HomeMy WebLinkAboutCity Council Packet 04-12-2004 BOEAgenda
City of Plymouth
Board of Appeal and Equalization
Monday, April 12, 2004
7:00 p.m.
Council Chambers
1. Call to Order
2. City Assessor's Report
3. Public Comments
4. Adj ourn
2004
LOCAL BOARD OF
APPEAL &
EQUALIZATTON
CITY OF PLYMOUTH
APRIL 12, 2004
M ENIO
CITY OF PLYINJOUT1I
3400 PLYMOUTH BOULEVARD, PLYNIOUTI1, MN 55447
DATE: April 12, 2004
TO: Plymouth Board of Appeal & Equalization
FROM: Nance- Bye, City Assessor
SUBJECT: 2004 LOCAL BOARD OF APPEAL & EQUALIZATION
The followinL- report explains the statistical measurement and general information the
assessin L' staff utilizes in determining values for the annual, Jahuary 2 Asses5111e11t. This
will hopefully slake your job as a member of the Board of Appeal & Equalization cagier to
understand.
The purpose of the Local Board of Appeal & Egtlal Zatlon is to hear testirluln% from
property owners on their objections to the Assessor's 2004 estimated mai-ket v ;lue or
property classification. This may be done in three ways: (1) in person, (2) in w ritinL, or
3) by the property owner's representative.
The Board of Appeal & Equalization is not empowered to adjust taxes, but only deal with
the 2004 estimated market value or classification questions.
At the conclusion of the meeting the Board of Appeal & Equalization will recess, and will
reconvene on April 26, 2004 at 7:00 p.m. Decisions on all appeals will be mule !L that
time based on staff reports and information submitted.
Please read through the information and feel free to contact me with any questions or
comments you may have before the Board convenes.
Nancy Bye
Extension #535 1
E-mail NBye@ci.p1yl11outIl.II1I1.LIS
TABLE OF CONTENTS
DESCRIPTION PAGE?
LOCAL BOARD OF APPEAL & EQUALIZATION AUTHORITY I
2004 BOARD OF APPEAL & EQUALIZATION SUS i'IARY 2
INTRODUCTION TO TIDE 2004 ASSE=SSMENT 4
INTRODUCTION TO PLYMOUTH ASSESSING DIVISION 10
2004 ASSESSMENT STATISTICS 1 I
2004 SALES RATIO STUDY 15
DISTRIBUTIOiN OF MARKET VALUE 16
SINGLE FAMILY HOUSING BREAKDOWN 17
2004 ASSESSMENT SALES STATISTICS 18
RESIDENTIAL VALUE DISTRIBUTION 19
APPEAL PROCESS -)0
LAKESHORE STUDY -) 1
LOCAL BOARD OF APPEAL & EQUALZATIO,N AUTHORITY
Minnesota Statutes, Section 274.01, provides that the council of each city shall be or shall
appoint a Board of Appeal & Equalization. The Plymouth City Charter requires that the
City Council act as the Board of Appeal & Equalization.
Assessments of property are made to provide the means for the measurinyT of the relative
share of each taxpayer in meeting the costs of local government. It is the duty 01' the
Assessor to assess all real and personal property except that which is exempt or taxable
under some specia! 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 necessauy that all taxable
property be listed on the tax rolls and that all assessments be made accordinLTly.
The authority of the local board extends over the individUL11 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. The County
Board of Equalization makes changes in ayTgregatc assessments by classes.
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 aggregate. if the total of such assessments docs 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 mind instances oi' 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 Appeal & Equalization assures the property owner Lttt 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 exec )t the tax. The board is
required to review the matter and make any corrections that it deems just.
A new piece of legislation was added in the 1999 legislative session and affects the Local
Board of Appeal & Equalization.
Effective May 26, 1999 for taxes payable in 2000 and thereafter:
Chapter 243, Article 5, Section 24
Allows property owners to refuse to allow an assessor to inspect their property. The
refusal must be verbal or in writing. Tile assessor may then estimate a property's %alue
by making assumptions believed appropriate concerning the property's finish and
condition. If the assessor is refused entry, the local board of review may not adjust the
market value or classification in a way that would benefit the property.
