County Assessor Jason McCaslin reported at the Board of Appeal and Equalization public hearing that his office has received about 100 appeals from property owners through the local board or open book appeal process. He expects there will be a lot of appeals until compliance and equalization are back on track.
McCaslin stressed that an equalization across jurisdictions is important to make sure people pay their fair share of the tax burden based on Minnesota Statute. His office is required to maintain a Median Sales Ratio between 90% and 105%.
Last year when the State Board of Equalization found a jurisdiction to be out of compliance, it ordered changes to bring the jurisdiction into compliance. In 2021 the state board documented eight issues that needed to be taken care of. Two issues still to be addressed are the county wide median small sample report and the county wide median. There have been no state board orders this year, as there was last year. Commissioner Mitch Lentz told McCaslin work he has done to get us back into compliance is appreciated.
In regard to agricultural land McCaslin noted an example where land classification is inaccurate. Much will need to be done to the 2022 assessment to improve equity. Staff will delineate acres and how they are being used. There have been quite a few splits where farmers have sold off waste ground. Aerial imagery allows his office to observe land use changes; he said it is a huge asset.
Interim county assessor Steve Hacken observed inequity in the valuation of lots. He implemented measures to correct the discrepancies. All land values were increased.
Adjustments were made to jurisdictions with six or more sales. McCaslin said he prefers to keep the Median Sales Ratio somewhere between 93% and 97%. While many adjustments applied increases to the house base rate or the land value in a jurisdiction; some adjustments decreased the house base rate or land value in a particular jurisdiction.
In jurisdictions where there have been less than six sales, the 5-Year Small Sample Study is used to allow the assessor to make adjustments for compliance and equalization throughout the county. This includes both residential and commercial/industrial properties.
McCaslin explained how a residential property can look updated on the outside, leading the appraiser to assume the inside is similarly updated. To make an accurate appraisal it is beneficial to view the interior of a home. He gave an example of a 100-year-old home that was updated with siding, roofing, and windows, when viewed on the outside. However, when the inside was viewed it appeared much like it had been 100 years ago.
The assessor’s office is required to inspect properties every five years. He acknowledged staffing levels in the past have made it hard to give appraisals the attention they deserve. He showed a chart which he said illustrates the inconsistent appraisal of lower valued homes. He noted it is important to see the interior of homes to get the depreciation correct. Properties need to be appraised equitably.
Appeals
Three property owners appealed their valuations at this meeting. Two were women that owned homes in Spring Valley.
The first questioned the $16,500 increase in her valuation with no improvements being made to the 65-year-old home. McCaslin noted there had been a slight change in the land value, but most of the increase was on the building value. The Spring Valley median ratio had been quite low, so the overall change in value was up 19.56%. Even when no improvements are made to a house, its value may go up. Right now demand for homes is stronger than the supply, which causes values to go up.
The second woman owned a 130-year-old home in Spring Valley with no improvements in over 20 years. Her taxable market value went up over $50,000. She insisted there is no way she could sell her home for $188,700 as it is valued by the county. McCaslin noted that the appraiser was not granted permission to observe the home’s interior. So, the appraiser has only half the information. The woman said this is her private residence and suggested they should be able to take her word for the condition of the interior of the home. McCaslin noted that Minnesota Statute allows a home owner to appeal, but a change in the valuation can not be approved when access to the interior of the home is denied.
A third property owner of an undeveloped one-acre lot in Canton explained the value of that lot had increased from $1,000 to $32,500. The property was located on the old railroad bed. The assessor’s office kept it at the $32,500 valuation because the lot next to it has an apartment building on it. The land on that lot which is smaller is valued at over $23,000. Two undeveloped lots have recently sold for about the same per square foot valuation as his lot is now valued. McCaslin said the land value is consistent with the land values throughout the city. It was noted that the city of Canton has given no indication that it is not a buildable lot.
No action was taken to change the market valuation on any of the three appeals detailed above.
Adjustments
Of the about 100 that appealed, most property owners called in, after which an appraiser visited the properties. Adjustments were made in the data. The majority of the property owners were fine with the resolution except for the handful that appealed tonight in person.
McCaslin brought in seven situations where property owners called his office. Then, staff looked at the properties and found discrepancies that supported a change in value. These changes in valuations need to be approved by the board of appeal and equalization.
One was a discrepancy in land use and with review it was noted the house had been renovated. Land value was decreased and home value was increased. The board approved a net change in value of $300 as recommended by the assessor.
From Whalan, a property owner called in that the property was over valued. Upon inspection the building value was reduced $72,400. The board approved the decrease as recommended.
In Peterson a property owner called in about three properties. One valuation was recommended to be reduced because it was not a buildable lot (straight up a bluff), cost prohibitive to build on. The value was reduced from $17,500 to $2,800 as recommended. A second parcel was incorrectly measured and had a power pole directly in the middle of it. The value was reduced from $3,000 to $600 as recommended. The third property was changed because of what staff thought was an old grain bin, was actually a water tower. This old concrete water tower is still used by the city of Peterson. McCaslin explained that since the water tower is located on private property there is no justification to exempt it, so it is a taxable structure. No change to land value was made to the wooded property, but the improvement (water tower) was valued at $22,500; the mistaken grain bin was valued at $700. The change in valuation was approved as recommended.
In Rushford a building was reduced in value from $528,700 to $331,000 because it had been in the system as a 100% finished building. The building is only a third to half finished. The change in valuation was approved as recommended.
A property in Pilot Mound was changed from a value of $603,900 to $548,400 due to the depreciation applied to the house and a few changes to the out buildings. The change was approved as recommended.
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