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STAFF REPORT 04-11-2016Template Updated 4/14 Request for Action To Mayor and City Council Item Number Agenda Section Board of Appeal Meeting Date April 11, 2016 Prepared by Tina Allard, City Clerk Item Description Board of Appeal and Equalization Meeting Reviewed by Cal Portner, City Administrator Reviewed by Action Requested 1. Sherburne County will call upon each property owner. The Board is asked to listen to the property owner and then make a determination regarding the value or classification of the parcel being considered. If the Board is faced with a decision that it is not sure how to vote, the decision should be “no change.” The property owner is then able to appeal to the County Board or the Tax Court. 2. If the Board determines further review of any parcels by the assessor are needed, a reconvene meeting must be set in order for the assessor to report back to the Board for further action. The date and time must be determined before the recess of this meeting. The date must be set within 20 days of this meeting. This timeline would be Tuesday, April 12 through Sunday, May 1. There is a Council meeting scheduled for April 18. Background/Discussion Board Purpose The Board’s purpose is to objectively determine if 2016 values and classifications of parcels has been properly set by the assessor and should keep in mind that reductions in value shift the tax burden to others. It’s assumed the assessor has properly valued and classified a property and the burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s value or classification. All changes made by the Board must be based on fact. Reconvene Meeting The Board should not order the assessor to review a parcel and change the valuation/classification and then adjourn. The Board may ask the assessor to review a parcel and report back to the Board at a reconvene meeting. All issues must be resolved before the meeting is adjourned. If issues still need to be considered, the Board should recess until the next meeting. Once the Board has adjourned, it can’t reconvene. Reconvene meetings should be limited to appeals and not for hearing a property owner’s initial appeal. For a refresher, you can download the Local Board of Appeal and Equalization Handbook or a PowerPoint presentation from the Department of Revenue at: N:\Public Bodies\Agenda Packets\04-11-2016\Staff Report 2016.docx Handbook http://www.revenue.state.mn.us/local_gov/prop_tax_admin/education/baetraining_handbook.pdf PowerPoint Presentation http://www.revenue.state.mn.us/local_gov/prop_tax_admin/education/baetraining_presentation.pdf Certification At least one Councilmember must be at this meeting who attended state required training. The following are currently certified:  Dietz – July 1, 2019  Olsen – July 1, 2019  Westgaard – July 1, 2017  Wagner – July 1, 2018 Financial Impact N/A Attachments  None 4a-dc)u+ Sherburne County Assessor Sherburne County Government Center 13880 Business Center Dr NW Elk River, MN 55330-1692 Phone: (763)765-4900 FAX. (763)765-4905 2016 ELK RIVER CITY ASSESSMENT Spring Mini Reports Residential and Seasonal values increased in overall market value by approximately 4.06%. The property value increases are the result of 386 sales in the City and 1,185 sales County -wide. Assessment Years Study Ratio Overall Change 113.4% adjusted by -11.25% 93.0% adjusted by +2.59% 84.6% adjusted by +7.67% 85.9% adjusted by +6.09% 89.3% adjusted by +4.06% Agricultural Values increased less than +1 % Apartment values increased +3.27% in the City. There were 3 sales in the City and 4 County -wide. Commercial values decreased -2.74% in the City. There were 2 sales in the City and 10 County -wide. Industrial values increased +4.17%. There were 4 sales in the City and 7 County -wide. Total Taxable New Construction Sales 2012 85 sales 2013 137 sales 2014 208 sales 2015 292 sales 2016 386 sales Study Ratio Overall Change 113.4% adjusted by -11.25% 93.0% adjusted by +2.59% 