HomeMy WebLinkAboutCity Council Packet 04-15-2003 BOEAgenda
City of Plymouth
Board of Appeal and Equalization
Tuesday, April 15, 2003
7:00 p.m.
Council Chambers
1. Call to Order
2. City Assessor's Report
3. Public Comments
4. Adj ourn
2003
LOCAL BOARD OF
APPEAL &
EQUALIZATION
CITY OF PLYMOUTH
APRIL 15, 2003
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: April 15, 2003
TO: Plymouth Board of Review
FROM: Nancy Bye, City Assessor
SUBJECT: 2003 LOCAL BOARD OF APPEAL & EQUILAZATION
The following report explains 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 Appeal & Equalization easier to
understand.
The purpose of the Local Board of Appeal & Equalization is to hear testimony from
property owners on their objections to the Assessor's 2003 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 Appeal & Equalization is not empowered to adjust taxes, but only deal with
the 2003 estimated market value or classification questions.
At the conclusion of the meeting the Board of Appeal & Equalization will recess, and will
reconvene on April 29, 2003 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
comments you may have before the Board convenes.
Nancy Bye
Extension #5351
E-mail NBye@ci.plymouth.mn.us
TABLE OF CONTENTS
DESCRIPTION PAGE#
LOCAL BOARD OF APPEAL & EQUALIZATION AUTHORITY 1
2003 BOARD OF APPEAL & EQUALIZATION SUMMARY 2
INTRODUCTION TO THE 2003 ASSESSMENT 4
INTRODUCTION TO PLYMOUTH ASSESSING DIVISION 9
2003 ASSESSMENT STATISTICS 10
2003 SALES RATIO STUDY 14
DISTRIBUTION OF MARKET VALUE 15
SINGLE FAMILY HOUSING BREAKDOWN 16
2003 ASSESSMENT SALES STATISTICS 17
RESIDENTIAL VALUE DISTRIBUTION 18
APPEAL PROCESS 21
LAKESHORE STUDY 22
LOCAL BOARD OF APPEAL & EQUALZATION 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 measuring of the relative
share of each taxpayer in meeting 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. The County
Board of Equalization makes changes in aggregate 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 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 Appeal & Equalization assures 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.
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. The assessor may then estimate a property's value
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
2003 BOARD OF APPEAL & EQUALIZATION SUMMARY
The majority of properties in the City of Plymouth saw changes in their estimated market
value. The value changes range from general citywide 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
Value Percent Change
8%
8%
10%
8%
5%
4%
Exceptions to the above market value changes would include new construction, quartile
areas, reappraisals, and/or other market adjustments.
The condominium and townhouse market continues to be a rapidly appreciating market.
This is based on the aging baby boomers and the demand for maintenance free living.
On March 18, 2003 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 2". The City of Plymouth
continued to have a high quantity of building permits for new construction and remodeling
projects. This does not include the 5,400 quartile parcels that had to be reviewed and re-
appraised.
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 for
taxation. 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
determining property tax bills. Approximately 14,458 of the 24,005 parcels in the City
qualify for a limited value. These properties are taxed on their limited market value, not
their estimated value. $303,669,700 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.
With the ongoing conversion of our computerized system for property appraisal, certain
workloads shifted. A computerized mass appraisal system requires extensive time
verifying the accuracy of the converted data as well as sketching to scale each property into
the new system. Our computerization of the assessing function of Plymouth continues to
be one of the most progressive and sophisticated systems that exists in the State of
2
Minnesota. The excellence and quality of the 2003 assessment is a direct result of this
computerization.
The assessment just completed for 2003 represents many hours of staff research and time.
We feel confident the 2003 assessment is fair and well equalized throughout the City of
Plymouth.
