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041904 Board of Review Min . . . BOARD OF REVIEW CITY OF SHOREWOOD MONDAY, APRIL 19, 2004 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 P.M. MINUTES 1. CONVENE BOARD OF REVIEW MEETING Chair Love called the meeting to order at 7:00 P.M. A. Roll Call Present: Chair Love, Boardmembers Garfunkel, Turgeon, and Zerby; Administrator Dawson Absent: Boardmember Lizee Also present: City Assessors Davy and Kunik B. Review Agenda Zerby moved, Garfunkel seconded, Approving the Agenda as presented. Motion passed 4/0. 2. PRESENTATION BY HENNEPIN COUNTY ASSESSOR Administrator Dawson explained the Council would be acting as a Board of Review for the evening to review valuation of properties established by City Assessors, Bill Davy and Tom Kunik. He noted valuation was determined as the amount informed buyers and sellers would pay for a particular piece of property, and stated the purpose of the meeting was to review values and make comparisons with other City properties. He went on to explain the assessors had received a number of inquiries regarding limited market value increases on properties within the City. The limited market value on properties was being phased out over a period of six to seven years that had begun in 2001. This year the maximum increase to limited market value was set at 15% for all properties within the City as set forth by State statute. Chair Love reviewed the process for the evening, and introduced City Assessors, Bill Davy and Tom Kunik. He also stated, should it be necessary, the next Board of Review Meeting likely would take place on April 26, 2004, at 6:00 P.M. at City Hall for further consideration of issues presented this evening. Mr. Davy reviewed the duties of an assessor, noting the purpose was to provide an estimate of the market value of a property for taxation purposes. The market value was defined as the highest value a buyer and seller would pay for a property. Within the City of Shorewood, he explained, overall growth for lakeshore properties increased by 5.2% and off-lakeshore properties by 6.9%. He went on to explain the history of the growth of the limited market value as stated in State statutes. He noted the maximum increase in 2002 was 10%,2003 was set at 12%,2004 and 2005 at 15%, with full market value to be achieved by 2007. Mr. Davy also explained the appeals process for residents, noting that the next level was the Board of Equalization in Hennepin County that took place the last two weeks in June, and a final appeal at the State Tax Court to take place no later than April 30, 2005. . . . CITY OF SHOREWOOD BOARD OF REVIEW MEETING MINUTES April 19, 2004 Page 2 of 4 Chair Love thanked Mr. Davy and Mr. Kunik for their efforts, and noted this Board was the first step in the review process. 3. APPEALS BY RESIDENTS Ron McKinney, 26005 Wild Rose Lane, PID 32-117-23-130004, had received an assessed value of $239,000 from the City this year. He stated he had a private assessor value his home in January of 2004 that noted a $34,000 difference from the assessed valuation from the City. Chair Love suggested Mr. McKinney meet with the assessors present to attempt to remedy the situation. John Moore, 22340 Bracketts Road, PID 35-117-23-320037, stated he had spoken with Mr. Kunik regarding his valuation, and had remaining questions. Mr. Moore stated he and his wife, Sue, had lived in his residence since 1976. He questioned whether there were different methods of assigning value to lake shore and off-lakeshore properties. Mr. Kunik responded affirmatively. Mr. Moore stated he was also concerned about the health of Galpin Lake as it was quite crowded with algae growth to the point where he did not believe it was possible to canoe the lake any longer. For this reason, he questioned whether it was possible for lakeshore values to decrease as well as increase given the decline in the health of the lake. He went on to explain his home had increased approximately 69% in value since 2003. He stated he was looking for fairness in this matter, and stated he was concerned his home was being compared to homes 20 years younger than his in that area. Mr. Kunik stated he had inspected the property and also noted lakeshore properties in Mr. Moore's area had increased in land value. His information had been obtained from public records, and he agreed to report back at the next meeting regarding comparable properties for this case. Chair Love stated he was also quite concerned with the declining health of Galpin Lake, and would like to see a neighborhood association work toward improving the health of that lake. Mike McDonald, 4695 Lagoon Drive, PID 30-117-23-310005, stated he had no questions regarding the lot his house existed upon; however, he was present this evening to question the method for assigning values to lots considered unbui1dable. He stated the lot he owned adjacent to his homestead lot was considered unbuildable and yet had an assessed value of$81,000. Mr. Davy stated he had spoken with Mr. McDonald regarding this property in the past, and had explained this lot added value to his primary property as it was next to it. Chair Love questioned Mr. McDonald how much lake frontage this adjacent lot held. Mr. McDonald replied he was uncertain. Chair Love stated lakeshore properties were typically valued by the frontage on the lake and also whether they were contiguous to a primary property. He requested the assessors report back on this issue as it related to the suitability of