City staff fielded questions Wednesday evening from assemblymembers and members of the public frustrated over the new methodology being used for property value assessments this year.
A public meeting was held minutes after Finance Director Bob Bartholomew made a presentation to the Borough Assembly Finance Committee on the new approach.
The biggest change in the assessment process this year appears to be the way mass appraisals are conducted. Instead of averaging property sale data boroughwide, the Assessor’s Office has taken data for 21 specific “neighborhoods,” into which it has divided the City and Borough of Juneau for assessment purposes, and used “cluster land models” to assess properties within them, making adjustments to some land parcels based on characteristics like slope, shape and access.
Another significant change is the approach to determining the value of residential buildings. A written overview from the Assessor’s Office noted that this change may increase the assessed value of vacant lots and the proportion of the value of improved properties that is attributed to the underlying land.
City Assessor Robin Potter, responding to questions in an email Wednesday, said the CBJ has been planning to switch over to the new methodology “for a number of years,” with the backing of the state assessor.
Potter acknowledged that not everyone has welcomed the change.
“I’ve heard criticism and I’m not surprised,” Potter wrote. “Change always brings resistance, particularly when many of the public think the assessment drives the market value of their property.”
Potter added, “Assessments are taxable values based on large groups of properties compared to large groups of sales data. The result is based on an overall average of the data, not an individual sale. The advantage of the new approach is more accuracy and consistency in how properties are valued for their differences.”
But there have been reports of dramatic changes in property values this year as well.
At Wednesday’s Finance Committee meeting, Mayor Merrill Sanford said he has seen a substantial undervaluation on his own property. He called the change “hard to take.”
“On my assessment, I went down $86,000,” said Sanford. “You can’t tell me that I can’t sell my house for the exact same as it was last week. … My land only went up $6,000. So there’s no rationale to it.”
Assemblymember Carlton Smith, who lives near Sanford in West Juneau, joked, “I was real happy with the fact that my house went down $130,000.”
Potter, responding to Smith at the meeting Wednesday, said the assemblymember’s property undervaluation will be adjusted this year.
Potter suggested the same to Mark Kelley, a resident speaking at the public meeting who said he has filed an appeal over a piece of land he owns that he described as “unbuildable” increasing from an assessed $10,000 to $38,000.
“The whole process comes into question when you get a 400 percent increase,” Kelley said, adding, “It just seems totally unfair.”
If the piece of property cannot be built upon, that is a variable the model can be adjusted to account for, Bartholomew said.
“I don’t think it means, in your example, that the system is broken or doesn’t work,” said Bartholomew.
A table of 2013 initial values attached to the overview from the Assessor’s Office indicate the total property assessment value increased 2.87 percent from 2012. That compares to an increase of about 5.1 percent between 2011 and 2012, according to Bartholomew.
Another table of residential assessed value percentage change from 2012 to 2013 indicates 24 percent of developed land properties and 43 percent of vacant land properties experienced no change in value this year.
However, 28 percent of developed land properties saw their assessed value increase by more than 5 percent — with 4 percent actually experiencing increases of more than 20 percent — while a relatively small 11 percent of developed land properties saw their value decrease by more than 5 percent, according to the table.
Twenty-four percent of vacant land properties experienced assessed value increases of more than 20 percent, the table indicated.
CBJ staff have said that some large variances are to be expected in the short term due to the major change this year.
Bartholomew and Potter also said Wednesday that gathering more data on particular properties and areas — including via appeals — is actually going to help the model become more accurate over time.
“If we had all the data that would help us explain variations … that’s our goal,” Bartholomew said. “It’s just part of the process of gathering that information. That’s the step we’re at right now. This year, there’s a lot of people coming into the Assessor’s Office and providing a lot of information that we did not have in the database.”
Bartholomew said last week that he is aware of public confusion about the process and the change.
“In hindsight, we would have done more communication to prepare people for the change,” said Bartholomew. “I think that’s one of the big issues I’m hearing from people is, ‘Why didn’t we know about this before the assessment card showed up?’ And that’s a valid question.”
“This is the result of what happens when we do too much in one year,” Potter said Wednesday evening.
Assemblymembers remarked on the issue as well on Wednesday.
“That’s part of why the public is so upset is we’re all over the place, and there’s no consistency,” said Crane.
Assemblymember Jerry Nankervis expressed frustration over the CBJ’s approach.
“I think what folks are looking for is consistency,” Nankervis said, addressing Bartholomew. “That sounds like what you’re saying to me is we’re just going to have to wait and see whether this is accurate or not.”
Bartholomew responded that staff are confident in the change and believe it was necessary. But he said it will likely take multiple years to sort out the major problems.
“I think it’s easily going to take a two-year cycle,” said Bartholomew. “Maybe it can happen in one year, but that’s probably not practical.”
Potter said that efforts are underway to provide the public with more information, such as summaries of the geographic areas used for assessment purposes.
“The more information the I can give to the public, the better,” said Potter. “But we need to have a free exchange of information, and that needs to help us, too.”
Former Assemblymember Ruth Danner, who asked several questions at the public meeting about how differently sized lots are assessed, said she is looking forward to seeing more information on the new methodology.
“I applaud in particular the idea that you’ll be putting more information on the Web,” said Danner.
Not every critic of the new methodology spoke at the meetings Wednesday.
Prudential Southeast Alaska Real Estate broker Debbie White, a former member of the CBJ Board of Equalization, testified at last week’s Borough Assembly meeting to protest the new approach and call on people who are not happy with their assessments to appeal them — advice she repeated this Monday.
“I am not saying, necessarily, that I want people to call me,” White said. “I’m not the only licensed Realtor in Juneau. But they need to call somebody. If they find that their number is incorrect, they need to get it contested. And they should get it contested whether it’s high or low, because it’s about being fair. I’m not against paying my taxes, but I am against what I see as hugely inaccurate information.”
White said her real estate office has been asked to prepare more than 100 assessment appeals by clients.
Although she made it clear that she believes the formulas being used for the modeling approach are flawed, White said she does not believe the errors are deliberate.
“I think they truly thought that this model they were using was going to give them a more accurate picture,” said White. “And in some cases that we spot-checked … it was surprisingly accurate on some. But the ones that it was not, it was horribly inaccurate.”
Notices of assessment were mailed out April 15.
Juneau residents who wish to appeal their 2013 initial assessed values have until May 15 to file an written appeal with the city Assessor’s Office.
• Contact reporter Mark D. Miller at 523-2279 or at email@example.com.