The opinion
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Property Tax
JERRY LINSTROM, )
)
Plaintiff, ) TC-MD 220086R
)
v. )
)
LINCOLN COUNTY ASSESSOR, )
)
Defendant. ) DECISION
Plaintiff appealed Defendant’s Board of Property Tax Appeals (BOPTA) Real Property
Order, dated February 17, 2022, for the 2021-22 tax year. A remote trial was held on September
22 and September 23, 2022, via WebEx. Tom Linstrom appeared as Plaintiff’s representative
and testified on behalf of Plaintiff. Jerry Linstrom testified his own behalf. Ric Becker
(Becker), certified residential licensed appraiser, testified on behalf of Plaintiff. Peter Burch
(Burch) appeared and testified on behalf of Defendant. Plaintiff’s Exhibits 1 to 5, 7, 11, 18, 19,
and 35 (pages 2 to 21) and Defendant’s Exhibits A to Z were admitted into evidence.1
I. STATEMENT OF FACTS
The subject property, identified as Account R61258, is a narrow 5,028 square foot
riverfront parcel along the Siletz River near Highway 101, Lincoln City, and Gleneden Beach.2
Plaintiff purchased the subject property for $65,000. See Linstrom I, 2018 WL 6077843 at *5.
Plaintiff challenges Defendant’s BOPTA Order, which found the real market value of the subject
1
Some of Plaintiff’s exhibits were renumbered during trial due to labeling errors. An updated version of
Exhibit 7 was admitted only to the extent it supplemented improperly redacted pages on the original version, but not
for pages that were updated for purposes unrelated to the redactions because the new version of the exhibit was not
timely exchanged.
2
“The subject property was originally two separate lots, tax lot 301 and tax lot 501, which were combined
into a single tax lot, 301, as of the 2016-17 tax year.” Linstrom v. Lincoln Cty. Assessor, TC-MD 180084N, WL
6077843 at *1 (Or Tax M Div Nov 16, 2018) (Linstrom I).
DECISION TC-MD 220086R 1
property at $72,130. Specifically, Plaintiff challenges the buildability of the lot, its potential for
a septic system, the square footage and value of a boat ramp and dock, the value of a shed, and
Defendant’s classification of the property as residential. Although Plaintiff has not applied for
permits, the court is persuaded by the evidence that the lot is not buildable and would not qualify
for a septic permit.3
A. Plaintiff’s Evidence
Becker testified he has been a certified licensed appraiser for 34 years. He prepared an
appraisal of the subject property, as of June 6, 2022, that concluded the market value was
$49,000. He did not make adjustments for the appraisal date being 17 months after the January
1, 2021, assessment date because his assignment did not include performing a retrospective
appraisal. He opined that the market for a riverfront property in Lincoln County that is
unbuildable and without the ability to get septic, has remained flat over several years. However,
Becker did apply an adjustment for time of sale on the comparable properties in the amount of
eight percent per year, to the date of June 6, 2022, based on “a matched pairing of Sales #1 and
#2[.]” (Ex 7 at 8). Becker testified that he also prepared an appraisal of the subject property in
2019, which had a concluded value almost identical to his June 2022 appraisal.4
Becker relied on the sales comparison approach to value after concluding that the income
and cost approach were inappropriate for the type of property under consideration. Becker
3
This finding is in accordance with prior cases regarding the subject property: Linstrom I, 2018 WL
6077843; Linstrom v. Dept. of Rev., 24 OTR 223 (2020) (Linstrom II); Linstrom v. Lincoln Cty. Assessor, TC-MD
200147G, WL 871211 (Or Tax M Div Mar 9, 2021) (Linstrom III).
4
Plaintiff did not submit the appraisal Becker prepared in 2019 as evidence in this case and Becker was
unable to recall specifics of his analysis. However, in Linstrom II, this court considered two appraisals of the
subject property completed by Becker: one for the 2017-18 tax year valuing the subject property at $32,000, as of
February 4, 2018, and one for the 2018-19 tax year valuing the subject property at $43,000, as of February 4, 2019.
Linstrom II, 24 OTR at 232-33.
DECISION TC-MD 220086R 2
selected nine comparable properties. However, he deemed the first three as most relevant and
the remaining comparable properties as successively less persuasive. (See Ex 7 at 4-7.)
Comparable 1 is located 8.9 miles from the subject property, sits on the Salmon River, and sold
for $55,000 on April 15, 2022. Becker adjusted the value down by $12,500 for the site area, up
by $6,500 for lack of a shed and dock, and made no adjustments for the time of sale. He
concluded an indicated value for Comparable 1 was $49,500. Comparable 2 is located 9.2 miles
from the subject property, sits on the Salmon River, and sold for $43,500 on June 10, 2019.
