2013.03.19 Work Session PacketCRYSTAL CITY COUNCIL
WORK SESSION AGENDA
Tuesday, March 19, 2013
6:30 P.M.
Conference Room A
Pursuant to due call and notice given in the manner prescribed by Section 3.01 of the
City Charter, the work session of the Crystal City Council was held at p.m. on
Tuesday, March 19, 2013 in Conference Room A located at 4141 Douglas Drive,
Crystal, Minnesota.
I. Attendance
Council members Staff
Peak Norris
Selton Therres
Adams Norton
Budziszewski Revering
Deshler Tassoni
Hoffmann
Libby
II. Agenda
The purpose of the work session is to discuss the following agenda items:
■ Open Book Meeting with County Assessors
■ Commission Liaison update*
* Denotes no supporting information included in the packet.
III. Adjournment
The work session adjourned at p.m.
Hennepin County Assessor Department
A-2103 Government Center www.co.hennepin.mn.us
300 South Sixth Street
Minneapolis, MN 55487-0213
To: City of Crystal Mayor and Council
From: Rob Winge, Principal Appraiser
Tammy Schumacher and Michael Silker, Appraisers
Date: February 25, 2013
Re: 2013 Assessment and Open Book Meeting
The 2013 Crystal Open Book Meeting has been scheduled for Tuesday, April 2nd, 2013,
from 4:OOPM to 6:OOPM. As preparation for the upcoming Open Book Meeting, please
find the enclosed data to help you.
Annual Revaluation
Each year, one fifth of the properties in the city are reviewed and the records are updated.
See the enclosed revaluation area map.
Summary of the 2013 Assessment
Each year the estimated market values are analyzed along with sales data from the
market. Adjustments, as appropriate for each property, are made. The results of those
adjustments for the 2013 assessment areas are as follows:
Residential -0.3%
Commercial/Industrial -3.4%
Apartments +1.7%
Condos -14.9%
Townhouses +5.2%
Duplex -4.1%
Zero Lot Line -20.9%
There are 7,978 taxable parcels in the city with a total market value of approximately
$1,295,610,700. This value includes $6,130,000 in new construction improvements. The
overall value change for all property types in the City of Crystal is -0.6%.
An Equal Opportunity Employer Recycled Paper
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The Open Book Meeting Process
Value notices are being mailed the first week of March. Taxpayers with value or
classification concerns should contact the assessor's office. During the initial
conversation the property owner may discuss their concerns and review sales
information with an appraiser. The majority of callers, approximately 70-75 percent, are
satisfied after a conversation with an appraiser. If additional attention is necessary the
appraiser will review the property.
The open book meetings provide a forum for property owners to meet with assessment
staff on an informal basis to review information about their property and to ask
questions about the assessment. Property owners do not need to make an
appointment to meet with the assessment staff. They can simply show up at the dates
and times stated on the Notice of Valuation and Classification, and an appraiser will
discuss their assessment.
Property owners who are not satisfied with the "open book" approach may appeal to the
County Board of Appeal and Equalization and/or appeal to Tax Court.
It is only a recommendation that the property owner attend the open book meeting to
discuss concerns prior to the County Board of Appeal and Equalization. In a jurisdiction
that does not have a Local Board of Appeal and Equalization, the property owner is
not required to attend an open book meeting in order to appeal to the County
Board of Appeal and Equalization.
If you have any questions or concerns please contact me at 612-348-3046.
Alternate Method of Appeal ---Open Book Meeting
Open book meetings are an alternative to the Local Board of Appeal and
Equalization. During "open book" meetings, the valuation and classification
issues are handled by the assessor's staff on a one-on-one basis with the
property owner. Typically, open book meetings are held by the county assessor's
staff. However, larger cities with an appointed city assessor may hold their own
open book meetings.
The open book meetings are held in locations that are convenient for property
owners. Often open book meetings are held over several days during both day
and evening hours. This allows property owners to appeal when it best suits their
schedules instead of having to rearrange their schedules to attend a local board
meeting held at one place and time.
The open book meetings provide a forum for property owners to meet with
assessment staff on an informal basis to review information about their property
and to ask questions about the assessment. This setting allows the assessor's
office to resolve questions and reduce the number of property owners who feel
the need to appeal to the County Board of Appeal and Equalization.
Property owners do not need to make an appointment to meet with the
assessment staff. They ,can simply show up at the dates and times stated on the
Notice of Valuation and Classification, and an appraiser will discuss their
assessment.
Depending on the jurisdiction, the appraisers may have laptop computers to
access information about the taxpayer's property. Some counties may be able to
link directly to their computer-assisted mass appraisal (CAMA) system which
allows the appraiser to obtain data on sales of comparable properties.
