Submitted: December 24, 2014
Upon Appellant's Appeal from the Decision of the Commissioners of the City of Rehoboth Beach Sitting as the Court of Appeals. DENIED.
Seth L. Thompson, Sergovic, Carmean & Weidman, Attorney for Appellant
Stephen E. Smith, Baird Mandalas Brockstedt, LLC, Attorney for Appellee
Richard F. Stokes, Judge
Presently before the Court, Appellants are appealing a decision rendered by the Commissioners of the City of Rehoboth Beach ("City") regarding a tax assessment of the subject property. Appellants request judicial relief resulting in the entry of an order declaring the assessment of the subject property void. Further, Appellants petition this Court to utilize the assessment conducted by a private assessor as opposed to permitting the City to conduct a subsequent reassessment of the property. For the reasons which follow, the assessment is void as a matter of law and the remaining issues are subsequently mooted.
FACTS AND PROCEDURAL POSTURE
City hired Property Tax Associates of Delaware Valuations ("PTA/DelVal") to evaluate the tax burdens present in Rehoboth Beach. City sought to achieve a more accurate and equitable distribution of the tax burden among the current property owners. City initiated a City-wide assessment even though the Charter amendment enabling the re-assessment was not signed by the Governor; House Bill 313 of the 147th General Assembly was not signed into law until August 1, 2014. Initially, City believed the Charter amendment was effective months prior to August of 2014. Based on this erroneous belief, City commenced the assessment.
PTA/DelVal created a computer valuation model by undertaking a comprehensive re-assessment of properties in the area. City proceeded to evaluate the property according to the Charter amendment, by allowing a Tax Assessor as opposed to a Board of Assessment, value the subject property. Based on this model, the Appellant's property assessment rose from $25, 250 to 1.53 million.
Appellant filed an appeal with City following an informal appeal process. In the formal appeal, a determination as to whether the subject property was substantially overvalued was sought. City reduced the assessed value of the property based on a reduction in lot size; however, Appellants continue to dispute the assessment value of the property.
Appellant represented the subject property should be valued at $1.32 million based on an expert's computation. This figure is derived from utilizing an alternative discount rate of eighty-five percent, as opposed to the City adopted rate of fifty percent, to apply to land values with square footage in excess of 5, 000 feet.
At this juncture, City concedes the assessment was contrary to the Charter because City began the tax assessment via a Tax Assessor, as opposed to a Board of Assessment, prior to the signature of the Governor. Also, City seeks to void the current re-assessment based on the above-mentioned failure to comply with the law. Appellant shares this position and seeks to set aside the assessment. However, Appellant seeks to replace both the recent assessment and the previous assessment with a new assessment as appraised by their expert, Mr. Piper. Mr. Piper's assessment values the subject property at $1.32 million. Further, Appellant contends this amount should not be subject to re-assessment under a supplemental ...