HomeMy WebLinkAboutCity Council Packet 04-09-1997 BOEAGENDA
1997 BOARD OF REVIEW
APRIL 9, 1997
7:00 P.M.
Council Chambers
City Assessor's Report
II. Public Comment
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447__
DATE: April 4, 1997
TO: Mayor and City Council
FROM: Kathy Lueckert, Assistant City Manager 4WIZ
SUBJECT: Certification of Local Performance Aid
Last year's state Omnibus Tax Bill contained a provision for Local Performance Aid
LPA). Authored by Representative Andy Dawkins, LPA was intended to encourage
cities and counties to develop performance measures. Local performance aid was
funded through a reduction in HACA, which cities and counties would then receive
back as LPA. Plymouth's share of LPA was over $66,000.
Local performance aid has been met with mixed reactions throughout the state. No
guidelines were established for what constitute "good" performance measures. Many
small cities see LPA as onerous because of the administrative burden associated with
most performance measurement systems. In essence, since LPA was approved last
May the League of Minnesota Cities and other organizations have worked to repeal it
or make substantive changes to it.
To receive LPA in the first year, cities merely had to certify that they were developing
a performance measurement system. Plymouth did certify that, and will receive LPA
in 1997. However, because of the likelihood of changes to LPA in the current session,
we have not put much effort into developing a performance measurement system for
Plymouth. A current proposal by Rep. Dawkins adds more money to the program and
simplifies reporting procedures. Representative Ann Rest has proposed that LPA be
transformed into a grant program to encourage cities to develop innovative service
delivery programs.
Hopefully this legislative session will clarify the intent and purpose of LPA, or modify
it. Developing a meaningful performance measurement system requires a significant
effort by staff, and can become an administrative burden if not thoughtfully designed.
Plymouth does have some performance measures. These primarily are workload
measures, rather than measures that assess effectiveness and outcomes. Before effort is
put into designing a performance measurement system, we recommend waiting to see
what happens in the legislature.
However, the Department of Revenue has requested that the city certify local
performance measures in order to receive LPA in 1998. There are two options for
certification: Plymouth can certify that the city has performance measures and presents
these to the city council at least once a year, or the city can again indicate that it is
developing a performance measurement system. We recommend certifying that
Plymouth is developing a performance measurement system. The certification form
must be signed by Mayor Tierney and one other councilmember, and we would suggest
that Deputy Mayor Tim Wold also sign.
A copy of the certification form is attached. If you have questions, please call me at
509-5052.
MINNESOTA Department of Revenue,_ I1
A y
Property Tax. Divisi ~` ra!C;1 Station 3340 St. Paul, MN 55146-3340
pI e (612) 296-5141 Fax (612) 297-2166
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March 26, 1997 ''
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TO: ALL CITY CLERKS, A I ORS, MANAGERS, AN
FINANCE DIRECTORS
RE: CERTIFICATION OF LOCAL PERFORMANCE MEASURE
FOR LOCAL PERFORMANCE AID PAYABLE IN 1998
Minnesota Statutes, Section 477A.05 provides for Local Performance Ai
order to qualify for LPA, your city must have a system of performance measures for
services provided by the city, and must regularly compile and present these measures to
the city council at least once per year. If there is currently no system of performance
measures in place, your city may still qualify for this aid if it is in the process of
ver, eligibilitydevelopingandimplementingasystemofperformancemeasures. Howe
based upon being in the process of development may not be used for more than two
consecutive years.
For the purpose of the enclosed certification form, "in the process" may include having
he city shouldthesubjectofperformancemeasuresontheagendaofthecitycouncil. T
then use the time period between this year's certification and next year's certification to
beyond thisdevelopbasicmeasuressuchas "workload," unless it has already moved
stage. The second year of "in the process" must be used to move to a higher level of
performance measurement, such as measuring efficiency and effectiveness.
98: The totalLocalperformanceaidwillbedeterminedasfollowsforcalendaryear19
amount of aid available for cities in 1998 is $4,107,673, plus an inflation adjustment
based on the implicit price deflator. A per capita aid amount will be determined by
alify for the aid. dividing the total aid available by the total population of all cities that qu
Each qualifying city then receives an aid amount based on its population times the per
city. Cities are
capita aid amount.
Distribution of LPA is based on yearly certifications for each qualifying
required to submit an annual certification in order to receive LPA payable in calendar
year 199E and subsequent years.
Note: The State Legislature is currently looking at LPA, and there could be changes
which affect LPA. Your city will be notified if there are changes which affect your
of 1998.
1998 Certification of Local Performance Measures or your 1998 LPA.
LPA will be paid in two equal installments on July 20 and December 26
Qualifying cities will receive a certification of their 1998 LPA by July 31, 1997.
continued)
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Ethical Practices Board
First Floor South, Centennial Office Building
658 Cedar Street
St. Paul, MN 55155-1603
011 i
for
LOCAL OFFICIALS
in a Metropolitan Governmental Unit
This handbook is intended to aid local officials in meeting the requirements of Minn. Stat. Chapter 10A, the
Ethics in Government Act. Chapter 10A and Minn. Rules Chapters 4505 to 4525 should be consulted as needed
for a fuller explanation. Questions may be addressed to the staff at 612/296-5148 or 800/657-3889. Board staff
may also be reached by e-mail at epb.info@state.mn.us. The Board also maintains a worldwide web site at
http://www.state.nm.us/ebranch/epb.
Contents
Economic interest disclosure...................................................................................... 1-2
Giftprohibitions........................................................................................................ 2-3
Conflict of interest disclosure.................................................................................... 3-4
Listof forms................................................................................................................. 4
General information.................................................................................................. 4-5
Definitions................................................................................................................. 5-6
Economic Interest Disclosure
Who must file Holder of an elective office in a Metropolitan Governmental Unit or a local official who
is appointed to or employed in a public position in a Metropolitan Governmental Unit '
in which the person has authority to make, to recommend, or to vote on as a member of
the governing body, major decisions regarding the expenditure or investment of public
money.
Where to file Statement should be filed with the governing body of the local official's Metropolitan
Governmental Unit.
When to file 1. Candidate within 14 days after filing an affidavit of candidacy.
2. Local official within 60 days after accepting employment or appointment as a local
official in a Metropolitan Governmental Unit.
3. Annually on April 15th.
1/96
What to file 1. Candidate - Form ET -32, provided by the filing officer at the time of filing.
2. Local official - ET -33, provided by the governing body of the Metropolitan
Governmental Unit at the time of appointment.
3
3. Incumbent elected official and appointed local official - ET ,,7', provided by
governing body of the Metropolitan Governmental Unit annually.
Amendments Any changes or corrections in information filed must be reported to the governing body
in writing within ten days after the date the local official became aware of the
inaccuracy. The amendment must specify the form and sections of the form, along
with the corrected information.
Termination A local official (appointed or elected) must file a termination statement after leaving
office. The statement covers the period from the end date of the most recently filed
statement through the last day of service as a local official.
Penalties
Violation Penalty
Not filing a statement 5 per business day
to a maximum of
100
Filing false information or knowingly omitting required Gross misdemeanor
information
Willfully failing to amend a filed statement Gross misdemeanor
Gift Prohibitions
Certain gifts A local official of a Metropolitan Governmental Unit is prohibited from accepting gifts
from a lobbyist or lobbyist principal including:
money;
real or personal property;
a service;
a loan;
a forbearance or forgiveness of indebtedness; or
a promise of future employment
unless the lobbyist or lobbyist principal receives consideration of equal or greater value
in return. Minn. Stat. § 10A.071
Exceptions The prohibitions do not apply to the following gifts if not prohibited by other law:
political contributions to a state candidate;
services to assist an official in the performance of official duties, including
providing advice, consultation, information, and communication in connection with
legislation and services to the official's constituents;
services of insignificant monetary value;
plaques or similar mementos recognizing the official's services in a field of specialty
or to a charitable cause;
trinket or memento of insignificant value;
informational material of unexceptional value;
food or beverage at a reception, meal, or meeting away from the official's place of
work provided by an organization before whom the official appears to make a
speech or answer questions as part of a program.
Additional The prohibition does not apply if the gift is given:
exceptions
because of the official's membership in a group, a majority of whose members are
not officials, provided an equivalent gift is given to the other members of the group;
or
by a lobbyist or lobbyist principal who is a member of the official's family, unless
the gift is given on behalf of someone who is not a member of the official's family.
Conflict of Interest Disclosure
Who must file A local official who finds that a pending official action or decision presents a potential
conflict of interest that affects the official's personal financial holdings or those of a
business with which the official is associated, and the effect is greater on the official
than on others in the official's business classification, profession, or occupation.
When to file 1. Before the action or decision involving a potential conflict of interest;
AND
2. Within one week after the potential conflict of interest, if the public official was not
permitted or was unable to abstain from taking action.
What to file 1. Before the action is taken - Foml ET -36 available upon request from the governing
body of the Metropolitan Governmental Unit; or orally, if time does not permit written
notice.
2. After action is taken - Form ET -38 available upon request from the governing body
of the Metropolitan Governmental Unit.
3
Where to file Before the action is taken:
Appointed member or employee of Metropolitan Governmental Unit
the chair, or if the conflict involves the chair, the appointing authority
Elected member of Metropolitan Governmental Unit
the presiding officer, or if the conflict involves the presiding officer, the acting
presiding officer
After the action is taken:
Governing body of the Metropolitan Governmental Unit.
List of Forms Used
Form # Form title Used for Page #
ET -39 Notice of Appointment of Local Official Appointment of local official by 2
appointing authority
ET -33 Original Statement of Economic Interest for Original statement 1-2
Appointed Local officials
ET -32 Statement of Economic Interest of Candidates Original statement 1-2
and Elected Local official Supplementary statement (incumbents
only)
Termination
ET -34 Supplementary Statement of Economic Interest Annual report 1-2
Amendments
Termination
ET -35 Statement of Termination as a Local Official Termination 2
ET -36 Potential Conflict of Interest Notice Notification of potential conflict before 3-4
action is taken
ET -37 Notice of Inability to Abstain from Potential Notification of potential conflict after 3-4
Conflict of Interest action has been taken
General Information
Advisory opinions Individuals or associations may request an advisory opinion from the Board regarding
the requirements of Minn. Stat. Ch. 10A, the Ethics in Government Act, based on real
or hypothetical situations to guide their own actions to ensure compliance with the law.
The request must be applied for in writing and the application and the Board's opinion
are confidential. The Board may publish an opinion or a summary of an opinion, but
4
not include the name of the requester, the name of a person covered by the request, or
any other information that might identify the requester, unless the person consents to
the inclusion. An opinion by the Board is binding on the Board should a Board
proceeding involve the person making the request or covered by the opinion.
The opinion may be used as a defense in a judicial proceeding unless the Board has
amended or revoked the opinion prior to initiation of a proceeding and has notified the
person making or covered by the request of its action and has allowed 30 days for the
person to do whatever is necessary to comply with the amended or revoked opinion; the
request has omitted or misstated material facts; or the person making or covered by the
request has not acted in good faith in reliance on the opinion. .
Complaints An individual may file a complaint with the Board concerning suspected violations of
Minn. Stat. Ch. 10A.
Related resources Copies of Minnesota Statutes, Chapter 10A, and Minnesota Rules, Chapters 4500-
4525 are for sale by the Minnesota Bookstore, 612/297-3000 or 800/657-3757; and
available on the Board's worldwide website at http://www.state.mn.us/ebranch/epb.
