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<Scott Diffenderfer>
posted
How would you appraise a 33 inch white oak with
extensive bark damage to the trunk (due to an
automobile accident)? The bark is shattered up
to 20 feet from the ground and the wound face is
31 inches wide at it's widest point.

Trunk formula seems inappropriate to me. Any
ideas?

Thanks,
Scott Diffenderfer
 
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<Scott Cullen>
posted
Reply to post by Scott Diffenderfer, on May 28, 2000 at 13:58:02:

Scott,

The first thing you need to decide or determine is whether the damage is entirely curable, that is it can be fixed with no reduction in value after the fix. If it is curable the Cost of Repair Method seems appropriate.

If the damage is not curable, that is there will be a lasting, negative effect on value, then you will have to estimate value before the damage. Trunk formula is appropriate. Then the Guide gives you two choices: 1) appraise value after damage by reflecting the damge in the Condition rating, subtract after from before to get amount of loss, 2) estimate a percentage of damage and multiply by value before to get loss.

The 8th and earlier editions had a Table based on Bernatsky for reducing value for bark damage. It seems to have been dropped from 9th.
 
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<Russ Carlson>
posted
Reply to post by Scott Diffenderfer, on May 28, 2000 at 13:58:02:

I won't answer your qeustion, but will ask another. How did you measure the width of the damage? Was it a straight line measurement, or did you measure the line along the circumference? The latter is the correct method, in most cases.

If you are going to compare the percentage of the bark that was damaged, you need to know the circumferential distance. This is compared to the total circumference of the trunk at that level.

If you are measuring a cavity for a risk assessment job, the same applies. The Bartlett Modified formula for strength loss is only correct when the cavity is measured along the circumference (Matheny & Clark, A Photographic Guide to the Evaluation of Hazard Trees in Urban Areas, 2nd ed.).
 
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<Scott Diffenderfer>
posted
Reply to post by Russ Carlson, on May 28, 2000 at 13:58:02:

Yes I did measure the circumferential diameter
of the wound.

At present there is no cavity, but there will be.
I could use cost of repair for this.

This leads to another question, can I use 2
different methods in appraising this tree? Cost
of repair and trunk formula for the loss (per cent)
due to the damage to the tree?
 
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<Scott Cullen>
posted
Reply to post by Scott Diffenderfer, on May 29, 2000 at 00:06:57:

If your judgment is that there WILL be a cavity it might be that the damage is not fully curable and then Cost of Repair will not equal the long term loss in value. Would you do bark tracing? Rods and other bracing x years in future once the cavity is open?

If on the other hand, your judgment is that with care the wound will callus over with sound woundwood (whatever and whenever one turns into the other... the wound gets covered over with good stuff) and there will be no reduction in life or performance, then you're characterizing the damage as curable and COR might be OK.

Curable vs. Incurable is the key decision. Choice of method follows.
 
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<Russ Carlson>
posted
Reply to post by Scott Diffenderfer, on May 29, 2000 at 00:06:57:

With a wound 31 inches wide by 20 feet high on a 33 inch tree, effectively 1/3 of the bark circumference was destroyed. This tells me there will be significant long term injury. That tree will be seriously decayed in 10 to 15 years (less depending on species). If there is any significant target nearby and why else would you be appraising it?), that means the safe useful life of the tree was shortened, assuming it was relatively sound to begin with. While repairs make it better for now, it is only treating the wound, not the basic problem. We haven't a method to prevent the decay in the long term.

This is not an either/or situation. Without treatment the tree will live a few years. With treamtent and repairs, it may last a while longer, providing benefits for a bit more time. This means that the loss is less, perhaps by the difference in the CoR. The balance (or validation) is whether the cost of repairs equals the redcuction in loss in value from those applied treatments. IOW, if the tree lives 10 percent longer with treatmetn than without, is that a greater gain than the cost of the treatments? This is as much a management decision as it is an appraisal exercise, and can help in determining if the treatments are worth applying.
 
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<Scott Cullen>
posted
Reply to post by Russ Carlson, on May 29, 2000 at 09:54:50:

Russ,

1) I'm not sure I accept that the only reason this tree would be appraised is if there's a significant target nearby. There might well be, but the estimate of loss in monetary value might be required in other situations.

