Property Reassessment

September 7, 2009

Fight about lake homes valuations not finished

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
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Around this time last year, Harveys Lake property owners were talking of breaking away from Luzerne County because they were so outraged over new assessed values that threatened ballooning tax bills.

The public outcry has subsided, in large part, because assessments have been slashed on many homes fronting the lake.

But other Lakeside Drive property owners are still fighting, and they make it clear that silence shouldn’t be mistaken for satisfaction.

As of Friday, 71 lakefront properties had gone through court-level mediation.

These property owners received a combined $16.6 million in reductions through the assessment challenge process, which included reassessment company informal reviews and revisions, county appeals board rulings and court-level mediation, an analysis by The Times Leader shows.

Laurie Kehler is still disgusted with the process but is satisfied with the value she and her husband, Thomas, ultimately obtained at mediation.

Their two-story 1950s home on 0.61 acre was originally assessed at $775,600, which would have equaled $10,000 in school, county and local taxes.

“We were out of our minds when we saw the value. We thought the decimal was in the wrong place,” Laurie said.

The assessment was reduced to $718,700 at an informal review and to $418,800 at a formal appeal, but it still wasn’t close to their certified appraisal value of $245,000, she said.

The appraisal amount was accepted by the county at mediation, which means taxes will be around $3,200.

The Kehlers ended up with one of the largest assessment reductions along the lake to date – $530,600. Laurie Kehler said her husband submitted the appraisal and other information to the county, and the matter was settled over the phone without requiring a mediation conference.

Part of the higher value stemmed from the county’s misconception that a dock was part of the property, she said. The Kehlers have rights to use a dock along the lake, but it is owned by a neighbor.

“It was very nerve-wracking. The whole experience was very upsetting,” she said.

Andrew Mulson, who also went through mediation, received $570,800 in reductions on his two adjoining lakefront properties.

His value started at $1.19 million and ended up at $620,000 after appeals and mediation.

Mulson, of Philadelphia, bought the Harveys Lake property in 2003 for use as a second home, motivated largely by the affordable property taxes.

His taxes were $4,530 before reassessment and are now $8,000 based on the mediated assessment. He worries that his tax bill will continue to climb as taxing bodies seek more revenue. He believes state legislators need to reform the tax structure to reduce the burden on property owners.

“It’s a beautiful lake, but I kind of regret my decision to move there. I never expected to incur that kind of cost to have the pleasure of a second home,” Mulson said.

Mike Dziak was able to obtain a $477,600 reduction on his lakeside property at a formal assessment appeal, which means he didn’t have to advance to mediation like many of his neighbors.

His assessment went from $973,600 to $496,600.

Dziak said he presented an appraisal to the appeals board valuing the property at $485,000. He said he had also obtained a second backup appraisal that came in around the same amount.

Some features of the property make it less attractive, he said. For example, the driveway is shared with a neighbor, and a guard rail restricts most access to the dock, he said. He said his boathouse was valued like ones that are livable, even though his has no bathroom or sleeping quarters.

Dziak, who is head of the Earth Conservancy organization, said the original reassessment values would have been more accurate if the county had required the reassessment company to consult with local real estate experts who understand the nuances of values on the lake.

“It will take years to resolve the issues at the lake,” Dziak said.

For some, long wait goes on

Dave Wilson is among the property owners still waiting for justice.

“I am extremely frustrated,” said Wilson, who is paying about $8,600 in 2009 property taxes on a two-bedroom, 1910 house on 0.43 acre in the Sandy Beach section of the borough.

“After over a year’s time, lawyer and appraisal fees and the $111.75 fee to the county to appeal – and most recently a giant school tax bill – my property has still not been addressed,” he said.

The county will reimburse Wilson for tax overpayments if he obtains a reduction at mediation, but he said it’s unfair that he should have to pay more than his fair share until the county processes his challenge.

About 680 of the 2,000 mediations sought by taxpayers countywide have been completed to date, and county officials say they are being resolved as quickly as possible.

A county assessment appeals board had knocked $31,400 off Wilson’s dock and house, for a building value of $103,300, but it wouldn’t touch the $560,000 land portion of the assessment, he said.

He has a certified appraisal valuing the property – land and buildings – at $300,000.

Borough Tax Collector Terry Jones is also antsy. He obtained a certified appraisal that says his two adjoining properties are worth $600,000, and he is awaiting mediation to contest the appeal board value of $963,900.

He believes reassessment was long overdue but said the assessments at the lake are still significantly out-of-whack. Like Wilson, he is most troubled by the land portion of his assessment – $420,000 for 0.84 acre.

“That’s where the value is – on the lakefront – and I’m finding a lot of inconsistencies,” Jones said. “It’s mind boggling.”

Property owner Len Skrosky filed a second assessment appeal for next year’s taxes when he learned about the reductions being granted on other lakefront properties.

He said he never advanced to mediation because he didn’t realize it would yield such substantial reductions, but now he sees properties with more land and lakefront access being valued lower than his.

His 2,700 square-foot home on 0.56 acre is assessed at $691,300, and he believes he should be in the $400,000-plus range.

“I don’t mind paying my fair share, but there’s no rhyme or reason for how they valued properties along the lake. They took guesses,” Skrosky said.

Property owner Walter Cepukaitis, another lakeside property owner, has filed an appeal for 2010 because he’s still not comfortable with the value he obtained at mediation.

His assessment is $306,000, compared to the original $560,200. He has an appraisal valuing the property at $287,000.

Cepukaitis has a nice front-porch view of the lake from his cottage, but he said that view comes at a steep cost that devalues the home. More than 50 stairs must be climbed to access the front door, and the property requires three sets of retaining walls. Two of those walls are deteriorating, which will require tens of thousands of dollars in repairs, he said.

Borough resident and Realtor Michelle Boice, who has helped Cepukaitis and many other property owners with their research, said she still sees lots of questionable values – both high and low – along the lake.

“I could’ve done a better job with a dartboard, because that’s how bad the values were and still are at Harveys Lake,” she said. “I felt the Harveys Lake assessments should have been completely redone.”

Representatives of reassessment company 21st Century Appraisals Inc. have argued that the valuation of lakeside properties was difficult because the county did not want to pay for extensive deed searches to show which properties have lake access. The company also stressed that the county cleared the original values before they were issued to property owners.

Boice, who once joined two busloads of borough property owners in a boisterous anti-reassessment rally outside the courthouse, said many folks are more subdued because they lost their battle to convince county officials to halt the reassessment.

Interest in breaking away from Luzerne County has fizzled, she said.

But many borough property owners support Hanover Township property owner Victor Kopko’s planned lawsuit to throw out the county reassessment, she said.

“They’re holding onto that hope. In the meantime they’re struggling through the process,” she said.

Go to www.timesleader.com to see a spreadsheet with all the lakefront mediation settlements to date.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

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