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Home My WebLink AboutBOR - April 19, 20211685 CROSSTOWN BOULEVARD N.W. • ANDOVER, MINNESOTA 55304 • (763) 755-5100 FAX (763) 755-8923 . WWW.ANDOVERMN.GOV Board of Review 7:00 P.M. Monday, April 19, 2021 at Andover City Hall Council Chambers Some or all members of the Andover City Council may participate in the April 19, 2021 City Council meeting by video conference rather than by being personally present at the City Council's regular meeting place at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, MN 55304. Members of the public can physically attend, although there is very limited seating in the City Council Chambers as appropriate social distancing will be required by all visitors. The public can also be provided a ZOOM video conference invite by going to www.andovermn.gov and clicking on the meeting in the calendar for the link. wm ��021 ASSESSOR'S REPORT BOARD OFAPPEAL AND EQUALIZATION Anoka County CityofAndover 2021 Local Board of Appeal and Equalization Agenda April 19, 2021 1. Call the Board ofReviewtoOrder 2. Roll Call 3. Read Official Noticeofthe Board ofReview 4. Board Chair outlines the ground rules for the meeting. The specific ground rules may vary for eadi local board but should include: • Purposeof the meeting • Remind property owners that only appeals for the current year valuation or classification maybe made. The 2021 board is to review the assessment as of January 2, 2021, which will be used to compute the property taxespayable in 2022. Prior years' assessments or taxes (including taxes payable in 2021) are notwithin the jurisdiction of the board; • The order of theappellants -by appointment first followed by walk-ins on a first- come basis. The board will also receive written appeals from prop ertyownem The secretarywill record the required information (name, mailing address, telephone number, and address of property, etc) • The expectations ofthe appellant when presenting their appeal (i.e. the appeal must be substantiated by facts; where the appellant should stand or sit; the appellant should be prepared to answer questions posed bythe board,etc); • Time limits imposed(if any); • The procedure theboard will followfor making decisions CWill the board hearall appeals before making any decisions? Willtheboardsenda letterto appellantsto inform them ofthe decision? Etc.) The Board maycorrect any erroneous valuation and add any omission of properties orincrease ofvalue after due process. Thetotal decrease of valuations may not exceed one percent of the total valuation of the taxingdistrict S. The Board Chair shouldgivethe assessor the opportunityto present a brief overviewofthe property tax process and a recap of the current assessment. 6. Appellants should then present their appeals to the b card. If the assessor has hada chance to review the property prior to the meeting, the assessor can present facts and information either supporting the valuation and or classification, or recommend that the board make a change. If the assessor has not had a chance to review the property prior to the meeting the board may ask the assessor to review the property and present his/her findings to the board at a reconvene meeting Recess or Close the Meeting. (If needed, the meetingwill be reconvened at a date to be determined. The Board of Appeal and Equalization of any city must complete its workand adjourn within twentydays from the time of convening as specified in the notice of the clerk, unless a longer period is approved by the Commissioner of Revenue. No action taken subsequent to such date shall be valid.) Anoka County City ofAndover Understanding Your Assessment and Appeal Options Assessment Process Timeline In Minnesota it is the duty of the Assessor to value and classify property. This is done annually as of the assessment date of January 2nd. Each year's assessment is based on arms -length transactions (sales that meet the criteria of an open market transaction, see market value definition below l that occurred the previous October thru September. When the assessment is completed the local taxing jurisdicti onsbegin their budgeting process for the following year. They use the total assessment to determine their tax base and develop theirtax rates (formerlyreferred to as mill rates). All aspects of the assessment, includingbut not limited to the assessment date, sales period for each assessment and property tax classification are dictated by state statute and under the oversight of the Minnesota Department of Revenue. Market Value Defined As in private appraisal, Market Value is defined as: The most probable price thata propertyshould bring in a competitive and open marketunde• all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming thepriceisnot affectedbyanyundue stimulus. Implicitinthis definition are the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: • buyer andseller are typically motivated: • both parties are well informed or well advised, and acting in what they consider their own best interests; • a reasonable