Representative Buehler;
copies to: Bend City Manager, Bend City Mayor, Two Bend City Council Members, others.....
copies to: Bend City Manager, Bend City Mayor, Two Bend City Council Members, others.....
The Deschutes County Assessor reports at this link that within the city of Bend (County Code Area 101) there are 87 acres of Designated Forestland. Investigating this situation reveals official reasons for this designation applying to specific properties totaling 43.4 acres of Designated Forestland within the city. (Additional properties are unknown) It also reveals substantial inappropriate property tax avoidance that deserves attention and correction to assure that all citizens of the city pay equitable property taxes that support both the City of Bend and Deschutes County.
I ask that you review this matter and introduce appropriate legislation for its correction. Specifically the exclusion of property within a city from eligibility for Designated Forestland assessment that has the intended purpose of protecting forestland from the pressures of urban growth. This following analysis is related to the city of Bend and Designated Forestland within the city limits. In accordance with applicable OAR and ORS this situation may exist in any Oregon city.
I submit this analysis for your review of the fairness of a few Bend property owners taking advantage of a tax assessment that was never the intention of legislation to extend into cities. It is a tax avoidance that should not apply to any city residential area. It promotes large acreage city tax lots with extreme reduction in property taxes. A 2 acre minimum is required in addition to a residence, if any. A 3 acre homesite property in Bend is a luxury of the affluent. Fair and fine if they pay the same property tax assessments as the rest of the city residents. If their true intent is to grow harvest timber on their city residential property for commercial sale they should be free to do that or any other permissible residential zone property use without an extremely substantial inappropriate tax reduction incentive.
In your current position you represent all citizens of Bend and in the future perhaps all citizens of Oregon. I look forward to your reply stating a position on Designated Foresland assessment for property in the city of Bend or any other city in Oregon and the introduction or support of legislation to prohibit this assessment for residential zoned city properties. What owners of these properties do not pay in county property taxes either the rest of county residents make up as an addition to their taxes or, depending on how the accounting is done, the county and Bend get that much less in tax revenue. Either way it is private self interest gain at public expense over the long period of time it takes to grow a tree to maturity for commercial harvest.
As a citizen voter I expect my representative, senator and governor to always support public interest in the face of blatant narrow and self interest attempts to gain personal benefit at public expense.
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Bend, Oregon
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Designated Forestland Analysis -
Twelve of a total of the 36 properties at this link are located on Bachelor View Rd, a residential zoned neighborhood in Bend, have a total of 43.4 acres of Designated Forestland. In accordance with this Department of Revenue link the acreage is assigned a property tax assessment value of $77.07 per acre 2017-18 at this link Owners of these properties are entitled to this Designated Forestland property tax assessment by submission and assessor approval of this Application for Designation as Forestland form 150.309-024 (rev. 03/17) as required by this link: ORS 321.358
Among all the requirements of this Application the applicant must own all least 2 contiguous acres of land and answer this question: “Is the predominant purpose of this land to grow and harvest trees of a marketable species?” If the answer is “no" the application is not approved. When approved by the assessor the applicant’s property tax assessment in accordance with Oregon Forestland Values for 2017 -2018 (Eastern Oregon) are an MSAV of $77.07 per acre regardless of weather the land is located in the most remote part of Eastern Oregon or in a residential neighborhood with expensive residences in Bend.
The "Forestland Owner" signs this Application Declaration:
"As owner of the above described land, I indicate by my signature that I am aware of the potential tax liability involved when the land ceases to be designated forestland. I declare under the penalties of false swearing (ORS 305.990(4) that I have examined this application (and any accompanying documents), and to the best of my knowledge, it is true, correct and complete.”
When the Application is approved there is no requirement that any trees already exist on the property, only the required management plan for planting and growing them to maturity for market sale. The assessment carries a tax liability of 5 years at the property tax rate that the property would otherwise be taxed. That liability to be invoked for reasons specified in the Application.
The following is a single example of the property tax implications of a Designated Forestland assessment on three residential zoned bare land lots under the same owner located on Bachelor View Rd. in Bend. Three lots on Bachelor View Rd. under the same ownership.
