HomeMy WebLinkAboutCity Council Packet 05-10-1988 BOErel2
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PLYMOUTR
BOARD OF REVIEW
TUESDAY MAY 10TH
7:30 PM
Writ ]
CITY OF PLYMOUTH
3400 PLYNDUTH BOULEVARD, PLYMOUTH, MINNESOTA 55447
DATE: May 5, 1988
TO: Plymouth Board of Review '
FROM: Scott L. Hovet, City Assessor
1
SUBJECT: 1988 BOARD OF REVIEW
Transmitted herewith for your review is a report on the 1988 assessment. The
report introduces you to what has been done, statistical measurement of our
work and general information which will, hopefully, make your task as a Board
of Review member easier and more enjoyable.
I invite you to read through the information and then feel free to ask
questions and give your comments on the methods used, the values and the
results obtained.
1988 BOARD OF REVIEW
SUMMARY
This past year, again, there were some changes in estimated market values of
all properties located in Plymouth. These value changes range from reductions
in some condominium valuations to substantial increases in large commercial
and industrial properties. Typical valuation changes are as follows:
Property T W Percent Chanes
Residential Homestead (Varied neighborhoods) +5% to 15%
Residential Non -Homestead (Apartments) +10%
Residential Lakeshore +10%
Commercial & Industrial +8% to 11%
Exceptions to the above market value changes would include new construction,
quartile areas, reappraisals, and/or other market adjustments.
On April 28, 1988 estimated market value notices were mailed to all Plymouth
property owners. We have noticed a dramatic increase in phone call activity
received by the division since this mailing. We are experiencing between 20
and 40 phone calls per hour within the division.
It should be pointed out that state law provides that the assessment shall be
an annual assessment with all property in the taxing jurisdiction be revalued
to its market value every January 2nd. The annual assessment this past year
put a real burden on our staff. Mandatory overtime was required this year
from September lst through the end of February because of the large volume
increase in new building permits that were issued during the calendar year of
1987. This does not include the 4,250 quartile parcels that had to be
reviewed.
With additional improvements to our Telxon unit and to our computer 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 data entry information, and interpretation of
various printed reports were a major part of our workload. Our
computerization of the assessing function in Plymouth is, perhaps, the most
progressive and sophisticated that exists in the State of Minnesota. The
excellence and quality of the 1988 assessment is a direct result of this
computerization.
The assessment just completed for 1988 represents a good many hours of staff
research and time. I feel confident that the 1988 assessment is fair and well
equalized through the city.
Respectfully submitted,
Scott L. Hovet, CAE
City Assessor and Staff
SH/je
I • : i:1 1'JI
The 1988 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 property subject to taxation shall be listed
and assessed every year with reference to its value on January 2 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 deteMininq 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 not m!fty be
valued at market value. This obviously 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 money 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 1988 Assessment (not the 1988 taxes) reflects an approximate average
increase of 7% valuation over 1987 (excluding new construction, quartile
adjustments, and/or market adjustments). This process was aided a great deal
by the use of our city computer system.
During this past year, our staff has gathered property data onto a computer
field sheet or the Telxon unit which, in turn, was entered and calculated by
the computer system. Adjustment have been made in land values, depending on
the area of the city.
Those areas of the city that equal 25% of all existing properties have been
physically reviewed during 1987 and represent over 4,200 parcels, excluding
1,685 building permits. This is commonly referred to as the "quartile". In
the areas of reinspection, new items that previously were not on our records
were added, or where applicable, deleted. This year, again, a preliminary
sales study was analyzed, prior to placing a final value on each property
inspected.
INTRODUCTION To THE 1988 ASSESSMIIU (cont.)
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, and multiple residential properties were increased
approximately 5% to 15% in valuation. These areas represent over 5,000
parcels. There were 75 co mlercial/industrial/apartment properties physically
inspected this year.
The value we place on 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, he 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, afterall, 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.
1988 ASSESSMENT STATISTICS
Total City Parcel Count ... 01-02-87) ........................ 16,100
Total City Parcel Count ... 01-02-88) ...................••••• 16,980
Parcel Count Per Appraiser 1988..Assessment................. 4,245
Parcel Count Per Appraiser 1987..Assessment................. 4,600
Assessor's Industry Standard ................................ 2,500
1988 Total Estimated Market Value.. (Preliminary)....... 2,289,300,000.
1987 Total Estimated Market Value ....................... 11940,021,000.
1987 to 1988 Total City Valuation Growth ....................
1986 to 1987 Total City Valuation Growth ....................
1987 Total Building Permits .................................
1986 Total Building Permits .................................
1987 Metropolitan Area Average Home Sale Price ..............
1987 Plymouth's Average Horne Sale Price .....................
1988 Total Number of Homesteads .............................
1987 Total Number of Homesteads .............................
1988 "Mean" Sales Ratio (Assessment Level) ..................
1987 "Mean" Sales Ratio (Assessment Level) ..................