Definitions
Local Official A person who holds elective office in a Metropolitan Governmental Unit or who is
appointed to or employed in a public position in a Metropolitan Governmental Unit in
which the person has authority to make, to recommend, or to vote on as a member of
the governing body, major decisions regarding the expenditure or investment of public
money.
Metropolitan Includes the seven counties in the metropolitan area as defined in Minn. Stat.
Governmental Unit §473.121, subd. 2:
Anoka County
Carver County
Dakota County
Hennepin County
Ramsey County
Scott County
Washington County;
a regional railroad authority established by one or more of the counties listed above,
including:
Anoka County Regional Railroad Authority
Carver County Regional Railroad Authority
Dakota County Regional Railroad Authority
Hennepin County Regional Railroad Authority
Ramsey County Regional Railroad Authority
Scott County Regional Railroad Authority
Washington County Regional Railroad Authority;
5
a city with a population of over 50,000 located in one of the counties listed above:
Anoka County - Coon Rapids
Dakota County - Burnsville, Eagan
Hennepin County - Bloomington, Brooklyn Park, Minneapolis, Minnetonka,
and Plymouth
Ramsey County - St. Paul;
the Metropolitan Council;
a metropolitan agency as defined in Minn. Stat. §473.121, subd. 5a:
Metropolitan Parks and Open Space Commission
Metropolitan Airports Commission
Metropolitan Sports Facilities Commission;
the State High School League; and
Minnesota Technology, Inc.
Political The Metropolitan Council;
subdivision metropolitan agencies as defined in Minn. Stat. §473.121. subd. 5a:
Metropolitan Parks and Open Space Commission
Metropolitan Airports Commission
Metropolitan Sports Facilities Commission;
municipalities as defined in Minn. Stat. §471.345, subd. 1:
a county,
a town,
a city,
a school district, or
any other municipal corporation or political subdivision of the state authorized
by law to enter into contracts, for example: a port authority, seaway port
authority, economic development authority, hospital district;
the State High School League;
Minnesota Technology, Inc.
L
POTENTIAL CONFLICT OF INTEREST NOTICE
Metropolitan Governmental Unit
under Minn. Stat. § § 10A.07
This notice must be completed and filed with the official's immediate superior prior to taking an action or
making a decision that would substantially affect the official's financial interest or those of an associated
business.
If there is insufficient time to comply with the filing of this notice, the official shall orally inform the
superior of the official body of service or committee of the body of the potential conflict.
It is unlawful to use this information for commercial purposes.
All information on this report is public information.
Address questions to the Ethical Practices Board staff at 612/296-5615 or 800/657-3889.
Coca[ '> :,:::>:<:::::<:::>; >:.»:::::;.;.:::::<:: <»>»>>>> >>>>>>>>»<>>>><»>
NX
rt
Name
Address
City, state, zip Telephone No.
X.>:>::::::>A til:
Title
Governmental unit
Name of immediate supervisor (member of governing body, list name of presiding officer)
certify that the information contained on this form is
print or type name] is complete, true, and correct.
Signature of local official Date
Any person who signs and certifies to be true a report or statement which the person knows contains false
information, or who knowingly omits required information, is guilty of a gross misdemeanor.
ET -36 (1/96) Page 1 of 2
rA ... ::::I
I
Date the action or decision will occur
I Describe action or decision oresentina a notential conflict of interest I
Check the appropriate box and explain the nature of the potential conflict of interest
Source of compensation; earned income Securities Real property
Description of potential conflict of interest
ET -36 (1/96) Page 2 of 2
Inability to Abstain From Potential Conflict of Interest
Metropolitan Governmental Unit
under Minn. Stat. § § 10A.07
Vit.. r ;...........................................
This notice must be completed and filed with the governing body of the official's metropolitan
governmental unit if the official is not permitted or is unable to abstain from taking an action or making a
decision that would substantially affect the official's financial interest or those of an associated business.
This notice must be filed within one week of the action taken.
It is unlawful to use this information for commercial purposes.
All information on this report is public information.
Address questions to the Ethical Practices Board staff at 612/296-5615 or 800/657-3889.
Name
Address
City, state, zip Telephone No.
f
Tide
Governmental unit
Name of immediate supervisor (member of governing body, list name of presiding officer)
certify that the information contained on this form is
print or type name) is complete, true, and correct.
Signature of local official Date
Any person who signs and certifies to be true a report or statement which the person knows contains false
information, or who knowingly omits required information, is guilty of a gross misdemeanor.
ET -37 (1/96) Page 1 of 2
I .....................
Date the action or decision occurred
I Describe action or decision presenting a potential conflict of interest
Check the appropriate box and explain the nature of the potential conflict of interest
Source of compensation; earned income Securities Real property
Description of potential conflict of interest
the action taken
ET -37 11/96) Page 2 of 2
CITY OF PLYMOUTH
REVIEW
APRIL 9, 7: 00 PM
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MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: April 9, 1997
TO: Plymouth Board of Review
FROM: Nancy D. Bye, City Assessor
SUBJECT: 1997 BOARD OF REVIEW
Attached for your review, is a report on the 1997 Assessment. The report introduces you
to the statistical measurement and general information the assessing staff utilizes in
determining values for the annual, January 2 Assessment. This will hopefully make
your job as a member of the Board of Review easier to understand.
The purpose of the Local Board of Review is to hear testimony from property owners onP
their objections to the Assessor's 1997 estimated market value or property classification.
This may be done in three ways: (1) in person, (2) in writing, or (3) by the property
owner's representative.
The Board of Review is not empowered to adjust taxes, but only deal with the 1997
estimated market value or classification questions.
At the conclusion of the meeting the Board of Review will recess, and will reconvene on
April 23, 1997 at 7:00 p.m. Decisions on all appeals will be made at that time based on
staff reports and information submitted.
Please read through the information and feel free to contact me with any questions or
tcomments you may have before the Board convenes.
11
MEMO/5026/NANCY
TABLE OF CONTENTS
PAGE #
DESCRIPTION
LOCAL BOARD OF REVIEW AUTHORITY
1
1997 BOARD OF REVIEW SUMMARY
2
INTRODUCTION TO THE 1997 ASSESSMENT
4
INTRODUCTION TO PLYMOUTH ASSESSING DIVISION 8
1997 ASSESSMENT STATISTICS
9
ASSESSMENT TERMINOLOGY
11
1997 SALES RATIO STUDY
17
DISTRIBUTION OF MARKET VALUE 18
SINGLE FAMILY HOUSING BREAKDOWN 19
1997 ASSESSMENT SALES STATISTICS 20
RESIDENTIAL VALUE DISTRIBUTION 21
ASSESSMENT ADJUSTMENTS 23
APPEAL PROCESS 25
PROPERTY TAX SUMMARY 26
COMMERCIAL TAX SUMMARY 28
LAKESHORE STUDY 31
ADDENDUM 32
I
1
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LOCAL BOARD OF REVIEW AUTHORITY
Minnesota Statutes, Section 274.01, provides that the council of each city shall be or
appoint a Board of Review. The Plymouth City Charter requires that the City Council
act as the Board of Review.
Assessments of property are made to provide the means for the measuring of the
relative share of each taxpayer in the meeting of the costs of local government. It is the
duty of the Assessor to assess all real and personal property except that which is exempt
or taxable under some special method of taxation. If the burden of local government is
to be fairly and justly shared among the owners of all property of value, it is necessary
that all taxable property be listed on the tax rolls and that all assessments be made
accordingly.
The authority of the local board extends over the individual assessments of real and
personal property. The board does not have the power to increase or decrease by
percentage all of the assessments in the district of a given class of property. Changes in
aggregate assessments by classes are made by the County Board of Equalization.
Although the local board has the authority to increase or reduce individual assessments,
the total of such adjustments must not reduce the aggregate assessment made by the
Assessor by more than one percent of said aggregate. If the total of such assessments
does lower the aggregate assessment made by the Assessor by more than one percent,
none of the adjustments will be allowed. This limitation does not apply, however, to
the correction of clerical errors or to the removal of duplicate assessments.
In reviewing the individual assessments, the board may find instances of under
valuation. Before the Board can raise the market value of property, it must notify the
owner. The law does not prescribe any particular form of notice except that the person
whose property is to be increased in assessment must be notified of the intent of the
board to make the increase. The Local Board of Review meetings assure the property
owner an opportunity to contest the valuation that has been placed on his/her property
or to contest or protest any other matter relating to the taxability of his/her property
except the tax. The board is required to review the matter and make any corrections
that it deems just.
1
1997 BOARD OF REVIEW SUMMARY
This past year there were changes in estimated market value of most properties located
in Plymouth. Some of these value changes range from general city wide increases to
substantial increases due to locational market activity. Average percentage increases in
valuation are as follows:
Property Type
Residential
Residential Lakeshore
Condominiums
Townhomes
Apartments
Commercial/Industrial
Vacant Land
Value Percent Change
3.4%
6.2%
4%
4%
8%
12%
10%
Exceptions to the above market value changes would include new construction, quartile
areas, reappraisals, and/or other market adjustments.
The condominium and townhouse market, after being flat for a number of years,
continues to be a rapidly appreciating market. This is based on the aging baby boomers
and the demand for maintenance free living.
On March 13, 1997 estimated market value notices were mailed to all Plymouth
property owners.
State law provides that the assessment shall be an annual assessment with all property in
the taxing jurisdiction re -valued to its market value every January 2nd. For the fourth
year in a row, the city has had a record breaking number of building permits. This
does not include the 5,378 quartile parcels that had to be reviewed and reappraised.
Continued administration of legislative changes required considerable added staff time
to implement.
With an ongoing conversion of our computerized system for property appraisal, certain
workloads were increased. Also, other work areas were needed for proofing valuations
being returned from the computer, correcting coding of field card data entry
information, and interpreting various printed reports. Our computerization of the
assessing function of Plymouth is, perhaps, one of the most progressive and
sophisticated systems that exists in the State of Minnesota. The excellence and quality
of the 1997 assessment is a direct result of this computerization.
The assessment just completed for 1997 represents many hours of staff research and
time. We feel confident the 1997 assessment is fair and well equalized throughout the
City of Plymouth.
Respectfully submitted
IAssessing Department Staff
7
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INTRODUCTION TO THE 1997 ASSESSMENT
The 1997 Assessment affects all the property owners of Plymouth. As required by
current state law, the Assessor is required to reassess all property every year.
State Statute reads: ".All real proveE1y subject to taxation shall be listed and assessed
every year with reference to its value on January preceding the assessment." This
has been done and the owners of property in Plymouth have been notified of any
change. Minnesota State Statute 273.11 reads: "All property shall be valued at its
market value." It further states that "in estimating and determining such value, the
Assessor shall not adopt a lower or different standard of value because the same is to
serve as a basis for taxation, nor shall he adopt as a criterion of value the price for
which such property would sell, or in the aggregate with all the property in the town or
district but he shall value each article or description of property by itself, and at such
sum or price as he believes the same to be fairly worth in money." The statute says all
property shall be valued at market value. This means that no factors other than market
such as economics, personalities or politics) shall affect the Assessor's value and the
subsequent action by the Board of Review.
