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Home My WebLink About5H Assessing Services Agreement with Scott County Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: NOVEMBER 12, 2016 AGENDA #: 5H PREPARED BY: DON URAM, FINANCE DIRECTOR PRESENTED BY: DON URAM AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING A JOINT POWERS AGREEMENT FOR ASSESSMENT OF THE CITY OF PRIOR LAKE FOR ASSESSMENT YEARS 2018 AND 2019 DISCUSSION: Introduction The purpose of this agenda item is to ask the Council to consider authorizing Scott County to continue to provide assessing services for the City for the next two years. This change will also put Prior Lake on the same three-year contract schedule as all other jurisdictions in Scott County. History Prior Lake has never had its own assessing department since this function can be more cost effectively delivered by contracting with the County. With all Scott County cities receiving assessment services through the County there is also greater consistency in the treatment of properties. The current assessment agreement was entered by the Council on October 24, 2014 for calendar years 2015 – 2017. This cooperative agreement between the City and Scott County has existed since 1972. The current agreement is scheduled to expire on December 31, 2017. Assessment service costs for the current service contract are shown in the following table: Year Cost Amount of Change from PY % Inc. 2017 $185,000 17,500 10.4 2016 $167,500 17,500 11.6 2015 $150,000 Current Circumstances Michael Thompson, Scott County Taxation Department Manager, has requested that Prior Lake and several other jurisdictions) consider a two- year contract so that all jurisdictions within the County would be on the same three-year contract schedule. Part of the reason for this request is to simplify the process of contract administration. It is much easier to send all the contracts to the County Board at one time. More importantly, after June of 2017 when the 1/2/2017 assessment work is completed, and the appeals process has concluded through the County Board of appeals hearing, the County technically would not have a contract to start the Prior Lake 2018 assessment. This work typically starts in June of 2017 but earlier if possible. The City could defer entering a new contract up until about April/May of 2017, when the County would need a new contract to start working on Prior Lake’s assessment. Considering the reduction in administrative process and that a new contract will be needed early next year it makes sense to consider it now. A proposal for providing property assessment services covering calendar years 2018-2019 is attached to this agenda report. Conclusion The Council should determine if contracting with the County continues to be the best way to accomplish statutorily required valuations. ISSUES: The operation of a city assessing department would be more than the annual contract cost from Scott County. Attached are two exhibits that outline a comparison of County assessing costs and City assessing costs. Exhibit A shows that the assessment cost per parcel in Scott County is $25. Exhibit B shows that the average assessment cost per parcel in those cities surveyed with their own on staff assessment division equals $43.39. The lowest cost is the City of Minnetonka at $35.23 per parcel. Prior Lake has about 10,675 parcels. The reason Prior Lake’s fee is less than the $25 per parcel is that 100% of the costs are not billed. FINANCIAL IMPACT: The following table reflects the agreement being proposed by Scott County for the City of Prior Lake: Year Cost Amount of Change from PY % Inc. 2019 $200,100 7,700 4.0 2018 $192,400 7,400 4.0 ALTERNATIVES: The following alternatives are available to the City Council: 1. Adopt a Resolution as part of the consent agenda authorizing the Joint Powers Agreement for Assessment of the City of Prior Lake for Years 2018 and 2019. 2. Remove this item from the consent agenda for further discussion. RECOMMENDED MOTION: Alternative 1. ATTACHMENTS: 1. Resolution 2. Assessing Agreement for Years 2018 and 2019 EXHIBIT A Source: Scott County EXHIBIT B Source: City of Minneapolis 4646 Dakota Street SE Prior Lake, MN 55372 RESOLUTION 16-XXX A RESOLUTION AUTHORIZING THE JOINT POWERS AGREEMENT BETWEEN SCOTT COUNTY AND THE CITY OF PRIOR LAKE FOR ASSESSMENT SERVICES Motion By: Second By: WHEREAS, Since 1972, the City has contracted with Scott County to provide assessment services within the City; and WHEREAS, The City has determined that because of the experience and expertise required to conduct property valuations and the number and cost of employees necessary if the City were to undertake property assessments that it is most cost-effective for the CITY to contract with Scott County to receive assessment services; and WHEREAS, The City of Prior Lake desires to continue the Assessment Agreement. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City of Prior Lake hereby approves the contract for Scott County to provide the CITY with assessment services. The cost of the services for 2018 and 2019 is $192,400 and $200,100, respectively. 