Loading...
CCM 04/24/2017 BOAE BOARD OF APPEAL AND EQUALIZATION MEETING CITY OF FRIDLEY APRIL 24, 2017 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 Pat Maghrak, Senior Appraiser Mary Smith , City Assessor, stated this meeting is held in accordance with Minn. Stat. §274.01. The purpose of the Board is to establish a consistent appeal procedure for the January 2, 2017, valuation and/or classification. Upon hearing appeals, the Board has three courses of action: to affirm, reduce, or increase the current value based on information presented. If the property owner feels the Board did not resolve their concerns, they may bring their case to the County Board of Appeal and Equalization meeting which will be held on June 12 at 6 p.m. Ms. Smith stated the responsibilities of the Board are 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 individual properties. The amount of a Board reduction cannot exceed 1 percent of the citywide aggregate assessment. Ms. Smith 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 convened. Ms. Smith stated the appeal procedures are to hear property owners who 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. Ms. Smith stated according to the Certificates of Real Estate Value received in their office, there were 471 sales. This number is up slightly from last year’s 430 and presents a 9.5% volume increase. There were 320 qualified residential sales that occurred in Fridley from October 1, 2015, through September 30, 2016. These sales involved single-family homes, townhomes, double bungalows, and condominiums. To bring the assessment within the State’s ratio requirement of 90 to 105 percent, there were increases in structure values of approximately 7 to 10 percent, depending on the structure type. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 2 Ms. Smith stated along with the structure increase, there were land adjustments. During the 2017 reassessment, staff reviewed neighborhood zones and made changes to some areas of the City which affected the land value. The countywide commercial sales ratio which compares real estate sales prices to estimated market value to measure the overall accuracy of our values was determined to be 99.67 percent. The Department of Revenue requires ratios to be between 90 and 105 percent. Ms. Smith stated the Fridley industrial sales ratio is 99.88 percent compared to the countywide ratio of 97.19 percent. Fridley’s ratio is based on 8 qualified sales. Fridley and Blaine had enough qualified sales to be judged independent of the County. Based on sales countywide of commercial and industrial properties, a 2.5 percent multiplier was applied to account for depreciation, holding the commercial and industrial property values flat from the 2016 to 2017 assessment. After application of these rate adjustments along with the addition of new construction and changes made during the annual reassessment, commercial and industrial properties increased moderately. Ms. Smith stated upon review of apartment sales, an increase of 12 percent was applied to structures countywide. Along with changes made during the reassessment, the result was an overall increase of 8.8 percent for Fridley apartments. To summarize the 2017 assessments, single and multi-family continued with substantial growth with industrial and commercial properties that grew at a more modest pace. Ms. Smith stated residential sales within the first six months of the 2018 assessments study period indicated a 13.65 percent increase in the average sales price, with sales volume similar to last year. Market time is down by 15 percent and sellers are getting almost 100 percent of their asking price. Ms. Smith stated sales price ranges for the first six months of the 2018 assessment are as follows: There were 7 sales under $100,000; 88 sales from $100,000-$200,000; 50 sales from $200,000-$300,000; 11 sales from $300,000-$400,000; and 1 sale over $500,000. As of March 31 there were only 30 homes on the market and 20 of them had offers with some form of contingency. This continues the trend metro-wide of significant short supply. Mayor Lund said Council received two memos, with a total of 4 residential properties and 1 commercial. He asked whether a motion was necessary or in order for them to accept these adjusted market values or are they a done deal and are just for their information. Ms. Smith replied, they are a done deal, but they need to be written into the minutes of the meeting. Councilmember Bolkcom stated it would be worthwhile tonight, because they just received one tonight, that they go over each one individually. Ms. Smith could tell them what it was originally and then adjust it, and they could do a motion for each one by PIN number. Mayor Lund stated he is interested in the home on Matterhorn Drive, because that was significant adjustment. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 3 Pat Maghrak, Senior Appraiser, asked Mayor Lund if he was familiar with the house. Mayor Lund said he was not. Mr. Maghrak said it is like stepping on the set of “Pirates of the Caribbean.” It is set on wooden poles. The first problem he would have is to find a buyer who is able to secure financing for that house because it is so atypical. If you limit the potential for buyers, you have to account for that. He said he had been to the home for the first time four years ago he believed. When he went in the home, there were physical conditions that were really affecting the value. A tree had fallen on the house, cracked the trusses, and the property owner could not get an agreement from his insurance company on how to repair it. Whenever they write that value down, they always want to go back every year and make sure they are reviewing to see if it has been fixed. Mr. Maghrak stated the property owner called this year about his value, and Mr. Maghrak went out and looked at the property again. Because the property owner had not responded to calls in prior years, the procedure then is to assume the property owner has corrected those conditions. That is why staff brought the value up substantially and, then after reviewing it this time, he brought it back down. Mayor Lund asked Councilmember Bolkcom if she had any particular questions about the other three. Councilmember Bolkcom replied, no, but they have to be separately talked