Market value has been defined many different ways. Simply stated, it is "the highest
price estimated in terms of cash which a property will bring if exposed for sale on the
open market by a seller who is willing but not obligated to sell, allowing a reasonable
time to find a purchaser who is willing but not obligated to buy, both with knowledge
of all the uses to which it is adapted and for which it is capable of being used. "
The real estate tax is an ad valorem tax which is based on the value of property and not
on the ability of the property owner to pay. The values placed on all real estate in
Plymouth are based on the amount of land and the improvements upon the land, while
no consideration is given to who owns the land.
The 1997 Assessment (not the 1997 taxes) reflects an increase of 9.8% overall
valuation over the 1996 assessment (including new construction, quartile adjustments,
and/or market adjustments). This can be demonstrated as follows:
1996 TOTAL CITY VALUE 1997 TOTAL CITY VALUE
PRELIMINARY)
3,771,079,000 4,140,154,300
Total Value Increase: 369,075,300 9.8%
Value of New Construction: 138,971,400 3.7%
Appreciation of Existing Property: 230,103,900 6.1%
Sheetl
TOTAL PERCENT VALUE GROWTH OF PLYMOUTH
5
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1997 ASSESSMENT INTRODUCTION
During this past year, our staff has streamlined the internal assessment process by
creating and utilizing a new field card and computer screen displays. Property data was
collected and recorded onto a computer field sheet which, in turn, was entered and
calculated by the computer system
Those areas of the city that equal 25 % of all existing properties have been physically
reviewed during 1996 and represent over 5,300 parcels, excluding 2,216 building
permits. This is commonly referred to as the "Quartile". In the areas of re -inspection,
new items that previously were not on our records were added, or where applicable,
deleted. 62% of all homes reviewed were internally inspected. This year, again, a
preliminary sales study was analyzed, prior to placing a final value on each property
inspected.
Plymouth's preliminary residential median ratio entering the 1997 assessment was
90.1 %. This is determined by Hennepin County by comparing the January 2, 1996
estimated market values to sales occurring from October 1, 1995 through September of
1996. The average residential increase for the January 2, 1997 assessment was 3.4%.
This was determined by comparing the January 2, 1997 estimated market values to the
same sales, thus establishing the 1997 estimated market values at a median sales ratio of
93.5. In accordance with the results of this sales study, certain areas of the city, certain
styles of houses and certain sizes of houses were adjusted in value, either lower or
higher than the original value, to more properly reflect actual market values.
Commercial/Industrial property values increased an average of 12% from 1996 to
1997. This increase was due to several factors: rebounding market sales, increasing
rents and profits to owners, economic recovery which has created demand for new
construction. The one year property growth does not represent the rate of inflation of
the Consumer Price Index. Plymouth's 1997 sales ratio before adjustments was 89.6%
median ratio. After adjustments to value the resulting ratios were 95.8% median and
98.8% mean. The latter ratios were accepted by Hennepin County as sufficient to
maintain a uniform assessment of commercial property as compared to other
jurisdictions within the county.
The total aggregate increase on vacant land parcels zoned for residential,
commercial/industrial, or farm acreage is 10%. However, commercial/industrial zoned
land was reviewed and reappraised for the 1997 assessment. Many of the parcels
received a substantial increase.
The Legislature in its 1993 session passed a law imposing a limit on how much an
assessor's estimate of market value is permitted to increase from one year to the next.
Under the law, assessors are required to continue to estimate the market value of all
properties. However, the law requires the use of a limited market value for purposes of
J
determining property tax bills. Approximately 1300 parcels in the city qualify for a
limited value. These properties are taxed on their limited market value, not their
estimated market value. This law was scheduled to expire with the 1998 payable taxes.
There is currently a bill on the house floor to extend the life of this bill well into the
twenty first century.
The value we place on the property is accomplished only after we have conducted
thorough studies in the market place. Costs of replacement are checked with builders
in the area, as well as cost manuals that are available, which are put together by experts
in the field of building and appraising. Sales of property are constantly analyzed to see
what is happening in the market place. The assessor does not create value, she only
measures its movements.
Assessing property values equitably is partly science, partly judgment, partly
communication skills, and largely a mystery to many property owners. Add to that the
fact that property construction, financing and ownership are more complex today than
ever before and the task becomes more difficult.
Training cannot tell us how to find the "perfect" value of a property, but training can
consistently produce the same estimate of value for identical property by different
assessors. That, after all, is a working definition of equalization.
The following pages contain information that hopefully will inform you and make your
job as a member of the Board of Review a more productive one.
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1997 ASSESSMENT STATISTICS
Total City Parcel Count (01-02-96)
Total City Parcel Count (01-02-97)
Parcel Count Per Appraiser 1996 Assessment
Parcel Count Per Appraiser 1997 Assessment
Assessor's Industry Standard per Appraiser
1996 Total Estimated Market Value
1997 Total Estimated Market Value (Preliminary)
1995 to 1996 Total City Valuation Growth
1996 to 1997 Total City Valuation Growth
1995 Total Building Permits
1996 Total Building Permits
1995 Plymouth's Average Home Sale Price
1996 Plymouth's Average Home Sale Price
21,013
21,511
4,203
4,302
3,000
3,771,079,000
4,140,154,300
10.6%
9.8%
2,149
2,216
175,700
190,300
1996 "Median" Sales Ratio (Assessment Level) 93.5%
1997 "Median" Sales Ratio (Assessment Level) 93.5%
1997 Hennepin County "Median" Sales Ratio 93.8%
1996 Coefficient of Dispersion (Assessment Accuracy) 5.80%
1997 Coefficient of Dispersion (Assessment Accuracy) 5.80%
1995 Approximate Number of Sales (including new construction) 1,600
1996 Approximate Number of Sales (including new construction) 1,700
D
Sheetl
10
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ASSESSMENT TERMINOLOGY
AD VALOREM TAX - A tax varying with the value of a good or commodity; a real
estate tax based on the value of the property.
APPRAISAL - An estimate or opinion of value. The act or process of estimating
value. The resulting opinion of value derived from the appraisal may be informal,
transmitted orally; or it may be formal, presented in written form. Usually it is a
written statement setting forth an opinion of the value of an adequately described
property as of a specified date, supported by the presentation and analysis of relevant
data.
APPRAISER - One who estimates value; specifically, one who possesses the necessary
qualification, ability and experience to execute or direct the appraisal of real property.
CAPITALIZATION - The process of converting into present value (or obtaining the
present worth of) a series of anticipated future periodic installments of net income. In
real estate appraising, it usually takes the form of discounting.
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CAPITALIZATION RATE - The sum of a discount and a capital recapture rate. It is
applied to any income stream with a finite term over which the invested principal is to
be returned to the investor or lender.
CITY MARKET VALUE RATE - Established in 1996 (payable 1997 taxes) as a direct
computation against the market value to offset the purchase of open space for nature
areas and trails.
CLASS RATE - Statutory percentage applied to the estimated market value of a parcel
based on the parcel's classification. Formerly known as tax capacity rate or
percentage.
CLASSIFICATION OF PROPERTY - The classification of property after the valuation
is complete to identify the property as residential, commercial, homestead, non -
homestead, etc. Each class refers to a different statutory assessment rate. It is based
on the use as of the assessment date.
COEFFICIENT OF DISPERSION: (Assessment Accuracy) - In statistics, the measure
of absolute dispersion to an appropriate average. A measure of relative dispersion.
Sometimes referred to as an "index of assessment inequality". Under 10% is in the
excellent range.
COST APPROACH - That approach in appraisal analysis which is based on the
proposition that the informed purchaser would pay no more than the cost of producing a
substitute property with the same utility as the subject property. It is particularly
11
ASSESSMENT TERMINOLOGY (continued)
applicable when the property being appraised involves relatively new improvements
which represent the highest and best use of the land or when relatively unique or
specialized improvements are located on the site and for which there exist no
comparable properties on the market.
DEPRECIATION - A loss of utility and hence value from any cause. An effect caused
by deterioration and/or obsolescence. There are several types of depreciation.
PHYSICAL DEPRECIATION - A reduction in utility resulting from an
impairment of physical condition. For purposes of appraisal analysis, it is most
common and convenient to divide physical deterioration into curable and
incurable components.
PHYSICAL CURABLE DEPRECIATION - Physical deterioration which the
prudent buyer would anticipate correcting upon purchase of the property. The
cost of effecting the correction or cure would be no more than the anticipated
addition to utility, and hence ultimately to value, associated with the cure.
PHYSICAL INCURABLE DEPRECIATION - Physical deterioration which in
terms of market conditions as of the date of the appraisal is not feasible or
economically justified to correct. The cost of correcting the condition or
effecting a cure is estimated to be greater than the anticipated increase in utility,
and hence ultimately in value, of the property that will result from correcting or
curing the condition.
FUNCTIONAL DEPRECIATION - Impairment of functional capacity or
efficiency. Functional obsolescence reflects the loss in value brought about by
such factors as over capacity, inadequacy and changes in the art, that affect the
property item itself or its relation with other items comprising a larger property.
The inability of a structure to perform adequately the function for which it is
currently employed.
ECONOMIC OBSOLESCENCE - Impairment of desirability or useful life
arising from factors external to the property, such as economic forces of
environmental changes which affect supply -demand relationships in the market.
Loss in the use and value of a property arising from the factors of economic
obsolescence is to be distinguished from loss in value from physical
deterioration and functional obsolescence, both of which are inherent in the
property. Also referred to as Location or Environmental Obsolescence.
12
ASSESSMENT TERMINOLOGY (continued)
ESTIMATED MARKET VALUE - The value which the Assessor has estimated the
tproperty to be worth.
EQUALIZATION - The adjustment of assessed valuation of real property in a
particular area to establish a more equitable division of the total tax burden within the
area.
FISCAL DISPARITIES - Program which provides for the sharing of 40 percent of the
growth of the commercial/industrial tax base in the seven county metro area since 1971.
A percentage of the property tax on each commercial/industrial parcel is calculated at
the seven county uniform rate.
GEOCODE NUMBER - A geographically related parcel numbering system. The
number contains thirteen digits made up of section, township, range, quarter -quarter
and parcel. The first seven digits, based on the public land survey, geographically
locate the section in which the property is located. The next two digits will designate in
which quarter -quarter the property is located. The ten through thirteen digits indicate
the parcel within the quarter -quarter. The parcels will be numbered consecutively
beginning with 0001. When a division is made, the next consecutive available
number(s) will be assigned, and the old number(s) will be retained for historical data.
GROSS TAX CAPACITY - A parcel's estimated market value multiplied by the gross
class rate for that type of property. Formerly known as assessed value.
HIGHEST AND BEST USE - That reasonable and probable use that will support the
highest present value, as defined, as of the effective date of an appraisal.
HOMESTEAD AND AGRICULTURAL CREDIT AID (HACA) - Replaces homestead
credit and agricultural credit. The state gives this aid directly to the local units of
government.
HOMESTEAD FULL YEAR - Property is granted a lower assessed value if the owner
lives in and owns the property as of January 2. If a person owns and occupied their
home up until December 1, they receive a mid year homestead which carries the full
homestead benefits payable the following year. For example, the January 2, 1996,
classification affects the taxes payable in 1997.
u
13
I
ASSESSMENT TERMINOLOGY (continued)
NON -HOMESTEAD - Residential property that does not qualify for a full year or half
year homestead. The tax capacity is higher, hence a higher tax.
