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2015/04/13 - ADMIN - Agenda Packets - City Council - Study Session
AGENDA APRIL 13, 2015 (Councilmember Sanger & City Manager Harmening Out) 6:15 p.m. CONVENE LOCAL BOARD OF APPEAL & EQUALIZATION – Community Room 6:30 p.m. CITY COUNCIL STUDY SESSION – Community Room Discussion Items 1. 6:30 p.m. Future Study Session Agenda Planning – April 20 and April 27, 2015 2. 6:35 p.m. Competitive Video Franchising Process in St. Louis Park 3. 7:05 p.m. Environment & Sustainability Commission Annual Report & Work Plan 4. 8:05 p.m. Update on Highway 100 Traffic Issues (Verbal) 8:35 p.m. Communications/Meeting Check-In (Verbal) 8:40 p.m. Adjourn Written Reports 5. Central Park West Redevelopment Contract Update 6. Encore Development – France Avenue Update 7. Bridgewater Development Update 8. Southwest LRT Update Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting. Meeting: LBAE Meeting Date: April 13, 2015 EXECUTIVE SUMMARY TITLE: 2015 Local Board of Appeal & Equalization (LBAE) RECOMMENDED ACTION: Staff recommends the LBAE take the action as noted below. POLICY CONSIDERATION: Local Boards and/or Open Book Meetings are required by law. The Board must conclude its business within 20 days of convening, this year by May 2, 2015. SUMMARY: All property owners are entitled to the right of appeal regarding their classification and market value. The property classification is determined by the actual use of the property. The market value is based on records maintained for every property and market conditions as of the date of the assessment (January 2). Minnesota statute requires that all properties are to be valued at full market value. In most jurisdictions and our historic practice, the Local Board is accomplished in two meetings. The first meeting is used to convene the Board, set the Board process and announce that appeals are resolved at the reconvene meeting. The second meeting (reconvene) is used to hear and decide the merit of each appeal. The Local Board process depends on active participation from all parties involved including the board members, the property owner and assessing staff. The following Agenda and related action is proposed: 1. Convene the St. Louis Park Local Board of Appeal and Equalization 2. Roll Call of Board Members – Declaration of Quorum 3. Appoint Chair 4. Acknowledgement of Trained Members (Sanger, Mavity, Lindberg & Brausen) 5. a. Accept Roster of Appellants b. Call for Any Additions 6. Determination of Date and Time for Continued Proceedings (Reconvene) … Suggested as April 27, 2015 prior to Study Session … 7. Instruct Assessor to: a. Inform Appellants of Reconvene Date & Board Process via Telephone and Mail b. Re-Inspect and Re-Appraise Parcels Under Appeal 8. Completion of the Local Board Certification Form 9. Recess FINANCIAL OR BUDGET CONSIDERATION: Not applicable for budgeting from the perspective of the taxing jurisdictions. Changes made by the Board may affect the property owner’s share of the total property tax budget levy in the Pay 2016 tax period. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Summary of Duties & Responsibilities Sample Letter – To Be Sent to Each Appellant on April 14 DOR Board Training Handbook Prepared by: Cory Bultema, City Assessor Approved by: Tom Harmening, City Manager LBAE Meeting of April 13, 2015 Page 2 Title: 2015 Local Board of Appeal & Equalization SUMMARY OF DUTIES AND RESPONSIBILITIES LOCAL BOARD OF APPEAL AND EQUALIZATION Most of the responsibilities listed under the Local Board of Appeal and Equalization are statutory, primarily found in Minnesota Statutes 274.01. • The first responsibility is attendance. The Local Board of Appeal and Equalization is an official public meeting similar to a City Council meeting and cannot convene without a quorum. The local assessor, the county assessor, or one of his/her assistants is required to attend. • At least one member must be present at each meeting of the Local Board of Appeal and Equalization (beginning in 2006) that has attended an appeals and equalization course as developed and approved by the Commissioner of Revenue. The compliance date is December 1 of the year prior to the current year’s meeting. • The valuation notices shall be in writing and be sent by ordinary mail at least ten calendar days before the meeting of the board. The valuation notice will include the dates, places and times set for the meetings of the Local Board of Appeal and Equalization as well as the Hennepin County Board of Appeal and Equalization. • The meetings must be held between April 1 and May 31 each year, including reconvene meetings. The County Assessor shall fix a day and time when the Local Board of Appeal and Equalization shall meet. The board must complete its work and adjourn within 20 days from the time of convening stated in the notice of the clerk, i.e. calendar days – original night is day one. • The City Clerk shall give published and posted notice of the meeting at least ten days before the date of the meeting. • Local Boards of Appeal and Equalization must see that all taxable property is properly valued and classified for the current assessment year only. The board may consider both real and personal property, and both estimated and taxable value. Personal property is limited to mobile homes and their storage sheds, decks and other improvements located in a manufactured home park, structures on leased public lands and RR operating ROW, and leased buildings located on land owned by the occupant and used as their homestead. • If any property has been omitted, the board must correct the assessment by adding it to the list of assessments along with its market value. • The board may not increase or decrease by percentage all assessments in a district of a given class of property. Changes in the aggregate to assessments are by class and are made by the County Board of Equalization. • The board may not make an individual market value adjustment or classification change that would benefit the property in cases where the owner or other person having control over the property will not permit the assessor to inspect the property and the interior of any buildings or structures. LBAE Meeting of April 13, 2015 Page 3 Title: 2015 Local Board of Appeal & Equalization • Although the Local Board of Appeal and Equalization has the authority to increase or decrease individual assessments, the total of such adjustment must not reduce the aggregate assessment by more than one percent. If the total reductions would lower the aggregate assessment by more than one percent, none of the adjustments may be made. The assessor shall correct any clerical errors or double assessments discovered by the board without regard to the one percent limitation. • The local board does not have the authority to reopen former assessments on which taxes are due and payable. • If an assessment was made after the local board meeting or if a taxpayer can establish not having received the notice of market value at least five days before the meeting, they can appeal to the County Board of Appeal and Equalization. • The board may find instances of undervalued properties. The board must notify the owner of the property that the value is going to be raised. The property owner must have the opportunity to appear before the board if they so wish. • The local boards do not have the authority to address exemption issues. Only the county assessor (and the tax court) has the authority to exempt property. They also have no jurisdiction over special programs for which an application process is required (Veterans Exclusion, Market Value Homestead Exclusion, Green Acres, etc.). • A taxpayer may appear in person, by council, or written communication to present his or her objection to the board. The focus of the appeal must center on the factors influencing the estimated market value or classification placed on the property. • All changes will be entered into the assessment record by the county assessor’s office. • Before adjourning, the local board should prepare an official list of the changes. The law requires that the changes be listed on a separate form. All assessments that have been increased or decreased should be shown on the form along with their market values. • Administrative Rule from the Department of Revenue beginning with the 2013 Local Board of Review… The Assessor may not make administrative changes to the valuation or classification less than 10 days prior to the Board. All contemplated changes should be brought to the Board for review and approval. • Administrative Rule from the Department of Revenue beginning with the 2013 Local Board of Review… Each appeal must be ruled on separately. • Directive from the Department of Revenue beginning with the 2015 Local Board of Review… assessing staff from Hennepin County will attend Local Board meetings. • Further reference, attached separately, is provided by the MN Department of Revenue Board Training Manual (2015 update). This manual gives considerably greater detail as to the process and role of the Board in the assessment process. LBAE Meeting of April 13, 2015 Page 4 Title: 2015 Local Board of Appeal & Equalization SAMPLE LETTER TO ALL BOARD ROSTER PROPERTIES Address line 1 April 14, 2015 Address line 2 Address line 3 Re: St. Louis Park Local Board of Appeal & Equalization Subject Address Property ID #: xx-xxx-xx-xx-xxxx Dear : The Board convened on April 13 and the above-referenced property has been entered onto the appeal roster. You are receiving both a telephone call and this letter to inform you that the reconvene date has been scheduled for X:XX pm on April 27, 2015 in the City Hall Council Chambers located at 5005 Minnetonka Boulevard, St. Louis Park, MN 55416. Appeals will be heard at this meeting. The following are important for you to know: If the Assessing staff has not already inspected your property within the last year, they must complete an interior and exterior inspection to revalue the property. Important: Refusing access precludes the Board from taking action that would benefit the owner (MN statute 274.01). Assessing staff will then complete their revaluation and contact you prior to the April 27 meeting to inform you of their conclusion. This is an important component of the Local Board process. If the assessing staff and you as the owner can mutually agree to resolve the matter, the agreement will be reported to the Board… while it is common that that the Board ratifies mutual agreement, please note that the Board is the decision maker on the issue. This method of resolution is often preferred by property owners as it is not necessary to speak before the board. When agreement cannot be reached, the Board hears the case. Past practice has been as follows: You, as the appellant, are allowed about 5-10 minutes to present information supporting your value position. The assessing staff, as the respondent, is allowed about 3-5 minutes to present information and their conclusion. The Board hears the information and decides the market value and/or classification as of January 2, 2015. The Board has full authority to sustain, increase, or decrease individual assessments. The Board does not have authority to reopen prior assessments. The Board does not have authority to change current and past real estate taxes. The property owner may appear in person, by representative, and/or by written communication to the Board. As the Assessor, I suggest focusing your appeal on the factors influencing market value and/or classification of the property as of the assessment date. We strongly recommend fact based locally competitive market information pertaining directly to your property (competitive sales, appraisals, etc.). National or regional information, while interesting, may not necessarily correlate to this specific local market. The Board appreciates receiving written information before the meeting. The assessing staff prepares a written report on all parcels under appeal and submits it to the Board prior to the meeting. If you would like your written documentation to be included in the Board packet, please provide it to my office by 12:00 Noon on Wednesday April 22 to allow time for copying LBAE Meeting of April 13, 2015 Page 5 Title: 2015 Local Board of Appeal & Equalization or scanning. Otherwise, please prepare ten (10) copies of written materials to be brought to the Board meeting on April 27. Upon completion of the Local Board, you will be notified via letter of the Board action. If you do not agree with the Local Board decision, you are eligible to attend the Hennepin County Board of Appeal & Equalization which convenes in June. An application to appear before the County Board is required no later than May 20, 2015. If you have any further questions on the Local Board process, do not hesitate to contact me directly. Cory Bultema, City Assessor Direct Dial 952-924-2536 2015 Board of Appeal and Equalization Training This handbook was created to satisfy the training requirements of Minnesota Statutes, sections 274.014 and 274.135 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 6 Table of Contents Table of Contents Table of Contents .................................................................................................................................... 1 Introduction .............................................................................................................................................. 1 Purpose of the board ................................................................................................................................................................. 1 Training for Boards of Appeal and Equalization ............................................................................................................... 1 The impetus for the legislation ................................................................................................................................................................. 1 Compliance requirements ......................................................................................................................................................................... 2 Failure to comply ....................................................................................................................................................................................... 2 Role of the board in the assessment process .................................................................................... 3 Market value ............................................................................................................................................................................... 3 Estimated market value ............................................................................................................................................................................. 4 Classification ............................................................................................................................................................................... 4 Split-class property..................................................................................................................................................................................... 5 Overview of the assessment process....................................................................................................................................... 5 Assessor estimates value ........................................................................................................................................................................... 6 Three approaches to value ......................................................................................................................................................................... 7 Assessor determines classification ........................................................................................................................................................... 7 Assessor reviews sales ratio ...................................................................................................................................................................... 7 The sales ratio study ................................................................................................................................................................................... 8 Assessor notifies taxpayer ......................................................................................................................................................................... 9 The board meeting .................................................................................................................................................................. 10 Who must attend the meeting - ...............................................................................................................................................................10 Local Boards .............................................................................................................................................................................................10 Meeting dates and times for the local board..........................................................................................................................................10 Who must attend the meeting .................................................................................................................................................................11 County Boards ..........................................................................................................................................................................................11 Meeting dates and times for the county board ......................................................................................................................................11 Documenting board actions ....................................................................................................................................................................11 Required forms for documenting board actions ...................................................................................................................................12 Duties of the board .................................................................................................................................................................. 13 Prohibition on changes within 10 days of local board meeting ..........................................................................................................13 What the board can do .............................................................................................................................................................................13 What the board can’t do ..........................................................................................................................................................................14 Recommendations for board members .............................................................................................................................. 15 Become familiar with sales information prior to board meeting ........................................................................................................15 Duties of the clerk – Local Boards ....................................................................................................................................... 16 Legal and policy reasons for fair and impartial appeal and equalization hearings ................... 16 Legal reasons for fair and impartial local board meetings ............................................................................................. 16 Policy reasons for fair and impartial board meetings...................................................................................................... 17 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations ................................................................................................... 18 Meeting procedures ................................................................................................................................................................. 18 The board should run the meeting ..........................................................................................................................................................18 Establish ground rules for the meeting ..................................................................................................................................................18 All proceedings must be public ..............................................................................................................................................................19 Make appellants feel comfortable ..........................................................................................................................................................19 Dealing with angry or difficult property owners ..................................................................................................................................19 Hearing appeals ........................................................................................................................................................................................19 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 7 Table of Contents Review process, not value-reduction process .......................................................................................................................................20 Recess or adjourn .....................................................................................................................................................................................20 Decisions ...................................................................................................................................................................................................20 Appeals must be substantiated by facts .................................................................................................................................................21 Best practices recommendations .......................................................................................................................................... 22 Have appellants call for appointments ...................................................................................................................................................22 Time limits for presenting appeals .........................................................................................................................................................22 Hear all appeals first ................................................................................................................................................................................22 Conducting other business at the board meeting ..................................................................................................................................23 Notifying property owners of decisions ................................................................................................................................................23 Quorum requirements for boards ....................................................................................................... 23 Quorum must be present ....................................................................................................................................................... 23 What constitutes a quorum? ....................................................................................................................................................................23 When a quorum is not present ................................................................................................................................................................24 Arrive on time for the meeting ...............................................................................................................................................................25 Explanations of alternative methods of appeal ................................................................................ 25 Benefits for the property owner ..............................................................................................................................................................25 Benefits for the local board .....................................................................................................................................................................26 Benefits for the county ............................................................................................................................................................................26 Option 1: Transferring assessment and local board duties to the county ...........................................................................................26 Option 2: Transferring local board duties to the county ......................................................................................................................27 Other alternate methods of appeal ...................................................................................................................................... 28 Special Boards of Appeal and Equalization - Local ............................................................................................................................28 Special Board of Appeal and Equalization - County ...........................................................................................................................28 Tax Court ..................................................................................................................................................................................................28 Appendix ................................................................................................................................................. 29 Glossary ..................................................................................................................................................................................... 29 Duties of local and county boards ........................................................................................................................................ 32 How value changes affect taxes ............................................................................................................................................. 32 Recommended format to notify appellants of board decisions ...................................................................................... 34 Local Board of Appeal and Equalization Trained Member Certification Form ...................................................... 35 County Board of Appeal and Equalization Trained Member Certification Form ................................................... 36 Frequently asked questions by board members ............................................................................................................... 37 What is the purpose of the Board of Appeal and Equalization? .........................................................................................................37 On what basis should I make my decisions as a board member? .......................................................................................................37 What options do property owners have if they are not satisfied with the board’s decision? .........................................................37 What factors make up the valuation of property?.................................................................................................................................37 Why do values change? ...........................................................................................................................................................................37 Frequently asked questions by property owners .............................................................................................................. 