about with the PIN numbers. You cannot just approve them all at one time. She does not believe they have not done that in the past. Mr. Maghrak replied, right, and these are changes that were agreed upon with the homeowner prior to it. This year what staff is doing at the request of the County Assessor is, within ten days of the Board meeting, they would like these agreements written into the record. It is not something that the homeowner is appealing, and the City is disagreeing. It is going out in the normal course of things and revaluing it once it has been brought to staff’s attention. Councilmember Bolkcom replied she is not disagreeing with them but they have to go PIN by PIN. That is how they have done it in the past. Ms. Smith stated as to PIN 24-30-24-42-0060, 5525 Matterhorn Drive, the original EMV was $247,000; it was adjusted to $190,000. MOTION by Councilmember Varichak to approve the assessment to the adjusted value on PIN 24-30-24-42-0060, 5525 Matterhorn Drive. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 4 Ms. Smith stated as to PIN 14-30-24-21-0052, 549 Rice Creek Terrace, the original EMV was $295,800; it was adjusted to $275,700. MOTION by Councilmember Saefke to approve the assessment to the adjusted value on PIN 14-30-24-21-0052, 549 Rice Creek Terrace. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Smith stated as to PIN 14-30-24-14-0041, 6527 Monroe Street NE, the original EMV was $188,700; it was adjusted to $169,400. Councilmember Saefke asked why there was a reduction. Mr. Maghrak replied, the homeowner called after getting their notice and asked the City to come out and view their property. Oftentimes when they go through on their once every five year visit, they will not get a response from the owner. Several times what will happen is they will have a change in ownership. So the owner calls and questions the value, staff looks at the record and sees they have not been on the property for years, and they go out and take a look at it and make adjustments based on what they see at the time. Specifically on this property, the assumption was made that what he observed this week was the same as he would have seen in January of this year. MOTION by Councilmember Saefke to approve the assessment to the adjusted value on PIN 14-30-24-14-0041, 6527 Monroe Street NE. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Smith stated as to PIN 13-30-24-33-0027, 6279 Baker Street NE, the original EMV was $186,400; it was adjusted to $178,700. Councilmember Saefke asked if that was the same explanation. Mr. Maghrak replied, very much so. The only difference would be that this was not someone who did not respond. Last summer he went through the neighborhood and this was a property where he said he thinks the information is accurate and said you can call if you would like him to come through. She did not call but when she got her notice, she did call to ask. MOTION by Councilmember Saefke to approve the assessment to the adjusted value on PIN 13-30-24-33-0027, 6279 Baker Street NE. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Mayor Lund said they also have one for Home Depot. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 5 Ms. Smith stated, yes. Metro-wide, the assessors have received a telephone call from Brandon Wright of Ernst & Young in regards to value. The last e-mail they received was that he was going to appeal all the values in Anoka County. Because of that and the information that he sent, the County Assessor felt it would be a good thing to just have it all moved to the County level; and they would handle all of them up there. Mayor Lund stated it seems like a reasonable request since the County does the valuations on commercial/industry properties. Ms. Smith replied they will be helping them also since there is a Home Depot in Fridley and there are three others in the County. Councilmember Bolkcom asked as far as their assessed value this year compared to last year, what is the difference? Ms. Smith replied their value went down from last year. Last year, their value was $7,311,500; and this year it was $6,925,001. MOTION by Councilmember Bolkcom to affirm the value of Home Depot, PIN 22-30-24-41- 0007, 5650 Main Street NE. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Steve Saba , 1470 Onondaga Street, stated he is questioning the classification at 7345 Central Avenue. It is classified as commercial, industrial, non-homestead residential. He started questioning this in 2013 and has not received any answers yet. Mayor Lund asked Mr. Saba when he first approached the Assessor’s department. Ms. Smith replied Mr. Saba filed a tax petition in 2013. That is a tax petition that is filed at the County. She has a letter from the County Attorney in 2013 in which she replied to Mr. Saba regarding his petition. Mr. Saba stated he read the letter for the first time tonight. It had been sent to an address that he does not live at. He did not receive that letter. They send his tax statement to his home address and one would think they would send everything else there. Councilmember Bolkcom asked about the tax petition letter. Ms. Smith replied Mr. Saba filed a tax petition for taxes payable in 2013. That would have been on the January 2, 2012, value. Mr. Saba has noted here, the property should be 75 percent residential, 25 percent commercial/industrial. Staff never addressed this, as the County Attorney had sent Mr. Saba a letter saying they had attempted to locate a case number for the court for several months and could not locate one. The letter said: “Did you file your Tax Petition with Anoka County court administration? If so, please contact our office and notify us of the court BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 6 file number assigned to your case. Until we receive notice that the proper documents were filed with the Court, and a case has been opened, we will be unable to address your petition”. Mayor Lund asked if it was dated in 2013. Ms. Smith replied September 30, 2013. Mr. Saba phoned her on Friday morning, and he questioned his classification; and she told him she would really need to come out and take a look at his house. He said he would contact his daughter because his daughter lives in the house and he would get back to her. She said she did not receive a follow-up telephone