2009-05-11 Regular MeetingKODIAK ISLAND BOROUGH
Citizens Board of Equalization Meeting
May 11, 2009
A regular meeting of the Kodiak Island Borough Citizens Board of Equalization was held May 11, 2009
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.
Present were Board members Cheryl Boehland, Karenia Hackett, Tim Hurley, Cassandra Juenger,
and John Parker. Staff members present were Borough Assessor Tom Anderson, Borough Clerk Nova
Javier, and Deputy Clerk Marylynn McFarland.
The Board members and Borough Assessor Tom Anderson were sworn in by Borough Clerk Nova
Javier.
NOMINATION FOR CHAIRMAN OF THE BOARD
HURLEY moved to nominate Board member Parker as Chair.
VOICE VOTE ON MOTION CARRIED UNANIMOUSLY.
APPROVAL OF AGENDA
HURLEY moved to approve the agenda.
VOICE VOTE ON MOTION TO APPROVE THE AGENDA CARRIED UNANIMOUSLY.
APPROVAL OF MINUTES
A. BOE Meeting of May 20, 2008
BOEHLAND moved to approve the minutes as submitted.
VOICE VOTE ON MOTION TO APPROVE MINUTES CARRIED UNANIMOUSLY.
ITEMS OF BUSINESS - Hearings
Docket #2009-001, Appeal No. 2009-001, Appellant: Polaris Properties LLC
Board member Hurley declared a business and friendship conflict of interest with the Appellant, Mr.
Mel Stephens, manager and majority owner of Polaris Properties LLC. Confirming that there was no
financial interest, Chairperson Parker waived the conflict.
Mr. Stephens was sworn in by Clerk Javier.
Mr. Stephens, manager and majority owner of Polaris Properties LLC reported that he had purchased
the subject property on November 14, 2008 for $700,000 cash. Mr. Stephens contended that the price
actually paid for said property was conclusive as to the assessed value of that property as of January
1, 2009. He also reported that the sale was established at arm's length and felt that an assessment
value could not be validated by using income information.
Kodiak Island Borough BOE Minutes
May 11, 2009 Page 1
In response to Assessor Anderson, Mr. Stephens reported that the property had not been listed, a
commission had not been paid to his knowledge, and a fee appraisal had not been performed for the
transaction.
Assessor Anderson reported that the November 2008 sales price may not have met all conditions of
an arm's length transaction in that it was unclear whether it received the benefit of adequate exposure
in the open marketplace. The Assessor also concluded that the value produced by the income
capitalization approach was based upon accepted and sound appraisal methodology and resulted in a
credible and well -supported estimate of value.
Mr. Stephens' rebuttal statement reviewed and questioned the property's income and expenses
methodology used by the Assessing Department
HURLEY moved to adjust the valuation from $1,687,800 to reflect the sales price of November 14,
2008 of $700,000; $100,500 for land, $599,500 for improvements for a total of $700,000.
ROLL CALL VOTE ON MOTION CARRIED THREE TO TWO: Hurley, Parker, and Hacket (Ayes);
Juenger and Boehland (Noes).
Chair Parker stated "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."
The meeting was recessed at 9:50 p.m. and reconvened at 10 p.m.
JUENGER moved to reschedule Docket #2009-006 (Appellant: Greg Spalinger) as the next item on
the agenda.
ROLL CALL VOTE ON THE MOTION CARRIED UNANIMOUSLY: Juenger, Parker, Boehland,
Hackett, and Hurley.
Docket #2009-006, Appeal No. 2009-007, Appellant: Gregory Spalinger
Mr. Greg Spalinger was sworn in by Clerk Javier.
Mr. Spalinger reported he was appealing the assessment on Dr. Bob's Clinic/Safe Harbor building,
New Kodiak Bk14, Lots 6 & 10 as being excessive. Mr. Spalinger purchased the property in 2007 in an
auction which met the requirements of an arm's length transaction. He distributed additional
information for the Board's review.
Assessor Anderson noted that he had not seen the additional information and needed an opportunity
to review.
HURLEY moved to postpone Docket #2009-006 to May 12, 2009 at 7:30 p.m. in order to give
Assessor Anderson time to review the new information provided by Mr. Spalinger.
ROLL CALL VOTE ON MOTION TO POSTPONE CARRIED THREE TO TWO: Parker, Hackett,
Hurley (Ayes); Boehland and Juenger (Noes).
Kodiak Island Borough BOE Minutes
May 11, 2009 Page 2
Docket #2009-004, Appeal No. 2009-004, Appellant: Martin Wandersee
The Board mentioned Ms. Carol Wandersee was present earlier at the meeting and would like to give
her the opportunity to present her case at the next meeting.
JUENGER moved to postpone Docket #2009-004 (Martin Wandersee) to May 12, 2009.