INCOME APPROACH - That procedure in appraisal analysis which converts
anticipated benefits (dollar income or amenities) to be derived from the ownership of
property into a value estimate. The income approach is widely applied in appraising
income-producing properties. Anticipated future income and/or reversions are
discounted to a present worth figure through the capitalization process.
LEGAL DESCRIPTION - The formal way to describe a parcel of property typically
metes and bounds, lot and block or government survey.
LOCAL TAX RATE - Rate of tax applied to the tax capacity of property to calculate
the tax due. Formerly known as tax capacity rate, mill rate.
MARKET VALUE - The most probable price in terms of money which a property will
bring in a competitive and open market under all conditions requisite to a fair sale, the
buyer and seller, each acting prudently, knowledgeably and assuming the price is not
affected by undue stimulus.
MASS APPRAISAL - A method used in valuation of a jurisdiction for tax purposes.
As the term implies, it is a method of appraising a large number of properties at one
time by adopting standard techniques, and giving due consideration to the appraisal
process so that uniform or equality of values may be achieved between all properties.
METES AND BOUNDS - A description of a parcel of land by reference to the courses
bearings, that is, the angles east or west of due north or due south) and distances
usually in feet or chains) of each straight line which forms its boundary, with one of
the corners tied to an established point; that is the bearing and distance from an
established point; such as a section corner or to the intersection of the center lines of
two roads, etc.
If one part of the boundary is on a curve, this part is described by showing the number
of degrees of the central angle subtended by the curve (arc), the length of the radius,
and the length along the curve.
PARCEL - A piece of land, with or without improvements, in one ownership.
PRICE RELATED DIFFERENTIAL: (Assessment Difference) - A statistic used to
measure the assessment differences that may exist between higher priced properties vs.
14
ASSESSMENT TERMINOLOGY (continued)
lower priced properties. 100 points is ideal. Within 10 points of 100 is considered
excellent.
PROPERTY TAX REFUND - All homeowners with household income below $61,930
OR where the property taxes increased more than 12% over last year, may be eligible
for a property tax refund.
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SALES COMPARISON APPROACH - Traditionally, an appraisal procedure in which
the market value estimate is predicted upon prices in actual market of value in a static
or advancing market (price wise), and fixing the higher limit of value in a declining
market; and the latter fixing the higher limit on any market. It is a process of analyzing
sales of similar recently sold properties in order to derive an indication of the most
probable sales price of the property being appraised. The reliability of this technique is
dependent upon (a) the availability of comparable sales data, (b) the verification of the
sales data, (c) the degree of comparability or extent of adjustment necessary for time
differences and (3) the absence of non -typical conditions affecting the sale price.
SALES RATIO (Assessment Level) - The ratio derived by dividing a property's sale
price into the Assessor's estimated market value.
SALES RATIO ANALYSIS - Study of the relationship between the Assessor's values,
sales prices and the deviations resulting from differences between the two. The
purpose of such an analysis is to determine the efficiency, equity, quality and fairness
of assessing activities of a particular neighborhood or jurisdiction.
SCHOOL MARKET VALUE RATE - Established in 1995 (payable 1996 taxes) as a
direct computation against the market value after the passing of school bond
referendums.
SPECIAL ASSESSMENT - Street, sewer, water, curb, or other infrastructure costs
that are incurred by a city/township and assigned to benefiting properties.
THIS OLD HOUSE" - The Legislature, in its 1993 session passed a law to exempt
from the property tax all or a portion of the value of improvements made to homes 35
years of age or older (Article 5, Section 13 of the Omnibus Bill). The law is designed
to provide owners of older and deteriorated homes with an incentive to restore or
renovate their homes. In turn, is hoped that this will ultimately lead to the preservation
of aging homes in rural communities.
To qualify for the exemption of improvements from the property tax, the property must
be 35 years of age or older at the time the improvements commence and it must be
receiving the homestead classification or will be receiving the homestead classification
by December 1st of the year the improvement is made.
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Only the improvements made to the residence and garage, or the construction of a new
garage qualify for the exemption. An application must be made to the Assessor's
Office for the exemption.
Improvements such a swimming pools and yard improvements are not included. Only
improvements which contribute to increase the value by $1,000 or more may be eligible
for the exemption. If more than 50 per cent of the square footage of the house or fifty
percent of the value is increased, it shall constitute a new home and not qualify. All
homes valued at $150,000 or more do not qualify. To qualify for exemption, the
homeowner must have obtained a building permit before the work began. The
exemption shall be applied to no more than 3 separate improvements made to the house
or garage. The homeowner has the right to pick which 3 permits to have exempted, but
once it has been selected it cannot be repealed or replaced by a later improvement.
The total qualifying value is dependent upon the age of the residence. Houses that are
less than 35 years of age, do not qualify. The qualifying value of houses that are at
least 35 years of age, but less than 70 years, is limited to one-half of the value of the
improvement up to a maximum exemption of $25,000. Houses that are 70 years of
age, or older, are eligible to have the actual value of any improvements excluded, up to
a maximum of $50,000. The valuation of the improvement shall be calculated and
determined by the Assessor and shall be based on the increase in market value of the
year period and once the value of the improvement is established by the Assessor, it
remains frozen during the ten year period of exclusion; however, the inflationary trend
for the total value of the property, including that portion attributable to the addition,
will be eligible for taxation.
Under the law beginning April 1, 1994, owners must disclose to prospective buyers
whether any improvements made to the home are exempt from property tax. Owners
are also required to notify buyers that the exemption will terminate when the property is
sold. The exemption for the value of the improvement remains in effect for 10 years
beginning with the initial assessment year in which the improvements contributed to the
value of the house or garage. After the 10 year period has expired, the exemption is
reduced each year by one-fifth or 20 percent of the total value of the improvement.
This amount is added back to the taxable value of the property. By the end of the 15th
year, the full value of the improvement is subject to the property tax.
The following pages discuss the methodology and our 1997 Sales Ratio Study. We are
fortunate in Plymouth to have a very active market with numerous sales to be able to
accurately measure our assessment.
16
1997 SALES RATIO STUDY
Equalizing is done in today's procedures through ratio studies. These studies compare
the Assessor's value with that same property's actual sale price. This comparison gives
us ratio indicators that are recognized by the County and the State Commissioner of
Revenue. The ratio indicators must reach acceptable levels or they will trigger
corrective action for general across-the-board adjustments by the County Assessor or
the Commissioner of Revenue. These general corrections are essentially a "shotgun
blast" type correction that affects the adequate and inadequate values alike, and
although they correct equalization across jurisdiction lines, they do just the opposite
within a jurisdiction by increasing inequity. In Plymouth, this type of correction was
done to Commercial/Industrial properties for the 1988 assessment. (+5% to building
value.) Fortunately it has never been done to residential properties.
The 1997 sales study recently completed by our staff and Hennepin County places our
overall median ratio at 93.5%. Hennepin County's average median ratio is 93.8%
which puts Plymouth below the average and dictates that jurisdictions at or above the
median carry a slightly greater share of the load. We want to be the leader in most
other areas, however, in equalization ratio studies we certainly don't want to be at or
near the top.
The Commissioner of Revenue and the Hennepin County Assessor have mandated that
any jurisdiction falling below a 90.0% plateau will be forced into corrective action, and
then everyone suffers.
Our coefficient of dispersion in this year's study is 5.8%. This is comparable to other
jurisdictions of our size in Hennepin County. (Anything under 10 is considered
excellent.) This is a direct result of our computerization of the appraisal process and
demonstrates our ability to administer fair and equalized valuations at both ends of the
value spectrum.
Our price related differential fluctuated between 99 and 101. This also shows our
ability to treat higher priced homes as equally as the lower priced homes. It is
currently at 100. (100 is consideredep rfect.)
17
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TOTAL EMV
All other includes: Farms and mobile home parks
3
1997 1996
Residential 71.61% 2,964,646,600 2,761,105,900
CommerciaUlndustdal 22.97% 951,003,500 800,268,900
Apartments 4.93% 204,274,400 188,591,700
All Other 0.49% 20,229,800 21,112500
4,140,154,300 3,771,079,000
TOTAL EMV
All other includes: Farms and mobile home parks
3
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: March 5, 1997
TO: Assessing Staff
FROM: Nancy D. Bye; City Assessor
SUBJECT: SINGLE FAMILY LIVING UNIT COUNT BREAKDOWN (TOTAL CITY)
The following is a listing of the type and the number of living units for each that is on the tax rolls
for assessment year January 2, 1995, 1996 and 1997.
TYPE OF DWELLING '95 ASMT 96 ASMT 97 ASMT
OF UNITS OF UNITS OF UNITS
Apartment Units 5,230 5,294 5,294
Single Family Homes 13,709 14,018 14,335
Condominiums 1,689 1,750 2,123
Townhomes 1,977 2,097 2,057
Permalease 100 88 81
Mobile Homes 62 62 62
Farm Houses 32 31 31
Seasonal Res. (Cabins) 10 10 10
TOTAL LIVING UNITS: 22,809 23,351 23,931
1997 Assessment represents an increase of 580 living units over January 2, 1996.
19
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: January 27, 1997
TO: Nancy Bye, City Assessor
FROM: Jan Olssoif Senior Appraiser
SUBJECT: 1997 ASSESSMENT HENNEPIN COUNTY STUDY
Splits
SALES STATISTICS
OVERALL SALES RATIO
1997 Estimated Market Values were used on all sales)
STYLE OF SALES AVG. SALE PRICE MEAN RATIO
Ramblers 147 154,600 927
Splits 259 162,100 928
Two Stories 272 236,400 948
Condominiums 163 79,800 934
Townhomes 104 112,200 941
TOTAL 945
Approximate Number Homes Sold Including New Construction 1,700
Average Sale Price of Single Family Homes $190,300
cc: Earl Zent, Commercial Appraiser
Mike Carroll, Appraiser
Joan McCormick, Appraiser
Paul Kingsbury, Appraiser
20
Sheet1
PLYMOUTH RESIDENTIAL PROPERTY VALUE DISTRIBUTION 1997
VALUE PERCENT OF HOMES
UNDER $50,000 3.36 625
50,001 TO $100,000 16.85 3,125
100,001 TO $200,000 57.27 10,623
200,0001 TO $300,000 17.52 3,250
300,001 TO $400,000 4.18 775
400,001 TO $500,000 0.64 119
OVER $500,000 0.18 33
TOTAL 100 18,550
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21
Sheet1
PLYMOUTH RESIDENTIAL PROPERTY VALUE DISTRIBUTION 1996
VALUE PERCENT OF HOMES
UNDER $50,000 3.57 645
50,001 TO $100,000 19.51 3,523
100,001 TO $200,000 57.39 10,365
200,0001 TO $300,000 15.49 2,797
300,001 TO $400,000 3.39 613
400,001 TO $500,000 0.54 97
OVER $500,000 0.12 21
TOTAL 100 18,061
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22
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: MARCH 10, 1997
TO: ASSESSING STAFF
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FROM: JAN OLSSON, SENIOR APPRAISER
SUBJECT: 1997 ASSESSMENT ADJUSTMENTS
The preliminary residential ratio entering the 1997 assessment was 90.1. This is
established by comparing 1996 sale activity to the 1996 estimated market values. The
entire city was adjusted by increasing the building rates 4%. Each individual
neighborhood was then studied to see if further adjustments were necessary. Some
neighborhoods took less than a 4% adjustment while other neighborhoods took increases
in excess of 10%. The average residential increase is 3.4%.
