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04-25-2005 CC MIN - BOA . . . MEETING OF THE ELK RIVER BOARD OF APPEAL AND EQUALIZATION HELD AT SHERBURNE COUNTY MONDAY, APRIL 25, 2005 Members Present Mayor Klinzing (arrived at 6:32 p.m.), Councilmembers Dietz, Gumphrey, Motin, and Farber Members Absent: None Staff Present City Clerk Joan Schmidt Also Present Sherburne County Assessor Jerry Kritzeck, Residential Appraiser Greg Olson, Residential Appraiser Roger Holmgren, Agricultural Appraiser Jeanne Henderson, Commercial Appraiser William Riley, and Office Staff Theresa Quinn 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River Board of Appeal and Equalization was called to order at 6:30 p.m. by Acting Mayor Dietz. 2. Board of Appeal and Equalization Sherburne County Assessor Jerry Kritzeck indicated that the purpose of the Board of Appeal and Equalization is to consider and review 2005 estimated market values and property classifications. Mr. Kritzeck introduced his staff consisting of Residential Appraisers Roger Holmgren and Greg Olson, Agricultural Appraiser Jeanne Henderson, Commercial Appraiser William Riley, and Office Staff Theresa Quinn. Mr. Olson presented information on the assessment procedures and statistics for the 2005 City of Elk River assessments. The Council then reviewed concerns from individual property owners. 1. Marl Larson, Parcel Identification Number 75-503-0490 Ms. Larson lives across from The Elk Ridge Center and stated that the property across from her has only dirt piles and had been rezoned since she moved to her home in November of 2003. She stated that property values have gone down and that her value had been raised by $24,000. She is asking that her value stay at last year's value until the development across from her is completed. Appraiser Holmgren stated that the properties adjacent to this development were reduced by 5 percent. Assessor Kritzeck recommended the property value to stay the same. Board of Appeal and Equalization Minutes April 25, 2005 Page 2 . MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER MOTIN TO LEAVE THE PROPERTY VALUE AT THE ASSESSED VALUE PER THE ASSESSOR'S RECOMMENDATION DUE TO THIS VALUE HAD ALREADY BEEN REDUCED BY 5 PERCENT. MOTION CARRIED 5-0. 2. Charles Hulse, Parcel Identification Number 75-690-0130 Mr. Hulse stated that in April of 2004 he paid $356,000 for his home and that now the value is at $74,600 for the land and $324,583 for the building for a combine value of $399,200. He asked that this amount be reduced. Appraiser Holmgren stated that other houses in the area with the same square footage have sold for $400,000+. He stated that this value was placed using the same methods as used for other homes in the area with similar comparisons and that this amount should be correct. Assessor Kritzeck recommended the value to stay the same. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER FARBER TO KEEP THE VALUE THAT THE COUNTY ASSESSOR HAS PLACED ON IT. Councilmember Morin felt that the value should be at 100 percent of the purchase price plus 92.5 percent. . The Mayor called the question. MOTION CARRIED 4-1 with Councilmember Motin voting no. 3. Chuck Jensen and Mr. Jacobs representing Cargill Corporation, Parcel Identification Numbers 75-001-3400, 75-011-1401, 75-011-4100, 75-011-4105, 75-011- 4400,75-012-1100,75-012-1411,75-012-2000, 75-012-3000, 75-012-3300, 75-013-2100,75- 013-2400,75-014-1100 Mr. Jacobs stated that the best use of this land is to remain agricultural and should be valued similar to other agricultural land. He stated that AG sales of land could have the price built in for future potential and developments or the AG sales of land could be for using the land for crops. He stated that $3,000 to $4,000 per acre is farmland price. This land is used by the Cargill Corporation as farming land. Assessor Kritzeck stated that agricultural land has gone up by 15 percent. He stated that this land is classified as AG and taxed as AG but that the Green Acres Program cannot be extended to corporations. It was also discussed that the settlement agreement that Cargill Corporation has with the City of Elk River eliminates them from the Urban Expansion Area. . Appraiser Henderson stated that sales of agriculture land in February 2004 in Bluehill Township that went from AG to AG sold for $6,100 per acre. Sales in Clear Lake were listed as $3,800 in January 2003; $3,700 in December 2003. It was stated that Elk River has a more valuable market. . . . Board of Appeal and Equalization Minutes April 25, 2005 Page 3 Mr. Jacobs stated that farmland close to the Cargill property is valued at $1200 an acre. Assessor Kritzeck stated that the Spects' farm has 119 acres valued at $145,100 and is enrolled in the Green Acres Program. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO ASSESS AT ONE VALUE OF $7,015 PER ACRE FOR ALL THE PARCELS. MOTION CARRIED 5-0. 4. Michael Wirig, Parcel Identification Number 75-601-0450 Mr. W1rig stated that he purchased this bank owned foreclosure property in November 2004 for $347,000 and the county now has a value of $403,000. He stated that there was extensive damage to the house: holes in the sheetrock, urine and feces from animals on the carpeting, knobs and handles throughout the house stolen, wet bar removed from the basement, etc. He stated that this house sold in 2001 for $370,000. He stated that he has invested about $40,000 in doing repairs and he still needs to redo the basement and yard Appraiser Olson stated that he did not have knowledge of the damages and that he agrees that it should be valued between $347,000 to $403,000. He stated that as of January he is agreeable to a value of $360,000. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER MOTIN TO PLACE A $360,000 VALUE ON THIS PROPERTY. MOTION CARRIED 5-0. 5. Russell Anderson, Parcel Identification Number 75-417-0520 Councilmember Motin wished to disclose that Mr. Anderson is a client of his in unrelated matters. Mr. Anderson stated that his home was built in 1956 and his valuation has gone up about $50,000 in the past four years. He was inquiring if at any time there is an adjustment to be made for depreciation. Assessor Kritzeck stated that he is eligible for the limited market value program. Mr. Kritzeck stated that this property has a limited market value of $202,500 and estimated for 2005 at $205,110 and it was estimated in 2004 at the price of $196,100. This is a 4.5% increase which is less than the typical increase for the City of Elk River. Most are at 5%. Appraiser Holmgren stated that Mr. Anderson has a double lot and this is where the difference comes from. His lot is 120' by 120'. The average home value in this neighborhood is $175,000. Mr. Anderson cannot subdivide because the house is in the middle of the lot and as a result of having two lots, valued at 33% more. Assessor Kritzeck feels that this property is assessed appropriately since it has two full lots and that the limited market value situation will level off. MOVED BY COUNICLMEMBER FARBER AND SECONDED BY COUNCILMEMBER DIETZ TO LEAVE THE PROPERTY VALUE THE SAME BASED ON THE RECOMMENDATION OF THE COUNTY ASSESSOR. MOTION CARRIED 5-0. Board of Appeal and Equalization :Minutes April 25, 2005 Page 4 . 6. Mary Roy, Parcel Identification Number 75-478-0120 Ms. Roy lives on Naples Street in Riverview Heights in a home that was built in 1974. She stated that she observed a house at the end of her street that is on the market for $360,000 and it is 15 years newer and on the river and the taxes between her home and this home were only a difference of $300. Appraiser Holmgren stated this home is being taxed on the value of $202,000 and that it might not be realistic for this home to sell for the price of $360,000. He stated that the house stands on its own whether it is located on or off the river, but that the property on the river would be at a higher price range than other property. Appraiser Olson stated that Ms. Roy's property seems to be assessed correctly and that the property on the river needs to be re-assessed. No further action was requested by Ms. Roy. 7. Dan Schwark, Parcel Identification Number 75-503-0470 Mr. Schwark lives in the Brentwood Addition and he has a valuation for 2005 of $235,700. In 2004 it was at $216,000. He stated that the appraisal in 1998 was $168,400. Mr. Schwark feels that the value is at 100% of the market value and he is concerned that it will continue to go up 15% next year. . Appraiser Holmgren stated that he was through this neighborhood on a reassessment so the value may have been brought up closer to the market value. Assessor Kritzeck feels that this property was properly reassessed and did not get any additional value placed on it but only the 5% as the rest of the city. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER GUMPHREY TO LEAVE THE PROPERTY VALUE AS IS. MOTION CARRIED 5-0. 8. Richard Schulz, Parcel Identification Number 75-454-0120 Mr. Schulz has new construction on 1.2 acres which he feels is increased at 14%. He is concerned about the land portion versus the building portion. He stated that his competitors have not gone up this amount but only approximately 3% in value. He stated that the land portion now for 2005 is at $260,000 and in 2004 it was at $230,000. Assessor Kritzeck stated that commercial properties at value of less than $500,000 went up 10% and commercial properties that were over $500,000 went up by 5%. He stated that the price varies according to the size, the quality of the construction, the land, the age, etc. He stated that properties on Highway 169 are higher in value. Mr. Schulz stated that the ECM building has a land value at $4.85/sq. ft; the Yaeger building a land value at $5.51/sq. ft.; Rick's land value at $2.68/ sq. ft.; and his has a land value of $5.00/ sq. ft. . Councilmember Dietz asked what are the new building standards. Board of Appeal and Equalization Minutes April 25, 2005 Page 5 . Assessor Kritzeck stated that it is dependent upon the judgment as to the quality (average); they use the Marshall/S'Wift manual; they pay attention to the size, sidewalk, etc.; and that this is applied consistently. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO MAKE THE LAND VALUE AT $4.85/SQUARE FOOT WHICH WOULD LOWER THE LAND VALUE BY $7,800 WITH THE BUILDING VALUE NOT CHANGING. MOTION CARRIED 5-0. 9. Les Lindquist and Floyd Kruse of K & L Properties, Parcel Identification Numbers 75-740-0040, 75-733-0205, 75-733-0105, 75-733-0115, 75-733-0110, and 75-733- 0120 Mr. Lindquist and Mr. Kruse have vacant lots in a commercial district. They stated that they do not have access to their 5.5 acres and are having problems selling it. The market value is at $939,200 'With a taxable base of $244,700. Assessor Kritzeck stated that this is $4.00/sq. ft. which appears to be on the high side. He stated that a fair value for a i-acre plot is $3.00/ sq. ft., a 5-acre parcel at $2.75 sq. ft. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER MOTIN THAT THE FIVE 1-ACRE LOTS TO BE ASSESSED AT $3.00 PER SQUARE FOOT AND THE ONE 5-ACRE LOT TO BE ASSESSED AT $2.75 PER SQUARE FOOT. MOTION CARRlED~. . 10. Scott Wold, Parcel Identification Numbers 75-674-0138 and 75-674-0140 Mr. Wold is a builder who has a town home which he is having problems selling. He stated that he has three homes at the market value but can't sell at this time. MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER MOTIN TO REDUCE THOSE TWO PARCELS BY $10,000 EACH, ONE FROM $186,360 TO $176,360 AND THE OTHER ONE AT $186,800 TO $176,800. MOTION CARRIED ~. 11. Downing Fountain, Parcel Identification Number 75-411-0305 Ms. Fountain questioned why her townhouse property went up by $17,000 value. She stated that the land in 2004 was valued at $22,000 and in 2005 was valued at $38,800. She stated that she does need to do some repairs and replace her roof. Appraiser Olson stated that he was not comfortable 'With how he had appraised the property value at this location and was more comfortable 'With placing a value of $29,000 for the land versus $38,800. He also stated that a 5% depreciation could be given. . MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO LOWER THE LAND VALUE TO $29,000 ON BOTH SIDES OF THIS TOWNHOUSE AND TO GIVE 5% FOR - DEPRECIATION FOR THE BUILDING ALSO ON BOTH SIDES OF THIS TOWNHOUSE. MOTION CARRIED 5-0. 12. Richard Bury, Parcel Identification Number 75-109-1100 . . . Board of Appeal and Equalization :Minutes April 25, 2005 Page 6 Mr. Bury has commercial land of 111 acres that he leases out for gravel mining. He stated that it was valued in 2004 at $470,900 and that it went up to $968,400 in 2005. He says that this is placing a value of $9,000 per acre. Assessor Kritzeck stated that there has been a revaluation of some gravel acreage areas and that this property lies within that boundary area that was revalued. He stated that the value was placed at $6,500 per acre for un-mined property and $11,400 for actively mined property. He recommended no change. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER MOTIN TO LEAVE THIS PROPERTY AT THE VALUE IT WAS ASSESSED AT BASED ON THE ASSESSOR'S RECOMMENDATION. MOTION CARRIED 5-0. 13. Lois Carton, Parcel Identification Numbers 75-128-4100 and 75-128-4205 Ms. Carton asked if there is a maximum increase of taxes in one year time. She stated that she has a little over ten acres and resides by Salk Junior High School. Assessor Kritseck explained that this property had been re-designated as residential. Previously it was designated as agricultural. However, Ms. Carton's properties total 10 acres, but it was discovered that she could not receive agricultural status since her properties were not contiguous. In 2004 under Ag status, the land was valued at $52,600. In 2005 after discovery that she did not qualify for Ag status, it was valued at $75,600. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO CHANGE THE VALUATION TO $55,000 BECAUSE OF THE WETLANDS ON HER PROPERTY. MOTION CARRIED 5-0. The following letters were received: 14. Ronald Schreckengaust, Parcel Identification Number 75-546-0254 Appraiser Olson explained that the owners challenged the value of $331,000. Staff reviewed the property and concluded that the house was over-assessed It is the recommendation of the Assessor to place a new value of $320,300 on this property, a reduction of $10,700. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER FARBER TO PLACE A NEW VALUE OF $320,300 ON THIS PROPERTY AS RECOMMENDED BY THE ASSESSOR. MOTION CARRIED 5-0. 15. Donald Lemmon, Parcel Identification Number 75-115-1000 Appraiser Henderson explained that the owners questioned the acreage amount. The Public Works Department researched the legal through their mapping system and reduced the acreage by .99 acres. Board of Appeal and Equalization 'Minutes April 25, 2005 Page 7 . It is the recommendation of the Assessor to adjust the land value of $682,500 to $676,200, a reduction of $6,300. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO PLACE A NEW VALUE OF $676,200 ON THIS PROPERTY AS RECOMMENDED BY THE ASSESSOR. MOTION CARRIED 4-1. 16. Ronald Middelstadt, et aI, Parcel Identification Number 75-125-1200 Appraiser Henderson explained that the owners questioned the acreage amount. The Public Works Department researched the legal through their mapping system and reduced the acreage by 2.15 acres. It is the recommendation of the Assessor to adjust the land value of $252,400 to $236,600, a reduction of $15,800. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER FARBER TO PLACE A NEW VALUE OF $236,600 ON THIS PROPERTY AS RECOMMENDED BY THE ASSESSOR. MOTION CARRIED 5-0. 17. John E. Polden II, Parcel Identification Number 75-503-1030 . Appraiser Holmgren explained that the owner challenges the value of $210,900; previously this property was valued at $191,800. The owner also feels that Outlot A located across from him may have a bearing on his valuation. Mr. Polden has submitted a letter of appeal and wishes to meet with Mr. Holmgren and to be able to present his issues to the county board. MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER DIETZ TO HAVE MR. POLDEN MEET WITH APPRAISER HOLMGREN AND ALLOW HIM TO PRESENT HIS ISSUES TO THE COUNTY BOARD AND THAT THE ELK RIVER BOARD OF APPEAL AND EQUALIZATION WILL ABIDE BY THE DECISION OF THE COUNTY BOARD. MOTION CARRIED 5-0. 18. Briggs Properties, Parcel Identification Number 75-599-0120 Appraiser Riley explained that there was a clerical error in the land valuation for the 2005 assessment. The original 2005 assessment for land was $48,000 and the 2005 suggested change for land is $360,800 with the building value remaining the same at $631,600. It is the Assessor's recommendation that the total value for this property would go from $679,600 to $992,400. . MOVED BY COUNCILMEMBER FARBER AND SECONDED BY COUNCILMEMBER GUMPHREY TO PLACE THE VALUE OF THE LAND AT $360,800, VALUE OF THE BUILDING AT $631,600, WITH THE TOTAL VALUE OF THE PROPERTY AT $992,400 AS RECOMMENDED BY THE ASSESSOR . . . Board of Appeal and Equalization Minutes April 25, 2005 AND TO SEND THE OWNER A NEW LAND VALUE CARD. MOTION CARRIED 5-0. 6. Adjournment There being no further business, Mayor Klinzing adjourned the meeting at 10:30 p.m. Joan Schmidt City Clerk Page 8