20 property owners will get refunds totaling $217,000

By Lynn R. Parks

At last, the city of Seaford's long struggle to solve problems caused by a 2004 "audit" of city property values seems to have come to an end. Tuesday night, the city council agreed unanimously with city manager Dolores Slatcher's recommendation that $217,446 be refunded to 20 property owners who were overcharged based on the findings of the audit. The city will not refund money to 17 other property owners who protested the findings of the audit. The refund will come out of the city's reserve accounts. All 37 appeals have been pending the results of a formal reassessment of city property. That reassessment, conducted by Delaware-licensed real estate appraiser David R. Hickey, was completed earlier this year. Slatcher acknowledged during the city council meeting that the city's earlier efforts to update its assessment roles "could have been handled differently." She added that the recently-completed reassessment has resolved many of the disputes that were caused by the audit. In 2004, the city hired Randy Westergren, Milford, to conduct what he called an audit of values of property throughout the city. In December of that year, Westergren told the city council that he had identified 899 properties, about a third of those in the city, whose owners were paying taxes based on assessments that were too low. The city was losing $246,526 every year in tax revenue, he said. The city council voted to retroactively bill owners of those properties additional amounts for the 2004-2005 fiscal year, based on Westergren's values. Tax bills that have gone out since have also been based on those values.

Shortly after that decision, Larry Moynihan, a certified real estate appraiser and owner of Tidewater Properties, Seaford, sent two letters to the city, indicating that the procedure Westergren used in the assessment audit was illegal and that Westergren did not have the proper license. He also said that Westergren's billing procedure was illegal – Westergren charged half of the additional taxes he said were due the city, or $123,263. In May 2005, Moynihan and Harry Freedman, Seaford, filed a lawsuit against the city. During a hearing in Chancery Court in Georgetown in March 2006, Moynihan told the court that Westergren's methods were "bizarre" and "ludicrous." In August 2006, Vice Chancellor John Noble ruled in favor of the city, but only on procedural matters and only after he commended the plaintiffs for trying to have the audit overturned. "One cannot confront Westergren's methodology and not come away wondering if any semblance of fairnessÉwas buried in an attempt to increase the city's tax base," Noble wrote in his decision. In his ruling, Noble advised the men to pursue appeals of the audit with the city. Stephen Ellis, attorney for Moynihan and Freedman, filed a motion for reargument, asking the court to rule on Westergren's methodology and qualifications. In September 2006, Noble rejected that motion for reargument, saying that "the court neither misunderstood nor misapplied the law" in the first decision. In February 2007, the city council voted to stay the nearly 40 appeals of Westergren's audit that were still pending until after a full reassessment of the city was complete. With Tuesday night's vote, about half of those people who had appeals pending will receive refunds.

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