84.6% adjusted by +7.67% 85.9% adjusted by +6.09% 89.3% adjusted by +4.06% Agricultural Values increased less than +1 % Apartment values increased +3.27% in the City. There were 3 sales in the City and 4 County -wide. Commercial values decreased -2.74% in the City. There were 2 sales in the City and 10 County -wide. Industrial values increased +4.17%. There were 4 sales in the City and 7 County -wide. Total Taxable New Construction Assessment Years 2012 $12,562,700 2013 $ 8,656,700 2014 $20,085,400 2015 $17,354,782 2016 $28,093,805 Total City Estimated Market Values Taxable Real Property Assessment Years 2012 $1,721,462,200 2013 $1,728,439,800 2014 $1,838,493,300 2015 $1,927,795,700 2016 $2,009,030,900 ��Cu+ Elk River L®eall Honird of AppeaH and IEquaHzalio n April Il Il, 2016 6;00 pra Elk River Year End Summary — 2016 Assessment Re -Assessment Cindy & Beth re -assessed 1,194 single family properties. In addition, they led a team of appraisers and re -assessed an additional 825 single family properties in the older "Village of Elk River". Greg and Peter re -assessed 324 townhouse and condominium properties. There were a total of 2,343 residential properties re -assessed during 2015. The re -assessment exceeds our goal of re -assessing 20% of all residential properties each year. Letters were sent to re -assessment areas to inform the homeowners that their property would be re -appraised. Drawings were updated, new photos taken, and inspections of homes were completed. Depreciation was applied to buildings as necessary. Value was added for all improvements that were not currently listed on the assessment. Permits There were 54 permits issued for new single family homes and 20 for new detached townhomes. There were an additional 203 permits issued for improvements to properties such as additions, decks and basement finish. Improvements were measured, photos taken, and inspections were completed. Residential Statistics 2015 2014 2013 New Homes 74 68 87 Improvement Permits 203 177 242 Good Sales 386 292 208 Bad Sales 108 132 213 Total Sales 494 424 421 Ave Sale Price $219,375 $207,214 $205,524 Ave Assessed Value $204,140 $189,815 $190,281 Beginning Sales Ratio 89.3 85.9% 84.6% Ending Sales Ratio 93.7 92.2% 91.09% Change Overall +4.92 +6.09% +7.67% State Time Adjustment 4.7 8.06% +8.4% Apartment Sales 3 (4, 24, 30 unit) 1 (30 unit) 2 (8, 30 unit) Sales Ratio Studies Sales ratio studies compare the Assessor's Estimated Market Value to the sales price of the property. Sales from October 1, 2014 to September 30, 2015 were used to determine the Estimated Market Value for the January 2, 2016 Assessment. The Minnesota Department of Revenue requires the Assessor to maintain a ratio of 90% to 105%. The sales ratio for the 2016 assessment is 93.7%. Residential Sales There were a total of 494 residential sales in Elk River that occurred between October 1, 2014 and September 30, 2015. Of that number, 386 sales were considered `good' sales that were included in the Department of Revenue Sales study for the 2016 assessment. The average sale price was $219,375 with an average assessed value of $204,140. There were an additional 108 `bad' sales that were not used. These were rejected for such reasons as foreclosures, sales to relatives, and relocations. Vacant Land/Lot Sales There were 51 vacant land/lot sales in 2015. Of those, 42 were single family platted lots with an average sale price of $48,825. Residential Building Changes Increases were made to raise the level of assessment. The house and garage building schedule was increased by 5%. Residential Land Changes Land values on existing homes were increased 5% to the base rates. Rural Vacant Land: Base rates are unchanged, $4100 to $4500 per acre, however the size tables were re -instated. The residential and rural vacant land wetland, lowland, pond and waste were increased to $1,000 per acre based on sales activity and for consistency within the county. Ag Building Changes Ag house and garage increased 5% with the