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CCM 04/25/2016 BOAE BOARD OF APPEAL AND EQUALIZATION MEETING CITY OF FRIDLEY APRIL 25, 2016 The Board of Appeal and Equalization Meeting for the City of Fridley was called to order by Mayor Lund at 6:30 p.m. MEMBERS PRESENT: Mayor Lund Councilmember Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: Mary Smith, City Assessor Kelsey Jorrison, Anoka County Pat Maghrak, Senior Appraiser Mary Smith, City Assessor, stated the meeting is held in accordance with State Statute 274.01. The purpose of the Board is to establish a consistent appeal procedure for the January 2, 2016, valuation or classification. Upon hearing appeals, the Board has 3 courses of action: to affirm, reduce or increase the current value based on information presented. If the property owner feels that the Board did not resolve their concerns, they may bring their case to the County Board of Appeal and Equalization which will be held on June 13 at 6:00 p.m. Ms. Smith noted that the responsibility of the Board is to have a majority of the members in attendance to have a quorum. There must be at least one member who has attended an appeals and equalization course approved by the Commissioner of Revenue within the last four years. If a property is omitted from the tax rolls, it may be added by the Board. The Board may only increase or decrease the value of individual properties. The amount of a Board reduction cannot exceed 1% of the City wide aggregate assessment. If the Board finds a case of under-valuation, it may raise the valuation of the property, but it must first notify the owner. The Board must complete and adjourn within twenty days from the time it convened. Ms. Smith said appeal procedures are to hear property owners that are present and accept any information provided and direct staff to review the property. Written appeals will be read once property owners who are present have completed their appeal. According to the Certificates of Real Estate Value received in our office there were 430 sales. This number remained unchanged from 2014 to 2015. According to Northstar MLS, sales volume in Fridley was nearly the same as 2014 while the average sale price was up 7.5%. There were 277 qualified residential sales that occurred in Fridley from October 1, 2014 through September 30, 2015. These sales involved single family homes, townhomes, double bungalows and condominiums. Ms. Smith stated to bring the assessment within the State’s ratio requirement of 90% to 105%, there were increases in structure values of approximately 5% to 8% depending on structure type. Along with the structure increase there were land adjustments. During the 2016 reassessment, staff reviewed neighborhood zones and made changes to some areas of the city which in turn FRIDLEY BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 25, 2016 PAGE 2 affected the land value. Based on sales Countywide, commercial and industrial structure rates received increases of 10-20% depending on building type. These increases brought the commercial industrial ratios in line with the state requirement of 90-105%. After application of these rate adjustments commercial and industrial properties increased overall by 12% compared to last years’ assessment. Ms. Smith reported upon review of apartment sales, countywide increases took place based on the unit size of the buildings achieving a ratio of 93%. This increase created a year over year growth in value of 17% in Fridley. To summarize, the 2016 assessment reflects a market that continued in recovery when compared with the 2015 assessment. The study period for the 2015 assessment revealed values had remained flat while the same period 1 year later shows a 7.5% increase in the average sale price. Residential sales within the first 6 months of the 2017 assessment study period indicate a 7.5% increase in the average sales price with sales volume similar to last year. Market time is down by 15.3% and sellers are getting 98% of their asking price. Sale price ranges are as follows for the first six months of the 2017 assessment: 10 sales under $100,000 98 sales from $100,000 - $200,000 30 sales from $200,000 - $300,000 2 sales from $300,000 - $400,000 1 sale over $400,000 As of March 31, 2016, there were only 47 homes on the market and 17 of them had offers with some form of contingency. This reflects a trend metro-wide of significant short supply. Councilmember Bolkcom asked if staff received any other phone calls or if everything is resolved. Ms. Smith replied there is an appellant at the meeting tonight. Staff received the information this evening. Staff also received a written appeal. Mayor Lund asked if the subject properties were twin homes. Pat Maghrak , Senior Appraiser, replied yes but they have separate pin numbers and can be sold separately. Mayor Lund said it is confusing because some photographs are twin homes and some only show one side. He asked if the comparable properties were talking about the entire building. Mr. Maghrak replied the twin homes are individually owned and both sides were conveyed on separate deeds. Duplexes have to be sold as one property, they cannot be split. A duplex is also a different audience and different type of financing. Mayor Lund asked if staff, after further review, is recommending reducing each to $164,000 rather than $186,000 and $184,000. FRIDLEY BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 25, 2016 PAGE 3 Mr. Maghrak replied the property owner thinks the value should be between $120,000 and $130,000. He used comparable properties that are not located in Fridley. Fridley only has 14 property types like this in the city and three have sold during the study period. He said he was not sure how the property owner came up with his comps. Staff is willing to advocate for the homeowner and will show what sales are most relevant. Staff used the most similar property sold in the same city and school district. When staff took a closer look they considered the sales and income approach and put the value more attainable to the market. Mayor Lund noted that the square foot dollar value is reasonable at $105 per square foot. Mr. Maghrak noted that the property owner’s analysis used a comparable property on East River Road. Staff used the same property but did not put a lot of weight on it because it is a town home and has association dues. Staff used that property because it shares the same busy road, similar in square footage but less weight because it is not a twin home. MOTION by Councilmember Bolkcom to move into record an email to Ms. Smith from Stone Trail dated April 19, 2016, and a memo received pre-conference from Ms. Smith dated April 25, 2016. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLEARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Bolkcom asked if the appellant could not be at the meeting. Ms. Smith replied that he had another engagement. Staff talked about continuing the meeting but he is busy the next date too. Staff is recommending to the Board a value if $164,000. The appellant can take this to the County Board of review. Staff will let them know the date and time. MOTION by Councilmember Bolkcom to confirm the value of 110 Mississippi Place N.E., Pin No. 15-30-24-42-0108 a value of $164,000. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to confirm the value of 100 Mississippi Place N.E., Pin No. 15-30-24-42-0109 a value of $164,000. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Peter Borman, 157 River Edge Way, noted that he should have contacted staff before tonight but he just saw the appeal hearing was for tonight. He was wondering how the value of his house went up by $55,000 in one year and what was used to come up with the value when the previous year it only increased $6,000. FRIDLEY BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 25, 2016 PAGE 4 Mayor Lund stated that Mr. Borman could state his case and staff will review it. His case will be continued to the next Council meeting. Mr. Borman said he would like to hear the methodology and comparables used for his property. MOTION by Councilmember Bolkcom to continue the Board of Appeals meeting to May 9, 2016. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTINE AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Respectfully Submitted, Krista Peterson Scott J. Lund Recording Secretary Mayor