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2002-05-14 Regular MeetingKODIAK ISLAND BOROUGH BOARD OF EQUALIZATION METING May 14, 2002, 7:30 p.m. Assembly Chambers A meeting of the Board of Equalization was held on May 14, 2002 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: Tim Hurley Michael Machulsky Cheryl McNeil Jim Nagan comprising a quorum of the Board; Geoff Mould, Borough Assessor Judi Nielsen, Borough Clerk Nova Javier, Deputy Clerk BOARD ORGANIZATION McNEIL, seconded by MACHULSKY Absent: Jim Carmichael Carrie Morton moved to nominate Tim Hurley as chair. Boardmember Hurley declined the nomination. MACHULSKY, seconded by McNEIL VOICE VOTE ON MOTION MOTION CARRIED APPROVAL OF AGENDA MACHULSKY, seconded by McNEIL HURLEY, seconded by MACHULSKY ROLL CALL VOTE AS AMENDED Ayes: Noes: moved to nominate Jim Nagan as chair. Unanimous voice vote moved to approve the agenda. moved to amend the agenda by moving Docket 2002-04 as the first appeal to be heard. Hurley, Machulsky, McNeil, Nagan None ROLL CALL BOARD ORGANIZATION APPROVAL OF AGENDA Board of Equalization Meeting May 14, 2002 Page I Absent: MOTION CARRIED Carmichael, Morton Unanimous ITEMS OF BUSINESS ITEMS OF BUSINESS A. Approval of Minutes of the May 21, 2001 Board of Equalization. APPROVAL OF MINUTES McNEIL, moved to approve the minutes as seconded by NAGAN submitted. ROLL CALL VOTE ON MOTION Ayes: Hurley, Machulsky, McNeil, Nagan Noes: None Absent: Carmichael, Morton MOTION CARRIED Unanimous B. Hearings HEARINGS Assessor Mould was sworn in by Deputy Clerk Javier. Assessor Mould introduced the case. Appeal No. 2 Docket 2002-04 APPEAL NO.2 David A. Colwell vs. Kodiak Island Borough DAVID COLWELL VS KIB Boardmember Hurley has indicated a potential conflict of interest as he owned two properties adjacent to the subject property. Chair Nagan read into the record Section 2.39.140 of the Kodiak Island Borough Code under Conflict of interest that stated that every member shall vote on all questions unless he has a direct or substantial indirect financial interest in the matter being discussed. Chair Nagan, with input from the Board, ruled no conflict of interest. Mr. Colwell was sworn in by Deputy Clerk Javier. Mr. Colwell felt that his house should not be assessed more than $575,000 once finished. He noted that the percentage of completion for his property was 75% as opposed to the 80% assessment by the assessor. He explained that he was paying $4,400.00 per year to live in only ten percent of the finished and habitable section of the house. In response to Boardmember McNeil, Mr. Colwell said that the dollar value of improvements since 1998 that he had done was approximately $60,000. In response to Boardmember Machulsky, Mr. Colwell said that, in argument of Board of Equalization Meeting May 14, 2002 Page 2 percentages of completion of improvements since 1998, essentially not a lot has been done except the apartment which was dry -walled and primered. r In response to Assessor Mould, Mr. Colwell advised that construction has stopped since 1998 and just resumed a year ago. He had paid a carpenter l$36,500 who worked part-time. He also said that he had a pre -appraisal on the property in order for him to get his Certificate of Occupancy. The appraisal stated the value of $600,000 and subtracted the amount to complete the property which was $250,000 - $275,000. In response to Boardmember Nagan, Mr. Colwell said that he was able to obtain a Certificate of Occupancy for the whole house because he did enough upgrades to pass the safety code. In response to Assessor Mould, Mr. Colwell related to the insured value of $947,000 to determine the total cost that he spent on the property. Assessor Mould appreciated Mr. Colwell for letting him look at the property. He advised that he treated the property as he would any property in the Borough. He described the property to the board and gave a history of assessment valuation from 1997 to 2001. He noted that the subject property was 80% complete which caused an increase in valuation. He based his assessment upon a market tempered Cost Approach utilizing the Marshal Swift Cost Service. He explained the cost analysis per square foot of the living area. As of January 1, 2002, he noted that there have been no sales of large, custom homes in the Kodiak market. He explained the Standard Report as -is document. He advised an appraisal was done in January 1999 which determined the subject was at 70% completion. He then related to the Standard Report as -finished document. He also noted that