2) In the abstract, the SULE would have been shortened (a 33" Q.a. is just a baby), but that's a factual determination in the case, not a constant. I had a case of bark damage, for example, in which the species profile and condition would have SULE = say 40 years. The injury might have reduced SULE to say 15 years. But the placement of the tree was such that a reasonable management plan would have it removed in 10 years because of competition from larger trees and interference with traffic. COR was appropriate in that case. The point is, when considering SULE your caveat - "assuming it was relatively sound to begin with" - needs to be expanded to consider all facts and expectations, not just current soundness.
3) "Without treatment the tree will live a few years. " The real problem for the appraiser is if the tree will live for more than a "few" years. (The repair adjustment is pretty easy, set that aside for the moment.) If, as you suggest, the decay will be "extensive" in 10-15 years that's already more than a few. It could live well beyond that. The big question is how safely? There are of course target considerations in that equation, but assume they are what they are, the appraiser still needs to estimate lost value. While it might not be necessary to actually do the calculations the appraiser might consider that in concept there are two adjustments to Basic Tree Cost (9th TFM p. 72) (assume 100% Species and Location): a) SULE is being shortened and if you considered the time value of money the adjustment would not be straight arithmetic.... $1 today is worth more than $1 next year and a whole lot more than $1 50 years from now, the benefits stream shoulfd be discouted over time, and b) the benefits stream should be discounted for risk as well.... say you're 100% sure the tree will still be safe in 10 years, and 90% sure it will be safe in 12 years and 50% sure it will be safe in 15 years and 25% sure it will be safe in 20 years. That may sound complicated but unless you decide the tree's a total loss today that's really what you are doing.... trying to describe the future stream of benefits.

4) "This is not an either/or situation." If your interpretation of facts is correct then you are also correct, COR is not a choice. That's factual in this case. The decision model for the appraiser, however, is either-or. The damge is either curable or incurable. COR can only be used alone if the damage is 100% curable. COR might create some offset to loss if there's a partial cure but the uncurable part will require other methods.

5) Good observation about COR as a decision tool. That's actually the most basic definition of all appraisal... a guide to decision makers. Management decisions have a great impact on value. The 3rd party appraiser needs to understand, however, that those management decisions belong to somebody else. A final estimate of value should reflect management decisons. If it assumes them, they should be clearly stated as assumptions (what if a, b or c) and not as if they are fact. The purpose and use of the appraisal should be clearly stated. "This is an range of possible values to help you select from management plans a, b and c" is different from "this is the absolute and only value of the tree that your lawyer should squeeze out of the plaintiff."
 
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<Scott Diffenderfer>
posted
Reply to post by Scott Cullen, on May 30, 2000 at 21:59:11:

I think you have to do both evaluate the loss
and predict the future and the costs associated
with the care of the tree and ultimately the
removal of the tree - this will be the final
result. The problem is how long will it take
to reach that point? What will the value of the
tree be then (when ever then is)? Do you
project the cost of removal and reevaluation?

My feeling at this point is to evaluate the loss
now (most likely as a per cent) and then by
use of knowledge and literature describe a "most
likely" scenario for the tree in the next 10,
15 and 20 years.

I'm still not sure this is the best way to
evaluate the loss but it's the best idea I have
right now. Scott I still think the comparitve
approace and reconcile method has merit. Russ
how can we predict longevity of the species? Also
I like your glossary - the bibliography
list is good too!
 
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<Scott>
posted
Reply to post by Scott Diffenderfer, on May 31, 2000 at 07:01:41:

I'll have to search for the correspondence (could have been here on Knothole or maybe direct e-mail) but Ed Milhous and I spent some time on the issue of future removal costs and if I recall correctly it can get to be a complex analysis.

1. what portion of the need for removal is attributed to the damage x years in the future... % of life kind of analysis maybe? 2. beyond a given number of years out does the removal cost discount to zero? depends on discount rate. 3. If you award future removal costs: today's cost assuming inflation will = investment return? Estimate a future cost (i.e. inflate it) and then discount back at an investment rate (or use a sinking fund factor)? 4. Same for interim maintenance costs (directly attributable to damage).
 
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<Scott>
posted
Reply to post by Scott, on May 31, 2000 at 20:56:59:

Here's the link
 
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<Scott Cullen>
posted
Reply to post by Scott, on May 31, 2000 at 20:56:59:

http://tree-tech.com/board/?topic=topic1&msg=766
 
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<Scott Diffenderfer>
posted
Reply to post by Scott Cullen, on June 01, 2000 at 06:24:26:

The situation warrents an appraisal that includes
cost of repair and loss of value, I think.

Perhaps a valuation that includes both is in
order here. I think the cost of removal is part
of the value of the loss - its factored in by
virtue of the condition rating. The higher the rating
the less likely the need for removal. Conversely
a low condition rating lessens the value and
can lower value considerably. A tree in very poor
condition has a negative value of at leat the cost
of removal so after reviewing all the info, I will
exclude removal as a consideration.

Thanks for all your help Scott Russ and Ed (where
ever you are),

Scott D.
 
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<Ed Milhous>
posted
Reply to post by Scott Diffenderfer, on June 01, 2000 at 09:05:49:

Duh...
I dodged that issue and hope not to have to dodge it again anytime soon.
But it seems to me that a tree, say a white oak in good condition growing in an appropriate location, has a very long potential life ahead of it. If some smuck smashes into it, and debarks it by 30%, you gotta think its useful lifespan has been reduced by 50% or more. (Who better to predict that than a qualified arborist?)
The most expensive event in any tree's life is removal. This smuck's actions will have caused the removal to occur much sooner than it would have otherwise. So, the removal costs must be amortized over a much shorter time period than if the tree had not been damaged.
I also figure that such a tree (in theory at least) increases in value at a more-or-less steady (perhaps slightly decreasing) rate, becoming more and more valuable until near the end. At some point, its value drops very rapidly from its peak to a negative figure, because of the removal costs. (If I can sell you my house with the beautiful oak just before it croaks, I have reaped the most value from the tree, and you get the big loss.)
What this all means in an appraisal, I don't know. But I feel sure Lew or Jim or Scott does and just won't tell the rest of us.
 
