HomeMy WebLinkAboutPlanning February 26 20131
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WHATCOM COUNTY COUNCIL
Planning and Development Committee
February 26, 2013
CALL TO ORDER
Committee Member Barbara Brenner called the meeting to order at 3:02 p.m. in the
Council Chambers, 311 Grand Avenue, Bellingham, Washington.
ROLL CALL
(3:02:22 PM)
Present: Ken Mann and Barbara Brenner.
Absent: Bill Knutzen.
Also Present: Pete Kremen and Carl Weimer.
COMMITTEE DISCUSSION
I. DISCUSSION WITH WHATCOM COUNTY ASSESSOR KEITH WILLNAUER
REGARDING OPEN SPACE CLASSIFICATIONS AND CRITERIA (AB2013 -099)
Keith Willnauer, Assessor, stated he is available to answer questions and gave a brief
overview of the history of the two operating statutes in Revised Code of Washington (RCW)
chapters 84.33 and 84.34. These statutes originated in the 1930's and were meant for a
timber exemption program. Timber, as a value -added component to the land, and the fair
market value of the land are exempt from property taxation.
Brenner asked and there was discussion of the difference between exempting the
property tax and reducing the property tax. Willnauer stated the land is valued according to
a formula, which has to do with an analysis of stumpage values and long -term timber
forecasts. The land value is the land, absent the timber. The land itself is not valued at fair
market value. It's valued at its current use, which is different from market value. Current
use is extrapolated to be the value of land over a 60 year period, when it's used to grow
trees. The timber excise division uses a formula to determine the per -acre value. The trees
are exempt from taxation, but they become taxable in timber excise tax when harvested.
The program was always reserved for the most commercial of timber holdings, so it has a
20 -acre minimum.
Willnauer continued the presentation on:
• How the statutes evolved and expanded to what they are today, including the
open space statute for smaller forestland, agriculture, and open space /open
space.
• The payment structure.
• How the Assessor's Office manages tax status.
• The penalties that occur upon removal from the program or change of use.
Brenner asked if the penalty is to pay back up to seven years or all seven years'
difference between the assessed value of the property and the fair market value. Weimer
stated that if someone is not in the program for seven years, the penalty is only for the
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years included in the program. The penalty is for the most current seven years in the
program.
Brenner asked the consequence of a building a one -acre home site on property in the
program that is zoned rural forestry. Weimer stated they will begin paying fair market
value on the home site and house. If the property was in the program, they would pay the
seven years penalty on the development of the one acre. It can be a significant amount,
depending on where the land is located. When a 20 -acre parcel is in the program, and one
acre becomes a developed home site, they no longer qualify for the designated timber
program but can transfer into the other program. That involves a reaction from the
Assessor's Office that landowners may not appreciate.
Brenner stated the law is still the law. Willnauer stated it is the law, but it happens
nevertheless. The entire activity begins with the person who makes the change in the first
place. It's not something the Assessor's Office is simply doing due to a change in policy.
Brenner asked if the County staff make sure landowners are abiding by their timber
management plans. Willnauer stated they don't.
Brenner stated someone from the Department of Natural Resources (DNR) said there
are a number of cases where they get a timber management plan from someone who
doesn't really do anything. Willnauer stated he will look at any properties submitted to him.
The compliance program in the timber program has a lot to do with maintaining some kind
of statutory connectivity to the forest practices permits. As DNR acquires those forest
practices permits, the DNR is engaged in a rigorous compliance administration. The County
has recently become more active in this arena in a somewhat confusing role under the
conversion option harvest plan (COHP) permit activity. The County can take over the role of
the DNR in forest practices application compliance, because it falls under the County's
clearing.
Brenner stated the problem is that is at the end. They don't harvest, but just use it
as a tax break for 40 years, and then pay back seven years. If they had to submit a
harvest management plan, they should have to follow through. There should be a way for
the County to know they're doing that. Willnauer stated there are dramatic points when not
following a timber management plan is obvious. Those are addressed straightforwardly in
the statute. Typically, this is when one clear cuts the land and doesn't replant. That is an
easy thing to track and maintain the compliance administration. During the 60 years in
which the trees are growing, it is more difficult to have a compliance plan and create
compliance administration.
Brenner stated they don't just watch the trees. The trees have to be thinned and
there has to be a way for people to get around the land, otherwise they'll know that
someone isn't keeping up with their plan. Willnauer stated they wouldn't know. Timber
grows on its own. Thinning is recommended, but not required.
