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Condo owners not only group treated unfairly in gas line assessments

Posted: August 21, 2014 - 12:22pm

Kenai Superior Court Judge Charles Huguelet ruled favorably on behalf of business condo owner Ken Castner; the rest of us Homer property owners need to pay attention to the repercussions. The condo owners have a legitimate beef, if you compare their gas line assessments to those of apartment owners. 

But no worries, there is plenty of beef to go around. The problem is that if the condo owners are let off the hook, someone has to pick up their tab. And fellow property owners, that means you and me. 

The condo owners have found a loophole in the semantics of the ordinance. If it had been written to say each residence and each business, instead of each lot, then they would not have grounds for a lawsuit. 

The judge ruled that the assessment on condos places an “arbitrary, unreasonable and inequitable burden” on the condo owners.  Did the judge consider the entire gas line project or limit his decision to a very narrow scope?  Perhaps the whole gas distribution project merits judicial review?

Resolution 12-069 states that “the natural gas distribution system will benefit equally all parcels of real property.” As I understand it, the city’s definition of “benefit” is merely that the gas line passes by your property and you have access to it. Some, if not most of us, would interpret “benefit” much differently. 

If a big box store saves $50,000 in heating bills each year, a benefit was clearly derived from access to the gas. If a property is vacant or the owner is unable to hook up to the gas line, is there any benefit derived? As it stands the multi-billion dollar corporations of Safeway and Wells Fargo pay the same assessment on their multi-million dollar facilities in Homer as an owner of a sub-standard house or trailer home living on minimum wage. Is that fair? Really?

Has Homer become so calloused that a reasonable concept of fairness ceases to exist? The ordinance could have been written with the intent to assess each home, regardless if it was in an apartment building, a condominium complex, or a stand-alone structure.

If the Huguelet ruling is not overturned, the other big winners are the high-end condos like Land’s End and Quiet Creek. Those 22 towers of wealth at the end of the Spit will pay $149 each for the gas line. Only two of the 22 owners have Homer listed as their address. But wait … Land’s End Resort and the adjacent condos, with an assessed valuation of $16 million dollars will pay a total of $6,566.  Hmmm, is that fair? Really? Not to mention that 5 miles of gas mainline were needed to bring gas to the end of the Spit, primarily for them. Those who can afford the most will pay the least.

Some of the condo owners have expressed that a much more equitable assessment would have been by valuation of the property. I totally agree that would have been a better approximation of benefit. The city had those figures in hand. It is simple fifth-grade arithmetic to determine what the assessment for each property should have been based on value. Several of the high-end condos currently are on the market. One at the end of the Spit is listed for $1.95 million. Why should the owner of a low-end condo have the same gas assessment for a property worth a small fraction of the multi-million dollar unit? 

The condo owners suggest that the city manager should acquiesce to the judge’s ruling and assess their properties per lot to avoid further lawsuits and expenses to the city. I think the possibility of additional lawsuits lies more with people of limited resources, and undeveloped properties who also feel disenfranchised, and now will be asked to bear the burden of additional assessments.

Mr. Wrede is making a prudent decision to go slow on his determination. If the condo owners are sincere about saving the city money by avoiding additional litigation, and passing the buck on to the rest of us, they could request not to be covered by the Castner ruling. 

My wife and I chose to invest in Homer. We have a residence, a cabin and three vacant properties. Our home is hooked up to gas, but the other four properties will not be. Our assessment will be $16,416. If condo owners are given a pass, we will be billed an addition $440. We feel like we are being disproportionately penalized for investing in our own town.

So who’s at fault for the mess some of us will pay disproportionately for?

Some blame the Homer City Council for lack of foresight, some blame the city manager. The city could have tried to reach a consensus of its citizens by offering options, but declined to.

We, the people, ultimately need to accept responsibility. Overall the gas line project may have a positive impact on the city, but the choice of assessing payment for the distribution line was fatally flawed. Not enough of us voted against it sending it back to the city for a more equitable solution. If an electorate is uniformed or apathetic, someone else will make decisions for you.

Doug Van Patten is a 35 year resident of the Homer area, an HVFD member, and senior soil scientist for Three Parameters Plus. He retired from USDA-NRCS after a 30 year career of classifying and mapping soils throughout Alaska and three other states.

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