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HomeMy WebLinkAbout1981 06-01 CCM Board of Equalization MINUTES OF THE PROCEEDING OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN THE STATE OF MINNESOTA Board of Equalization June 1, 1981 City Hall CALL TO ORDER The Brooklyn Center City Council met as the Board of Equalization and was called to order by Mayor Dean Nyquist at 7:05 p.m. " ROLL CALL Mayor Dean Nyquist, Councilmembers Tony Kuefler, Bill. Fignar, Gene Lhotka, and Celia Scott. Also present were City Manager Gerald Splinter, City Assessor Peter Koole, Appraisers Merry Ritter and Joe Dabruzzi, Assessing Clerk Grace Geske, and Administrative Assistant Tom Bublitz. The City Manager stated the City Assessor was prepared to review the purpose of the Board of Equalization, conduct a procedural review of property taxation, and present the City Assessor's report. He noted that, following the Assessor's presentation, there would be time for public inquiry regarding local assess - ments. The City Manager requested that all persons present who wished to make inquiries regarding their assessments please fill out the appropriate forms and present them to the City Assessor. 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. The City Assessor stated 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 noted this has been done and the owners of the property in Brooklyn Center have . been notified of any value changes. Additionally, the City Assessor explained Minnesota Statute 273.11 states, "All property shall be valued at its market value ". The City Assessor 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 , tself, 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 6 -1 -81 -1- 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 next reviewed the sales ratio studies. He referred the Council to a copy of a graph received in the Agenda packet, stating 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 94.8 %, the median ratio is 94.1 %, the coefficient of dispersion is 6.0. The average sale price is $60,412 and the average market value is $57,272. He explained the Assessing Department analyses the sales by style, location, price 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 showed the Council a neighborhood map which had been prepared and discussed the general percent of increase in various areas of the City. He stated the figures indicate that with various increases throughout the City the Assessment Department obtained a reasonably well grouped set of ratios in every neighborhood City wide. He pointed out the percent of increases in the City's neighborhoods ranged from 4.5% to 11% and that the average increase in valuation City wide was'8% to 9%. The City Assessor reviewed inspections made by the Appraisers. He commented, State law requires that one- fourth of the properties be revalued and inspected each year. He showed the Council on a map of the City which areas had been revalued and inspected in 1980 for the 1981 assessment. He noted in addition to the regular inspections made each year, the Assessment Department must also inspect the work on each building permit. He noted in 1980 there were over 600 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 1972 to 1981. He stated these properties have not been extensively changed physically although normal main- tenance and depreciation are present in their average properties. He explained the income adjusted homestead credit (circuit breaker) has been considered in the example as listed on the chart. He pointed out that even though values of homes have gone up this does not always mean that taxes will increase. Councilmember Fignar stated that the City's share of the total tax dollar is approximately 15% to 18 %. He inquired what percentage this 15% to 18% represents with regard to revenues needed for City functions. The City Manager explained the 15% to 180 of the tax dollar received by the City represents approximately 45% to 50% of the total revenue required for City functions. The City Manager proceeded to review the forms submitted by persons present at this evening's meeting who wish to ask questions regarding their valuations. The first person to appear was Mr. Gene Sorby, 6437 Emerson Avenue north, Property Identification No. 36- 119 -21 -32 -0084. Mr. Sorby stated his home has been valued at $67,000 and that he paid only $63,000 for the home three months ago. The City Assessor stated that he will have the City's Property Appraisers review Mr. Sorby's valuation and -make a recommendation to the City Council at the next meeting. The City Manager stated the Board can defer any action on 6 -1 -81 2- the valuation of Mr. Sorby's property until the staff reviews the valuation and reports back to the Council. The next person to appear was Mr. Robert Melina, 3919 61st Avenue North, Property Identification No. b3- 118 -21 -21 -0127. Mr. Melina stated that his valuation had been $48,000 previously and is now $62,000. lie, stated his house is 42 years old and that he has made no improve - ments to the property and that he was here this evening to find out why his valuation had increased from $48,000 to $62,000. The City Assessor reviewed