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HomeMy WebLinkAbout04-19-2006 Board of Appeal and Equalization MinutesMINUTES OF THE ORONO BOARD OF APPEAL AND EQUALIZATION Wednesday, ipril 19, 2006 • 7:00 o'clock p.m. ROLL The Orono Board of Review met on the above date with the following members present: " - Mayor Barbara Peterson, Council Members Jim White; Lili,- McMillan, and Jim=Murphy -The= following represented City Staff: Ron Moorse, City Administrator; Hennepin County Appraisers William Davy and Tom Kunik; and Recorder Jackie Young. 1 Council Member Bob Sansevere was absent. Mayor Peterson called the Board of Appeal and Equalization to order at 7:00 p.m. APPEALS Peterson explained the procedure that would be foll I wed in hearing the appeals. Davy explained that tonight's meeting is intended to give Orono residents the opportunity to discuss their property valuations and present any evidence they feel would help show why their market valuation is incorrect for 2006. j Davy stated the valuations are arrived at by studying the market and by doing market ratio studies of sales through the City of Orono. Those assessments are turned into the Hennepin County Review - • Board, which reviews the assessments to insure that certain standards are being met. Davy stated each year the Hennepin County Assessors Office conducts a sales analysis to determine what type of valuation changes need to occur. Davy stated the values are based on sales from October 1, 2004 to September 30, 2005, with the overall valuation of properties in the City needing to be between 90 percent and 105 percent of the valuation determined) through the sales analysis. Davy indicated following a comparison of the estimated market value to the sale price of the properties, if they find that the market values are low, they needed to be adjusted. Davy stated if, after reviewing the valuation, the property owner is not satisfied with the valuation, they have the right to appeal their valuation at the County Board of Review. Davy stated following appeal by a property owner to the local Board, the assessor would review the information on file regarding the property. The property owner may request that the assessor visit the property and provide information on how that valuation is obtained. After reviewing the property, the assessor brings his findings back to the local Board for their approval, and the property owner may appear at the Reconvened Board of Appeal and Equalization if he is still dissatisfied with the valuation assigned to the property. The property owner may also choose to appeal the local Board's decision by appearing before the County Board of Equalization, followed by the Minnesota Tax Court. APPEALS 1. John Eric9dn -1620 Shadywood Rbad; PID 17- 117 =23 210012 - Etidson stated his estimated''" market value for 2005 was $980,000 and for 2006 is! $1,083,000, which is an increase of $103,000 in one year. Ericson stated his house was built in 1902 and was remodeled approximately 15 years ago and has had no further improvements. Ericson commented his residence is not like a new house and is, • instead, over 100 years old. P 14 MINUTES OF THE. ORONO BOARD OF APPEAL AND EQUALIZATION Wednesday, April 19, 2006 7:00 o'clock p.m. • Ericson stated he has 125 feet of lakeshore property. Erickson stated he has two lots listed on one tax statement and that the City would not allow him to construct a new residence on the 65 -foot lot a few years ago. Ericson reiterated--that-an increase of $103,000 in one year is too much and that he will not be able to live there once he retires. Davy indicated they did visit the Ericson property last year and that the market valuation was carried forward from last year. Murphy inquired whether Mr. Ericson took his case through the appeal process last year. Ericson indicated he did not. Ericson stated the aerial photograph that was displayed last year shows that his neighbor's house is located on his property. Murphy indicated that he also experienced a similar increase and that the city is in a difficult situation with property valuations. Murphy stated this is the first time in about three years that the average increase is less than 10 percent throughout the city. Murphy stated the hot real estate market is driving these increases. Ericson stated no matter what the valuation is, people have to be able to live in a house, and that based on the overall valuation of the city, the board has some leeway to reduce his valuation somewhat. McMillan stated they cannot reduce it by more than one percent of the total'assessed value. • White inquired why Mr. Ericson's valuation came in higher than the average. Davy stated the valuations vary around the lake, with some valuations going up 17 or 18 percent and others only going up 5 or 6 percent. Ericson stated the problem along Shadywood Road is that people are buying up houses and then tearing them down and constructing million dollar homes. Murphy noted that there is a lot available on Bohn's Point for $3.5 million without a house. Ericson stated in his opinion he is being penalized because the City told him approximately 15 years ago that he could not build a home on that adjoining lot. White commented he does not like the system because some people are getting taxed out of their homes. White stated he does not see a way to get around the process that the City is required to go through in determining valuations. Peterson stated the county