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3. BAE SR 04-10-2017Template Updated 4/14 Request for Action To Mayor and City Council Item Number Agenda Section Board of Appeal Meeting Date April 10, 2017 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 11 through Sunday, May 30. There is a Council meeting scheduled for Monday, April 17. Background/Discussion Board Purpose The Board’s purpose is to objectively determine if 2017 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 are 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\City Council\Board of Appeal\Staff Report 2017.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 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 2017 ELK RIVER CITY ASSESSMENT Spring Mini Report Residential and Seasonal values increased in overall market value by approximately 5.7%. The property value increases are the result of 346 sales in the City and 1,274 sales County-wide. Assessment Years Sales Study Ratio Overall Change 2013 137 sales 93.0% adjusted by +2.59% 2014 208 sales 84.6% adjusted by +7.67% 2015 292 sales 85.9% adjusted by +6.09% 2016 386 sales 89.3% adjusted by +4.06% 2017 346 sales 88.4% adjusted by +5.70% Agricultural Values increased county-wide by +1.57% . Apartment values increased +6.93% county-wide. There were 5 sales County-wide, 3 in Elk River. Commercial and Industrial values combined decreased -0.58% in the City. There were 18 sales county- wide. Total Taxable New Construction Assessment Years 2013 $ 8,656,700 2014 $ 20,085,400 2015 $ 17,354,782 2016 $ 28,093,805 2017 $ 18,842,026 Total City Estimated Market Values Taxable Real Property Assessment Years 2013 $ 1,728,439,800 2014 $ 1,838,493,300 2015 $ 1,927,795,700 2016 $ 2,009,030,900 2017 $ 2,119,094,900 Elk River Local Board of Appeal and Equalization April 10, 2017 6:00 pm Elk River Year End Summary — 2017 Assessment Re -Assessment Cindy and Beth re -assessed 1,429 single family properties. Peter and Beth re -assessed 310 townhouse and condominium properties. There were a total of 1,739 residential properties re- assessed during 2016. This number meets 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 63 permits issued for new single family homes and 12 for new townhomes. There were an additional 244 permits issued for improvements to properties such as additions, decks and basement finish. Improvements were measured, photos taken, and inspections were completed. Residential Statistics New Homes Improvement Permits Good Sales Bad Sales Total Sales Ave Sale Price Ave Assessed Value Beginning Sales Ratio Ending Sales Ratio Change Overall State Time Adjustment Apartment Sales 2016 2015 2014 63 74 68 244 203 177 346 386 292 136 108 132 553 494 424 $224,856 $219,375 $207,214 $210,771 $204,140 $189,815 88.4% 89.3% 85.9% 93.4% 93.7% 92.2% +5.7% +4.92% +6.09% 5.19% 4.7% 8.06% 3 (4, 6, 80 unit) 3 (4, 24, 30 unit) 1 (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, 2015 to September 30, 2016 were used to determine the Estimated Market Value for the January 2, 2017 Assessment. The Minnesota Department of Revenue requires the Assessor to maintain a ratio of 90% to 105%. The sales ratio for the 2017 assessment is 93.4%. Residential Sales There were a total of 553 residential sales in Elk River that occurred between October 1, 2015 and September 30, 2016. Of that number, 346 sales were considered `good' sales that were included in the Department of Revenue Sales study for the 2017 assessment. The average sale price was $224,856 with an average assessed value of $210,771. There were an additional 136 `bad' sales that were not used. These were rejected for such reasons as foreclosuresibank sales, sales to relatives, and relocations. Vacant Land/Lot Sales There were 61 vacant land/lot sales in 2016. Of those, 55 were single family platted lots with an average sale price of $48,412. Residential Building Changes Increases were made to raise the level of assessment. The house and garage building schedule was increased by 7%. 