ROLL CALL VOTE ON MOTION TO POSTPONE CARRIED UNANIMOUSLY: Boehland, Hackett,
Hurley, Juenger, and Parker.
Docket #2009-002, Appeal No. 2009-002, Appellant: Xerox Corporation
Appellant was not present.
Assessor Anderson reported that the assessed value was based upon the cost approach to value. The
Assessing Department estimated the replacement cost new of all assets based upon reported
acquisition cost and/or market sources. Each asset was assigned an appropriate depreciation
schedule based upon the type of asset and its expected economic life.
Assessor Anderson concluded that adding 50% for delivery and installation, the rate applied in recent
years, was too high and did not represent market values. Based upon the quoted prices obtained from
Office Tech, the Assessor concluded that the value added for shipping and installation should be 25%.
It was recommended that the value of the account be amended accordingly to $204,258.
HURLEY moved to adjust the valuation from $245,109 to $204,258 because of excessive valuation.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Hackett, Hurley, Juenger, Parker, and
Boehland.
Chair Parker stated "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."
Docket #2009-003, Appeal No. 2009-003, Appellant: Xerox Corporation
Appellant was not present.
Assessor Anderson reported that the assessed value was based upon the cost approach to value. The
Assessing Department estimated the replacement cost new of all assets based upon reported
acquisition cost and/or market sources. Each asset was assigned an appropriate depreciation
schedule based upon the type of asset and its expected economic life.
Assessor Anderson concluded that adding 50% for delivery and installation, the rate applied in recent
years, was too high and did not represent market values. Based upon the quoted prices obtained from
Office Tech, the Assessor concluded that the value added for shipping and installation should be 25%.
It was recommended that the value of the account be amended accordingly to $422,233.
JUENGER moved to adjust the valuation from $506,679 to $422,233 because of excessive valuation.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Hurley, Juenger, Parker, Boehland, and
Hackett.
Kodiak Island Borough BOE Minutes
May 11, 2009 Page 3
Chair Parker stated "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."
Docket #2009-005, Appeal No. 2009-005, Appellant: Safeway Stores Inc.
Appellant was not present.
Assessor Anderson reported that he reviewed the value and valuation method applied to all assets for
this account. It was concluded that, based upon asset type and description, some of the assets should
be placed on a 5, 10, 16, and some on a 20 year depreciation schedule based upon the expected
economic life of each type of asset. All assets were depreciated accordingly. The Assessor concluded
that the appellant's request to place all assets on a 10 -year depreciation schedule would be improper
and beyond the authority of the Board of Equalization.
BOEHLAND moved to adjust the valuation from $1,373,154 to $1,243,504 to reflect the new system of
depreciation.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Juenger, Parker, Boehland, Hackett, and
Hurley.
Chair Parker stated "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."
Docket #2009-007, Appeal No. 2009-008 Appellant: T.C. Enterprises
Appellant was not present.
Assessor Anderson reported that based upon oral conversation with Assessing staff, the owner
claimed that most of the property on this account had been disposed of, and that the remaining assets
could not function as intended or manufactured without the disposed -of components. Assessor
Anderson and staff conducted a field inspection and verified that property was indeed onsite.
HACKETT moved to uphold the decision of the Assessor by keeping the valuation at $56,021.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Parker, Boehland, Hackett, Hurley, and
Juenger.
Chair Parker "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."
Docket #2009-008, Appeal No. 2009-009, Appellant: Robert Coyle
The appellant was not present.
Kodiak Island Borough BOE Minutes
May 11, 2009 Page 4
Assessor Anderson corrected the appeal docket information in that the Assessed value on page 3 of 3
should have read $128,400 instead of the stated $129,500. The appellant provided no documentation
of the sale next door, avid it was assumed that the sale price was correct and was an arm's length
transaction, the sale was consummated in 2005. Market conditions changed significantly over the
intervening 4 years and the 2005 sale was not a reliable indicator of market value for the subject as of
January 1, 2009.
Assessor Anderson noted that the other side of the zero lot line property was appraised at $123,500
due to the enclosed patio.
HACKETT moved to adjust the assessed value to $128,400, land value at $34,200 and improvements
at $94,200.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Boehland, Hackett, Hurley, Juenger, and
Parker.
Chair Parker stated "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."
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.
ADJOURNMENT
HURLEY moved to adjourn.
ROLL CALL VOTE ON MOTION CARRIED UNANIMOUSLY: Hackett, Hurley, Juenger, Parker, and
Boehland.
The meeting was adjourned at 10:55 p.m.
ATTEST: �
Q ; ;
� hC P er, Chair
Nova M. Javier, MMC, orough Clerk �J e/a6/O f
Kodiak Island Borough BOE Minutes
May 11, 2009 Page 5