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HomeMy WebLinkAbout04 06 09 City Council Work Session. . 2009 P IOR LAKE CITY ASSES MENT Conducted by the Scott County Taxation Department L Role of the Local Board 1. -Understand assessment process ^Valuation and classification procedures ^Sales ratio studies ^Appeal procedure ^LBAE meetings and duties -Make an informed decision ^Understand "classification" ^Understand "market value rThe Appeals Process. LL Appeals Process Overview TAX COURT COUNTY BOARD OF APPEAL Ensures equalization among the taxing tlisNicts Can make chances to class or value OPEN BOOK LOCAL BOARD OF REVIEW Less Formal Process Verifes Assessment No decision making authority Can make changes to class or value 4.. INFORMAL APPEALS '~ Addresses wncerns or issues of taxpayers. f Context of Meeting ] ,~_, L ^ The purpose of the meeting is to discuss the results and process for the 2009 /Payable 2010 Assessment. ^ The payable 2009 Tax Statements cannot be debated or appealed at this time. If owners wish to appeal the value or class they can only do so by filing for tax court prior to April 30, 2009. Role of the Local Board (cunt), > Board Control -The Local Board is to be 100% in control of the meeting. Do not allow taxpayers to run the meeting and at no time should taxpayers be addressing the audience. Consent Items -County staff will bring forward a list of consent agenda items that are being presented for approval. These are items where staff was asked to review prior to the local board and it was determined an adjustment should be made n Need fora 2"a Meeting - If a taxpayers issue cannot be resolved, a 2nd meeting must be established to finalize the taxpayers issue/concern Determination of Market Value ] C Market value - Prices that would tend to prevail under open market conditions: • Typical • Normal • Competitive - Non-market value factors should not affect market value • Personalities • Politics • Relationships f The Assessment Process ] >L - Physical review/inspection • Quintile Requirement 1. Physically view property 1X every 5 years 2. Reviews size, condition, quality...etc - Reviewing Sales - Measure assessment level: • How close EMVs are to sale prices • Must have a Sales Ratio of 90 - 105% • Must have at least six sales per "area" -Could expand market area -Could expand time period rAcceptable Sales Ratios L ^ State law requires assessors to value property at 100% of market value ^ The State conducts a sales ratio study each year. It is mandatory that the overall median ratio to fall between 90- 105% Our Goal rArms Length Transaction L ^ An "open market sale" is one in which both the buyer and seller are acting prudently, and the price is not affected by undue stimulus. Neither the buyer nor the seller must be under great pressure to complete a transaction in a short time. ^ Properties that sell/transfer during the foreclosure process usually do not meet the definitions of open market, arm's-length transactions. ^ Properties that are sold on a short sale or that are bank owned following a foreclosure are not `arms length sales', therefore are not included in the sales Study. rSales Ratios L ^ Calculated by dividing our Estimated Market Value (EMV) by the actual sale price. EMV = $100,000 and the property sells for... $90,000 = 111.1% Ratio $110,000 = 90.9% Ratio r Acceptable/Qualified Sales L DEFINITIONS ^ Arm's-length transaction ^ Well informed parties ^ Acting in own best interest ^ Reasonable marketing ^ Normal payment/financing Timeline for Property Taxes [Payable in 2010. Value Date TNT 1^ Half "2^^ Half Jan 2, 2008 _ County BOard of Meegng lax Due Tax Due Equallzatlen In June May 75th Octoberl5th - -~- zno~ zom 2oo~a ~o~n . eLs ~tuny l_cral ©oard _ •al,:• •~„ ~y l,prd-clay , r I OCt 07 -Sep 08 Exact dates '~. Appear on the vatuatlon Notlee •NOVember 75'^ for properties classed as ag. - - 2070 Tax Statements/ •MOblle Home taxes due In 2009 Tax Statementsl 2077 Value Notlces September 2010 Value Notlees ,,,i ~ ~ rFrequently Asked Question ] L ^ Are the number of foreclosures in 2009 expected to be similar to what was seen in 2008? It is impossible for us to predict how many foreclosures there will be in 2009. We can provide existing information. Below is a breakdown of foreclosures in Scott County from 2005 to 2008. SCOTT PRIOR LAKE'. -- COLT DITY 2005 142 34 2006 313 61 2007 644 176 2008 1083 154 rResults of 2009 Assessment ] L Average Impacts: ^ Residential - No Lakeshore nor deeded access: Average 12% Reduction ^ Lakeshore & Deeded Access: 1-3 Reduction ^ Agricultural: 12-15% Reduction rLimited Market Value Sunsets , L ^ Most of the properties that were subject to limited values were located on Prior Lake or Spring Lake. ^ The Limited Market Value provision sunsets for pay 2010. ^ Properties whose Taxable Market Values were less than Estimated Market Values saw increases in their taxable values. ^ Taxable Market Value is un-appealable. Results of 2009 Assessment C Commercial Industrial: ^ 13 Properties had class changes to Commercial/Industrial ^ 8 Properties had value reductions ^ 314 Properties had no value/class changes ^ 17 Properties had value increases (12 of which were <4%) [Median Sales Ratio -Lakeshore ^ There were 25 qualified sales that were on the lake ^ The median sales ratio for Lakeshore is 93.77% ^ Due to the ratio, decreases to Lakeshore property was limited to 1-3% rConclusion L ^ Taxpayers cannot contact the County offices to appeal their payable 2009 values or classifications. That time period has expired. ^ The 2009 Assessment/Pay 2010 Valuation Notices were mailed with tax statements in March. This is the time period to appeal values or classification if properties could not be sold between Oct 2007-Sept 2008 for what it is being valued for. ,.~, y. Conclusion C ^ Foreclosures, short sales and bank owned sales are not `qualified' sales according to MN DOR sales study. ^ Limited Market Value sunsets for payable in 2010. This means that even though an estimated market value may go down, an owners taxable market value may go up. ^ There are 2 equations that affect taxes: Value & Levies. Just because a value goes down, taxes may not go down at all or in the same proportion. Conclusion Questions