38 Is it legal for the assessor to increase my value so much in one year? ...............................................................................................38 Why are my taxes so high? .....................................................................................................................................................................38 Will I be taxed out of my home? ............................................................................................................................................................38 Property Tax Fact Sheets ....................................................................................................................................................... 38 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 8 1 Introduction Introduction Purpose of the board The purpose of the Board of Appeal and Equalization is to provide a fair and objective forum for property owners to appeal their valuation or classification. The local board often serves as the first formal step in the appeals process for taxpayers. One of the most important duties placed by law upon the governing body of a township, city, or county is to serve as the Board of Appeal and Equalization. Effective actions taken by the board may potentially make a direct contribution to attaining assessment equality. The goal of the Board of Appeal and Equalization should be to attempt to address property owners’ issues efficiently, fairly and objectively. Always keep in mind that any changes made by the board must be substantiated by facts. Any value reductions must be justified because they have the effect of shifting the tax burden to other property in the jurisdiction. Further, any changes made by the board must meet statutory guidelines. Training for Boards of Appeal and Equalization Legislation enacted in the 2003 and 2008 sessions requires that there be at least one member at each meeting of a Board of Appeal and Equalization who has completed an appeals and equalization course developed or approved by the Commissioner of Revenue within the last four years. Board members have a four-year certification cycle. They may have also taken additional appeals and equalization courses as a refresher. This handbook and the accompanying presentation have been updated to provide additional useful information to help the local board members better understand the overall assessment process and their role within it. The impetus for the legislation The legislation was enacted in part as a response to complaints that were directed to the Governor, Legislature and Department of Revenue. The legislature determined that training was needed to address the procedural shortfalls of some boards. This training will provide information and education for board members that will make the process more efficient and result in a better overall experience for both property owners and board members. Training for Local Boards of Appeal and Equalization is not a new concept. From 1947 to 1979, Local Boards of Appeal and Equalization (then referred to as local boards of review) were required by law to attend an instructional meeting at the county. In 1979, Minnesota Statutes, Section 273.03, subdivision 1 read as follows: “The assessors and at least one member of each local board of review shall meet at the office of the county auditor on a day to be fixed by the commissioner of taxation for the purpose of receiving instructions as to their duties under the laws of the state.” While training or instructional meetings may not be a “new” idea, the 2003 legislature determined that training for Local Boards of Appeal and Equalization was necessary to explain and clarify the role and duties of the board to help ensure that property owners receive a fair and impartial review of their valuation and classification. County Boards were added in 2008. Does “training” sound familiar? LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 9 2 Introduction The appeals and equalization course details the responsibilities, procedures and requirements of the Board of Appeal and Equalization. The legislation also requires the Commissioner of Revenue to develop a handbook to be reviewed during this course. This handbook includes: The role of the board in the assessment process; Legal and policy reasons for fair and impartial appeal and equalization hearings; Meeting procedures that foster fair and impartial assessment reviews and best practices recommendations; Quorum requirements for boards; and Explanations of alternate methods of appeal. Compliance requirements All cities and towns must certify in writing to the county assessor and all counties must certify in writing to the Commissioner of Revenue by February 1of each year that: At least one voting member at each board meeting has completed the appeals and equalization course within the last four years; and A quorum was present at each board meeting for the previous assessment year. The form that must be completed and returned by February 1 to the county assessor or Commissioner of Revenue will be distributed by the Department of Revenue on an annual basis (see pages 35 & 36). Failure to comply Any city or town that fails to meet the compliance requirements by February 1of each year is deemed to transfer its powers to the County Board of Appeal and Equalization for the following assessment year. The jurisdiction would lose its local board for one assessment year at a minimum, until proof of compliance and a resolution to the County Assessor are completed. Any county that fails to provide proof of compliance to the commissioner of revenue by February 1 is deemed to transfer its powers to the Special Board of Equalization for the following assessment year (see alternate methods of appeal section for more information on special boards). The county board must appoint the special board before the following year’s assessment. A special board of appeal and equalization must also meet the training requirements of the regular board of appeal and equalization. The Notice of Valuation and Classification must notify property owners when the Board of Appeal and Equalization for a city or town has been transferred to the county or for a county has been transferred to a special board for failure to comply with these requirements. Instead of a Local Board of Appeal and Equalization meeting, property owners must be provided with a procedure for reviewing their assessments, such as open book meetings, prior to the meeting of the County Board of Appeal and Equalization. This alternate review process will take place in April and May. A board who fails to meet these requirements may be reinstated by resolution of the governing body and upon proof that one of the members of its Board of Appeal and Equalization has completed the appeals and equalization course. The resolution and proof must be provided to the county assessor for cities and towns and to the commissioner of revenue for counties by February 1 to be effective for the current assessment year. Note: The citation for the appeals and equalization course and meeting requirements for local boards is Minnesota Statutes, Section 274.014 and for county boards is section 274.135. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 10 3 Role of the board in the assessment process Role of the board in the assessment process The Board of Appeal and Equalization has the authority to change the valuation or classification of a property for the current assessment year. Taxes or prior year assessments are not within the jurisdiction of the board. Any decisions made by the board must be supported by facts and by Minnesota law. The board must make informed decisions and ensure all taxpayers are treated fairly and uniformly. In order to make an informed decision on the valuation or classification of a property, it is important to understand the concepts of valuation and classification. These two concepts are equally important in the assessment process. They are both determined on the assessment date, January 2, each year. We will look at the definition of market value and explain how classifications are determined. Market value State law requires that all property shall be valued at its market value (Minnesota Statutes, Section 273.11, subdivision 1). Minnesota Statutes, Section 272.03, subdivision 8 defines “market value” as follows: “ ‘Market value’ means the usual selling price at the place where the property to which the term is applied shall be at the time of assessment; being the price which could be obtained at a private sale or an auction sale, if it is determined by the assessor that the price from the auction sale represents an arm's-length transaction. The price obtained at a forced sale shall not be considered.” Many professional appraiser/assessor organizations have a more detailed definition of market value. The elements of these definitions can be used to clarify the statutory definition. The definition of market value usually implies the consummation of a sale as of a specific date under the following conditions: The buyer and seller are typically motivated; Both parties are well informed or well advised and both are acting in what is considered to be their own best interest; A reasonable time is allowed for exposure in the open market; Payment is made in cash or its equivalent; Financing, if any, is on terms generally available in the community on the specified date and typical for the property type in its locale; and The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs or credits incurred in the transaction. In other words, market value is the price that would tend to prevail under typical, normal competitive open market conditions. 1 The price that would tend to prevail under typical, normal competitive open market conditions. Market value LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 11 4 Role of the board in the assessment process Minnesota Statutes, Section 273.11, subdivision 1 further states: “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 of taxation, nor shall the assessor adopt as a criterion of value the price for which such property would sell at a forced sale, or in the aggregate with all the property in the town or district; but the assessor shall value each article or description of property by itself, and at such sum or price as the assessor believes the same to be fairly worth in money.” The law provides that all property must be valued at market value, not that it may be valued at market value. This means that factors other than market value issues (such as personalities or politics) should not affect the market value determined by the assessor. Non-market value factors also should not affect the actions of the Board of Appeal and Equalization. Estimated market value The value determined by the assessor as the price the property would likely sell for on the open market is called the estimated market value (EMV). This value is determined on the assessment date, January, 2 of each year. The EMV for the current assessment year is the only value property owners may appeal to the board, even though taxpayers will also be given a taxable market value. Taxable market value Taxable market value (TMV) is the value that property taxes are actually based on, after all reductions, limitations, exemptions, exclusions and deferrals. There are many programs and provisions in Minnesota law that allow for a property’s EMV to be different from its TMV. For example, qualifying veterans who are disabled receive an exclusion of up to $150,000 or $300,000 of their property’s EMV. This reduction is reflected in their TMV. Other programs and provisions to be aware of include the Agricultural Property Tax Law (Green Acres), the Rural Preserve Property Tax Program (effective for the 2011 assessment) and Plat Deferment. If you have questions about these or any other programs, speak with your county assessor. The board cannot change the TMV of a property. The only value the board has the authority to change is the EMV for the current year. Changing the EMV may ultimately change the TMV, but it is important to note that there can be instances where the board raises or lowers the EMV, and the TMV remains the same. Classification In Minnesota, property is classified according to its actual use on the assessment date (January 2 of each year). If the property is not currently being used, it is classified according to its most probable, highest and best use. Property owners do not get to choose how they want their property to be classified. It is the assessor’s job to classify property consistent with Minnesota Statutes, according to its current use or its most probable, highest and best use. When determining the most probable, highest and best use for a property that is not being used, zoning may be an influencing factor in the classification of the property; however, it is not the sole factor. Additionally, all real property that is not improved with a structure must be classified according to its current use or its highest and best use permitted under the local zoning ordinance if The assessor assigns a statutorily-defined classification to all property based upon the actual use of the property on January 2 of each year. Examples of Minnesota property classes include residential, agricultural, commercial-industrial, apartment and seasonal residential recreational. Classification LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 12 5 Role of the local board in the assessment process there is no identifiable current use. If zoning permits more than one use, the land must be classified according to the highest and best use permitted. If no such zoning ordinance exists, the assessor shall consider the most likely potential use of the unimproved land based upon the use of surrounding land or land in proximity to the unimproved land. Property classifications are defined in Minnesota Statutes. Examples of classifications include residential homestead, residential non-homestead, apartment, commercial, and agricultural. The board can change the classification for the current assessment year of any property which in the board’s opinion is not properly classified. The classification must be based on use, and in order for the board to change the classification, the owner must present evidence that the property is used in a manner consistent with the classification he/she is seeking. The board can only change the classification of a property to a classification that is permitted by law. For example, the assessor classifies a property as residential. The owner seeks the agricultural classification. In order for the board to change the classification to agricultural, the owner must prove that the property is used agriculturally and meets the statutory requirements of the agricultural class. It is important to remember that use – not zoning – is the key factor in determining the classification of a property. For example, a property owner has a parcel that is used as an auto repair shop. The assessor has the property classified as commercial. The property is zoned agricultural so the owner is seeking the agricultural classification. Classification is based on use. Since the property is used as an auto repair shop, it is properly classified as commercial. Therefore, the board must vote to uphold the commercial classification. Split-class property A property can have more than one property tax classification if it has more than one use. Such properties are called split-class properties. If this is the case, the assessor will classify the different uses accordingly. For example, when an owner-occupied farm also has a structure that is used as a commercial repair shop for farm equipment, the property is split classified agricultural homestead and commercial. Overview of the assessment process The assessment of property – determining the estimated market value and classification – technically occurs on January 2 (the assessment date) of each year. The work and analysis required to make these estimations involves several months before and after the assessment date, however. Most of the field inspections of real estate for the next assessment begin in the summer and continue through the fall. For example, assessors will inspect properties starting in the summer of 2012 for the January 2, 2013 assessment. These inspections are when the assessor identifies and records the specific characteristics of each property being reviewed. These characteristics include square footage, condition of the property and number of bedrooms, for example. Assessors gather a lot of information to help them estimate each property’s value and determine its use for classification purposes. This field inspection work is completed as the assessment date nears. At about this same time, assessors start work on analyzing sales and other market data in a sales ratio study to help them estimate values. The sales included in this sales ratio study should represent a typical open market. The sales are from October 1 of two years prior to the assessment year to September 30 of the year prior to the assessment year. In other words, sales from October 1, 2011 to September 30, 2012 are included in the study for the 2013 assessment. The Department of A principle of appraisal and assessment requiring that each property be appraised as though it were being put to its most profitable use (highest possible present net worth), given probable legal, physical and financial constraints. Glossary for Property Appraisal and Assessment, International Association of Assessing Officers, 1997. Highest and best use LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 13 6 Role of the board in the assessment process Revenue, through the State Board of Equalization, conducts a similar sales ratio study to monitor the work of the assessors. Based on the field inspections and sales ratio study, all taxpayers are notified of their value and classification for that January 2 assessment date in the spring of each year. This notification initiates the appeals process that continues until the middle of June at the local level. Once the appeal process is complete, the assessor starts work on the next assessment, and the entire cycle starts again. The final value and classification for each property for each assessment year is used in determining that property’s taxes in the following year. For example, the value and classification for the 2013 assessment, once finalized, is used to determine the taxes paid in 2014. Assessor estimates value The assessor determines the approximate selling price (or EMV) for each taxable parcel based on the conditions of the market on January 2 of each year. The assessor is required by law to view each property at least once every five years. However, even if the assessor did not physically visit a property for that assessment year, the property is subject to valuation changes to reflect market conditions. The assessor is required to estimate the market value as of January 2 of each year to reflect current market conditions because the real estate market is constantly changing – sometimes dramatically. When the assessor views the interior of a property, he/she can make a more accurate assessment and eliminate any guesswork. The assessor bases his/her assessment on multiple factors, including size, age, condition, quality of construction and other features such as fireplaces. The assessor compares the property to actual sales of similar properties in the area to determine the EMV of a property. In addition to this approach to determining value, the assessor may also consider the cost to construct the property or the income generated from the property. These techniques are often referred to as the “three approaches to value.” LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 14 7 Role of the local board in the assessment process The assessor applies one or more of the three approaches to value in estimating a property’s value: Sales comparison approach; Cost approach; and/or Income approach. The assessor will consider all approaches to value, but one approach may be better suited than the others for estimating the value of a particular property. In some cases, one or more approaches may not be applicable. Sales comparison approach: This approach is based on the reasoning that the value of a property is related to the sale prices of similar properties in the same market. Using this approach, the assessor identifies similar properties that have recently sold and analyzes the differences between the subject and the comparable properties. The sale price for each comparable sale is adjusted to reflect the differences (i.e. the subject property has three bathrooms and the comparable property has two bathrooms, so the sale price of the comparable property is adjusted upward to make it more similar to the subject property). The assessor then estimates the value based on the analysis of the comparable sales. The sales comparison approach is most applicable when there is sufficient sales data available for analysis. This approach is most often used for residential properties. It is the most common and preferred method for valuing vacant land when comparable sales data is available. The sales comparison approach should be supported by other approaches to value when comparable sales are limited or unavailable. Cost approach: This approach is based on the principle of substitution which means that an informed buyer will not pay more for a property than it would cost to build an acceptable substitute with comparable utility. Using the cost approach, the assessor calculates market value by estimating the current cost of replacing a structure with one having comparable utility then subtracting depreciation and adding in the land’s value. The cost approach is most reliable when valuing new or relatively new properties because the depreciation is minimal. Depreciation is the loss in value of a property, perhaps due to wear and tear or some other factor. Estimating the amount of depreciation can be difficult making the cost approach less reliable when valuing older properties. The cost approach can be more useful when valuing structures that are not frequently sold. Income approach: This approach is based on the reasoning that the value of the property is directly related to its ability to produce income. The property value is measured in relation to anticipated future benefits derived from ownership of the property. Using this approach, the assessor reviews income and expense information for the subject property and estimates the market value of the property based upon the income stream projected to be derived from the property. This approach has limited applicability because it is only appropriate for income-producing properties such as commercial, industrial and apartments. The income approach is the primary approach for valuing income-producing properties. Assessor determines classification Along with estimating the market value of each property, the assessor must determine the classification, or use, of each parcel of property. Property classifications are defined in Minnesota Statutes, and the assessor classifies the property based on its use as of January 2 of each year. Examples of classifications include residential homestead, residential non- homestead, apartment, commercial and agricultural. Assessor reviews sales ratio Assessors analyze the sales in a community in order to understand local market trends and provide direction in estimating values. Whenever real estate is sold for more than $1,000 a certificate of real estate value (CRV) must be filed in the county in which the property is located. The assessor uses CRVs to analyze actual sales of property and to complete sales ratio studies for each community and for each type of property. The ratio is determined by dividing the EMV by the sale price. The assessor uses the sales as guides to estimate what similar properties would likely sell for on the open market. It is Three approaches to value LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 15 8 Role of the board in the assessment process important to remember that one sale, taken by itself, does not necessarily reflect the actual real estate market in a jurisdiction. In addition to the sales ratio study conducted by the assessor, the Department of Revenue conducts a similar independent sales ratio study for the jurisdiction to monitor how close the median ratio is to the required level of assessment and is used by the State Board of Equalization. The Department of Revenue’s sales ratio studies should be the same or similar to the studies conducted by the assessor. The sales ratio study is a tool assessors use to help determine values for properties. The study helps assessors plan the upcoming assessment and evaluate the current assessment. If results of the study are not within acceptable guidelines, the assessor is required by law to either decrease or increase values so that they more closely reflect the market. The sales ratio study period includes sales that have occurred in a twelve month period. For the January 2, 2013 assessment, the assessor reviews sales that occur between October 1, 2011 and September 30, 2012. By design, there is a lag between the sale and when it is used to help estimate value so it can be verified and reviewed for accuracy. The assessor only considers sales that have been verified as typical and open market. This means the buyer and seller are typically motivated, both parties are acting in their own best interests and a reasonable time is allowed for marketing. According to state law, the assessor must not use sales that cannot be verified as open market sales. This means sales between family members, for example, are not included. This also means that foreclosure sales are very rarely (if ever) included. The assessor completes a sales ratio study by gathering basic data and screening and editing information to make any adjustments and exclude all sales that do not represent arm’s-length transactions. The remaining data is put into an acceptable format for processing (usually done by computer) and sorted by similar property types within each city or township (or neighborhood if possible). Finally, statistics are computed to describe the information and determine results of the assessor’s work. There are numerous calculations in a sales ratio study that describe the overall levels and quality of the assessment. An important one is the sales ratio; it shows the relationship between the EMV and a property’s sale price. It is the EMV divided by the sales price. Sale Ratio = EMV Sale Price The median sales ratio is the midpoint (middle) of all the individual ratios that are included for that property type in that city or township for that study period when they are put in order. In Minnesota, this median sales ratio should be between 90% and 105%. This means that when all sales from that study period for that property type in that city or township are put in order from smallest to largest ratio, the middle ratio should be between 90% and 105%. In Minnesota, six sales of each property type in each jurisdiction are required to complete a sales ratio study. In fact, just because a property sells does not mean its sale price should be its EMV. Assessors look at all sales in a study to arrive at conclusions and value estimates in mass. When there are limited sales to study, the assessor uses other tools, e.g. expanding the time and/or geographic areas. The sales ratio study LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 16 9 Role of the local board in the assessment process Assessor notifies taxpayer The assessor notifies taxpayers of their values and classifications each year after they have been estimated on the assessment date. This notification – the Notice of Valuation and Classification – must be mailed at least 10 days prior to the Local Board of Appeal and Equalization meeting or 10 days prior to the open book meeting (generally, this means that the notices are mailed in February or March of each year). At this point, the property owner can appeal the EMV and/or classification if he/she feels that the property is: classified improperly; valued at an amount higher than they could sell the property for; and/or valued at a level different from similar properties in the area. The property owner should first contact the assessor’s office to discuss questions or concerns. Issues often can be resolved at this level. If questions or concerns are not resolved after talking with the assessor, formal appeal options are available: Property owners may appeal to the Local Board of Appeal and Equalization (some jurisdictions that have transferred the local board duties to the county will have open book meetings instead of local board meetings); If the property owner is not satisfied with the local board’s decision (or the outcome of the open book meeting), he/she may then appeal to the County Board of Appeal and Equalization; and/or The property owner may appeal to Tax Court. The Notice of Valuation and Classification must provide the property owner with the date, time and location of the Local and County Boards of Appeal and Equalization. Assessor meets with State Board of Equalization The State Board of Equalization ensures assessors follow approved appraisal and assessment practices and reviews the results of the assessors’ work in estimating values. This board meets in June of every year. The meeting, and any resulting changes, occurs only after a review of values and sales ratios and after discussions with the county assessor, county assessors in adjacent counties, and the Commissioner of Revenue. The Department of Revenue, as the State Board of Equalization, completes its own sales ratio studies – one which is very similar to the assessor’s study, plus two additional studies – to be sure values closely match the real estate market. The department has determined that a minimum of six sales in a jurisdiction are required for the median ratio to be reflective of actual assessment levels for its studies. There are some jurisdictions and property types that may never have enough sales, for example small-town commercial properties. In these instances, the assessor and the State Board of Equalization may examine sales over a protracted period of time or borrow sales from other similar jurisdictions to help evaluate the assessment and estimate values. The State Board of Equalization completes this verification statewide for each property type and jurisdiction and can order changes to EMVs if the assessor’s work does not comply with law and guidelines. If the study indicates that the median ratio is below 90 percent or above 105 percent, the Commissioner of Revenue has the authority to increase or decrease values to bring about equalization. The equalization process is designed not only to equalize values on a county-, city- and township-wide basis but also to equalize values across county lines to ensure a fair valuation process across taxing districts, county lines and by property type. State Board orders are usually on a county-, city- or township-wide basis for a particular classification of property. All State Board orders must be implemented by the county, and the changes are made to the current assessment year. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 17 10 Role of the board in the assessment process The board meeting Who must attend the meeting - Local Boards Per Minnesota Statutes, Section 274.01, subdivision 1, paragraph (a), the town board of a town or the council or other governing body of a city is the Local Board of Appeal and Equalization, except in the following situations: Cities whose charters provide for a board of equalization; Cities or towns that have transferred their local board duties to the county (see Chapter 5); Cities with Special Boards of Appeal and Equalization appointed by the governing body (see Chapter 5); or Cities or towns whose local board duties have been transferred due to noncompliance with the training requirements. When a Local Board of Appeal and Equalization convenes, a majority of the voting members (quorum) must be in attendance in order for any valid action to be taken (see Chapter 4 for more information about quorum requirements). The local assessor – when applicable – is required by law to be present with his/her assessment books and papers. The local assessor is required to take part in the proceedings to support his values or recommend a change, but the local assessor has no vote. He/she should be prepared to explain how the value was determined, and in doing so, the assessor should be able to describe the characteristics of the property, such as: location and neighborhood, public or private restrictions on the property, building type and size, quality of construction, age of the structure, physical condition of the structure, total number of rooms and total number of bedrooms and bathrooms, and market conditions, etc. The local assessor should be knowledgeable about the local real estate market and the property in the area. While it is not the goal of the assessor to influence the board, the assessor should provide factual information to support the value and classification or to support a recommended change to a subject property. The local assessor also should be able to explain how the property classification was determined. In addition to the local assessor, the county assessor or one of his/her assistants is required to attend. The board should ask the local and/or county assessors to present any tables that have been prepared, making comparisons of the current assessments in the district. Either the local or county assessor is required to have maps and tables relating particularly to agricultural land values for the guidance of the Local Board of Appeal and Equalization. The local board should be prepared to ask the local and county assessors questions, and assessors should be prepared to answer questions and provide information that will assist the board in its deliberations. Meeting dates and times for the local board The meeting date and time for the Local Board of Appeal and Equalization is set by the county assessor. The county assessor must provide written notice of the date and time to the city or town clerk by February 15 of each year. The clerk shall publish and post notice of the meeting at least 10 days before the date of the meeting. The Local Board of Appeal and Equalization meeting must be held between April 1 and May 31 of each year (unless the provisions of a charter provide otherwise). The local board must conduct its business and adjourn within 20 days of the date stated in the published notice. Upon request, the Department of Revenue (at its discretion) may grant extensions beyond the 20-day time period to date no later than May 31. No changes may be made by the local board after adjourning. The county assessor also may not make any changes in valuation or classification that are intended to correct errors in judgment by the county assessor after the local board has adjourned. However, the county assessor may make changes that are clerical in nature or changes that extend homestead treatment until the tax extension date for that assessment year. A list of all the changes made by the local board must be fully documented and maintained in the assessor’s office and must be available for review by any person. A copy of the changes made during this period in those cities or towns that hold a local board must be sent to the county board no later than December 31 of the assessment year. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 18 11 Role of the local board in the assessment process Who must attend the meeting County Boards Per Minnesota Statutes, Section 274.13, subdivision 1, the county commissioners, with the county auditor, or, if the auditor cannot be present, the deputy county auditor, or, if there is no deputy, the court administrator of the district court, shall form a board for the equalization of the assessment of the property of the county, including the property of all cities whose charters provide for a board of equalization. When a County Board of Appeal and Equalization convenes, a majority of the members (quorum) must be in attendance in order for any valid action to be taken (see Chapter 4 for more information about quorum requirements). The county assessor is required by law to attend the meeting of the county board of equalization. He/she takes part in the proceedings to support values and classifications or to recommend changes to the board but is not a voting member of the board. The county assessor investigates and reports on any assessment ordered by the county board and enters all changes made by the board in the assessment books. The county assessor should be prepared to explain how the value was determined, and in doing so, the assessor should describe the characteristics of the property, such as: location and neighborhood; public or private restrictions on the property; building type and size; quality of construction; age of the structure; physical condition of the structure; total number of rooms and total number of bedrooms and bathrooms; and market conditions, etc. The county assessor is knowledgeable about the local real estate market and the property in the area. He/she provides factual information to support the value or to support a recommended change to a subject property. The county assessor also should explain how the property classification was determined and why the classification is appropriate or why it should be changed. While the County Board of Appeal and Equalization is in session, the county assessor assists the board in performing its duties. The assessor shall furnish the board with all necessary charts, tables, comparisons, and data which it requires in its deliberations, and shall make whatever investigations the board may desire. The county assessor should present any information that has been prepared, making comparisons of the current assessments in the county. The county assessor is required to have maps and tables relating particularly to agricultural land values for the guidance of the County Board of Appeal and Equalization. The board should be prepared to ask the county assessor questions, and the county assessor should be prepared to answer questions and provide information that will assist the board in its deliberations. Meeting dates and times for the county board The board may meet on any 10 consecutive meeting days in June, after the second Friday in June. The actual meeting dates must be contained on the Notice of Valuation and Classification mailed to each property owner in the county. New legislation resulting from the 2008 session now allows the board to meet on Saturdays. The legislation also requires at least one meeting must not end prior to 7:00 pm. Similarly, if the board requires appointments, some of the available times must extend until at least 7:00 pm. The Saturday meeting may be in lieu of the extended meeting time requirement. No action taken by the County Board of Appeal and Equalization after June 30 is valid, except for corrections that are clerical in nature or changes that extend homestead treatment until the tax extension date for that assessment year. Any such changes made by the assessor after adjournment must be fully documented and maintained in a file in the assessor's office and shall be available for review by any person. A copy of any changes made by the assessor during this period shall be sent to the county board no later than December 31 of the assessment year. The county auditor shall keep an accurate record of the proceedings and orders of the board. The record must be published like other proceedings of county commissioners. A copy of the published record must be sent to the commissioner of revenue, with the abstract of assessment. Documenting board actions Before adjourning, the Board of Appeal and Equalization must prepare an official record of all actions taken by the board. This means that the board must prepare an official record of the proceedings. The record must reflect all board actions. Therefore, the record must list all: LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 19 12 Role of the board in the assessment process Assessments of property added to the tax rolls with the market value for each local boards only; Appeals brought before the board, indicating the action taken by the board (including all appeals in which the board voted “no change”); All blanket changes (changes to an entire class of property) county boards only; Assessments that have been increased or decreased with the market value for each; All classification changes; and All changes that the county assessor brought to the board for action, indicating the action taken by the board. For each meeting, a certification form must be signed and dated by the members of the board who were present at the meeting. The certification form must also list the names and titles of all voting members of the board, including those who are present and those who are absent, to verify that the quorum and training requirements were met. The county assessor is to make all changes ordered by the board that are authorized by law. Required forms for documenting board actions County assessors are required to submit any changes made by the Local and County Boards of Appeal and Equalization to the Commissioner of Revenue, along with a copy of the proceedings of each board. For local boards, this must be done within 10 working days following final action of the local board. For county boards, this must be done within 5 working days of the final action. The information must be filed in the manner prescribed by the Commissioner of Revenue (Minnesota Statutes, Chapter 270C and Section 270C.89 subdivision 1). In recent years, there has been increasing interest by the legislature and others in the number of appeals at the local level and the effect of the changes that were made. However, because of the manner in which many counties submit this information, the Department of Revenue has not been able to respond to requests for this information. Therefore, we are requiring that the counties provide the data in a format that is complete, readable and easily interpreted. Each county will be required to submit this information in an electronic format as instructed by the Department of Revenue. To ensure that the information is consistent from local jurisdiction to local jurisdiction and from county to county, the Department of Revenue requires that each board complete the following two forms for each meeting: Board of Appeal and Equalization Certification Form – must be completed and signed to verify that the quorum and training requirements were met and to provide a summary of board actions; and Board of Appeal and Equalization Record Form – must be completed to provide a detailed report of the proceedings of the board. The county assessor will provide these forms to the board. The board will complete the forms (the jurisdiction total EMV is to be completed by the assessor), and the county assessor will take possession of the completed forms at the end of the meeting. A Certification Form must be completed in the case of a reconvene meeting. If a recess is called, a quorum and trained member must also be present at the reconvene meeting for the board to take valid action. To verify that the quorum requirement was met, the board must complete and sign a Certification Form for each reconvene meeting. The board will continue to complete the original Record Form at each reconvene meeting. The reconvene meeting(s) must be held and all business of the local board must be concluded within 20 calendar days (including the day of the initial meeting) unless the board requests a time extension in writing from the Department of Revenue and the time extension is granted by the department (no extensions will be granted beyond May 31). For county boards, no action may be taken after June 30. The date and time for the reconvene meeting must be determined before the initial meeting is recessed. Once the Board of Appeal and Equalization has adjourned, it cannot reconvene. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 20 13 Role of the local board in the assessment process Duties of the board The board is to determine whether all of the taxable property in the jurisdiction has been properly valued and classified for the current assessment. All property is to be valued at its market value, and all property is to be classified according to use. At the county level, the board is to ensure equalization from jurisdiction to jurisdiction as well. The county board is required by law that each member take an oath to fairly and impartially perform duties as a member. It is assumed that the assessor has properly valued and classified all the property in the jurisdiction. The burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s value or classification. The complaints and objections of property owners appealing individual assessments for the current year should be considered very carefully by the board. An appeal may be made in person, by letter, or through a representative of the owner. Written objections should be filed prior to the meeting of the Board of Appeal and Equalization and must be presented to the board for consideration while it is in session. The board must hear all complaints and examine all letters. Such assessments must be reviewed in detail, and the board has the authority to make corrections as it deems to be just. The board may recess from day to day until all cases have been heard. The board should look for improvements that are not on the tax rolls. When improvements are missing from the tax rolls, an unfair burden falls upon the owners of all properties that have been assessed. If the board finds any improvements that are not on the tax rolls, the board should place it on the assessment list along with its market value, and correct the assessment so that each tract or lot of real property and each article, parcel or class of personal property is entered on the assessment list at its market value. Prohibition on changes within 10 days of local board meeting Since the Notice of Valuation and Classification must be mailed to taxpayers at least 10 days prior to the meeting of the Local Board of Appeal and Equalization, the assessor should not make changes to the valuation or classification of a property within that 10-day window without bringing the change to the local board for action. After receiving the notice, the property owner can contact the assessor to discuss questions or concerns. The assessor can make changes to the valuation or classification without bringing the change to the local board if a new notice is mailed to the property owner at least 10 days prior to the local board meeting. Oftentimes, the assessor will continue to review properties within 10 days of the local board meeting. However, if the assessor makes a change, that change should be brought to the local board for action. If the property owner agrees with the change, he/she does not need to personally appeal to the board. Instead, the assessor should present such changes to be voted on by the board. What the board can do Reduce the value of a property. The board may reduce the value of a property if the facts show that the property is assessed at a value that is higher than its market value. All property is to be valued at its market value. It is assumed that the assessor has properly valued the property. The burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s value. Increase the value of a property. The board may increase the value of a property if the facts show that the property is assessed at a value that is lower than its market value. The board must also base the decision to increase the market value on facts. All property is to be valued at its market value. It is assumed that the assessor has properly valued the property. The board must rely on factual evidence to disprove the assessor’s value. Before the board raises the market value of a 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 owner must be notified either in writing or orally. He/she should be given a time to appear before the board. After the hearing, the board should make any corrections that it deems just. Add improvements to the assessment list. In reviewing the individual assessments, the board may find instances where property is not listed at its market value because the value of a building or other improvement was not included when the market value of the property was LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 21 14 Role of the board in the assessment process estimated. These should be carefully reviewed by the board and placed on a tentative list of property values to be increased. The board should then determine to what extent the valuation of such property should be increased. Before the board adds value for new or overlooked improvements, it must notify the owner. Change the classification of a property. In Minnesota, property is classified according to its use on the assessment date (January 2 of each year). If the property is not currently being used, it is classified according to its most probable, highest and best use. Property owners do not get to choose how they want their property to be classified. It is the assessor’s job to classify it according to its current use or its most probable, highest and best use. The board can change the classification of any property which in the board’s opinion is not properly classified. Again, it is assumed that the assessor has classified the property correctly. The classification must be based on use, and in order for the board to change the classification, the appellant must present evidence that the property is used in a manner consistent with the classification. Local Boards Only: Add properties to the assessment list. If the board finds that any real or personal property has not been entered onto the assessment list, the board shall place it on the assessment list along with its market value, and correct the assessment so that each tract and lot of real property and all personal property is entered on the assessment list at its market value. County Boards Only: Order percentage increases or decreases for an entire class of property (blanket changes). The county board can order a percentage increase or decrease to an entire class of property if it feels that the original assessment is incorrect. These increases or decreases can be on land alone, buildings alone, or land and buildings together. The county board does not need to notify the property owners affected by blanket changes. Additionally, the county board has the authority to make changes to market values or classifications established by local boards as it deems appropriate. The County Assessor typically brings these changes to the county board’s attention. What the board can’t do The board can’t consider prior year assessments. The Board of Appeal and Equalization does not have the authority in any year to reopen former assessments on which taxes are due and payable. The board considers only the assessments that are in process in the current year. Occasionally, a property owner may appear with a tax statement and protest the taxes or assessment of the previous year. The board should explain tactfully that it does not have the authority to consider such matters. After taxes have been extended, adjustments can be made only by the process of application for abatement or by legal action. The board can’t reduce the aggregate assessment by more than 1 percent. Although the both Local and County Boards of Appeal and Equalization have the authority to increase or reduce individual assessments, the County Board alone can increase or reduce the assessments of an entire class of property. However the total of all adjustments for both local and county boards must not reduce the aggregate assessment of the jurisdiction by more than 1 percent. The “aggregate assessment” is the total EMV that the board has the authority to change, i.e. the total EMV of assessments within the jurisdiction excluding state assessed property. For example, if the total EMV of a jurisdiction is $2,000,000, the board cannot reduce the total EMV of the jurisdiction by more than $20,000. This means the EMV after all board actions must be at least $1,980,000. If the total amount of adjustments made by the board does lower the aggregate assessment by more than 1 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. Clerical errors are limited to errors made by someone performing a clerical function during the course of the actual assessment. Examples of clerical errors are errors such as transposing numbers or mathematical errors. Errors that occur when making estimations during the inspection and appraisal process (judgment errors) are not considered to be clerical errors. The board can’t exempt property. The Board of Appeal and Equalization does not have the authority to grant an exemption or to order property removed from the tax rolls. Assessor’s EMV + Total board EMV increases - Total board EMV reductions EMV after board actions LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 22 15 Role of the local board in the assessment process A member of the board can’t make changes to property in which he/she has a conflict of interest or financial interest. If a property being appealed is owned by a board member, a board member’s spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister, uncle, aunt, nephew, or niece, by blood or marriage, the board member is prohibited from participating in the actions of the board for that appeal. The board member is also prohibited from participating in an appeal of a property in which a board member has a financial interest. If the remaining members constitute a quorum, the board may vote on the action with the compromised board member abstaining from the vote. Otherwise, or if the board wishes to prevent any perception of preferential treatment, it should mark “No change” on the record form for the meeting. The taxpayer will be eligible to appeal to the next appeal level (County Board, Tax Court). The board can’t grant special program status. If a property owner is appealing for enrollment in special programs that require an application (e.g. Green Acres), they must follow the proper application procedure. The local board can’t make changes benefiting a property owner who refuses entry by the assessor. The board may not make an individual market value adjustment or classification change that would benefit the property in cases where the owner or other person having control over the property will not permit the assessor to inspect the property and the interior of any buildings or structures. The county board is not statutorily precluded from making a change based on the property owner’s refusal to allow the assessor access to view the property. However, simply because the statute does not explicitly preclude the county board from making such a change, it is strongly recommended that the county board not grant any reduction in value until the property owner has allowed the assessor access to view the property. It seems obvious that for an assessor to make a fair and knowledgeable value estimate, he/she must first be allowed to view the entire property. Until such access is granted, the county board should not grant a value reduction. The local board can’t order percentage increases or decreases for an entire class of property. The county board can’t add properties to the assessment list. It can request that the auditor place such omitted properties on the tax rolls. Recommendations for board members Become familiar with sales information prior to board meeting Most board members are not necessarily aware of current trends in the real estate market or trained in the field of appraisal. Therefore, advance preparation is essential to making informed, fair decisions on the appeals heard by the local board. The county assessor (or the local or city assessor in some instances) should provide information on the real estate market in advance of the board meeting. If this information is not provided, the board should request that the assessor provide the information at least one week prior to the meeting so board members have time to review it. The following are examples of the type of data that the assessor may provide for the board to use when determining if an adjustment is necessary. This is not an all-encompassing list, and depending on the jurisdiction, it may or may not be necessary for every board to have all the items on the list. The board should work with the assessor to determine the specific information to be supplied to the board. Information on sales within the district that occurred in the previous year. Valuation tables of land types. Copy of the values from the mini-abstract for the district (current year and prior year). Printout of parcel listings for the district with the values. Review of the current statutory classifications and the corresponding class rates. Review of value changes by property type in the district. The board should also be prepared to request additional background information and to ask questions of the assessor in order to assist with the board’s deliberations. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 23 16 Legal and policy reasons for fair and impartial appeal and equalization hearings As a board member, you should review the information provided by the assessor. If you have any questions about the materials, please be sure to contact the assessor. Being knowledgeable about the real estate market is the key to making informed and fair decisions. Duties of the clerk – Local Boards The town or city clerk plays an important role in the Local Board of Appeal and Equalization process. The following is a brief list of the duties of the clerk pertaining to the local board meeting: Work with the county assessor to establish the meeting date(s) for the local board; Publish and post notice of the meeting at least 10 days prior to the date of the (Minnesota Statutes, Section 274.01, subdivision 1); Ensure that a quorum will be present; Provide a sign-in sheet for appellants; Take minutes of the meeting as part of the town or city record; and Return all necessary records to the county assessor in a timely manner. In some jurisdictions, various duties of the clerk may be performed by the city or county assessor or the assessor’s staff. In these instances, it is recommended that the clerk be aware of and monitor these duties to ensure they are completed. Legal and policy reasons for fair and impartial appeal and equalization hearings Legal reasons for fair and impartial local board meetings Minnesota Statutes, Section 274.01, subdivision 1, paragraph (b) states: “The [local] board shall determine whether the taxable property in the town or city has been properly placed on the list and properly valued by the assessor.” Minnesota Statutes, Section 274.13, subdivision 1 states: “The [county] board shall examine and compare the returns of the assessment of property of the towns or districts, and equalize them so that each tract or lot of real property and each article or class of personal property is entered on the assessment list at its market value…” This means that any action taken by the board must be done in an effort to ensure that all taxable property in the jurisdiction has been properly valued and classified by the assessor. It is assumed that the assessor has correctly valued and classified all property. The burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s valuation or classification of the property. Minnesota Statutes, Section 273.11, subdivision 1 requires that all property be valued at its market value. The assessor is required to value all property at market value, and the Board of Appeal and Equalization also must keep this in mind when adjusting market values. The board is to hear all appeals and act in a manner that is just. Minnesota Statutes, Section 274.01, subdivision 1, paragraph (b) states: “On application of any person feeling aggrieved, the board shall review the assessment or classification, or both, and correct it as appears just.” To act in a just manner, the board must only make changes that are based on facts. County Boards of Appeal and Equalization are required by Minnesota, Statutes, section 274.13 to take an oath to fairly and impartially perform their duties. 2 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 24 17 Legal and policy reasons for fair and impartial appeal and equalization hearings A sample of the oath is as follows: “I, <board member’s name>, will solemnly swear that I will support the Constitution of the United States and the Constitution of the State of Minnesota, and that I will faithfully execute and discharge the duties of the <county name> Board of Appeal and Equalization according to law and to the best of my ability and understanding.” The oath may be administered by a district judge or the clerk of the court and underscores the importance of acting fairly and impartially on all appeals brought before the county board. Policy reasons for fair and impartial board meetings Property owners expect and deserve a fair and impartial hearing. Serving as the Board of Appeal and Equalization is an important duty. It is very important that the meeting be conducted in a fair and impartial manner, or the property owner’s confidence in the entire appeal process will be undermined. In order for the property owner to receive a fair and impartial hearing, the property owner must have an opportunity to present his/her appeal and provide evidence to support it. Then the assessor should explain his/her valuation or classification. It is assumed that the assessor has valued and classified the property correctly, and the burden of proof rests with the property owner, who must present factual evidence to disprove the assessor’s value or classification. Then the local board must take the appeal under consideration. An educated board is the key to a fair and impartial hearing. A board that is knowledgeable about the local real estate market does not simply “rubber stamp” the assessor’s value but makes independent decisions based on facts. It is important that the property owner does not perceive the outcome to be predetermined or believe that the board is “defending” the assessor’s value. This does not mean that the board should not uphold the assessor’s value. It does mean that if the local board changes the assessor’s value or classification, it must be based on the facts presented. A fair and impartial hearing does not necessarily mean that the property owner is granted the value reduction or classification change that he/she is seeking. Receiving a fair and impartial hearing only means that the owner had the opportunity to present his/her appeal, the board considered the appeal and based its decision on facts. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 25 18 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations Each board meeting is conducted differently. While there are not any specific statutory guidelines for conducting the meeting, this chapter will outline meeting procedures that foster fair and impartial assessment reviews. Also included in this chapter are best practices recommendations. We acknowledge that some jurisdictions may have bylaws or rules of procedures that may preclude some of these recommendations. Keep in mind that these are recommended procedures for the boards, and they are not intended to contradict such rules or bylaws. It is up to each board to determine which procedures are most appropriate for its Board of Appeal and Equalization meeting. Meeting procedures The board should run the meeting The board should take charge of the meeting. It is not the assessor’s meeting. The board is intended to be a fair and impartial review of the assessment. The assessor should realize that the appeal decisions are not in his/her hands. The board’s decisions are between the board and the appellant. The assessor is not on trial for his/her work. The board should not critique the assessor’s performance or blame the assessor for increasing values (or taxes). Assessors should try not to become too personally involved with the decisions and remember that they have already done their best job. It is now the task of the local board to review the facts and make decisions as it deems just. Establish ground rules for the meeting Before hearing any appeals, the Board Chair should outline the ground rules for the meeting. The ground rules set the tone for the meeting. The specific ground rules may vary for each board but should include: The purpose of the meeting; A reminder to property owners that only appeals for the current year valuation or classification can be made – taxes or prior years’ assessments are not within the jurisdiction of the board; A reminder to property owners that they may only appeal the estimated market value (EMV), and that the appeals process is concerning this amount - not tax amounts; An explanation of the order of the appellants (will it be by appointment first, followed by walk-ins on a first-come basis, etc.); The expectations of the appellant when presenting his/her appeal (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.); The time limits imposed (if any); and 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 Chair should give the assessor the opportunity to present a brief overview of the property tax process and a recap of the current assessment. Appellants should then present their appeals. If the assessor has had a chance to review the property prior to the meeting, the assessor can present facts and information to the board to support the valuation 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 assessor can present such information to the board at the reconvene meeting. 3 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 26 19 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations All proceedings must be public The board meetings are subject to the open meeting law. The open meeting law requires that meetings of governmental bodies generally must be open to the public. Therefore, all board proceedings must be public. Board members should not leave the meeting to the assessors while they talk about other business. Board members should not confer with each other, the assessor, or appellants regarding appeals in question outside the board meeting(s). Make appellants feel comfortable Presenting an appeal to the Board of Appeal and Equalization can be intimidating for appellants. The goal of the board should be to make the appellant feel comfortable, not intimidated. To make the appellant more comfortable when presenting an appeal to the board, it is recommended that the appellant sit (or stand) in front of the board and present directly to the board rather than having the appellant speak and address all present in the audience. This not only allows the appellant to be more comfortable, but also decreases the potential that an angry “mob” will form at the meeting. Dealing with angry or difficult property owners The following are some tips that may be helpful when dealing with an angry or difficult property owner: Always treat the property owner with respect; Listen to the property owner; Speak calmly and keep your body language calm; Encourage the property owner to discuss his/her concerns; Do not get defensive; Keep things on a positive level; Avoid blaming statements (“You…”); Keep the conversation focused on the issue, not personalities (“The assessor doesn’t like me,” etc.); Clarify the problem; Acknowledge the property owner’s concerns; Show empathy for the property owner; Emphasize collaboration (“Let’s see if we can find a solution to this problem.”); Let the property owner know that you will be reviewing the facts of the case; and End the property owner’s presentation by acknowledging in a tactful manner that you’ve heard what he/she has to say and will consider the matter. If things get too heated, it may be a good idea to suggest a short break so the parties can calm down. Do not let things get out of hand before informing the authorities. If the board is anticipating any problems, it may be a good idea to inform local law enforcement of the meeting in advance. Do not take threats or someone talking about violence lightly. Safety should be your main concern. If you feel threatened, call the authorities. Oftentimes, property owners are frustrated by the process because they are unsure about how to appeal to the local board. To reduce their frustration, it is recommended that the local board let them know what they will need to do to substantiate their appeal (see “Handouts for property owners” section in the Appendix for information local boards may supply to property owners). The Notice of Valuation and Classification will direct property owners to the Minnesota Department of Revenue website (http://www. revenue.state.mn.us) for information on the appeal process and how to substantiate appeals. Many counties also have information on their websites concerning how to appeal, property information, frequently asked questions, etc. If your county website does have information relating to assessment or property taxes, it is a good idea to become familiar with this information so you can refer property owners to it. Hearing appeals The Board Chair should call the appellant. The board must be attentive when the appeals are being presented. Take the time to listen to the person presenting the appeal, but do not let the appellant dominate the meeting. After an appellant has presented his/her case, the chair should ask the assessor to explain how the value and/or classification was determined. To keep things moving and to conduct a fair meeting, any time limits imposed on an appellant should also be imposed on the assessor. The board should ask questions of the appellant and the assessor if more information is needed. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 27 20 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations The final closing of a meeting, such as a meeting of the board of directors or any official gathering. Adjourn is not to be confused with “recess,” which means the meeting will break and then continue at a later time. Adjourn Depending on the procedure that the board is following, the chair should either: Have the board make a decision on the appeal; or Inform the appellant that his/her concern will be taken into consideration and let the appellant know when a decision will be made, as well as how he/she will be informed of the board’s decision. Review process, not value-reduction process The appeal process is a review process and not just a value-reduction process. The Board of Appeal and Equalization is an important step in maintaining an equitable property tax system. It is vital that the board members take this responsibility seriously. Any value changes – increases or decreases – must be justified as value changes have the effect of shifting the tax burden to other property owners in the jurisdiction. The purpose of the board is to ensure equality between taxpayers so that each taxpayer is paying the fair share of taxes – no more, no less. Keeping in mind that a reduction in estimated market value may not reduce taxes, and sharing this information with appellants, may help set the proper tone for the meeting. Therefore, it is not incumbent upon the board to reduce the value of all individuals who appeal to the board, as that may be unfair to the property owners who have not appealed. The board should not give reductions to people just for “showing up.” It is assumed that the assessor has properly valued and classified all property in the jurisdiction. The burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s value or classification. All changes made by the board must be based on facts. Recess or adjourn The board may not take action after adjourning. All issues must be resolved before the meeting is adjourned. If issues still need to be considered, the board should recess until the next meeting. For county boards, the next (reconvene) meeting must be held within the ten-day time limit for the board and no later than June 30. For local boards, the reconvene meeting must be held within 20 calendar days (including the day of the initial meeting) unless the local board requests a time extension from the Department of Revenue, and the time extension is granted by the department. The date and time for the reconvene meeting must be determined before the initial meeting is recessed. Once the Board of Appeal and Equalization has adjourned, it cannot reconvene. Decisions It is the board’s duty to review the facts and make corrections as it deems just. It is not appropriate to turn the decision over to the assessor. The board should not order the assessor to review the property and change the value or classification and then adjourn. In this instance, the issue is not resolved. The board may ask the assessor to review the property and report back to the board at a reconvene meeting. Ultimately, it is the board that must make any adjustments. All decisions should be adopted by a formal vote. Options for decisions include: No change; Lower the value; Raise the value; Notify a property owner of intent to raise the value; Change the classification; or Have the assessor inspect the property and report to the board (within the appropriate meeting timeframe). A break in a meeting or proceedings until a certain date and time. Recess is not to be confused with “adjournment,” which ends the proceedings. Recess LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 28 21 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations There are certain circumstances, such as appeals involving contamination values or income-producing properties, that may require more than the given time for the assessor to review. In such instances, a local board may decide to vote “no change” and forward the appeal to the County Board of Appeal and Equalization. There also may be circumstances involving complicated appeals, in which the board may review the information presented and not be able to determine if the assessor’s value should stand or if the property owner’s evidence justifies a value or class change. If the board is faced with a situation in which it is not sure how to rule based on the facts presented, the proper decision would be “no change.” In these instances, the board should keep in mind that the taxpayer can appeal to Tax Court. For local boards: The property owner can appeal to the county board or he/she can take the case to Tax Court; and The county assessor can ask the county board to review the property value or classification if he/she believes that the local board change was not justified. Appeals must be substantiated by facts Appeals must be based on facts. The property owner must present supporting evidence to convince the board that the current year valuation or classification is incorrect. The supporting evidence can be presented either in person, through a letter or through an authorized representative. The property owner should describe the property, how the property is used, as well as its current condition. Photos can be very helpful in illustrating the condition of the property. The property owner should review the assessor’s data on the property to make sure that it is correct. The property owner should also review recent property sales in the area. At the assessor’s office, the property owner can review Certificates of Real Estate Value (CRVs) for properties in the area. Other evidence such as a recent appraisal may also be helpful information to present. The property owner should keep in mind that taxes are not the issue. The board should not consider arguments based on the ability of the taxpayer to pay, services received for taxes paid or tax equalization. Given the broad spectrum of tax capacity rates, tax classifications and state credit programs that apply to various properties throughout the jurisdiction, tax comparisons are misleading. To strengthen their appeal, property owners should present evidence about the property’s value or classification, not how much they are paying in taxes. Property in Minnesota is classified according to its actual use, such as commercial, agricultural, or residential homestead, not zoning. Property owners disputing the classification need to present information that proves how they use the property. For example, a property is classified as residential. The property owner believes that his/her property is eligible for the agricultural classification and appeals to the board. In order for the board to change the classification to agricultural, the owner must prove that the property is used agriculturally and meets the statutory requirements of the agricultural class. As a board member, you should be objective and be sure that any changes are based on facts. Do not recommend changes without any supporting documentation. Do not recommend changes for all people who appeal to the board (unless each appeal can be substantiated). Simply taking the time to appeal is not a valid reason for adjusting the market value or changing the classification of a property. Always keep in mind that any reductions that the board may make will have the effect of shifting the tax burden to other property in the jurisdiction. The amount the jurisdiction levies will not change when values are increased or decreased; only the amount paid by each taxpayer changes. For information on the appeal process and how to substantiate an appeal, you can direct property owners to the Minnesota Department of Revenue website (http://www.revenue.state.mn.us). If your county website also contains additional information such as how to appeal, property information, frequently asked questions, etc., it is a good idea to become familiar with this information so you can refer property owners to it. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 29 22 Board meeting procedures that foster fair and impartial assessment reviews and other best practices recommendations Best practices recommendations Have appellants call for appointments It is recommended that the board hear appeals on an appointment basis. The Notice of Valuation and Classification sent to all taxpayers to notify them of their property value and classification can instruct appellants to call for an appointment with the board. Appointments benefit the board, the assessor and the appellant. Appointments give the board an idea of how many property owners will be appealing, so the board can manage their time appropriately. It gives the assessor time to assist in the board’s deliberations by reviewing the property and collecting supporting data or recommending that the board make a change. Appellants also benefit because they need only come to their scheduled appointment and do not have to spend time listening to other appellants. In some instances, property owners call to schedule appointments with the local board, and the appeal is avoided altogether because the issue can be resolved easily by the assessor’s staff. Property owners who call for appointments can also be given information on preparing and presenting an appeal so they will know what to expect at the meeting (see “Handouts for property owners” section in the Appendix). In addition to hearing appeals by any appellants who scheduled appointments, the board also must hear any appeals by property owners who come to the meeting without having scheduled an appointment prior to the meeting. (Unless extenuating circumstances apply, the property owner must first appeal to the local board before appealing to the county board.) When outlining the ground rules for the meeting, the board chair should inform the appellants that the board will be hearing appeals from those who have scheduled appointments first, and then the board will be hearing appeals by others (in the order listed on the sign-in sheet). Time limits for presenting appeals Time limits can help to keep the meeting moving. Time limits may be more appropriate in jurisdictions with a significant number of people appealing their valuation or classification. If there are only a few people at the meeting, time limits may not be necessary. If there are several appellants, it may be beneficial to establish a time limit for each appeal. If time limits are established, they should be included in the ground rules that are outlined at the beginning of the meeting. Whether or not a time limit is established, it is the responsibility of the board chair to keep the meeting moving. If an appellant goes on at length about a specific point, the Board Chair should intervene – in a professional manner – to keep the meeting on track. The chair should ensure that appellants stick to their time allotments. If the appellant discusses taxes or previous assessments, the Board Chair should remind him/her tactfully that the issue is the current year valuation or classification. If the board determines that time limits are appropriate for appellants, it also should impose time limits for the assessor to support his/her valuation or classification or recommend that the board make a change. Hear all appeals first It is recommended that the board hear all appeals before making any decisions. The board should make all decisions later in the meeting or at the reconvene meeting (within the appropriate meeting timeline) if it is determined that the assessor should view the property or if the board requests additional information from the assessor. If a reconvene meeting is necessary for the assessor to report back to the board, it should be limited to appeals made at the initial meeting. The reconvene meeting is typically not for hearing a property owner’s initial appeal. Hearing all appeals first gives the board an opportunity to get a better understanding of what happened in the district, so it can make consistent recommendations. It eliminates situations where the board feels obligated to respond in a certain manner to one property owner because of an earlier decision. It also speeds up the process for appellants as they may leave after they present their appeal. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 30 23 Quorum requirements for boards Conducting other business at the board meeting It is best to hold a special meeting for the Board of Appeal and Equalization and not conduct the regular council meeting (or other business) at the board meeting. However, due to the low attendance in some jurisdictions, conducting other business at the meeting may be an acceptable practice if handled appropriately. If other business is also to be conducted at the meeting, the time listed on the Notice of Valuation and Classification should be the start time for the appeals portion of the meeting. You should conduct other business either before the meeting (table any discussion if not completed when it is time for the Board of Appeal and Equalization) or after the meeting (allow any late arrivals to present their appeal even if the board has moved on to other business). There have been instances in the past where the board members have held their regular meeting in one part of the hall, and the assessor has been told to meet with appellants in another area. This is not an acceptable practice. It is the responsibility of the board to hear the appeals and the facts presented to make an informed and fair decision. Notifying property owners of decisions It is recommended that all appellants be notified in writing of the decision of the board, even if the appellant was present for the decision. Given the recommended format of hearing all appeals before making any decisions, appellants may choose not to stay for the entire meeting. A letter notifying appellants of the decisions ensures that they understand and are aware of the action, if any, taken by the board. It is also an opportunity to notify appellants of additional appeal options if they are not satisfied with the board’s decision (see “Recommended format to notify appellants of board decisions” in the Appendix). Quorum requirements for boards Quorum must be present A majority of the voting members of the Board of Appeal and Equalization must be in attendance in order for any valid action to be taken. When a board meets and conducts business without a quorum, it is conducting an illegal meeting. This means that any changes made by a board which does not meet the quorum requirement are null and void. What constitutes a quorum? Quorum requirements differ depending on the type of body that is meeting. Per Minnesota Statutes, Section 274.01, subdivision 1, paragraph (a), the town board of a town, or the council or other governing body of a city is the Local Board of Appeal and Equalization. Except for the following situations: Cities whose charters provide for a board of equalization; Cities or towns that have transferred their local board duties to the county (see Chapter 5); Cities with Special Boards of Appeal and Equalization appointed by the governing body (see Chapter 5); or Cities or towns whose local board duties have been transferred to the county due to noncompliance with the training requirements. 