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042103 Board of Review Min . . . BOARD OF REVIEW CITY OF SHOREWOOD MONDAY, APRIL 21, 2003 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 P.M. MINUTES 1. CONVENE BOARD OF REVIEW MEETING Chair Love called the Board of Review meeting to order at 7:02 P.M. A. Roll Call Present: Chair Love, Boardmembers Garfunkel, Turgeon, and Zerby; Administrator Dawson Absent: Boardmember Lizee B. Review Agenda Administrator Dawson explained that the purpose of the a Board of Review tonight whose purpose was to examine property valuations and hear concerns brought forward by residents regarding proposed valuations for their property. He stated that the property tax system was established by the Minnesota State Legislature, and the Board of Review could consider all issues regarding valuation to be remedied no later than twenty days from this date. Administrator Dawson explained that although this property valuation may form the basis for property taxation, it does not necessarily correspond to property taxation increases. He explained that the City had contracted with Hennepin County to perform assessment of property valuations. He also explained the procedures to be utilized in this meeting and noted the Board could approve the valuation, make changes to the valuation, or suggest the appellant work to remedy the areas of concern with the assessors. As a result, he anticipated the Board of Review would be holding another meeting in approximately one week to hear progress made on issues brought forth this evening, which would be decided later in the meeting. Chair Love explained that the next step in the process was for the assessors to review the cases, meet with the appellants, and provide comparables for discrepant properties. He then introduced City Assessors, Bill Davy and Tom Kunik, of the Hennepin County Assessors Office. 2. PRESENTATION BY HENNEPIN COUNTY ASSESSOR Mr. Davy explained that state law requires that the estimated market value of each property be established as of January 2nd of each year. Estimated market value is defined as the most probable price which a property should bring in a competitive and open market assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for sale and assuming for prices not affected by undue stimulus. BOARD OF REVIEW MEETING MINUTES April 21, 2003 Page 2of6 . Administrator Dawson stated that approximately one-fourth of the properties are reviewed by the assessors each year and asked Mr. Davy to explain what areas of Shorewood were reviewed and the general changes in property valuation that were determined. Mr. Davy stated that the properties approximately east of Eureka Road, south of County Road 19, and south of Excelsior were reviewed. He also explained that there were many factors, such as size of the building and quality of the structure on the property, involved in providing an accurate assessment. The sale study period began from October 1, 2001, and ended on September 30,2002. In the fall of 2002, the Hennepin County Assessor's Office ran ratio studies for each city in Hennepin County and compared actual sales to what they had been valued at as of January 2, 2002. Then the property valuations are adjusted based on the comparison results, along with all similar properties, in order to create the growth reports. Mr. Davy reported that residentiallakeshore properties averaged approximately 15% adjustments and residential off-lake properties averaged 8.1 %. The overall rate of adjustment for the City of Shorewood was approximately 11 %. State law requires that all properties be valued at their appropriate market value amount regardless of whether they are on the market. Mr. Davy also explained the steps of the appeal process in first appearing before this Board of Review, then appealing to the Hennepin County Board that meets on June 16, and finally, before the Minnesota State Tax Court if the issue remains unresolved. . Chair Love stated that the Board's job was to examine and evaluate the process with the assessor so that fair market value is established for the properties. The purpose of the Board is not to set taxes and it has no control over any taxes that have been set. 3. APPEALS BY RESIDENTS John Bridge, 25810 Birch Bluff Road, PID 34-117-23-22-0018, stated that the information he had gathered suggested that the estimated market value assigned to his home was too high. Mr. Bridge presented MLS sheets to the Board listing property valuation of houses within five homes of his own. One home was listed last August for $849,000 and sold for $829,000. Mr. Bridge's home was set on a cliff next to the lake with approximately 77 steps to the lake and considered to be a disadvantage to the children and the elderly. The second