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<Scott>
posted
Reply to post by Ed Milhous, on June 01, 2000 at 21:41:10:

I won't speak for Jim or Lew. I don't know what it means directly in an appraisal yet either Ed. You theoretical analysis sounds valid to me.

I suppose theoretically, the cost of ultimate removal is assumed to be included in a net value figure. They all gotta go someday. I suppose that gets closest to practical truth in a municipal situation, with a well age stratified or age diverse population. There is perpetual ownership, and x%/year mortality and replacement. It's all factored in. In a private, single tree situation everybody probably thinks in terms of the removal being so far out in the future either somebody else pays or it discounts to zero (the positive benefit inflows occur over a long period before you have the negative outflows of decline and removal).

In terms of your white oak a 500 year expected life could give you a 50 year decline period that's only 10% of life... and be the rapid or short period you describe on that basis. But in typical ownership periods, or typical management careers or budget periods even a 10 year decline period is pretty long... particularly if somebody else experienced the good years and you get stuck with the bad ones.

Say your white oak had a 100 year remaining life. Jerko smashes it now it's reduced by 50%, that means removal is still 50 years off. You amortize 50% of removal cost as attributable to the damage and give it to the current owner as part of the damage award. Do we think it's going into escrow to be handed to the Xth downstream owner to do the removal in 50 years? Do we as appraisers decide what's fair? or is that someone elses job? I think I'd be inclined to state loss in value as the principal conclusion and, IF I addressed it at all, future removal cost (amortized, sinking fund factor, whatever) as a separate damages item.... let the parties or the judge work out what's fair.

Maybe place the money in a watertightbox in the cavity....
 
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<lewbloch>
posted
Reply to post by Scott, on June 04, 2000 at 21:45:03:

I will speak for lew. I always have a hard time playing Tree-god and determining the future of the tree. We have all seen trees that we did not think would last a year, but survived for many, as well as seen trees that "looked good" but fell off the cliff. I can only appraise the value of a tree on the day I see it, or perhaps estimate what it was before it became a casualty, but not in the future. If I thought this subject tree was in jeapordy, I might consider it to be a total loss, but most likely would do a TF and take some kind of percentage for damages, along with a C of R.
This is a difficult part of appraising!
Very treely,
lew
 
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<Scott>
posted
Reply to post by lewbloch, on June 05, 2000 at 06:48:19:

It is difficult to see the future, but the value we estimate in EVERY appraisal is based on nothing but the future. Remember that thread that went on and on? Value is the present worth of future benefits. So we must base our judgments on facts. Sometimes the predictions will be off and the tree will suprise us, but that's just part of the exercise.
 
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<Russ Carlson>
posted
Reply to post by Scott, on June 04, 2000 at 21:45:03:

The arguement goes that if the tree is damaged but will survive (albiet in reduced condtion) the present owner suffers since (theoretically) his sale of the property including the tree will be less, due to reduced value of the tree.

doesn't always happen that way, though.
 
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<Ed Milhous>
posted
Reply to post by lewbloch, on June 05, 2000 at 06:48:19:

Making those tough decisions is why you get paid the big bucks, Lew.
Really, though, isn't it an arborist's job at times to make a prognosis? And with trees, who is better qualified?
In baseball, the best hitters don't get to first base but about one-third of the time. I think I do better than that... at least I hope I do. I certainly guess better than, for example, the homeowners I typically work with. And my guesses are at least educated guesses; whereas their's are often based on emotion, fear, and ignorance (or too often the fantasies of some huckster).
 
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<lewbloch>
posted
Reply to post by Ed Milhous, on June 05, 2000 at 17:54:02:

Sorry i did such a poor job of expressing myself. I have no problems in giving advice about tree health, structure, safety and that good stuff as relates to the future. What I do have problem with is giving the appraised monetary value of a tree in the future. When i put a price tag on a tree, I am comfortable with that. But how much it is worth in 5 or 10 years is another story. Who knows what the weather will be like, what biotic or abiotic problems might arise, and what kind of maintenance it will recieve. O.K.?
lew
 
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<Russ Carlson>
posted
Reply to post by lewbloch, on June 07, 2000 at 08:03:31:

Right on, Lew. It is one thing to suggest the health of condition of a tree with 'most probable' assumptions, and quite something else to expound on the value in the future. In fact, the stock market makes kings and paupers of those who deal in 'futures', because it is a little guesswork rolled up with luck, as well as a detailed knowledge of the product. When the Eighth Edition of the Guide came out, could anyone predict what the 'Unit Tree Cost' would be today? I rather doubt it, and to predict the value into the future that way can leave you in a very awkward position.
 
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