Sharply rising property assessments in Kenai brought three dozen citizens and a smattering of local government officials to a town hall meeting last Thursday, hosted by the Kenai Peninsula Borough assessor.
A new valuing ability made possible by a recently installed computer software system, as well as rising property sales prices, account for the increases, according to assessor Shane Horan.
Horan was joined by staffers Paul Knight, land appraiser; Randy Hughes, commercial appraiser; and Gary Roten, appraisal system analyst, who described the methods and mandates that drive property assessments used to determine people's property tax bills.
Following a brief introduction by Borough Mayor John Williams, Horan began the presentation by stating the meeting was not for people to bring up individual concerns about individual pieces of property.
People can file appeals to their assessments or visit the assessor's office to question them, he said.
Assessments went out March 1 and people have until March 30 to file appeals if they do not agree with the value the assessor's office has put on their property.
While fees ranging from $30 to $1,000 are charged for formally appealing assessments, Horan said property owners can visit the assessor's office in the Borough Building in Soldotna anytime during regular business hours to go over individual tax files. The office is open from 8 a.m. to 5 p.m. Monday through Friday. If an appeal is not filed, there is no charge.
Also, if an appeal fee is charged and the assessment is found to be incorrect, the fee is refunded.
Horan told the audience attending the meeting at the Challenger Learning Center of Alaska that property assessments are driven by Alaska statute.
"We are to assess property at its full and true value as of Jan. 1," he said.
The statute AS 29.45.110 defines full and true value as the estimated price the property would bring on the open market under then-prevailing market conditions.
By borough resolution, Horan said appraisers on the Kenai Peninsula are on a five-year inspection cycle, when they physically inspect properties to assist in assessing them fairly.
Roten said the new cost model used by the Manatron-ProVal Assessment software bases the value on the actual value of the land, plus the new replacement costs of improvements on the property, minus depreciation of the improvements.
One challenge of the assessor's office is to determine how close the calculated costs of improvements are to market prices.
In order to make the determination, the calculated value is divided by the most recent sale price, he said.
For example, if the calculated, or assessed value, is $100,000 and the property sells for $100,000, the sales ratio is said to be 100 percent.
The Kenai borough assessor, however ,strives for 90 to 95 percent.
"I find a 90 to 95 percent appraisal errs on the conservative side," Horan said.
Hughes said, "Probably the number one question in our office is, 'Why did my assessment go up in just one year?'"
On commercial properties, Hughes said a new canvass system now requires that all building types be categorized.
Also contributing to the increases is that commercial property reviews are not done often enough, he said, and sales information is not always reported to the assessor.
Land appraiser Knight said prior to the 2008 assessments, there were no tables or attributes in the system to make annual adjustments or recognize things that influence values such as views, water frontage, utilities or access to the property.
"Most land values hadn't been updated in almost 10 years," he said.
With the new computer system, the assessor can enter attributes into the calculations.
"Finally we adjusted (land values) to the market," Knight said.
During a question-and-answer session, Horan said while the assessor's office looks at listing prices when setting values of property, the values are based only on selling prices, not list prices.
He said people may visit his office any time during the year, not just during the 30-day assessment appeal period. Property owners can request physical inspections of their property. Interior inspections allow more accurate information for determining assessed values.
"It takes a lot of money to run the borough the way it is," Williams said.
"We have 13 separate service areas ... all voted in by the people. We're doing the best we can."
Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.