assessor has provided some numbers for neighboring communities, with Deephaven being at a 16 percent overall average and Excelsior is over 30 percent. Davy stated the City of Orono has been more current in their increases than some of the other cities and that most property owners do not experience a huge increase. • PAGE 2 4t MINUTES OF THE ORONO BOARD OF APPEAL AND EQUALIZATION Wednesday, April 19, 2006 • 7:00 o'c ck p.m. • Peterson stated Orono's rate of increase at 9.5% sho s that the City's valuations over the past few years have been on target. Murphy pointed out the City does not make the law Viand that there is something not right about basing — ~=property-values°at whatproperty=sells for. Murphy commented-that Mh Ericson should - decide- what_�:- . . path he wants to take with regard to his valuation. White stated the taxes should be based more on the Mayor Peterson inquired whether it would be Ericson stated he has made no changes since last record. 2. Carol Sandberg, 1380 North Arm Drive, happy being a resident of the City of Orono and tha Sandberg stated the value of her new improvement; whether that increase is from the kitchen remodel tl where that number comes from. used by a particular person. for the assessor to visit the property again. and that he is merely putting his comments on the PID 0811723320025. Sandberg indicated she is the City has a very good building inspector. for 2006 is listed at $8000 for this year and inquired at was done two years ago. Sandberg questioned Sandberg stated her market value for 2005 was $245,000 and for 2006 it is $273,000, which is a little over 10 percent. Sandberg stated they have a tuck -under garage and that in her opinion anyone that purchases her property would tear down the house. I Sandberg indicated she has been unemployed for the past year and inquired whether her taxes could be decreased. White inquired how old the house is. Sandberg stated it was built around 1950. Davy noted they have not reviewed this property. The City Council requested the assessor visit the property. 3. Nancy Danko, 1510 Green Trees Road, PID 11- 117 -23 23 0015. Danko stated she went to the bother of looking up what she feels are comparables to her properly. Danko noted her house has been determined to be lakeshore and inquired why it is determined to be lakeshore. Davy stated the access to the lake would be sold with the house. Davy stated that. lakeshore classified property is taxed no differently than residential property. Danko stated she pays two bills and that this particular house is not lakeshore. Danko stated she brought a list of comparable homes and would provide it to the assessor to determine whether her 'property valuatiori�should be reduced based on the comparables: ---- - - Davy stated he would look the comparables over and would contact her. Danko noted that one comparable has a valuation of over $200,000 more than hers but yet the taxes paid are approximately the same. Nancy stated that if you have a million dollar property, it should be PAGE 3 MINUTES OF THE 1 ORONO BOARD OF APPEAL AND EQUALIZATION Wednesday, April 19, 2006 7:00 o'clock p.m. • depreciated rather than appreciated due to the long time it sits on the market. Danko inquired whether this is being addressed in the valuation. Davy stated that sales are stratified based on all the sale price levels. Danko stated she does not feel this is a good valuation for her property since million dollar houses have decreased in valuation due to a surplus of that type of home. Danko stated the selling price of those homes would have to be reduced in order to sell the house. Murphy commented about an article related to the whole metropolitan area and that the real estate market is reaching a point where the higher- priced homes are not selling as quickly. Murphy stated the City of Orono has not experienced the problem of million dollar plus houses sitting on the market for a long period of time. Davy indicated he would take a look at the information that the property owner brought. Danko stated one comparable is the house on Fox Street that is valued at $2.5 million, with the taxable being $1,812,000. Danko stated that property has an indoor pool and other nice amenties. Danko stated a real estate agent would bring comparables to her when she goes to sell her home and requested that the assessor review the comparables that she has brought. Davy indicated that he would take a look at the information. Murphy inquired why the lot with the residence on it is being classified as lakeshore since it is not • located on the lake. Davy stated that area is one section of the city where the homes have a lot across the street that gives them access to the lake. Murphy stated he does not understand why, if there are two tax ID codes on these properties, they would still be considered as one property. Danko stated the actual piece that is located on the lake has no value to her. McMillan commented that the lot on the lake is nonbuildable. Murphy inquired whether these property owners would be taxed separately on the lots. Davy stated they would get two separate tax statements and that it is valued somewhat less as if the home were located on the lake. Davy stated the assessor's office still has to value that access to the lake. Danko stated County Road 15 runs between the• two- lots and-that the•lotwith her - residence on Lit is -not- - lakeshore and that she would not cross the busy road to use that lot. White stated in Orono those two lots would need to be sold together because a dock cannot be put on a lot without a principal residence. 