Becker adjusted the value up by $10,500 for time of sale, $6,500 for no shed or dock, and down
by $16,000 based on the site size, for an indicated value of $45,000. Comparable 3 is 41.54
miles from the subject property, sits on the Wilson River, and sold for $50,000 on July 30, 2020.
Becker adjusted the value up by $8,000 for time of sale, $6,500 for no shed or dock, $7,500 for
“electrical available” but no water, and down by $24,500 for site size. The total indicated value
was adjusted to $47,500.
On the assessment date, the subject property was improved with a floating dock and ramp
totaling 1,321 square feet and a multi-purpose shed with a covered porch totaling 152 square
feet. (Ex B at 3.) Plaintiff disputes these measurements because some of the dock boards were
removed, and the railings moved inward for handicapped accessibility. Tom Linstrom testified
that he measured the ramp and dock intentionally disregarding the extra space beyond the
railings and eliminating square footage where boards had been removed. On inspection, Becker
measured the dock at 21 by 26 feet, resulting in 546 square feet of usable area. Although Becker
did measure the dock, he testified that the actual square footage was not significant because the
age and poor condition of the dock made its value negligible. Becker contacted individuals from
Marshall & Swift and worked through an estimate cost of the dock, ramp, and shed as new, and
DECISION TC-MD 220086R 3
depreciated those costs for age and condition. Becker opined the combined value of the items
was $6,500.
Using the Marshall & Swift valuation program to estimate the value of the dock alone,
Becker multiplied the total square footage of the dock by $57 per square foot, and reduced the
value by 83.6 percent for depreciation, resulting in a value of $4,978. However, he found that
the dock was built before the current records were first maintained, so he “conservatively”
reduced the value down from $4,978 to $3,000, and then increased it by $1,500 for the wood
ramp, for a total dock value of $4,500. He added $2,000 to that value for the shed and the
property fence. (Ex 7 at 10.)
B. Defendant’s Evidence
Burch testified he is Property Appraiser II and has worked for Defendant for three years.
He previously worked in residential construction for about 18 years. He prepared a retrospective
opinion of value of the subject property as of January 1, 2021. (See Exs C-I.) Burch selected
five comparable sales to value the subject property. (See Ex G.)
Comparable 1 is located 3.1 miles from the subject property, sits on the Siletz River, and
sold for $125,000 on September 19, 2019. The property has an illegal septic system and is likely
unbuildable. Burch adjusted for site size (-$8,493), shed size (-$2,152), a porch ($1,932), a fence
($4,799), and because the time of sale was the three and a half months before the assessment date
($28,406). Comparable 2 is located 11.06 miles from the subject property, sits on the Siletz
River, and sold for $55,000 on October 6, 2018. Burch adjusted for site size (-$2,279), a dock
($26,151), shed ($2,800), porch ($1,932), fence ($4,799), and for the sale date ($22,498).
Comparable 3 is located 43.9 miles from the subject property, sits on the Alsea River, and sold
for $99,900 on December 17, 2020. Burch adjusted for site size (-$51,493), time of sale
DECISION TC-MD 220086R 4
($1,513), electricity available at the street ($4,000), no water ($10,900), and dock, shed, porch,
and fence in the same amounts as Comparable 2. Comparable 4 is located 7.9 miles from the
subject property, sits on the Siletz River, and sold for $264,900 on March 18, 2021. Burch
adjusted for site size (-$205,356), time of sale (-$12,040), and no dock, shed, porch, or fence in
the same amounts as Comparable 2. He also adjusted for electricity available at the street and no
suitable well site in the same amounts as Comparable 3. Comparable 5 is located 8.4 miles from
the subject property, sits on the Siletz River, and sold for $125,000 on June 4, 2021. Burch
adjusted for site size (-$15,615), time of sale (-$9,469), and dock, shed, porch, fence, concrete,
and deck in the amounts of $18,306, $187, -$2,362, $4,799, -$166, and -$1,683, respectively. He
also made a negative adjustment of $11,000 for a septic system.
Burch analyzed the boat dock, ramp, shed, and fence using the Marshall & Swift
valuation program. He found the price of the dock and ramp, deducted for the missing boards by
assuming the dock was 75 percent complete, and depreciated for age by 35 percent.