When reviewing the details of the properly with the owner, the appraiser can
verify the accuracy of the county's data and correct any errors. The property
owner can also schedule an appointment for the appraiser to view the property if
needed.
Benefits for the property owner
Property owners often find that the open book meeting is less intimidating than
presenting their appeal to the Local Board of Appeal and Equalization. They
often appreciate the fact that they can have their questions answered in a more
private setting, and not have to be apprehensive about making a presentation in
front of their friends and neighbors. In this one-on-one setting, property owners
may spend as much time with the appraiser as they need. They can compare the
value of their home with the values of similar homes owned by their neighbors.
The process is very efficient because concerns and questions are often resolved
immediately. Property owners can see that the appraiser collects the same
information on all properties, reassuring them that the process is the same for
everyone, and they have not been singled out for a value increase.
Property owners who are not satisfied with the "open book" approach may appeal
to the County Board of Appeal and Equalization and/or appeal to Tax Court.
It is only a recommendation that the property owner attend the open book
meeting to discuss concerns prior to the County Board of Appeal and
Equalization. In a jurisdiction that does not have a Local Board of Appeal and
Equalization, the property owner is not required to attend an open book
meeting in order to appeal to the County Board of Appeal and Equalization.
Benefits for the local board
The benefit for the local board is that an open book meeting saves time for board
Members. It eliminates the need for the board to become familiar with and
educated on the local real estate market. Board members will be able to spend
this time concentrating on their other duties as town board or city council
members. In addition, board members can avoid confrontational situations with
constituents and will no longer be put into difficult situations by having to make
decisions about the property values or classifications of property owned by
friends and neighbors.
Benefits for the county
While the number of appeals made at the open book meeting may not be less
than the number of appeals to the local board, the benefit for the county is that
the open book process allows for immediate consideration of issues, and in many
cases, appeals are resolved before the County Board of Appeal and
Equalization. The process is efficient for the county because it can often
consolidate several jurisdictions into one meeting (or a series of meetings)
instead of holding at least one meeting in each jurisdiction.
Copied from the MN Dept of Revenue Local Board of Appeal Equalization Handbook.
MINNESOTA- REVENUE www.taxesstatemn.us
Assessor Estimates
Property Tax Assessment Process
Minnesota has what is known as an ad valorem property tax.
This means property tax is divided among taxable properties
according to their value. The final amount of propertytax
the owner of a properly pays in any given year is the end
result of a process that begins over two years before property
tax statements are actually mailed to property owners.
The process begins with the assessor collecting data on sales
of properties within the market during a specific time period
between October of one year and September of the following
year (this period is known as a sales study period). Over the
next several months and by using mass appraisal techniques,
assessors analyze the data in order to estimate each
property's market value for the next assessment (January 2).
Pursuant to Minnesota Statutes, section 273.11 assessors
must estimate the value of property at a value that would
represent what the property would sell for in an operl-market
arm's length transaction on January 2 of each year. The
assessor cannot adopt a higher or lower standard of value
because the value will be used for the purposes of taxation.
Assessors also classify property according to its use on
January 2. Between April and June, taxpayers have an
opportunity to appeal both the estimated market value and
the classification of their property. Values and classifications
are generally finalized July 1 of each year.
Local units of government then finalize their estimated
budgets for the upcoming year. Once the budgets are
finalized in December, the market values and classifications
are used to divide the overall tax levy among all taxable
properties. Tax statements are mailed by the following
March 31.
For example, sales of properties that occur between October
1, 2008 and September 30, 2009 are used by assessors to
estimate a property's market value for the January 2, 2010
assessment. Following an appeal process that occurs between
April 1, 2010 and June 30, 2010, the valuations and
classifications generally become final on July 1, 2010.
Property Tax Division - Mail Station 3340 St Paul, MN 55146-3340
Revised 07/09
This lengthy time frame may result in a significant difference
between actual sales prices occurring in the current market
and assessors' estimated market values for the current year's
assessment.
Using the final values and the local jurisdictions' proposed
budgets, the auditor then estimates each property's proposed
taxes payable for 2011. After public budget meetings are
held and final budget numbers are adopted, property tax
statements are mailed to taxpayers by March 31, 2011.
in summary, sales taking place from October 2008 to
September 2009 are used to estimate a property's market
value as of January 2, 2010 which will in turnbe used to
calculate property taxes payable in 2011.
What is the role of the assessor?
Assessors use historical sales in order to estimate each
property's market value as of the assessment date (January 2)
of each year. The assessor also classifies the property
according to its use on January 2 of each year.
Assessors also review other quantifiable data such as
supply/demand, marketing times, sales concessions, vacancy
rates, etc. to help in analyzing whether a market is increasing,
stable, or decreasing.