time isallowedforexposure inthe open markel; • payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; • the price represents the normal consideration for the property sold unaffected by special or creative financing or sales conce,sionsgranted by anyone associated with the sale (a foreclosure sale or a short sale (a sole to avoidforeclosuref is not consideredan arms -length transaction). Mass Appraisal Defined Property valuesfor Minnesota real estate tax purposes are determined via mass appraisal. Massappraisal is the practice of determining individual values based on statistical analysis of a group of sales for a large area. The values are determined as of a specific date and are based on arms -length transactions that occurred duringa specified sales period. Anoka Sales Statistics Defined 6i::1'iT0M We have the ability by using statistical analysis to test the accuracy of the assessment. We use these statistics to ensure equity between properties at the neighborhood, municipal and countylevels. The Minnesota Department of Revenue also uses these same techniques to test for equity between counties The primary statistics used are: Median Ratio: This is a measure of central tendency that is the midpoint of a group of sales ratios when arrayed from low to high. The median is a useful statistic as it is not affected by extreme ratios. Aggregate Ratio: This is the total market value of all sale properties divided by the total sale prices. It, alongwith them can ratio, gives an idea of our assessmentlevel. Withinthecity, we constantly try to achieve an aggregate and mean ratio of 94% to 95%to give us a margin to account for a fluctuating market and still maintain ratios within state mandated guidelines Also referred to asthe Weighted Mean. Mean Ratio: The mean is the average ratio. We usethis ratio notonly to watch our assessment 1 evel, butalso to analyze property values by development type of dwellingand value range. These studies enable us to track market trends in neighborhoods, popular housing types and classes of property. Coefficientof Dispersion (COD): The COD measures the accuracy of the assessment It is possibleto have a median ratio of93%with 300 sales,two ratios at 93%,149 at 80% and 149 at 103%. Although this is an excellent median ratio, there is obviously a great inequality in the assessment The COD indicatesthe spread of the ratios from the mean or median ratio. The goal of a good assessment is a COD of 10 to 20. A COD under 10 is considered excellent and anythingover 2 0 will mean an assessment reviewbythe Department of Revenue. Price Related Differential (PRD): This statistic measures the equality between the assessments of high and low valued property. A PRD over 100 indicates a regressive assessment orthelowervalued propertiesare assessed ata greater degree than the higher. A PRD of less than 100 indicates a progressive assessment or the opposite. A perfect PRD of 100 means that both higher and lower valued properties are assessed exactly equal. Appeals Procedure Each springAnoka County sends outa property tax bill (based on the prioryear assessment) alongwith the Notice of Valuation and Classification. Three factors that affect the taxb III are: 1. The amount your local governments (town, city, county, etc.) spend to provide services to your community; 2. The estimated market value of your property; 3. The classification ofyour property (how it is used). The assessor determines the finaltwo factors. You mayappeal the value or classification of your property as described on the next page. Anoka Countv City of Andover Informal Appeal • Property owners are encouragedtocalltheappraiserorassessorwhenevertheyhavequestions or concerns about their marketvalue, classification ofthe property, or the assessment process. • Almost all questions canbeansweredduringthisinformal appeal process. • When taxpayers call questioningtheirmarhet value, every effortis madeto make an appointment to inspect properties that were not previously inspected. • I fthe data on the propertyis correct, the appraiser can showthe property owner othersales in the market that support the estimated market value. • If errors are found duringthe inspection, or otherfactorsindicate a value reduction is warTanted, the appraiser can easilymake the changes atthistime. Local Board of Appeal and Equalization • The Local Board ofAppeal and Equalization istypicallymadeup of citycouncil members or township board members. In certain cases, asp ecialb oard is appointed and is typicallyconsists of real estate professionals. • The Board meets duringlateApril and early May. • Taxpayerscan maketheir appeal inperson or byletter. • If an interiorinspectionis denied no adjustmentcan be madeto valueperMN Statute. • The assessor is presentto answer anyquestions and present evidencesupportingtheirvalue. County Board of Appeal and Equalization •InordertoappealtotheCountyBoardofAppealandEqualizationapropertyownermustfirst appealto theLocal Board ofAppeal and Equalization. • The CountyBoard ofAppeal and Equalization followsthe Local