THE CITY AND BOROUGH OF JUNEAU, ALASKA
BOARD OF EQUALIZATION
MAY 10, 1999
MEETING NO. 99-15b: The Board of Equalization meeting, held in the Assembly Chambers of the Municipal Building, was called to order at 6:00 p.m. by Mayor Dennis Egan.
Assembly Present: Kibby, MacKinnon, Perkins, Egan, Hagevig and Koelsch
Assembly Absent: Garrett, Powell and Muñoz
A quorum was present.
Staff Present: Marian Miller, Municipal Clerk; Dave Palmer, City Manager; John Hartle, Assistant City Attorney; Craig Duncan, Finance Director; Tom Pitts, Acting Assessor
Mayor Egan identified the appellants who were in the audience and he said testimony would be limited to five minutes. Mr. Duncan noted that item number 8 had been resolved.
1. Appellant: Juneau Moose Lodge Appeal No.: 70
Parcel No.: 5B1501020200 Location: 8335 Airport Blvd.
2. Appellant: Juneau Moose Lodge Appeal No.: 56
Account No.: 558832 Location: 8335 Airport Blvd.
There was no objection to hearing appeals 1 and 2 together, since they were basically the same.
Mr. Duncan stated the applicant was requesting an exemption because the property burnt down on February 23rd. The Assessorís Analysis referred to CBJ Code and Alaska Statutes Sec. 29.45.110(a) "the assessor shall assess property at its full and true value as of January 1 of the assessment year." The Assessorís recommended, since the law clearly requires the assessment be based on the condition of the property on 1/1/99, no change in assessed value; next year the property would fall from the roles.
MOTION Ė by Kibby to move appeal No. 1 and 2, the Moose Lodge Property and the Personal Property.
Rick Jacobsen, representing the Moose Lodge, said he was under the impression this was the 1999 taxes. They did not get their notice of assessment until after the building burnt down. They have had rough times with the sewer backing up in October and then the fire in February and they did not know when the building would be rebuilt. They hope to do it this year. Mr. Duncan stated that for the tax bill that comes out in July of 2000, they would automatically be removed.
Mr. Kibby asked unanimous consent. There being no objection, it was so ordered.
Mr. Kibby clarified his motion was to grant the appeal on building and the business personal property, not the land. He stated the findings would be that the building had burned. Mr. MacKinnon added that there was no building value to tax.
3. Appellant: Wayne & Bette Wilson Appeal No.: 65
Parcel No.: 4B2001000010 Location: 1480 Fritz Cove Road
Mr. Duncan said the basis for the appeal was that the market was overinflated. The Assessorís Analysis indicated a market study was performed using recent sales of similar waterfront properties. The results indicated a market value of $450,000. On April 6, 1999 a review of the property was performed by the Assessor staff. Several areas of deferred maintenance and extraordinary wear were observed. The Assessor recommended a new assessed value of $380,000 due to condition of structures. Mr. Duncan added that in no way did the market support the $300,000 value that the appellant requests.
MOTION Ė by Kibby, to move BOE no. 3,appeal No. 65.
Bette Wilson, appellant. She and her husband bought the property in 1968 and the following year, at 35 with a son to raise and a house to build, she was a widow. She had worked 30 years in the Juneau school system and she never dreamed she would be required to pay $560 per month to the CBJ to live on her own property. She has been before the board before because she thought the assessments were unfair. At that time waterfront assessments were made by charging X number of dollars per frontage foot. The board lowered her footage rate, which lowered her taxes, but she was still paying $1,200 more than her neighbor. It took four years but now the assessment is right back to where they had been. She referred to her handout and said the property they purchased was a one-acre lot, which she had subdivided in hopes of building a little retirement house. There is no dwelling on Lot A, which consists of .49 acres. Her home sits on Lot B, which consists of .51 acres. Her neighbors property was identified as Lot C. She noted that her property was next to a slough that goes dry twice a day. In 1995 her property assessment and taxes took a giant leap and she thought maybe the Assessors started to assess by view. Between 1994 and 1995, Lot A increased $64,400 in value and Lot B increase $38,200 in value. Her house increased $16,300 in value. The total assessment increased $119,000 in one year. From 1995 to 1996, the total assessment increased $32,000. In 1996 they left Lot A the same but in 1997 Lot A went up $20,000 and Lot B went up $40,000 and her house stayed the same. That brought her taxes, in 1997, up to $6,723.80. In 1998 and 1999 she was pretty much left alone, but she did not know what would happen this year. She said that one of the staff in the Assessorís office commented that he and his wife were both working and he doubted they could afford her tax bill. Assessing property by view is absurd; it is a judgement call at best. Everyone has a view, be it mountains, water, glacier, sky. People live where they do by choice. Her neighbors chose a restrictive view, according to the assessor, and she should not be penalized for her choice. She said in the comparables used by the Assessor, no. 1 and 2 were built within the last six years and no. 3, which may be close, sold for $265,000, not the inflated $438,000 and certainly not $545,000. She had pictures of her view. She recommended that the assessment for Lot A be at $140,000 and Lot B be $300,000.
