Some owners of commercial properties in Moffat County experienced sticker shock after 2005 valuations for their businesses hit mailboxes earlier this week.
"Initially, I thought they had made a mistake," said Chris Nichols, owner of Craig's McDonald's. " I had a 150 percent increase from last time. How do they expect people to budget for this?"
Every odd year, Moffat County officials are required to reassess property values in an attempt to achieve fair market values. Appraisals are issued on all properties, including residential, commercial, industrial, utilities, agriculture, vacant land and oil and gas companies.
But rates of valuations for commercial properties are three times as high as residential properties, said John Zimmerman, a certified general appraiser with Littleton-based ValueCheck. Zimmerman was hired as a contractor by Moffat County to appraise the county's commercial properties.
Zimmerman said two factors might account for some businesses' steep increases in valuations this year. A number of the county's businesses may have been undervalued in the past and commercial valuations have been skyrocketing on this side of the Rockies. Decisions for commercial valuations come down from state legislation and aren't controlled by the whims of city or county ordinances.
"There have been several sales that occurred recently that have really shown support for higher levels than the past," Zimmerman said. "There are significant value increases on commercial property all over the Western Slope. I'm very sympathetic, but what we're trying to do is get a fair value."
Like Nichols, Don Griffin's automotive shop, Jim's Tire and Auto, experienced a valuation increase. Griffin's business experienced a 100 percent increase. Griffin said he hasn't made any improvements on his business for years.
Both business owners said they would protest the valuation.
"It looks to me like they're trying to raise the tax base," Griffin said about the county, trying to explain the sharp increase. He estimated the change might cost an extra couple of thousands of dollars in taxes.
"Anything that hits you is hard, especially for a small business," he added.
Zimmerman said property owners shouldn't think of the increases in terms of percentage but as an attempt to make "everything equitable."
"I think it's likely that there are some under appraised and some over appraised properties," he said.
Moffat County properties are mass appraised, which means assessors don't individually check each one.
They are appraised by keeping in mind a balance of a property's cost, its market value and by the income it generates, Moffat County Assessor Suzanne Brinks said.
However, property owners have the opportunity to protest valuations that seem too high or too low. Deadline to start that process is June 1.
Property owners need to offer a reason and facts to support their assertions. The county received about 300 protests last year, Brinks said.
Protests start with the county assessor and head to county commissioners. If property owners still aren't satisfied, the cases can wind through the courts.
Moffat County will see an $11 million increase over last year on its assessed property values. That amounts to about $354,000 in extra revenue for the county's taxing districts. But nearly 50 percent of that money goes to fund schools.
Still, four categories of properties, including residential, commercial, industrial and agriculture, account for 20 percent of the county's value. The bulk of taxes that make up county coffers are paid by public utilities and natural resources.
Brinks said commercial properties were divided into thirds on whether appraisals increased, decreased or stayed the same. In general, area hotels and motels were valued about the same. Storage units tended to be valued higher this year, as well as houses in the Pine Ridge area.
The 2005 valuations come on the heels of the county's plan to ask taxpayers for permission to keep more tax revenue. County commissioners authorized a ballot question for a five-year exemption from a state law that restricts property tax growth. In November, voters will decide whether to approve the exemption, which will allow the county government to keep an additional $296,596.
"Commissioners are asking for something that may be very hard for me to vote for," Nichols said considering his increased valuations.
Zimmerman stressed that protests are a regular part of the appraisal process. He said officials are willing to accept information that properties may be under or overvalued. Property owners can prove their cases by showing evidence such as an assessor's error in square footage, condition of a property, comparing a valuation to the selling price of a neighbor's house or the income generated from a property.
"I can't make any promises, other than we will give consideration to what they have to say," he said.
Brinks said the county is responsible for an independent state audit to ensure it is evaluating properties at their fair market values.
As an example of the cost of increased valuations, an increase of $5,000 to a residential property equates to a $30 a year increase in taxes, Brinks said. That's about $2.50 a month if it's rolled into an escrow loan.
"People only have the month of May to protest," Brinks said. "After that, my office starts certifying and working on (mill levy) budgets. It's all tied in."