Board of Appeal and Equalization

Fillmore County’s five commissioners and Auditor/Treasurer Heidi Jones were sworn in as the County Board of Appeal and Equalization convened on June 23.

County Assessor Jason McCaslin explained the purpose of this board is to provide a fair and objective forum to ensure equalization of assessment. Market values may be increased or decreased or property may be reclassified. The property owner appealing is expected to provide evidence to disprove the assessor’s valuation or classification.

For compliance, which is governed by the Minnesota Department of Revenue, the Median Sale Ratio must be maintained between 90% and 105%. McCaslin explained he likes to see that ratio in the mid to upper 90s. Other statistics include the Coefficient of Dispersion or method to measure appraisal uniformity and the Price Related Differential or a means to treat lower value properties consistent with higher value properties. McCaslin stressed the importance of consistency.

McCaslin demonstrated that some commercial/industrial and residential properties are out of compliance. Correcting this will take a couple of years. For agricultural land there has been about a 5% reduction applied to tillable land values.

The State Board of Equalization issues an order for corrective action when there are non compliant assessment statistics. The State Board ordered equalization changes for the cities of Lanesboro, Preston, and Village of Rushford. In Lanesboro and Preston there will be an increase in residential land values and also residential building values. The Village of Rushford will see an increase of residential building values.

McCaslin explained taxpayers will see changes in their valuations. His department will be working to establish a uniform, equalized assessment. The residential building schedule will be completely replaced. Commercial properties will be valued using a national cost service as a foundation. Ag land will be valued using Crop Equivalency Rating or Crop Productivity Index as a basis.

Many taxpayers will see little change in their valuations. Some will see a substantial decrease in their valuation and some will see a substantial increase in their valuation.

The change in valuations is not to generate additional revenue for the county, but to more fairly distribute the tax burden among property owners. Some taxpayers have been paying more than their fair share and others have not been carrying their fair share of the tax burden.

Fillmore County has 18,200 taxable parcels. Each of the county’s four appraisers is responsible for about 4,600 parcels. Minnesota statute requires the viewing of 20% of its parcels each year. McCaslin maintained they will work to restore the quality of the Fillmore County assessment, but it will take time.

Duane Bakke asked how long the county has been out of compliance. McCaslin, who has only been with the county for one month, said he has not been able to dig that deep yet.

Appeal

Harlan Marchant, Marchant Motors, appealed his assessment on four parcels in Spring Valley. Appraiser Brian Hoff said Marchant has a unique situation as the shop was built over Spring Valley Creek. This limits any improvements that can be made to the building. Marchant explained that the parcels are in the flood plain, “There is no way I can get the money it is valued for when I sell it.” The business is closed. McCaslin said the improvements are valued as is, regardless of  whether the business is in operation or not.

Hoff said the buildings are still up and operable. Bakke asked what could a buyer do with it. Marchant said one would have to work with regulatory agencies.

McCaslin noted sales ratios for commercial properties in Spring Valley are on the high side. We need to do more research. There seems to be a consistent trend that the commercial/industrial properties in Spring Valley are valued too high. McCaslin said at this point he doesn’t have a recommendation, but suggested there was some validity to Marchant’s appeal. A  decrease in the valuation would be appropriate.

The board unanimously approved about a 10% reduction in the valuation of the two parcels with the buildings over water ($103,300). No change in valuation was made to the parcels which are asphalt parking lots.

McCaslin asked the board to approve changes he recommends on properties where the owner questioned the valuation within the last 10 days. A Spring Valley residential property was reduced slightly due to water damage in the basement. A Preston property was changed from a commercial classification to a split classification (75% commercial and 25% Ag).

Two parcels in Holt Township (Highland) were tied together with an unusual error. One of the buildings, a house, was actually on the other parcel. The request to have the building tied to the correct parcel was approved.