1
2004 BOARD OF APPEAL & EQUALIZATION SUMMARY
The majority Of properties in the City Of PlyII1Outh saw changes in their estimated nl u-ket
value. The value changes range front general citywide increases to substantial increases
due to locational market activity. Average percentage increases In valuation are as
follows:
Property ype
Residential
Residential Lakeshore
C011doini llullls
TowI111omes
Apartments
Commercial/Industrial
Value Percent Change
From 2003 to 2004
99
1 1 `7
6
7 17.
3 `c
2 V7
Value Percent Change
From 2002 to 2003
8%
8%
101/_16
857C
517c
4%
Value Percent Change
2002
119
12.2`/(
13.95'
14. 1
10.2 '7
0
Exceptions to the above market value changes would include new construction, gLlartile
areas, reappraisals, and/or other market adjustments.
The condominium and townhouse Illarket Continuo's to be a rapld1%, appl'eclatlil'g market.
This is based on the aging baby boomers and the demand for m lintenance 1 I lig ing
Vacant land sales are indicating a tremendous upswing in the market value; 01' huild tlhIC
land.
On March 18, 2004 estimated market value notices were mailed to all P1yrlulLllh properuV
owners.
State law provides that the assessment shall be an annual assessment with all property ill the
taxing jurisdiction re -valued to its market value every January 2"'. The City Of Plyrllouth
continued to have a high quantity of building permits i'Or new construction and reMOdellll_
projects. This does not include the 4,579 quartile parcels that had to be reviewed and re-_
appraised.
The Legislature in its 1993 session passed a law imposing a limit on IlO1v 111LICtt an
assessor's estimate of market value is permitted to increase from one vear to the next for
taxation. Under the law, assessors are required to Continue to estimate the market valLlc of
all properties. However, the law requires the use of a limited nuu-ket value for purposes of
determining property tax bills. Approximately 7,250 of the 24,354 parcels in the Cite
qualify for a Iimited value. These properties are taxed On their limited market value, nol
their estimated value. $$148,817,300 of estimated market value is not being taxed due to
the limited taxation law. The Limited Law is gradually being phased Out Over the next
several years and is scheduled to sunset in 2007.
New this year is the approaching event of property information on the city web site The
assessing staff is looking forward to havinyg this information available to the public and
hopes that it will clarify a great deg] of questions and misconceptions. Our computerization
of the assessing function of Plymouth continues to he one of the most progressive and
sophisticated systems that exists in the State Of Minnesota. The excellence and quality of
the 2004 assessment is a direct result Of this computerization. Since our conversion we are
still in the process Of viewing sketches and data for accuracy.
The assessment just completed for 2004 represents many hours of staff research and time.
We feel confident the 2004 assessment is fair and well equalized throughout the City of
Plymouth.
Respectfully submitted
Assessing Department Staff
3
INTRODUCTION TO THE 2004 ASSESSMENT
The 2004 Assessment affects all property owners in the City of Plymouth. As required by
current state law, the Assessor is required to reassess all property each year.
State Statute reads: "All real property subject to taxation shall be listed and assessed
every year with reference to its value on January2preceding, 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 lie adopt as a criterion of value the price for which such property would sell, or in
the aaaregate with all the property in the town or district but he shall value each article or
description of property b itself, tself, and at such sum or price as lie believes the s -,mc to be
fairly worth in nioney." 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 Appeal
Equalization.
Market value has been defined many different ways. Simply stated, it is "the highest price
estimated in terms of cash which a property will brim 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 buN', both with knowledge of all the
uses to which it is adapted and for which it is capable of bein(l 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 ill 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 2004 Assessment (not the 2004 taxes) reflects an increase of' 9.39c overall valuation
increase over the 2003 assessment (including new construction, quartile adjustments,
and/or market adjustments). This can be demonstrated as follows:
2003 TOTAL CITY VALUE
2004 TOTAL CITY VALUE
PRELIMINARY)
2004
PERCENTAGES,
7,375,677,600 8,063,494,900
I '
Total Value Lrcrease: 687,817,300 9.3%
Value of New Construction: 201,821,400 2.7%
Appreciation of Existing Property: 485,995,900 6.69
m
City of Plymouth Percentage Value Growth
1997 1998 1999 2000 2001 2002 2003 2004
2004 RESIDENTIAL PROPERTY VALUES
Total Estimated Market Values According to Assessor Records
7LM City of
Wb Plymouth,
This represents a compilation of information and
data from city, county, state and other sources that has
not been field verified. Information should be field
verified and compared with origianl source documents.