Brenner asked if there are plans that don't require thinning. Willnauer stated they
do. The commercial growth and harvest of timber is really all about harvesting the timber
at some point. That is the critical side of the equation. Even that's been somewhat
addressed in the fact that selective cutting activities now are used instead of a typical clear
cut. One can go into a timber wood lot, cut down a couple of trees, and that qualifies as
selective cutting. One could conceivably maintain a wood lot continuously that never looks
like it's been harvested.
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Brenner stated the DNR fellow said the DNR goes into areas to make sure people are
keeping up with their management plans, and they can tell when it's not happening.
Willnauer stated it would be wonderful to have a collaborative compliance administration
with DNR. The DNR is doing that compliance effort, but doesn't collaborate with the
Assessor's Office on compliance. Timber management plans are diverse. It makes
compliance administration very difficult. When he hears of a DNR compliance administrator
approaching a piece of property regarding compliance, it is undoubtedly associated with
harvest. Harvest time is an important juncture. They realize the protection of certain
critical environments, runoff, and activities associated with harvest and road building are so
dynamic that they become involved.
Brenner stated she would check into it. That was not her understanding from the
DNR representative. Willnauer stated the Assessor's Office has appraisers in the field and
are at every property at least once every six years. If it's apparent that the use has
changed, that's their compliance administration. It's about whether there is an apparent
change of use.
Brenner stated she wasn't talking about changes of use. She was talking about
people who are not doing what their management plan says they'll do. Willnauer stated
disqualification from the timber program is about whether there is a change of use. A
change of use means the land is no longer primarily devoted to the growth and harvest of
timber. If that situation were evident at a physical inspection and review of the property,
the Assessor's Office will engage in compliance administration.
Willnauer stated that after a standard harvest activity, the statute requires
replanting within a certain period of time. If people don't replant within that time, they are
no longer in compliance with the forest practices statute, which begins to establish the
framework for a potential change of use determination on the Assessor's Office. Some of
those situations occur, but are difficult to administrate. The replanting statutes allow for
dynamic modifications to that replanting requirement, and can extend beyond five years.
Brenner asked if the County ran into that issue with Semiahmoo. Willnauer stated it
..
Brenner stated it was a conversion because they didn't replant. She asked why that
wasn't apparent. Willnauer stated the forest practice permits were issued to the property
owners. A review of the forest practices harvesting permits indicated their intent was to
continue the use of the property for the growth and harvest of commercial timber and to
replant. Within a certain period of time, which the statutes call out superficially within two
years, the Assessor's Office reviewed those forest practices permits. The Assessor's Office
made a phone call to the DNR's forest practices compliance division, which indicated the
DNR was investigating these permits and determined they were not out of compliance.
Brenner asked for a copy of those letters. She was told by DNR there weren't
complaints for seven to nine years, and then the complaints started. Willnauer stated the
DNR compliance division doesn't give him any letters.
Brenner stated it wasn't from the DNR. Willnauer stated the statute directs the
establishment of a change of use. The statute would say that a defining factor of change of
use would be a determination by the DNR within their forest practices compliance
administration that the property owner was out of compliance. Therefore, he followed the
direction of the statute to acquire that determination from DNR, but was emphatically told
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that the Semiahmoo permits were all active, valid, and not out of compliance. The time
continued on.
It became apparent that something wasn't correct, because nothing was happening.
Semiahmoo was still not replanting, and another couple of years had gone by. There were
continued concerns from citizens about the Assessor effectively analyzing the change of use
under the forest practices compliance administration. That's when he went to the DNR
again, and it became apparent that there was a change of jurisdiction. Now, they were no
longer necessarily under the auspices of the DNR forest practices division. In fact, the
jurisdiction transferred to the County under the COHP administration.
He began to question why he hadn't heard concerns from the County agency about
compliance under the COHP permits associated with the property. That began another
process of trying to work through someone else's compliance administration. He had the
DNR foresters go to the property and make a determination from the Department of
Revenue's timber excise tax division, because no one effectively was willing to make the
change of use determination on that property. When he acquired the determination from
the Department of Revenue, he proceeded with a change of use determination.
Brenner asked if the County is now getting the money as though it was the highest
value rather than current use timber. Willnauer stated it is. It is an example of a
compliance administration that puts the Assessor's Office in an apparent role to
administrate a compliance requirement associated with the standards exemption program,
but ties that administration directly to the operations of the DNR. That's a long answer to
why he isn't more aggressive in a compliance administration. The reason is that they must
be involved with DNR, or with the County if the County takes that authority. It's a very
confusing array of new statutes.