call. His real estate agent phoned Mr. Maghrak this afternoon and talked about the classification. Mayor Lund stated this is at the County’s level. Mr. Saba stated he does not know where this should be taken. He filled out all the paperwork at the County. Mayor Lund asked Mr. Saba if he had an issue with 2017. Mr. Saba replied he would question 2012 through 2017. He was told he had to come to the City first before he went to the County. He does not know how the zoning and classification are determined. Mayor Lund asked Ms. Smith if the City would have some input on classification and if there is any adjustment needed there. Since this has been petitioned, at least at some level at the County, it sounds like they should just affirm what the City has so Mr. Saba can move onto the County and address the issue. Ms. Smith replied, the City handles reclassification of a property; however, in regards to this tax petition, Mr. Saba would have to contact the County Attorney and talk to her. She does not know what would be done at this point. Mr. Saba stated he has talked to different real estate agents who have looked at the property. Obviously it is different from what it was in the past. He asked if it was commercial, industrial, or residential. Mayor Lund replied he assumed it was zoned residential. Ms. Smith replied it was zoned C-1, Local Business. Mayor Lund asked if this is something Council should postpone in order to give Mr. Saba another two weeks. Mr. Saba asked when they changed this. When he asked in 2013, he could not get an answer as to when it was changed. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 7 Ms. Smith replied, it appears it was changed probably during 2011, because it appeared for the 2012 value which would be taxes payable in 2013. Mr. Saba asked could they get a date and who changed it? Councilmember Bolkcom asked if it says something on his tax statement. Ms. Smith replied yes, at the top. Councilmember Bolkcom stated Mr. Saba has known since 2013 and has not contacted the County since then. Mr. Saba stated he wants to sell the property, and he has talked to different real estate agents who have said there are three classifications. Councilmember Bolkcom asked if there is any reason they cannot just continue this hearing until two weeks from now, so the City has an opportunity to look at Mr. Saba’s property. The issues between 2013 and 2017 are at the County level, but they could at least find out if it should be considered. Mr. Saba stated she should be able to drive by and look at it. Councilmember Bolkcom asked Mr. Saba if he was saying he would allow the City to go in. Mr. Saba replied, he is not saying that at all. They changed the classification before without going inside, and he does not know how going into the house changes the classification. Mayor Lund asked whether the property was zoned residential 100 percent in 2011. Mr. Saba replied, it has always been zoned C-1. It was residential use. The classification was residential and then sometime, as Ms. Smith said, in 2011 they must have changed it to commercial/industrial, non-homestead residential. He is not arguing the non-homestead residential because he cannot do a relative homestead which can be done if the property is in your personal name, not in a business name. It is in the business name, so the homestead does not make any difference. He was hoping the classification would be residential, non-homestead. Mayor Lund stated they have a couple of weeks. Maybe that will give staff an opportunity to look at this, and maybe consult with the County, in order to find out where they are at with this. Councilmember Bolkcom asked Ms. Smith in order to change, whether it is the value or anything, you have to be able to physically inspect not just the outside but the inside. Someone is going to need inspect Mr. Saba’s home within the next two weeks. She believed it is in the State Statute. Mr. Saba asked is it also in there that to change it from residential to commercial, you have to inspect it at that time. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 8 Ms. Smith replied it is up to the City to have the right classification on the property. Mr. Saba said but to have changed it from residential classification to commercial classification, they had to have looked at the house at that time also. Mr. Maghrak replied they did not get inside the house, and a request was made to do so. Mr. Saba stated going inside the house to see if you have pretty walls or whatever should not make any difference whether it is classified as commercial or industrial. Mr. Maghrak replied if it is all converted office space, then it is not being used as a residence. That would make a tremendous difference and they cannot see that from the outside. Mayor Lund asked Mr. Saba if he wanted it to be residential or commercial because he would think commercial property has a higher valuation than residentially-zoned. Mr. Saba replied that is a good question. Darcy Erickson, City Attorney, stated she does not know that the Board of Appeal and Equalization has the authority to make the classification determination. Ms. Smith can correct her, but she believed there were three options and that relates to property valuation on the tax roll, to affirm, increase, and decrease; but she does not know if it reaches as far as changing classification. Ms. Smith replied, according to what they have read it does. Attorney Erickson stated she believed there is a provision in the State Statute, Section 274.01, that the Board cannot take an action to benefit a property owner if there is a refusal for the inspection. She asked if that was correct. Ms. Smith replied that is correct. Attorney Erickson stated in order to change any kind of classification to Mr. Saba’s betterment, financially on a tax basis, there needs to be an inspection. Mr. Saba stated no offense but he needs to talk to a couple of real estate agents and see what they want this at. Mayor Lund stated they are under a time limitation. They can only keep this open until the next meeting. MOTION by Councilmember Bolkcom to continue the Board of Appeal and Equalization meeting to May 8, 2017. Seconded by Councilmember Saefke. BOARD OF APPEAL AND EQUALIZATION MEETING OF APRIL 24, 2017 PAGE 9 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