the owners, back in November 1997, advertised the property for sale at $700,000. He referred to an advertisement also on the Alaska Business Monthly which offered the property at the finished price of $1,500,000. He explained the comparable assessed values with three other properties in the Monashka Bay area. Assessor Mould advised that the insured value of the property was at $947,000 and if the $200,000 was added to finish the construction, the total value of the property would be at $1,147,000. He remarked that Mr. Colwell would not even consider to sell the subject property at the current assessment. Boardmember Machulsky concurred. In response to Boardmember Nagan, Assessor Mould said landscaping was included in the twenty unfinished percentage. In response to Boardmember Hurley, Assessor Mould advised that the formula he used took into account the marketability of an unfinished house. In response to Boardmember Machulsky, Assessor Mould advised that he did not raise assessment on properties in Kodiak. Mr. Colwell rebutted by reiterating the roughly $100,000 increase. He advised that he had not put $100,000 in improvements since the last appraisal. Board of Equalization Meeting May 14, 2002 Page 3 In response to Boardmember Machulsky, Chair Nagan explained that a motion was not necessary if the assessment was held. HURLEY, seconded by MACHULSKY moved to reduce the assessed value of the improvements to 75 percent of the estimated completion of the assessor's report. Boardmember McNeil further clarified that they would use the assessor's determination of as- finished value and multiply that by 75% instead of 80%. Assessor Mould advised that the adjustment would be from the total assessed value of $490,100 to $463,100 rounded to the nearest $100. Boardmember Hurley, in consideration of the appellant's testimony, felt that there was 20% left of unfinished work yet to be done. He proposed to adjust by an additional 5%. In response to Clerk Nielsen, he advised that his motion should be considered for the findings of fact. Boardmember McNeil did not want to set a precedence by delineating back and forth on properties under construction. She did not want to see this become an annual event. ROLL CALL VOTE ON MOTION TO ADJUST Ayes: Hurley, Machulsky, Nagan Noes: McNeil Absent: Carmichael, Morton MOTION CARRIED 3 Ayes, 1 Noes FINDINGS -OF -FACT: The chair ended the appeal hearing by stating the following: "According to Appellate Rule 602, the Appellant or the Assessor has 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 No. 1 Docket 2002-13 APPEAL NO. 1 Mary Cossette vs. Kodiak Island Borough MARY COSSETTE VS. KIB Assessor Mould noted that the Appellant would not be present at the meeting. The appellant was unable to submit written comments to the board. Clerk Nielsen referred them to the hearings procedure which stated that a party to whom notice was mailed fails to appear, the board may proceed with the rhearing in his absence. l_ Assessor Mould read into the record the attached information supporting the Board of Equalization Meeting May 14, 2002 Page 4 appeal that Ms. Cossette wished the Board would consider which stated "why is the land my house sits on gone up in leaps. I have not done any improvements. Why is this? I would like to know." I Assessor Mould noted the property's location. He advised that Ms. Cossette lrequested a replat and sold a smaller lot for $65,000 to Mr. Pete Thompson. He noted that Ms. Cossette's property was adjusted conservatively in the amount of $80,000 as opposed to $120,000 as she owned a much bigger lot than Mr. Thompson. There were no questions from the board. FINDINGS -OF -FACT: The chair ended the appeal hearing by stating the following: "According to Appellate Rule 602, you, the appellant, or the Assessor has 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 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. Boardmember Nagan liked the organized hearing packets. G Assessor Mould advised that a faxed appeal was received from Mr. Bernie Karl, Kodiak Narrow Cape Lodge owner. He noted that he explained to Mr. Karl the deadlines for appealing the assessment. Assessor Mould advised that he provided this information for the record. The board did not have any questions. ADJOURNMENT McNEIL, seconded by MACHULSKY VOTE ON MOTION moved to adjourn the meeting. Unanimous voice vote With no further business to come before the Board, the meeting was adjourned at 9:12 p.m Board of Equalization Meeting May 14, 2002 GENERAL COMMENTS AND QUESTIONS ADJOURNMENT Page 5