building, or lack thereof, associated with this lot. Clint and Marlys Bucher, 5490 Manitou Lane, PID 33-117-23-21-0049, were present this evening. Mrs. Bucher stated she was concerned the assessed valuation had increased by nearly 25% this year, and CITY OF SHOREWOOD BOARD OF REVIEW MEETING MINUTES April 19, 2004 Page 3 of 4 . the estimated market value had nearly doubled since 2000. She noted an assessor had inspected the property three to four years ago and nothing had changed significantly since that time. She stated she and her husband had lived in the City since 1972, and requested further discussion with the assessors. Brent Rice, 5970 Boulder Bridge Lane, PID 31-117-23-41-0014, stated he had spoken with Mr. Davy regarding his situation. He stated he and his family had to move out of the house in 2002 due to intrusive water problems and associated mold issues. As a result, he believed the house to be worth nothing more than the land it sat upon, and was concerned about his valuations since that time. He went on to explain the history of the situation, noting he was currently in the midst of a trial regarding this issue with his builder's insurance company. As part of the judicial process, he had been advised to request property tax relief. Board member Turgeon questioned the formula utilized for new construction in cases similar to this one. Mr. Kunik stated there had been miscommunication regarding the permitting process for this house, and as a result, he had to rely on conversations and records of the City Building Inspector. Mr. Davy explained, in response to Mr. Rice's question, that unfortunately disaster credit issues did not apply to houses with mold issues. Boardmember Turgeon stated she disagreed with that determination as she did not believe reconstruction due to mold issues was the same concept as new construction, and therefore, valuations should be handled in a different manner. . Boardmember Garfunkel stated he disagreed as the circumstances did not change the property value of new construction. Boardmember Zerby stated in this role, he was always forced to consider what someone would be willing to pay for a property. While he remained sympathetic to the use of the house, residents had to pay taxes on the value of what was owned, regardless of circumstances pertaining to the ownership. Boardmember Garfunkel stated he thought there needed to be consideration for mold Issues as reconstruction due to mold was not the same thing as new construction. Chair Love stated that all four persons on the Board present this evening were sympathetic to what the Rice family had been through in recent years. However, it was very difficult to yield a determination regarding the kind of use, volume and presence within the home, as well as the difference between natural disaster issues and new construction. Mr. Kunik stated the assessor's office had given the benefit of doubt in this case and had decreased the value of the property; however, it was important to remember a house with some prior quality did exist on the site, and when the house was completed, it would be requalified. He stated the assessor's office could only do so much in this case, as mold did not qualify residents for disaster credit. He also stated he was not unsympathetic to this case, as he had tried to decrease the value using all parameters available, and had done the best he could in this case, noting the house had been decreased from $706,000 to $587,000. . Chair Love stated he heard two issues present this evening. The first issue pertained to the appropriate policy and procedures being followed, and the second issue pertained to the assessed value of the house and property. He questioned Mr. Rice whether he agreed with the policy and procedures utilized in this . . . CITY OF SHOREWOOD BOARD OF REVIEW MEETING MINUTES April 19, 2004 Page 4 of 4 case. Mr. Rice stated he was not sure if the appropriate policies had been followed in this case. He had been told by persons at the state legislature it was sometimes possible to have tax relief granted when possible, so he was appearing before the Board this evening asking to have that relief granted. Chair Love requested the assessors review history to find similar cases to this one and report back at the next meeting. Chair Love noted written appeals had been received from Michael Rogers, 19800 Sweetwater Curve, PID 36-117-23-43-0004, and from John Bridge, 25810 Birch Bluff Road, PID 29-117-23-44-0007. Mr. Kunik stated an adjustment had been made to the Bridge property, noting the property contained 110 feet of lakeshore, and thus he believed his valuation was correct at this point. Garfunkel moved, Turgeon seconded, Closing the Appeals Process, noting no further appeals would be taken after this evening, and also Establishing April 26, 2004, at 6:00 P.M. at City Hall as the date to reconvene the Board of Review Meeting. Motion passed 4/0. 4. BOARD DIRECTION TO ASSESSOR Chair Love requested the assessors provide further direction to the cases discussed this evening and report back at the Reconvened Board of Review Meeting next week. 5. ESTABLISH DATE FOR BOARD TO RECONVENE The Board had agreed to reconvene on April 26, 2004, at Shorewood City Hall at 6:00 P.M. for further discussion and review of these topics. 6. . ADJOURN Garfunkel moved, Zerby seconded, Adjourning the April 19, 2004, Board of Review Meeting at 7:59 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED, Sally Keefe, Recording Secretary Woody Love, Chair Attest: