The Ocean View Town Council voted unanimously this week to return to having a private company assess property values for property-tax purposes, following an unwelcome switch to using the Sussex County assessed values for taxes in the current, 2019 fiscal year.
“At the Dec. 12, 2017, town council meeting, the town council voted to switch to the County assessed values in order to save the $225,000 spent every five years,” said Mayor Walter Curran of the cost of the private assessments.
“Sussex County uses the base year of 1974 assessed values for setting tax rates. The tax rate is set based on 50 percent of the 1974 assessed values. Sussex County evaluates a property value when it first comes into being on the County property rolls. Today, a new property is assessed, then the value is ‘rolled back’ to what it would have been in 1974, then 50 percent of that is calculated. The tax rate is then applied to that property.”
Curran said the County does not reevaluate a property when it is resold but does reevaluate a property when permitted improvements are made.
While the council’s original plan was to raise everyone’s taxes by 50 percent, Curran said it did not happen “because of the large variances in the Sussex County system,” which resulted in widely disparate tax increases across the town.
Returning to the Town’s old way of tax assessments will take time, said Curran. He said they hope to hire a new assessor no later than the end of October of 2018, with new assessed values going into effect on May 1, 2019 — the start of the 2020 fiscal year.
“After analyzing the master list of last year’s taxpayers and this years’ taxpayers, we know exactly who paid the anticipated 50 percent increase, who paid more and who paid less. What happened wasn’t fair. We have already acknowledged that fact.”
While the Town did look into “refunding” tax monies paid in excess of the planned 50 percent increase, Curran said it would violate both the U.S. and State Constitutions.
Curran added that the 2019-fiscal-year tax bills “are legitimate and are payable in full as of Aug. 21, 2018.”
“Anyone not paying the full tax bill is subject to all the penalties and interest charges under the town charter, Section 3.113,” he said. “The Town can enforce a lien against the property if taxes are unpaid. Also, under the ‘Clean Hands Doctrine,’ the Town has the right to refuse to issue any permits, licenses, etc., to the delinquent party.”
The council voted 4-0, with Councilman Bill Olsen absent, to return to its former system of assessments.
A private company will conduct a full reassessment of Town properties once every five years, with partial assessments in the subsequent four years for properties that are new to the Town or have been permitted for improvements that year. A tax rate will be set by the council based on what the Town’s monetary requirements are for the fiscal year.
“In my opinion, by doing another full assessment at this point, and then potentially trying to tax again at 50 percent — we’re going to reproduce exactly what happened this year,” said Councilman Berton Reynolds, noting his concern.
“What we’re doing now is doing the reassessment of the town, and then when it comes time, as we get into the budget, we look at what our needs are, and that’s when it’s decided what the tax rate will be for next year,” responded Curran.
“We’re stuck with what we have now. What we do next year will be decided during next year’s budget process… This process simply gets us out of the County system, comes up with a clean assessment across the board. That way we have a whole new tool to work with. How much we tax, that is a decision of the council that is separate from this.”
Reynolds, again, stated that he does not want to reproduce the tax issues the Town went through in this current fiscal year.
“I’ll table it for now, but I think more discussion needs to be had.”
Property owner Chic Stearrett asked if there would be a way for property owners to receive a credit for the monies paid in taxes over the planned 50 percent increase to be used toward the 2020-fiscal-year tax bills.
Curran reiterated that such a credit would be in violation of the Delaware Constitution.
“I’ve got to say, I’m really, really stunned by what you’ve all presented tonight,” said resident Kent Liddle. “I find it unconscionable that you’re going to sit here and tell us that those of us who were taxed 70, 80, 100, 120 percent have to pay it — it’s ridiculous.”
Resident Liz Reynolds tried to offer clarification, noting that the council had admitted they made a mistake.
“It’s the tax per capita you’re paying… We can’t give a credit to Mr. Smith if his taxes were here, because the tax base is the tax base. You can’t charge one person a lower tax base than you did another person.”
Town Solicitor Dennis Schrader agreed with Reynolds’ explanation.
“The tax rate is uniform throughout the entire town. Everyone is paying the same tax rate. But when you apply that tax rate to different assessments, you get different results,” he said. “A lot of people have complicated the issue by saying, ‘We’re going to have a 50 percent tax increase.’ Well, the rate did increase — to generate 50 percent more revenue.
“But when you change the assessments, the way it portions out between the number of properties assessed, then the way people pay in relation to their neighbors, changes.”
Schrader added that residents should keep in mind that the County assessments the property owners are upset with are already in effect, and the property owners are already paying County taxes based upon those assessments.
Curran noted that, by law, the Town’s budget has to be revenue-neutral.
“If you give people a refund, then you are, in fact, charging a different tax rate — am I correct?” asked Reynolds.
“Yes,” said Curran.
Property owner Ann Scolari asked the council what they would be doing with the “extra money” they received from the tax increase.
“When your employees come to you for a wish list, you fill it. I’ve watched you do it over and over. You hire people all the time. This Town used to be run by one woman and one cop,” she said. “What are you going to do with all the extra money?”
“We did not get extra money: We came out revenue-neutral,” emphasized Curran.
Prior to the council voting on returning to five-year private assessments, a number of property owners spoke out, expressing their upset regarding the year’s taxes.
John Reddington, a member of the Bear Trap community’s Board of Directors, submitted a letter to the council stating that’s group upset with the fiscal year’s taxes.
“The adopted plan was not properly vetted, is fatally flawed and does not provide fairness to all. Using Town tax records, 80 homes in the Village of Bear Trap Dunes were randomly reviewed and, in every case, the tax increase was greater than 50 percent. In fact, in most cases, it was anywhere from 80 to 110 percent…
“We expect the tax issue will be corrected quickly so that, in the end, it is fair to all.”
Steve Cobb said his property was one of 33 within the Town that did not see an increase in its taxes.
“Mine did not go up, and that’s not fair. I’m willing to pay today, tomorrow — just tell me who to make it out to,” he said. “That needs to be in your plan, because we need to pay our equal share.”
Residents speak out on special-use exception
During Tuesday’s meeting, there was also a first reading of and a public hearing on an ordinance that would allow for a miniature-golf course within the Town’s GB-1 and GB-2 districts, through a special-use exception.
“I do have problems with even putting this ordinance out there,” said Woodland Avenue resident Lisa McIntyre. I’ve been a resident here for eight and a half years now. I consider Ocean View a residential community, not a resort community. We are not Bethany Beach… I see no need or want for a miniature-golf course in Ocean View.”
Trisha Supik said she’s concerned what a miniature-golf course could do to the already congested Route 26.
George Walter, who said he’s been a resident since 1972, recalled a miniature-golf course at nearby Salt Pond on Cedar Neck Road back in the day.
“It did not have anything that made noise, nothing that twirled. It did not make any noise,” he said. “The people who were there were families coming up. We may not be a resort are,a but I think we can all agree we get a lot more company during the summer, and they want to do things…
“Right now, I’m riding down 26 to go to the pirate golf course in Bethany Beach. I’m sure so are a lot of other people with grandchild or people who want to play miniature golf. I think if we really look at the type of course… to me, miniature golf courses are something very needed in this area, especially with the summer company we get.”
Woodland Avenue resident Rebecca Adams, who along with her husband requested the Town consider allowing for a miniature-golf course as a special-use exception, said her family feels bringing the business to the town would be beneficial.
A second reading of the ordinance will be held at the town’s council’s Oct. 9 meeting.
By Maria Counts