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Home My WebLink AboutBOR - April 17, 20231685 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 17, 2023 at Andover City Hall Council Chambers CITY OF ANDOVER COUNTY OF ANOKA STATE OF MINNESOTA Important Information Regarding Assessment and Classification of Property This may affect your 2023 property tax payments. NOTICE IS HEREBY GIVEN, that the Local Board of Appeal and Equalization for the City of Andover shall meet on April 17, 2023, 7:00 p.m., at Andover City Hall. The purpose of this meeting is to determine whether taxable property in the jurisdiction has been properly valued and classified by the assessor, and to determine whether corrections need to be made. If you believe the value or classification of your property is incorrect, please contact your Assessor's Office to discuss your concerns. If you are still not satisfied with the valuation or classification after discussing it with your Assessor, you may appear before the Local Board of Appeal and Equalization. The board shall review the valuation, classification, or both if necessary, and shall correct it as needed. Generally, an appearance before your Local Board of Appeal and Equalization is required by law before an appeal can be taken to the County Board of Appeal and Equalization. Given under my hand this 1" day of April, 2023. Michelle Hartner — Deputy City Clerk A,,M Amak ANOKA COUNTY 2023 ASSESSOR'S REPORT BOARD OF APPEAL AND EQUALIZATION Anoka Countv Citv of Andover 2023 Local Board of Appeal and Equalization Agenda April 17, 2023 1. Call the Board of Review to Order 2. Roll Call 3. Read Official Notice of the Board of Review 4. Board Chair outlines the ground rules for the meeting. The specific ground rules may vary for each local board but should include: • Purpose of the meeting; • Remind property owners that only appeals for the current year valuation or classification may be made. The 2023 board is to review the assessment as of January 2, 2023, which will be used to compute the property taxes payable in 2024. Prior years' assessments or taxes (including taxes payable in 2023) are not within the jurisdiction of the board; • The order of the appellants - by appointment first, followed by walk-ins on a first- come basis. The board will also receive written appeals from property owners. The secretary will record the required information (name, mailing address, telephone number, and address of property, etc.) • The expectations of the 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 by the board, etc.); • Time limits imposed (if any); • The procedure the board will follow for making decisions (Will the board hear all appeals before making any decisions? Will the board send a letter to appellants to inform them of the decision? Etc.) The Board may correct any erroneous valuation and add any omission of properties or increase of value after due process. The total decrease of valuations may not exceed one percent of the total valuation of the taxing district; S. The Board Chair should give the assessor the opportunity to present a brief overview of the property tax process and a recap of the current assessment 6. Appellants should then present their appeals to the board. If the assessor has had a 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 meeting will be reconvened at a date to be determined. The Board of Appeal and Equalization of any city must complete its work and adjourn within twenty days 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 of Andover 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 2•d. Each years assessment is based on arms -length transactions (sales that meet the criteria of an open market transaction, see market value definition belowl that occurred the previous October thru September. When the assessment is completed the local taxing jurisdictions begin their budgeting process for the following year. They use the total assessment to determine their tax base and develop their tax rates (formerly referred to as mill rates). All aspects of the assessment, including but 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 that property should bring in a competitive and open marketunder all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by any undue stimulus Implicit in this 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 andselleraretypicallymotivated: • both parties are well informed or well advised, and acting in what they consider their own best interests; • a reasonable time is allowed for exposure in the open market; • payment is made in terms of cash in US. 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 concessions granted by anyone associated with the sale (a foreclosure sale or a short sale [a sale to avoid foreclosure] is not considered an arms -length transaction). Mass Appraisal Defined Property values for Minnesota real estate tax purposes are determined via mass appraisal. Mass appraisal 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 during a specified sales period. Anoka County City of Andover Sales Statistics Defined 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 county levels. 