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04/14/2008 BOE - 29247BOARD OF APPEAL AND EQUALIZATION CITY OF FRIDLEY APRIL 14, 2008 The Board of Appeal and Equalization meeting for the City of Fridley was called to order by Mayor Lund at 7:04 p.m. PLEDGE OF ALLEGIANCE: Mayor Lund led the Council and audience in the Pledge of Allegiance to the flag. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember-at-Large Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Fritz Knaak, City Attorney Richard Pribyl, Finance Director Mary Smith, City Assessor Lynn Krachmer, City Appraiser Mike Sutherland, County Assessor Mary Smith, City Assessor, stated if the Board finds a case of undervaluation, it may raise the valuation of the property but it must first notify the owner. The Board must complete and adjourn within 20 days from the time it convenes. The procedures for the Fridley Board of Appeal and Equalization will be to hear the property owners' appeals and make a decision based on information provided by the appellant and the assessor. If no information is provided, the Board may direct staff to reappraise the property and report to the Board at a reconvened meeting. Written appeals will be read once the property owners who are present have completed their appeal. Once read, the Fridley Board may confirm the 2008 estimated market value allowing the property owner to take the appeal to the County Board. Ms. Smith said the 2007 reassessment consisted of viewing approximately 1,600 homes. These properties were located in the southwest section of the City. Each of these properties was initially visited. If the property owner was not at home, a tag was left asking the property owner to schedule an appointment. If there was no response, values were estimated assuming some improvements had been made since the last reassessment. In order for these property owners to appeal their value, they will need to have the City physically review their homes. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 14, 2008 PAGE 2 Ms. Smith stated there were 253 residential sales that occurred in Fridley from October 1, 2006, through September 30, 2007. Of this number 238 were single-family homes, townhomes, and double bungalows along with 15 condominium sales. The sales used for the sales ratio study occurred from October 1, 2006, through September 30, 2007. These dates are determined by the State. The sales indicated that two neighborhood land zones required lowering to bring the assessment within the county assessor's recommended ratio of 94-95 percent. State ratio requirement is 90-105 percent. All other land zones remained the same. Countywide, the structure rates remained the same. Therefore, in the calculation of the estimated market values with added depreciation, most values decreased. This created an overall decrease in residential value of 2.65 percent. Ms. Smith stated a study of commercial industrial sales indicated that our sales ratio was within the recommended range by the State. Increases were minimal depending on the building type. Land values were also reviewed and adjusted if needed. This created an overall increase in value of 6 percent. Ms. Smith stated within the State sales study period there were six arm-length sales of apartment buildings in Fridley. As a result of these sales and sales within Anoka County, decreases were made to the rates resulting in an overall decrease in apartment value. Ms. Smith called Patrick Delaney. Mayor Lund asked if they have had a chance to talk with the people who will be coming forward. Ms. Smith replied, no, they just came in tonight. Patrick Delaney, 6250 Riverview Terrace, stated their taxes went up about $500 last year and are supposed to go up $600 more this year. The house just north sold for $450,000 three years ago because it was on the river and two different parties wanted it. Also, because the owner who was an architect completely gutted both his lower level and upper level, redid the house, and made it worth $450,000. At the time it was commonly recognized that it was oversold by about $50,000. Right now their taxes are more than the taxes for that house and a reputable realtor has estimated the value of their home at $325,000. The City has them assessed at $350,000. He does not know why with the value of houses going down, that their taxes have gone up over $1,000 the last two years. Mayor Lund asked if this was a property on the river. Mr. Delaney replied, yes. Councilmember Bolkcom asked Mr. Delaney to confirm what he said his assessed value was. Mr. Delaney replied, $353,000. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 14, 2008 PAGE 3 Councilmember Bolkcom asked if he had an appraisal done or if a realtor just looked at the property. Mr. Delaney replied, they had an estimate for $325,000. The realtor sells property in that area all the time. They bought their house from him, and he is reputable. Mayor Lund stated he thought the appropriate thing to do is to allow our assessing office to review this particular case. Julie Delaney stated they do have the taxes on the houses that are down the street from them as well. Mayor Lund stated there may be a lot more differences and the assessors may be more readily able to determine those and differentiate between their house and somebody else's. Unless anyone on the Council objects, he is going to ask those who came tonight to give staff an opportunity to review their case. They are going to continue their case until the next Council meeting. As they heard in the presentation, they do have to start this tonight. They have 20 days to complete their activities. If the residents are not ultimately satisfied, it goes to the County. MOTION by Councilmember Bolkcom to continue the case for the property at 6250 Riverview Terrace to April 28, 2008, to give staff an opportunity to review this information. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Smith called Mary Anderson of Anderson's New Carpet Design. Mary Anderson, Anderson's New Carpet Design, 7300 University Avenue (Showroom); and 7685 Main Street N.E. (Warehouse), said she is looking for an extension so they can put materials together and come up with a fair market value. Ms. Smith asked if it was for both properties. Ms. Anderson replied, yes. The tax basis is the same for both and the showroom is smaller than the warehouse. MOTION by Councilmember Bolkcom to continue the case for the property located at 7300 University Avenue and 7685 Main Street N.E. to Apri128, 2008. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Bolkcom asked Mayor Lund if they had to come back if an agreement was worked out. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 14, 2008 PAGE 4 Mayor Lund explained if they are satisfied they are not going to show up. In that case, they will still have a brief discussion and make sure their interest is heard and they are okay with it. Councilmember Bolkcom asked about the three cases that were sent to them. Ms. Smith stated Council can disregard those cases. They are not going to be addressed. If they are not present tonight, they do not address them. Councilmember Bolkcom asked if they knew they should attend tonight. Ms. Smith said they did. Councilmember Bolkcom asked, what would happen if they came to the next meeting Ms. Smith said they cannot be heard. Councilmember Bolkcom asked how they were notified. Mrs. Smith said the property owners called staff and were informed of this meeting. They said they would be coming. One owner had three different properties, so they were all aware of it. However, if they do not show up in person or at least send a letter, they cannot hear their case. Mayor Lund stated they cannot hear any new cases at the next meeting either. Mrs. Smith replied, correct. Tom Budnick, 601 Ironton Street, said he thinks his taxes are high and he has done nothing to his home. For the last four years, his taxes have gone up almost $200 a year. It is hard when you are on limited income. The only thing else he has left to do is sell. He would like someone to go through his home when he is there. Mayor Lund stated the best evidence is to have an official appraisal and it does cost money. Councilmember Bolkcom asked Mr. Budnick if he was in the school district that just had a huge levy, and if part of his tax statement related to the tax levy. She said he should check on that. Mayor Lund stated to make sure to look at the other taxes on the statement from the school district, the county, and other levying jurisdictions. You can look line item to line item, year to year. There may be a number of other factors. MOTION by Councilmember Bolkcom to continue the case for the property located at 601 Ironton Street to Apri128, 2008. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 14, 2008 PAGE 5 MOTION by Councilmember Bolkcom to continue the Board of Appeal and Equalization Meeting to April 28, 2008. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor