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City Council Minutes 04-29-2008 Joint Board of ReviewMinutes Special Meeting: 4/29/08 MINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL BOARD OF REVIEW Tuesday April 29, 2008 - 7 p.m. Members Present: Clint Herbst, Tom Perrault, Brian Stumpf and Susie Wojchouski Members Absent: Wayne Mayer 1. Call to Order. Mayor Herbst called the meeting to order at 7 p.m. and declared a quorum present. 2. Introduction of representatives from the Wright County Assessor's Office. Greg Kramber, Wright County Assessor, Tony Rasmussen, Senior Appraiser and Lori Thingvold, Assessor for the City of Monticello were present at the meeting. 3. Conduct Board of Review. The Board of Review looks at classification and valuation on the 2008 assessment for taxes payable in 2009. Values placed on the property are determined by a Department of Revenue study which compares sales for the period from October 1, 2006 through September 30, 2007. Sales occurring from October 1, 2007 through September 2008 will be the basis for determining property values for the 2010 taxes. Greg Kramber explained the appeals process. The first step in the process is the local Board of Review. If the individual is not acceptable to the decision of the local board, they can go to the County Board of Appeal and the final appeal is to the State Tax Court. Greg Kramber added that the Board of Review does not have the power to open the valuation for taxes payable in 2008. Lori Thingvold stated that in Monticello there were 135 qualified sales which was the basis of the Department of Revenue sales ratio study. The median sales ratio was 94.4%. The assessor reviews 1/5 of the parcels each year. In Monticello some townhomes saw reductions and lots along the river saw a slight increase. Tony Rasmussen talked about commercial property county wide. There were 26 qualified sales resulting in a median sales ratio of 95.7%. The overall increase in commercial property value was about 1.2%. Most of the property value changes were a result of the impact of the interchange. There was $12,500,000 in new commercial construction including River City Extreme, Moon Motors, Palf, Ryan Companies strip mall and Mielke Properties strip mall. An area of concern for the assessor is the amount of vacancies county wide for commercial property. Greg Kramber pointed out that foreclosures are not included in sales ratio study. Minutes Special Meeting: 4/29/08 Robert Milless owns two vacant lots in Monticello; one in Hillside Farms Second Addition (155-167-002040) and one in Carlisle Village Fourth Addition (155-183-001010). He noted the valuation for the Carlisle Village lot for the last two years has been $70,000 and the purchase price was $71,900. The lot in Hillside Farms Second Addition has a valuation of $60,000. Greg Kramber noted these lots were impacted the Plat Lot Deferral law which was passed to assist developers. There is three years left on the plat lot deferral for Hillside Farms and four years left for Carlisle Village. Greg Kramber said they thought the valuation was fair and would not want to lower it for these lots without making an adjustment for all the lots in the development. Greg Kramber stated that if properties are not selling in a community they would look at comparable sales in other areas. Any indication of value would be looked at. He added that over the last five years a considerable number of residential lots were platted and there is surplus of lots at the present time. Rick Williamson and Al Blason came before the board concerning properties they own in the Riverview Square Addition (155-117-001020, 155-117-001030 and 155-117-002010). Mr. Williamson stated the valuation on the property stayed the same as last year but he questioned the high rate that went into effect last year. Rick Williamson stated that last year they had sold property to Steiner Development and while they didn't like the increase in valuation they accepted it. He went on to say they have also increased the tax rate on convenience stores. With the new freeway interchange the convenience store has lost 50%-60% and they have to rely on coupons and promotions to keep sales up. The interchange for them was not a positive thing as far as their business. The valuation of the convenience store is $1,500,000 which was the same as last year. Mr. Williamson stated last year there was a 62% increase in land value and the convenience store went up about 30% Tony Rasmussen said there were a number of factors: 1) The interchange; 2) The Dahlheimer and Bondus sale of raw land at $5/sq. ft. 3) When land was sold to Home Depot the price was $7.40/sq. ft. In discussion of land sales it was noted that the property sold to Steiner Development went for $8/sq. ft. Rick Williamson indicated they are currently trying to sell the land for $6.30/sq. ft. but nothing is moving out there. Tony Rasmussen stated there have been sales of convenience stores in Albertville, Cokato and other communities which sold for more than their assessed value. He added that the cost of holding land is one of the big burdens for property owners. It was noted when the interchange was put in there was significant development in the area which accounted for the increases in valuation they had seen earlier. If development doesn't continue they would not expect that the properties would see such increases again. If the property owners decide to appeal it at the county level, Tony Rasmussen would go out and review the property. Mr. Williamson noted he would likely be appealing this at the county level. Tony Rasmussen said based on the data he had, he felt comfortable with the valuation for the parcels. Mr. Williamson stated the property is zoned PZM. The question was asked how the zoning impacted the valuation. The state's position is that usage dictates the tax classification. If it is bare land then it is based on zoning. Mr. Williamson spoke about the 2 Minutes Special Meeting: 4/29/08 increase in valuation and its impact on his taxes. Greg Kramber said there are fourteen factors that go into the taxes and valuation is just one of them. Looking at the sales and development that is happening in the area, Greg Kramber is recommending no change in valuation. Brian Stumpf said if the valuation has remained the same as last year he is reluctant to lower it. Greg Kramber reiterated that the sales data they have supports the valuation. If the property owner appeals to the county, the assessor will provide him with information on the convenience store sales. BRIAN STUMPF MOVED TO MAKE NO CHANGE ON THE VALUATION OF THE PROPERTIES IDENTIFIED AS 155-117-001020, 155-117-001030 AND 155-117-2010. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. BRIAN STUMPF MOVED TO MAKE NO CHANGE ON THE VALUATION FOR THE PROPERTY OWNED BY ROBERT MILLESS IDENTIFIED AS 155-167-002040 AND 155-183-001010. SUSIE WOJCHOUSKI SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Dinesh Amin owner of the AmericInn (155-010-003040) spoke to the board stating that being an independent hotel owner instead of a franchise owner and the decline in business over the last six months are reasons to consider a reduction in his valuation. He stated the valuation remained the same as last year. Tony Rasmussen said they are looking at hotels/motels and said over the past years they have actually lowered the rates for hotels/motels. Mr. Amin stated because of the new exit people are going to hotels on the south side of the exit and he is on the north side. Tony Rasmussen said hotels across the county did not see an increase in valuation. The valuation on the AmericInn is the second lowest in the county. The assessor was asked if valuation is determined by income or what factors. Tony Rasmussen said they look at income as well as other factors. He added that the county has made some adjustments on the hotels in Monticello several years back and overall the rate has not changed. Tony Rasmussen noted hotel business is cyclical and that the power plant has brought business to the Monticello hotels. Mr. Amin agreed noting that Xcel gives them business for 2-3 months. In discussing the valuation it was stated the land was valued at $4.20/sq. ft. The total valuation was $652,800 and $200,000 of this was land. There are 28 units in the structure. Greg Kramber said they would need to look at 2-3 years of income stream. If the downhill trend continues over the next couple of years they would need to look at this again. For comparable sales there was the sale of the Silver Fox Inn, the Days Inn and a hotel in Clearwater. Greg Kramber said based on the information they had and the comparable sales it was hard to recommend making a change in the valuation. Mr. Amin offered to submit financial information but Greg Kramber indicated he could not base a decision on six months income stream. TOM PERRAULT MOVED TO APPROVE NO CHANGE IN THE VALUATION FOR THE PROPERTY IDENTIFIED AS 155-010-003040 AND IF THE PROPERTY OWNER 3 Minutes Special Meeting: 4/29/08 DESIRED HE COULD APPEAL THE VALUATION AT THE COUNTY LEVEL AND MEET WITH THE ASSESSOR TO REVIEW COMPARABLE SALES. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. The Assessor's office received a number of letters from property owners which were addressed. Mike Leuer, owner of 155-500-172100 and 155-500-083400 requested a change in valuation. The parcels which total approximately 100 acres had been annexed into the City and platted as the Hidden Forest Addition. The sale price was $2,100,000 which comes to about $22,000 per acre. The assessor has met with Mike Leuer and reviewed the area. The assessor noted today they received a tax court petition on this property which is the final level of appeal. BRIAN STUMPF MOVED TO MAKE NO CHANGE TO THE VALUATION FOR THE PARCELS IDENTIFIED AS 155-500-172100 AND 155-500-083400. SUSIE WOJCHOUSKI SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. The Bapa Enterprise, owner of the Silver Fox Inn requested a reduction in valuation. The assessor noted there was no change in the valuation from last year when the valuation was set at $1,681,800. BRIAN STUMPF MOVED TO MAKE NO CHANGES TO THE PROPERTY IDENTIFIED AS 155-079-001020. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Scott Douglas, owner of the former Golden Valley Furniture Building (155-010-052010) brought up the issue of damage to his roof. The assessor is recommending a reduction from the valuation of $278,700 by $8,900 until damage is repaired. BRIAN STUMPF MOVED TO APPROVE THE REDUCTION IN VALUATION FOR 155-010-052010 AS RECOMMEND. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. In a response to how Xcel Energy property is valued Greg Kramber indicated the state values the property within the fenced area. The county values the land and anything outside the fence. Greg Kramber thanked the Council and staff for their support. CUNT HERBST MOVED TO ADJOURN AT 8:40 P.M. TOM PERRAULT SECONDED THE MOTION. MOTION CARRIED. '~~~~ ~~ Recording Secretary 4