4 The number of people required to be present before the members at a meeting can conduct business. For the Board of Appeal and Equalization, a majority of the voting members of the board must be present to meet the quorum requirement. Quorum LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 31 24 Quorum requirements for local boards Townships: Per Minnesota Statutes, Section 366.01, subdivision 1, the supervisors of each town constitute the town board. Two supervisors constitute a quorum at a town board meeting unless the town is operating under “option A,” which means it has a five-member board of supervisors. In the latter case, three supervisors are required to meet the quorum requirement. City councils: According to Minnesota Statutes, Section 412.191, the city council in a standard plan city shall consist of an elected mayor, an elected clerk, and three or five elected council members (which means these cities have either five or seven voting members). In optional plan cities, the city council consists of an elected mayor and four or six elected council members (which means these cities have either five or seven voting members). In all statutory cities, the mayor is a voting member of the council and must be counted when determining whether a quorum is present. A majority of the voting members must be present to meet the quorum requirement. Charter cities may provide that a different number of council members constitute a quorum. Special boards: Appointed by the governing body of a city, a majority of the voting members must be present in order to meet the quorum requirement. County commissioners serve as the County Board of Appeal and Equalization: The number of commissioners is either five or seven. (Generally, there are five members; however, counties with more than 100,000 in population may, by board resolution, increase their county board from five to seven members.) When the county board is serving as the County Board of Appeal and Equalization, the county auditor is also a voting member. If there are six total voting members, at least four must be present to meet the quorum requirement. If there are eight total voting members, at least five must be present to meet the quorum requirement. If a quorum is not present, the meeting cannot legally be held. The County Board of Appeal and Equalization will be transferred to a special board for the next assessment for failure to comply with the quorum requirement. A county board whose powers are transferred to the special board for failing to meet either the training or quorum requirement may be reinstated by resolution of the county board and upon proof that at least one of the county board’s members has completed the appeals and equalization course. The resolution and proof must be provided to the commissioner of revenue by February 1 to be effective for the current assessment year. Note: The citation for the appeals and equalization course and meeting requirements for county boards is Minnesota Statutes, Section 274.135. County commissioners appoint a Special Board of Equalization: The county board of any county may appoint a Special Board of Equalization and delegate its powers and duties to this special board. The special board of equalization serves at the direction and discretion of the appointing county board, and is subject to the restrictions imposed by law on the appointing board. The appointing board may determine the number of members to be appointed to the special board, the compensation and expenses to be paid, and the term of office of each member. At least one member of the special board must be an appraiser, real estate agent, or other person familiar with property valuations in the county. For a special board, the county auditor is a nonvoting member and serves as the recorder. When a quorum is not present Each year, there are numerous complaints from property owners who have taken time off from work – or simply taken their personal time – to attend a board meeting only to find that the meeting cannot take place due to the lack of a quorum. When a local board does not meet because a majority of the members are not present, it sends a message to property owners that the board does not value their time. It also sends the message that the board does not take the responsibility of serving as the Local Board of Appeal and Equalization seriously. Rather than simply sending home angry and frustrated property owners, the assessor changes the format to an “open book” meeting. Property owners can discuss their issues one-on-one with the assessor or the assessor’s staff. If they are not satisfied with the outcome, they can appeal to the County Board of Appeal and Equalization. This assures that the time property owners set aside to appeal to the local board is not wasted. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 32 25 Explanations of alternate methods of appeal If a county or special board of appeal and equalization fails to satisfy quorum or training requirements, owners and taxpayers who would have appealed to the board can appeal to the Commissioner of Revenue before August 1. A fee of $500 per tax parcel that is appealed will be assessed to the county. Arrive on time for the meeting It is also very important that the board members and all required attendees (county assessor, local assessor, clerk, auditor, etc.) arrive at the meeting on time and that the meeting begins at the scheduled time. This shows respect for the people who are appealing to the board, and also shows that their time is valued. Explanations of alternative methods of appeal Open Book Meetings Role of the board in the assessment process Traditionally, open book meetings have been scheduled for jurisdictions in which the Local Board of Appeal and Equalization duties have been transferred to the county. During “open book” meetings, the valuation and classification issues are handled by the assessor’s staff on a one-on-one basis with the property owner. Typically, open book meetings are held by the county assessor’s staff. However, larger cities with an appointed city assessor may hold their own open book meetings. The open book meetings are held in locations that are convenient for property owners. Often open book meetings are held over several days during both day and evening hours. This allows property owners to appeal when it best suits their schedules instead of having to rearrange their schedules to attend a meeting held at one place and time. The open book meetings provide a forum for property owners to meet with assessment staff on an informal basis to review information about their property and to ask questions about the assessment. This setting allows the assessor’s office to resolve questions and reduce the number of appeals to the County Board of Appeal and Equalization (or the Special Board of Equalization). Property owners do not need to make an appointment to meet with the assessment staff. They can simply show up at the dates and times stated on the Notice of Valuation and Classification to discuss their assessment. Depending on the jurisdiction, the appraisers may have laptop computers to access information about the taxpayer’s property. Some counties may be able to link directly to their computer-assisted mass appraisal (CAMA) system which allows the appraiser to obtain data on sales of comparable properties. When reviewing the details of the property with the owner, the appraiser can verify the accuracy of the county’s data and correct any errors. The property owner can also schedule an appointment for the appraiser to view the property if needed. Benefits for the property owner Property owners often find that the open book meeting is less intimidating than presenting their appeal to the board of appeal and equalization. They often appreciate the fact that they can have their questions answered in a more private setting, and not have to be apprehensive about making a presentation in front of their friends and neighbors. In this one-on-one setting, property owners may spend as much time with the appraiser as they need. They can compare the value of their home with the values of similar homes owned by their neighbors. An open book meeting is a meeting held by the county assessor’s office to discuss property owners’ questions regarding their assessments. The one-on- one meeting usually is held as an alternative to the Local Board of Appeal and Equalization. Open book meetings 5 LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 33 26 Explanations of alternate methods of appeal The process is very efficient because concerns and questions are often resolved immediately. Property owners can see that the appraiser collects the same information on all properties, reassuring them that the process is the same for everyone, and they have not been singled out for a value increase. Property owners who are not satisfied with the “open book” approach may appeal to the County Board of Appeal and Equalization (or Special Board of Equalization) and/or appeal to Tax Court. It is only a recommendation that the property owner attend the open book meeting to discuss concerns prior to the county or special board. If a jurisdiction does not have a Local Board of Appeal and Equalization, the property owner is not required to attend an open book meeting in order to appeal to the County Board of Appeal and Equalization (or Special Board of Equalization). Benefits for the local board The benefit for the local board is that an open book meeting saves time for board members. It eliminates the need for the board to become familiar with and educated on the local real estate market. Board members will be able to spend this time concentrating on their other duties as town board or city council members. In addition, board members can avoid confrontational situations with constituents and will no longer be put into difficult situations by having to make decisions about the property values or classifications of property owned by friends and neighbors. However, one possible disadvantage is that the assessor who made the original assessment may also be reviewing the property for the open book appeal. Objectivity (or the appearance of objectivity) may be lost. Benefits for the county While the number of appeals made at the open book meeting may not be less than the number of appeals to the local board, the benefit for the county is that the open book process allows for immediate consideration of issues, and in many cases, appeals are resolved before the County Board of Appeal and Equalization. The process is efficient for the county because it can often consolidate several jurisdictions into one meeting (or a series of meetings) instead of holding at least one meeting in each jurisdiction. Option 1: Transferring assessment and local board duties to the county The town board or city council may transfer the powers and duties of the Local Board of Appeal and Equalization to the county board (under Minnesota Statutes, Section 274.01, subdivision 3) and no longer perform the function of a Local Board of Appeal and Equalization. However, in order to exercise this option, the local jurisdiction also must have its assessment done by the county. This means that the local jurisdiction must give up its local assessor. Some jurisdictions do not see this as an option, because they have no intention of relinquishing this power to the county. For other town boards or city councils, this may be a good option. Before transferring the powers and duties to the county board, the town board or city council must give public notice of the meeting at which the proposal for transfer “Open book” meetings provide many benefits: No appointment needed. Property owners can verify or correct information about their property. Property owners can schedule a time for the assessor to view their property. The setting is less intimidating than a board meeting. The property owner does not need to “present” their appeal in front of friends and neighbors. Property owners can compare their values to the values of other similar homes. Questions and concerns are often resolved immediately. The process is very efficient. Property owners may appeal to the County Board of Appeal and Equalization (or the Special Board of Equalization) and/or to Tax Court if not satisfied with the outcome. Open book benefits for property owners LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 34 27 Explanations of alternate methods of appeal is to be considered (the public notice needs to follow the procedure contained in Minnesota Statutes, Section 13D.04, subdivision 2). A town board or city council that wishes to transfer the assessment and local board duties to the county board must communicate this intent in writing to the county assessor before February 1 of any year to be effective for the current year's assessment. This transfer of duties may either be permanent or for a specified number of years. However, the duties must be transferred to the county board for a minimum of three years, and the length of the transfer must be stated in writing. A town or city may renew its option to transfer its duties to the county board. Property owners in jurisdictions that have chosen this option would be provided with an open book meeting in place of the Local Board of Appeal and Equalization. Property owners who are not satisfied with the outcome of the open book meeting may appeal to the County Board of Appeal and Equalization and/or to Tax Court. Option 2: Transferring local board duties to the county Previously, the only option for transferring the local board duties to the county board meant that the local jurisdiction had to give up its local assessor as well. Some jurisdictions saw this option as a loss of control, and therefore, it was not considered to be an option for the city or town. The quorum and training requirements for local boards were implemented to improve the local board process so that the boards function fairly and objectively. The intent of the legislation was not to force or require a city or town to give up its local assessor. However, a jurisdiction that fails to meet these requirements must transfer the duties of the Local Board of Appeal and Equalization to the County Board of Appeal and Equalization. In this situation, the jurisdiction would lose the right to hold its local board, but it would be able to retain its local assessor. It seems unfair that a jurisdiction which voluntarily transfers its Local Board of Appeal and Equalization duties to the County Board of Appeal and Equalization must give up its local assessor, while a local board that must transfer its duties to the county board for failing to meet the training or quorum requirements may retain its local assessor. It seems appropriate that the local jurisdiction be given the opportunity to decide to forego its right to act as a Local Board of Appeal and Equalization and still maintain its local assessor. If the town board or city council deems that property owners would be best served with an open book meeting, which also would relieve the board from having to make difficult value and classification decisions, the board or council should contact the county assessor and inform him/her of the jurisdiction’s intent to be treated as though it did not meet the quorum or training requirements. It should clarify that the city or town is transferring its duties to the county board, but will retain its local assessor. The town board or city council must notify the county assessor of this decision in writing by February 1 to be effective for the current assessment year. Property owners in a jurisdiction that has chosen to transfer its Local Board of Appeal and Equalization duties to the County Board of Appeal and Equalization would be provided with an open book meeting in place of the local board. Property owners who are not satisfied with the outcome of the open book meeting may appeal to the County Board of Appeal and Equalization and/or to Tax Court. The local board can be reinstated by resolution of the governing body of the city or town and upon proof of compliance with the training requirements. The resolution and proof of compliance must be provided to the county assessor by February 1 to be effective for the current assessment year. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 35 28 Explanations of alternate methods of appeal Other alternate methods of appeal Special Boards of Appeal and Equalization - Local The governing body of a city (including cities with charters that provide for a board of equalization) may appoint a Special Board of Appeal and Equalization in lieu of a local board. The city may delegate to the Special Board of Appeal and Equalization all of the powers and duties of the Local Board of Appeal and Equalization. Town boards are not able to appoint special boards. The special board serves at the direction and discretion of the appointing body, subject to the restrictions imposed by law. The appointing body shall determine the number of members of the board, the compensation and expenses to be paid, and the term of office of each member. At least one member appointed to the Special Board of Appeal and Equalization must be an appraiser, realtor or other person familiar with property valuations in the assessment district. The special board must also meet the training and quorum requirements that a local board must meet. Special Board of Appeal and Equalization - County As mentioned in the quorum requirements section of this handbook, the county commissioners of any county can appoint a special board of equalization and delegate the powers and duties to this special board. A special board may also be required when the training or quorum requirements are not satisfied by the county board of appeal and equalization. These special boards serve at the direction and discretion of the appointing body and are subject to the restrictions imposed by law. The appointing body shall determine the number of members of the board, the compensation and expenses to be paid, and the term of office of each member. At least one member appointed to the Special Board of Appeal and Equalization must be an appraiser, real estate agent, or other person familiar with property valuations in the county. This special board must also meet the training and quorum requirements that regular boards must meet. Tax Court Minnesota has a specific court established to hear and determine all questions of law and fact arising under the tax laws of the state. The Tax Court has statewide jurisdiction. Except for an appeal to the Supreme Court, the Tax Court is the sole and final authority. The petitioner must file in Tax Court on or before April 30 of the year in which the tax is payable, not the year of the assessment. There are two divisions of Tax Court: the Small Claims Division and the Regular Division. The Small Claims Division only hears appeals in certain circumstances and is less formal. Property owners often represent themselves and there is no official record of the proceedings, meaning the decisions cannot be appealed further. The Regular Division hears all types of appeals and the decisions can be further appealed. There is a filing fee and other fees associated with appealing to Tax Court. The court is based in St. Paul, but it travels to the county where the property being appealed is located for the trial. More information is available at www.taxcourt.state.mn.us. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 36 29 Appendix Appendix Glossary Abatement – Reduction of estimated market value, taxes, costs, penalties or interest which have been erroneously or unjustly paid. Adjourn – The final closing of a meeting, such as a meeting of the board of directors or any official gathering. Adjourn is not to be confused with “recess,” which means the meeting will break and then continue at a later time. Agricultural property – Property including the house, garage, farm buildings and farm land used for raising or cultivating agricultural products for sale. Defined in Minnesota Statutes as Class 2a agricultural land. An agricultural homestead is class 2a land that is homesteaded along with any contiguous class 2b rural vacant land under the same ownership. Agricultural property may also be non-homestead. Apartment property – Residential real estate containing four or more units and used or held for use by the owner or by the tenants or lessees of the owner as a residence for rental periods of 30 days or more. Defined in Minnesota Statutes as Class 4a rental housing. City council – The legislative body of a city. The city council in a standard plan city consists of an elected mayor, an elected clerk, and three or five elected council members (which means these cities have either five or seven voting members). In optional plan cities, the city council consists of an elected mayor and four or six elected council members (which means these cities have either five or seven voting members). In all statutory cities, the mayor is a voting member of the council and must be counted when determining whether a quorum is present. Charter cities may provide that a different number of council members constitutes a quorum. Class rate – The percent of market value (as defined in Minnesota Statutes) used to determine a property’s net tax capacity. Classification – The assessor assigns a statutorily- defined classification to all property based upon the use of the property on January 2 of each year. Examples of Minnesota property classes include residential, agricultural, commercial-industrial, apartment and seasonal residential recreational. Commercial-industrial property – Property used for commercial or industrial purposes such as retail or manufacturing. Defined in Minnesota Statutes as Class 3a commercial and industrial property. Comparable property sales – Properties that have recently been sold which have similar property characteristics to a property being appraised. Computer-assisted mass appraisal (CAMA) system – A computerized system that uses statistical analysis to generate estimates of property value. County Board of Appeal and Equalization – A group of people, typically the county commissioners and the county auditor, authorized to examine, compare and equalize property assessments so that each parcel in the county is listed at its market value. Estimated market value (EMV) – This is the value that the assessor estimates the property would likely sell for on the open market. This value may be appealed to the Local Board of Appeal and Equalization, County Board of Appeal and Equalization or Tax Court. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 37 30 Appendix Exempt property – Property that is not subject to taxation. All property, real and personal, in the state is taxable except that which by law is exempt. Exemption laws are to be construed strictly, not broadly. Local or County Boards of Appeal and Equalization cannot grant an exemption. Ownership, use and necessity of ownership are key elements reviewed by the assessor when determining exemption. Highest and best use – “A principle of appraisal and assessment requiring that each property be appraised as though it were being put to its most profitable use (highest possible present net worth), given probable legal, physical, and financial constraints.” Glossary for Property Appraisal and Assessment, International Association of Assessing Officers, 1997. Home rule charter city – Any city which has adopted a home rule charter pursuant to the constitution and laws; “statutory city” means any city which has not adopted such a charter. Homestead – Property that is occupied as the principal place of residence by the owner is eligible to receive the homestead status and the market value homestead exclusion. Property may be a residential or agricultural homestead. Local assessor – An assessor who works on a contract basis for a township or city. Local Board of Appeal and Equalization – A group of people, typically the town board or city council, authorized to determine whether the assessor has properly valued and classified all parcels of taxable property located within the district. Mass appraisal – The process of valuing a group of properties as of a given date using standard methods and statistical testing. Median sales ratio – The midpoint (middle) of all the individual ratios that are included for that property type in that city or township for a sales ratio study period when they are put in order. In Minnesota, the median sales ratio should be between 90% and 105%. This means that when all sales from that study period for that property type in that city or township are put in order from smallest to largest ratio, the middle ratio should be between 90% and 105%. Net tax capacity – Determined by multiplying the class rate by the taxable market value for each property. Notice of Valuation and Classification – A notice mailed to taxpayers at least 10 days prior to the Local Board of Appeal and Equalization (generally in February or March) to inform them of their property values and classifications for the current assessment year. Minimally, the notice must include: the estimated market value for the current and prior assessment; the value of any new improvements; the amount qualifying for any deferral or exclusion; the taxable market value for the current and prior assessment; the property classification for the current and prior assessment; the assessor's office address, phone number, website and time when property information can be viewed by the public; and the dates, places and times set for the meetings of the Local Board of Appeal and Equalization, any open book meetings and the County Board of Appeal and Equalization. Open book meeting – A meeting held by the county assessor’s office to discuss property owners’ questions regarding their assessments. The one-on-one meeting usually is held as an alternative to the Local Board of Appeal and Equalization. Property characteristics – Distinguishing interior and exterior features of a property and its surroundings such as its: location and neighborhood; public or private restrictions on the property; building type and size; quality of construction; age of the structure; physical condition of the structure; and the total number of rooms, bedrooms and bathrooms. Quorum – The number of people required to be present before the members at a meeting can conduct business. For the Local Board of Appeal and Equalization, a majority of the voting members of the board must be present to meet the quorum requirement. Recess – A break in a meeting or proceedings until a certain date and time. Recess is not to be confused with “adjournment,” which ends the proceedings. Residential property – Property that is residential in nature consisting of the house, garage and land including homestead and non-homestead single-family houses, duplexes and triplexes. Defined in Minnesota Statutes as Class 1a residential homestead, Class 1b disabled homestead, Class 4b(1) residential real estate containing less than four units that does not qualify as class 4bb, Class 4bb(1) nonhomestead residential real estate containing one unit, other than seasonal residential recreational property; and Class 4bb(2) a single family dwelling, garage, and surrounding one acre of property on a nonhomestead farm. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 38 31 Appendix Rural vacant land – Property that is unplatted, rural in character and not improved with a structure unless it is a minor, ancillary and nonresidential structure. Defined in Minnesota Statutes as Class 2b rural vacant land. Rural vacant land may be part of an agricultural homestead if it is contiguous to class 2a agricultural land under the same ownership. Sales ratio study – A tool assessors use to help determine values for properties. The sales ratio study period includes sales that have occurred in a twelve month period. For the January 2, 2013 assessment, the assessor reviews sales that occur between October 1, 2011 and September 30, 2012. A sales ratio shows the relationship between the EMV and the sale price of a property. It is the EMV divided by the sales price. In Minnesota, six sales of each property type in each jurisdiction are required to complete a sales ratio study. One sale is not enough evidence for the assessor to change values. Assessors look at all sales in a study to arrive at conclusions and value estimates in mass. Seasonal residential recreational property – Real property devoted to temporary and seasonal residential occupancy for recreation purposes, including real property devoted to temporary and seasonal residential occupancy for recreation purposes and not devoted to commercial purposes for more than 250 days in the year preceding the year of assessment. Defined in Minnesota Statutes as Class 4c(1) commercial or noncommercial seasonal residential recreational property. Special Board of Equalization – A specially-appointed board established by the governing body to complete the appeals and equalization duties delegated to it. One member of the board must be an appraiser, real estate agent, or other person familiar with proper valuations in the assessment district. State Board of Equalization – The Commissioner of Revenue, serving as the State Board of Equalization, ensures assessors follow approved appraisal and assessment practices and reviews the results of the assessor’s work in estimating values. This board meets in June of every year. The board can increase or decrease values to bring about equalization on a county-, city- and township-wide basis as well as across county lines to ensure a fair valuation process across taxing districts, county lines and by property type. Statutory city – Any city which has not adopted a home rule charter pursuant to the constitution and laws; the term “home rule charter city” means any city which has adopted such a charter. Tax Court – A specific court established to hear and determine all questions of law and fact arising under the tax laws of the state. The Tax Court has statewide jurisdiction. Except for an appeal to the Supreme Court, the Tax Court is the sole and final authority. The petitioner must file in Tax Court on or before April 30 of the year in which the tax is payable, not the year of the assessment. Tax levy – The total amount of property tax revenue needed to meet a jurisdiction’s budget requirements. Tax rate – Determined by taking the total amount of property tax revenue needed (tax levy) divided by the total net tax capacity of all taxable property within the taxing jurisdiction. Tax statement – Mailed to taxpayers in March of each year, the property tax statement includes the actual tax amounts to be paid in the current year. Property tax statements for manufactured homes assessed as personal property are mailed in May of each year. Taxable market value (TMV) – This is the value that property taxes are actually based on, after all reductions, exclusions, exemptions and deferrals. Town board – The supervisors of a town constitute the town board. Unless provided otherwise, there are three supervisors. Towns operating under “option A” have five supervisors. Truth in Taxation Notice – Mailed to taxpayers in November of each year, the truth in taxation notice contains the estimated tax amounts for the following year. The statement also includes current year tax amounts for comparison purposes and notice of budget meetings. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 39 32 Appendix Duties of local and county boards LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 40 33 Appendix How value changes affect taxes LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 41 34 Appendix Recommended format to notify appellants of board decisions [DATE] {Insert property owner’s name} {Address line 1} {Address line 2} Dear {Insert name here}: This letter is to acknowledge an appeal to the {insert jurisdiction here} Board of Appeal and Equalization regarding the value or classification of parcel number {Insert parcel number here}. The local board considered the appeal and any information presented (or supplied in the case of written appeals). As a result of its review, the local board voted to: ______ Make no change to the {YEAR} value or classification ______ Change the {YEAR} classification from _____________________ to ____________________ ______ Reduce the {YEAR} value from $ ___________________ to $ ___________________ ______ Increase the {YEAR} value from $ ___________________ to $ ___________________ Comments: If you are not satisfied with the outcome of the Board of Appeal and Equalization, you may appeal to Tax Court [local boards only: You may also appeal to the County Board of Appeal and Equalization. {Add details about scheduling appointments or how to appeal to the county board.}]. For more information on the Tax Court, go to http://www.taxcourt.state.mn.us. Sincerely, {insert name} {insert title} LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 42 35 Appendix Local Board of Appeal and Equalization Trained Member Certification Form Minnesota Statute 274.014 subdivision 3 states: “Any city or town that conducts local boards of appeal and equalization meetings must provide proof to the county assessor by February 1, 2006, and each year thereafter, that it is in compliance with the requirements of subdivision 2. Beginning in 2006, this notice must also verify that there was a quorum of voting members at each meeting of the board of appeal and equalization in the current year [emphasis added]…” Please select one of the options below and fill in the information that is needed. Upon completion please email or fax the completed form to the county assessor no later than February 1 of the current year. A DOR Property Tax Compliance Officer will be reviewing the files to be sure that all jurisdictions are complying with the submission of these forms by the February 1st deadline. If the form is not returned by February 1st, the board of appeal powers will be transferred to the county for the current assessment year. Option 1: As of February 1 of the current year, _______________________________________has verified that at (Jurisdiction Name: ex – City of Rice/Bear Twp) least one board member has completed the Board of Appeal and Equalization training in the past four years. _____________________________________ _____________________ (Name of one trained board member) (Training expiration date) _______________________________ _____________ (Jurisdiction Clerk/Admin Signature) Date ___________________________ ___________ (County Assessor Signature) Date Option 2: As of February 1 of the current year, _________________________________________ will not have a (Jurisdiction Name: ex – City of Rice/Bear Twp) trained board member therefore, we understand that under Minnesota Statute 274.014 subdivision 3 the jurisdiction will lose its board of appeal and equalization powers beginning with the current year’s assessment. The board of appeal powers will be transferred to the county until a resolution and proof of training are provided to the county assessor. _______________________________ ______________ (Jurisdiction Clerk/Admin Signature) Date ___________________________ ___________ (County Assessor Signature) Date LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 43 36 Appendix County Board of Appeal and Equalization Trained Member Certification Form Minnesota Statute 274.135 subdivision 3 states: “Any county that conducts county boards of appeal and equalization meetings must provide proof to the commissioner by February 1, 2009, and each year thereafter, that it is in compliance with the requirements of subdivision 2. Beginning in 2009, this notice must also verify that there was a quorum of voting members at each meeting of the board of appeal and equalization in the current year [emphasis added]…” Please select one of the two options below and fill in the information that is needed. Upon completion please email the completed form to the DOR no later than February 1 of the current year. If the form is not returned by February 1st, the board of appeal powers will be transferred to a special board for the current assessment year Option 1: As of February 1 of the current year, ___________________________________, has verified that at (County Name: ex- Washington County) least one board member has completed the Board of Appeal and Equalization training in the past four years. _____________________________________ _____________________ (Name of one trained board member) (Training expiration date) _________________________ ___________ (County Auditor) Date Option 2: As of February 1 of the current year, __________________________________ will not have a (County Name: ex – Washington County) trained board member therefore, we understand that under Minnesota Statute 274.135, subdivision 3 the county will lose its board of appeal and equalization powers beginning with the current year’s assessment. The board of appeal powers will be transferred to the special board of equalization. If the county board or special board does not meet the quorum and training requirements then that person may appeal to the commissioner of revenue. The commissioner must charge and bill the county where the property is located $500.00 for each tax parcel that is appealed. ___________________________ ___________ (County Auditor) Date LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 44 37 Appendix Frequently asked questions by board members What is the purpose of the Board of Appeal and Equalization? One characteristic of the valuation (and to a lesser extent the classification) part of the property tax process is that there are subjective elements involved. Both mass appraisal and independent appraisal are inexact sciences. The property tax system has a method for property owners to appeal the decisions made by the assessor. Effective actions taken by the Board of Appeal and Equalization may potentially make a direct contribution to attaining assessment equality. Any value reductions have the effect of shifting the property tax burden to other properties, so any changes made by the board must be justified. On what basis should I make my decisions as a board member? You have an obligation to objectively listen to the property owner’s appeal, which should focus on the market value and facts that impact the market value or the facts that focus on the classification. It is assumed that the assessor has valued the property correctly. The burden of proof rests with the property owner who must present factual evidence to disprove the assessor’s value. For example, if the property owner states that his/her home is overvalued because it is located on a busy street, the property owner should present comparable sales also located on that street. The board would want to take that information under advisement. Then the board should ask for information from the assessor concerning how the value of the property was determined. Again, any decisions made by the board should be based on facts because any reductions have the effect of shifting the property tax burden to other properties. It is important to keep in mind that all decisions must meet statutory guidelines as well. What options do property owners have if they are not satisfied with the board’s decision? For local boards¸ the property owner can: appeal by letter, representative or in person to the County Board of Appeal and Equalization (a property owner must appeal to the local board to be able to appeal to the county board); and/or appeal to Tax Court. For county boards, the property owner can appeal to Tax Court. What factors make up the valuation of property? The critical question is whether the property is valued in excess of market value or a theoretical selling price as of January 2 of each year. The components that make up the market value are developed from vacant land sales, replacement cost schedules, abstraction from sales data, and other sources. The mass appraisal system includes both quantitative and qualitative variables. Quantitative variables are objective characteristics, such as square footage, number of bathrooms or fireplaces, and other straightforward items. It is important that the property description is accurate to allow for a fair application of the mass appraisal schedule to the property. Qualitative variables are more subjective in nature. They include the grading (or estimating the construction quality) of the property which always involves judgment. Why do values change? There are basically three reasons why values change. Appreciation or depreciation in the real estate market. The assessor’s office collects information on the local real estate market and adjusts property values annually in order to reflect the market. The requirement that the assessor actually view properties once every five years does not limit the assessor to revaluing properties once every five years. The assessor is required to review property values and classifications each year. Physical changes to improvements on the property. Improvements such as building a deck or finishing the basement increase the value of the property, and the assessor would adjust the value to reflect these improvements. Similarly, the assessor should adjust the value for any structural components that may be removed. Equalization process. The Commissioner of Revenue, acting as the State Board of Equalization, has the authority to increase or decrease values to bring about equalization. The orders are usually on a county-, city-, LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 45 38 Appendix or township-wide basis for a particular classification of property. All State Board orders must be implemented by the county for the current assessment year. The equalization process is designed not only to equalize values on a county-, city-, and township-wide basis but also to equalize values across county lines to ensure a fair valuation process across taxing districts, county lines, and by property type. State Board orders are implemented only after a review of values and sales ratios, discussions with the county assessors in the county affected by the State Board orders, county assessors in adjacent counties and the Commissioner of Revenue. Frequently asked questions by property owners Is it legal for the assessor to increase my value so much in one year? Yes. The assessor must value property at market value each year. Property values change continuously with changing economic conditions. There is no limit to the amount of increase or decrease in estimated market values in a given year. The assessor is required to review the values and classifications as of January 2 of each year. Why are my taxes so high? Taxes are not within the authority of the board. The property tax on a specific parcel is based on its market value, property class, the total value of all property within the taxing area, and the budget requirements of all local government units located within the taxing area. Only concerns relating to the current year valuation and/or classification may be heard by the board. Will I be taxed out of my home? The local board cannot reduce tax amounts. There is relief for property classified as homestead. The market value homestead exclusion may be applied. In addition to the homestead classification, Minnesota provides property tax relief to homeowners through the Property Tax Refund program. This program has been around for many years and includes two different kinds of refunds: the regular refund and the special refund. The regular refund was designed to relieve the burden on homeowners whose property taxes are high in relation to their income. The special refund is for homeowners who experience a property tax increase of more than 12 percent (and at least $100), regardless of their income level. Both of these refunds must be applied for using form M1PR from the Minnesota Department of Revenue. There are specific requirements for each refund, which are included in the M1PR instructions. In addition, qualifying individuals may participate in the Senior Citizen Property Tax Deferral program. This is a deferral of tax, not a reduction. The taxes accumulate along with interest at a rate not to exceed 5 percent and a lien is attached to the property. Forms and instructions for the Property Tax Refund and Senior Citizen Property Tax Deferral program are available on the Department of Revenue website (http://www.revenue.state.mn.us). Property Tax Fact Sheets All Property Tax Fact Sheets can be found on the Minnesota Department of Revenue’s website at http://www.revenue.state.mn.us/propertytax/Pages/factsheets.aspx. Please advise anyone who needs more information regarding property taxes, appeals and special programs to visit our website. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 46 39 Appendix Note: This handbook is designed to provide information to city, town, and county boards or special boards serving as the Boards of Appeal and Equalization. This handbook mentions local, city and county assessors. The specific responsibilities of the local, city and county assessor may differ from one jurisdiction to the next. Not all jurisdictions have a local assessor. For example, counties with a true county assessing system (all assessments are done by the county) will not have a local assessor. In counties having a city of the first class, the powers and duties of the county assessor within such city shall be performed by the duly appointed city assessor. In all other cities having a population of 30,000 persons or more, according to the last federal census (except in counties having a county assessor prior to January 1, 1967), the powers and duties of the county assessor within these cities will be performed by a duly appointed city assessor. The county assessor will, however, retain the supervisory duties contained in M.S. 273.061, subdivision 8. For example, the county assessor may provide sales information for the local boards in the entire county, or a city assessor may be responsible for providing the information for the local board in a city that has an appointed city assessor. If the board has questions about the division of assessor duties in the jurisdiction, please contact the county assessor for clarification. LBAE Meeting of April 13, 2015 Title: 2015 Local Board of Appeal & Equalization (LBAE)Page 47 Meeting: Study Session Meeting Date: April 13, 2015 Discussion Item: 1 EXECUTIVE SUMMARY TITLE: Future Study Session Agenda Planning – April 20 and April 27, 2015 RECOMMENDED ACTION: The City Council and the City Manager to set the agenda for a Special Study Session on April 20 and the regularly scheduled Study Session on April 27, 2015. POLICY CONSIDERATION: Does the Council agree with the agendas as proposed? SUMMARY: At each study session approximately five minutes are set aside to discuss the next study session agenda. For this purpose, attached please find the proposed discussion items for a Special Study Session on April 20 and the regularly scheduled Study Session on April 27, 2015. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: Not applicable. SUPPORTING DOCUMENTS: Future Study Session Agenda Planning – April 20 & 27, 2015 Prepared by: Debbie Fischer, Office Assistant Approved by: Tom Harmening, City Manager Study Session Meeting of April 13, 2015 (Item No. 1) Page 2 Title: Future Study Session Agenda Planning – April 20 and April 27, 2015 Special Study Session, April 20, 2015 – 6:45 p.m. Tentative Discussion Items 1. Use of $250,000 Westwood Hills Nature Center Donation & Upcoming Master Plan – Operations & Recreation (30 minutes) Staff will be providing ideas and options on how to utilize the money donated to the Nature Center, as well as provide an overview of a proposed master planning process for the Nature Center property. Special Study Session Cont., April 20, 2015 – Immediately Following City Council Meeting 2. Off Sale Intoxicating Liquor Licenses – Administrative Services (45 minutes) Staff will provide information regarding off sale liquor licensing in St. Louis Park to help determine if City Council would like to implement any changes. The discussion will include data on business locations, zoning regulations, licensing concepts, current establishment size and separation of distance between liquor stores. Study Session, April 27, 2015 – Immediately Following LBAE Reconvene Tentative Discussion Items 1. Future Study Session Agenda Planning – Administrative Services (5 minutes) 2. Polystyrene/Plastic Bag Update – Operations & Recreation (30 minutes) Staff will be providing next steps in the process to eliminate polystyrene for carry out use in restaurants and moving towards eliminating plastic bags. 3. Application for TIF Assistance (CSAH 25 & France Ave.) – Community Development (30 minutes) Information related to Bader Development’s Tax Increment Financing (TIF) Application for the redevelopment at CSAH 25 & France Avenue will be presented. 4. PLACE Development Update & Predevelopment Agreement – Community Development (45 minutes) Staff will provide an update on the PLACE project and proposed Preliminary Development Agreement. Communications/Meeting Check-In – Administrative Services (5 minutes) Time for communications between staff and Council will be set aside on every study session agenda for the purposes of information sharing. Reports 5. Southwest LRT Update 6. Compensation & Personnel Programs 7. Park the Street (Health in the Park) 8. 13th Lane & Texas Avenue - MnDOT Parcels 9. Zoning Text Amendments South Side Excelsior Blvd. Design Guidelines Meeting: Study Session Meeting Date: April 13, 2015 Discussion Item: 2 EXECUTIVE SUMMARY TITLE: Competitive Video Franchising Process in St. Louis Park RECOMMENDED ACTION: No formal action required. Staff desires to update Council on actions being taken in Minneapolis and other communities related to CenturyLink’s request for St. Louis Park to initiate a video franchise process. POLICY CONSIDERATION: Should St. Louis Park initiate a video franchise process as requested by CenturyLink by publishing a “Notice of Intent to Franchise.” A more detailed discussion of various policy considerations is included later in this report. SUMMARY: CenturyLink is applying for franchises in metro area cities so they can offer video programming services, in addition to current telephone and internet services. Staff will be in attendance. Members of the Telecommunications Advisory Commission, CenturyLink, and Comcast have been notified of this meeting. FINANCIAL OR BUDGET CONSIDERATION: Not applicable. VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Discussion Excerpt from CenturyLink Response to Mpls Info Request Prepared by: Reg Dunlap, Civic TV Coordinator Reviewed by: Clint Pires, Chief Information Officer Approved by: Tom Harmening, City Manager Study Session Meeting of April 13, 2015 (Item No. 2) Page 2 Title: Competitive Video Franchising Process in St. Louis Park DISCUSSION BACKGROUND: CenturyLink currently provides telephone and internet service to St. Louis Park customers and is upgrading their hybrid copper-fiber network to offer 1 gigabyte internet service in some areas of the city. CenturyLink offers video programming services in cities like Phoenix, AZ and Lacrosse, WI, and seeks video franchises in the Twin Cities market to compete with Comcast. CenturyLink provided a demonstration of their Prism TV services in mid-February at their Minneapolis office, attended by Telecommunications Advisory Commission Chair Bruce Browning, Civic TV Coordinator Reg Dunlap, Community TV Coordinator John McHugh and representatives from other cities. Prism currently has 240,000 customers nationwide and offers many advanced TV features, like video on demand (VOD), digital video recorders (DVR’s) and 240 high definition (HD) channels. To offer the TV service, CenturyLink must deliver a 25 megabit per second Internet speed to a customer’s home. Currently, most St. Louis Park homes cannot receive that speed so CenturyLink would have to do an upgrade to the telephone lines called “grooming.” They intend to begin offering service in Minnesota June 1, 2015, and have been actively pursuing franchises with Minneapolis and other local franchise authorities as that date approaches. PRESENT CONSIDERATIONS: The key legal issue will be the geographical area served by CenturyLink, whose representatives said they will not commit to upgrading their system to serve all of St. Louis Park in a meeting with City Manager Tom Harmening, Chief Information Officer Clint Pires and Communications and Marketing Coordinator Jamie Zwilling on December 30, 2014. Minnesota Statute 238.08 that pertains to video franchises says: (b) No municipality shall grant an additional franchise for cable service for an area included in an existing franchise on terms and conditions more favorable or less burdensome than those in the existing franchise pertaining to: (1) the area served; (2) public, educational, or governmental access requirements; or (3) franchise fees. CenturyLink representatives say that the Federal Communications Commission has issued regulations that preempt this particular requirement. The St. Louis Park City Attorney for telecommunications issues, Joel Jamnik, does not believe the issue will be settled without litigation. It is likely that Comcast will take legal action against any city that approves a franchise that is more favorable or less burdensome than the existing franchise. CenturyLink has said verbally that it would indemnify and pay all legal costs related to any legal action taken by any party, if they are granted a video franchise. Attached is CenturyLink’s legal explanation about why they feel Federal law and Federal Communications Commission rulings preempt Minnesota Statute on the geographical area served. The excerpt is from a CenturyLink response to Minneapolis’ Request for Information pertaining to CenturyLink’s application for franchise, and here’s the link to the entire document: http://www.ci.minneapolis.mn.us/www/groups/public/@clerk/documents/webcontent/wcms1p- 138692.pdf Study Session Meeting of April 13, 2015 (Item No. 2) Page 3 Title: Competitive Video Franchising Process in St. Louis Park Another issue is the build out schedule or timeline. Minnesota Statute 238 requirements for a franchise application includes: (6) a time schedule for construction of the entire system with the time sequence for wiring the various parts of the area requested to be served in the request for proposals; CenturyLink will not commit to a time schedule to build out any city at this point, preferring a market-based approach. City staff has worked with CenturyLink to be ready to discuss a franchise proposal when the Council adopts a plan of action. Staff provided a copy of the existing Comcast franchise to CenturyLink so they can review it and possibly identify changes they require. To date, CenturyLink has not provided a marked up copy of the existing franchise document. POLICY CONSIDERATIONS: As cities embark on the video franchising process, here are a few concerns that will ultimately need to be addressed. Should the City approve a franchise that allows competition on CenturyLink’s terms, which means some of the City will have a second choice for cable TV, with no guaranty that all of the City will receive that benefit? Should the City push forward aggressively and risk litigation from Comcast or move slowly to allow other local franchising authorities to take that risk first? Another factor is CenturyLink intends to begin offering service June 1, 2015, and has a finite budget for improving their system to allow video service. If the City waits too long, CenturyLink may no longer choose to budget the capital to upgrade St. Louis Park. Staff would suggest that the policy questions noted above be weighed against the recent priority and goal established by the Council at its 2015 Workshop as follows: “Priority/Goal – St. Louis Park is a technology connected community. Why is this important? – Broadband speed and capacity requirements continue to grow as technology and the Internet continue to evolve. A community that is connected by a very robust and comprehensive broadband system will set itself apart and be better able to promote economic growth, innovation and community development. High speed broadband enables the exchange of information in many different forms and is vital to high-tech and medical industry growth, and to the delivery of services in education, health, government, public safety, and for overall quality of life. Given the significant amount of fiber infrastructure in place that is owned by the City, we are uniquely situated to take advantage of the digital economy” OTHER CITIES AND CENTURYLINK’S APPLICATION: The City of Minneapolis held a public hearing about the “Notice of Intent to Franchise” on February 23, 2015 (link to meeting here: http://mpls.dev.implex.net/?p=2633) and other cities will be following their lead. For example, Northwest Community Television, serving Brooklyn Center, Brooklyn Park, Crystal, Golden Valley, Maple Grove, New Hope, Osseo, Plymouth and Robbinsdale, will hold their “Notice of Intent to Franchise” public hearing on April 16 at 7:30 a.m. CITY ATTORNEY COMMENTS: Federal law requires that the City must approve or deny an application for video franchise within 90 days of receiving the application, so the safest course of action is to wait and see what happens in other communities. In addition to the previously mentioned litigation risks, an application that is denied without sufficient cause could involve litigation. Study Session Meeting of April 13, 2015 (Item No. 2) Page 4 Title: Competitive Video Franchising Process in St. Louis Park Here is an overview of the process. • The franchising authority shall have published once each week for two successive weeks in a newspaper of general circulation in each municipality within the cable service territory, a notice of intent to consider an application for a franchise other than a franchise renewal pursuant to United States Code, title 47, section 546. • The franchising authority shall allow at least 20 days from the first date of published notice to the closing date for submitting applications. • A formal application for franchise is received. • The City has 90 days to grant or deny the application, based on Federal Communications Commission rules. • A public hearing is held for comments about any applications for a franchise. • CenturyLink and City staff negotiate franchise terms. • City staff recommendation is submitted to Council to approve or deny the franchise. Staff notes for Council that Minneapolis and the Northwest Community Television cities would require that CenturyLink follow through with its verbal promise to indemnify and pay all costs related to any legal action taken by any party, if they are granted a video franchise. St. Louis Park would do the same. As noted by the City Attorney, an application that is denied without sufficient cause could also involve litigation, including from the applicant. The legal costs of that would not be covered. In either case, there are no commitments to cover City staff costs. At this time, Council can choose to aggressively pursue a competitive video provider to serve part of St. Louis Park, with attendant legal risks and staff costs as noted above; or, wait for these issues to be settled by other local franchising authorities and the possibility of delayed investment in St. Louis Park by CenturyLink. NEXT STEPS: Council to direct staff whether or not to begin the process by publishing a Notice of Intent to Franchise. Study Session Meeting of April 13, 2015 (Item No. 2) Page 5 Title: Competitive Video Franchising Process in St. Louis Park Excerpt from CenturyLink Response to Minneapolis Request for Information Below is an excerpt from a February 16, 2015 letter from CenturyLink Director of Public Policy Mary LaFave to Michael Bradley, Attorney for Bradley, Hagen & Gullikson LLC, counsel for City of Minneapolis for issues pertaining to telecommunications, responding to a request for information. Full letter available at: http://www.ci.minneapolis.mn.us/www/groups/public/@clerk/documents/webcontent/wcms1p- 138692.pdf 29. Minnesota State law requires a City not to grant an additional franchise that is more favorable or less burdensome compared to the incumbent's franchise related to the area served and further requires that all initial franchises have provisions requiring a complete build out of the cable communications system over a period of five years. In prior discussions, you have indicated that you believed these provisions in state law are preempted. Please provide a detailed factual basis and description of the legal reasons supporting Franchisee's conclusion that these Minnesota State law provisions are preempted. This could be in the form of a legal opinion. Please address the Order on Reconsideration released by the FCC on January 21, 2015. Before addressing the state statute, the following sets forth some critical background with respect to deployment of both telecommunications and cable infrastructure. Initially, local telephone companies were granted monopolies over local exchange service in exchange for taking on a provider of last resort obligation- a duty to provide service - to customers in its service territory. Similarly, with respect to video services, Minneapolis has given the incumbent video provider (and its predecessors) a monopoly over facilities based video. In exchange for making the capital investment to deploy facilities, the incumbent cable company got 100 percent of the customers who wanted cable television. Subsequently, with respect to telephone services, the federal and local governments effectively eliminated the local telephone monopolies and fostered robust competition. It should be noted that in doing so, the telecom second entrant had absolutely no obligation to build any facilities or to serve any particular location(s) at all. As the FCC noted, imposing build-out requirements on new entrants in the telecommunications industry would constitute a barrier to entry (13 FCC Rcd 3460,1997). Cable companies were free to enter the telecom market on terms that made business and economic sense to them. This very environment was the catalyst for robust wireless and wireline competition and the proliferation of higher broadband speeds. Congress became concerned about the lack of competition in the video world and in 1992 amended federal law to prohibit a local franchising authority from "unreasonably[y] refus[ing] to award an additional competitive franchise." 47 U.S.C. § 541(a)(1) provides a direct avenue for federal court relief in the event of such an unreasonable refusal. 47 U.S.C. § 555(a) and (b). Until the advent, however, of state statutes granting statewide cable franchises without a mandatory build requirement (e.g., Florida) or progressive cities willing to grant competitive franchises, cable monopolies continued to the detriment of consumers and competition. Level playing field requirements are just one example of barriers to competitive entry erected by cities at the behest of the cable monopolies. Study Session Meeting of April 13, 2015 (Item No. 2) Page 6 Title: Competitive Video Franchising Process in St. Louis Park Courts have ruled, however, that "level playing field" provisions do not require identical terms for new entrants. See, for example, Insight Communications v. City of Louisville, 2003 WL 21473455 (Ky. Ct. App. 2003), where the court found: There will never be an apple-to-apple comparison for Insight and other franchisee simply because Insight is the incumbent which in its own right and through its predecessors has been the exclusive provider of cable services in the City of Louisville for almost thirty years. No new cable franchisee can ever be in the same position as a thirty-year veteran. See also, In Cable TV Fund 14-A, Ltd. v. City of Naperville (1997 WL 209692 (N.D. III); and New England Cable Television Ass'n, Inc. v. Connecticut DPUC 717 A.2d 1276 (1998). In sharp contrast to the monopoly provider, a second entrant faces a significant capital outlay with absolutely no assurance of acquiring customers; rather, it must compete with the monopoly incumbent and win each and every customer over. As Professor Thomas Hazlett of George Mason University has explained, "[i]ncumbents advocate build-out requirements precisely because such rules tend to limit, rather than expand, competition." The federal Department of Justice has also noted that "...consumers generally are best served if market forces determine when and where competitors enter. Regulatory restrictions and conditions on entry tend to shield incumbents from competition and are associated with a range of economic inefficiencies including higher production costs, reduced innovation, and distorted service choices.” (Department of Justice Ex Parte, May 10, 2006, FCC MB Dkt. 05-311). The fact is that the incumbent cable provider has (1) an established market position; (2) all of the cable customers; and (3) an existing, in-place infrastructure. These disparate market positions make imposing a build-out requirement on a competitive entrant bad public policy. Under the guise of "level playing field" claims, incumbent cable operators seek to require new entrants to duplicate the networks the incumbents built as monopolies, knowing that such a requirement will greatly reduce, if not eliminate, the risk of competitive entry. In 2007, the FCC issued its findings with respect to facilities based video competition and held as follows: (1) with respect to level playing field requirements, the FCC stated that such mandates "unreasonably impede competitive entry into the multichannel video marketplace by requiring local franchising authorities to grant franchises to competitors on substantially the same terms imposed on the incumbent cable operators (Para. 138); and (2) with respect to mandatory build out, the FCC held that "an LFA's refusal to grant a competitive franchise because of an applicant's unwillingness to agree to unreasonable build out mandates constitutes an unreasonable refusal to award a competitive franchise within the meaning of Section 621(a)(1) [47U.S.C. § 541(a)(1)]." Those two FCC holdings alone should put this entire matter to rest - level playing field requirements and unreasonable mandatory build requirements are barriers to competitive entry in the cable market and violate the federal Cable Act and the FCC's order. Minnesota, however, codified its requirements in a state law and the FCC expressly declined to "preempt" state laws addressing the cable franchising process. It is clear, however, that the FCC did not intend to protect the Minnesota statute which mandates the imposition of barriers to entry on each and every local franchising authority. As various providers were trying to enter the competitive cable market and encountering barriers such as level playing field requirements and mandatory build out provisions, many states passed statutes to facilitate competitive entry and to prevent local Study Session Meeting of April 13, 2015 (Item No. 2) Page 7 Title: Competitive Video Franchising Process in St. Louis Park franchising authorities from erecting barriers to entry. Such laws were passed in 26 states including Florida, Missouri and North Carolina, where CenturyLink has taken advantage of the streamlined process to enter a market without a mandatory build obligation. These laws have facilitated competitive entry as evidenced, for example, by the presence of four facilities based competitors in the Orlando, Florida market, including CenturyLink and Comcast. As such, these state laws are aligned and not in conflict with the FCC's and Congress' policies for promoting competition in the video distribution market. Minnesota's cable law, however, is quite the opposite. Minnesota's cable act dates back to the 1970s and directs each local franchising authority to impose not only a level playing field across a broad range of issues (many of which Franchisee does not oppose), but also a five year mandatory build out requirement. Both of these provisions have been deemed to be barriers to entry by the FCC. The incontrovertible fact is that the law has been extremely successful in barring cable communications competition in Minneapolis: Minneapolis has not experienced any facilities based competition because of the barriers to entry Minnesota codified in Chapter 238. In support of this position, that the FCC's 2007 Order preempts Minn. Stat. Chapter 238, Franchisee notes the following: • Conflict preemption: State law may be preempted without express Congressional authorization to the extent it actually conflicts with federal law where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" English v. General Elec. Co., 496 U.S. 72,79 (1990). • Whether state law constitutes a sufficient obstacle is a matter of judgment to be informed by examining the federal statute as a whole and identifying its purpose and intended effects. Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363,372 (2000). • Minn. Stat. § 238.08 mandates terms that each municipality must implement in granting a new or renewed cable franchise. • Minn. Stat. § 238.084 sets forth the required contents of a franchise ordinance and sets forth very precise requirements in an initial franchise about the build: commence build within 240 days; must construct at least 50 plant miles per year; construction throughout the franchise area must be substantially completed within 5 years of granting the franchise; and these requirements can be waived by the franchising authority only upon occurrence of unforeseen events or acts of God. • Section 621(a)(1) initially gave local authorities the authority to grant franchises, but this broad grant resulted in exclusive franchises/monopolies. Congress "believe[d] that exclusive franchises are contrary to federal policy... which is intended to promote the development of competition. H.R. Conf.Rep. NO.102-862, at 77 (1992) • Legislative history clearly supports that Congress was focused on fostering competition when it passed the 1992 Act. Qwest Broadband Servs. Inc. v. City of Boulder, 151 F. Supp.1236, 1244(0. Colo. 2001). • In its 2007 order, the FCC found that "an LFA's refusal to grant a competitive franchise because of an applicant's unwillingness to agree to unreasonable build out mandates constitutes an unreasonable refusal to award a competitive franchise within the meaning of Section 621(a)(1 )." The FCC order, however, targeted local and not state laws. • Arguably, the Minnesota build requirements set forth in Section 238.084(m) are in conflict with Section 621(a)(1) and are, therefore, preempted. o In the Boulder case, the court applied Section 621's prohibition on unreasonable refusals to grant franchises to find conflict preemption where local rules required voter approval for any new franchises. Study Session Meeting of April 13, 2015 (Item No. 2) Page 8 Title: Competitive Video Franchising Process in St. Louis Park • The mandatory build out in the Minnesota statute could be considered a de facto "unreasonable refusal" to grant a franchise and thus conflict with the pro-competition purpose set forth in 621(a)(1). • In upholding the FCC's ruling, the Sixth Circuit stated that "while the [FCC] characterized build out requirements as 'eminently sensible' under the prior regime in which cable providers were granted community-wide monopolies, under the current, competitive regime, these requirements 'make entry so expensive that the prospective ... provider withdraws its application and simply declines to serve any portion of the community." Alliance for Cmty Media v. FCC, 529 F.3d 763, 771 (6th Cir. 2008). • The FCC ruling targeted local rules and actions and the FCC refrained from preempting state regulation because it lacked "a sufficient record to evaluate whether and how such state laws may lead to unreasonable refusals to award additional competitive franchises." FCC Cable Franchising Order (FCC 06180, at n.2 & 11126). That is not to say, however, that upon full consideration, the FCC would not find the Minnesota mandatory build requirements to constitute an unreasonable refusal under Section 621. o The franchising laws which were being enacted about the time of the FCC order facilitated competitive entrants into the facilities based video market. o In sharp contrast, the Minnesota statutes mandates individual cities and commissions to include onerous build out schedules which, standing alone, would run afoul of the FCC's order. It should also be noted that at least two cities in Minnesota have chosen to award competitive franchises to second entrants without satisfying all the mandates of Chapter 238. See Mediacom Minnesota, LLC v. City of Prior Lake, Minn. Ct. of Appeals, A091379 (Unpublished decision, Filed June 22, 2010), a copy of which is attached as Exhibit 0 in accordance with Minn. Stat. § 480A.09, subd. 3 (2008). In October 2014, the City of Owatonna awarded a competitive franchise to a second provider, and the franchise did not contain the five year build requirement set forth in Chapter 238. Rather, it contained a market success model expressly endorsed by the FCC. The competitor will provide service to 25 percent of the City of Owatonna and will have no further obligation to enable the provision of cable communications services until 48 percent of households in the footprint subscribe to its service. Finally, nothing in the FCC's Order on Reconsideration released in January of this year alters the above analysis. Meeting: Study Session Meeting Date: April 13, 2015 Written Report: 3 EXECUTIVE SUMMARY TITLE: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan RECOMMENDED ACTION: No action required. This study session discussion is intended to provide an opportunity for the City Council to interact with the Environment and Sustainability Commission on their 2015 work plan. POLICY CONSIDERATION: Are the actions of the ESC in alignment with the expectations of the City Council? SUMMARY: The Environment and Sustainability Commission previously submitted a summary of their 2015 work plan at the March 23rd study session. With this submission, the commissioners have provided a more detailed work plan and have asked for an opportunity to address the Council on their previous accomplishments, the 2015 work plan and any initiatives the City Council would like them to undertake. FINANCIAL OR BUDGET CONSIDERATION: Not Applicable VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental stewardship. We will increase environmental consciousness and responsibility in all areas of city business. SUPPORTING DOCUMENTS: 2014 Annual Report & 2015 Summary Work Plan 2015 Detailed Work Plan Prepared by: Phillip Elkin, Senior Engineer Project Manager Reviewed by: Debra Heiser, Engineering Director Approved by Tom Harmening, City Manager Study Session Meeting of April 13, 2015 (Item No. 3) Page 2 Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Environment and Sustainability Commission 2014 Annual Report & 2015 Summary Work Plan The Environment and Sustainability Commission: The purpose of the Environment and Sustainability Commission: Sustainable SLP shall be to: 1. Provide recommendations to advance city goals, policies, and programs. 2. Provide advice and assistance to staff and council through collaboration. 3. Provide leadership in engaging the community, encouraging relationships and partnerships with neighborhoods, special interest groups, religious institutions, business leaders, and other commissions. 4. Serve as a conduit for environmental and sustainable information, topics, and direction to and from residents and the public. Activities as a Commission The ESC establishing operational Work Groups on a number of key topic areas to develop action plans and continued its on-going effort to educate Commission members on the sustainability efforts by other municipalities, the City of St. Louis Park operations and policies as they deal with sustainability goals, and the tools available to reach sustainability goals. The Commission went through a two-evening Workshop on Sustainability and the Natural Step Framework to develop a shared awareness and understanding of sustainability, conduct a baseline sustainability assessment, create a sustainability vision and develop a sustainability plan, in addition to assessing the potential value of such an approach for the City. Most monthly meetings included guest speakers, such as City Staff, Xcel Energy and U of M extension service. The topics have ranged from surface water management and pesticide use to energy assessments and community solar gardens. This educational aspect of the commission will continue into 2015 with additional topics and guest speakers at meetings. Initiatives Undertaken During the past year both the commission and work groups have identified potential sustainability initiatives for participation by the City. The Commission approved an Environmentally Preferable Purchasing Policy that was forwarded to staff for review, subsequently revised and resubmitted to the staff for review. Other initiatives have included the PACE Program, B3 energy analysis and the Partners in Energy program. The Commission developed and approved a logo and website to increase public awareness of the commission and to set the ground work for future communications through social media. The Commission also gave input on the proposed Environment and Sustainability Coordinator position. Work Group Plans The COMMUNICATIONS WORK GROUP goals are to raise awareness of sustainability as well as our commission within St. Louis Park and encourage community involvement. The Communications Work Group will also work closely with the Commission, city staff and the community to help develop and implement a vision for sustainability within St. Louis Park. The Communications Work Group will explore a number of tactics including the following: • Creating a stand-alone Sustainable SLP web page • Setting up social media platforms to share news and information about sustainability • Using the Ideas in the Park program to encourage community involvement Study Session Meeting of April 13, 2015 (Item No. 3) Page 3 Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan • Developing stories about successes in sustainability for placement in local neighborhood newsletters, the city’s newsletter, and the local newspaper • Helping promote events including existing classes and presentations that highlight sustainability themes and actions • Designing posters, t-shirts, decals and other visual aides to increase awareness of Sustainable SLP The EDUCATION AND ACTION WORK GROUP goals are to offer a wide of opportunities for learning about sustainability and to support efforts to encourage action and sustainable behaviors for everyone in St. Louis Park, including the City Council and staff, citizens, businesses, schools, congregations, nonprofits and other institutions. Our strategy is to demonstrate that sustainability is a positive, fun, inspiring win-win-win-win-win opportunity to save money, time, energy and resources while creating a healthier, more just world. Our priorities include: • Promoting sustainability at City-sponsored programs ranging from the Organic Living Workshop to Parktacular and National Night Out; • Doing a workshop on Sustainability and the Natural Step Framework for the City Council and staff and offering public presentations and workshops on sustainability, the Natural Step Framework and specific environment and sustainability topics; • Conduct a survey of citizen and community sustainability awareness and actions; • Create sustainability education materials for the SLP Welcome Packet and Sustainable SLP website; • Implement the online MN Energy Challenge; • Arrange for tours of waste, recycling and composting facilities; and • Collaborate with other Work Groups to provide education and action opportunities with their efforts. The WATER-LAND-WILDLIFE WORK GROUP of the Environment and Sustainability Commission, which was formed in November 2014, proposes the following work plan for 2015: • Assess policies, programs, and practices and make recommendations that help protect, enhance, and restore St. Louis Park's natural resources in the following areas: storm water management, native landscaping (homes, businesses, parks, and open spaces), invasive species, wildlife and wildlife habitat; • Review and make recommendations on projects such as Bass Lake Preserve and subwatershed, Minnehaha Creek subwatershed, undeveloped land within St. Louis Park and City Parks; and • Assist St. Louis Park Environmental and Sustainability Commission’s Green Steps work group and the City of St. Louis Park with implementation of Green Steps best practices related to water, land, and wildlife. The ENERGY WORK GROUP will be completing the city-wide energy use analysis and develop communication plan to promote energy use awareness and promote ways to reduce energy use. The mission of the Energy Work Group is to promote energy education and awareness, and to identify and promote programs and policies that will result in city-wide energy efficiency, reduction of greenhouse gas emissions, and the increased utilization and deployment of clean energy resources. Our Work Group passionately believes that smart energy choices will save money, reduce pollution, and inspire environmental stewardship. The Energy Work Group will operate in a collaborative and all-inclusive manner. Study Session Meeting of April 13, 2015 (Item No. 3) Page 4 Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan • Research, assess and recommend initiatives, partnerships, and programs to the St. Louis Park Environment and Sustainability Commission and St. Louis Park City Council to achieve defined green energy goals in our City. • Eliminate or offset greenhouse gas emissions in all city sectors. • Accelerate use of renewable clean energy technologies in all city sectors. • Significantly increase the energy efficiency of commercial, residential, and public buildings. • Identify and utilize an objective evaluation tool for prioritization of energy action items. • Enable community to engage in Energy Work Group action plans and maintain two-way communication with all citizens. • Assist in education around sustainability. • Demonstrate effectiveness of Energy Work Group benchmarks by measuring success. • Be an attractive city for sustainable businesses. • Become a city that is recognized as a leader in sustainability. The GREENSTEP CITIES WORK GROUP goals are to work with the new Sustainability Coordinator in defining which of the current City Best Management Practices count toward the credit to the program and what areas need to be revised. • Meet with City Staff regarding priorities/needs for Green Step Cities Program • Develop 2015 priority/need list for Green Step Cities program • Develop schedule and work effort estimate and plan to achieve priorities and needs • Submit schedule and work effort plan to city staff for approval • Hold monthly meetings to discuss ongoing work effort. • Recruit community members for work group • Research grants and partnering with other cities with their Green Step Cities efforts • Submit a summary of work efforts and priorities/needs met to city council by end of 2015 The ENVIRONMENTALLY PREFERRED PURCHASING WORK GROUP will submit the recently completed policy to Council for approval. Promote the new policy and look to expand the policy coverage to other areas. 