Mr. Melina's past valuations noting that the property in question had been valued at $49,900 in 1979, $58,300 in 1980 and $62,000 in 1981. He noted the increase in property valuations have followed a normal percentage increase in valuation as compared to other similar properties in the City. The City Manager pointed out the Appraisers can physically inspect only 2000 homes per year- and that this is why the sales ratio is used in determining valuations for homes which the Appraisers cannot physically inspect. He noted the City's Appraisers can review this property along with the sales of other homes in the area. The City Manager stated the next individual making an inquiry regarding the valuation of his property was Mr. Paul Linton, 6915 Indiana Avenue North, Property Identification No. 27- 119 -21 -34 -0005. Mr. Linton stated he tried to sell his home approximately 4 years ago and at that time the FHA valued his home at $25,000. He explained his home did not meet FHA requirements since there was no basement in the home. The City Assessor'explained $46,800 is the current value of Mr. Linton's home and that his property has not been appraised recently. He explained the Appraisers can review and inspect Mr. Linton's home and return back to the Council with their inspection report. The City Manager introduced the next inquiry from Mr. Earl Dukatz, 5655 Northport Drive, Property Identification No. 03- 118- 21 -42- 0009. The City Assessor explained that the City's Appraisers had problems gaining entry to appraise this property and that the staff will report back to the Council after the property has been inspected and reviewed. He stated the staff anticipates no problem with this property. The City Manager introduced the next inquiry from Lucille Hargzi, 3527 27th Avenue North, Property Identification No. 10- 118 -21 -42 -0024. He explained Ms. Hargzi's concern was with the increase in valuation of her property. The City Assessor stated the property in question has been valued $159,500 for 1981 and is an eleven unit apartment building. He added, he believes this property is grossly undervalued. He cited examples of other apartment buildings noting a four unit apartment building on Lake Breeze Avenue sold for $167,000 in 1980. He stated another four unit building at 6637 Humboldt Avenue North sold for $172,900 in 1980. He added, in 1982 the staff will undertake a major apartment study throughout the City. The City Manager pointed out that the State Legislature has shifted the tax relief to homestead property and not to commercial properties, resulting in an increased share of the tax burden for commercial property owners. The City Assessor pointed out that Ms. Hargzi's property at 3527 27th Avenue North was valued at $140,300 in 1980 and $159,500 in 1981. Councilmember Lhotka stated that he wanted to clarify the fact that taxes are set to a great extent by the State Legislature and not by local City Councils. - The City Manager pointed out, in apartment properties tax relief is given to the renter since the State views the renter as the ultimate taxpayer on cor— tercial properties. He explained the tax burden.has been taken off the single family home in recent years and a greater share of the burden has been placed on apartment buildings. 6 -1 -81 -3- The City Manager introduced the next inquiry, which was submitted by Mr. Amos LeVang owner of the properties at 4100 Lake Breeze Avenue and 4816 Lake View Avenue North, Property Identification No. 10- 118 -21 -32 -0068. Mr. LeVang stated he was opposed to.the.system set up by the Legislature which has placed a greater share of the tax burden on apartment properties. He stated he realizes the City Council's hands are tied with regard to the State's actions. He explained his four -plex, located at 4100 Lake Breeze Avenue, has increased 80% in valuation and that the taxes have increased 83% to almost $1,800. He stated there was a problem with the tax system and that something must be done to bring the selling price of property down to a reasonable level. He added, the system is also unfair to renters. The City Manager stated the City can invite local legislators in to discuss the problem and emphasized to Mr. LeVang that he should carry his protest forward to the State Legislature. The City Assessor noted that what Mr. LeVang is saying is true and that the State has been responding to a certain segment of the population, that being the homesteads not commercial and industrial property. Mr. LeVang stated he has no objections to the actual taxes he paid last year, but that he is opposed to the system that is placing a greater tax burden on commercial property. The City Manager explained the City staff has discussed this problem with local legislators in the past. Mayor Nyquist suggested that the City use Mr. LeVang's data and forward a resolution to the State Legislature regarding this problem. The City Manager requested Mr. LeVang to include the information he presented this evening in a letter that the City could pass along to the State Legislature along with a resolution. The City Manager introduced the next inquiry from Mr. Urban Sander, 6732 Willow Lane, Property Identification No. 36- 