Property Acres RMV Assessed Tax -2017-18 Designated Forestland since at least
https://dial.deschutes.org/Real/Index/117545 2.12 $807,520 $2,163.00 $52.30 1993
https://dial.deschutes.org/Real/Index/241568 3.23 $796,430 $248.00 $22.60 2004
https://dial.deschutes.org/Real/Index/241569 2.89 $796,430 $222.00 $22.19 2004
Totals: 8.24 $2,400,380 $2,633.00 $97.11
This bare land contiguous property on Bachelor View Rd. does not have an associated Designated Forestland assessment of $77.07 per acre but is assessed at a probable representative normal assessment value for properties in this area without Designated Forestland assessment rates.
https://dial.deschutes.org/Real/Index/244200 .99 acres, RMV: $280,610, Assessed Value: $141,200 (50% of RMV) Tax 2017-18: $2,190.95.
If the three example properties were assessed approximately as the above contiguous property then their assessed value would be estimated at about $1,200,000.00 (50% of RMV). Applying tax at $15.00 per thousand would would result in a 2017-18 county property tax of $18,000.00 instead of $97.11. Note that the three example properties in the city of Bend have been taxed at the Designated Forestland rate since at least 1993 and 2004.
The Designated Forestland assessment example of 3 properties gives an astounding property tax reduction. The basis for this assessment of $77.07 per acre is that the owner has declared under false penalties of swearing and intent to grow timber for commercial sale. These are overhead views of the same properties displaying the degree of progress toward eventual timber harvest for sale and profit at maturity.
The real profit of the Designated Forestland intent to grow trees is not for timber but for more than 200,000 in tax savings over the period of ownership!
The following is an analysis of the 9 remaining 12 properties on Bachelor View Rd. have Designated Forestland (DF) acreage assessed at $77.07 per acre. It is to be noted that unlike the straight forward assessment of bare property with DF, properties with a dwelling have a combine assessment of the DF acres at $77.07, with dwelling acreage and residence assessment at normal rates. The degree of reduction in property tax is not as readily evident due to the combining of taxes but is apparent in the disparity between RMV and Assessed value.
DF Residence RMV Total Assessed % Av Tax 2017-18
Property Acres Acres Land Structure RMV Value of RMV
https://dial.deschutes.org/Real/Index/117550 6.9 1.09 $765,180 $701,120 $1,466,300 $551,031 37.6% $8,616.38
https://dial.deschutes.org/Real/Index/117551 4.36 1 $1,221,720 $784,000 $2,005,720 $671,895 33.5% $10.491.77
https://dial.deschutes.org/Real/Index/117552 4.81 1 $964,680 $368.930 $1,333,610 $410,330 30.1% $6,433.17
https://dial.deschutes.org/Real/Index/117569 3.72 1 (lot) $739,380 $0 $739,380 $136,396 18.4% $2,135.16
https://dial.deschutes.org/Real/Index/162127 2.60 2.4 $697,650 $449,360 $1,147,010 $569,230 49.6% $8,898,078
https://dial.deschutes.org/Real/Index/189042 2.50 1 $129,400 $788,340 $917,740 $694,842 75.7% $10,874.83
https://dial.deschutes.org/Real/Index/200999 1.74 1 $2,030,810 $1,194,440 $3,225,250 $972,034 30.1% $15,148.93 (3.88 acres open space)
https://dial.deschutes.org/Real/Index/205941 5.57 1 $6,300,810 $499,710 $6,800,520 $687,488 10.1% $10,740.43 (6.86 acres open space)
https://dial.deschutes.org/Real/Index/208548 2.96 1 $535,100 $1,458,560 $1,993,650 $989,168 49.6% $15,414.78
Total Designated Forestland acres for all 12 properties is 43.4 acres. They are assessed at $77.07 per acre and would otherwise be assessed at least $200,000 per acre and a rate of about $15 per thousand.
43.4 acres at $77.07 per acre = $3,345.00 X $15 per thousand = $50.17 per year
43.4 acres at $200,000 per acre = $8,680,000.00 X 15 per thousand = $130,200.00 per year
Subsequent to this analysis I have discovered three additional properties in Bend in a residential zoned area on McClain Dr, Bend that have Designated Forestland acreage.
https://dial.deschutes.org/Real/Index/244558 3.58 1 $630,860 $593510 $1,224,370 $534,425 43.6% $8,292.47
https://dial.deschutes.org/Real/Index/169808 1.99 1 $1,327,120 $781,820 $2,108,990 $729,583 35% $11,386.90
Note: fails to qualify for the 2 acre minimum requirement
https://dial.deschutes.org/Real/Index/183021 8.22 0 $493,510 $0 $493,510 $633.00 00.1% $28.
Note the tax history since 1996: https://dial.deschutes.org/Real/TaxInformation/183021
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