Title: Vermont Electric Power Co., Inc. v. Town of Vernon

State: vermont

Issuer: Vermont Supreme Court

Document:

Vermont Electric Power Co., Inc. v. Town of Vernon (2001-034); 174 Vt. 471;
807 A.2d 430

[Filed 08-Jul-2002]
  	
                                 ENTRY ORDER

                      SUPREME COURT DOCKET NO. 2001-034

                              MARCH TERM, 2002


  Vermont Electric Power Co., Inc.	}	APPEALED FROM:
                                        }
                                        }
       v.	                        }	Property Valuation and Review 
                                        }	Division 
                                        }	
  Town of Vernon	                }
                                        }	DOCKET NO. Windham 1999


             In the above-entitled cause, the Clerk will enter:


       The Town of Vernon appeals the decision of the state appraiser
  reducing the listed value of five properties owned by Vermont Electric
  Power Company, Inc. (VELCO) within the Town.  On appeal, the Town argues
  that the state appraiser erred by: (1) finding that VELCO had not met its
  burden of persuasion; (2) relying on non-credible testimony; (3) failing to
  use an appropriate method for determining depreciation; and (4) failing to
  make adequate findings of fact.  We affirm.

       In 1999, the Town of Vernon revalued all property within the town for
  the grand list.  The town lister revalued five properties owned by VELCO
  for the grand list including one substation, partially owned by VELCO, and
  four parcels of properties containing transmission lines, at $7,377,100. 
  VELCO appealed the valuation to the Town of Vernon Board of Civil Authority
  (BCA).  After a hearing, the BCA affirmed the town lister's valuation. 
  VELCO appealed the BCA's decision to the state appraiser. (FN1)  
   
       The state appraiser held a hearing in October 2000, at which both the
  Town and VELCO presented testimony on the useful life of the properties and
  the method of depreciation that should be used in determining their
  fair-market value.  The Town and VELCO's witnesses agreed on the original
  cost of the property and trended those costs to current value using the
  "Handy-Whitman" indices, but applied these indices differently to arrive at
  different figures for the replacement cost new (RCN) of the properties. 
  The main disagreement arose with regard to which method of depreciation,
  and what useful life should be applied to the RCN to arrive at the
  fair-market value of 

 

  the properties.  VELCO's witness testified that the transmission lines had
  a forty-year useful life and the substation had a thirty-year useful life,
  and applied the Iowa Curve method of depreciation to arrive at a
  fair-market value of $4,127,939.  In contrast, the Town's witness set the
  "actual, physical and functional" life of the properties at 90 years and
  applied a straight-line method of depreciation to arrive at a fair-market
  value consistent with the town listing.    

       The state appraiser issued a decision in December 2000.  He found that
  the Handy-Whitman indices along with the Iowa Curve method of depreciation
  were used in other towns, and were recommended by the State of Vermont as
  the appropriate set of methods for determining depreciation of transmission
  lines.  Furthermore, the state appraiser found that the Iowa Curve method
  took into account the long term economic viability of the property, making
  it more appropriate for valuation of transmission lines.  Moreover, he
  found that the straight-line method used by the Town's appraiser, which
  focused on physical deterioration of the property, failed to consider
  "deficiencies inherent in improvements [and physical] external factors that
  may offset the desirability of the property in the market place."  Adopting
  VELCO's recommendation for a thirty-to-forty-year useful life, and applying
  the Iowa Curve to that useful life, the state appraiser set the fair market
  value of the properties at $4,130,530 and the listed value at $4,125,987. 
  The Town appeals. 

       An appeal before the state appraiser is considered de novo. 32 V.S.A.
  § 4467.  The state appraiser must make findings of fact "supporting its
  ultimate determination."  Beach Props., Inc. v. Town of Ferrisburg, 161 Vt.
  368, 371,