The average sale price of existing housing stock in the City in 1996 was $190,300. This
is extracted from the Hennepin County Ratio Study of all arms -length transactions
involving single family homes. The average sale price of new construction for 1996 was
243,100.
Various townhouse and condominium complexes were adjusted according to market
activity as well as studied to determine if the number of bedrooms per unit affected the
sale prices. The average increase to the townhouse and condominium market was 4%.
The sale activity of condominiums and townhouses was brisk again in 1996. The market
was strong on townhouses ranging from $100,000 to $125,000 and condominiums
ranging in sale price from $75,000 to $100,000.
Lakeshore in Plymouth was adjusted according to the sale activity of the lakes in general
as well as the individual sale activity of various neighborhoods around the lake. The
average lakeshore property took an increase of approximately 6.2%. The average sale
price of lakeshore property is $298,200, an increase of 5% over the average 1995 sale
price of $284,100.
23
The final Hennepin County Sales Ratio, after adjustments, has a mean ratio of 93.5 and a
median ratio of 93.5 with a coefficient of dispersion of 5.8. This is established by
comparing 1996 sale activity to the 1997 estimated market values after adjustments.
The total aggregate increase on vacant land parcels zoned for residential,
commercial/industrial, or farm acreage is 10%. However, commercial/industrial zoned
land was reviewed and reappraised for the 1997 assessment. Many of the parcels
received a substantial increase. Sales of land zoned for industrial use are selling for
between $2.00 to $2.50 per square foot buildable area. Commercial zoned land is selling
for between $3.00 to $5.00 per square foot buildable area. Some specific properties are
selling for as much as $6.50 per square foot buildable area.
The commercial/industrial market was strong again this year. The average aggregate
increase was 12%. The apartment complexes average aggregate increase is 8%.
Plymouth continues to be a growing prosperous city.
F- I
24
MARKET VALUE APPEAL PROCESS
NOTICE OF MARKET VALUE
DISCUSS WITH ASSESSOR'S OFFICE
LOCAL BOARD OF REVIEW
DENY APPEAL 1 I CHANGE VALUE
COUNTY BOARD
OF EQUALIZATION
STATE TAX COURT
25
ABATEMENT PROCESS
ADMINISTRATIVE
REVIEW)
APPROVE APPEAL
DENY APPEAL
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11
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: February 26,1997
TO: Nancy D. Bye, City Assessor
FROM: Jan Olsson, Senior Appraiser
SUBJECT: 1997 PROPERTY TAX SUMMARY
The 1997 tax extension rates have recently been released from Hennepin County. Tax
statements are scheduled to be mailed by March 1. To better prepare ourselves to
respond to citizen inquiries, we have updated our charts, graphs, and comparison data
attached).
Market values on most residential properties were increased approximately 4% between
nayable 1996 and 1997 taxes (excluding quartile areas and lakeshore properties).
Commercial/Industrial properties were increased approximately 13%.
This is the second year Plymouth has had additional property taxes levied due to the
passing of school bond referendums. Three of the four school districts in Plymouth
passed bond referendums in 1995 which affect the 1997 taxes. In addition to taxes
calculated using the tax extension rates, a tax is calculated against the market value of
individual properties to allocate for the school bond referendums. This money goes
directly to the school districts.
This is the first year Plymouth has had a city referendum market rate. This is calculated
directly against the estimated market value of individual properties in the same way as
the school referendum rates. The referendum is to offset the purchase of open space to
be preserved for nature areas and trails.
To illustrate, the taxes on a $150,000 home in the Wayzata School District would be
calculated as follows:
1 st $72,000 of market value at 1%
Remainder of MV $78,000 at 2%
26
720
1,560
2,280
2,280 x tax extension rate of 1.07842 = $2,459
School Market Value ratio .0023912 x $150,000 = $ 359
City Market Value ratio .0000502 x $150,000 = 7
Tax Rate = $2,459
School Market Rate = +359
City Market Rate = + 7
Total 1997 Payable Taxes = $2.825
Overall, property taxes decreased in all four of Plymouth's school districts. A property
where the market value remained unchanged has a substantial decrease in property tax.
The County Solid Waste Fee does not appear on the tax charts either. This is an
additional rate of .01902% against the market value of individual properties.
Our contribution share to the fiscal disparities pool for Commercial/Industrial properties
decreased from 34.4726% last year to 31.9684% this year.
cc: Dwight Johnson, City Manager
Kathy Lueckert, Assistant City Manager
Dale Hahn, Finance Director
Assessing Division
27
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: 3/3/97
TO: Nancy Bye, City Assessor
FROM: Earl Zent, Commercial Property Appraiser
SUBJECT: Commercial Tax Rate Charts
Attached are recaps of the 1997 Effective Tax Rates for your review. The Effective
Tax Rate Recap includes all four school districts showing both the effective tax rate on
the first $100,000 of taxable value should the property qualify and the remaining
effective tax rate on anything over $100,000 or on non -qualifying properties.
The second page depicts how property taxes are computed using school district 284,
sewer district number four and watershed district number zero.
Tax rates on commercial properties located in school district 270 (Hopkins) decreased
as much as .415% with other rates decreasing somewhat less. Apartment rates also
decreased with the greatest reduction in Hopkins of .272%.
Actual tax decreases are unlikely to most property owners due to the rising property
values from 1995 to 1996.
cc: Dwight Johnson, City Manager
Kathy Lueckert, Assistant City Manager
Dale Hahn, Finance Director
Assessing Division
28
EFFECTIVE TAX RATES FOR PAYABLE 1997
City of Plymouth
Commercial and Industrial Effective Tax Rates
School
District
Sewer
District
1st $100,000
LOW RATE CLASS
Over $100,000 and
Non -qualifying properties
270 1 3.782% 5.7556%
279 3 & 4 3.946% 5.8695%
281 1 & 4 3.813% 5.8098%
284 4 3.972% 5.6876%
284 1 &2 W. S. #31 3.999% 5.7289%
Apartment Effective Tax Rates
NOTE: On "T" Property Type, the building value is multiplied by the "T"
Property Type rate and the land multiplied by the "A" Property Type
School
District
SEWER "A" Property Type
District
T" Property Type
270 1 4.024% 2.731%
279 3&4 4.140% 2.839%
281 1 & 4 4.083% 2.770%
284 4 3.930% 2.744%
284
1
1 &2 W.S. #3 3.975% 2.774%
NOTE:
Vacant commercial\industrial land (LC, LI) have same tax rate.
School districts 270, 279 & 284 have additional market value rate included in tax rate.
Solid waste management fee is included in all rates (applied against market value).
Revised 2/27/97
taxrcharfl97PLYTR.WK 1
29
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1997 PLYMOUTH Real Estate Taxes on Commercial and Industrial Property
Example rate is for School District 284, Sewer District # 4 & Watershed District # 0.
Tax Rates
Local Rate 107.8420%
Fiscal Disparities or Area Wide Rate 139.3760%
Market Value Rates (School & City) 0.2441%
County Solid Waste Fee 0.0190%
City Percentage of Fiscal Disparity 31.9684%
Procedures for calculation of tax capacity and tax.
Estimated Market Value (EMV) X 4.60% = Tax Capacity
Tax Capacity Tax Capacity Estimated Market Value
x 0.680316 x 0.319684 x 0.0026316
Local Tax Capacity = Area Wide or Fiscal Disparity Rate = Market & Solid Waste Fee Tax
x 1.07842 x 1.39376
Local Tax Capacity = Fiscal Disparity Tax
Local Tax + Fiscal Disparity Tax + Market Value Tax + Solid Waste Fee = Total Tax Payable
Total Tax / EMV = Effective Tax Rate
EXAMPLE: Commercial or Industrial Building with an EMV of $1,000,000
1,000,000 EMV x 4.60% _ $46,000 Tax Capacity
46,000 Tax Capacity $46,000 Tax Capacity $1,000,000 Estimated Market Value
X 68.0316% x 31.9684% x 0.0026316 Market Rates & Waste Fee
31,295 Local Tax Cap. _ $14,705 Area Wide Tax Cap. _ $2,632
x 107.8420% Local Tax Rate x 139.3760% Area Wide Tax Rate
33,749 Local Tax = $20,496 Fiscal Disparity Tax
33,749 Local Tax + $20,496 Area Wide + $2,632 Market & Waste Fee = $56,877 Total Payable Tax
Total Tax Effective Tax Rate 5.6876%
Note: Commercial & Industrial property owners may qualify for a reduced tax capacity rate on the first
100,000 of market value. More than one parcel may be considered in the qualification
for the reduced tax capacity.
Qualifying Property: 1 st $100,000 EMV x 3.00%
Remainder EMV x 4.60%
Tax Capacity
wrkshts\5148\taxchart\97chart
30
1997 RESIDENTIAL LAKE SHORE SALES STUDY
1996 SALES) '
11J ISass L YU.l
NUMBER
OF
PARCELS
NAME
OF
LAKE
1 YEAR
OF
SALES
PRELIMINARY AVERAGE ADJUSTMENT AVERAGE
RATIO LOT TO VALUE SALE PRICE
VALUE
48 Hadley 1 89.0
11J ISass L YU.l
37 Gleason 0 0
48 Hadley 1 89.0
33 Lost 3 93.0
141 Medicine 0 83.2
43 Mooney 2 90.0
53 Parkers 0 0
8 Pike 0 0
60 Schmidt 2 89.2
530 11 89.2
Before increases)
zobu,uuu 1 V
175,000
60,000 to
130,000
70,000 to
165,000
66,000
105,000
70,000 to
170,000
62,000
75,000
91,000
t ;s,uuu-
5,000 TO
LAND
5,000 TO
LAND
QUARTILE
5,000-
10,000 TO
LAND
5,000 TO
LAND
5,000 TO
LAND
5,000 TO
LAND
0
7,000 TO
LAND
Hennepin County Sales Study of all Residential Lake Shore Sales in Plymouth for the
1997 Assessment:
TOTAL SALES: 11 MEAN RATIO: 94.2 (after increase)
Lakeshore properties were given the city wide average increase then attention was paid to the
location of the lakes, the similarity of the lakes, and the market activity in the last year in the
various neighborhoods surrounding each lake before further adjustments were completed.
31
I
ADDENDUM
32
i
u
1995 BOARD OF REVIEW ATTENDEES THAT HAVE SINCE SOLD THEIR
PROPERTY
Alina Vrabel - 19-118-22-31-0006 - Sold 11/95 for $142,000.
Local Board did not change the 1995 estimated market value of $145,300. The County
Board of Equalization changed the value to $129,000
Camile Jahnke - 21-118-22-33-0195 - Sold 3/96 for $71,000.
Local Board upheld 1995 value of $68,500.
David & Jayne Douglas - 29-118-22-11-0020 - Sold 7/95 for $341,250.
Local Board upheld 1995 value of $329,800.
Thomas & Jean Hillstrom - 30-118-22-42-0024 - Sold 11/96 for $149,000.
Local Board upheld value of $147,000.
1996 BOARD OF REVIEW ATTENDEES WHO HAVE SINCE SOLD THEIR
PROPERTY
LaVonne Wanha - 32-118-22-11-0009 - Sold 10/96 for $102,900.
Local Board upheld 1996 estimated market value of $113,000.
Dee Bloch - 16-118-22-23-0081 - Sold 8/96 for $174,500.
Local Board upheld value of $157,300.
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PAGE 114 • STAR TRIBUNE Homes SATURDAY, JUNE 1.199E
Assessors valuation and market. price
not always same but affect each other' J r.
By Neal Gendler
Star Tribune Staff Writer
The notice that your local govern-
ment has increased the valuation of your
home is an invitation to practice what
you preach to your children: Remember
the virtue of delayed gratification.
Rising home values are a two-edged
sword; they can mean a bigger profit
when you sell but potentially higher tax-
es in the meantime. In other words,
when the assessor comes to the door to
look around, remember what your par-
ents said: "Someday you'll thank me for
this."
t
uKeep
in mind that assessors are re-
ired by state law to make house valua-
ons reflect actual market value. Accura-
cy helps everyone pay no more than
their fair share of the cost of public
tervices.
The tax assessor's valuation of a
ouse is one of the variables in a home
ale that may be misunderstood. The list
price and the valuation may differ', and,
in fact, the price paid will affect future
valuations.
The assessor's valuation also is taking
n more importance in the transaction
itself as high-tech mortgage underwrit-
ing systems begin to rely less on inde-
endent appraisers and more on valua-
ion records in determining loan ap-
roval..
Valuation and price
tUnder state law, assessed valuation
ust be within 90 to 105 percent of real
arket value, or it's adjusted.
Market value is "the most probable
price. .'. a propertywill bring if exposed
or sale on the open market by a seller
ho is willing but not obligated to sell,
Mowing a reasonable time to find a
urchaser who is willing but not obligat-
ed to buy," said a document from Scott
itenne, Minneapolis city assessor.
The best indicator of fair market value
is market activity, said John Hagen,
manager of the Minnesota Department
of Revenue's property tax division's in-
formation and education section. Con-
sumers decide market value when
houses are bought and sold. But that
doesnt mean that the sale price
But,
becomes the market value.,
Each sale is part of the sales that we
analyze on a collective basis," Renne
said. In other words, what you pay for
the house is reported, but it gets tossed
into the mix with all the other sales. "If
somebody paid too much for a house for
whatever reason, that's going to very
slightly increase the schedule," he said.
But if the dominant purchase prices are
70 a square foot, that's what our basic
schedule will be based on. 'Outliers' [oc-
currences far from the norm] don't influ-
ence the schedule that much — it's real-
ly the pattern of sales."
Valuations are changed because of
inflation or deflation in the real estate
market or because a property, based on
an analysis of sales, is assessed incor-
rectly, Renne said. That may occur be-
cause of changes in the market, especial-
ly when different kinds of houses change
value at different rates.:
Market is fluid _
Realtors say that because of rapid
changes in the real estate market, their
comparative market analyses can pro-
duce more accurate values than an as-
sessor's valuation that is made once a
year. However, it, can be hard to con-'
vince clients.
In the city, what we're dealing with
many times is that the assessed values
are higher than what the market analysis
shows the property should be listed at,".
said Sheryl Craven, president of the St.'
Paul Area Association of Realtors. '
In a fast market, a house may, be `
undervalued, but more of a problem for
agents is overvaluation. Craven, an Edi- .
na Realty agent, recently lost a prospec-
tive listing because she believed that it
was overvalued.
This house had been taxed for a
considerable time (based on an assessed
valuation ofl $115,000," she said, but she,
could find only one comparable house in
the area that had sold for more than
100,000 In the previous year. She told"
the seller what she thought the list price,
should be — and didn't get the listing. .
My competitor went in and listed it
at $112,500," she said: .
It was a beautiful home on the
top end of its neighborhood," she said,
but the neighborhood was the problem.
Location is everything."
Sellers often pay a lot of attention to
assessed valuation, Craven said.
They tend to establish value based
on that, and many times you have to go
in and say, 'That isn't relevant,' especial-
ly in a fast market."
Buyers pay "a moderate amount of
attention" because they think it reflects
market value, said Diane O'Donnella -
Realtor in Burnet Realty's Maplewood
office. "A tax assessor has a whole lot
more credibility than a 'salesperson,'.".
she said. But she, too, said assessed
valuation may not reflect the market.' -
I live in one of those properties
taxed at a value higher than what I can
get," O'Donnell said. "So, I can be rather
empathetic." She said -that assessed and
market values are getting much closer.
She used to see a 5 percent difference;
now it's about 2 percent."
Buyers may use.assessed value as'a .
measure of whether they're paying too
much, O'Donnell said. Some call after
the sale to check the assessed value
against market value if their taxes go up.
Usually, she said, she tells them that the
assessment is "right on the money." -'.
She added, "Occasionally I will warn
people that the valuation has not kept
up with the marketplace and not to, be
surprised after we file the certificate of
real estate transaction and their taxes
Diane O'Donnell, Burnet Realty
take a jump. But I don't get very many
calls about that — I tend to get them
when people have been there a few years
and their taxes take a jump."
Higher is better?
People have to look at assessments
the right way, said Larry Peterson, presi-
dent of the Minneapolis Area Association
of Realtors. Some buyers view valuation
below list price as a justification for
offering less, but even if that succeeds,
undervaluation won't last forever — nor
should taxes be the main concern. -
People's No. 1 priority is to buy the
house," he said. He said he figures that
most folks who've owned a home for a
few years couldn't afford to buy their
houses at today's prices. .
So, it's good news -bad news," Peter-
son said. "The good news is your house
is worth.a lot more; the bad news is the
cost of living there goes up."
Hagen put it another way: Pretend
that the assessor's valuation is the most
you'd be permitted to get for selling your
house. In that case, you'd sure want it
valued fully.
So, when the next notice of increased
valuation arrives, remember another of
those timeless parental sayings: "It's for
your own good."
any popular myths about assessment still considere_ d fact
y Neal Gendler
tar Tribune StafjWriter
Several popular assessment myths
ersist; and folks who practice that
ometimes unwelcome art find therii-
elves catching misplaced blame. Here
are a few misconceptions:
Myth: Houses aren't valued for tax
urposes at their full value.
Fact: This may be one of the most
persistent myths, perhaps because it
used to be fact
valuation, Hagen said. Also, the amount
of tax collected didn't triple when the
valuation was tripled, so the change -
didn't make an enormous difference. -
Minnesota Statute 273.11 states:
All real property shall be valued at its
market value," which is defined as "the
most probable price estimated in terms
of money which a property will bring if.'
exposed for sale on the open market"
and seller and buyer are willing but not:
obligated to sell or buy. Assessments.'
must fall from 90 to 105 percent of the
marketvalue, or an adjustment is made.
Before 1970, assessments were based > Myth: The assessor determines`
n something called 'full and true' val your property tax.
e," said John Hagen of the Minnesota > Fact: Governmental bodies, not Ias-
Department of Revenue's property tax sessors, determine budgets; tax rates —
Fact: See previous fact. True, in an
inflationary environment, taxes tend to
increase, along with everything else. But
Increased taxes are the result of in-
creased government spending. If every-,
one's home value rose but governmental
budgets did not rise — or if the tax base
or other sources of revenue increased
sufficiently to cover budget increases —
property taxes could remain the same or
even fall.
Note: Minnesota's residential proper-
ty taxes have a two-tier system; _your,
taxes could rise if. a new - valuation
pushes your home into the second tier,
where the amount of home value above
72,000 is taxed at a higher rate than the
amount below.
vision. Despite the name, those values how much tax per dollar of value — areWWereneitherfullnortruebutwere "sup- set so that taxable property provides > Myth: If I don't Jet the assessor in,
osed to equate to one-third of the actu-needed revenues. The assessor does not he or she can't increase my valuation. market value of the -property: _ settaxrates. --
r. > Fact:Bad idea.,Thelalvtgifyes.as js,- The law changed but folks' didn't-noo'•'' +"'•' ''rrt; rc . a , z`, .^ r.•. ,cr:.: sors access to the tti a 3tldttl'C CarifiCttightWay9ACattsisbackthlitoWtt-' Y'iKytli:'rricY$sedv'alu3Con o7youFtf come back with a sheriff deputy, Ha- rs were hot sent annual statements of house means that your taxes will go up. gen said.
In practice, however, assessors tend
not to go where they're unwelcome. In-
stead, the assessor does what's called an
arbitrary assessment, trying to estimate
the value of the property without going
inside, and the assessed valuation prob-
ably will tend to be on the high side.
Myth: When the local government
needs more money, it reassesses home
values upward.
Fact: "It is totally untrue that valu-
ations are increased to raise more mon-
ey for a taxing jurisdiction," Hagen said.
If you took all the valuations in a taxing
jurisdiction and doubled them, but the
public budgets in that jurisdiction didn't
change, the taxes owed wouldn't
change." The exception is if the increase
pushes your house into the second tier
of property tax rates. "All you do by
valuation increases or decreases is you
igs*e:thetRiv-Pe4rjjd SrtionMill:So1; lect tfia( whole pie tut Just change the
sizes of the pieces."
SATURDAY, JUNE 1.1996 STAR TRIBUNE • PAGE H5
Assessors try to determine
true market value of property
By Neal Gendkr
Star Tribune Staff Writer
Assessors are required by state law to
value every property at market value
every year.
The law allows for human frailty by
setting a range of accuracy: Properties
must be valued at 90 to 105 percent of
their market value, or the state board of
equalization makes adjustments to make
them fit.
The method is a combination of pa-
perwork, computer work, judgment of
market trends and inspection.
The county assessor has the final
responsibility except in cities of the first
class — Minneapolis; St. Paul and Du-
luth," said John Hagen, information
manager for the Minnesota Department
of Revenue's property tax division.
The person doing the assessment may
be a county or city employee or a li-
censed assessor working under contract,
Hagen said. .
The state requires that property be
viewed by an assessor at least once every
four years, so assessors generally physi-
cally inspect 25 percent of the houses in
their jurisdiction every year. That's no
small chore; Minneapolis' 11 residential -
property assessors are responsible for
about 90,000 dwellings of one to three
units. That is one reason that the view-
ing may be as simple as a drive or walk
past the front and back to see if anythinghaschangednoticeably.
Annual valuation begins with "the as-
sumption that all properties are fairly
assessed," Hagen said, and then they are
adjusted to reflect changes in the econo-
my or the real estate market, deprecia-
tion or alterations to the property as
noted in permits or by a visit.
Sale of a property generates a certifi-
cate of real estate value, which may
affect that property's valuation and
which becomes part of the assessor's
database for adjusting the entire market
for that neighborhood or kind of house.
The assessor may learn that 1960s
ramblers, for example, are selling for 15
percent more then they have them val-
ued at," Hagen said. "They'll extrapolate
that from the market and put a 15 per-
cent increase on all like properties."
Computers have made this process
far more accurate and efficient, increas-
ing the amount of information fed In
and the precision of data spit out. Hagen
said it's easier now to identify which
kinds of houses in which locations are
appreciating or depreciating because the
computer can handle more variables.
An example of a variable that affects
valuation is interest rates, which Hagen
said "have a strong influence."
He said, "When they're high, people
can't afford as much house, so the lower
valued houses increase in demand and
price. When interest rates are low, that
has a tendency to increase the sales
price of more expensive homes because
of the greater demand for them, which
causes a lot of the smaller houses to
decline in value because there's less
market for them."
Even if you pay more for a house than .
Its assessed value, the sale price doesn't
automatically, show up as the assessed
va uation. 1'1re.pritie•%t a li'1h' ' e*t'S
homogenized Into prices paid for all
houses of that kind.