house near Mr. Bridge's sold on December 1, 2002, and only sold after 241 days on the market with a list price of $798,000. Chair Love asked Mr. Bridge ifhe had talked directly to the tax assessor regarding the valuation of his home. Mr. Bridge stated that he had talked to Mr. Davy but that he had no visit from the assessor. He provided the Board with the information from houses comparable to his own in order to correct his own estimated market value. . Chair Love asked Mr. Davy ifit was possible to visit Mr. Bridge's property although he acknowledged that the values oflakeshore properties varied significantly. He expressed appreciation to Mr. Bridge for his request. Mr. Davy stated he would examine Mr. Bridge's property. BOARD OF REVIEW MEETING MINUTES April 21, 2003 Page 3 of 6 . Chair Love stated that the Board would hear the report by the assessor regarding Mr. Bridge's property at the next meeting of the Board of Review and that Mr. Davy would keep in contact with Mr. Bridge. Raymon Brockhouse, 25960 Birch Bluff Road, PID 29-117-23-44-0012, stated that between 2000 and 2003, his property value has gone up 2.25 times. His next door neighbor had placed his home on the market for 2 years and it finally sold for $625,000. That house was two times bigger than Mr. Brockhouse's home, with a 50% bigger yard. Mr. Brockhouse's home was appraised at $581,000. In January of2002, Mr. Brockhouse considered the housing market to be flat as there were already 77 other houses listed when Mr. Brockhouse put his house on the market. His house was appraised by ReMax at $650,000. He stated that his home was a glamorized cabin that was 31 years old. Chair Love asked Mr. Brockhouse what was the proposed assessed property value of his home. Mr. Brockhouse stated it was $737,000. Chair Love asked Mr. Brockhouse ifhe had met with the assessor. . Mr. Brockhouse stated that he had not met with the assessor but two years ago his house had been visited twice. Mr. Davy stated that there was sufficient evidence for a reassessment of his property. William Colopoulos, 26215 Shorewood Oaks Drive, PID 32-117-23-43-0028, stated that his wife and himself were realtors. His property was not on the lake but in a residential area. No other house in the area had sold at the price of $452,000, which is the current property valuation of his home. The estimated market value of his house last year was $385,000 and this year's valuation is a 19% increase, making it higher than the lakefront and the overall city adjustment rate. The average increase per year in the Lake MinnetonkalMLS district has been 13%, which is largely driven by an 18% market increase from 1998 to 1999. Recent statistics showed an 8.6% increase overall between 2002 and 2001 and a 7.7% increase in 2001 over 2000. He stated that there was not a lot of sales activity as his wife was involved with 6 of the 8 total sales in their neighborhood. The selling price of one neighboring property was $415,000 and its house is approximately the same size as Mr. Colopoulos's house. He stated that his property valuation was too much of an increase. Chair Love instructed Mr. Colopoulos to provide his phone number to Mr. Davy in order to be contacted by the assessor for an assessment. . Dennis Regnier, 5250 St. Albans Bay Road, PID 25-117-23-33-0040, questioned the unusually high rate of 11 % in his property valuation as no properties have sold in his neighborhood for the last three to four years. He stated that he was not questioning the increase but merely the increase rate of 11 %. . BOARD OF REVIEW MEETING MINUTES April 21, 2003 Page 40f6 Mr. Davy stated that 11 % was the average rate of adjustment for all the residential properties in the City of Shorewood, with some being adjusted less than 11 % and some adjusted more than that percentage. Chair Love asked Mr. Regnier ifhe had spoken with the assessor concerning factors that impact property valuation. Mr. Regnier stated that he had not spoken with the assessor previously but that he would like to discuss his concerns with the assessor. Celia Garcia-Hall and Steven Hall, 6195 Deer Ridge, PID 35-117-23-3342, stated that they were not aware of the dates used in determining the current property valuation. They purchased a new home in Shorewood last fall and questioned the current property valuation. As they are relatively new to Shorewood, the Halls had not previously met with the assessor. Mr. Davy stated that the Halls' property transaction was an open transaction and he liked to visit sold houses so that he could compare the property valuations between recently sold properties with surrounding houses. The Halls agreed to an inspection of their property. . Mike Hoy, 25480 Smithtown Road, PID 33-117-23-23-0005. stated that his home was valued