During increasing markets, this may benefit some property
owners because a buyer may pay a price that is sipificazrtly
higher than the assessor placed on the property for the last
assessment. For example, if a property is valued by the
assessor at $180,000 for the 2009 assessment (based on sales
that occurred between October 2007 and September 2008),
and it sells for $230,000 in August 2009, the new property
owner is benefiting from the lower market value for the 2009
assessment which will be used to calculate taxes payable in
2010.
The August 2009 sale of the property will be included in the
study period of October 2008 to September 2009 which the
This fact sheet is intended to help you become more familiar with Minnesota tax
laws and your rights and responsibilities under the laws. Nothing in this fact
sheet supersedes, alters, or otherwise changes any provisions of the tax law,
administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, How the Assessor Estimates Your Market Value 1
n
assessor will use to value property for the 2010 assessment
for taxes payable in 2011.
This same lag time is also present in declining markets. For
example, if the assessor places a market value of $200,000
on a property for the 2009 assessment (again using sales that
occurred between October 2007 and September 2008), but
the property sells for $175,000 in August 2009, does it mean
the January 2, 2009 assessed value is incorrect? Not
necessarily. It could signal a downturn in the housing
market just began to occur between September 2008 and
August 2009. The assessor will use the August 2009 sale as
well as others occurring in the market to estimate 2010
marketbalues.
The assessor does not raise property tax revenues by
increasing values. Total property tax revenues are a function
of county, school district, and city/town spending as well as
state -paid local government aid and other factors. The value
and classification of the property are merely a way to divide
the total property tax levy among all taxpayers. The total
amount of the levy will be collected whether values increase
or decrease from one year to the next. An individual's share
of the overall tax burden may change from year to year,
however.
What are sales ratio studies?
Sales ratios show the relationship between the assessor's
estimated market value on a property and the actual sale
' price of aproperty.
Each year the assessor performs sales ratio studies on
properties that have sold in their jurisdiction. These sales are
stratified many different ways including by location and
propertytype (residential, agricultural, commercial, etc.).
The sales can also be stratified further such as by home style,
subdivision, age of structure, location on or off water
frontage, price range, etc.
A single sale may not represent the true market activity.
Rather, sales of all properties are reviewed to determine
market trends. However, even if there are no sales occurring
within the sales ratio study period, assessors are still
expected to use their professional judgment and knowledge
of the local market to annually value properties in their
jurisdiction.
Whenever any real estate is sold for a consideration in excess
of $1,000, a Certificate of Real Estate Value (CRV) is filed
These CRVs are the foundation of all sales ratio studies
because they contain important information about each
transaction. Assessors then verify the information contained
on the CRV in order to determine whether or not the sale
represents an open -market arm's length transaction. If the
sale does not represent an open -market, arm's length
transaction, it may not be used in the sales ratio study.
Simply having an extremely high or low sales ratio is not a
valid reason to remove a sale from the sales -ratio study.
Rather, the extreme ratio indicates a need for additional
investigation by the assessor.
Again, sales ratio study periods are generally October 1 of a
given year to September 30 of the following year. For
example, for the 2010 assessment, assessors use sales that
took place between October 1, 2008 and September 30,
2009. This -is the reason that assessors' market values may
lag a bit behind current market activity.
Assessors will use the median sales ratio as the statistical
measure of the overall level of assessment. The median ratio
is the middle ratio of all the ratios when they are arranged in
order from highest to lowest (or vice versa). The median is
used because it is not affected by extreme ratios. Department
of Revenue guidelines indicate that the median ratio of a
sales ratio study should be between 90 and 105 percent.
Is it. possible for the values of some
properties to decrease while others
increase?
Yes. Each segment of the market is different. Sales prices of
certain types of properties can vary widely. Currently, sales
of both farmland and recreational properties are strong and
show appreciation. However, the sales of residential
properties are stable or declining in some areas.
Sometimes it can be difficult to estimate the rate at which a
market is increasing or declining. Ideally, a property would
sell twice within a certain period of tune, such as one year, .
but all other characteristics of the property would remain the
same. That way an appraiser or assessor would be able to
isolate a time adjustment to indicate whether the market is
increasing or decreasing or simply remaining stable.
Do all areas increase or decline at the same
rate?
No. Some areas or neighborhoods are declining at a much
faster rate than others that are showing stable values or
values that are slightly increasing.
Conclusion
In conclusion, it is essential that taxpayers understand that
there may be a legitimate reason for the assessor's annual
market value to be different from current market conditions
due to the lag time between sales study periods and sales
taking place today.
For additional information, please refer to Fact Sheet 12a
Understanding Property Taxes and Fact Sheet 12c
Understanding Your Assessment and the Appeals Process.
Minnesota Revenue, How the Assessor Estimates Your Market Value 2