Mr. MacKinnon clarified she thought the value of the house was $160,000. He asked if she qualified for a Sr. Citizen Property Tax Exemption this year. She said she would qualify for 1999 but not for 1998.
Ms. Hagevig asked Mr. Pitts what kind of criteria was used to determine the value of specific views in Juneau. Mr. Pitts said for this one, the value was reduced by $70,000, as compared to other property on Fritz Cove, because of the tide land. The neighbors have a restricted view. Mr. Duncan said the value differential between Lot A and Lot B is the improvements on Lot B.
Mr. Kibby objected. Mayor Egan clarified the motion was the Assessorís recommendation. Mr. Hartle clarified the motion was to grant the appeal, grant what the taxpayer was asking for and overturning the assessorís decision. Mr. Kibby withdrew his motion.
MOTION - by Kibby, to grant BOE 3, appeal no. 65.
Ms. Hagevig objected to the value of $300,000.00
Ayes: Kibby, Koelsch and Perkins,
Nays: Hagevig, MacKinnon and Mayor Egan
MOTION Ė by Koelsch, for an assessed value of $325,000 on BOE no. 3.
Mr. Hartle clarified that the appellant had asked for $300,000 for the combined land and improvement. The Assessor had put a number of $395,200 for the combined land and building and Mr. Koelsch moved $325,000.
Ms. Hagevig said the Assessor had revised his assessed value to $380,000 due to the condition of the structures and Mr. Hartle clarified that was the Assessorís recommendation. Mr. Koelsch broke it down as $185,000 for the house and $140,000 for the land. Mr. MacKinnon said then the value of the land would be the same as the value the appellant was seeking for the adjacent lot, which is completely unimproved. This lot is improved which increases the value.
Ayes: Hagevig, Kibby, Koelsch, MacKinnon, Perkins and Mayor Egan
motion carries 6:0
4. Appellant: Wayne & Bette Wilson Appeal No.: 66
Parcel No.: 4B1801030200 Location: Fritz Cove Road
Mr. Duncan said the appellant was asking that the assessment of $165,000 be lowered to $140,000. This property was directly adjacent to the property just reviewed by the Board and is on the beach. The comparable sales indicate an average value from $155,000 to $195,000. The average of eight comparable parcels was $177,700. The Assessor recommended a value below market of $165,000.
MOTION Ė by Kibby, for the appellantís value of $140,000.00. There being no objection, it was so ordered.
5. Appellant: David Reischl Appeal No.: 83
Parcel No.: 4B2001020030 Location: Fritz Cove Road
MOTION Ė by Kibby, for the appellantís request of $300,400.00 and he asked for a no vote.
Nays: Hagevig, Kibby, Koelsch, MacKinnon, Perkins and Mayor Egan
motion fails 0:6
6. Appellant: David S. Miller Appeal No.: 76
Parcel No.: 8B3301000150 Location: 16615 Pt. Lena Loop Road
Mr. Duncan said this was a beachfront property that the Assessor valued at $312,000. The appellant was requesting a value of $114,000. The appellant argues that the median house on beachfront property sells for $300,000.00 and that the house on his property has no value. Assuming that property sells for $300,000 with a 1,200 sq. foot house, the appellant would assume that it would cost $130 per square foot to build a house so it would be $156,000 for value. He has taken the cost of a new house away from the $300,000 asserted value for a house on the beach to come up with an estimated value of $114,000. The Assessorís office determined the $312,000 value based on comparable sales. The Assessor recommended no change in the value for consistency but stated that the actual property was probably undervalued by $50,000 so next year the value of the property would be going up based upon the current market.