at $233,000 and he asked whether his house, which was a 1920s farmhouse, qualified for the This Old House exclusion. Chair Love stated that he believed no Shorewood homes have ever qualified for the This Old House exclusion. Mr. Davy stated that the intent of the This Old House exclusion is that costs of home improvements would be excluded from a home's market value for 10 years and then it would gradually be phased in. Mr. Hoy asked Mr. Davy whether the date of the home improvements for the This Old Home exclusion applied to the date of completion of the improvements or the date of application. Mr. Davy stated that the home improvements must be completed 10 years from the time that the application was completed. Mr. Hoy asked ifhe could apply now for the This Old House exclusion. Mr. Davystated that the program was initiated in 1993 or 1994 and it was now phased out as this past year was the last year that applications were accepted. He also stated that home . improvements completed prior to 1993 or 1994 do not qualify for this exclusion. Mr. Hoy also questioned whether his property could be reclassified as a farm as his primary income is derived from the selling of pumpkins that he cultivates on his property. 'ft BOARD OF REVIEW MEETING MINUTES April 21, 2003 Page 5 of6 . Mr. Davy stated that he would contact Mr. Hoy regarding his classification as a farm property and his eligibility for the This Old House exclusion. Cary Robinson, 26995 Marsh Point Court, PID 32-117-23-23-0009, stated that three years ago when he built his new house it cost $475,000. The latest assessment of his home was $603,000 with a limited market value of $504,000. This represents a 27% increase in adjustment since the house was built. He also stated that the housing statistics showed that sales fell 11 % from January to February 2003, considered to be the largest decline in 10 years as stated by the Commerce Department. He stated that he had his home refinanced and the appraiser from the mortgage company assessed his home at between $525,000 to $540,000. Chair Love stated that Mr. Robinson could exchange phone numbers with the assessor in order to coordinate an assessment of his home. Dale Woodbeck, 26475 Strawberry Court, PID 32-117-23-31-0037, stated that he believed his home was appraised too high as other similar two-story houses in his area had sold for approximately $380,000. His property consisted of 1,900 square-foot, split-level home that was assessed at $403,000. He also stated that he had spoke with Mr. Davy and that he was looking forward to meeting with him soon. . Mr. Davy stated that he would reassess Mr. Woodbeck's home. Mike Histon, 26220 Wildrose Lane, PID 32-117-23-12-0032, stated that he did a comparison study of 10 properties that were adjacent to or within one lot of his own home. From his study, he concluded that there was a 36% higher estimated market value for his property than the average estimated market value ofthe surrounding ones. His house was appraised at $405,000 last year while nearby houses are valued at between $65,000 to $85,000 lower than his own home despite their similarities. Chair Love stated that equity and the determination of a reasonable price were concerns of the Board. He asked Mr. Histon ifhe would agree to a meeting with the assessor. Mr. Histon agreed to a meeting. While there was no one present wishing to address the Board, Mr. Daly explained that there were some requests that they had received that wished to be entered into the minutes for this evening as having concerns with the proposed valuations for the properties specified. . . Marjorie Yaeger, 5445 Timber Lane, PID 34-117-23-22-0018 . Dean Stinchfield, 19655 Silver Lake Trail, PID 36-117-23-43-0021 . Clifford Whitehill, 19215 State Highway #7, PID 25-117-23-41-0028 . Jim Quandt, (vacant lot issue), PID not given . Jeff Fox, 5270 Howard's Point Road, PID not given . . . '" BOARD OF REVIEW MEETING MINUTES April 21, 2003 Page 6 of6 4. BOARD DIRECTION TO ASSESSOR Without objection from the Board, Chair Love closed the testimony before the Board of Review this evening. Zerby moved, Turgeon seconded, that the Board close the hearing of additional appeals. Motion passed 4/0. Mr. Davy stated that concerned property owners could continue to meet and speak with the assessors, changes would be made administratively, rather than as a case heard before the Board of Review. 5. ESTABLISH DATE FOR BOARD TO RECONVENE In cooperation with Mr. Daly and Mr. Kunik, the Board of Review agreed to reconvene on May 5,2003, at 7:00 P.M. 6. ADJOURN Turgeon moved, Garfunkel seconded, adjourning the Board of Review Meeting of April 21, 2003, at 7:52 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, SUSAN FISCHER Recording Secretary Woody Love, Chair