MN
N
W+E
S
MARKET VALUE RANGES
100,000 and under
100,001 to $200,000
200,001 to $300,000
300,001 to $400,000
400,001 to $500,000
500,001 to $700,000
t: Over $700,000
2004 ASSESSMENT INTRODUCTION
During this past year, our staff has concentrated on collecting data on property field cards.
Once collected the data was entered into and calculated by the computer system. The output
is then analyzed for accuracy and parity.
Those areas of the city that equal 20% of all existing properties have been physicallyreviewedduring2003andrepresentover4,579 parcels, excluding 2,304 building permits.
This is commonly referred to as the "Quintile". In the areas of re -inspection, new items
that previously were not on our records were added, or where applicable, deleted. 60% of
all homes reviewed were internally inspected. A preliminary sales study was analyzed,
prior to placing a final value on each property inspected.
Plymouth's preliminary residential median ratio entering the 2004 assessment was 88.5 `% .
Hennepin County determines this ratio. They compare the January 2, 2003 estimated
market values to sales occurring from October 1, 2002 through September 30, 2003. The
average residential increase for the January 2, 2004 assessment was 9.3%. This was
determined by comparing the January 2, 2004 estimated market values to the same sales.
thus establishing the 2004 estimated market values at a median sales ratio of 96.5 and a
mean ratio of 96.1 with a coefficient of dispersion of 5.9. In accordance with the results of
this sales study, certain areas of the city, certain styles, and certain sizes of houses were
adjusted in value, either lower or higher than the prior year value, to more properly rellect
actual market values. This past year the appreciation on existiny homes was in [he sinulc
di -?its. `
The 2003 median sale price of existing rousing stock in the City was S323,900, this does
not include townhouses or condos. This is extracted from the Hennepin County Ratio
Study of all arms -length transactions involving sinle family homes.
Lakeshore in Plymouth was adjusted according to the sale activity on each individual lake.
The average lakeshore property received an increase of approximately 11 %. The median
sale price of existing lakeshore property in 2003 was $546,200.
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
sales prices. The average increase to the townhouses was 7%. The increase to
condominiums was approximately 6%. The sale activity of condominiums and townhouses
remained brisk in 2003. The median sale price of condominiums was $159,500. The
median townhouse sale price was $220,200.
7
Overall the commercial/industrial values declined around 2% from the 2003 values.
Larger investment type properties, other than retail, reported less revenues and higher
vacancies. Market demand has soften in the office, office showroom, manufacturing, and
distribution segments. In some cases, current sales on larger facilities are very close if not
the same as vacant land prices. It is forecasted that redevelopment of these sites will occur.
Retail has continued to be a strong property type for both smaller properties bou`7ht for
1031 exchanges and larger well anchored projects. Retail in general throughout the Metro
is doing well and vacancies of this property type is around 5%. All of the Plymouth retail
sales in the past year have showed substantial growth appreciation with augregate values
increasing around 10% between 2003 and 2004.
Other more defined property types; such as banks and daycares, have also experienced
increased values from 2003 to 2004. These properties are influenced by investor appetites
and/or the economic expansion of banks into the newer growing suburban markets.
The owner -occupied type properties continue to have a strong demand and have held their
value. This is due in part to the continued lower interest rates and those owners who can
combine a SBA loan along with their new purchase. This is true for both office and
industrial properties. In this product size, there continues to be multiple bidding resulting
inhighersellingprocess. One example of this is the new office townhomes now in Phase
II after Phase I has sold out.
Contacts with property owners, investors, and legal associates suggest that the market has
hit bottom and is starting to turn around. Plymouth has fewer vacant properties today than
a year ago. New business is continuing to enter the market. The pace is slower [hall in
previous years, but changes appears to be coming. We will continue to follow market
trends and adjust values accordingly.