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, along with the mean ratio, gives an idea of our assessment level. Within the city, 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 as the Weighted Mean. Mean Ratio: The mean is the average ratio. We use this ratio not only to watch our assessment level, but also to analyze property values by development, type of dwelling and value range. These studies enable us to track market trends in neighborhoods, popular housing types and classes of property. Coefficient of Dispersion (COD): The COD measures the accuracy of the assessment It is possible to have a median ratio of 93% 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 indicates the 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 anything over 20 will mean an assessment review by the 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, or the lower valued properties are assessed at a 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 spring Anoka County sends out a property tax bill (based on the prior year assessment) along with the Notice of Valuation and Classification. Three factors that affect the tax bill 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 of your property (how itis used). The assessor determines the final two factors. You may appeal the value or classification of your property as described on the next page. Anoka County City of Andover Informal Appeal • Property owners are encouraged to call the appraiser or assessor whenever they have questions or concerns about their market value, classification of the property, or the assessment process. • Almost all questions can be answered during this informal appeal process. • When taxpayers call questioning their market value, every effort is made to make an appointment to inspect properties that were not previously inspected. • If the data on the property is correct, the appraiser can show the property owner other sales in the market that support the estimated market value. • If errors are found during the inspection, or other factors indicate a value reduction is warranted, the appraiser can easily make the changes at this time. Local Board of Appeal and Equalization • The Local Board of Appeal and Equalization is typically made up of city council members or township board members. In certain cases, a special board is appointed and is typically consists of real estate professionals. • The Board meets during late April and early May. • Taxpayers can make their appeal in person or by letter. • If an interior inspection is denied no adjustment can be made to value per MN Statute. • The assessor is present to answer any questions and present evidence supporting their value. County Board of Appeal and Equalization • In order to appeal to the County Board of Appeal and Equalization, a property owner must first appeal to the Local Board of Appeal and Equalization. • The County Board of Appeal and Equalization follows the Local Board of Appeal and Equalization in the assessment appeals process. • Again, if an interior inspection is denied no adjustment can be made to value per MN Statute. • Their role is to ensure equalization among individual assessment districts and classes of property. • Decisions of the County Board of Appeal and Equalization can be appealed to 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 fact arising under the tax laws of the state. There are two divisions of tax 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 market value of the property is less than $300,000 • The entire parcel is classified as a residential homestead and the parcel contains no more than one dwelling unit • The entire property is classified as an agricultural homestead. • 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 are final and cannot be appealed further. Small claims decisions do not set precedent Anoka of Andover The Regular Division of the Tax Court will hear all appeals, including those with the jurisdiction of the small claims division. Decisions made here can be appealed to a higher court 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 that taxpayers may appear with as little inconvenience and expense to the taxpayer as possible. Appeals of property located in Anoka County are heard at the Anoka County Courthouse. Three judges make up the Tax Court Each may hear and decide cases independently. However, a case may be tried before the entire court under certain circumstances. The petitioner must file in tax court on or before April 30 of the year in which the tax is payable. Anoka County City of Andover Andover Assessment Overview Andover Assessment Staff Name Position license Level Responsibility Alex Guggenberger County Assessor SAMA Countywide Oversit Diana Stellmach DeputyAssessor SAMA Countywide Oversit Jim Ryan SeniorAppraiser CMA -Income Qualified Commercial/Industrial/Apartrnent/Exempt Jake Stenzel ResidentialAppraiser CMA Residential 1-3 Units JeanneWashburn ResidentialAppraiser raiser Trainee I Residential 1-3 Units City of Andover Property Breakdown 2023 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 statutorily required). This is an ongoing process whereby 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 quintile review, properties are also inspected when there is a building permit issued or at the request of the property owner. The sale of a property does not initiate a reassessment. The map on the next page depicts the residential quintile plan for the next 5 years. Quintile Maps are also available on our Public Website. For furtherinformationgoto:https:://anokacountymn. ov DocumentCenterNiew/20015/Andover NumberofParcels _PropertyType Vacant Residential 437 Improved Residential 10,994 acant&Im roved 157 -Agricultural Apartment(Vacant & Improved) 24 Commercial Industrial(Vacant & Improved) 131 Railroad & Public Utili 32 Exempt 493 Total 12,268 2023 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 statutorily required). This is an ongoing process whereby 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 quintile review, properties are also inspected when there is a building permit issued or at the request of the property owner. The sale of a property does not initiate a reassessment. The map on the next page depicts the residential quintile plan for the next 5 years. Quintile Maps are also available on our