1997-05-13 Regular MeetingKODIAK ISLAND BOROUGH
BOARD OF EQUALIZATION METING
May 13,1997 @ 7:30 p.m.
Borough Assembly Chambers
A meeting of the Kodiak Island Borough Board of Equalization was held May 13, 1997 in the
Assembly Chambers 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: Absent:
Craig Fanning Jim Carmichael
Karenia Hackett
Tim Hurley
Steve Jensen
Cheryl McNeil (alternate)
comprising a quorum of the Board; and
Pat Carlson, Borough Assessor
Judi Nielsen, Deputy Borough Clerk
Lila Koplin, Appraiser Technician
BOARD ORGANIZATION
HURLEY,
seconded by JENSEN
Nominations were closed.
VOTE ON MOTION
MOTION CARRIED
Karenia Hackett assumed the chair.
APPROVAL OF AGENDA
HURLEY,
seconded by McNEIL
moved to nominate Karenia Hackett as chair.
Unanimous voice vote
moved to approve the agenda.
VOTE ON MOTION TO APPROVE
MOTION CARRIED
Board of Eaualization
May 13, 1997
Unanimous voice vote
Page 1
ITEMS OF BUSINESS
A. Approval of Minutes of the 1996 Board of Equalization.
HURLEY, moved to approve the minutes of the
seconded by MCNEIL 1996 Board of Equalization.
VOTE ON MOTION
MOTION CARRIED Unanimous voice vote
B. Hearings
Assessor Carlson was sworn in by Deputy Borough Clerk Nielsen.
Docket No. 1:
Anneal #97-01
AT& T dba Claircom Communications Group, Inc. vs
Citizens of the Kodiak Island Borough
Chair Hackett noted that the Appellant was not present.
Assessor Carlson concurred, stating that the appellant wished to make their presentation based on the
records that were included in the packets.
At the request of the chair, Assessor Carlson read the appeal from Real Estate Tax Services, Inc., the
tax representatives for Claircom, requesting that the Assessor incorporate a permanent economic
obsolescence factor in the tax valuation formula for assets purchased prior to 1997.
He also referred to a copy of the amended personal property filing with a copy of the equipment
description, an explanation of the determined fair market value, an estimate of the percent of good life
for sale of the equipment, and financial projections for 1996-2001 from Coopers and Lybrant.
Assessor Carlson said the property was the down -link equipment for the passenger phones on airplanes.
This corporation had a contractual agreement to provide the down -link equipment for operation of the
phones. The service had to be provided wherever the planes flew, and service was on the Alaska
Airlines jet to Kodiak as well as to other areas outside of Alaska. The case was appealed on their
position that the projected income would be lower than the projected expenses.
Assessor Carlson took into consideration the cost of the equipment to set the assessed value, and that
value was being reduced slower than the property owner would like. He related that computers and cell
electronics had a short life, other support equipment had a 10 year life, antennas had a 15 year life, and
buildings had a 25 year life.
Board of Equalization Page 2
May 13, 1997
Claircom estimated they would lose $80.7 million in 1996 before depreciation but instead had a profit
of $49.6 million so that projection varied over $130 million. The appellant could not provide any
reason for the dramatic change; however, they felt a huge reduction in the assessment was appropriate.
Assessor Carlson felt the facts indicated they would make a profit. The gross income figures for Kodiak
do not reflect the transmissions into Anchorage which he felt would be a larger percentage. He did not
know the cost to the airlines to provide the service and the equipment, but he understood there was a
base monthly cost and then a percentage of the earnings. He said that based on projections for an
increase he did not find any justification to reduce the assessment. He walked the Board through a
breakdown that determined the assessment.
In response to Mr. Hurley, Assessor Carlson said the equipment could not be sold because it was
specifically tied to the contract on a special frequency base tied directly to the phones and transmitters
in the aircraft.
In response to Mr. Fanning, Assessor Carlson said that with the accelerated depreciation schedule the
five-year life was accelerated with more written -off over a shorter period of time, but that was not a
clear, straight line depreciation.
Ms. McNeil understood that, if used, the depreciation schedule affected all taxpayers equally.
FINDINGS -OF -FACT: No motion was forthcoming; the assessment was upheld.
The chair ended the appeal hearing by stating the following: "According to Appellate Rule 602, you,
C 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."
GENERAL COMMENTS AND QUESTIONS
A. Pending Legislation, House Bill 94 Confidentiality of Certain Municipal Tax Records.
Assessor Carlson said the Fort Knox Gold Mine approached the state legislature to adopt statewide
legislation on records confidentiality. The legislation was written in such a way that it could put the
Board of Equalization in a liability situation that would create the need for an executive session to
discuss most appeals. He hoped the legislation would be changed to allow appeals in an open meeting
and permit the Board to determine the need for an executive session.
B. Update on New Assessment Software and FY 98 Goals.
Assessor Carlson reported that the Borough and school district HTE, Inc. software for the AS 400 main
frame was installed. The package included the Kb Systems Software to be used specifically with the
Borough tax program, so this provided a complete computer assessment package.
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May 13, 1997
Per Kodiak Island Borough Code 3.20.050(E)(9) Certification: The board shall certify its actions to the
assessor within seven days following its adjournment
ADJOURNMENT
With no further business to come before the Board, the meeting was adjourned at 7:57 p.m.
1"Ie-
Karenia Hackett
Chair
Ev aSo
di Nielsen, CMC -11--1/
epaty Borough Clerk
Board of Equalization Page 4
May 13, 1997