The Pierce County Assessor-Treasurer’s Office skipped tens of thousands of property inspections required by state law to ensure that properties are assessed fairly for tax purposes, the new assessor and several employees say.
The department skipped inspections of at least 133,000 residential properties and perhaps more than 181,000 over six or more years, documents and interviews show. The latter figure is well over half of all residential parcels in Pierce County.
Newly elected Assessor-Treasurer Dale Washam said the department also skipped tens of thousands of commercial inspections.
The missed inspections occurred during the tenure of Washam’s predecessor, Ken Madsen. On Wednesday, Madsen said his office “touched” every parcel in Pierce County. But he acknowledged it didn’t conduct “boots on the ground” inspections of every property.
When asked if the county had conducted the inspections in compliance with state law, Madsen said, “It depends on what you mean by physical inspection.”
Madsen said the state Department of Revenue was aware of the county’s practices. A spokesman said the agency was not aware and never granted Pierce County an exemption from a state law requiring physical inspections at least every six years.
It’s unclear what effect the lack of inspections may have had on the assessed value of affected properties, let alone on the tax bills of the people who own them.
Many property owners may have benefited from a lack of inspection because the assessor’s office failed to find improvements such as a new garage or deck. That could have led to a lower assessed value and perhaps a lower tax bill.
Properties that had significantly deteriorated since their last inspection may have been overvalued.
And the lack of inspections might have created unequal tax bills for people who own similar properties. If you and your neighbor both remodeled your homes but the assessor’s office knows about only your improvements, you may be paying a higher tax while your neighbor gets a tax break.
At a County Council budget hearing Wednesday, Washam said he asked his appraisers about the impact of skipped inspections. “The answer I got is, we can’t answer,” he said.
Though the council is considering a 3 percent cut to the assessor-treasurer’s budget, Washam said he needs more staff, not less, to conduct physical inspections. “With the funding being reduced, it would be untenable,” Washam said.
LAW REQUIRES INSPECTION
Most years, local assessors use statistical methods to calculate a property’s value. They consider the location and characteristics of a home, sales of comparable properties and other factors.
But state law requires local assessors to “physically inspect” every property at least once every six years. At a minimum, that means “an exterior observation of the property to determine whether there have been any changes in the physical characteristics that affect value,” according to the Washington Administrative Code.
The inspections help appraisers discover improvements or deterioration that affect property values. And they allow them to update property descriptions used as a base for those statistical methods that determine values in other years.
The Assessor-Treasurer’s Office divides Pierce County into six parts for the purposes of physically inspecting properties. The idea is to inspect one-sixth of parcels each year.
In addition to the regular inspection cycle, appraisers also inspect new construction and may inspect properties for other reasons.
Washam, a persistent government critic and frequent candidate for public office, has long claimed that the assessor’s office failed to inspect properties as required by state law.
He filed a recall petition against Madsen in 2005, citing the lack of inspections. He also claimed Madsen reported false information about physical inspections to the state Department of Revenue.
A judge found the recall petition factually and legally insufficient, in part because it didn’t demonstrate that Madsen intentionally committed any unlawful acts.
Now it appears Washam was right about the lack of property inspections.
In January staff meetings, managers in the department told Washam that required inspections were not completed on 133,681 residential parcels – about 45 percent of all residential properties – over six years.
Quoting a subsequent report, Washam contends the number of residential properties not inspected is 181,540. He also said inspections weren’t completed on “tens of thousands” of commercial properties.
Several current and former employees told The News Tribune that Madsen and his chief deputy, Kathy Fewins, decided not to physically inspect all properties. Instead, the department statistically updated the values on some properties, as they do most years.
Some employees said staffing at the office was inadequate to keep up with physical inspections. Others said a new computer software system drained staff time and reduced productivity.
Still, some employees thought skipping physical inspections was a bad idea.
“Ken and Kathy did not think the cost of a physical inspection was worth it,” said Jim Hall, who supervises commercial appraisers. “Where did they get this idea? Staff, experts they hired, manuals and textbooks as well as common sense tells you that you can’t estimate the value of a property without good (property) characteristics.”
“Why should staff have to argue with the boss just to be able to do their job?” Hall added. “I felt like the world was upside down.”
Fewins did not immediately return phone calls late Wednesday.
Administrative manager Billie O’Brien also said physical inspections “were determined to be of less value than other statutorily prescribed processes by management.”
She said the department inspected properties “identified statistically as being outside the statistical norm or otherwise in need of inspection.”
“Those properties had appraisers on site to verify all data on the appraisal record,” she said. “Other properties, that fit within the statistical model, were statistically updated.”
In a recent memo to Washam, appraiser Gary Foreman was more blunt. He said the department has been “cooking the books” and “not completing the six-year residential physical inspection cycle.”
EVERY PROPERTY ‘TOUCHED’
Madsen maintains the office complied with state law.
“Every property in the county was touched somewhere or some way by the office,” he said Wednesday.
So what does “touched” mean? Madsen gave several answers. He said “touching” may have involved an employee driving around a neighborhood.
Later, he said “we physically touched them, be it electronic or be it boots on the ground.”
He also said that for some properties, “we did a physical inspection, but it was statistical.”
Madsen said the office used statistical models to study neighborhoods. If certain properties were outside the norm for the area, they were flagged for a physical inspection.
Madsen suggested most houses don’t change much in six years, and that any changes can be picked up through building permits.
He said other Washington counties use the same methods for physical inspections. And he said state Department of Revenue officials “have not argued against the way we define physical inspection.”
In a written statement last week, Mike Gowrylow, a spokesman for the state Department of Revenue, said the department “has not granted any waivers to Pierce County regarding its statutory requirement to physically inspect properties every six years, nor do we have the authority to do so.”
“The (county) assessor’s office provides us with annual reports on its work, and we are not aware of any problems with physical inspections,” he said. “If the department became aware of some problem in this area, it does have the power to order the assessor to perform the necessary physical inspections. It has not done that.”
In a follow-up statement Wednesday, Gowrylow said the department is “not aware of any other counties that are improperly classifying statistical or electronic verification as physical inspections.”
Last year a state House of Representatives committee considered a bill that would have allowed local assessors to use digital image technology to satisfy the physical inspection requirement. It died in the committee.
MORE STAFF REQUESTED
Madsen said the assessor’s office would need more employees to physically inspect every parcel in the county, as Washam wants to do.
“Boots on the ground on every parcel, he’s probably going to have to double or triple the staff,” Madsen said. “And I don’t think the council’s going to buy that.”
Washam appeared at Wednesday’s County Council hearing in part to argue against a proposed 3 percent budget cut for his office. He said the cut would make it difficult to conduct the inspections.
In an interview last week, he pledged to physically inspect every property.
“I’m going to do it right,” Washam said. “I’m going to do it by the law.”
David Wickert: 253-274-7341