residential building schedule. Apartments With the completion of Coachman Ridge, Elk River now has 40 Apartment projects with a total of 1266 units. The overall change for apartments increased 3.27%. I n 2016 Elk River Local Board of Appeal and Equalization April 11, 2016 In previous years the Green Acre per acre value was determined by using the 5 base counties in Southwestern Minnesota and applying a factor to set the county average. For 2016 the methodology for determining the Green Acre averages was changed. The current methodology utilizes agricultural sales within a region to develop a tillable and non -tillable value to be used for Green Acres in that area. The Department of Revenue issued a memo which indicated that the average per acre value for tillable land was to be $3,100 and the average for non -tillable was to be $1900. Values are on a parcel or group of parcels 40 acres or more in size. 2016 Estimated Market Values 2a Tillable 4200/ac 2a/2b Pasture 4100/ac -Same values have been applied to CRP land Waste 750/ac Wetlands 750/ac 2016 Green Acres Values 2a Tillable 3100/ac 2a Pasture 2200/ac Waste 750/ac -Same values have been applied to CRP land 2016 Elk River Board of Review PID 2016 Market Value Recommendation Decrease 75-694-1206 $ 229,500 $ 216,000 $ 13,500 75-474-0140 $ 251,900 $ 245,000 $ 6,900 75-130-1101 $ 197,000 $ 194,500 $ 2,500 75-126-2110 $ 192,800 $ 183,800 $ 9,000 75-503-0236 $ 354,000 $ 351,300 $ 2,700 75-126-1100 $ 224,100 $ 204,800 $ 19,300 75-806-0002 $ 770,800 $ 694,200 $ 76,600 75-635-0115 $ 202,600 $ 202,600 No Change 75-714-0140 $ 236,000 $ 236,000 No Change 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment 2015-3 I1-12 BORROWER L.P. 901 MAIN ST SUITE 4700 DALLAS TX 75202 P.I.N. 75-694-1206 Description: Lot 3 Block 12 Windsor Park Third Addition Physical Address: 21361 Joplin St NW, Elk River MN Robert Peyton of Ryan LLC, representing 2015-3 I1-12 Borrower LP, contacted the Assessor's Office concerning the value of 75-694-1206. The property is a.31 acre parcel with improvements. Sales were reviewed and the land and improvements inspected. The following changes are recommended. 75-694-1206 Land Improvements Total Decrease of $13,500. 2016 Original $ 52,700 $ 176,800 $ 229,500 2016 Suggested Change $ 52,700 $ 163,300 $ 216,000 1 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment 2015-3 I142 BORROWER L.P. 901 MAIN ST SUITE 4700 DALLAS TX 75202 P.I.N. 75-474-0140 Description: Lot 4 Block 1 Ridgewood Second Addition Physical Address: 12285 Rush Circle NW, Elk River MN Robert Peyton of Ryan LLC, representing 2015-3 I1-12 Borrower LP, contacted the Assessor's Office concerning the value of 75-474-0140. The property is a 1.64 acre parcel with improvements. Sales were reviewed and the land and improvements inspected. The following changes are recommended. 75-474-0140 2016 Original 2016 Suggested Change Land $ 60,100 $ 60,100 Improvements $ 191,800 $ 184,900 Total $ 251,900 $ 245,000 Decrease of $6,900. 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment JUDITH ANN RANALLO 19530 OGDEN ST NW ELK RIVER MN 55330 P.I.N. 75-130-1101 Description: Unplatted Section 30 Township 33 Range 26 Physical Address: 19530 Ogden St NW, Elk River MN The taxpayer contacted the Assessor's Office concerning the value of his property. The property is a five acre parcel with improvements. Based on an interior inspection and the condition of the basement finish the following change is recommended. 75-130-1101 2016 Original Land $ 68,400 Improvements $ 128,600 Total $ 197,000 Decrease of $ 2,500. Value decreased after review. 2016 Recommended Change $ 68,400 $ 126,100 $ 194,500 1 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment ANGLE, JAMES E 19590 TYLER ST NW ELK RIVER MN 55330 P.I.N. 75-126-2110 Description: Unplatted Sec 26, Twp 33, Rge 26 Physical Address: 19590 Tyler St NW, Elk River MN The taxpayer contacted the Assessor's Office concerning the value of his property. The property is one 1.00 acre parcel with improvements. Sales were reviewed and the land and improvements inspected. The following changes are recommended. 