 in this subdivision was adjusted by $30,000 due to hillside, as was Lot 49. All lots from lot 40 to lot 52 received this adjustment if they bordered the Pine-Featherville Road. This brings these lots down to what sales prices the Assessor’s Office had reported to them in 2006, except for lot 49 which Mr. Mickelson bought for $150,000 in November of 2006. The last reported arms length transaction was a lot that sold for $127,000 in April of 2007. Ms. Soboslai stated there are two sales in the time frame allowed but are not in this subdivision. One is in Evergreen Subdivision: it is 1.030 acres in size and sold in June of 2008 for $125,000.00. The next one is 1.340 acres in size in Twin Pines Subdivision and it too sold in June 2008 for $154,956.00. Ms. Soboslai stated she did make calls to other counties to see what sales they might have for golf course subdivisions. The only county that provided one was Valley County which was a sale for a .474 acre bare lot that sold in July of 2008 for $135,000.00. Mr. Mickelson stated he gave those comparisons of other counties to the Assessor’s office in error. Ms. Soboslai stated the sales that Mr. Mickelson is referring to in the Elk Valley Subdivision was a divorce settlement and are considered a fire sale and cannot be used. Ms. Soboslai explained what a fire sale was. Discussion followed on sales in the area and that sales must be reported to affect the assessments.

Motion by Rose, second Cruser, to recess as a Board of Equalization and reconvene as a Board of Commissioners.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

The Commissioners met with Growth and Development Director Brent Butler to discuss a replacement for his position. Advertising for the position was discussed. An interim replacement for the Department was discussed.

Motion by Rose, second by Cruser, to recess as a Board of Commissioners and reconvene as a Board of Equalization.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

Todd McCurry, Hammett, Idaho, appeared representing the appeal on Paula Kae, LLC parcel number RPA01060010040A. Mr. McCurry is appealing the property assessment increase on the basis of the unprecedented challenge in the whole retail automotive industry. The car dealership is a single purpose building. Mr. McCurry brought information on the industry of car dealerships and explained that 23 of the 108 dealerships in the state have closed. The assessment of the property increased by approximately $3,000,000 after it was remodeled and reopened. Assessor Gridley stated the assessed value for the building in 2002 as a functioning K-Mart was $2,684,179. After K-Mart closed, the building was reassessed to reflect that it was empty and not generating income. A value of $10 per square foot was used for the 2004 roll with an assessed value of $951,260 and it remained at that amount until 2009 when it was reappraised after extensive remodeling. Paula Kae LLC purchased the property in September of 2005 for an undisclosed amount from the 1995 K-3-K-4 Mountain Home, Idaho Statutory Trust, a Liquidation Trust Agreement. The building had been empty and not used since early 2003. Mr. McCurry obtained building permits from the City of Mountain Home in February 2007 in the amount of $250,000 for site work and in March 2007 in the amount of $2,250,000 for improvements. In August of 2008, Paula Kae, LLC, sold two parcels to MBG LLC for $1,600,000. One parcel was just paving and the other parcel was a building in addition to paving. Previously the building had been used as an Auto Dealership, after the sale it has continued to be used for auto sales and service. All three approaches were considered to obtain a value for the Mountain Home Auto Ranch as required by Idaho Code. The cost approach was calculated using the Marshall and Swift cost manual. Of the 95,126 square feet, 42,350 was appraised as showroom with a cost of $82.94 a square foot, and 52,776 was appraised as service garage with a cost of $46.86 a square foot. Both were given a multiplier for sharing a common wall. There was a 10% quality placed on the building for the quality of work when the building was built in 1994. There is a 20% depreciation for the age of the building. The current value for the building is $3,908,831. More weight was given to the cost approach in 2009 to obtain the current value of the Mountain Home Auto Ranch since the data is more accurate. We feel we have treated Paula Kae, LLC fairly and equitable. Mr. McCurry stated a car dealership is a special task to appraise. Mr. McCurry stated he could not sell the property for what it is assessed for due to the current economy. The Boise market was discussed.

The next appeal was from Danskin Properties, parcel number RP001970010190A. Barbara Waite and James Underwood appeared representing Danskin Properties. Mr. Underwood gave a history of the property. The parcel is listed as a lot on the plat but was never intended to be a residential lot. Mr. Underwood stated a well and building are on the lot. Mr. Underwood stated he recently sold his interest in Danskin Properties to Todd and Barbara Waite. Ownership of the property was discussed. Ms. Soboslai stated the lot is currently assessed the same as it was in 2008, the value is $155,513.00. An adjustment was made of a minus 25% on this lot for access and easement problems. Ms. Waite stated in the appeal letter that this property is located in the Indian Creek, 100 year flood plain. In the past she felt it should be treated as an unbuildable lot. She has been asked to provide documentation from Central District Health stating that all or some of the 21.160 acres are indeed unbuildable. The Assessor’s office has not received documentation at this time. The Assessor’s Office does not dispute that it is in the flood plain but without this documentation, the next step is to compare land sales that are located in this same flood plain and see if it has affected the sales in anyway. There is a bare land sale that is also located in the same flood plain; it was 11.740 acres of bare land that sold for $164,000 in December 2007. Ms. Soboslai asked if Ms. Waite or Mr. Underwood could bring something in from Central District Health showing it is an unbuildable lot, then it can be reclassified and adjusted either by the Board of Equalization or through a tax cancellation.

Motion by Rose, second by Cruser, to recess as a Board of Equalization and reconvene as a Board of Commissioners.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

Deputy Clerk Steele asked questions regarding advertising for the open position of Growth and Developer Director.

A request from Jim Carrie regarding the Conditional Use Permit for Clear Springs Ranch was discussed. The Commissioners recessed to go visit with Growth and Development Department Brent Butler in his office.

Motion by Shaw, second by Rose, to adjourn.
ROSE - AYE
SHAW - AYE
CRUSER - AYE Motion carried and so ordered.

/S/ LARRY E. ROSE, Chairman
ATTEST: /S/ MARSA PLUMMER, Clerk