1988 Coefficient of Dispersion (Assessment Accuracy)........
1987 Coefficient of Dispersion (Assessment Accuracy)........
1987 Total Number of Sales ..................................
1986 Total Number of Sales ..................................
18.01%
16.51%
1,685
1,841
95,000. (Est. )
135,000.
12,724
12,308
92.7%
92.1%
7.720%
7.904%
1,150
1,768
ASSESSING STAFF
NAME CLASSIFICATION DUTIES PERFORMED
Scott Hovet, CAE ASSESSOR Adminstration
Appraisal Review
Tax Court Defense
Comm/Ind. Appraisal
Sue Mauderer, RES APPRAISER Computer Coordinator
Residential Appraiser
Condominiums
Green Acres Coodinator
Mike Carroll, CMA APPRAISER Townhouse Appraisal
Rural Appraisal
Residential Appraisal
Vacant Land
Nancy Bye, CMA APPRAISER Residential Appraisal
Mobile Homes/Sales
113CC" Coordinator
Tax Increment Finance
Dick Toy, CMA
Janice Olsson
Janet Evenson
APPRAISER Residential Appraisal
Sales Ratio Studies
PC Applications
ASSESSMENT Sales Ratio Studies
TECHNICIAN Abatements
Appraisal Preparation
DATA PROCESSING
CLERK/TYPIST
CAE: Certified Assessment Evaluator
Homesteads
Property Divisions
Clerk/Typist
Data Entry
Highest professional designation awarded
by the International Association of Assessing Officers
RES: Residential Evaluation Specialist
Designation awarded by the International Association of Assessing Officers
CMA: Certified Minnesota Assessor
Awarded by the State Board of Assessors
LOCAL BOARD OF REVIEW AUTHORITY
Minnesota Statues Section 274.01 provides that the council of each city shall
be or appoint a 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
accurately.
Whenever any property that should be assessed is omitted from the tax rolls,
an unfair burden falls upon the owners of all property that have been
assessed. If any property is undervalued in relation to the other property on
the assessment record, the owners of the other property are called upon
automatically to assume part of the tax burden that should be borne by the
undervalued property. Fairness and justice in property taxation demands both
completeness and equality in assessment.
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 adjustments 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
undervaluation. 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 a property owner an opportunity to contest the
valuation that has been placed on his property or to contest or protest any
other matter relating to the taxability of his property except the tax. The
board is required to review the matter and make any corrections that it deems
just.
all o •
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.
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.
Price Related Differential: (Assessment Difference)
A statistic used to measure the assessment differences that may exist between
higher priced properties vs lower priced properties. 100 points is ideal.
Within 10 points of 100 is considered excellent.
The following page discusses the methodology and our 1988 Equalization Sales
Ratio Study. We are fortunate in Plymouth to have a very active market with
numerous sales to be able to measure our assessment accurately.
Equalizing is done in today's procedures through ratio studies. Said studies
compare the Assessor's value with that same property's sale price. This
comparison gives us ratio indicators that are recognized at the county level
and the State TAx Commissioner's level. 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 State Tax Commissioner.
These general corrections are essentially a "shotgun blast" type correction
that affect the adequate value and inadequate value alike and, although they
correct equalization across jurisdiction lines, they do just the opposite
within a jurisdiction by increasing inequity. Fortunately, in Plymouth this
type of correction has never been needed.
The 1988 spring sales study recently completed by our staff and Hennepin
County places our overall mean ratio at 92.7%. Hennepin County's mean ratio
is 92.8% which puts Plymouth slightly above the average and dictates that
jurisdictions at or above the mean carry a slight part of our 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 7.720 % and is one of
the lowest in Hennepin County for a jurisdiction of our size. (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 spectrum.
Our price related differential during 1987 has fluctuated between 97 and
102. This also shows our ability to treat higher priced homes as equally as
the lower priced homes. It is currently at 101. (100 is considered perfect.)
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYNDU H, MINNESOTA 55447
DATE: April 29, 1988
TO: Scott Hovet, City Assessor
FROM: Janice Olsson, Assessment Technician
SUBJECT: 1987 YEAR-END SALES ANALYSIS (EXISTING HOMES)
cc: Sue
Mike
Dick
Nancy
OVERALL , SALES RATIO
1988 Estimated Market Values were used on all sales)
SALE PRICE/
S OF SALES MEAN RATIO SO_ FT_
Ramblers 159 981 $ 81.94
Splits 195 914 96.16
Two Stories 144 968 130.67
1-1/4, 1-1/2, 1-3/4 Stories 14 902 92.66
Perma Lease 8 1.033
Condominiums 64 943
Townhouses 185 898
TOTAL 769 948
cc: Sue
Mike
Dick
Nancy
1)
1988 BOARD OF REVIEW
CITY OF PLYM DU [i
MAY 10, 1988 - 7:30 P.M.
AVE Value Increases:
Residential 5 - 10%
Lakeshore 10% or less
Commercial 10%
Industrial 10%
Apartments 10%
2) Approximately 1100 houses sold in Plymouth last year.
3) 8 1988 Mid -Year Homesteads show as Non -Homestead on value notice.
