Council braces for property assessment appeals

The item was not on the agenda, but a discussion at Monday’s regular Nome Common Council meeting addressed the widespread unhappiness felt by property owners in Nome as real property assessment letters have fluttered into mailboxes, bearing news of significant increases on property values.
While the mill rate has yet to be set by the Nome Common Council, increased value usually means bigger property tax bills. Property owners may be pleased to see the value of their real estate went up, City Manager Glenn Steckman said, but appear not to be so happy about paying the tax bill related to the increase. Steckman said that a lot of people don’t understand that even though they did not improve their property, its value has increased. “Your property has also been subject to inflation and inflation has hit Nome hard,” he said. The effect is that values go up but that doesn’t necessarily mean big increases in the tax bill, he said.
In his report Steckman noted that the city administration is still preparing recommendations for the fiscal year 2024 budget, and determining what the city’s revenue needs are.
“I anticipate the mill rate will be lower than the current 12 mill rate,” he said in his report. One mill is 0.1 cents or one thousandth of a dollar. Thus, a mill rate of 1 means taxpayers pay $1 in taxes for every $1,000 of their property’s assessed value.

How does the assessment work?
According to a handout distributed by the state’s assessor, the difference between an appraiser who is tasked to value one particular property and an appraiser tasked with the assessment of a mass of properties – or ad valorem (latin, “according to value”) — is that “the ad valorem appraiser’s primary job is to see that the tax burden is distributed equally among all property owners.”
In municipal property taxes, the real estate is periodically assessed by a public tax assessor to determine its current value, in Nome this usually occurs in the fall. According to the handout, this is done by “multiple regression analysis, which is basically a refined and automated application of the sales comparison approach to value.” Values are assigned by square footage and the sales prices of comparable properties.
According to the Nome Code of Ordinances, there are a few property tax exemptions. Those include improvements to real property if an increase in assessed value is directly attributable to new maintenance, repair, or renovation of an existing structure and if the maintenance, repair, or renovation, when completed, enhances the exterior appearance or aesthetic quality of the land or structure. Also exempt is real property used for a private park, all aircraft, places of worship used for nonprofit religious purposes, the first $150,000 of value of a property owned by a disabled veteran, a person 65 or older.
Property owners who disagree with the property assessment can appeal by April 20. Steckman stressed that the City has no role in the assessment but allows for an appeal process. Once an appeal is made, the property owner and the assessor work things out but if no agreement is reached, the case will go before the Board of Equalization.  
Councilmembers Scot Henderson and Mark Johnson both said they’ve been approached by upset property owners and been asked about the increased assessments of property value in Nome. Henderson agreed that the increase is very significant and that he is being asked if the city could budget more cost effectively. He asked for a history of the mill rate, which currently stands at 12 mill. Steckman said that the mill rate was at 13 mill when he first started as City Manager in 2019 and was then lowered to 12 mill. Steckman said that the city took a $1.1 million hit when the council suspended the seasonal sales tax last year. “We haven’t even presented the budget yet, it’s challenging, but we are very sensitive to the impact of the tax payer,” Steckman added.
Council member Johnson reminded Steckman though that the city has picked up an increase in sales tax when pot shops and online sellers like Amazon began paying sales taxes to the municipality.
According to the budget calendar, the council will go through several work sessions prior to the first reading of the FY 2024 city budget on May 22, at which date the council will also set the mill rate by resolution. On June 12, the budget will go into the second reading and tax bills will be sent out on June 16. Both Henderson and Johnson recommended that property owners who disagree with the assessment they received file an appeal by April 20. Mayor John Handeland concurred, saying “Filing an appeal will get your foot in the door.”

Resolutions passed
In other business, the council voted affirmatively on granting a tax exemption on late filed property tax exemption applications to St. Joseph’s Catholic Church and senior Russell Swanson.
The council passed a resolution commending Dept. of Public Works employee Michael Hahn for his quick actions taken to report a fire in the Public Works Building. On March 11, a Saturday, around 3:30 pm Michael Hahn noticed smoke coming out of the third floor of the Public Works building and quickly called 911 to alert the Fire Department. “Mr. Hahn’s quick actions helped prevent the destruction of the Public Works building which would have amounted to millions of dollars in losses to the City of Nome, as well as cripple the Department of Public Works in fulfilling their duties to the citizens,” the commendation reads. “ The Nome Common Council acknowledges and commends the efforts of Michael Hahn and extends to him the gratitude of a grateful community.”
Mayor John Handeland presented the commendation and the City Council took the opportunity to pose with Hahn and his family for a photo.
The council passed resolutions to put out a bid for upgrades to the heating and ventilation system at City Hall, at an estimated cost of $1.1 million. Steckman proposed to use ARPA funds for the project.
The council also passed a resolution authorizing the city to apply for US Dept. of Transportation grant funds to construct marine utilities infrastructure as part of the Port of Nome expansion. The total cost of the expanded marine utilities ( piping, electrical parts, transformers, catch basins, valve pits, lighting and communications cables, etc.) would cost $25 million, with $11.25 million requested as federal funding and the city’s portion being $13.75 million.

Upcoming
As Nome is still in the process of removing snow from recent snow and wind storms, Steckman said Public Works has removed 3,600 truckloads of snow in March alone. “This is the highest number of snow removed since December 2011,” he said. Staff is now preparing for the “great melt” by clearing storm drains and getting ready to turn on heat tracers.
Steckman said that a three month period has passed since the liquor stores have entered in an voluntary Memorandum of Understanding to curb alcohol abuse and limit liquor sales. Steckman said that Sunday, when no alcohol is sold, is reportedly the calmest day of the week for the police department as well as for NEST. The memorandum included to have a meeting every quarter to compare notes and see what works and what didn’t.
Steckman announced in his city manager report that Spring Cleanup will begin May 30 and go through June 3.
The Coast Guard will be in touch from April 24 -25 to train local organizations on emergency preparedness and handling hazardous materials.
Mayor John Handeland reported that during the Arctic Encounter Symposium in Anchorage last week he met with the upper echelon of HUD officials and that he received information from them on a potential large-scale housing developer interested in developing housing units in Nome. “They talk 50 to 100 unites,” Handeland said. “We try to beat the bushes and try to find out more.”
He also wished Happy Birthday to Nome, as April 9 was the 122nd year since its incorporation in 1901.