The overall apartment assessment for 2004 decreased 3% from 2003. This is due in part
by the 1,200 new apartment units completed in 2003. The vacancy rates increased and the
rents were reduced with numerous concessions Offered. Many apartment dwellers are
purchasing homes as the interest rates remain low. FOur Of the larger Plymouth apartment
complexes sold in 2003. These upper end complexes were purchased by insurance
companies and large real estate trusts. The market on four plexes and small apartment
complexes remains strong.
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 assessors/appraisers do not create value; they only measure- its
movements.
E.
Assessing property values equitably is partly science, partly judgment, partly
con-ununication shills, 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 Appeal & Equalization a more productive one.
9
Plymouth Assessing Department
City Assessor
A'anc), A BYe CAE
Senior Ippraisel. Commercial App raher
All Olsson RES Earl Zent GI E
Appraiser Appraiser Appraiser
MiAe Henderson CIIA Ciuch- Bowman CTIA Paul Kin,,,sbmy ON
Part-time
Appraiser
Alike Vander Linden
I ssessillellt
Technician
Laurie Lokken
H
ccU ml t ill
Clerk
Barbara Yrnrick
2004 ASSESSMENT STATISTICS
Total City Parcel Count (01-02-03) 2)4,00
Total City Parcel Count (01-02-04) 24.354
Parcel Count Per Appraiser 2004 Assessment 4,059
Assessor' s Industry Standard per Appraiser 3,000
2003 Total Estimated Market Value S7.375.677.600
2004 Total Estimated Market Value (1'reliminarv) SS. 063.494, 900
2002 to 2003 Total Cite Valuation Growth + S.4`/o
2003 to 2004 Total Cite Valuation Growth * 9.3%
2002 "Dotal 13uildin g, Permits 143
2003 Total 131.1ilding Permits x.304
2001 Plvmoutlt' s Median Home Sale Price S284.000
2002 Plymottth- s Median Home Sale Price 5294.500
2003 Plymouth' s Meclian Home Sale Price S323.900
Does not include toWnhottses or condos)
2003 - Median- Sales Ratio (Assessment Level) 9. 3°/„
2004 `' Median" Sales Ratio (Assessment Level) 1)().51,lo
2004 Hennepin County Area Median Sales Ratio 9-5.7`/o
2003 Coefficient of Dispersion (Assessment Accttracy) 6.8%
2004 Coefficient of Dispersion (Assessment Accuracy) 5.9%
2002 Approximate Number of Sales (including nCXX- construction) 2,033
2003 Approximate Number of Sales (includin( neW construction) x.391
ice 1 l
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rPA 2004 LIMITED MARKET VALUE
City of
Plymouth, MN
This represents a compilation of information and
data from city, county, state and other sources that has
not been field verified. Information should be field
verified and compared with origianl source documents.
N
W+E
S
ii;
2004 SALES RATIO STUDY
Equalizing is done today through the process of sales 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
The 2004 sales study recently completed by our staff and Hernnepin County places our
overall median ratio at 96.5%.
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 ye.11-'S Stud%' is 5.9%. This is comparable to other
jurisdictions of our size In Hennepin COU11ty. (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 CC1UaliZCd va1LIL1tiO11S at both CndS ()1 the
value spectrum.
Our price -related differential is currently at 100.230. This shows Our ability to treat 111LhCr
priced homes as equally as the lower priced homes. 100 is considered perfect.
15
Distribution of 2004 Estimated Market Value by Property Type
6%
18 q
J%
ESTIMATED MARKET VALUE
Percentage 2004
Residential 76% 6,121,667,600
Commercial/Industrial 18% 1,429,727,300
Apartments 6% 512,098,000
TOTAL EMV 8,063,492,900
16
2003
5,456,984,900
1,445,460,300
473,232,400
7,375,677,600
MEINIO
CITY OF PLYNIou'II
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: March 1, 2004
TO: Assessing Staff'
FROM: Nancy Bye, City Assessor
SUBJECT: LIVING UNIT BI:EAKDO\\'N
The followin`'i is a listing of the type and the numhcr of livimi units for each timt is un the
tax molls for assessment year January 2, 2004.
