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HomeMy WebLinkAbout1982 06-07 CCM Board of Equalization MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA Board of Equalization' June 7, 1982 City Hall C ALL T O ORDER The Brooklyn Center City Council met as the Board of Equalization and was called to order by Mayor Dean Nyquist at 7:09 p.m. I ROL'L CALL Mayor Dean Nyquist, Councilmembers Gene Lhotka, Celia Scott, Bill.Hawes, and Rich Theis. Also present were City Manager Gerald Splinter, City Assessor Peter Koole, Appraiser Joe DaBruzzi, Assessing Clerks Julie Caswell and Evelyn Byron, and Administrative Assistant Tom Bublitz. Mayor Nyquist reviewed the purpose of this evening's meeting pointing out that the City Council was serving as the Board of Equalization to conduct a review of assessed valuation within the City, and to allow a time for public inquiry regarding local assessments after the City Assessor makes his report. The City Manager pointed out that there are various steps that individuals must take when seeking adjustments in their valuations and he explained that the meeting tonight is the first step after which the inquiry is passed on to the County,, and the County then passes it on to the State for their review. He explained that the values discussed this evening will serve as the basis for 1983 taxes. He added that.the Board of Equalization reviews the City Assessor's work and he explained that the City appraisers and assessing staff are fully certified by the State of Minnesota. The City Assessor explained the appeal process, stating the channel of appeal begins with the local Board, then onto.the County Board, the State Board, and finally to the tax court if carried that far. He also noted that individuals may appeal to the tax court directly without going to the County Board or State Board. He added that an individual must go to the local Board first before they can qualify for the next step, which is the County Board, and that an individual must also appeal' to the County Board `prior to appealing to the State Board. The City Assessor explained that the County Board of Equalization is appointed by the County Commissioners and that the Commissioner of Revenue serves as the State Board of Equalization. The City Assessor stated that the duties and the procedures to be followed by the local Board are set in Minnesota Statute 274.01 to "examine and see that all taxable property in the City has been properly placed upon a.tax list and duly valued by the Assessor ". "Furthermore ", he stated, "on application of any person feeling aggrieved, the Board shall review the assessment and correct as shall appear just ". In reviewing the duties of the City Assessor, he noted the State Statute reads "All real property subject to taxation shall be listed and assessed every year with reference to its value on January 2, preceding the assessment ". The.Assessor stated this has been done and the owners of the property in Brooklyn Center have been notified of any value changes. He also pointed out that Minnesota Statute 273.11 states, "All property shall be valued at its market value ". The City Assessor 6 -7 -82 -l- further explained the Statute states "In estimating and determining such value the Assessor shall not adopt a lower or different standard of value because the same is to'serve as a basis for taxation; nor shall he adopt as a criterion and a value the price for which such property would sell at auction or at a forced sale, or an aggregate with all the property in the town or district; but he shall value each article or description of property by itself, and at such sum or price as he believes the same to be fairly worth in money ". The City Assessor noted in cases where a property may be so unique as to make a comparative market value hard to determine, Minnesota Case Law is clear as demonstrated in the case of State of Minnesota versus Fritch. In this case, the court stated, "It is up to the Assessor to form an opinion of the market value even when there is no market or sales to aid in fixing values, where there have been no actual sales for a long period of time, there is no way of determining values except by the judgment and opinion of men acquainted with the lands, their adaptability for use and the circumstances- of the surrounding community ". The City Assessor explained that the assessor's work is based on historical value and that their data is based on actual sales and not projections. The City Assessor next reviewed the sales ratio studies. He explained that the sales ratio study was a substantive part of what is done by the Assessing Department. The City Assessor briefly reviewed the 1981 sales ratio study noting the aggregate ratio is 93.9 %, the median ratio is 93.20, and the coefficient of dispersion is 6.5 %. He stated that the average sale price is $66,052 and the average market value is'$61,763. He explained.the Assessing Department analyzes the sales by style, location, price, age, and neighborhood. He reviewed the valuations of " several homes located in different parts of the City, including homes located on a lake or river, in proximity to a highway or freeway, commercial and multiple' family units, and homes located near parkland. He pointed out the pe -rcent of increases in sale prices in the City's neighborhoods ranged from 3% to 8% and that the average increase in- valuation City wide was 5.9 %. He explained that in the 1980's the inflation rate in real estate is expected to lag behind inflation