Cari Hermacinski’s tax abatement supported by fellow Routt County commissioners
March 15, 2016
Steamboat Springs — The Routt County Board of Commissioners voted 2-0 Tuesday to retroactively grant residential tax status to fellow commissioner Cari Hermacinski and her husband, Mark, on an undeveloped duplex building lot adjacent to the lot where their Old Town home sits at 824 Pahwintah St.
The net result is that, with a lower tax ratio applied to the building lot, the Hermacinskis will save thousands of dollars in property taxes annually and receive a refund of $8,853 against tax bills they paid in 2013, 2014 and 2015.
Hermacinski stepped down and joined her husband at the other side of the meeting table for the hearing that lasted about 30 minutes.
Commissioners Tim Corrigan and Doug Monger agreed with County Assessor Gary Peterson that the Hermacinskis' use of the unbuilt lot — they take care of landscaping on it, maintain a volleyball court, a shed and a chicken coop — makes it "integral" to their home.
That determination can be the basis for the assessor to apply a tax assessment ratio of 7.9 percent, which has been applied to all residential property in Colorado, instead of the 29 percent applied to all other property, including undeveloped residential lots, since the Gallagher Amendment to the state's constitution was passed in 1982.
County Appraiser Susan Siggson wrote in a report that the Hermacinskis' duplex lot, which wraps around the back of their home, was turned down for residential status in 2008, but when she and Peterson visited it in June 2015, they saw that, in addition to the ongoing use of the property, it was almost completely fenced, and Peterson agreed that a residential tax levy was appropriate in 2015.
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Through an oversight, the taxes weren't reduced as planned last year.
Peterson told the commissioners Tuesday he was reluctant to extend the refund to 2013 and 2014 tax bills without more evidence of how the property was used during those years. He said he has analyzed similar abatement requests in the past and always walks the property himself with an appraiser.
"It's a significant benefit to the property owner that others don't receive," Peterson said. "I think I have an obligation to make sure … this is legitimate. We're careful about granting it."
Peterson said he had no dispute with allowing residential status for 2015, and although he accepted Cari Hermacinski's assurances that the integral use had been ongoing since before 2013, he did not feel confident that aerial photos, which were made available to him to confirm the use of the duplex lot in 2013 and 2014, were of high enough quality to see in sufficient detail as to be definitive.
"Certainly, the volleyball, the chicken coop, there's no doubt it's part of their yard," Peterson said. "But we've never done this retroactively."
He added there is case law generated in Pitkin County that supports retroactively bestowing residential tax status, but the test is that there must be strong evidence there was integral use of the undeveloped parcel in relationship to the parcel the owner keeps a dwelling.
Hermacinski said she had written confirmation from people who have worked on the improvements to the duplex lot, verifying their longevity, including a notarized statement from her landscaping contractor.
“Kyle Pietras has taken care of our yard since 2005, and he’s attesting to the fact that we have landscaped the subject parcel — mowed, weed-whacked and watered,” Hermacinski said. “The shed that’s on the property, we have an affidavit from Brad Williams, who put it up in 2011. The chicken coop was built in 2013 — Joe Russo is my dad,” but he signed too.
Hermacinski presented signed statements from a local landscaper affirming that upkeep had been ongoing and from the builder of her shed in 2011. Her father built the chicken coop, she said, and he, too, signed a statement to that effect.
Records on file at the Routt County Clerk's Office show the difference in taxes on property with residential improvements and unbuilt lots can be significant.
Until last year, the Hermacinskis have been paying higher taxes on the duplex lot — $4,046 in 2014 and $4,192 in 2015 — than they have been paying on their six-bedroom home on its adjacent lot. Taxes on the home were: $3,400 in 2012; $3,125 in 2013; $3,189 in 2014; and $4,584 in 2015.
Noting that he "despises" the rule that results in disproportionately high taxes on undeveloped lots, Monger said he was "comfortable moving forward with years '13 and '14″ with regard to the Hermacinskis' tax abatement, adding, "It's just the right thing to do."
Corrigan said he, too, was ready to accept the "petitioners' evidence" of having used the duplex lot in a way that was integral to their home.
Peterson assured the commissioners they would soon be seeing more abatement hearings similar to the Hermacinskis'.
An international tax service agent, Duff & Phelps, sent letters to all property owners of vacant lots contiguous to residential improvements in Routt County, offering the company’s services in filing abatements for prior years.
At least another dozen are in the pipeline, Peterson said.