ANCHORAGE — A decision to return more than $1 million in municipal property taxes to Enstar Natural Gas Co. led to the resignation of Anchorage’s longtime property assessor.
Marty McGee, who was behind the higher assessment of Enstar pipelines, resigned to protest the settlement of Enstar’s challenge, the Anchorage Daily News reported.
McGee said he quit because he was being undermined by his boss, Chief Financial Officer Lucinda Mahoney, who settled with the utility rather than continue rejection of the company’s appeal. She and other administration officials under Mayor Dan Sullivan have ties to the oil and gas industry, he said.
Mahoney said ending the case was appropriate, supported by staff and in the best interest of the city. Her husband, a lawyer, has represented owners of the trans-Alaska pipeline in a valuation dispute, she said, but that had nothing to do with the Enstar settlement.
Sullivan’s chief of staff worked for Enstar for three decades but was not involved in the case, the mayor said.
McGee’s revised assessment raised the value of Enstar pipelines from $78 million to $119 million. Enstar’s annual tax bill increased from about $1.2 million to $1.8 million.
Enstar appealed. The case landed before Superior Court Judge Mark Rindner, who in August 2012 agreed with some city arguments and wanted more information before ruling on others. He sent the matter to the city property tax appeals board for reconsideration.
Mahoney decided the appeal was taking too long. Enstar had paid disputed taxes for 2010, 2011 and 2012, and the city would have been required to return the disputed money with interest if it lost the case.
The settlement called for the city to continue collecting $300,000 per year more than it did before the higher assessment. However, it returned another $300,000 per year it had received since 2010. With interest, that added up to $1,051,723.45.
McGee disagreed with the order to settle and resigned in May.
“If you settle out a case for half of what you think it should be, you’ve done a disservice to the other taxpayers,” he said. “I felt that it was unethical and inappropriate, in the practice of my profession, to do what she was asking to do.”
Mahoney said by email she made the decision after consulting with her staff.
“I do not make decisions like this in a vacuum. Based on advice from the legal department and appraisers, we all believed it was appropriate to re-evaluate our methodology,” she said. “It was better to adjust the value than to spend taxpayer funds litigating a very uncertain case for years.”