David Miller, 16615 Lean Loop Road. He said the Assessor was taking the highest cost of recent sales and trying to apply them to all of the property by applying factors to come up with a value to adjacent or similar property. Mr. Miller felt that was unfair and was driving those who were becoming senior citizens out of the community because it was driving the prices up dramatically. By the time he qualifies, the $150,000 exemption for senior citizens would be eliminated. His taxes have increase 250% in the past 10 years at an average rate of almost 10% a year. Soon he will no longer own the property and just be paying rent to the CBJ. They bought this property because it was the only property they could afford in 1972. They would like to stay there but they may be forced to move. Mayor Egan informed Mr. Miller that his time to testify was running out and Mr. Miller objected and noted that if he was not heard out, he would be seeking legal redress. Mr. Miller passed out pictures and said that location, value and view of the property were not comparable to recent sales. The Assessor thought his property was worth more than the adjacent neighbors but he feels the other house was far superior to his. He noted that he received a $10,000 bonus for having a three-car garage but he said he could not possibly get three cars into the garage. The Assessor added on for a porch and patio, which other people have also. He said a lot of pluses had been added on to the other four comparable sales in the neighborhood and he did not understand how his property could be valued more than any of the comparables.
Mr. MacKinnon clarified he bought the property in 1972. He referred to the pictures and asked where the pictures were in relation to the subject property. Mr. Miller noted he had only a 10-foot side yard easement on the garage and there was no way to get into the garage. Mr. Duncan said when looking at comparable sales, looking at no. 2, even though it has a 2-car garage, the value had not been changed so they assume it is equivalent, for evaluation purposes, to a two-car garage.
Mr. MacKinnon did not question the value of the land as that was what the land was going for. On the building, the structure was very old and he asked staff if that was considered. Mr. Duncan said it was valued at $48 per square foot.
Mr. Koelsch clarified the CBJ was saying $312,000 and Mr. Miller was saying $114,000. Mr. Miller noted that there should be a reduction in value because a person would have to be able to afford to pay for it because there would not be any financing available. Mr. Koelsch clarified it had been going up at least 10% per year since 1989. Mr. Miller said in 1991 and 1995 it went up 78%, and in 1994 it went up 22%. He said he could not keep up with it. Mr. Koelsch asked what he would put the value of the property at and Mr. Miller said it was not up to him to value the property. He felt the value had to be between his value of $114,000 and Assessorís value of $312,000. He did not think anyone would pay that amount of money for this property and he noted that the property was not for sale. This was their home and they were being priced out.
Ms. Hagevig asked how the property was assessed last year. Mr. Duncan referred to page 56 and Ms. Hagevig clarified the value of the building had not changes since 1997. The only change this year was the increase in the value of the beachfront property from $225,000 to $250,000. She asked if all the other parcels on Lena were at $250,000 this year. Mr. Duncan said some were at $275,000. Ms. Hagevig asked what would be the deciding factor. Mr. Pitts said it would be the access, the year round driveway and no stairs. Mr. Miller indicated he had a 30% driveway year round. Ms. Hagevig said there had not been a considerable difference in the assessment for the past three years, except for the $25,000 increase this year, which is standard across the board for every piece of property in that area.
MOTION Ė by MacKinnon, to grant the appeal and he asked for a no vote.
Mr. MacKinnon said for a number of years, there had been a number of properties in the Lena area before the board. They have seen comparable sales of land value alone at $250,000 minimum; beachfront property is very valuable. He sympathized with Mr. Miller but said the value must be consistent and the BOE cannot be emotional. Mr. Kibby asked if he would be reducing the value of the building. Mr. MacKinnon said no, it was assessed at $47 a square foot and that was not a lot. He felt the Assessorís determination was realistic in reflecting the value of the property.
Mr. Koelsch spoke in support of voting no on the motion because he did not think the Board could grant $114,000 value. But, he did not think that people should be taxed out of their property. The assessment had gone up enough in the 90ís and he would feel more comfortable with $287,000.
Mr. Kibby said the Board was in the situation, by law, to be required to use fair market value. This is the regulatory process. Mr. Duncan said the concern with the Assessorís office was the consistency between the parcels that are out there. The Assessorís Office goes through every parcel and this one is valued consistently with all the neighboring parcels. If you adjust one, then that would affect all neighboring parcels. Mr. Koelsch said the pictures of the houses with the same assessment look entirely different.
Ms. Hagevig said the fact that the value of $62,000 for this property was not challenged in the past three years, and further, that previous to that it was valued at $76,100 and was reduced to $62,000 on appeal. For the past three years it has been consistent.
Mayor Egan asked if there were other parcels on Favorite Channel that were assessed at $225,000 and this year had been raised to $250,000. Mr. Pitts said there were a few but there needed to be consideration to stairs, how far down the beach, and where the parking was in relation to the property.
Nays: Hagevig, Kibby, Koelsch, MacKinnon and Mayor Egan
MOTION - by Koelsch, to put the assessment back at the 1998 assessment of $287,000.00.
