Are properties in Scow Bay being assessed too low?
City officials and members of the Finance Committee have had concerns that the properties in Scow Bay, including the Reid property, have been assessed too low. This question is posed because the appraisal value and assessment value are so different.
City Assessor Mike Renfro met with the Finance Committee to explain the industry and the differences between appraisal and assessment.
According to Alaska Statute AS 29.45.110, the assessor shall assess property at its full and true value as of Jan. 1 of the assessment year. The full and true value is the estimated price that the property would bring in an open market.
“When the appraisal (for the Reid property) was completed, the appraiser made comparisons with property in Ketchikan and Juneau,” Renfro stated. “For an appraiser, that is common practice, but I use property in this area as comparison to assess the value.”
“The economic differences in the communities of Juneau, Ketchikan and Petersburg are completely at odds,” Petersburg Finance Director Jody Tow stated. “It's hard to compare property here in Petersburg with property in these areas.”
The Reid property has been given an assessment value of approximately $900,000 but has an appraised value of $1.4 million, which is the asking price from the Reid Family Trust.
“The independent appraiser looks at the appraisal differently than does a tax assessor,” Renfro stated. “They may be doing the similar jobs, but how they go about it is the main difference.”
Renfro also explained that the assessor's primary job is to see that the tax burden is distributed equally among property owners. The fee appraiser's job is to see that his client receives an appraisal which is accurate and professional, and contains the information the client requested.
“One of the most important facts to remember,” Renfro stated, “the assessor, nor the appraiser creates market value.”
He explained that the assessor has the responsibility and duty to ensure that all property on the roll represents current market value.
“The property assessments for Petersburg may be slightly under-assessed but are in line with industry standards,” Renfro stated. “The 2012 assessment ratio is at 95.6 percent of sales and Petersburg has a stable real estate market with the target area being 95 to 105 percent.”
He also stated that the appraisals are not an indicator of a large discrepancy between current assessments and value.
“Our rates are coming up,” Finance Committee member Susan Flint said. “At this time, we will not be entertaining any change to the assessment rates.”