Mr. WRIGHT. Let the witness answer. Mr. THOMPSON. Mrs. Gore. As I understand, it was the first building that we considered reestablishing. The settlement, I think, was made on the basis of that. When that was done we decided that we would treat the other people down. We went all through—where the road came up within a pretty close distance of close proximity of a house, that they get a contractor, a moving contractor, to give estimates as to what it would cost to move all the buildings back. It was done to equalize the property owners' amounts. Mr. CONSTANDY. That is the whole thing, Mr. Thompson, that you Mr. THOMPSON. Actually Mr. CONSTANDY (continuing). And that concept, being applied to the parcels on which it was applied together with the concept of always awarding damages for the remainder, was ultimately what led to the figures that we had read into the record on Friday which disclosed a 291 percent overpayment on the property as a whole. It was an attempt, after having set certain high appraisals, certain high settlements, to bring the others in balance with it. And I want to point out that, as Mr. Estill testified, your motivation, as you continually preached to him, was fairness—«We want to be fair to the property owners.” Is that true? " Mr. CONSTANDY. Well, we will leave that for other people to conclude. But, in any case, it was this concept of balancing out the appraisals, raising them, to be equitable to all the people, to be fair to all the people, that led to the result that it did ? Mr. THOMPSON. That is right. Mr. WRIGHT. Mr. Thompson, is there anything else that you would like to say to the committee? Do you have any additional statements that you care to make while Mr. THOMPSON. Well, it has already been brought out that I had more work than I could do, and these things that happened in Beckley, you might call them mistakes or irregularities or whatever you might call them. I was going day and night, and I was doing the best I could on it. If I made mistakes—I did make mistakes. I know I made mistakes, a lot of places. But everything that I had done was to the best of my ability and it was conscientious. I had no ax to grind with any property owner. I only knew three people on that street, and I am not too well acquainted with them. Anything I did there, it could have been wrong, it could have been right. There could have been mistakes, but I used the best judgment I had on it. And my object was to try to be fair with everybody concerned and equalize values, and in so doing we raised some appraisals there that the property owner might have settled for, but I was not a negotiator. I was an appraiser. I was establishing an appraised value on it as I saw it. you are here? Well, as I say, I had nobody there to consider it whatsoever, and not a lot of time in which to go in there and go into the thing thoroughly. It was responsible for a lot of mistakes that did happen. Mr. WRIGHT. The committee wants to express its appreciation to you for having come and for having shared with us this information regarding this situation. If there are no other questions of this witness the committee will stand in recess until 10 o'clock tomorrow morning. (Whereupon, at 12:26 p.m., the subcommittee was in recess, to re , convene at ÎO a.m., Thursday, July 19, 1962.) RIGHT-OF-WAY ACQUISITION PRACTICES IN WEST VIRGINIA THURSDAY, JULY 19, 1962 HOUSE OF REPRESENTATIVES, SPECIAL SUBCOMMITTEE ON THE Washington, D.C. The special subcommittee met, pursuant to recess, at 10:10 a.m., in room 1302, New House Office Building, Hon. Jim Wright presiding. Present: Representatives Wright, Blatnik, Baldwin, Cook, Cramer, Fallon, Kluczynski, and Schwengel. Also present: Walter R. May, chief counsel; John P. Constandy, assistant chief counsel; George M. Kopecky, chief investigator; George H. Martin, adminstrative assistant; Robert L. May, minority counsel; Kathryn M. Keeney, chief clerk; Salvatore J. D'Amico, associate counsel; George E. Burgess, investigator; A. Courtney Hayden, Jr., investigator; C. Murray Gold, General Accounting Office investigator; Richard J. Sinclair, General Accounting Office investigator. Mr. WRIGHT. The special subcommittee investigating the Federalaid highway program will be in order. Before questioning any witnesses this morning, the Chair wants to recognize the committee counsel, Mr. May. Mr. May. Mr. Chairman, still speaking of deficiencies which existed in the right-of-way program in West Virginia, I would like to refer to a report on right-of-way acquisition appraisal practices in West Virginia prepared by the Bureau of Public Roads. It is dated November 9, 1961, and it refers to takings made earlier by West Virginia. I will read pertinent portions of it, because it substantiates in great part what we have heard in these hearings for the past 2 weeks. With respect to discrepancies in ages of improvements, talking now about structures and houses on rights-of-way, as reported by the Bureau of Public Roads appraisers, the report reads: Since it has been the practice of the State to use the value derived from the reproduction cost method, the age of the improvements is critical. It was noted during the review that the appraisers did not verify from official records the ages of improvements affected. One appraiser stated that the ages of the improvements were determined by asking the property owners. The following are examples of instances where it was determined from the county tax assessor's records that the age shown by the appraisers, and