in other areas. The City Assessor reviewed inspections by the Appraisers. He commented that State , law requires one - fourth -of the properties in the City be revalued and inspected each year. He showed the Council on a map of the City which areas had been revalued and inspected in 1981 for the 1982 assessment. He noted in addition to the regular inspections made each year, the Assessing Department must also inspect the work on each building permit. He noted that in 1981 there were 518 permits that had to be inspected at least once to determine what effect the work has had on the property value. The City Assessor next reviewed a tax comparison for properties which were chosen to be representative samples of homes in Brooklyn Center in two different price ranges. A comparison was made from the years 1973 to .1982. He stated these properties have not been extensively changed physically although normal maintenance and depreciation are present in their average properties. He explained the income adjusted homestead credit (circuit breaker) has not been considered in the example as listed on the chart. Historically, he pointed out, taxes on homesteaded properties have decreased over the years. The City Assessor then proceeded to review an example of how the homestead credit 6 -7 -82 -2 works with regard to taxes. For his example, the City Assessor assumed a gross tax of $1,100; when the 58% homestead credit ($638) is deducted the net taxes are $462. The City Assessor then assumed that the budget of the taxing authority increased by 10 %, or $1,100 plus $110 for a total of $1,210 reflecting the 10% budget increase. The 1982 gross tax, he pointed out, would then be $1,210 and the 58% homestead credit would be $701.80; however, the homestead credit provides a maximum of $650, therefore, the net tax would be $1,210 less $650 or $560. The tax increase from one year to the next on the example property increased $98 for a 21.2% increase. He explained that the additional increase is due to adjustments made by the State Legislature. The City Manager pointed out that the City's share of the total tax dollar is approximately 15% to 17 %. The City Assessor proceeded to review small apartment building sales and also the sale of four - plexes in the last five years. He explained the use of the gross rent multiplier in developing values for apartment buildings. He explained that the gross rent multiplier is obtained by dividing the sale price of the building by the gross rent of the building. He pointed out that four- plexes,that were sold more than once in eleven years experienced an annual inflation rate of 34.3% with regard to their selling price. The City Assessor reviewed new legislation for the Council and pointed out that homestead properties with tax increases over 30% received refunds from the state for 75% up to $200. Mayor Nyquist proceeded to review the forms submitted by persons present at this evening's meeting who wished to ask questions regarding their valuations. The first persons to appear were Donald and Elizabeth Tinker, 3337 - 49th Avenue North, PID No. 10- 118- 21 -13- 0017. Mr. Tinker stated that his value was raised 33% in one year and that he believes this is too high since his valuation is up $18,000 from the year before. He stated that his tax statement is 100% over the year - before. The City Assessor stated that Mr. Tinker's 1981 market value was $64,700. He pointed out that in March of 1982 the property.was reappraised at $61,700.- He stated that this is an example of an expansion home being revalued and he noted that these types of homes were grossly undervalued until 1981 which resulted in great tax increase when they were brought up to their proper value. He stated_ that he recommends the value remain as is for this property. The City Manager explained that the Assessing Staff can sit down with Mr. Tinker and compare values of other homes in his neighborhood. Mayor Nyquist stated that he would recommend that Mr. Tinker get together with Mr.- Koole's staff and examine the values as suggested by the City Manager. Mayor Nyquist stated that the next person making an inquiry regarding the valuation of his property was Mr. William F. Shutte, owner of the properties at 6715, 17, 19, and 21 Humboldt Avenue North, PID No. 35- 119 -21 -11 -0009, 0010, 0007, and 0008. Mr. Schutte stated that the taxes on the four four- plexes he owns have gone up 200% in two years. He stated that he is questioning the fairness of computing the values of all multiple family type housing together. He stated that it does not seem fair to compare the small multiple family housing with large multiple family housing units. He stated that his valuation in.1981 was $112,900 and in 1982 was $126,700 per unit. The City Assessor stated that, he agrees with Mr. Shutte in that he is competing with larger apartment complexes. He stated that 6 -7 -82 -3- four- plexes sell at a higher cost per unit than large 100 unit complexes-and the assessment must reflect this. He pointed out that the State Legislature requires all multiple family type_ buildings, which includes anything -over four.units, to be_in the same.tax classification. He stated that the gross rent multiplier for a four -plex is between 8 and 10 and that for.larger units it is between 4 and 6, F Councilmember Lhotka left the table at 8:02 p.m. The City Assessor explained that there is more demand for four unit buildings than " for sixteen unit buildings, thus the sales price is increased by the demand. He