Notice is effective as of 01-02-88.
Mid -Year Homestead is effective 06-01-88.
4) Scott: Conu ercial-Industrial-Apartments
W
Chippewa Trails Bass Lake Estates
Fox Run Bass Lake Heights
Hadley Hills Bass Lake Woods
Heritage Estates Creekwood Hills
Heritage West Deerwood Estates
Mission Trails Harrison Hills 2nd
Palmer Creek Jamestown
Pinecrest Lake Park Heights
Steeplechase Oakwood Shores
Swan Lake Schmidt Lake Hills
Westwood Ridge Windridge at Bass Lk.
Zachary Hills
Golf Courses Blind & Disabled
Green Acres Condominiums
Lakeshore Mobile Hcmes
MIKE DICK
Amhurst Cedar Ridge
Camelot Deerwood Glen
Chelsea Woods Glen Echo Ponds
Cron Humphrey Estates
Elmhurst Quail Ridge
Kingsview Hts. Wild Wings
Kingswood Farms Woodlands
Oakdale
Parkers Lake Farm
Silverthorne
Timberton
Tyrell
Farms
Patio Homes
Townhouses
1988 ASSESSMENT
AREAS WITH PE%ERrAGE CHANGES TO VALUE
Percentage 1988 Ratio
2 -Year Stud
CONDOMINIUMS
Creek Place Condos -15% to Building 1.00
Willow Grove Condos +10% to Building .999
TAKESHORE
Total values limited to 10% Increase
Bass Lake +15% to Land
Medicine Lake +15% to Land
Schmidt Lake +15% to Land
Lost Lake +15% to Land
Mooney Lake 15% to Land
GREEN ACRES (Agricultural)
Taxable" land values remained unchanged on a county -wide basis to reflect
leveling market values in the state's farm economy.
GOLF COURSES (Open Space Recreation)
Land values remained unchanged on a county -wide basis reflective of current
values of golf course properties.
COMMF',RCIAT..IIND LSTRIAL,ApA_ r
Values increased approximately 10% to reflect current market conditions.
RESIDENTI T
Total values increased approximately 5-10%.
Creekwood Heights 1st reduced to '87 values
Mapledell -5% to building values
Fazendin Park Addition -5% to building values
Beacon Heights - Sec. 35 -5% to building values
South 1/2 Section 35
Gleanloch Addition
Hidden Lake
Hadley Hills
20% to building values
values same as 187
3-10-88
SMM
N' .5.'M..:
Name of 2 -Year Study 1 -Year Study Average Increase to
Lakes Sales Ratio Sales Ratio Lot Value Land Value*
Bass 14 867 8 858 55,800 150
Gleason 7 911 1 705 28,000 0-
Hadley 9 957 4 906 45,200 0-
Lost 4 878 1 888 37,100 150
Medicine 8 887 1 868 60,100 15%
Mooney 6 896 2 1.034 51,800 150
Mud No Sales
Parkers 5 914 3 875 37,600 0-
Pike No Sales
Pomerleau No Sales
Schmidt 9 909 2 880 52,500 150
Land value increases as noted are included in ratios and lot values.
MEMO
CITY OF PLYMOUTH
3400 PLYNIJLTM BOULEVARD, PLYND[m, MINNESOTA 55447
DATE: April 27, 1988
TO: James G. Willis, City Manager\
FROM: Scott L. Hovet, City Assessor
SUBJECT: 1988 VALUATION NOTICES
The assessing staff is in the final stages of completing the 1988 assessment. valuation notices will be mailed to all Plymouth property owners beginning on
April 29th, 1988. These market values are the basis for the taxes payable in
1989.
Based upon approximately 1,100 residential sales transactions in Plymouth,
most areas of the City had their market values increased between 5% and 10%
for 1988. The typical value increase throughout the City was approximately 7%
to 8%. This is fairly typical in comparison to the municipalities similar to
us in the Metro area.
The land portion of the total market value for all lakeshore property in
Plymouth was increased by 15%. With the buildings adjusted accordingly,
lakeshore values increased approximately 8% overall.
Cam ercial, Industrial, and Apartment values on the average were increased
approximately 9%.
Due to the increase in property taxes this year, compounded by the fact that
our taxpayers will receive their increased value notices beginning the week of
May 2nd, 1988, it is anticipated that my staff may receive more than the
average number of property taxpayer inquiries. I am expecting between 1,200
to 1,500 calls over the next 2 weeks. (Approximately 20 to 30 calls per
hour.)
SLH/je
cc: Dale Hahn, Finance Director
Assessing Staff
y *06. 0• • I•4.y 21 • 41.a
BY PROPERTY
Residential 65%
Coimiercial/Industrial 24%
Exempt (NON TAXABLE) 7%
All Other 3%
Agricultural 1%
TOTAL ESTIMATED MARKET VALUE
1,587,820,000.
586,272,000.
153,487,000.
73,284,000.
41,937,000.
2,442,800,000.
All other includes: Commons, Open Land, Seasonal -Residential, Title II
Commerical Vacant Land