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HomeMy WebLinkAbout8A - Board of Appeal and Equalization Hearing MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: 4646 Dakota Street S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT May 4, 2009 8A Jerilyn Erickson, Finance Director PUBLIC HEARING TO CONDUCT BOARD OF APPEAL AND EQUALIZATION. INTRODUCTION: The purpose of this agenda item is to have the City Council act as the Local Board of Appeal and Equalization (LBAE) for 2009 assessed property values. DISCUSSION: Historv: Minnesota Statutes provide that the County or City Council can act as the Local Board of Appeals and Equalization, also known as the Board of Review. The City Council has decided it wishes to fulfill this function rather than delegate it to the County. Current Circumstances: The Board of Review this year is scheduled for Monday, May 4,2009, at 6 p.m. in the City Council Chambers or as soon as possible thereafter. Mike Thompson, Scott County Assessor, will be making a brief presentation prior to the public hearing and will be present to assist the City Council in conducting the Board of Review hearing. In accordance with state statute, notice of the hearing has been posted, published and sent to property owners with their statement of 2009 valuation. Conclusion: The Council should review the attached report and information sheets provided by the Scott County Assessor's office, to familiarize itself with appraisal and valuation-related issues. A sign-up sheet will be distributed for those who wish to address the Board of Appeals and Equalization. The Mayor will open the hearing at 6 p.m. or a soon as possible thereafter. I will provide a brief overview of the purpose of the hearing process. The Mayor will make any letters the City has received part of the formal record of the hearing and ask the Assessor to evaluate and provide a written response to the Council. It is assumed that the County Assessor has properly valued and classified all property in the jurisdiction. 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 facts. The LBAE has the authority to change the valuation or classification of a property for the current assessment year. Taxes or prior year assessments are not within the jurisdiction of the local board. Each property owner present will have the opportunity to state their concerns about the valuation of his/her property as of January 2, 2009. If there are RICouncil\2009 Agenda Reportsl05 04 09\Board of ~Ei.lG~ 9:tDiiliL4tl$ita~@;p'rtm 952.447.4245 www.cityofpriorlake.com questions requiring additional research, the Scott County Assessor staff will prepare a report and provide it to the City Council sitting as the Board of Review prior to May 18, 2009, when the Board will meet to take final action. After all appeals are heard, the City Council, acting as the Local Board of Appeal and Equalization, should close the hearing and accept the Assessor's appraisals for 2009 to the extent they agree with them. If the Scott County Assessor office is conducting additional research, the Board should conclude the public portion of the hearing and continue the Board of Review meeting until May 18, 2009. ISSUES: The only issue that the City Council, acting as the Local Board of Appeal and Equalization, will be considering is the valuation placed upon each parcel by the County Assessor as of January 2, 2009. Property owners received their valuation notice in April 2009. A property owner wishing to contest his or her valuation must do so in person or in writing at the Local Board of Appeal and Equalization hearing. Citizens wishing to perfect their appeal may do so this evening by submitting a written letter to the Mayor prior to the meeting or by making comments and providing a written statement at the meeting. This will allow the property owners who believe they are aggrieved by the valuation to continue the appeal process to the County and eventually the court system should they desire. ALTERNATIVES: 1. Conduct the public hearing, close the hearing and take action to affirm the appraisals of the Scott County Assessor. 2. Conduct the public hearing, close the public hearing and direct the Scott County Assessor to prepare a report for consideration at the May 18, 2009, meeting. RECOMMENDED MOTION: If the concerns of all persons present can be addressed at the May 4 meeting, then Alternative #1 is appropriate. If it is necessary for the Scott County Assessor to meet with property owners and prepare additional information for Council consideration, then Alternative #2 is appropriate. RrlJ L I R\Council\2009 Agenda Reports\05 04 09\Board of appeal and equalization agenda reportDOC Assessor's Report to the Citv of Prior Lake Board of Appeal and Eaualization The 2009 assessment for taxes payable in 2010 for Scott County and the City of Prior Lake has been completed by the Scott County Assessor's office. Throughout the year, the Scott County Assessor's Office diligently follows the real estate market, analyzes trends, and makes annual adjustments to property valuation as indicated. The Scott County Assessor's Office is committed to providing accurate property valuations and classifications. The 2009 Notices of Valuation and Classification for taxes payable in 2010, along with the 2009 Property Tax Statements, were mailed to taxpayers on or about March 27,2009. Physical inspection of properties in Prior Lake began in July 2008, and was completed in January 2009. This process included inspection of newly constructed buildings, additions and improvements to property. There were 83 new home permits issued in 2008, and a total of 351 properties with new permits were visited. Properties with improvements that were partially complete as of January 2008 were also revisited. Per State law, an annual inspection of 20% of all the properties within a taxing district was completed as well. Scott County has approximately 55,000 parcels, thus approximately 11,000 parcels were viewed by appraisers and assessors from the Scott County Assessor's Office. The City of Prior Lake has a total of approximately 10,300 parcels; approximately 2,060 were part of the annual review in 2008. Below you will find approximate percentage changes for the total estimated market value of specific residential categories. These percentage changes are for existing properties, they do not include any value added due to new construction. It is important to note that these numbers are aggregate and that in each category individual values may have increased or decreased at different rates. Lakeshore Lake Access All Remaining Residential Agricultural 1 to 3% reduction 1 to 3% reduction 12% reduction 12 to 15% reduction Minnesota statute requires assessors to value property at 100% of its market value. The Department of Revenue (DOR) measures compliance with this law by conducting a sales ratio study which compares the assessed value of properties to the sale price. This "sales ratio" study does not include any sales of foreclosed properties, as the DOR does not consider them to be fair market sales. The effect of these listings and sales is reflected in the fair market sales as they are competing with these foreclosures. The DOR guidelines require the median ratio of sales within a community shall be between 90% to 105%. Respectfully submitted, Michael Thompson Certified Minnesota Assessor Scott County Assessor's Office