emphasized that there is more demand for the smaller unit. Councilmember Lhotka returned to the table 8:03 p.m. The -City Assessor stated that he does not see an inequity in the appraisal since the appraisal is based on the market value and it can be demonstrated that a four- Alex can be sold for more per unit than a sixteen unit building. Mr. Shutte stated that he believes the expenses in maintaining the building should also be considered not just the gross rent multiplier. Mr. Shutte then requested information from the Assessor regarding the information the Assessing Department has on his rental income. Mayor Nyquist suggested that Mr. Shutte meet with Mr. Koole and his staff to clarify some of the questions he has regarding his property. Mayor Nyquist stated that the next person making an inquiry regarding valuation of his property was Mr. Charles Thompson, 4201 - 58th Avenue North, PID No. 03- 118 -21- 23 -0023. Mr. Thompson stated that between 1976 and 1981 the market value:of his home increased from $56,000 to $118,800. He stated he believes this increase is too high. He stated his assessed valuation increased from $118,500 in 1981 to $118,800 in 1982. The City Assessor noted that Mr. Thompson's property is located on the north end of Twin Lake and is a single story home on a A acre lot with 2,214 sq. ft. of space. He added that the last appraisal of the property was conducted on April 10, 1981. Mr. Thompson stated he believes the market value is not what the home would sell for and that the value has doubled since 1976. The City Manager stated that the value of most homes in the City has doubled since 1976 He added that by law the City Assessor is required to assess on the value of property. The City Assessor pointed out that the valuation on Mr. Thompson's property in 1979 was $83,800, in 1980 it was $97,200, in 1981 it was $118,500, and in 1982 it was $118,800. He stated that he believes the valuation on Mr. Thompson's property is far below the market value of the property. Mr. Thompson stated he would take his protest to'the next step, that being, the County, Mayor Nyquist introduced the next inquiry, from Mr. Kenneth Wutschke, 7226 Perry Court East, PID No. 28- 119 -21 -41 -0163. Mr. Wutschke stated that the valuation of his property at 7226 Perry Court East has increased from a valuation of $62,100 in 1981 to $77,100 in 1982 and that he believes this is a rather large increase. The City Assessor noted that townhouses were raised by a percentage this year to establish their valuation. He added that Mr. Wutschke's neighbor located at 7220 Perry Court East sold his unit for over $81,000. He added that the sale prices in the Creek Villa's Development have been very stable. Mr. Wutschke stated he believes his valuation is $5,000 greater than his neighbor's valuation and his neighbor has the same floor plan. The City Assessor stated that the staff will review Mr -. Wutschke's property and set up a reappraisal appointment for his propert 6 -7 -82 -4- Mayor Nyquist introduced the next inquiry, from Kathleen A. Grisser, 1708 - 69th Avenue North, PID No. 26- 119 -21 -44 -0079. He explained that apparently Ms. Grisser was present earlier in the meeting but that she was not present now. The City Assessor explained that the home at 1708 - 69th Avenue North was an expansion home and was a non- homestead property. He added that in 1980 Ms. Grisser applied for an abatement with the County and the County approved the valuation of $48,000 in 1980 and that the property is still valued at $48,000. He stated that he recommend the $48,000 valuation be reaffirmed. The City Assessor stated that this concludes the in person inquiries for this evening's meeting, but that a number of written protests will be entered into the record from persons who could not be present at this evening's meeting. .Mayor Nyquist directed that the written protests be entered into the official meeting record. Letters of protests were received from the following: 1. Prudential Insurance Company of America, James North and Freeway Boulevard, PID No. 35- 119 -21 -14 -0004, 1982 value $3,900. 2. Prudential Insurance Company of America, 1600 and 1700 Freeway Boulevard, PID No. 35- 119 -21 -14 -0011, 1982 value $1,570,900. 3. Prudential Insurance Company of America, 6820 Shingle Creek Parkway, PID No. 36- 119 -21 -12 -0002, 1982 value $2,638,200. 4. Prudential Insurance Company of America, 6840 Shingle Creek Parkway, PID No. 35- 119 -21 -21 -0003, 1982 value $2,245,300. 5. B & G Realty Incorporated, 6415 James Circle North, PID No. 36- 119 -21 -42 -0003, 1982 value $1,500,000. 6. Edwin W. Elmer, 6500 West River Road, PID No. 36- 119 -21 -13 -0008, 1982 value $163,800. The City Assessor stated that he will be meeting with a representative - of the Prudential Insurance Company of America this week to discuss the problems related to the protested valuations.. He stated he would recommend that the current values be reaffirmed, pointing out that this action would protect the right of appeal of the property owners to the next level. He added that he is awaiting information from B & G Realty Inc. and Mr. Edwin W. Elmer regarding the valuations of their properties. / Mayor Nyquist noted that the Board of Equalization meeting would be continued to the June 14 City Council meeting and at that time the Board would review as many properties as the staff can report on in time for that meeting. Mayor Nyquist adjourned the Board of Equalization meeting at 8:40 p.m. lerk l ayor s . i � 6 -7 -82 - -5-