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. Ag Building Changes Ag house and garage increases followed the residential building schedule. Apartments The overall change for apartments increased 6.93%. qt 10,�)otI 2017 Elk River Local Board of Appeal and Equalization April 10, 2017 The 2017 methodology utilizes agricultural sales within a region to develop a tillable and non - tillable value to be used for Green Acres in that area. Our Green Acres Region includes the Counties of Benton, Morrison and Sherburne. The Department of Revenue issued a memo which indicated that the average per acre value for tillable land was to be $3,300 (up from $3,100 in 2016) and the average for non -tillable was to be $1900 (no change from 2016). Township Averages as Reported to the Department of Revenue for the 2017 Assessment 2017 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 2017 Green Acres Values 2a Tillable 3300/ac 2a Pasture 2200/ac Waste 750/ac -Same values have been applied to CRP land Lf — c 1-7 Hztr0o(l�s PID MARKETVALUE RECOMMENDATION CHANGE 75-129-4400 $47,400 $25,600 -$21,800 75-678-0260 $104,000 $78,000 -$26,000 75-838-0110 $101,000 $55,300 -$45,700 75-673-0420 $402,599 $364,586 -$38,013 75-811-0125 Requested classification change from Agricultural to Commercial 2017 Elk River Board of Appeal and Equalization April 10, 2017 Recommendations from the County Assessor For Changes to the 2017 Assessment SMIT FAMILY LIMITED PARTNERSHIP #3 13170-B CENTRAL, SE ALBUQUERQUE NM 87123 1�MMI&P1 , � III,' Description: Unplatted Section 29 Township 33 Range 26 Physical Address: None, Vacant land The taxpayer contacted the Assessor's Office concerning the value of his property. The property is 8.78 acres with no improvements. Based on a review of the property, the following change is recommended. 75-129-4400 2017 Original 2017 Recommended Change Land $ 47,400 $ 25,600 Total $ 47,400 $ 25,600 Decrease of $ 21,800. 2017 Elk River Board of Appeal and Equalization April 10, 2017 Recommendations from the County Assessor For Changes to the 2017 Assessment CHAD M & JACQUELINE P BANACK 18642 LANDER DR NW ELK RIVER MN 55330 f� ��Rll�1l : IL►�i1] Description: Lot 12, Blk 2 CIC #25 Physical Address: 18681 Lander St NW, Elk River - iv -OA flrn SIA 6rdovIS (E) The taxpayer contacted the Assessor's Office concerning the value of his property. The property is 3.74 acres with no improvements. Based on a review of the property, the following change is recommended. 75-678-0260 2017 Original 2017 Recommended Change Land $ 104,000 $ 78,000 Total $ 104,000 $ 78,000 Decrease of $ 26,000 oar& 2017 Elk River Board of Appeal and Equalization April 10, 2017 (i6,) Recommendations from the County Assessor For Changes to the 2017 Assessment HELD, KATHLEEN A HELD LIVING TRUST 20225 MEADOWVALE RD NW ELK RIVER MN 55330 P.I.N. 75-838-0110 Description: Tract B, Reg Land Survey No. 43 Physical Address: Vacant land adjacent to 20225 Meadowvale Rd NW The taxpayer contacted the Assessor's Office concerning the value of his property. The property is 11.85 acres with no improvements. Based on a review of the property, the following change is recommended. 75-838-0110 2017 Original 2017 Recommended Change Land $ 101,000 $ 55,300 Total $ 101,000 $ 55,300 Decrease of $ 45,700 1 2017 Elk River Board of Appeal and Equalization April 10, 2017 Recommendations from the County Assessor For Changes to the 2017 Assessment CHRISTOPHER ALLEN 13513 210TH CIR NW ELK RIVER MN 55330 P.I.N. 75-673-0420 Description: Lot 4, Block 4 Meadowwoods Village Physical Address: 13513 210`h Cir NW )AeUIODO I ^ The taxpayer contacted the Assessor's Office concerning the value of his property. The property is .67 acres with a house and 3 car attached garage. Based on a review of the property (including interior and exterior inspection), the following change is recommended. 75-673-0420 2017 Original 2017 Recommended Change Land $ 59,500 $ 59,500 Improvements $ 343,099 $ 305,086 Total $ 402,599 $ 364,586 Decrease of $ 38,013 1 2017 Elk River Local Board of Appeal and Equalization April 10, 2017 Recommendation from County Assessor For Changes to 2017 Assessment SBH PROPERTIES LLC 9785 GATEWAY RD NW ELK RIVER MN 55330 Parcel # 75-811-0125 2017 Original 2017 Suggested Change Agricultural Commercial Difference: 10--,4D 1-7 60A This property sold in 2016 and had been used agriculturally. Construction started in late 2016 and the classification should have changed to commercial as of 1/2/17.