3. The Mayor and City Manager are hereby authorized to execute the contract on behalf of the City of Prior Lake. PASSED AND ADOPTED THIS 14th DAY OF NOVEMBER 2016 VOTE Hedberg Keeney McGuire Morton Thompson Aye ☐ ☐ ☐ ☐ ☐ Nay ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ ______________________________ Frank Boyles, City Manager SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER· 200 FOURTH AVENUE WEST · Shakopee, MN 55379-1220 JOINT POWERS AGREEMENT FOR ASSESSMENT OF City of Prior Lake THIS JOINT POWERS AGREEMENT is made and entered into by and between City of Prior Lake and the County of Scott, State of Minnesota, pursuant to Minnesota Statute 273.072 and Minnesota Statute 471.59. WHEREAS, City of Prior Lake wishes to enter into an agreement with the County of Scott to provide for the assessment of the property in said City of Prior Lake by the County Taxation Department; and WHEREAS, it is the wish of said County to cooperate with said City of Prior Lake to provide for a fair and equitable assessment of property; NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN CONTAINED, IT IS AGREED AS FOLLOWS: 1. That City of Prior Lake, which lies within the County of Scott and constitutes a separate assessment district, shall have its property assessed by the County Assessor of Scott County, for the assessment years 2018 and 2019. All work done necessary to the establishment of the estimated market value for each parcel shall be performed by the Scott County Assessor or by one or more of the licensed assessors under his direction and supervision. 2. It is hereby agreed that City of Prior Lake and all of its officers, agents, and employees shall render full cooperation and assistance to said County to facilitate the provision of the services contemplated hereby. 3. In consideration for said assessment services, City of Prior Lake hereby agrees to pay the County of Scott the sum of $192,400 for assessment year 2018 and $200,100 for assessment year 2019. Such payments are to be made to the Scott County Treasurer on or before June 1, of the year of the assessment. 4. The County agrees that in each year of this Agreement it shall, by its County Assessor or one or more staff appraisers; actually review at least twenty percent (20%) of the parcels within this taxing jurisdiction according to statute. It is further agreed that the County shall have on file documentation of those parcels physically inspected for each year of this Agreement. SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER· 200 FOURTH AVENUE WEST · Shakopee, MN 55379-1220 5. The County agrees that in each year of this Agreement it shall provide the following data summarized by property usage class (i.e. residential, commercial, industrial, utility, apartments, etc.) for each assessment year of 2017, 2018, and 2019: 1) Taxable Market Valuation 2) Tax Capacity 3) Taxable Market Valuation – New Construction 4) Referenda Market Value 5) Number of Parcels Such data will be available per the following schedule: April 1, 2018 – Assessment Year 2018/Payable Year 2019 Preliminary Data August 1, 2018 – Assessment Year 2018/Payable Year 2019 Preliminary Data (updated) April 1, 2019 – Assessment Year 2018/Payable Year 2019 Final Data April 1, 2019 – Assessment Year 2019/Payable Year 2020 Preliminary Data August 1, 2019 – Assessment Year 2019/Payable Year 2020 Preliminary Data (updated) April 1, 2020 – Assessment Year 2019/Payable Year 2020 Final Data 6. Each named party to this Agreement shall be liable for its own acts to the extent provided for by law and hereby agrees to indemnify, hold harmless and defend the other named parties to this Agreement, its officers and employees against any and all liability, loss, costs, damages, expenses, claims or actions, including reasonable attorney’s fees with the other, its officers and employees may hereafter sustain, incur or be required to pay, arising out of or by reason of any act or omission of the party, its agents, servants, or employees, in the execution, performance, or failure to adequately perform its obligations. This provision to indemnify and hold harmless does not constitute a waiver by any named party to limitations on liability provided by Minnesota Statute Chapter 466. Further, all workers’ compensation claims shall be handled in the jurisdiction in which the agent is employed. IN WITNESS WHEREOF, City of Prior Lake has executed this Agreement by its Mayor and City Administrator/Manager, or its Township Chairperson, by the authority of its governing body and the County of Scott has executed this Agreement by its Chairperson, County Administrator, and County Assessor pursuant to the authority of the Board of Commissioners intending to be bound thereby. SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER· 200 FOURTH AVENUE WEST · Shakopee, MN 55379-1220 City of Prior Lake: City Mayor Date City Manager Date City Clerk (if applicable) Date COUNTY OF SCOTT: Chairperson Date County Board of Commissioners County Administrator Date County Assessor Date Approved as to form: Scott County Attorney