The appraiser's visit
Hagen said that in an initial evalua-
tion of a particular property, "You have
to walk through and make judgments
about the quality of the workmanship,
quality of materials. Once you have
made that determination, you assign a
grade to it. That's a base line that doesn't
have to be changed."
Houses are a physically deteriorating
asset, but they are more likely to appre-
ciate because of inflation and increased
construction and land costs.
Scott Renne, Minneapolis city asses-
sor, noted that 25 percent of the house's
value is attributed to the land on which
it sits. The rest is derived from what the
appraiser sees: size — measured exter-
nally — and features such as a fireplace
and extra bathrooms.
Hagen said an appraiser looks at a
house much as a potential buyer would.
The assessor is trying to emulate
what a typical buyer would pay for the
house," he said. "They look for anything
that adds to or detracts from value"
compared with other houses of thatitype. Kitchen quality is important to.
buyers, so it's important to assessors.
Renne said visits to older houses are
made "to ensure that our records are
current and accurate," correcting for l,
new features or conflicts with record
cards the city keeps on all properties. An
interior evaluation would be made "for
more expensive properties and for any
that have had a building permit or an
appeal. If we had the staff, we'd like to
do an internal appraisal once every eight
years."
When appraisers look -at the exterior
only, "they just look for signs of
change,' such as whether there have
been any additions that haven't been
noted or whether there are signs of de-
cay, 'in which case thei'd want to haveaninteriorInspection, Hagen said. "If
everything appears the same, they may
assume that nothing in the base line has
changed."
A building'permit will trigger a reas-
sessment unless it's for maintenance,
such as roofing, which isn't considered
to add to a home's value, Renne said.
But if I put in a new bathroom or
fireplace, that'll generate a visit."
Reducing the pain
Some improvements don't add a lot
to the assessment — or the sale price.
The bulk of the value is in square
footage," Renne said. "If you finish off a
recreation room in your basement .: .
there's not a lot of value in that anyway, not as far as the market treats It...'. AnyfinishedareaabovegradeIsworthalot
more than any finished area below
grade."
Owners of older houses get a break
under a state law nicknamed after the 'IV
show "This Old House." Improvements
to houses at least 35 years old may
qualify for total or partial exemption
from increased property taxes for 10
years, then the improved value is phased
In over five years, Renne said \
VAtt1E'p#.
1
PAGE H6 • STAR TRIBUNE' "" Homes
VALUE from HS
l"The total value of that benefit can be
up to $16,000 in tax savings," he said.
Some people try to hide improve-
ments from the assessor, but Hagen said
that doesn't pay.
Often, taxpayers will finish parts of
their house or substantially renovate
parts of their house and not pull a per-
mit — which may be legal in some cities
and try not to let the assessor find
out," Hagen said.
He said people who don't allow the
assessor in lose "big time." Legally, the
assessor can return with a deputy sheriff,
but the usual practice is to do what's
called an "arbitrary assessment," an at-
tempt to estimate the value of the prop-
erty without going inside.
It's common practice that in cases
like that, assessors make the assumption
that the quality of finish is excellent," he
said. In other words, they guess high.
Asking for trouble?
Some folks actually ask for an asses-
sor to visit.
It happens frequently when people
buy a house and they pay less than the
assessed value," Hagen said. "Typically,
there's been some change to the proper-
ty — depreciation or deferred mainte-
nance that hasn't been noted on the
assessment.
Occasionally, before they sell, they
will ask to have it reassessed and have
the value better reflect what it's worth so
a buyer won't ask, 'Why are you asking
200,000 when it's only valued at
150,000?'." he said.
Renne said some people comp
that the valuation is too low, someti
because they are seeking a home eq
loan and need a higher valuationuft
borrow what they need. And some peo
pie want to protect their investment.
We have individuals who have
ketability problems in some neigh
hoods, and those individuals are
unhappy with us if we reduce values,'
he said.
Property owners unhappy with t
valuation can app-eal to a local boar
review, then a county board of equalff
tion and then to Minnesota Tax Court,
Hagen said. The state also has refund
programs for people whose reales
taxes have increased significantly or
high in relation to their income.
Hagen.said there's no good recor o
how often people appeal statewide.
Renne said that in Minneapolis, "
usually have about 200 people at
local board of equalization, and requ
for informal reviews are about 1,004
year." He estimated that Minneapolis
has 700 property tax court cases a year.
Renne said about 20 percent of
quests for reduction are granted a
another 20 percent succeed aper app
He said he'd like to convince people
that the appeal process is not adversari-
al. We view it as problem solving.
want to treat the taxpayers as customfindingwecanagreeonarevi
number or that the existing number is
appropriate."
He said that with an appeal, it's r
that valuation is increased.
u
u
1
P,
F1
YourRAo ney
Property taxes Are you paging too much?
0 f all the taxes you pay, probably
none delivers more tangible ben-
efits than the property tax you
send to your city, town, or county. Real-
estate taxes are the lifeblood of local gov-
ernments, accounting for some three-
quarters of their budgets for schools,
sanitation, parks, and public safety—in
short, for just about everything that
makes the quality of life in your commu-
nity what it is. But even if you're satisfied
with what your property -tax dollar buys,
you should not have to pay more than
your fair share.
Your local tax office computes your an-
nual property -tax bill by multiplying the
local tax rate by the assessor's estimate of
what your home and the lot it sits on are
worth. The rate is set by your commu-
nity's elected officials and applies equally
to everyone. However, if you pay sub-
stantially more than your neighbors do or
if your locality hasn't had a general prop-
erty revaluation in several years, your tax
assessment may be too high.
What do the records show?
The most basic errors arise from a sim-
ple misdescription ofyour property in the
municipal records, and this is where you
should look first if you suspect a problem.
The listing should specify the lot size,
type of construction, number of rooms,
and so forth.
Overworked assessors usually cannot
inspect every property they are required
to value. Often they rely on casual "drive
by" assessments, leading to mistakes in
the property records—an extra bedroom
here, a bath there, a garage instead of a
carport. The assessor may also have
missed defects such as a cracked founda-
tion, a leaky roof, or pest infestation that
could significantly reduce a home's value.
Undesirable environmental conditions,
such as unusually heavy local traffic from
a nearby freeway, can also lower a prop-
erty's value and may be grounds for a tax
reduction.
Assessing the assessment
Most municipalities try to peg the as-
sessed values of properties in their juris-
dictions to the actual market values.
However, unless the properties are reap-
praised often—something few communi-
ties do—the valuations tend to drift apart.
Some states try to bridge the difference
during periods between full-scale re-
evaluations by applying a so-called "as-
sessment ratio." In one New jersey city,
for example, a home carried on the tax
rolls as having a market value of $100,000
would be taxed as if it were worth
106,952, after its ratio—currently 93.5
percent—is applied. A homeowner who
thinks this figure overstates the market
value can challenge it, although in the
Garden State, unless an assessment ex-
ceeds the estimated market value by more
than 15 percent, the assessor's computa-
tion will prevail.
Many owners may be lulled by an ap-
parently low valuation into thinking that
1: • ..Understanding Your Assessment s a free hrochi
r .from the International Associatlon of Assessing*Oftieen
rte=._130 East Aen'dolph St., Suite 850; Chl6ago;.11l. 60601.6
a sett -addressed enveloPe with 55 cents"in postage
How,lo Reduce Your Property fax;" by Frank J. Ai
Harperllusiness, torthcoming July1996, $15.00); desc
i assessment rules and appeals procedures throughout f
U.S. and Canada
The Consumer Reports Home P i6tervice provid
r "'... " for 510, prices over the phone for recently sold properti
r,
f . s .. , ',w.5,w." r .Y.,f L i
64 CONSUMER REPORTS JUTE 1996
their tax bite is lighter than it truly is.
That's because some states tax properties
on just a portion of their assessed value—
as little as 10 percent in Louisiana. A fi-ac-
tional valuation, however, can mask a
high assessment. For example, if you live
in a $100,000 condo located in a state
with a 25 percent valuation and your
property is misassessed at $30,000, your
tax would be equal to that of a neighbor
living in a home worth 20 percent more.
Making your case
There are several ways to document a
claim that your assessment is too high.
The easiest is to point out obvious dis-
crepancies between the description of
your home in the official tax records and
its actual condition. Often the assessor's
office will adjust your record on the basis
of a single meeting if you can produce
compelling evidence that the assessment
is incorrect. (For a guide to sources that
may help you, see the box below.)
You can also buttress your claim by
tracking recent sales of three to five
homes that are similar to yours and lo-
cated nearby. A local realtor, Consumer
Reports Home Price Service, or even the
assessor's own records can help identify
these comparable properties. If the po-
tential savings warrant the expense, you
may wish to hire an appraiser who is cer-
tified or licensed by your state to prepare
a customized valuation of your home.
Expect to pay between $400 and $500 for
this service.
A formal appeal usually requires a hear-
ing before the local appraisal review
board. Typically, you'll have to pay all
taxes due while your appeal is pending,
though some municipalities will give a re-
fund if you win your claim. Daunting as it
sounds, most homeowners can manage an
appeal by themselves. If you don't want to
go it alone, a local real estate agent may
be able to refer you to a property -tax con-
sultant or an experienced attorney.
If too many owners challenge their tax
bills successfully, of course, a local gov-
ernment would have to ratchet up the tax
rate to provide the services residents say
they want. But that's a fair way to meet o
the community's needs—and one that
lets citizens will know what good govern-
ment truly costs. m
REAL ESTATE _
Q. The house across the street
from ours sold last Summer for
192,000. Our home has a swim=
ming pool and nicer landscaping,
but we aren't getting any offers at
214,900?
A. Comparing a neighbor's home
against yours to establish Value is
very inaccurate... The key.- factors .. _ _ _
which determine value may not be REALTOR• .
Y _4
the 'same criteria you are. using:;.,;. —
Whenyou examine the larger picture, (the one potential
buyers ate'lookinyou need to factor in other items.
ahead -of landscap' and swimming pools. First, compare
lot size and location; then compare the (tomes' square foot,
of bedrooms, # of garage'stalls, overall condition (specif-
ically, kitchen and baths), basement area -finished, walk-
out etc. Of lesser importance are yard emblements, new
appliances, swimming pools, etc. Other less tangible fac-.
tors affecting value include the time of the year itis, mort-
gag"Wes and the # of homes on the market in your sales
price range. Lastly; you need to get feedback from those
buyers who do come through, your home to identify the
obstacles to your sale! r.
1
t
t.
HtSaturday
MARCH 15, 1997 SECTIONlomes
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INDEX
Kenneth Harney Page H3
Calendar Page H2
Help lines Page H8
Home plan Page Hl l
Real estate transactions Page H 12
1/5)
FYI
Shop for lender
When shopping for a mortgage.
don't depend on the real estate
agent. Otherwise good real estate
agents may send you to lenders
that don't necessarily offer the best
mortgage interest rates.
Some real estate agents may not
be up to date with who has the
best loans or may not be into
shopping around. Others may have
simply gotten comfortable doing
business with certain lenders or
gotten client referrals from said
lenders previously.
Home Buying for Dummies*
by Eric Tyson and Ray Brown
Income tax lip
Special assessments
Special tax assessments" levied
on homeowners in an area some-
times are eligible for a deduction,
sometimes not. It all depends on
what the tax revenues were used
for.
