The Fairbanks North Star Borough runs on property tax. It’s the only regular tax that we pay in-state (though we expect that will change soon given the huge state deficit). Every year the borough sends out a notice telling you what they think your property is worth. We’ve never had a problem with them before, but this year when the notices came with a 20% rise in land values, we were surprised.

From our neighborhood perspective, this increase was not justified. So we did a little homework and formally appealed. The crux of our case was that 80% of the lots offered by the UA Lands Office in 2007 and 2008 remained unsold at the end of 2015—at the same prices being asked when they were first offered. That suggests that they were overpriced when they were first offered and that values have still not caught up with that pricing. It also meant that ours were being further overvalued in the most recent assessment. If you haven’t sold 80% of your stock in 8-9 years, you don’t raise your prices 20%; you probably wait it out or drop your prices by maybe 10%. So we asked for a 5% drop, thinking that was reasonable.

The appeals process is not made especially easy, but we put together our packet, sent it in, and waited. We don’t pick up our mail every day, and on a recent Friday after work Rose picked it up, we came home, went for a walk, had dinner, and only then turned our attention to the mail. A letter from the borough told us that we had a hearing scheduled on our appeal—but that we were supposed to have gotten our appeal packet into the borough clerk by that day at 5:00 pm. We were already well past that time, but the letter also mentioned that they had to have the material for a minimum of five working days before the hearing. That was still possible, and of the two deadlines given it was probably the regulated one. Fortunately, they accepted submissions electronically, so it was with them Monday at 8:00 am as required. It was just the same material that we’d sent to the Assessing Department.

The full process was not clear to us. The letter and the second submission of material were not expected. But we also had the opportunity to obtain a packet of information from the Assessing Department, which also had been deposited with the borough clerk five working days before the Friday evening hearing. Basically, that information deposit puts everyone on the same page. As Friday’s hearing approached, I read through the Assessing Department’s material and gained more confidence in their approach. The only weakness I could see is that they do not seem to take into account land that does not sell. Our lots are in a concentrated area of lots that haven’t sold for 8-9 years at flat prices. It’s sort of a local sink, but it really defines our local market.

What price a Boombah?

At about twenty to five on Friday, I was sitting at my desk skimming over the borough information one more time before our 6:00 pm hearing when the phone rang. It was someone named Ivar from the Assessing Department. That seemed really odd, given that we had a hearing before a board in a little more than an hour. But Ivar was pleasant and said he had gone over our case again and had some new numbers to run by us. It took me a little conversation to wrap my head around this totally unexpected call and approach, but when I dug out our appeal packet and looked over what Ivar was proposing it looked fine to me. And, to my surprise, because we came to this agreement on the phone we could just skip the board meeting entirely. So when Rose came to pick me up, we went home instead of to what we thought might be a contentious meeting. Win-win! It seemed unreal, but Ivar followed up our conversation on Monday with a nice letter outlining what we’d agreed on, and we’re all good.

The most important thing we learned is that the borough staff works hard to be fair, and we appreciate that. The next-most important thing I think we learned is that there is a blind spot in the complex assessment process: it does not put lack of sales into the assessment, and as we saw this factor can create a local sink.

A few modifications to the appeals process would be nice to see, though:

1. Enable electronic submission of appeals.

2. Clearly outline the entire process (i.e., that you will have to submit documents again before your scheduled hearing). The second submission was a surprise, and we almost missed the deadline by not picking up the mail every day. Fortunately, they allowed electronic submission at this stage.

3. An online presence outlining the Assessing Department’s methods in detail would be excellent and would probably reduce the number of appeals. This may already be there somewhere, but if so having it in your face as you prepare your appeal would be helpful.

4. The concept of not being able to introduce new information if you wish to take your appeal beyond the Board hearing seems unfair. We didn’t have to take that step, but it seems unduly punitive if the appellant is able to obtain more data. It does help you focus on doing your homework early, though.

The end. I hope we never have to deal with this again.