2003 AS.NIT 2004 AS\MT
TYPE OF DWEILL.ING r OF [-\ITS n OF UNITS
Apartment Units 6,879 7,081
Single Family Hames 15,292 15,422
Duplex 80 80
condom ill ill ills 2,496 x,639
Townhonies 2,815 3,019
I'crll]alease 42 38
Mobile Homes 62 62
Farm Houses 1 17
Seasonal Res. (Cabins) 7 6
Co -Op Units 210 210
TOTAL LIVING UNITS: 27,901 28,574
2004 Assessment represents an increase of 673 living units over January 2, 2003.
Total number of homesteads (1/2/04) 20,628
17
INIEN10
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: February 26, 2004
TO: Nancy Bye, City Assessor
FROM: Jan Olsson, Senior Appraiser
SUBJECT: ASSESSMENT - HENNEPIN COUNTY STUDY
SALES STATISTICS
OVERALL SALES RATIO
3004 Estimated Nbrket VAUCs \\•crC_ 1SCd on-;tll_saleS)
STYLE OF SALES AVG. SALE PRICE 'MILAN R.- T10
Ramblers 148 5277,600 .956
Splits 228 S255,200 955
T\v o Stories 2985346,900 983
Rambler -Cluster
Homes 6 5394,200 952
Splits - Cluster
Homes 23 5256,300 968 I
T\%,o Stories - Cluster
Homes 4 S392,200 974
Condominiums 275 S159,500 966
Townhomes 191 S220,200 964
t
TOTAL 1,173
The above figures are based on the sale of existinn! honors that meet the state critclia for arm's lcnzth
transactions.
Approximate Number Homes Sold (Including New Construction) 2,391
A cracC Sale Price of Sing -,le Family llomcs 5323,900
cc: Appr:i;sal Staff
T
PLYMOUTH RESIDENTIAL PROPERTY VALUE
DISTRIBUTION 2004
VALUE PERCENT OF HOMES
Under $100,000 01.23 260
100,001 to $200,000 23.76 5,017
200,001 to $300,000 39.01 8,237
300,001 to $400,000 21.41 4,521
401,000 to $500,000 09.01 1,902
500,001 to $700,000 04.73 998
Over $700,000 00.85 179
TOTAL 100% 21,004
45
40
35
30
I- 25
zLu
U
w
Wa 20
15
10
5
0
UNDER $100,001 $200,001 $3001001 $400,001 5500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 5700,000
VALUE
19
MARKET VALUE APPEAL PROCESS
NOTICE OF MARKET VALUE
ABATE'I IENT 1)ROC I:SS
DISCUSS WITH ASSESSOR'S OFFICEI (A DNIINISI'RATIVF
REVIE\1')
LOCAL BOARD OF APPEAL & EQUALIZATION
DENY APPEAL
COUNTY BOARD
OF EQUALIZATION
CHANGE
V:LUE
k1)1)1Z0VE- A1)Pl-AL
DENY APPEAL
STATETAX COURT
20
2004 RESIDENTIAL LAKE SHORE SALES STUDY
2003 SALES)
NUMBER NAME I YEAR AVERAGE AVERAGE I
OF OF OF LOT SALE
PARCELS LAKE SALES VALUE PRICE
116 Bass 8 181,000 TO 5583,494
323,000
37 Gleason 3 5147,000 TO S747,432
415,000
48 Hadley 2 S 175,000 TO 455,000
400,000
33 Lost 3 S136,000 TO S392,967
S140,000
139 Medicine 6 S205,000 TO 5=178,983
5242,000
43 Mooney 3 S330,000 TO 5955.158
S800,000
53 Parkers 4 S128,000 TO S688,750
240,000
8 Pike 0 5130,000 TO 0
180,000
59 Schmidt 2 5193,000 TO S589,950
S266,000
536 31
Parcels Sales
Hennepin County Sales Study of all Residential Lake Shore Sales in Plymouth for the
2004 Assessment included:
TOTAL SALES: 15 MEDIAN RATIO: 88.0 Preliminary Ratio
II AFTER ADJUSTMENTS MEDIAN RATIO: 96.8
Lakeshore properties were given a 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 to determine if further adjustments
were necessary.
21