on which the depreciation factor was applied, was in error And the report cites these examples: On Project F-315 (7), Parcel No. 117, the appraiser in his report said the age of the improvement was 3 years. The tax record shows 10 years. On the next parcel, No. 175, the appraiser said in his appraisal report that the age was “no” years and the tax record shows the age was 9 years. On Parcel No. 111, the appraiser said the age was 15 years. The tax record said the age was 19 years. On another project, F-173 (28) in district 10, up around Oak Hill, on Parcel No. 83, the appraiser said the age was 12 years—that was the age of the improvement—and the tax record said the age was 21 years. On Parcel No. 52, the appraiser said the age was “no” years and the tax record said it was 4 years. On Parcel No. 41, the appraiser said the age was 15 years and the tax records show 21 years. On Parcel No. 37, the appraiser said the age was 11 years and the tax records show 24 years. On Parcel No. 70, the appraiser said the age was 15 years and the tax records show 25 years. This certainly has an effect on value as found by the appraiser. It was also noted that the ages shown by the various appraisers for the same parcels generally varied as shown by the few examples below. On the Oak Hill project, F-173(28), Parcel No. 111, Appraiser A said the age of the improvements was 20 years, Appraiser B said the age was 25 years, and Appraiser C said it was 25 years. On Parcel No. 87, Appraiser A said the age was 50 years, Appraiser B said the age was 40 years, and Appraiser C said it was 35 years. . On Parcel No. 81, Appraiser A said the age was 20 years, Appraiser B said the age was 15 years, and Appraiser C said the age was 30 years. On Parcel No. 86, Appraiser A said the age was 30 years, Appraiser B said the age was 35 years, and Appraiser C said the age was 25 years. On Parcel No. 121, Appraiser A said the age was 8 years, Appraiser B said the age was 8 years, and Appraiser C said the age was 20 years. On Parcel No. 70, Appraiser A said the age was 15 years, Appraiser B said the age was 15 years, and Appraiser C said the age was 30 years. The report continues: Where property taken is also used as a comparable. In certain instance newer homes were used as comparables to very old homes, where it is apparent that adjustments should be made for age, obsolescence, and so forth. On Project I-64–1(25)— a project in Putnam County, district I, which runs between Charleston and Huntington-Parcel No. 49, the report continues, is: 8 A log house described by the appraiser as being in poor condition with logs rotted, and so forth, and was compared to a modern house described as being in good condition. In arriving at the market value through the cost approach the appraiser used a depreciation rate of only 1 percent per annum. The newer house had sold for $5,500 in 1956. The houses were described as being of equal value and the appraiser set the fair market value at $6,000 for the log house, the figure upon which the State settled the property. When this same house on Parcel No. 53 which had been used as a comparable was also needed for this project, the fair market value as estimated by the same appraiser using the cost approach was $9,200. That is a new house that the appraiser said sold for $5,500 in 1956, and yet when he was going to take it for the project, he values it at $9,200. On Project F-173(28) in Oak Hill, Parcel No. 52, the appraiser who had appraised this property for $50,728, the amount of the State's settlement, when using it as a comparable on Parcel No. 81, shows the value at $40,100, which is indicated as the price paid in 1955. It was stated in the appraisal that Parcel No. 81 was worth more than Parcel No. 52 by $9,780, and set the value of Parcel No. 81 at $49,880. Mr. Chairman, it makes no sense whatsoever. We have two graphic examples of this type of appraisal. We have a photograph to the Chair's left, and I will read what the report says about the photograph. The upper photograph shows one house, the house that was taken, an older type house, with the new house shown on the lower photograph. I will read from the report: On Parcel No. 41 a new home located on a paved street consisting of six rooms and bath was compared to an older home without bath on an unimproved road in a poor residential area. In the appraisal approved for negotiation the older home, indicated as 15 years old, was considered as less valuable by $900. The new home was valued at $8,500 and the old one at $7,626.25. The appraiser states that the comparable is newer, nicer, and larger than subject although this is offset by greater land area of subject. It should be noted that the land area referred to consisted of a half acre of steep land which the appraiser valued at only $2,450.70. We have one more example, Mr. Chairman. You see in the upper panel of this photograph marked “K” the old house which was taken. You see the comparables set forth in the photograph below, and the newer house on page 3. The report reads: On Parcel No. 37— and this on Project F-173 (28) in Oak Hillthe appraiser estimates that a new home used as a comparable is worth less than the subject by $725. You see, Mr. Chairman, on the photograph above, an old house by an unimproved road, with sunken land not up to grade, and the lower comparable on page 3 is the new house. May we make that first report exhibit 67, and photograph “J” will be 68, and “K” exhibit 69, Mr. Chairman? Mr. WRIGHT. Without objection it is so ordered. |