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1996-05-14 Regular MeetingKODIAK ISLAND BOROUGH BOARD OF EQUALIZATION May 14, 1996 A meeting of the Kodiak Island Borough Board of Equalization was held May 14, 1996, in the Conference Room of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 7:30 p.m. ROLL CALL There were present: Steve Jensen Craig Fanning Karenia Hackett Tim Hurley Cheryl McNeil comprising a quorum of the Board; and Pat Carlson, Borough Assessor Judi Nielsen, Deputy Borough Clerk Lila Michaels, Appraiser Technician OVERVIEW AND GENERAL DISCUSSION OF THE HEARING PROCESS Assessor Carlson gave an overview of the hearing process, followed by general discussion by the Board. BOARD ORGANIZATION HURLEY, seconded by HACKETT Nominations were closed. VOTE ON MOTION MOTION CARRIED ITEMS OF BUSINESS A. Approval of Agenda. FANNING, seconded by HURLEY Board of Equalization May 14, 1996 moved to nominate Steve Jensen for chairperson. Unanimous voice vote moved to approve the agenda. Page 1 VOTE ON MOTION MOTION CARRIED Unanimous voice vote B. Approval of Minutes of the 1995 Board of Equalization. HURLEY, seconded by HACKETT VOTE ON MOTION MOTION CARRIED B. Hearings: HURLEY, seconded by HACKETT VOTE ON MOTION MOTION CARRIED moved to approve the minutes of the 1995 Board of Equalization. Unanimous voice vote moved to hear Docket No. 2 prior to Docket No. 1 Unanimous voice vote Assessor Carlson was sworn in by Deputy Clerk Nielsen. Docket No. 2: Appeal No. 96-02 AT&T dba Claircom Communications Group, Inc. vs. Citizens of the Kodiak Island Borough. The Appellant was not present. Assessor Carlson introduced the appeal for the appellant that sought to reduce the assessed value of $215,282 to $54,920. He read the April 1, 1996 letter submitted by Vickie Youngs that asked for a permanent economic obsolescence adjustment for property tax valuation for 1996 based on 1) Claircom was not projected to generate enough cash flow to recover the book value of the assets; 2) Inability to market existing assets because of incompatible technology employed by competitors; 3) Sale of the business was highly improbable; and 4) Contractual commitments prohibited outright exit. He asked that the financial statistic become part of the record. Assessor Carlson said the company made a substantial investment of $150,000 for base equipment and there were substantial additions in 1995 that increased 1996 taxes. It was a difficult situation because the owner was contractually obligated and unable to sell. He said obsolescence was not a factor but values could be reduced based on increased technology. In response to Board Member Hurley, Assessor Carlson said the figures for the base equipment were submitted by the appellant. Board of Equalization Page 2 May 14, 1996 Chair Jensen noted that the new equipment increase was $116,000, but the increased assessment was only $65,000. He felt that was a considerable adjustment in favor of the appellant. Board Member Fanning asked if this was a unique situation. Assessor Carlson said it was unusual for a business to make a large investment and go broke within a year. FINDINGS -OF -FACT: With no motion forthcoming, the assessment as submitted by the Assessor, was upheld. The chair ended the appeal hearing by stating the following: "According to Appellate Rule 602, you, the Appellant, or the Assessor have the right of appeal to the Superior Court of the State of Alaska from our decision. Should you wish to exercise your right of appeal, you must do so by notifying the Borough attorney and initiating the process within 30 days from today. Failure to do so will forever bar you from any appeal of this case." Docket No. 1: Appeal No. 96-01 Holy Spirit Association, for the Unification of World Christianity vs. Citizens of the Kodiak Island Borough. Dana Carros and Tom Parsons, appellants, were sworn in by Deputy Clerk Nielsen. Dana Carros, Unification Church community coordinator, read from a prepared statement that the Assessor determined that 40 percent of the sanctuary building and 60 percent of the parsonage to be taxable. Mr. Carros held the position that they were 100 percent non-taxable as other churches CJ in Kodiak. The all purpose room adjoining the kitchen was used as an adult Sunday school classroom, the entire rear portion of the sanctuary was used as a Sunday school classroom, and should be exempt as well as the two bathrooms and a stairwell that connected the sanctuary office with the classroom. The upper portion of the sanctuary was used for storage and a playroom. Only two bedrooms in the parsonage were considered tax exempt. Mr. Carros presented blueprints and photos, contending that the sanctuary was not 2,500 square feet, but 2,250 square feet. There was a playground on part of lot 8. The Assessor only exempted the handicapped children's toilet facilities and not the adult toilet facilities that were adjacent to the adult Sunday school classroom area in the back of the building. Also non-exempt were storage closets as well as two communal baths that were used to clean children during Sunday school. No commercial business took place in the buildings. He argued that all areas of the buildings were used for religious education and were vital to that purpose. He was not requesting an exemption on the portion of the lot with the playground. In response to Board member Fanning, Mr. Carros said the parsonage was not used for any business such as a bed and breakfast. Mr. Carros said the boat storage area should be tax exempt because it was not used as a business but for church members and their children as well as a coastal outreach program. Assessor Carlson outlined that the Supreme Court determined that dining, relaxation, member housing, and recreational areas were not necessary for a religious purpose. He determined that the large bathing rooms, commercial kitchen and dining hall were taxable based on their size and makeup. Also, the building design and construction was excessive for a parsonage. He felt the Board of Equalization Page 3 May 14, 1996 main living unit was not used exclusively for an exempt purpose. The vacant lot with a portion of the church playground was not exempt as there was a large playground on the church parcel. In response to a question about whether the law specifically related to the size of kitchens, baths, etc., Assessor Carlson said no. Chair Jensen considered the buildings were used for non-profit purposes. HURLEY, seconded by FANNING VOTE ON MOTION MOTION CARRIED moved to exempt lots 11A, 13, 15, and the percentage of lot 8 that is used for a playground. Voice vote All but Board member McNeil responded affirmatively. The chair ended the appeal hearing by stating the following: "According to Appellate Rule 602, you, the Appellant, or the Assessor have the right of appeal to the Superior Court of the State of Alaska from our decision. Should you wish to exercise your right of appeal, you must do so by notifying the Borough attorney and initiating the process within 30 days from today. Failure to do so will forever bar you from any appeal of this case." Appeal Hearing Request Assessor Carlson explained that Mr. Gerald Ensley requested a late filing of his assessment appeal. Law required that appeals be filed within 30 days of mailing the assessment notices. In order to be equitable to all taxpayers, Assessor Carlson's recommendation was to deny the request. HURLEY, seconded by FANNING VOTE ON MOTION MOTION CARRIED moved to deny Mr. Gerald Ensley's request for a late filing. Unanimous voice vote GENERAL COMMENTS AND QUESTIONS Per Kodiak Island Borough Code 3.20.050E9 Certification: The board shall certify its actions to the assessor within seven days following its adjournment. The Board was pleased to have received the packets early which allowed them an opportunity for review. Board of Equalization Page 4 May 14, 1996 ADJOURNMENT HURLEY, moved to adjourn. seconded by JENSEN VOTE ON MOTION MOTION CARRIED Unanimous voice vote With no ft rther business to come before the Board, the meeting adjourned at 9:23 p.m. Steve Jensen Chair ATTEST: Judi Nielsel Deputy Borough Clerk Board of Equalization Page 5 May 14, 1996