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Assessor in fight of his life to save job, prove he’s right

MONTESANO —Assessor Rick Hole appears to be in the fight of his life to keep his job.

Appraisers in the Grays Harbor Assessor’s Office are in full revolt and say that the county is using flawed software spearheaded by Hole. The result, they say, is likely inaccurate appraisals that will be mailed out to residents all over the Harbor — and ultimately could lead to higher taxes for some and difficult budget choices for cities and the county.

The county has used a state grant valued at between $150,000 to $200,000 to design new appraisal software, and it’s not working and never has, according to county programmer Ron Malizia, who calls it a “money pit.”

“The money is gone and we have nothing to show for it,” Malizia said.

County Commissioner Wes Cormier, a former appraiser before he was sworn into public office in January, says he understands his former co-workers’ frustrations and agrees with them.

“The decision is ultimately up to Rick, … but it’s time to stop wasting money and start taking this seriously,” Cormier said.

County Commission Chairman Frank Gordon says he’s so fed up, he’s demanding Hole resign his position so the situation can be fixed. On Tuesday, Gordon issued a demand letter to Hole calling for his resignation “effective immediately.”

Hole said that he received the letter. However, he’s not a department head. He’s an elected official and could completely ignore Gordon’s request.

“I need time to look through the document and I need to get legal counsel’s advice on my next steps here,” Hole said. “I’m here to do what’s right for the county. I can’t comment further on the demand.”

Gordon says he’s had enough.

“The appraisers and staff are hard-working, dedicated people and Rick Hole is having them run in circles,” Gordon said. “They can’t do the job they’ve been hired to do. Rick Hole needs to step down and we need to appoint an interim appraiser that knows the office. People don’t realize how bad things are right now.”

Cormier and Gordon have pressed Hole to change direction, but he won’t budge. Hole says the situation is still fixable and is asking for another $125,000 allocation — the last bit of unbudgeted grant funds that the state Department of Revenue has given to the county to come up with the software the county needs to go from a revaluation cycle of every four years to an annual one.

For the past few weeks, the county commissioners have tabled the issue, although it remains a potential action item on their Monday afternoon agenda.

“I’m trying to get the money to fix the issues with the software,” Hole said. “I’m working with the appraisers. We’re working through the problems — but there are a lot of people mad at me right now.”

The biggest problem lately is that while a consultant has been hired to create this new software, it has allegedly corrupted parts of the existing software that appraisers use to help figure out the values of properties throughout the county.

“The existing appraisal programs and systems have been changed and modified repeated times to the point that it is no longer trustworthy as a tool to deliver property values,” a letter from the appraisers states. “The new mass update program has not been sufficiently tested or shown to be reliable and has been found to be riddled with serious errors.”

The new system “broke the only functioning system we have,” one of the appraisers said last week. “It’s a disaster.”

The Nov. 15 letter is signed by three senior residential appraisers, a residential appraiser, a commercial appraiser and a sales analyst. Only one residential appraiser and one commercial appraiser didn’t sign the letter.

Dan Lindgren, the shop steward for the Assessor’s Office, said that the union wasn’t involved in the letter, however, it was sent to the union, the county commissioners, the Board of Equalization and the state Department of Revenue.

The letter reads almost like a “No Confidence” vote in Hole as an assessor — and the commissioners say it provides the perfect out for anyone in the newly appraised areas of McCleary, Aberdeen, Satsop or the Mary M. Knight School District to appeal their valuations before the county’s Board of Equalization and maybe even win a case that would lower their property values and pay less taxes as a result. If the appraisers won’t defend their own appraised values, who will?

Hole says that the appraisers were used to doing their job one way and weren’t happy when he tried to direct them to change it.

“We, the undersigned, do hereby attest and affirm that we do not and did not, nor were allowed to perform a proper sales analysis to market value for the 2013 revaluation cycle of McCleary, Mary M. Knight, Satsop or Aberdeen school districts,” the letter states.

“We were instructed by the assessor, Rick Hole, to only gather site characteristics and enter them into the database. We were specifically instructed not to appraise the parcels. This is what we were instructed and that is what we accomplished. We, in no way, shape or form, agree to give our professional approval or endorsement to any property values in the above mentioned school district areas, as we were not allowed to perform or assist in developing a proper sales analysis to arrive at a professional opinion of market value.”

Hole says that it may provide an additional defense tool for those not happy with their appraised values, but that appeal boards would consider many other factors, as well.

“It’s not like people just present this letter and they suddenly win their case,” Hole said.

Hole said he’s learned some lessons from all of this and thinks that the process can be improved next year.

“We will do it better next year,” he emphasizes.

DEADLINES STILL NOT MET

The state Department of Revenue issued a scathing criticism of the Assessor’s Office in May of this year with a formal report and recommendations for change.

By state law, the report notes, the assessor must complete inspection and valuation of property by May 31 for all property in the revaluation area — a deadline not met since May of 2007.

Assessor Cherri Rose Konschu was in charge of the office from 2007 to 2010. Assessor Hole took over in January of 2011.

Under Hole, the inspections of property across the Harbor have been the latest they’ve ever been. In 2011, inspections weren’t finished until Nov. 2. And, last year, the inspections didn’t finish until Dec. 2, triggering the review by the state. The main culprit has been lack of staff in the Assessor’s Office, Hole has said.

The state Department of Revenue gave a deadline of Oct. 25 of this year for Hole’s office to meet. The deadline was missed.

The state then relaxed the deadline several more times and, as of Dec. 5, the revaluations still weren’t done.

This past weekend, those in Central Park and commercial property owners in Aberdeen received revaluation notices. The Assessor’s Office was still working on the others, Hole said.