Board ofAppeal and Equalization in the assessment appeals process. • Again, if an interior inspection is denied no adjustment can bemadetovalue per MNStatute. • Their role is to ensure equalization among individual assessment districts and classesofproperty • Decisionsofthe CountyBoard ofAppeal and Equalization can be appealedto the Minnesota Tax Court. Minnesota Tax Court The Tax Court has statewide jurisdiction. Except for an appeal to the Supreme Court, the Tax Court shall be the sole, exclusive and final authority for the hearing and determination of all questions of law and fad arisingunderthetax laws of the state. There are two divisions oftax court: the small claims division and the regular division. The Small Claims Division of the Tax Court only hears appeals involving one of the following situations: • The assessor's estimated marketvalue of the property is <$300,000 • The entire parcelis classifiedasa residential homestead and the parcel contains no morethanone dwellingunit • The entire propertyisclassifiedasanagriculturalhomestead. • Appeals involving the denial of a current year application for homestead classification of the property. The proceedings of the small claims division are less formal and property owners often represent themselves. There is no official record of the proceedings. Decisions made by the small claims division arefinal and cannot beappealedfurther. Smallclaimsdecisfonsdonotsetprecedent Anoka Co ofAndover The Regular Division of the Tax Court will hear all appeals, includingthose with the jurisdiction of the small claims division. Decisions made herecan be appealed to a highercoimt The principal office for the Tax Court is in St Paul. However, the Tax Court is a circuit court and can hold hearings at any other place within the state so thattaxpayers mayappear with as little inconvenience and expense to the taxpayeras possible. Appeals of property located in Anoka County are heard at the Anoka County Courthouse. Threej udges makeup the Tax Court Each may hear and decide cases independently. However, a case maybe tried beforethe entire court under certain circumstances. The petitioner must file intaxcourt on or before April 30 of the yearin which thetaxis payable. Anoka Co AndoverAssessment Overview Andover Assessment Staff ofAndover Name Position License Level ResponsibUity Jason Da sono Appraiser AMA Residential 1-3 Units Ben Hamill Assessment Compliance Manager CMA- Income Qualified Countywide Oversight Amanda Fahrendorff Appraiser Trainee CMA- In Process Residential 1-3 Units Alex Guggenberger County Assessor SAMA Coun de Oversight City of Andover Property Breakdown PropertyType NLmrberofParcels Vacant Residential 348 Improved Residential 10,788 Apartment CVacant&[ rov 22 Commercial/Industrial(Vacant &Im rov 130 Public Utility 7 Total 11.295 2 021 Assessment As part of this mass appraisal process, all properties are re -valued annually based on the information on record. Properties are physically inspected and property records reviewed once every 5 years (as statutorilyrequired). This is an ongoing processwhereby 20% (referred to as quintile) of a city is inspected each year so that in a cycle of 5 years all properties have been inspected at least once. In addition to this quintil e review, properties are also inspected whenthere isa building permit issued or atthe request of the property owner. The sale of a prop ertydoes not initiate a reassessment The map on the next page depicts the residential quintile plan for the next 5years. Quintil e Maps are also available on ourPublic Website. For furtherinformationgoto: anokacountL/3574/Property-Assessment Anoka Co ANDOVER J TCdI %-kU1IIUM IVICI rei::PiT[eiR-- Legend Sections 0 2019F—] 2021 2018 ❑ 2020 ❑ 2022 F] Anoka County City ofAndover As stated earlier, Minnesota state law governs the assessment date, which is January 2nd of each year, as well as the sales periods associated with each assessment date. The 2020 assessmentwhich was used for tax calculations this year (2021) wasbased on transactionsthat closed between October 1, 2018 and September 30, 2019. Property owners were notified of their 2020 value on their Notice ofValuation and Classification (also referred to as a valuation notice). Thenotices were mailed outin April of 2020 inthe same envelope as thetax statement The appeals processtook place at the municipal level during the month ofApril of 2020 and atthe county level in June of 2020. Atthis point if a property owner wishes to appeal their 2020 assessment (for taxes payable 2021) theironly option is to file a tax court petition. This mustbe done no laterthan April 30, 2021. The 2021 assessmentwas completed in February and the valuation notices were mail edthe week of March 29th. The 2021 assessed value will be used for tax calculation purposes next year. The sales period associated with this assessment is October 1,2019 thru September 3 0,2 02 0. Aswith pastassessmen% the local appeals processwill begin inApriland finish up in June. The options and requirements to appeal this assessmentare listed on the back of the valuation notice. If propertyownerhas an issue withtheir 2021 assessment:, the first thing theyshould do is contact their local assessor. The phone numbers are listed on their valuation notice. Please notethat onlyarms-length sales that closed between October 1, 2019 and September 30,2 020 have been used to determine valuations for the 2 02 1 assessment, for taxespayable in 2022. The following chart maybe helpful in following the timeline ofyour assessment: October 1, 2017 to January 2, 2019 2020 September 30, 2018 October 1, 2018 to January 2, 2020 2021 September 30, 2019 October 1. 