0 PAGE 4 • ORONO BOARD OF APP: Wednesday, 7:00 o'i OF THE ►L AND EQUALIZATION pri119, 2006 ck p.m. Moorse stated as part of this process the property owners could set up an appointment with the assessor and that the assessor would view the property and make a recommendation, which would be brought back before the Board. �"`-"- `~Danko - further- statedsshe also °receives °noI services <from the =city for the - taxes =she- pays as well as no. - — snow removal, and that the police do not travel down their road. Danko stated for the eight or nine years she has lived there, she has never seen a policeman go down their road. White pointed out that the majority of the roads in Orono are private roads, which helps to keep Orono's taxes lower. 4. Richard Lyman, 715 North Ferndale Road, PID 36- 118 -23 110017. Lyman indicated he has lived in his home for approximately 22 years and that the home was built in 1954, consists of 2200 square feet and is a single level house with only one third of the basement finished. Lyman indicated his valuations have steadily increased, with this year's increase being six percent. Lyman stated in his neighborhood a number of more expensive homes have been built but that their physical dimensions have not changed one bit. Lyman inquired how his valuation is justified, and noted - that in the previous two years he experienced a valuation increase of over 10 percent. Lyman stated it is a modest home. Davy noted the resident did not contact the assessor's office prior to tonight's meeting and that he does • not have the file with him tonight. Davy stated most of the valuation is based on how land values are being adjusted, and that if the house is close to 50 years old, the assessor's office could take a closer look at that. - Davy stated they would contact the property owner to set up a•time when they can visit the property. 5. Jane Slaughter, 4545 Spruce Lane, PID 30- 118 -23 310005. Slaughter stated she did talk to the assessor's office prior to tonight's meeting. Slaughter stated they live in a unique area and that she was told that the four properties in the neighborhood are valued quite similarly when it comes to the land itself. Slaughter noted they have an easement across the whole front of their property whereas the other three properties do not have that easement. Sl i ughter stated those three properties have their own driveways. Slaughter stated their house is also quite different fr last house sold in 1997 was purchased for $125,000 the other neighbor bought his house in approximate: purchased their property, and that their lot at that tir why the valuation of their house is over $200,000. neighbor's roof and that the neighbor's market valu barn, a house and a garage. White inquired what the valuation is on Slaughter's i the other houses. Slaughter explained that the td in 1996 it sold for $116,000. Slaughter stated 1984, which was about the same time they was purchased for $38,000. Slaughter inquired iughter stated their roof is older than the on is listed at $54,900, which also includes a pole Davy stated the house is at $263,000, with the land at $210,000. Slaughter stated there is getting to be quite a disparity between their land and the neighbors. P IF MINUTES OF THE ORONO BOARD OF APPEAL AND EQUALIZATION Wednesday, April 19, 2006 7:00 o'clock p.m. • Davy stated the valuation went up 11 percent. Slaughter stated they can never remove that driveway across their property and that their property is compromised compared to the neighbors. _..4:..x..m._. --.. ,... e ,¢.....1..... ... —.— _.,. .t.. ._...♦ .a u.. —.. ._._......,..—.,....- ..m-.._ . -. ...h _.. h*'}e..^a� "'^i.aid.i.. a21p Peterson inquired whether the assessor visited their property this past year. Slaughter stated they did not visit the property this past year. Davy stated the valuation for her neighbor should be adjusted. Davy stated the neighbor's house has a note that it has water in the basement. Murphy inquired whether the neighbor's house should be assessed higher or whether Slaughter is being treated differently. Davy stated he agrees that the neighbor's valuation should be higher. Murphy inquired whether the assessor's office should visit this property again. Slaughter stated she did speak about the easement over the phone with the assessor. Slaughter stated the neighbor behind her has to drive across her property all the time because the road was not brought to his lot. Davy stated he would take a closer look at how they are valuing the land in that area. • Peterson requested Mr. Davy contact Ms. Slaughter after he has a chance to look at the file. Murphy noted that only a small portion of the taxes paid actually go to the city. WRITTEN APPEALS Mayor Peterson noted the City received the following written appeal: 6. Genmar Industries, Inc., 1449 Shoreline Drive, PID 11- 117 -23 210001. Peterson moved, White seconded, to close the meeting to any further requests for reviews before the Orono Board of Appeal and Equalization. VOTE: Ayes 4, Nays 0. ADJOURNMENT McMillan moved, White seconded, to recess and to reconvene the Orono Board of Appeal and Equalization to May 8, 2006 at 6:30 p.m. VOTE: Ayes 4, Nays 0. The Orono Board of Appeal and Equalization was adjourned at 8:12 p.m. ATTEST:. L n Vee, City Clerk Barbara Peterson, Mayor PAGE 6