Brenner asked if the Assessor can work with the Department of Revenue to make
sure this doesn't take so long next time. Willnauer stated he can. The statute should
include better language that directs the DNR to coordinate.
Weimer asked to talk about agriculture and open space.
(3:38:07 PM)
Willnauer described the farm and agricultural program and the open space program.
Brenner asked if the agricultural program has to produce a certain amount of money
per year. Willnauer stated properties 20 acres and above have to demonstrate an
expectation of profit. Properties below 20 acres have to have an ongoing and continual
income. Properties between five and 20 acres have to qualify with at least 200 dollars per
acre of income for three of the preceding five years. Properties below five acres have to
qualify with $1,500 of total income for three of the previous five years. Conceivably, the
property could do nothing for two out of every five years. That has to do with the typically
fallow nature of agriculture in much of Washington State. The effort seems to make it
easier to qualify for the exemption with the larger pieces of property.
Mann asked about enforcement of the various programs and the potential for the
Council to designate it's approval responsibility to the County Assessor's Office. Willnauer
stated the County Council approves only the open space /timber and open space /open space
applications. The others are administratively approved. The approval process is
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determined by State law, but may not prohibit the Assessor's Office from some kind of a
role. He's had this discussion with the Executive.
Brenner stated that if the Assessor's Office has approval responsibility, it must still
follow State law. Willnauer stated State law directs that it be done by the County Council.
It also directs that the County Council can control it through local ordinance. That may
mean there is an opportunity to direct the process in the Assessor's Office, with his
agreement. It's a question for the attorneys. If it makes sense, is more efficient for the
taxpayers, can be kept under control, and makes sense administratively, then he's not
averse to the discussion.
Mann stated the Planning staff spends a lot of time on these things. At least half of
the requests that come forward seem like they're just about someone who is trying to get
out of paying their taxes. People are taking advantage of the program. He's not a fan of
the open space /open space program. Willnauer stated he's sensitive to tax programs that
don't instill integrity in the process and damage the overall concept of fair and equitable
distributions of responsibility. There are many kinds of exemption programs. He fosters
the same kind of concern. Some programs are legitimate, well- conceived, and appropriate
for providing relief from certain tax situations. Other programs aren't fair and equitable. In
general, the Assessors see this first hand and talk about this in Olympia.
Mann stated he would like to know about the exemption programs that are so unfair
and inequitable that Mr. Willnauer must go to the State legislature and lobby the legislators.
Brenner stated one example is that someone will have their property in the open
space /agriculture program and subdivide their property, put wells on each property, and
keep the properties in the program until they sell. If they go by lot rather than all in one
name, they can stop people from doing that. Willnauer stated he wants to have and will
have those conversations. He's committed to having those conversations with Olympia,
their representatives, and the councilmembers. He deals with these things daily. His office
routinely receives concerns, complaints, ideas, and perspectives from citizens. He can
speak to particular concerns if they will allow him a certain latitude from his professional
perspective and experience. When he hears complaints about the open space /agricultural
program, he has a lot of concern about qualification and compliance. The program is not
perfect. It has many loopholes. The Assessors try to close those loopholes, but the farm
lobby in Washington state is strong and effective.
Brenner stated that even the farm lobby would not like it when someone divides
their property and put wells on the parcels knowing they are for residential development
rather than farming. She asked if the law is specific per lot or allows lots of property
together under one name. Willnauer stated it allows lots of property together under one
name.
Brenner stated that has to change. Willnauer stated that is one area of very large
concern. You would think the farm lobby wouldn't be opposed. The farm lobby is large and
powerful. The farm bureau and granges are very hard to deal with in terms of moving any
kind of an apparently more aggressive agenda against their participants in these programs.
The law is specific about the definition of contiguous, for example. People will put in
subdivisions with roads and underground utilities. Yet the definition of contiguous is
ironclad. The farm lobby went to work on this contiguous statute, and made it wider open.
Now, it talks about properties that are part of a single farming operation, no longer owned
by the same person. It goes on to say a single farming operation is an operation that can
be operated by many different entities. It was an amazing expansion of the concept that
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removed counties' abilities to put people into noncompliance with open space. That
happened just last year. These programs are statewide. There is a difference in the
agricultural personality in Eastern Washington. They represent a huge constituency.
Many citizens wonder why the County doesn't hold the line in certain areas. He's
heard there are people in the program who don't belong. He takes that seriously. He would
not let anyone in the program who does not belong. However, there are ways for people to
be in the program that aren't as apparent. He deals with that routinely. People routinely
may call in about their neighbor. He takes that seriously. There is a detailed audit
compliance administration. He will force a re- compliance under terms. All it takes is a
complaint from a citizen, which is enough for him to move forward. There are other audit
tripping points, such as sale, transfer, or physical inspection. Most compliance
administration involves making people do something. A lot of people will do what is
necessary to remain in the program, such as sign an affidavit saying they've been farming.
That indicates he's at least putting due diligence to the situation, and is protection for him.
It doesn't mean that someone won't sign an affidavit with a flamboyant attitude. Keep the
pressure on those people and use any opportunity to apply a bright line audit control test to
get people into compliance. However, people could conceivably stop farming for a year and
still qualify because that's the year they don't have to provide any income. The statutes are
clear that, as apparently as the statute seems to put the Assessor in a position to be an
abuser of taxpayers, the truth is that the legislature is protecting the taxpayer from the
Assessor.
Mann asked what happens if the Council doesn't approve an application, even if it
qualifies under the public benefit rating system. He asked if the County violates State law
for not approving it. Willnauer stated he doesn't think the Council is bound by the public
benefit rating system, which makes a recommendation to the Council. He believes that
ultimately, the Council is the authority. The open space /open space program caused a
great deal of concern for Assessors because of it's potential for abuse. The legislature took
approval away from the Assessor and gave it to the local legislators. These programs are
dynamic in other counties. The Council could write an unbelievable array of public benefits
and run this program any way it wants. The County has done an exemplary job of
maintaining a reasonably just and fair administration of this program, but it's still very
difficult. The open space /open space program had up to 1,000 participants at one time, and
was getting out of control. The County decided to enforce the public access responsibility.
At the same time, it allowed people to get out of the program if they wanted. The number
of participants dropped from 1,000 to 20. Everyone bailed. Now it's going back up a little
bit. He got fairly aggressive with the open space /agriculture program at one time. In
response, a Senator created the open space /open space farm conservation designation.
The Council has been stuck with farm conservation as part of the open space /open space
program. He is concerned about that, because there is no compliance requirement. It's
endless.
OTHER BUSINESS
ORDINANCE AMENDING THE WHATCOM COUNTY CODE TO ALLOW
AGRICULTURAL SLAUGHTERING FACILITIES IN THE AGRICULTURE ZONING
DISTRICT (AB2012 -300) (4:04:27 PM)
Willnauer gave a staff report on the impact of slaughterhouses on property value and
assessed value from the perspectives of a tax base administrator and of a real estate
appraisal. He takes these things into consideration. He considers the effect on property
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value, in the sense of market value, which has some correlation to assessed value. He
considers every circumstance that affects negotiations between willing buyers and willing
sellers. The impacts are to someone's value of their property and to assessed values on
properties. Those two are separate. Regarding the tax base, there is a shift to the burden
if properties are changing values. There wouldn't be a loss of revenue to districts. He pays
attention to the shift. Most of the property in the agricultural zone is already exempted by
the current use program, so they're not at a fair market value relationship to begin with.
However, if the fair market goes down, one wouldn't pay as much to get out of the
program. In a way, the County loses some revenues associated with that.
Mann asked if there is a general rule of thumb. They've heard claims that
agricultural zone market values will drop 20 percent if they allow small scale
slaughterhouses in the agricultural zone, and some properties right next door will go down
100 percent in value. Willnauer stated there is not a rule of thumb. He looked at the
question from the perspective of a real estate appraiser, not as a tax base administrator.
He reviewed and described the Greenfield study, which said that no one would argue that
these will create an increase in property value. There is an identifiable negative impact to
certain property values.
Second, the study also said that proximity is a dynamic determinate. The properties
immediately adjacent will show a much more dynamic effect than the properties farther
away. Examples ranged from a 50 percent change within one -tenth of a mile to one
percent a mile away.
Third, the study included all different kinds of facilities, which was a large
determinate of what's going on. A gigantic operation is different from something managed
more sensitively. The study addressed site specific characteristics. It would not be wise to
locate some of these things in certain areas, and the effects would be more dynamic. The
industry would be sensitive to that, and realize that it will look for a location that minimizes
most of the impacts. Incompatible uses are the ones most damaged. That's the way it is in
almost all land uses. Residential uses will not get along well with agricultural uses, but
that's what they're talking about. Most of the study was done on incompatible properties.
If a farmer hauls animals all over the place to get them slaughtered, and someone locates a
facility in the neighborhood, it could be a good thing. Those are compatible uses. One
could conceivably argue that the benefit to the farm value would be positive. He doesn't
know what kind of facilities they are talking about here.
(Clerk's Note: Discussion continued later in the meeting.)
AIRPORTS
Mann asked and there was discussion of an airport notification zone. Willnauer
stated he's heard about it, but doesn't know. The County has maps of certain zones of
concern. He's translated those maps through market analysis to validate that there is some
concern in fact.
Brenner asked about people who move into the zone when the airport is already
there. The people get their benefit from the property being cheaper. Willnauer stated it's
just like the argument about railroad tracks. He's aware that things are changing. He
would have to study any changes, such as the runway approach modifications. The changes
become evident when they start seeing sale activity. Now, they are not yet seeing that
activity. That doesn't mean it won't happen. It's just because there are probably so many
other influences in a rural residential community. People tend to focus on one thing, and
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discount all the other things in their favor. He has to consider thousands of things that
affect the property value, not just one thing. The question is whether this one thing has
such a dynamic impact. In general, studies often show that things don't have impacts
anywhere close to expectations.
RURAL ELEMENT
Knutzen asked about adjusting assessed value of properties downzoned by the rural
element. Willnauer stated they don't automatically go to an area that's had zoning changes.
He has been aware of it. Value changes are occurring. When they see a situation occur in a
neighborhood, he will apply the situation to all the properties in the neighborhood.
However, it's very site specific. The Assessor's Office may value a property at less than
what a property owner thinks it should have, so there wouldn't be much change to the
assessed value.
Mann asked about the County's geographic information system (GIS) being available
online. Willnauer stated the GIS is not integrated with the property access database.
Mann asked if they should press the Executive to make it happen. Willnauer stated
he wouldn't mind it. However, it's not the County's highest priority.
Mann stated Clark County parcel information includes data about suspected critical
areas, links to the codes that govern development on the property, and a lot of other
features. Willnauer stated Whatcom County's system has that capability, but it requires a
project from the Information Technology (IT) Division for implementation.
Mann stated he would like the Planning Department to have more GIS staff.
Willnauer stated his office maintains that parcel layer. To get the GIS data to where it is
today, he absorbed the GIS function within his existing staff. He is a proponent of the value
of GIS, and Whatcom County is insufficient and missing a lot of application that other
counties routinely use. It's all associated with an effective GIS. It requires an overall
commitment on the part of the County. Skagit County made a costly but effective
determination to put resources into their GIS. It has paid off for them. That decision hasn't
occurred here.
Mann asked if the new Assessor /Treasurer system is robust enough to accommodate
such a commitment in the future. Willnauer stated it is. Now, they are maintaining the GIS
parcel layer in a standalone environment on their own. He is selling it to everyone in the
public who wants to use it, such as real estate agencies, natural resource planners, and
many others. Everyone is buying up these GIS from the County. He maintains the parcel
layer and a connectivity to the assessment information. The County charges its cost, and
the cost is in the unified fee schedule.
Mann stated the City of Bellingham's CityIQ system is accessible by anyone on the
internet. The County system isn't like that. He asked what is different and why it's not
available to the public. Willnauer stated the County isn't making the information available
in that environment.
Mann asked if there is no legal reason the County couldn't do that. Willnauer stated
there is not. The City has a good operating GIS. They also rely on his office. His
information is flowing directly to the City, and the City is building on top of it. His
information flows also into the County, but the County is not building much on it. That's the
difference.
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ORDINANCE AMENDING THE WHATCOM COUNTY CODE TO ALLOW
AGRICULTURAL SLAUGHTERING FACILITIES IN THE AGRICULTURE ZONING
DISTRICT (AB2012 -300)
(Clerk's Note: Discussion continued from earlier in the meeting.)
Mark Personius, Planning and Development Services Department, gave an update on
the slaughterhouse ordinance. The proposed ordinance will be in committee on March 12.
The committee will recommend one revised ordinance to go to Introduction on March 12.
ADJOURN
The meeting adjourned at 4:37 p.m.
ATTEST:
WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Please contact the Council Office to obtain an
official, signed copy:
360- 676 -6690 or council &o.w hatcom .wa.us
Planning and Development Committee, 2/26/2013, Page 9