Respectfully submitted
Assessing Department Staff
3
INTRODUCTION TO THE 2003 ASSESSMENT
The 2003 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 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 y 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 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 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 2003 Assessment (not the 2003 taxes) reflects an increase of 8.4% overall valuation
over the 2002 assessment (including new construction, quartile adjustments, and/or market
adjustments). This can be demonstrated as follows:
2002 TOTAL CITY VALUE
2003 TOTAL CITY VALUE
PRELIMINARY)
2003
PERCENTAGES
6,844,155,600 7,420,648,500
Total Value Increase: 576,492,900 8.4%
Value of New Construction: 182,233,100 2.7%
Appreciation of Existing Property: 394,259,800 5.7%
4
TOTAL PERCENT OF VALUE GROWTH IN THE
CITY OF PLYMOUTH
1996 1997 1998 1999 2000 2001 2002 2003
2003 RESIDENTIAL PROPERTY VALUES
Total Estimated Market Values According to Assessor Records
r1) city ofibPlymouth, MN
This represents a compilation of information and N
data from city, county, state and other sources that has
not been field verified. Infonnation should be field WE
verified and compared with origianl source documents.
S
X71
MARKET VALUE RANGES
100,000 and under
100,001 to $200,000
200,001 to $ 300,000
300,001 to $400,000
400,001 t0 $500,000
500,001 to $700,000
Over $700,000
2003 ASSESSMENT INTRODUCTION
During this past year, our staff has concentrated on collecting data on field property 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 25% of all existing properties have been physically
reviewed during 2002 and represent over 5,400 parcels, excluding 2,453 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. 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 2003 assessment was 88.6%.
Hennepin County determines this ratio. They compare the January 2, 2002 estimated
market values to sales occurring from October 1, 2001 through September 30, 2002. The
average residential increase for the January 2, 2003 assessment was 8%. This was
determined by comparing the January 2, 2003 estimated market values to the same sales,
thus establishing the 2003 estimated market values at a median sales ratio of 95.3 and a
mean ratio of 95.3 with a coefficient of dispersion of 6.8. 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 reflect
actual market values. This past year the appreciation on existing homes was again in the
double digits.
The average 2002 mean sale price of existing housing stock in the City was $294,500, this
does not include townhouses or condos. This is extracted from the Hennepin County Ratio
Study of all arms -length transactions involving single 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 8%. The average
sale price of existing lakeshore property in 2002 was $453,600.
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 8%. The increase to
condominiums was approximately 10%. The sale activity of condominiums and
townhouses remained brisk in 2002. The average sale price of condominiums was
149,200. The average townhouse sale price was $201,500.
7
Commercial and industrial property values peaked on most property types back in
2001. As of the 2003 assessment period, most of the industrial values other than
maybe the smaller owner -occupied properties, indicated declines due to the increasing
supply and lack -luster demand. Larger, single user, vacant buildings and or multi -
tenant buildings with large vacancies are especially affected by the downturn in the
marketplace.
Commercial values such as office and office showroom properties showed the most
decline of any of the product types. Again, smaller single user office buildings still
appear to have market demand. The larger single and or multi -tenant buildings with
vacancies problems have experienced the greatest negative market value trends. Retail
properties are about the only properties that have maintained values without much
change.
As an overall value trend, Plymouth experienced a -4% aggregate value loss on all of
the commercial and industrial properties. Each property value change varied depending
upon individual circumstances and factors that relate back to the marketplace.
The overall apartment assessment for 2003 increased 5% from 2002. Many luxury
apartment valuations were flat due to the rise in vacancies and the increased supply of this
class of apartments. Most increases in valuation were on the duplexes and smaller, older
complexes. The sales of complexes in this submarket is still reasonable.
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.
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 Appeal & Equalization a more productive one.