2019 to January 2, 2021 2022 September 30, 2020 Anoka County City ofAndover We are aware that due to the time frames we are required to work within itsometimes appears as though the assessor's estimated market value does not represent the market. It seems lower than it should be during times of inflation and higher than it should be in times of deflation. The foll owing chart illustrates the relationship between assessed valuesand actual sale prices; and howthe assessor's marketvalues have been followingthe changes as theyoccurin the open market Median Assessed Value as it Relates to Median Sale 280,000 27s,000 270,000 265,000 260,000 - - — 255,000 — 250,000 — 245,000 240,000 235,000 230,000 225,000 220,000 215,000 210,000 205,000 200,000 195,000 -- 190,000 185,000 180,000 _�-- '175,000 � 170,000 165,000 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 IT Tax Payable Year 0 --*—Median Sale Price Median Assessor's Estimated Market Value Note: TheMedianAssessoesEstimated Market Value represents thehomes that are in the sales study. One important thing to remember is the assessment process is completed before the budgeting process begins. Assessors do not adjustvalues in order to increase revenue. There is little correlation between changes in assessments due to market changes and how the resulting real estate tax changes. When we adjust assessments dueto market conditions, all propertiesare adjusted. Theonlytimethatan adjustment in an assessor's estimated market value will have an impact on the increase or decrease in tax is if the change in value is dueto value added for new construction or value removed dueto demolition/destruction of an improvement. I 2021 Sales Statistics -Residential The table below usesvarious sales metrics to comparehow theresidential market in Andover performed compared to the rest of the county. The sales study figures were gathered using NorthstarMLSdata 1Ketric� "` r Andover Countywide Average Sale Price & % Chane OY) $380,400(+7.97%) $314,800(+9.00%) Median Sale Price%Chane OY) $364,900(+8.60%) $287,000(+8.30%) Median Days on Market 0 15 14 # ofSales &% Chane 0 613(+9.66%) 6500(+9.920/o) #of Arm's Length Sales & % Change 0 609(+10.120/o) 6435(+11.08%) # of Non -Arm's Length Sales & % Change 0 4(-66.7%) 65(-45.84%) 2021 Sales Ratio Statistics The tables below display the final adjusted sales ratios for Residential, Apartments, Commercial, and Industrial properties. All the numbers arewithin State of MN requirements and indicate a high-quality assessmentwith good equalization. C O M B N E D Final Sales Ratio's 12 Month Andover 94.35% Anoka 94.35% Bethel 90.89% Blaine Centerville Circle Pines Columbia H 94.41% R East Bethel 94. E Fridley 94. S Ham Lake 94. 1 Hilltop 93. D Lexington 94. E Lino Lakes 94. N Linwood 94. T Nowthen 93. 1 Oak Grove 92. A Ramsey 94. L Spring Lake Park 94. 14.86 St. Francis 94. COD 6.18 6.71 9.60 6.88 6.76 7.71 9.12 13.42 5.37 8.47 6.08 6.20 3.12 7,49 A P T 12 Month COD 7.45 Countywide 93.58% 8.07 9.59 Columbia Heights 96.00% 7.00 8.18 C 0 M 12 Month COD 14.86 Countywide 90.93% 15.59 7.12 Blaine 90.42%1 16.16 6.23 I N D 12 Monthl COD 5.64 Countywide 92.889/. 11.95 6.96 Blaine 92.31%1 6.71 10 Anoka County City of Andover Market Value History The graphs below indicate how aggregate values have changed over the last 5 years for each of the four largest propertytypes. Residential Apartment $4,000,000,000 560,000.000 $3,000,000,000 S50,000,000 540,000,000 $2,000,000,000 530,000,000 520,000.000 I $1,000,000,000 510,000,000 I $- 5- 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Commercial Industrial $135,000,000 514,000,000 $130,000,000 $12,000,000 $125,000,000 $10,000,000 5120,000,000 $8,000,000 $115,000,000 $6,000,000 5110,000,000 $4,000,000 $105,000,000 $2,000,000 $100,000,000 5- 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Total EMV - Andover 55,000,000,000 $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 2017 2018 2019 2020 2021 11 of Andover 2021 MarketValue Statistics&NewConstruction The tables below indicate the percentage change (YOY) for each of the four largest property types as well as the total market value. The increase due to New Construction (NC) is also included in the table below. Property Type 2021 EMV %Increase % Increase Due to NC Residential $ 3,687,236,700 8.13% 1.45% Apartment $ 47,745,500 1.03% - Commercial $ 128,902,900 1.80% 0.02% Industrial $ 11,939,400 -1.10% Total EMV $ 3,923 205,900 9.46% 0.97% 12