Aberdeen Finance Director Kathryn Skolrood said that the city had to set its property tax levy by the end of the month, per state law, but it made it difficult without knowing what the total revaluations were for the city of Aberdeen.

“We were given a rough estimate that it’d be down by about 10 percent because the residential housing market is down, while the commercial properties are flat,” Skolrood said on Nov. 27. “But that’s just an educated guess. We still don’t have firm numbers.”

Skolrood met with Commissioner Gordon to go over some of her concerns about what was happening in the Assessor’s Office.

“They’ve been really great to work with,” Skolrood said. “I know they’re in a tough situation.”

The city of McCleary is also facing its own tough budget challenges with the mayor proposing layoffs and closures. He wants to do a maintenance and operations levy — but the city can’t even think about those details until the Assessor’s Office finishes its job and people know the total appraised value in the city.

SOFTWARE ISSUES

Once every four years, the appraisers go to all corners of the county to figure out if properties had gone down or up in values. This is called the revaluation process. The Assessor’s Office has broken up the county into four quarters and has been visiting each quarter once a year.

However, the state Legislature passed new laws requiring all counties go to an annual revaluation process. That means the county either needed to hire four times as many appraisers or, the more logical approach, invest in a software package to do statistical mapping of the county. The new requirement has appraisers visiting properties in person every six years while still doing the statistical modeling.

The county has used an in-house software system to help model its existing properties. But the in-house software didn’t have the capability to do the annual adjustments.

That meant the county either needed to buy a system created by professionals or create its own. The decision was entirely Hole’s. Most other counties, including Thurston and Lewis counties, have used the professionally-designed boxed software.

Most appraisers in the Assessor’s Office, including Cormier, wanted a professional system. Hole went with a stand-alone system with hopes that the customization ability would be able to better cater to the county’s needs. A professional system also meant an annual “maintenance fee” that Hole wanted to avoid in order to be budget savvy.

For about 18 months, Hole has worked with consultants he hired to work on developing new software. One of the first consultants was with David Beatty and his consulting firm The Bytes Advisor at a contract not to exceed $36,000, first put in place in July of 2012.

Beatty was a personal friend of Hole’s. Appraisers complained that the job should never have gone to Beatty because of their personal relationship. They had worked together on other projects before when Hole was manager at Ocean Spray, the job he had before becoming the county assessor. Beatty was paid at a rate of $50 per hour. Malizia says that the contract was discontinued after a few months. Beatty didn’t know appraisal software. The county paid him between $10,000 and $15,000. They got hardly anything in return, appraisers in the office said.

“It didn’t work out with David,” Hole said. “I’ve known him a long time and he’s a friend. I wished it would have worked out.”

After Beatty, the county went through several more programming consultants, including one that Gordon says he has contacted the state Auditor’s Office about bringing potential fraud charges on. Gordon said that the consultant, which The Vidette is not naming because he has not been charged with any illegal actions, “wasted at least $6,000.” The consultant used a county computer to do some of the work — and browser history reveals that the consultant visited video game and zombie websites in addition to many social networking sites while he was billing the county $50 per hour for work.

Hole said he had met the consultant previously through a Bible quiz group and he was an acquaintance with him. Hole said he discovered the consultant was looking for a job via a social networking site. Hole said that employees in the Assessor’s Office told him the consultant was wasting time and Hole directed the consultant not to bill for those hours.

Gordon adds, “After all of that happened, the consultant stopped using the county computers and moved to Olympia. We were still using him. He was still being paid — only now we couldn’t monitor him. That’s fraud. That’s illegal.”

The most recent software consultant is Dohdoh Design and Development “for services to improve the functionality of the existing appraisal and reporting system for the transition to the annual revaluation cycle,” according to the county’s approved contract.

Although the county has spent between $150,000 and $200,000 so far, Malizia says there’s not much to show for it.

“At this point, there’s, maybe, one screen that works,” Malizia said.

Malizia says he’s spent about a third of his time trying to troubleshoot technology issues with the Assessor’s Office. He has the time cards to prove it.

“This has taken up way too much of my time and of the county’s time,” he said. “We need to get out of this.”

Hole said that he actually wanted to use more of Malizia’s time and thinks that part of the programming problems would have been solved had the county hired a full-time programmer to assist him instead of relying exclusively on consultants.

“Finding a programmer willing to do this has been hard,” Hole said.

About two years ago, a professional, off-the-shelf program would have cost the county about $500,000 to $600,000. Today, a software package for a company called True Automation costs about $250,000 with an annual maintenance fee of $90,000.

“That’s the Cadillac package,” Cormier said. “That’s an amazing price from where it was before.”

Cormier says his recommendation is for the Assessor’s Office to cancel its consulting contracts, stop spending money they don’t have and to buy the out-of-the-box software package. Cormier says he may be willing to support spending general fund county dollars to make it possible.

But that would require Hole to concede that the software he’s spent so much time and energy and money on is flawed and won’t work. It would require Hole to admit that he made a mistake, which then could be used against him should he seek re-election next year.

“I have tried and tried not to get involved with the politics of the office, but it’s spilling out into the community and impacting the county as a whole now,” Cormier said. “This is impacting our budget and our decisions and something needs to change.”

Hole contends he made the right choices.

“How do we know it won’t work?” Hole said. “Why not give it more of a chance? … I don’t see the return on investment if we were to buy a boxed program. We’d be spending an annual maintenance cost each year when I’d rather see the county spend that money each year on personnel. Plus, the boxed programs require more of our appraisers’ time. You have to click more to get to a page that we’ve already created.”

Granted, Hole says, the pages that have been created don’t seem to be working too well.

“We’re almost there,” he said.