E:3
Plymouth Assessing Department
City Assessor
Nancy D. Bye CAE
Senior Appraiser Commercial Appraiser
Jan Olsson RES Earl Zent CAE
Appraiser Appraiser Appraiser
Mike Henderson CMA Cindy Bowman CMA Paul Kingsbury CMA
Part-time
Appraiser
Adrienne Garcia
Assessment
Technician
Laurie Lokken
0
Accounting
Clerk
Barbara Yurick
2003 ASSESSMENT STATISTICS
Total City Parcel Count (01-02-02)
22,863
Total City Parcel Count (01-02-03) 24,005
Parcel Count Per Appraiser 2003 Assessment 6,251
Assessor' s Industry Standard per Appraiser 5,000
2002 Total Estimated Market Value $6,857,378,300
2003 Total Estimated Market Value (Preliminary) $7,420,648,500
2001 to 2002 Total City Valuation Growth + 11%
2002 to 2003 Total City Valuation Growth + 8.4%
2001 Total Building Permits 2,250
2002 Total Building Permits 2,453
2000 Plymouth' s Average Home Sale Price $243,300
2001 Plymouth' s Average Home Sale Price $284,000
2002 Plymouth' s Average Home Sale Price $294,500
Does not include townhouses or condos)
2002 " Median" Sales Ratio (Assessment Level) 95.8%
2003 " Median" Sales Ratio (Assessment Level) 95.3%
The target ratio set by Hennepin County 95.5%
2003 Hennepin County Median Sales Ratio 95.9%
2002 Coefficient of Dispersion (Assessment Accuracy) 5.5%
2003 Coefficient of Dispersion (Assessment Accuracy) 6.8%
2001 Approximate Number of Sales (including new construction) 1,800
2002 Approximate Number of Sales (including new construction) 2,033
10
2002 RESIDENTIAL SALE
Market Value Ranges
r
City ofrib 100,000 and under
100,001 to $200,000
Plymouth, MN 200,001 to $300,000
300,001 to $400,000
400,001 to $500,000
This represents a compilation of information and N
data from city, county, state and other sources that has
500,001 to $700,000
not been field verified. Information should be field W E
verified and compared with origianl source documents.
Over $700,000
S
G'a 2003 LIMITED MARKET VALUE
F0
City of
Plymouth, MN
N
This represents a compilation of information and
data from city, county, state and other sources that has WE
not been field verified. Information should be field
verged and compared with origianl source documents. g
M
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.
1,076,000 NOT TAXED
160 PARCELS
W+E
S
1 2
J
2003 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. In Plymouth, this type of correction was received on Industrial properties for
the 1998 assessment (-5% to building value). Fortunately this has never been done to
residential properties.
The 2003 sales study recently completed by our staff and Hennepin County places our
overall median ratio at 95.3 %.
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 6.8%. 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 is currently at 100.430. This shows our ability to treat
higher priced homes as equally as the lower priced homes. 100 is consideredep rfect.
14
Distribution of Esti mated Market Value by
Property Type 2003
Residential
Commercial/Industrial
Apartments
TOTAL EMV
M
6%
f+%
ESTIMATED MARKET VALUE
Percentage 2003
74% $5,482,579,600
20% $1,463,256,500
6% $474,812,400
7,420,648,500
15
2002
4,947,454,600
1,493,863,200
402,837,800
6,844,155,600
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: March 3, 2003
TO: Assessing Staff
FROM: Nancy 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, 2003.
2002 ASMT 2003 ASMT
TYPE OF DWELLING # OF UNITS # OF UNITS
Apartment Units 5,766 6,879
Single Family Homes 15,178 15,292
Duplex 72 80
Condominiums 2,281 2,496
Townhomes 2,638 2,815
Permalease 42 42
Mobile Homes 62 62
Farm Houses 21 18
Seasonal Res. (Cabins) 7 7
Co -Op Units 210 210
TOTAL LIVING UNITS: 26,277 27,901
2002 Assessment represents an increase of 1624 living units over January 2, 2002.
Total number of homesteads (1/2/03) 20,309
16
MEMO
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: February 28, 2003
TO: Nancy Bye, City Assessor
FROM: Jan Olsson, Senior Appraiser
SUBJECT: ASSESSMENT HENNEPIN COUNTY STUDY
SALES STATISTICS
OVERALL SALES RATIO
2003 Estimated Market Values were used on all sales)
STYLE OF SALES AVG. SALE PRICE MEAN RATIO
Ramblers 118 253,000 963
Splits 195 249,200 943
Two Stories 342 355,800 962
Rambler - Cluster
Homes 11 279,100 944
Splits - Cluster
Homes 17 244,700 988
Two Stories - Cluster
Homes 12 312,900 975
Condominiums 256 149,200 963
Townhomes 174 201,500 968
TOTAL 1,125
The above figures are based on the sale of existing homes that meet the state criteria for arm's length
transactions.