Burch testified that he based his adjustments for time of sale on Defendant’s self-titled
Double Sales Time Trend Study. (See Ex N.) Properties in the time study were all in the same
classification as the subject property and had been sold twice in a short period of time. He
testified that he could not determine whether some of the properties in the time study had
improvements and/or a septic system. Based on the data in the time study, Burch found that
prices for properties in the same classification as the subject property appreciated by 0.973
percent per month during 2019, 1.899 percent per month during 2020, and 1.515 percent per
month during 2021. (Id.)
Burch concluded that the value of the subject property as of January 1, 2021, using the
sales comparison approach was $102,500. (Ex G at 8.) He found the value of the subject
DECISION TC-MD 220086R 5
property using the cost approach was $103,160 and reconciled the values to arrive at his
conclusion of value at $102,830.
II. ANALYSIS
The issue before the court is the real market value of the subject property for the 2021-22
tax year. As the party seeking affirmative relief, Plaintiff bears the burden of proof and must
establish his case by a preponderance of the evidence. See ORS 305.427. A “[p]reponderance of
the evidence means the greater weight of evidence, the more convincing evidence.” Feves v.
Dept. of Rev., 4 OTR 302, 312 (1971).
“Real market value is the standard used throughout the ad valorem statutes except for
special assessments.” Richardson v. Clackamas Cty. Assessor, TC-MD 020869D, WL 21263620
at *2 (Or Tax M Div Mar 26, 2003) (citations omitted). Real market value is defined by ORS
308.205(1),5 which states:
“Real market value of all property, real and personal, means the amount in cash
that could reasonably be expected to be paid by an informed buyer to an informed
seller, each acting without compulsion in an arm’s-length transaction occurring as
of the assessment date for the tax year.”
The assessment date for the 2021-22 tax year is January 1, 2021. See ORS 308.007; see also
ORS 308.210. The real market value of property “shall be determined by methods and
procedures in accordance with rules adopted by the Department of Revenue[.]” ORS
308.205(2). The three approaches to value that must be considered are: (1) the cost approach; (2)
the sales comparison approach; and (3) the income approach. OAR 150-308-0240(2)(a).
Although all three approaches must be considered, all three approaches may not be applicable in
///
5
The court’s references to the Oregon Revised Statutes are to 2019.
DECISION TC-MD 220086R 6
a given case. Id. Here, both parties primarily relied on the sales comparison approach, although
they also considered the cost approach with respect to the boat ramp, dock, and shed.
For the sales comparison approach, the “court looks for arm’s length sale transactions of
property similar in size, quality, age and location” to the subject property. Richardson, 2003 WL
21263620 at *3. “Competent evidence includes appraisal reports and sales adjusted for time,
location, size, quality, and other distinguishing differences, and competent testimony from
licensed professionals such as appraisers, real estate agents and licensed brokers.” Yarbrough v.
Dept. of Rev., 21 OTR 40, 44 (2012).
Plaintiff relies on Becker’s appraisal that valued the subject property at $49,000 as of
June 6, 2022. This is an obvious error because the assessment date is January 1, 2021—17
months before the effective date of Becker’s appraisal. The appraisal report does not account for
the time difference correctly. Instead, Becker used a time trend factor of eight percent based on
a sample size of only two properties, Comparable properties 1 and 2, and then applied them to
the date of June 6, 2022, rather than the assessment date. Plaintiff and Becker should have
anticipated this problem because a recent decision by this court, entered on September 24, 2020,
specifically mentioned Becker’s lack of adjustments for time of sale as a problem for Plaintiff.
See Linstrom II, 24 OTR at 228.
Upon realization of this critical error at trial, Plaintiff attempted to rehabilitate it by
asking Becker whether he remembered preparing the 2019 appraisal he prepared in connection
with Linstrom II. Becker could not recall the specifics of the appraisal but did remember his
conclusion that it was about the same as his current appraisal. Plaintiff did not offer the 2019
appraisal into evidence. However, as noted in footnote four, the court in Linstrom II identified
two appraisal reports submitted by Becker that show a dramatic increase in value from 2018 to
DECISION TC-MD 220086R 7
2019, which undercuts his testimony that the market has remined “flat.” Plaintiff did not present
persuasive evidence that market remained flat prior to, or after, the assessment date.
In Yarbrough, a taxpayer presented an appraisal for a property with an effective date of
June 30, 2011. Yarbrough, 21 OTR at 41. However, the assessment date was January 1, 2010.