119 -21 -12 -0013. Mr. Sander stated that other properties in his neighborhood were paying lower taxes than his property even though he had a smaller house. In light of this difference he inquired - why his taxes were greater. The City Assessor stated the City's Appraisers will show comparable valuations in Mr. Sander's neighborhood and will also show any values on any property which Mr. Sander's feels is comparable. Mrs. Sander's stated the taxes on a $60,000 home are $800 and on a $120,000 home are $1,500. She inquired why the taxes were structured in this manner. The City Assessor stated the higher the value of the property, the higher the tax rate, noting that this is the way the tax system is structured. Discussion followed regarding the general trend of home sales in the area and the inflated prices of homes. Mrs. Sander's stated she had no complaints with the market value the Appraisers have chosen to set and in fact she would not sell for that price. She did note, however, that she was concerned with the inflated prices of homes and the inability of many people to sell there home in today's market. The City Manager introduced the next inquiry from Ms. Audrey Alford, 5306 Camden Avenue North, Property Identification No. 01- 118 -21 -43 -0077. Ms. Alford questioned the current market value of her home noting that the market value of her.home was $29,600 in 1980 and was increased to $43,800 in 1981. The City Assessor explained the home consisted of 795 sq. feet with a double garage and that the home was reappraised during the past appraisal period. He explained the average value in Ms. Alford's neighborhood has been generally only one -half that of the rest of the City thus creating more demand for housing in the neighborhood and thereby increasing the valuation. He noted that only 12 homes in the City sold for under $40,000 as of Angust 1980. He noted the staff will review the appraisal of Ms. Alford's home with her and will report back to the City Council on this review. 6 -1 -81 -4- The City Manager 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 noted and entered into the meeting record, the written protest of P ersons who were not able to appear at this evening's meeting. Letters of protest were received from the following individuals: t 1. Mr. Robert Regan, 4435 68th Avenue North, Property Identification No. 34- 119 -21 -22 -0012. 2. Lionel Corporation /Toy City, Property Identification No. 02- 118 -21 -11 - 0005. 3. Prudential Insurance Company, Property Identification No. 35- 119 -21 -14 -0004, .and 55- 119 -21 -14 -0011. 4. Texas International Airlines, RLS 1380, Property Identification No. i 02- 118 -21 -11 -0001. 5. Health Industries, Incorporated, Executive Health Spa, Property `Identification No. 02- 118 -21 -23 -0019. 6. Plitt N. C. Theater's, Incorporated, Brookdale, 250 County Road 10, Property Identification No. 02- 118 -21 -24 -0013. 7. Gabbert & Beck Incorporated, Tract A except Highway RLS 1235- 22- 89757 5000- 281 -0, Property Identification No. 03- 118 -21 -14 -0022. 8. .McDonald's Restaurants of Minnesota Incorporated, 5525 Xerxes Avenue North, Property Identification No. 03- 118- 21 -41- 00 9. Lowry MLS Realtors, 7000 Brooklyn Boulevard, Property Identification No. 27- 119 -21 -33 -0006 and 27- 119 -21 -33 -0007. 10. Prudential Insurance Company of America, Shingle Creek Parkway Properties, 6820 Shingle Creek Parkway, Property Identification No. 35- 119 -21 -12 -0002. 11. Prudential, 6840 Shingle Creek Parkway, Property Identification No. 35- 119 -21 -21 -0003. Councilmember Kuefler suggested the Board of Equalization meeting be continued to the June 8, 1981 Council meeting and at that time the Council would review as many properties as the staff can report on in time for that meeting. Mayor Nyquist noted the Board of Equalization meeting will be continued to June 8, 1981 at 7:00 p.m. PURCHASE OF XEROX MACHINE The City Manager reviewed the memorandum in the Council's packets regarding copying costs for the City. He explained at the present time the City is paying $937 per month for the Xerox 7000 and that an identical machine is available from the City of Fridley for $7,500 plus moving expenses of approximately $300. He stated the staff is requesting the Council's authorization to submit a bid for $7,500 on the Xerox machine. He added, the normal cost for a used machine of this type is between $15,000 and $20,000. Mayor Nyquist inquired how old the used machine was. The City Manager explained the used machine was approximately . 5 to 6 years old. 6 -1 -81 -5- . i There was a motion by Councilmember Scott and seconded by_Councilmember Fignar to authorize a bid of $7,500 for the Xerox machine currently owned by the City of Fridley. Voting in favor Mayor Nyquist, Councilmembers Kuefler, Fignar, Lhotka, and Scott. Voting against: none. The motion passed unanimously. ADJOURNMENT There was a motion by Councilmember Kuefler and seconded by Councilmember Fignar to adjourn the Board of Equalization meeting. Voting in favor: Mayor Nyquist, Councilmembers Kuefler, Fignar, Lhotka, and Scott. Voting against: none. The motion passed unanimously. The meeting was adjourned at 8:40 p.m. - rk Mayo 6 -1 -8i -6-