Approximate Number Homes Sold (Including New Construction) 2,033
Average Sale Price of Single Family Homes $294,500
cc: Appraisal Staff
17
50 -.i_
45
40
35
30
r
Z
W
25
LUa
20
15
10
5
0
UNDER $100,001 $200,001 $300,0001 $400,001 $500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 $700,000
VALUE
I:
Plymouth Residential Property Value
Distribution 2001
VALUE PERCENT OF HOMES
UNDER $100,000 6.02 1,127
100,001 TO $200,000 47.02 8,797
200,001 TO $300,000 31.77 5,944
300,0001 TO $400,000 10.41 1,947
400,001 TO $500,000 3.50 655
500,001 TO $700,000 1.12 209
OVER $700,000 0.16 29
TOTAL 100.00 18,708
DOES NOT INCLUDE MOBILE HOMES OR CO-OPS.
50 -.i_
45
40
35
30
r
Z
W
25
LUa
20
15
10
5
0
UNDER $100,001 $200,001 $300,0001 $400,001 $500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 $700,000
VALUE
I:
Plymouth Residential Property Value
DOES NOT INCLUDE MOBILE HOMES OR CO-OPS.
40
35
30
25
i ZW
20
Wa
15
10
5
0
UNDER $100,001 $200,001 $300,0001 $400,001 $500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 $700,000
VALUE
19
Distribution 2002
VALUE PERCENT OF HOMES
UNDER $100,000 2.57 490
100,001 TO $200,000 39.90 7,615
200,001 TO $300,000 35.71 6,814
300,0001 TO $400,000 14.59 2,784
400,001 TO $500,000 5.08 969
500,001 TO $700,000 1.91 366
OVER $700,000 0.24 46
TOTAL 100.00 19,084
DOES NOT INCLUDE MOBILE HOMES OR CO-OPS.
40
35
30
25
i ZW
20
Wa
15
10
5
0
UNDER $100,001 $200,001 $300,0001 $400,001 $500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 $700,000
VALUE
19
Plymouth Residential Property Value
Distribution 2003
VALUE PERCENT
UNDER $100,000 2.20
100,001 TO $200,000 31.70
200,001 TO $300,000 37.50
300,0001 TO $400,000 17.65
400,001 TO $500,000 6.85
500,001 TO $700,000 3.30
OVER $700,000 0.80
TOTAL 100.00
DOES NOT INCLUDE MOBILE HOMES OR CO-OPS
40 -
35 -
30 ---
25--
z
25--
z
LU
20 --
w
M
OF HOMES
455
6,546
7,744
3,646
1414
682
165
20,652
UNDER $100,001 $200,001 $300,0001 $400,001 $500,001 OVER
100,000 TO TO TO TO TO $700,000
200,000 $300,000 $400,000 $500,000 $700,000
VALUE
MARKET VALUE APPEAL PROCESS
NOTICE OF MARKET VALUE
ABATEMENT PROCESS
DISCUSS WITH ASSESSOR' S OFFICE I I (ADMINISTRATIVE
REVIEW)
LOCAL BOARD OF APPEAL & EQUALIZATION
DENY APPEAL
COUNTY BOARD
OF EQUALIZATION
CHANGE
VALUE
APPROVE APPEAL
DENY APPEAL
STATE TAX COURT
21
2003 RESIDENTIAL LAKE SHORE SALES STUDY
2002 SALES)
NUMBER NAME 1 YEAR AVERAGE AVERAGE
OF OF OF LOT SALE
PARCELS LAKE SALES VALUE PRICE
116 Bass 6 160,000 TO 616,650
300,000
37 Gleason 4 100,000 TO 500,480
295,000
48 Hadley 4 145,000 TO 471,250
400,000
33 Lost 1 110,000 TO 225,000
160,000
139 Medicine 0 135,000 TO 0
300,000
43 Mooney 5 172,000 TO 791,495
360,000
53 Parkers 1 115,000 TO 445,000
220,000
8 Pike 1 100,000 TO 655,000
126,000
59 Schmidt 4 165,000 TO 540,905
240,000
536 26
Parcels Sales
Hennepin County Sales Study of all Residential Lake Shore Sales in Plymouth for the
2003 Assessment included:
TOTAL SALES: 15 MEAN RATIO: 91.2 Preliminary Ratio
AFTER ADJUSTMENTS MEAN RATIO: 97.4
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.
22