If the proceeds were used to pay
for local improvements that tend
to increase the value of the as-
sessed properties, such as adding
sidewalks or street lights, the levy
doesn't qualify as a deductible
property tax.
Even though these types of tax
assessments aren't deductible, they
can be added to the cost "basis" of
your residence, which reduces the
taxable gain from a sale.
Gary Klott
National Newspaper Syndicate
Eye on the numbers
Mortgage rates
Average interest rate offered by 15 to 20 Twin
Cities area lenders for the last 8 weeks.
9%.
e`
30-yearfixecl
s 15 -year Weed
s
1 -year ARM i
s 1 23 2.6 2.20 3.6
Source HSH Associates of Buller. N1
Renters' report... Page H27
Average rent for Average vacancy for
the Twin Cities the Twin Cities
5600 $
596
4%
ss90
3"• 2.7°ro
2.9%
sao
579
5m 2%
12N 3' 6 N96 9,96 122l996'96 A96 % Zce: Apartment search Profiles
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Published Saturday.March 15, 1997
Plymouth: Fast-growing suburb has many
faces
Star Tribune Online
Jim Buchta / Star Tribune
Variety Mention Plymouth, and many people who aren't familiar with the sizable
Twin Cities suburb tend to picture a sea of predictable houses, all built from
delated item
variations of the same tract -house floor plan.
More community profiles That's a skewed vision.
While Plymouth does have several enclaves of uninspired houses tucked
behind three -car garages, this 36 -square -mile suburb offers a melange of
housing alternatives for buyers, sellers and renters.
Just ask Suzanne Rooney, who, along with her husband, Brian, and their
three children, has experienced two of the many personalities of Plymouth:
the upwardly mobile middle-class upstart and the pleasant, unassuming
agricultural matriarch.
The Rooneys moved several months ago from a nondescript 17 -year-old
house in a planned development to a barn -red 95 -year-old farm house on 10
acres they bought for $232,000 in the still -rural northwest quadrant of
Plymouth. They've been suburban mice and country mice without having to
move from Plymouth.
Suzanne Rooney said her family swapped a friendly, helpful group of
neighbors for the company of a nearby stable of 1 I snorting steeds and the
rituals of the country, namely watching for the seasonal appearance of
swans and geese in Elm Creek, which runs right through the family's back
yard.
No community identity
Like many people who move to Plymouth, the Rooneys were job transferees
with young children, drawn to the suburb because of the fine reputation of
the Wayzata School District, one of four that serve the city. The others are
Robbinsdale, Hopkins and a small part of Osseo.
The Wayzata district is building a high school in Plymouth. At 487,000
square feet, it will be the largest high school in the state and the largest
building in the city.
The Rooneys also were attracted to Plymouth because of its proximity to
downtown Minneapolis, about 15 to 20 minutes by freeway. However, they
are less than enchanted with the lack of accessible mass transit, which they
were accustomed to in their former home in Canada.
Because of the convenient mass -transit system, "In Montreal and Toronto
you can go anywhere; the kids can go anywhere," Suzanne Rooney said. But
in Plymouth, "When kids are 16, parents buy them cars."
Having four notable school districts within Plymouth is considered an
amenity, but it also has been detrimental to developing a strong community
identity.
Schools have been a very strong factor throughout the history of
Minnesota for building identity," Mayor Joy Tierney said. "We're looking at
other things."
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other things."
Those "other things" include dozens of city parks, several large lakes and
regional attractions, such as the Clifton French Regional Park on the north
end of Medicine Lake and the Luce Line Trail, which has its trail head near
Parkers Lake in south-central Plymouth and runs west to Winsted, Minn.
Plymouth doesn't have a major regional shopping mall, but it is close to
Ridgedale in Minnetonka and Brookdale in Brooklyn Center. There also are
several small commercial nodes in most areas of the city, except for that
undeveloped northwest quadrant.
More than 40,000 people work in Plymouth, primarily at warehouses and
offices along Hwy. 55 and Interstate Hwy. 494 and at County Rd. 10 and
I-494.
From farms to cul-de-sacs
Until the 1960s, Plymouth was an agricultural community dotted with farm
houses and barns and full of rich habitat teeming with wildlife.
As Minneapolis, New Hope and Minnetonka grew, Plymouth found itself
on the doorstep of development. It was a place on the outskirts of the metro
area where you could buy a big lot inexpensively -- the land of opportunity
for young people such as Tierney and her husband, who 27 years ago
bought a house in Plymouth for less than $30,000. "We've watched the city
grow," she said.
And grow it has. Since 1970, the population has more than tripled from
18,077 to more than 58,000 within a 36 -square -mile area. Recent road maps
suggest a city designed by the hand of a manic Etch -A -Sketch artist, with
roads that twist and turn without any apparent sense of organization and
streets that end abruptly at cul-de-sacs.
In fact, Plymouth has more cul-de-sacs -- 690 -- than there are people in the
city of Medicine Lake, which Plymouth surrounds.
But the truth is that the city has been anything but willy-nilly in its approach
to development.
A considerable amount of effort has gone into getting control of the
planning process," Tierney said. "The Metropolitan Council had suburban
areas [including Plymouth] do a comprehensive plan and think toward the
future -- about what we want it to be."
What Plymouth wants to be and what Plymouth is may be two mutually
exclusive ideas. The city is working hard to develop a city center near Hwy.
55 and Plymouth Blvd.
That is the location of City Hall, a new Hennepin County Library and a Cub
Foods store and the future site of a LifeTime Fitness center and a Mann
Theater. But the city is so large that trying to convince residents that their
city has a center might be difficult.
Hopefully we would have an identity as we move along.... There's more
of an identity than when I moved in," Tierney said.
Running out of room
Because the areas within Plymouth that are supplied with city sewer and
water are nearly fully developed, and demand for homes in the city has
continued to grow, it is evolving into a community of higher priced
housing.
The median home price is significantly higher than in many area suburbs.
Last year, the median sale price of single-family houses in Plymouth was
188,000, ranging from a low of $57,000 to a high of $544,700, the
Regional Multiple Listing Service said. (The median price is halfway
between the highest and lowest prices.) The average sale price was
208,545.
Condominiums and townhouses tend to be significantly less expensive. Last
year, the median sale price of condominiums and townhouses sold through
the service was $94,800, ranging from a low of $15,000 (probably for a
garage) to $400,000. Todd Grill, a sales agent for RE/MAX Results and a
lifelong Plymouth resident, said townhouse sales in Plymouth are hot.
All told, the city has more than 21,000 housing units, mostly single-family
homes built primarily since 1960.
Last year, of the 546 building permits issued for new homes, 313 were for
single-family homes. That's down from 1992, when the city issued 814
building permits for new homes. The decline is a sign that developable land
is running out, said Anne Hurlburt, community development director.
Fans of "new urbanism," the development school of thought that promotes
pedestrian -oriented, mixed-use community development, might find plenty
to complain about in Plymouth. Most housing developments aren't within
walking distance of shops and services, and pedestrians clearly take a back
seat to hikers and bikers. Plymouth has few sidewalks but nearly 70 miles
of hiking trails.
Plymouth is the habitat of several large housing developers, such as Orrin
Thompson and Lundgren Brothers. Some real estate agents, such as Grill
and Sandy Patterson of Edina Realty, can identify houses by their
developer.
Patterson also is a longtime Plymouth resident. The house she and her
husband bought in 1969 for $36,900 now would sell for about $125,000.
They sold that one in 1984 and built a house nearby because they wanted to
stay near their school district and church, of which Plymouth has many.
One of the city's best known churches is Mount Olivet Lutheran Church.
The original Mount Olivet chapel, which was built in 1880 near Rockford
Rd., is one of the few 19th -century buildings in Plymouth. It's a stark
contrast to a townhouse development being built nearby.
The City Council has been willing to embrace relatively unusual housing
developments, such as Parkers Lake, a high-density development near the
city center" with single-family homes and townhouses on very small lots
that sell for $160,00 to $250,000. It's a lifestyle popular with empty -nesters
and single buyers because homeowners belong to an association that
handles all maintenance, Grill said.
Some of Plymouth's most affordable housing is in a trailer park not far from
Hwys. 55 and 169, across the street from an industrial area and a
development of new $150,000 townhouses. Most apartment buildings in
Plymouth, such as Vicksburg Village, have been built since the 1980s and
are heavy on the amenities. That also means that they're more expensive
than the average apartment.
Neighborhood associations aren't unusual in Plymouth. Chelsea Woods,
another townhouse/single-family housing development near Parkers Lake,
has a well-regarded association that manages the buildings, yards and
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has a well-regarded association that manages the buildings, yards and
belated item resident facilities, including a pool and tennis courts. Built in the 1970s, the
development has single-family houses and townhouses for less than
More community profiles $200,000.
Most of Plymouth's housing has been built at a density of two houses per
Star Tribune Online acre or less, Hurlburt said. But as the availability of developable land
Variety wanes, smaller housing developments are being built in areas overlooked
when larger parcels were available. Houses also are being built one at a
time on lots carved from I -acre -plus homesites.
Wetlands have been a major challenge for developers and the City Council.
About 20 percent of the city is covered by undevelopable wetlands or flood
plains. For nearby homeowners, wetlands are an asset. They provide a
natural buffer between housing developments and allow developers to
follow the land's natural shape when planning road patterns.
Controlling growth
The question for developers, planners and residents is whether Plymouth's
rural areas can survive. The answer lies with city planners and the
Metropolitan Council, both of which are wrestling with whether to proceed
with expansion of sewer and water services.
Slow, careful planning is the home shopper's lament and the seller's dream.
Grill said buyers are chomping at the bit for the chance to buy property in
the northwest corner of the city, where the Rooneys live. Most of that
section is undeveloped, in part because it's not served by city sewer and
water services. That means that landowners would have to divide the land
into multi -acre lots that can accommodate a private well and septic system.
We know development is going to come," Suzanne Rooney said. "When
development comes, we'll not want to stay.... Our youngest is 9. When he
leaves, we'll be ready to move, too."
2 Copyright 1997 Star Tribune. All rights reserved.
SATURDAY, 11515. 1997 Homes
Recent home sales
64,000
This rambler was built in 1920. It has 727 finished square feet, two bedrooms and one
bathroom. The sale closed in February 1996 after 149 days on the market. The original
list price was $69,900.
STAR TRIBUNE • PACE 1!
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151,000 $351,000
Built in 1983, this four -level house has three bedrooms, two bathrooms, a family room, This two-story house was built in 1993. It has 3,100 finished square feet, four b
central air conditioning, a fireplace, hardwood floors and a three -car garage. The sale rooms, three bathrooms, a family room, two fireplaces, central air conditioning an
closed in December after 214 days on the market. The original list price was $156,000, three -car garage. The sale closed in June after 35 days. The original price was $3GO,000.
265,000
This two-story house was built in 1982. It has four bedrooms, three bathrooms, a fam- Built in 1992, this two-story house has 6,519 finished square feet, seven bedrooms, six
ily room. two.Greplaces„central air condlooning and a two -car garage. The sale closed bathrooms, a family room, central air conditioning, hardwood floors and a three - in July after.3Ldays on thpjMket The.otightal list pricgvas $269,900. , garage. The sale closed in January 1995 after 16 dqs. The origigal price wai$560.0011Cy... .i. l'.. .. {-/s Lr -.el •ia i s er wdi r. ... i. ..: .. _. .. a....— .... .-..
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