Judge orders city to explain why it’s not following condo decision

A Homer condominium owner last week got a judge’s order to serve city officials and ask them to show cause why they should not be held in contempt of court. Ken Castner, who owns one of three business condos in the Kachemak Bay Title Company Building, served papers on the city Feb. 13.

If sustained, the order would compel interim City Manager Marvin Yoder, City Attorney Tom Klinkner and at least two Homer City Council members to appear at a hearing and explain why the city did not comply with Kenai Superior Court Judge Charles Huguelet’s January 2014 decision that the Kachemak Bay Title building and lot only receive one assessment in the Homer Natural Gas Special Assessment District. 

However, Huguelet has not yet set a hearing date, and he gave the city 10 days or until Feb. 23 to file a motion in opposition to Castner’s order to show cause. 

Castner called that “a shot across their bow” to get the city’s attention and give it a chance to avoid further court action.

“The facts are the facts, and the facts are that they have not followed the judge’s order,” Castner said. “They’ve denied me relief.”

In 2013, Castner challenged the city’s assessment of a business condominium building in which he has an interest, saying the city should have assessed him just once in the Homer Natural Gas Special Assessment District. 

The city assessed the building seven times, once for each parcel number associated with the building and lot, including parcel numbers for things like a boiler room.

In January 2014, Huguelet ruled in Castner’s favor, saying the city should have issued only one assessment for the Kachemak Bay Title Company building. Huguelet said the building was no different than an apartment building in which the entire building had the benefit of a single gas line connection. 

“The assessment charge, however, is disproportionate to the benefit received,” Huguelet wrote, “The city’s assessment with respect to condominium owners is arbitrary and unreasonable.”

Castner owns one condo in the building and Michael and Shira Hough and Kachemak Bay Title own the other two condos. When the city released its latest assessment on Feb. 3, the Kachemak Bay Title Company building at 3733 Ben Walters Lane was assessed three times, once for each business condo.

Castner filed a 52-page document, including an order to show cause, a motion supporting that order and exhibits. On Feb. 12, Huguelet told Castner to serve papers on the city. 

On Tuesday, Yoder said the city had received those papers and the Planning Department was looking into the assessment. He anticipated the issue would be on the council agenda at its next meeting on Feb. 23.

Planning technician Julie Engebretsen said a memorandum amending the assessment roll and correcting the Castner situation would be included in the March 9 council packet with an accompanying resolution to be considered.

On Jan. 12, the council amended the assessment district by exempting some lots. Engebretsen said lots can be exempted for such things as being too steep to develop, having conservation easements and having incorrect lot lines. Earlier this month, the city announced its process for approving the final assessment roll. Notices are expected to be received by Friday. Property owners have until 5 p.m. March 16 to object.

The current assessment amount is $3,237.14, $45.86 less than the original assessment. The project came in $340,000 under budget.

In February 2014, former City Manager Walt Wrede said the city would not appeal Huguelet’s decision in the Castner case. In a Nov. 7 memo, City Attorney Klinkner wrote that at a minimum Huguelet’s decision “binds the city in its assessment of Castner’s condominium property.” Klinkner also recommended “that the city apply the same assessment method to any other condominium where more than one unit is served by a single service connection.”

So far, other condo owners have been assessed by parcel and not by lot or service connection.

Before Wrede left on Dec. 31, on Dec. 12 he sent a transition memo to Yoder summarizing the status of the natural gas line project and assessment. He calculated that assessing on a per-lot basis the 102 condos in the district would cost $334,000 and have to be absorbed in some way. In that memo Wrede also told the council it could accept Klinkner’s Nov. 7 recommendation, but if it wanted more information, it could discuss that in an executive session.

At its Jan. 12 meeting, the council did so. After the meeting, council member David Lewis said, “We met with the attorney regarding condo assessments and decided to follow the original improvement plan.”

That is, the city would stick to assessing condos on a per-parcel basis, and not by lot.

According to Alaska’s Open Meetings Act, while a council can meet in executive session to discuss legal matters, it cannot take action. In his motion to Huguelet, Castner did not raise the issue of if the Jan. 12 executive session violated the Open Meetings Act, but he did comment on it.

“The executive session is simply another example of the city’s unwillingness to openly address the issue of condominium special assessments,” Castner wrote.

Lewis and other council members said their decision meant the city would stick to the plan of assessing by parcel number and not by lot or service connection. After the meeting, in response to an email from the Homer News, Klinkner wrote, “The council recognizes that the city is obligated to follow Judge Huguelet’s decision with regard to Mr. Castner’s property.”

Even though it “decided,” as Lewis said, Klinkner said the council did not take any action because the council didn’t vary from its original improvement plan.

In an email to Yoder on Feb. 2, Castner sought clarification on if the city would follow Huguelet’s decision. Yoder referred Castner to Engebretsen, who gave him information on the process for objecting to the assessment roll. 

In an email on Feb. 4, Castner pressed Engebretsen, asking if the Kachemak Bay Title building would receive three full assessments or just one. Engebretsen replied in a Feb. 4 email that the building would receive three full assessments. That was confirmed by the preliminary assessment roll the city published on its website showing 3733 Ben Walters Lane got three assessments.

A week later, Castner filed his motion asking the city to show cause why it’s not in contempt.

Castner said by ignoring the city attorney’s November recommendation, and by publishing a preliminary assessment that goes against Huguelet’s decision, the city and the council showed “willfulness.”

“‘Willfulness’ is the sole criteria for criminal contempt,” Castner said.

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