I. FIRST ASSESSMENT ROLL AND APPEAL In 2008, the Council created LID No. 1 to finance the construction of a sewer system, imposing the entire project cost on the owners of 161 parcels in the LID. The sewer system wascompleted in 2011 with an estimated cost of $21,238,268. To estimate the "special benefit"5 attributable to each of the properties within the LID as a result of the sewer system, the City hired professional appraisal firm Macaulay and Associates Ltd. Administrative Record (AR) at 362. After Macaulay submitted its proposed assessments, the City notified affected property owners of their right to object to the assessments at a hearing before a hearing examiner. Following the hearing, the hearing examiner recommended rejecting all of the property owners' protests, apart from reducing assessments to three properties. The Council thereafter considered the hearing examiner's recommendations and heard objections from protesting parties. After hearing the protesting property owners' objections, the Council voted to approve an ordinance that, apart from reducing assessments on two properties, confirmed the assessment roll as recommended by the hearing examiner.
Nine affected property owners appealed the Council's assessment decision to the superior court.6 Hasit, 179 Wn. App. at 932. The superior court concluded that the City's notice of the hearing examiner's proceedings was defective, and it remanded for a de novo hearing. Hasit, 179 Wn. App. at 932. The City appealed the superior court's decision to this court and the Docken Petitioners cross-appealed. Hasit, 179 Wn. App. at 932.
On appeal, we annulled the LID assessments as to the appealing property owners. Hasit, 179 Wn. App. at 960. In annulling the LID assessments, we first held that the City calculated the assessments on a fundamentally wrong basis by including costs for an oversized sewer system because the oversized sewer system benefitted only future users not assessed under the LID. Hasit, 179 Wn. App. at 938-41, 960. We further held that the Council's confirmation of the proposed assessment roll was arbitrary and capricious because it (1) based its confirmation in part on the objecting property owners' failure to present evidence that the City's flawed notice prohibited the property owners from presenting, (2) improperly required objecting property owners to submit expert appraisal evidence to challenge the assessments, and (3) improperly imposed a burden on property owners to prove that the assessments were founded on a fundamentally wrong basis or were arbitrarily or capriciously imposed. Hasit, 179 Wn. App. at 944-50. We also held that the City violated the property owner's due process rights by failing to notify the property owners sufficiently in advance of the hearing to allow the property owners to obtain the evidence required to challenge the assessments.7 Hasit, 179 Wn. App. at 952-58.
In annulling the assessments as to the appealing property owners, we rejected some of the property owners' claims. Relevant to this current appeal, we rejected the property owners' claims that the assessments rested on a fundamentally wrong basis due to the Macaulayappraiser's decision to utilize a mass-appraisal method rather than a zone-and-termini method. Hasit, 179 Wn. App. at 943-44.
After we issued our opinion in Hasit, the City reassessed the subject properties. The City commissioned a study to determine the costs of the sewer project attributable to oversizing the sewer capacity. The study determined that the oversizing costs totaled $805,687.
The City also recommissioned Macaulay to supplement its prior appraisals by conducting individual evaluations of the remaining subject properties. To assist in the reassessments of the subject properties, Macaulay's appraiser, Robert Macaulay, met with property owners and discussed the owners' concerns while inspecting their properties.8 Macaulay made adjustments to some of his prior assessments based on his discussions with property owners and inspections of their properties. After accounting for the elimination of oversizing costs, Macaulay determined that the total estimated special benefit yielded a cost/benefit ratio9 of 70.9 percent.Macaulay applied this revised cost/benefit ratio to each of the individual property assessments and, thus, reduced its estimated special benefit as to each property by 29.1 percent to reach his recommended final reassessment.10
Applying a retrospective valuation date of May 10, 2011, Macaulay recommended the following final reassessments:
AR at 3099.11
The City notified property owners that it would conduct a hearing on the final reassessment roll on September 17, 2014, and that property owners objecting to the proposed reassessment must file written objections at or before the hearing.12 Each of the affected property owners filed written objections.
The property owners filed the following written objections to Macaulay's proposed reassessments.
Stokes asserted that Macaulay's proposed reassessment (1) understated the property's before-LID value, (2) overstated the property's after-LID value by failing to consider extraordinary costs associated with developing the property, and (3) disproportionately estimated the property's special benefit as compared to a similarly situated property within the LID. In support of these assertions, Stokes presented an appraisal from Hunnicutt & Associates Inc. that concluded the assessment to the Stokes property should be $118,542. Stokes also presented a declaration from James Schweickert, a civil engineer with Larson & Associates Land Surveyors and Engineers Inc. Schweickert's declaration stated that he was retained by Stokes in 2012 to assist in commercial development plans for the property.
Larson & Associates completed a "Conceptual Site Plan" for the Stokes property that concluded storm water improvements would need to be made to develop the property. The Conceptual Site Plan estimated the costs of developing the necessary storm water improvementswould total $340,000 and would cause the loss of 35,000 square feet of otherwise developable property. The Conceptual Site Plan cost estimates did not include costs for acquiring easements through neighboring properties, which easements would be required to implement the storm water improvements.
Rempel asserted that Macaulay's proposed reassessment (1) understated the property's before-LID value, (2) failed to provide any explanation for the low valuation of the portion of the property not fronting Meridian Avenue, and (3) overstated the property's after-LID value. In support of these assertions, Rempel...
