March 21, 2013 | Volume 43, Number 11

Property value hike upsets land owners

Land value assessments that increased as much as 800 percent triggered confusion and anger among Haines property owners this week.

The Haines Borough sent out its 2013 property assessments March 13 and began receiving appeals as soon as the next day, according to assistant assessor Dean Olsen. No reason was provided with the mailed assessments for the seemingly abrupt and arbitrary increases, several property owners said this week.

“There’s no explanation. You pick up your card in the mail and that’s it,” said Mike Erny, whose land value for his 24,000-square-foot parcel on Muncaster Road jumped from $47,050 to $77,900 between 2012 and 2013 – a 65 percent increase.

Don Turner, who owns an undeveloped 7.8-acre lot out Tanani Bay, saw his assessment skyrocket by 891 percent -- from $49,920 in 2012 to $445,200 this year. “My other properties have been raised, too, but this one is just crazy. I don’t know where they come up with their numbers. I’ve talked to quite a few people and their stuff has raised 200 to 300 percent,” Turner said.

Property owner John Shaw, whose undeveloped 4.6-acre parcel near 25 Mile increased from $32,000 to $102,000, said the increase seemed so arbitrary that “it’s almost like the assessor is spinning the roulette wheel.”

Assessed values in the Haines Borough rose by 18 percent overall.

The mass confusion and clamor for explanation prompted Mayor Stephanie Scott to request from assessor James Canary a formal description of his methodology for the public. “I don’t like surprises, and it would have been nice to have the explanation beforehand so we would have been forewarned,” Scott said.

Canary, who has conducted real estate appraisals in Haines for more than 17 years and worked as an assessor in Juneau, Petersburg and Pelican, traveled to Haines for about a month to complete assessments.

The borough is required by law to maintain equity between assessed values and fair market values. An audit by the state assessor determined the borough was lagging considerably, sitting at about an 85 percent sales ratio, meaning, on average, properties were assessed at 85 percent of what they were actually worth on the market.

Scott said the borough had been “scrutinized by the state assessor for some time” because of the discrepancy.

Canary’s first step was to gather sales information from the past three years to determine how much properties in Haines have been selling for. As Alaska is a nondisclosure state, sellers are not required to release the results of a sale. Of the 236 sales in the past three years, 126 had confirmed sale prices.

Canary then analyzed each confirmed sale, occasionally making site visits and asking owners questions if additional information was required. Factors taken into account were raw land values by location, density, upland versus waterfront location, view, topography, site development and other characteristics. That data was then extrapolated out and applied to similar areas.

Developed properties with a driveway, site pad, water, sewer, electricity and a telephone had an additional $20,000 tacked on to the assessment. However, some houses – which would qualify something as a “developed property” – don’t have those amenities.

“I think he made an assumption based on ‘normal’ patterns of living. He assumed if you had a house, you had all those amenities. But that’s just one way (Haines) is different from other places,” Scott said.

“It seems like there was a formulaic approach to these assessments that maybe just doesn’t work for an isolated community,” she added.

After Canary’s assessment, the borough’s sales ratio increased from 85 percent to 98 percent, putting it within the range of acceptability in the eyes of the state.

“I understand as a tax payer this increase is hard to swallow, but my job as the assessor is to assess each and every property at full and true value as of January 1, 2013,” Canary wrote in a letter to Scott and the assembly.

Assistant assessor Olsen said bringing properties up to fair market value in Haines has lagged because of turnover in assessors, limited staff, and insufficient equipment.

“One of the problems we have is that we don’t have a Computer-Assisted Mass Assessment (CAMA) system like other municipalities have. They have a CAMA system and a staff that allows them to do reviews of the properties in a relatively timely matter in terms of doing site assessments of all the properties,” Olsen said.

Though property owners and borough personnel alike have been questioning Canary’s methodology, state assessor Steve Van Sant defended Canary’s approach.

“The assessor is the keeper and analyst of the data that is used to estimate values.  No one else has the data and understands it like the assessor; therefore he/she should be the one to determine which method, at his disposal, would provide the best indicator of value. Obviously, some will disagree with his value estimates,” Van Sant said.

Property owners concerned with their assessments can submit an appeal. The deadline is April 15.

“The appeal period will assist (Canary) in pinpointing any mistakes he has made or wrong assumptions he may have relied upon. It will also help in correcting data, such as topographical, access, view, wetlands and other issues he may not have been aware of,” Van Sant said.

Property owners can appeal if they feel their property is valued in excess of fair market value, unequal to similar properties, valued incorrectly or is undervalued.

Just because assessments increased does not necessarily mean taxes will increase proportionally, chief fiscal officer Jila Stuart said this week.  

“Property owners need to understand that just because their assessments may have gone up doesn’t mean their taxes will necessarily go up proportionally. The mill rate will be set as part of the budget process. I’m hoping that because the valuations have increased we will be able to decrease the mill rate, but that is a decision that will be made by the assembly,” Stuart said.

Residents are encouraged to attend the budget meetings through April and May.

Stuart also clarified that while some property owners saw an exorbitant increase in their assessments, some also saw decreases. In the townsite, values increased overall by 14 percent.

  “Keep in mind increases are not uniform. Twenty-four percent of the values in the townsite actually decreased, and 51 percent of the values in the townsite either decreased or remained within 10 percent of the 2012 values,” Stuart said.

If appeals are not resolved between the property owner and assessor to the property owner’s satisfaction, he or she can take the appeal to the Board of Equalization on April 29 at 6 p.m.