Council to seek Supreme Court’s review of condo gas assessments

At an emergency meeting on April 8, the Homer City Council said it will petition the Alaska Supreme Court to review an April 3 judicial order that it cease its method for assessing condominium owners in the Natural Gas Homer Special Assessment District. 

Council member David Lewis made the announcement after a 90-minute executive session in which the council consulted with city attorney Thomas Klinkner. Council member Bryan Zak did not attend the meeting. Mayor Beth Wythe has continually been recused from natural gas discussions because of a conflict of interest with her job at Homer Electric Association.

“The choice of an additional review is simply requesting a second legal opinion about whether one group of property owners should be required to subsidize another group,” council member Francie Roberts later explained at this week’s regular meeting of the city council.

On April 3, Kenai Superior Court Judge Charles Huguelet issued an order declaring unlawful the city’s method for assessing condos and told it to cease using the method. 

Huguelet also said because the city did not appeal his original Jan. 3, 2014, decision in the Kenneth Castner v. City of Homer case, his order was final.

In a statement she read at Monday’s meeting, Roberts said, “Regardless of the intent, the effect of the recent court ruling is that there is now a preferred class of property owners who will pay less than other property owners.”

The council took no public vote on its decision. Under the Alaska Open Meetings Act, governmental bodies meeting in executive session cannot take an action in that session. They can give direction to an attorney.

At its regular meeting on Monday, the council also met in executive session to discuss extending the time limit for condominium owners to contest the assessment schedule in Superior Court. 

After the 15-minute meeting, council member David Lewis said “the attorney is authorized to agree to adjustments in the assessment schedule in light of the pending petition for review.”

Castner successfully challenged the city’s method of assessing properties by the tax parcel and not by lot. Huguelet called that method “disproportionate” and “arbitrary and unreasonable.” The city corrected the assessment roll for Castner’s and two other condos in the Kachemak Bay Title Company Building, but not for another 102 condos in the assessment district.

Lewis said the council also would seek a stay of the April 3 order.

“I find them to be openly defiant to the extent that this is civil disobedience,” Castner said of the council after the April 8 meeting.

At its regular meeting on Monday, Roberts, speaking as Mayor Pro Tempore, elaborated on why the council sought judicial review. Roberts said that when the council first discussed the natural gas assessment method, it reviewed several methods and chose one “meant to insure that all property owners would pay an equal amount.”

“The council was emphatic that the system be uniform and fair,” Roberts said.

If the condo owners are assessed by their share in a condominium association, 102 properties would be dropped from the roll at a cost of about $335,000, and assessments would go up by about $45. The gas line came in $340,000 below budget.

Roberts said the other property owners would be subsidizing the condo owners.

“The council is adamant that this inequality is not consistent with the original intent of fairness that was agreed upon when they began the project,” she said.

People speaking in public comments at the end of the emergency meeting condemned the council’s decision.

Ginny Espenshade, a Homer lawyer and director of the Kenai Peninsula Youth Court, said one thing she teaches students is the relationship between the branches of government. Defying Huguelet’s order shows disrespect for the judicial branch, she said.

“I am embarrassed. I am embarrassed for the city,” she said. “I hope the next time there’s any interaction of that sort you show respect for the other branches of the government.”

“I too am embarrassed. You guys just spent an hour-and-a-half on Birch Horton’s meter,” said Kevin Hogan, a former city council member, referring to Klinkner’s law firm. “I’m tired of you guys spending our money and doing the wrong thing. This is so wrong.”

Condo owners also expressed dismay at the decision.

“I just don’t know what to say to you folks anymore. I’m not sure we’ve ever had a conversation,” said Amy Springer, a condominium owner. “There just hasn’t been any ears hearing.”

“I’m disappointed and dismayed with the statement you made tonight,” said Margarida Kondak, another condo owner. “I find it very troubling that our city council has had a ruling from a judge not once, but twice, and it still seems to think they know better than the court does.”

In February, Castner had filed a motion for the city to show cause why it was not in contempt of court for defying Huguelet’s decision. The April 3 order came out of that motion. In the order, Huguelet said he would defer a decision on whether contempt sanctions should be imposed on the city and culpable city officials “pending its determination that the city has fully complied with this order.”

A party asking for Alaska Supreme Court judicial review would file a petition with the court stating why it thinks the court should review an order, said Marilyn May, clerk of the Appellate Court. The Supreme Court would then decide if it wants to hear the case or not. If a review is granted, the court could overturn the lower court’s order or set a time for written arguments to be submitted.

Michael Armstrong can be reached at michael.armstrong@homernews.com.

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