75-126-2110 2016 Original Land $ 54,100 Improvements $ 138,700 Decrease of $9,000. Value decreased after review. 2016 Suggested Change $ 54,100 $129,7Q0c6L)D (c63, om 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment YARITZ, JOSEPH G 19876 BRENTWOOD LN NW ELK RIVER MN 55330 P.I.N. 75-503-0236 Description: Lot 18, Block 2, Brentwood Physical Address: 19876 Brentwood Ln NW, Elk River MN 5 The taxpayer contacted the Assessor's Office concerning the value of his property. The property is one 1.86 acre parcel with improvements. Sales were reviewed and the land and improvements inspected. The following changes are recommended. 75-126-2110 2016 Original Land $ 54,300 Improvements $299,700 Decrease of $2,700. Value decreased after review. 2016 Suggested Change $ 54,300 $297,000 I 2016 Elk River Board of Appeal and Equalization April 11, 2016 Recommendations from the County Assessor For Changes to the 2016 Assessment JOHNSON, MITCHELL L 19561 TYLER ST NW ELK RIVER MN 55330 P.I.N. 75-126-1100 Description: Unplatted Sec 26, Twp 33, Rge 26 Physical Address: 19561 Tyler St NW, Elk River MN The taxpayer contacted the Assessor's Office concerning the value of his property. The property is one 37.69 acre parcel with improvements. Sales were reviewed and the land and improvements inspected. The following changes are recommended. 75-126-1100 2016 Original Land $182,800 Improvements $ 41 300 $a�k4> IUO Decrease of $19,300. Value decreased after review. 2016 Suggested Change $173,300 $ 31,500 ,$av4, gbo 2016 Elk River Board of Appeal and Equalization April 11th, 2016 Recommendations from County Assessor For changes to the 2016 Assessment FTK PROPERTIES INC - ETAL 75-806-0002 6000 BASS LAKE RD #200 CRYSTAL MN 55429 LEGAL DESCRIPTION: CIC# 69 JACKSON PLACE CONDOS SEC/TWP/RGE : 4 34.0 30 ACRES: .30 PROPERTY TYPE: COMMERCIAL RETAIL 2016 Original Land $ 107,000 Building 663,800 Total $ 770,800 2016 Suggested Change Land $ 107,000 Building $ 587,200 Total $ 694,200 0 Reduction: $76,600 building decrease. Reason: Building was decreased after review for building layout and vacancy problems. Win-PowtnSo ms TaxingP.blemi .s to Tax/ng Problems. Thursday, April 07, 2016 Sherburne County Assessor 13880 Business Center Dr. NW Elk River, AN 55330 Dear Sir/Madam, 500 E. Broviard Blvd. Suite 1130 Fort Lauderdale, FL 33394. Tel. 954.740.6240 Fax 972.960.0613 v .ryan.com ©► On behalf of IH4 Property Borrower LP, we at Ryan, LLC would like to file an appeal for the 2016 value with the Sherburne County Assessor. Attached you will find evidence that supports our claim for a reduction in value. Property Address: 19420 Seymour St NW jW Elk River Parcel: 75-635-0115 Acquired Price: $186800 Acquired Date: 10/2/2014 Target Value: $188179.2 Appeal Basis: Based on market data, the petitioner does not agree with the property value. Please send all correspondence to ResidentialAppealskiyan.com or please call me at 954-476-4265. Regards, Bob Peyton Manager Ryan LLC 500 E. Broward Blvd., Suite 1130 Ry 0 Suite E. Broward Blvd. ® Suite 1130 Innovng Pmbletionz ro Taxing woblems Fort Lauderdale, FL 33394 Tel. 954.740.5240 Fax 972.960.0613 veww.ryan.com Thursday, April 07, 2016 Sherburne County Assessor 13880 Business Center Dr. NW Elk River, MN 55330 Dear Sir/Madam, 0( On behalf of 2015-1 I1-12 Borrower LP, we at Ryan, LLC would like to file an appeal for the 2016 value with the Sherburne County Assessor. Attached you will find evidence that supports our claim for a reduction in value. Property Address: 19657 Carson Cir City: Elk River Parcel: 75-714-0140 Acquired Price: $218000 Acquired Date: 7/30/2013 Target Value: $214016.76 Appeal Basis: Based on market data, the petitioner does not agree with the property value. Please send all correspondence to ResidentialAppeals@ryan.com or please call me at 954-476-4265. Regards, Bob Peyton Manager Ryan LLC 500 E. Broward Blvd., Suite 1130