Id. at 42. The taxpayer did not make a time adjustment and failed to “provide any meaningful
explanation for the gap in time.” Id. at 45. Thus, the court found the taxpayer’s appraisal in that
case as unreliable. The gap identified in Yarbrough is near the exact same length in time as the
17-month period between the assessment date and effective date of Becker’s appraisal in this
case. The court concludes that Becker’s failure to make appropriate time adjustments renders his
report as unreliable. Consequently, Plaintiff has failed to meet his burden of proof on the value
of the subject property as of the assessment date.
Defendant’s conclusion of value is based on the testimony and valuation report prepared
by Burch, in which he analyzed the subject property using the sales comparison approach
supplemented with the cost approach for the boat ramp, dock, and shed. Burch selected five
comparable sales. However, he treated Comparable 1 as an outlier. Burch’s chosen comparable
properties are primarily located on the same river, unbuildable, and do not have legal septic
systems. Plaintiff’s primary challenges to Burch’s report are twofold: Plaintiff first takes issue
with Burch’s time adjustments based on sale dates, and second, with the square footage and
value of the boat dock and ramp.
With regard to Defendant’s time adjustments, Plaintiff specifically takes issue with
Defendant’s data, as it uses a property classification that may include sites with homes and septic
systems, which may have significantly different rates of appreciation than the subject property—
a recreational lot. This court shares Plaintiff’s concerns and its questioning of Burch at trial
DECISION TC-MD 220086R 8
reflected that point. However, this exact argument was already litigated in Linstrom II. A quote
from that case is instructive:
“As to the time-based adjustments, the court starts with background. Each
year, an assessor is required to conduct a ‘ratio study’ based on property sales
data the assessor collects during the calendar year. ORS 309.200(2). Among
other things, the ratio study estimates the ‘percentage relationship between the
total prior year’s real market value of each class of taxable property on the prior
assessment roll and the total current real market value of the same properties in
each class on the current assessment roll.’ Oregon Administrative Rule (‘OAR’)
150-309-0230(12)(a). This year-to-year comparison is a tool that allows an
assessor to annually estimate the value of properties as of the prescribed time of
1:00 a.m. on January 1 based on trends apparent in the study, as opposed to
viewing and studying each property individually at that hour. See ORS
308.210(1) (requiring assessor to record value ‘as of’ that date and time). A
separate ratio study is required for each property class.
“* * * Because an assessor prepares a separate ratio study for each class of
property, it is theoretically possible that [the county’s] selection of an incorrect
class for the Property may have led to an incorrect percentage value change for
trending purposes and thus to an incorrect value indicator for each comparable
property. However, Plaintiff put forward no evidence that any misclassification
distorted [the county’s] value indicator for any comparable property.”
Linstrom II, 24 OTR at 227-28.
The argument and the presentation in this case mirror those in Linstrom II. Burch used a
double sale study using a class of property that could potentially skew the results. Yet Plaintiff
chose not to reform his approach and put forward affirmative evidence that “any
misclassification distorted” the values, as the court stated in Linstrom II. Linstrom II, 24 OTR at
228. Concerns and criticisms about Defendant’s evidence are not enough. The court has long
held “it is not enough for a taxpayer to criticize a county’s position. Taxpayers must provide
competent evidence of the [real market value] of their property.” Woods v. Dept. of Rev., 16
OTR 56, 59 (2002).
As to Plaintiff’s challenge to the size of the dock and ramp, the court deems Defendant’s
approach more reasonable. Removing boards from a dock and relocating railings for
DECISION TC-MD 220086R 9
handicapped accessibility does not change the actual measurements of the dock and ramp.
Defendant’s approach of reducing the percentage completion of the dock is more persuasive.
In his final reconciliation, Burch averages the values he found using the cost and sales
comparison approaches. However, the court finds the cost approach is useful only the extent it
assists in making adjustments within the sales comparison approach. Thus, the court rejects
Defendant’s reconciliation and finds the value of the subject property by the sales comparison
approach, which concluded a value of $102,500.
III. CONCLUSION
Plaintiff’s appraisal contained errors, which render it unreliable. Defendant’s appraisal of
the property, while imperfect, is the best evidence of value that was presented to the court. Thus,
the court finds the real market value as of the assessment date was $102,500. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal is denied.
IT IS FURTHER DECIDED that the real market value of the subject property for the
2020-21 tax year is $102,500.
Dated this _____ day of April 2023.
RICHARD DAVIS
MAGISTRATE
If you want to appeal this Decision, file a complaint in the Regular Division of
the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563;
or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.
Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Richard Davis and entered on April 10,
2023.
DECISION TC-MD 220086R 10