Public Website. For furtherinformationgoto:https:://anokacountymn. ov DocumentCenterNiew/20015/Andover Anoka County City of Andover Andover e 5 Year Quintile Map Legend — 3 s O 2026 Q 2027 202 � 2023 Q 2026 Q 2027 Anoka County City of Andover 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 2022 assessment which was used for tax calculations this year (2023) was based on transactions that closed between October 1, 2020, and September 30, 2021. Property owners were notified of their 2022 value on their Notice of Valuation and Classification (also referred to as a valuation notice). The notices were mailed out in March of 2022 in the same envelope as the tax statement The appeals process took place at the municipal level during the month of April of 2022 and at the county level in June of 2022. At this point, if a property owner wishes to appeal their 2022 assessment (for taxes payable 2023) their only option is to file a tax court petition. This must be done no later than April 30, 2023. The 2023 assessment was completed in February and the valuation notices were mailed the week of March 20th. The 2023 assessed value will be used for tax calculation purposes next year. The sales period associated with this assessment is October 1, 2021 thru September 30, 2022. As with past assessments, the local appeals process will begin in April and finish up in June. The options and requirements to appeal this assessment are listed on the back of the valuation notice. If a property owner has an issue with their 2023 assessment, the first thing they should do is contact their local assessor. The phone numbers are listed on their valuation notice. Please note that only arms -length sales that closed between October 1, 2021 and September 30, 2022 have been used to determine valuations for the 2022 assessment, for taxes payable in 2023. The following chart may be helpful in following the timeline of your assessment: We are aware that due to the time frames we are required to work within it sometimes appears as though the assessors 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 following chart illustrates the relationship between assessed values and actual sale prices; and how the assessor's market values have been following the changes as they occur in the open market October 1, 2019 to January 2, 2021 2022 September 30, 2020 October 1, 2020 to January 2, 2022 2023 September 30, 2021 October 1, 2021 to January 2, 2023 2024 September 30, 2022 40 Anoka of Andover One important thing to remember is the assessment process is completed before the budgeting process begins. Assessors do not adjust values 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 due to market conditions, all properties are adjusted. The only time that an 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 due to value added for new construction or value removed due to demolition/destruction of an improvement Note: The Median Assessor's Estimated Market Value represents the homes that are in the sales study. 2023 Sales Statistics - Residential The table below uses various sales metrics to compare how the residential market in Andover performed compared to the rest of the county. The sales study figures were gathered using Northstar MLS data. Andover howcoun Average Sale Price &%Change (YOY) $445,700(+6.78% $379,500(+6.78%) Median Sale Price %Change (YOY) $430,250(+3.18%) $349,900(+6.84%) Median Days on Market (DOM) 13 12 # of Sales & % Change (YOY) 497(-20.99%) 5172(-21.60%) # of Arm's Length Sales & % Chane(YOY) 494(-20.83%) 5131(-21.54% # of Non -Arm's Length Sales & % Change (YO 3 -40.00%) 41 -28.07% Anoka 2023 Sales Ratio Statistics of Andover The tables below display the final adjusted sales ratios for Residential, Apartments, Commercial, and Industrial properties. All the numbers are within State of MN requirements and indicate a high-quality assessment with good equalization. City/Township Qualified Sales Median Ratio COD COD Andover 412 94.41% 7.86 Anoka 203 94.94% 10.57 Bethel 11 94.27% 7.84 Blaine 1037 94.63% 6.82 Centerville 50 94.43% 5.61 Circle Pines 87 94.09% 7.15 Columbia Heights 324 94.10% 10.53 Columbus 33 94.52% 16.77 Coon Rapids 797 94.70% 6.30 East Bethel 141 94.89% 9.03 Fridley 358 94.51% 7.04 Ham Lake 158 94.45% 7.12 Lexington 14 95.2061 7.32 Lino Lakes 255 94.66% 6.30 Linwood 51 93.75% 12.65 Nowthen 27 95.08% 6.71 Oak Grove 68 95.64% 8.35 Ramsey 428 94.59% 8.90 Spring Lake Park 105 94.35% 6.66 St. Francis 125 94.55% 5.90 Countywide 4684 94.58% 7.62 Property Type Number of Sale Ratio COD Apartment 36 94.80% 12.25 Commercial 53 94.45% 12.92 Andover 1 83.93% N/A Industrial 48 92.95% 16.15 Andover 2 99.79% N/A 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 five largest property types. Residential Agricultural 55,000,000,000 $60.000,000 sa,ao0,o00,000 53,000,000,000 $40.000,000 52,000,000,000 $20,000,000 51,OIX1.IXIO,OUI 5- $- 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Apartment Commercial Industrial $AQgQO Sla.IXO.[W sm.uo0.mo 5]OU[O.mO 51aVA.Wo s�o.ay.ao s- ]0�9 1No tNl im) ,an ShW,Pl,Ofq SisO.MU,M1l� Simaq,Us smnm.aa Sw,aw.au smpn,rca smrMi n.�, EN9 tUN 1011 IOEE 1013 Total EMV - ANDOVER SiLkV.M1tl smnm.aa smpn,rca smrMi n.�, 1019 INU 2@1 )R) 8J. $6,000,000,000 $5,000,000,000 - $4,000,000,000 - $3,000,000,000 - $2,000,000,000 $1,000,000,000 $- 2019 2020 2021 202< 2023 11 Anoka County City of Andover 2023 Market Value Statistics & New Construction 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 2023 EMV % Increase % Increase Due to NC Residential $ 4,662,425,900 1.70% 1.22% Agricultural $ 55,054,300 8.54% 0.19% Apartment $ 69,824,100 25.47% 7.60% Commercial $ 183,016,800 35.83% 0.01% Industrial $ 35,167,000 1 113.44%1 0.00% Total EMV $ 5,005,488,100 1 3.37%1 1.25% 12