Mr. MacKinnon asked on what basis. Mr. Koelsch said comparing the structure to the structures on either side, he could not see where the increase came from. The structure would have to be demolished to be able to buy the property. Ms. Hagevig agreed the buildings looked different, but she was compelled by the fact that these people came before the Board in 1997 and, on appeal, this structure was reduced from $76,100 to $62,000. She did not see where, in law, the Board could take into consideration the demolition of a building; that was very speculative. The property was not for sale and during the year the assessment was good for, they were in possession of the square footage at the square footage rate. The reduction in land from $250,000 to $225,000 could be discussed further but she did not see a change in value on the building.
Ayes: Kibby, Koelsch, Perkins and Mayor Egan
Nays: Hagevig and MacKinnon
motion fails: 4:2
7. Appellant: Bethany Baptist Church Appeal No.: 32
Parcel No.: 5B2101600091 Location: East End of Forest Lane
Mr. Duncan said the parcel of property was adjacent to the church parcel and was 4.46 acres. The total assessed value was $44,600 and the appellant was stating that the property should be exempted because it is part of the church; it is a separate parcel of property and the church uses it. 2.47% of the property is actually developable and could be used for parking, however, 97.5% is not. The appellant was requesting that the value be assessed at $40,000 and that that value be totally exempt from taxation. The Assessor recommended no change in the value. Mr. Pitts presented a map and pointed out the property and the adjacent church. Mr. Duncan added that in order to qualify for an exemption for religious purposes, it needed to be exclusively used for religious purposes. The property is not being used and has not been for a number of years. The assessment was consistent with the assessment of other similar parcels of vacant lots.
Pastor John Bigelow, of Bethany Baptist Church. He said in 1986, the piece of property was given to them. They made an application in 1990 to put a building on it but because of the location and the size of the building, they were denied. The city allowed them to build a house and use it as a church. They subdivided the two pieces of property and the one larger piece is totally inaccessible. They were told they would have to come up with at least 20 spaces for off-street parking and the area that is west of Jordan Creek is parking area. In addition, they have Vacation Bible School and Teem Ministries and they use that area for those activities. Until this year, this property was exempt and no taxes have been paid on either portion. This assessment says the portion that the church is on is exempt and the portion that has no building on it is now taxable. His concern was that it a portion of that land was being used on a regular basis for church activities.
MOTION Ė by Kibby to move BOE #7, appeal No. 32, in favor of the appellant.
Ms. Hagevig asked why this was the first year that this property was being taxed. Mr. Duncan said the Assessorís Office had missed it in previous years; it should have come on the roles in 1994. Ms. Hagevig asked if the State Law was specific with respect to religious use of property; did it speak to the kind of exemption Pastor Bigelow was looking for. Mr. Duncan said the City Code and State Statute did speak to it and what had been done in the past was that if a portion of a parcel has been used for religious or charitable purposed, it would be portioned out. The problem with this particular one is that the portion is only 2.5% of the total parcel. Ms. Hagevig asked how this would compare to property that was dealt with last year that was being used as a cultural retreat. Mr. Duncan said to be consistent, they would take 2.5% off the value of the assessment. Last years appeal by SEARHC was based on an estimated amount of property that would be used for religious purposes. With this particular case, they did actually go out and measure the property. Ms. Hagevig clarified that this land was undevelopable because of the location of Jordan Creek on the land and the setback that would be required on either side of Jordan Creek. Mr. Duncan said it was not totally undevelopable, it would just be costly to develop it because of its location.
Ms. Hagevig asked if it was wetlands and Pastor Bigelow referred to the map and identified the 100-year flood plain in relation to the property. Ms. Hagevig asked if the backside of the property was currently accessible by a road. Mr. Duncan said they would have to put a road in.
Mr. MacKinnon asked if the sauna that was approved last year was still operating. Mr. Pitts said yes and that he did go out and look at it. He was not sure they used it over the winter. He said this year they measured the actual portion of land that was used and that generated a considerably decreased in the area that was exempted last year. Mr. MacKinnon said the subject property was subdivided so that it would have a certain amount of road frontage.
Mayor Egan asked if there was objection to granting the appeal.
Mr. Hartle pointed out that the appellant had asked for both a reduction to $40,000 and for total exemption so it needed to be clear which one was being adopted. He said he gathered from the discussion that it was to be a reduction to $40,000.
Mr. Kibby withdrew his motion.
Mr. Koelsch said his understanding was that the appellant wanted the assessed value of $40,000 and that that value should be totally exempt from taxation.
Ayes: Hagevig, Koelsch and Perkins
Nays: Kibby, MacKinnon and Mayor Egan
Motion fails 3:4
This appeal was withdrawn.
Marian Miller, Clerk