2015 Schedule • 2015 Meetings: January 7, February 4, March 4, April 7, May 6, June 3, July 1, August 5, September 2, October 7, November 4 and December 2. Energy Work Group Plan 2015 Energy Work Group Mission Statement: The mission of the Energy Work Group is to promote energy education and awareness, and to identify and promote programs and policies that will result in city‐wide energy efficiency, reduction of greenhouse gas emissions, and the increased utilization and deployment of clean energy resources. Our Work Group believes that smart energy choices will save money, reduce pollution, and inspire environmental stewardship. Energy Work Group Outcome Objectives: ● Research, assess and recommend initiatives, partnerships, and programs to the St. Louis Park Environment and Sustainability Commission and St. Louis Park City Council to establish and achieve defined green energy goals in our City. ● Eliminate or offset greenhouse gas emissions in all city sectors (residential, governmental and commercial). ● Accelerate use of renewable clean energy technologies in all city sectors (residential, governmental and commercial). ● Significantly increase the energy efficiency of residential, commercial and public buildings. ● Identify and utilize an objective evaluation tool for prioritization of energy action items. ● Enable community to engage in Energy Work Group action plans and maintain two‐way communication with all citizens. ● Assist in education around sustainability. ● Demonstrate effectiveness of Energy Work Group benchmarks by establishing and measuring success. ● Be an attractive city for sustainable businesses. ● Become a city that is recognized as a leader in sustainability. 1 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 5 Four Strategic Areas for Achieving Objectives: 1) CITY‐WIDE GREENHOUSE GAS MEASUREMENT AND PLANNING Vision and Strategy: Climate change threatens our food supply, economy, security and health, making it imperative that we, as a community, diligently work to reduce our contributions of greenhouse gas emissions. By collecting data on our total city greenhouse gas (GHG) emissions by city sector, including our municipal government emissions, we have a baseline from which to recommend a path forward for the city. We are proposing that all city sectors of St. Louis Park aim to reach net‐zero CO2e emissions by the year 2040. This can happen through a combination of conservation programs, purchasing renewable energy from our utility partners (100% renewable electricity), and compensating for the greenhouse gases that we do emit by purchasing carbon offsets. This is an aggressive goal, but one that is completely attainable using current technology and one that is also being pursued by other leading cities around the world. We have completed baseline data collection and preliminary analysis of GHG/energy data for the City of St. Louis Park using Regional Indicators Initiative (RII) data. We will continue to compile more‐exacting energy data through our partnership with Xcel. The further analysis of city‐wide energy data will continue to guide our planning. Action Plans and Priorities: Near‐term Recommendations for Action (2015‐2016): ● Continue to build strategic partnerships: ○ Regional Indicators Initiatives ‐ Rick Carter (LHB), Julie Grove (City of SLP). ○ Xcel and CenterPoint Energy ○ Metro Clean Energy Resource Teams (CERTS) and Center for Energy and Environment (CEE) ○ Minnesota and Twin West Chambers of Commerce and the SLP Business Council ● City Government ‐ lead by example: ○ Continue collection and analysis of B3 Benchmarking data (energy usage in city buildings). SLP has been awarded a Deep Assistance Accelerator Grant through Metro CERTS. This will allow for technical support of B3 Benchmarking data compilation and analysis. ○ Conservation through behavior change among city staff. ○ Xcel Windsource for city accounts. Detailed recommendations forthcoming. ○ CenterPoint Green Balance for city accounts. Detailed recommendations forthcoming. ○ Create a full‐time position on City Staff that is responsible for overseeing SLP Environment and Sustainability Commission and sustainable efforts city‐wide. ● Target energy action plans in commercial sector: ○ This is a priority sector. RII findings show this sector uses 70% of the city’s electricity (see Table 1). 2 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 6 ● Ensure energy strategy is a part of a broader sustainability strategy and vision: ○ The SLP Environment and Sustainability Commission is currently working on the sustainability vision. ○ Align strategies regionally with nearby cities to accomplish goals. Mid‐term Recommendations for Action (2015‐2020): ● Design for reduced consumption: ○ Adopt framework to evaluate life‐cycle impact. This framework will guide and assist the Energy Work Group, SLP Environment and Sustainability Commission, and city government in decisions regarding ecological footprint. ○ Produce locally ○ Waste less ○ Encourage more sustainable consumption patterns ○ Reduce embodied energy in infrastructure ● Begin to think seriously about transportation: ○ Form Transportation Work Group ○ Partner with the Health in the Park and Connect the Park initiatives ○ Promote “Live where you work, shop where you live” ● Target HVAC of existing residential and commercial building stock: ○ Reduce dependency on natural gas ○ Incent reporting of building performance in the commercial sector ○ Incent superinsulation and other conservation tactics at time of remodel Long‐term Recommendations for Action (2020‐2040): ● Fully address transportation: ○ Actively plan and design for higher‐density communities ○ Greatly reduced dependence on personal automotive transport ● Explore and implement distributed generation opportunities: ○ Community Solar Gardens ○ Bio‐digestion ○ Geothermal / district heat 3 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 7 2) ENERGY REDUCTION & EFFICIENCY Vision and Strategy: Identify and implement highest return on investment projects/initiatives, set goals, measure, and share our successes in energy reduction and efficiency with the various sectors in the city. This is a complex, multifaceted work area with countless shareholders and opportunities. We see this effort as a community‐wide dynamic effort. Our strategy is to reach‐out to four different city sectors with specific energy reduction and efficiency programs which can be measured, monitored, reported, reevaluated, and adjusted as needed to achieve success. The data collected in the city‐wide greenhouse gas measurement and planning phase will guide work in this area. Action Plans and Priorities: SLP Internal City Operations: ● Support continued energy reduction and energy efficiency efforts in various SLP city departments. ● Future action: ○ Continue to work with SLP staff to identify and recommend specific areas for change. ○ Work with city staff to explore and consider city policy/permitting changes regarding building renovation/construction to ensure that the best energy‐efficient standards are in place. SLP Residential/Ownership/Rental Sector: ● Continue our partnership with with Minnesota Center for Energy and Environment (CEE). Enhance support and work to increase use of Home Energy Squad Enhanced Visits to homeowners and renters in the city. ● Work with SLP city staff and CEE to set specific goals, identify changes to current strategy, measure, and report progress. SLP Commercial Sector: ● Begin Partners In Energy® Program with Xcel. Partners In Energy® is a two‐year commitment between the City of SLP, the SLP Community and Xcel. The program will strengthen development and implementation of a community‐wide energy action plan. ● Begin promotion of Property Assessed Clean Energy (PACE) financing for energy projects. SLP has been awarded a Rapid Assistance Accelerator Grant through Metro CERTS. This grant will bring together people from Metro CERTS, the St. Paul Port Authority, the City of St. Louis Park, SLP citizens and business people to develop an education and outreach program that encourages the use of this financing tool for energy projects. ● Possible future action: ○ Evaluate MN Chamber of Commerce programs: Waste Wise Program and Energy Smart Programs. 4 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 8 ○ Evaluate a possible partnership with CEE for One‐Stop Efficiency Shop® Lighting Retrofits for small businesses. SLP Non‐profit, School, and Faith ‐ based Organizations: ● Future action: ○ Connect with Roots and Shoots Environmental Club at SLP High School. ○ Explore and evaluate possible partnership with Class5Energy, MN Green Schools Coalition, and TOLBY (Turn Off Lights Behind You). 3) RENEWABLE ENERGY Vision and Strategy: Work with city staff to develop tools and/or processes that allows the city to effectively assess the cost and benefits of incorporating renewable energies into the city’s electric supply portfolio and that of the greater SLP community. The tools and/or processes will lend themselves to facilitating the cost/benefit analysis of SLP businesses and residents. Action Plans and Priorities: Solar: (PLEASE NOTE: NEW LANGUAGE COMING DUE TO RECENT WORK GROUP ACTIVITY IN THIS AREA) CITY POLICIES for permitting the deployment of solar on commercial and residential: ● Confirm that the city has fair and appropriate permitting processes for businesses and residents who plan to install solar panels on their property (transparent, economical, timely). ● Interview a limited number of residential and commercial entities who have installed solar in an effort to identify any potential obstacles or irrelevant policies. CITY DEPLOYMENT of solar for city internal use ● Work with city staff on the development of an internal economic evaluation tool and decision criteria in order to assess the cost/benefits of pursuing solar energy on city facilities (payback period, discount rate, assumed cost of avoided energy). ● Work with city staff to assess the cost/benefits and legal issues related to leasing space for 3 rd party project ownership (i.e., community solar gardens). Develop a transparent policy related to community solar gardens. ● Work with city staff on a regular basis to review local, state and federal solar incentive programs available to the city. ● Identification for suitable city locations (roof and open spaces) for solar development. 5 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 9 Microgrid: ● Keep abreast of the various R&D efforts going on both nationally and locally on the costs/benefits associated with microgrids. ● Investigate the opportunity to work with credible projects and/or parties on a microgrid demonstration project (e.g. Xcel RDF funding in 2016). Anaerobic Digester: ● Keep abreast of the various R&D efforts going on both nationally and locally on the costs/benefits associated with anaerobic digesters. ● Continue to monitor the progress of the proposed anaerobic digester with regard to the PLACE project that has been approved by the council for the the old McGarvey Coffee site. 4) EDUCATION and COMMUNITY INVOLVEMENT Vision and Strategy: Work with SLP city staff and Education/Behavior Change Work Group to educate and inspire citizens about energy issues and sustainability. ● Create a comprehensive website containing energy information that can serve as a resource for all sectors (residential, commercial, public, and neighborhood). Identify and streamline duplicate information regarding energy on the SLP city website. Possible Future Action Plans: ● Partner with providers such as Clear Energy Resource Teams and Center for Energy and Environment to deliver educational opportunities, information, and resources to our city. ● Showcase energy conservation and renewable energy projects within the city. ● Leverage the Energy Challenge, an existing program with SLP. ● Recruit/target community members in all sectors (residential, commercial, public, and neighborhood) as Energy Champions to help achieve energy goals. 6 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 10 Table 1 7 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 11 For City Council Study Sessions, Monday April 13,2015 The Water, Land, and Wildlife workgroup of the Environment and Sustainability Commission, which was formed in November 2014, proposes the following work plan for 2015: 1) Assess policies, programs, and practices and make recommendations that help protect, enhance, and restore St. Louis Park's natural resources in the following areas: storm water management, native landscaping (homes, schools, businesses, parks, and open spaces), invasive species, wildlife and wildlife habitat; 2) review and make recommendations on current projects such as Bass Lake Preserve and subwatershed, Minnehaha Creek subwatershed, undeveloped land within St. Louis Park and City Parks; and 3) assist St. Louis Park Environment and Sustainability Commission’s Green Step Cities work group and the City of St. Louis Park with implementation of Green Step Cities best practices related to Water, Land, and Wildlife. Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 12 GREENSTEP CITIES WORK GROUP goals are to work with the new Sustainability Coordinator in defining which of the current City Best Management Practices can claim credit towards the program and what areas need to be revised. Meet with City Staff regarding priorities/needs for GreenStep Cities Program Develop 2015 priority/need list for GreenStep Cities program Develop schedule and work effort estimate and plan to achieve priorities and needs Submit schedule and work effort plan to city staff for approval Hold monthly meetings to discuss ongoing work effort. Coordinate with other Environment and Sustainability work groups to develop best practices that will complement the Cities’ ongoing GreenStep efforts Recruit community members for work group Research grants and partnering with other cities with their GreenStep Cities efforts Submit a summary of work efforts and priorities/needs met to city council by end of 2015 Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 13 150409 Revised Proposed 2015 Work Plan for Education and Action Work Group Work Group Members: Terry Gips and Whitney Jacobs Detailed Work Plan 1. Promote the City’s April 18 Organic Living Workshop – We will help promote a good turnout and seek taping by Park TV for rebroadcast. 2. Promote other City of SLP’s Landscape Workshops - We will help promote a good turnout and seek taping by Park TV for rebroadcast. 3. Provide Sustainability Education at the June Parktacular Celebration – We will work with the Communications Work Group to provide Commission and sustainability materials and, if possible, have a Sustainable SLP booth at the event. 4. Develop Sustainability Education Materials and Possibly Offer Speakers for National Night Out in August – We will work with National Night Out in SLP and the Communications Work Group to include materials about sustainability and Sustainable SLP and offer the possibility of speakers for the neighborhood gatherings. 5. Create Sustainability Education Materials for the SLP Welcome Packet – We will work with the Communications Work Group to develop materials about sustainability and Sustainable SLP for inclusion in the packet. 6. Post Monthly Sustainability Tips on the Sustainable SLP Website – We will work with the Communications Work Group and other Sustainable SLP Work Groups to create monthly sustainability tips that will be posted. 7. Arrange and Promote Tours of Waste, Recycling and Composting Facilities – We will arrange for free public tours of each of the facilities that handles SLP’s waste, recycling and composting. 8. Conduct Community Survey on Sustainability Awareness and Actions – We will work with Macalester College Assistant Professor Christie Manning, a long-time sustainable behavior expert and survey designer, and a student intern on designing a community survey that will provide baseline data on sustainability awareness and action in St. Louis Park and inform the actions of the Work Groups and Commission. 9. Implement MN Energy Challenge and Possibly the Cool Neighborhood Project – We will utilize the Center for Energy and Environment’s online MN Energy Challenge to engage residents, businesses, schools, congregations and other groups in positive steps and commitments they can take to save energy, carbon pollution and money. We’ll also have a friendly competition among SLP neighborhoods, businesses, congregations, schools and other institutions on who has the greatest savings. We’ll also consider becoming part of other efforts, such as the Cool Neighborhood Project, Ann Arbor Energy Challenge and Baltimore Energy Challenge (Neighborhood Challenges) that we’ve been researching. Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 14 10. Presentations and Workshops on Sustainability and the Natural Step Framework – Sustainable SLP will conduct a workshop on Sustainability and the Natural Step for City Council members, staff and SLP commissions that will include sustainability education, baseline assessment, visioning and action planning. Sustainable SLP will also offer short, introductory presentations and full workshops on Sustainability and the Natural Step Framework for citizens, businesses, schools, congregations and other community groups. 11. Collaborate on Offering Workshops on Specific Sustainability Issues – We will work with various groups to offer workshops for homeowners, apartment and multi-unit housing residents, owners and managers on various sustainability issues, including gardening, composting, energy, transportation, community gardens, community solar gardens, water stewardship, rain gardens, etc. 12. Explore the Possibility of Utilizing the MPower Sustainability Champions Program – We will continue efforts to explore the feasibility of utilizing this proven, successful, year- long sustainability education and action program developed by the nonprofit Sustain Dane in Madison, WI. It supports business, government, schools and other institutions to become certified sustainability champions through mentoring, a monthly lunch and peer learning, energy and resource tracking and 5 action projects that each participating institution selects. 13. Participate in and Promote Twin Cities Metro Community Sustainability Forums – We’ll work to promote and co-sponsor forums with groups offering public forums, such as Metro CERTS (Clean Energy Resource Teams) that offers monthly sustainability forums and the Alliance for Sustainability with its regional sustainability networking gatherings. 14. Examine the Feasibility of Developing Overall SLP Sustainability Goals and Indicators and Becoming an Eco-Municipality - We’ll explore the possibility for Sustainable SLP to have public sustainability goals and indicators and for the City Council to approve a measure for St. Louis Park to become the second “eco-municipality” in MN and one of more than 100 globally (including Duluth, Madison and 24 other WI cities), which means the City would be making a commitment to sustainability and develop and implement a sustainability action plan following the four sustainability principles of the Natural Step. 15. Explore Possible Collaboration with Various SLP Community Groups – We have initiated discussions with the Community Education Advisory Council (CEAC), Three Rivers Park District, Spark-Y Youth Action Labs and other community groups to further expand our education and action efforts. 16. Seek Outside Funding for Sustainable SLP Education and Action Efforts - Sustainable SLP will work with various groups (such as Metro CERTS and the Alliance for Sustainability) to seek funding (including grants and sponsorships) for Sustainable SLP efforts for education and action efforts. Study Session Meeting of April 13, 2015 (Item No. 3) Title: Environment & Sustainability Commission 2014 Annual Report and 2015 Work Plan Page 15 Meeting: Study Session Meeting Date: April 13, 2015 Written Report: 5 EXECUTIVE SUMMARY TITLE: Central Park West Redevelopment Contract Update RECOMMENDED ACTION: No action at this time. The purpose of this report is to inform the EDA/City Council of upcoming requests for Assignments of Redevelopment Contract related to Central Park West. POLICY CONSIDERATION: None at this time. SUMMARY: In December 2014, the EDA and City approved the Second Amendment to Amended and Restated Contract for Private Redevelopment (the “Contract”) between the EDA, the City, Duke Realty Limited Partnership, and Central Park West, LLC (“CPW”). At that time, the parties agreed that CPW would acquire the undeveloped 14 acres of The West End redevelopment property (the “Property”), and that up to six additional phases of construction would replace the phases agreed to in the original Contract. Central Park West Phases I and II are to consist of multifamily housing, Phase III will be a hotel, and Phases IV and V will be Class A office buildings. CPW has informed Staff that the conveyance of the Property is scheduled for late April 2015. At that time, Duke will convey the Property to CPW. CPW will then simultaneously convey the Phase III (hotel) property to Regalia Suites of Minneapolis, LLC (“Regalia”) and will execute an Assignment and Assumption of Contract (“Assignment”) with Regalia. The Majority Member of Regalia is Rusian Krivoruchko who is the owner of DLC Residential (the entity behind Central Park West). Under the Assignment, Regalia will assume all of the obligations of CPW related to the Phase III property and construction of the hotel. Because Regalia and CPW are technically unrelated entities, the Contract requires that the EDA and City consent to this Assignment. At closing on the Property, CPW will also convey the Phases IV and V Property to CPW Office, LLC (“CPW Office”), which will immediately convey this property to The Excelsior Group (developers of West End Flats and recent purchasers of The Parkdales office complex) under the name OP4 SLP, LLC (“OP4”). As with the Phase III Property, the parties will execute an Assignment under which OP4 will ultimately assume all of the obligations of CPW related to the Phases IV and V Property and construction of the office buildings. Because CPW, CPW Office, and OP4 are unrelated entities, the EDA and City must consent to both of these Assignments. The proposed Assignments have been reviewed by the EDA attorney and will be scheduled for formal consideration on April 20th. FINANCIAL OR BUDGET CONSIDERATION: None VISION CONSIDERATION: Not Applicable Prepared by: Greg Hunt, Economic Development Coordinator Reviewed by: Michele Schnitker, Housing Supervisor Approved by: Tom Harmening, EDA Executive Director, and City Manager Meeting: Study Session Meeting Date: April 13, 2015 Written Report: 6 EXECUTIVE SUMMARY TITLE: Encore Development – France Avenue Update RECOMMENDED ACTION: No action required at this time. The purpose of this item is to provide an update to the Council regarding the status of France Avenue related to the Encore Development at 3907 Hwy 7 (Bader project). POLICY CONSIDERATION: Does the Council support the proposal to connect France Avenue to 31st Street? SUMMARY: Bader Development (the “Developer”) has applied for a Preliminary and Final Plat, Preliminary and Final PUD, and Alley Vacation for the Encore Development at 3907 and 3915 Hwy 7. The Council approved a Comprehensive Plan Land Use Map Amendment for the effected properties related to this project January 20, 2015 from Commercial to Mixed-Use. At the time of the Comprehensive Plan Amendment there were a number of questions of how France Avenue might need to change from its current state in order to better facilitate access to the proposed development, improve general circulation around the site, support goals in the Comprehensive Plan, and comply with provisions of the City’s Subdivision Ordinance. St. Louis Park Staff have been working with the Developer, and Minneapolis Staff to discuss potential options for reconfiguring France Avenue. (As a reminder; the municipal boundary between St. Louis Park and Minneapolis runs approximately down the centerline of France Avenue in this location.) Exact roadway design options are still being discussed. In general, St. Louis Park Staff support the connection of France Avenue between 31st Street and the CSAH 25 Frontage Road in an effort to achieve the City’s Livable Community Principles. The way the connection is designed could vary based on the ability to build any roadway in the Minneapolis owned right-of-way (ROW). A discussion of the various roadway configurations is discussed in later in this report. FINANCIAL OR BUDGET CONSIDERATION: To be determined. Generally, a road project related to redevelopment is paid for by the developer. The City would look to the developer to fund a significant portion of the construction of any reconstruction of France Ave, and that contribution could change in size due to the final design of France Ave. The developer has requested City financial assistance, which could be used to help fund the reconstruction of France Ave, and the City intends to pursue Metropolitan Council grant opportunities for funding as well. VISION CONSIDERATION: St. Louis Park is a connected and engaged community. SUPPORTING DOCUMENTS: Discussion Map of Development Area Excerpt of Development Plans Prepared by: Ryan Kelley, Associate Planner Sean Walther, Senior Planner Reviewed by: Michele Schnitker, Housing Supervisor Approved by: Tom Harmening, City Manager Study Session Meeting of April 13, 2015 (Item No. 6) Page 2 Title: Encore Development – France Avenue Update DISCUSSION BACKGROUND: Bader Development has applied for a Preliminary and Final Plat, Preliminary and Final PUD and Alley Vacation for a mixed-use development on the south side of the CSAH 25 Frontage Road. The redevelopment site is the entire block between France Avenue (and Minneapolis) on the east, Glenhurst Avenue on the west, CSAH 25 Frontage Road on the north, and 31st Street to the south. The development includes 147 residential units, 10,000 square feet of office space, which is to be the office for Bader Development, and a 10,000 square foot pediatric clinic. The developer requested a Comprehensive Plan Land Use Map Amendment last year, changing the land use guidance from Commercial to Mixed-Use, which was approved by the City Council on January 20, 2015. City staff had not previously considered this development site as having a high likelihood of redeveloping in the near-term, which led to a number of questions related to future redevelopment in the area, particularly along CSAH 25, and also the current status of France Ave south of the CSAH 25 Frontage Road. Currently, France Ave ROW exists in both Minneapolis and St. Louis Park connecting between CSAH 25 and 31st Street. But what is actually paved is essentially a driveway south of the CSAH 25 Frontage Road and is entirely in the St. Louis Park ROW. France Ave does not connect to 31st St, but extends approximately half-way down this block, and then curves behind the ASAP Building, at 3907 Hwy 7, and connects to an alley. This street segment has two-way traffic and haphazard parking on both sides, which is used by the apartment building on the east side of France Ave, in Minneapolis. The current configuration would not be allowed with the Encore Development project due to the width of this roadway segment, the limited access to the site in relation to the proposed development, traffic circulation and a lack of pedestrian and bike connectivity. France Ave needs to be reconstructed to provide minimum lane widths for vehicular travel, and additionally, to contain City required sidewalks and boulevards, as well as potential bike facilities. The Connect the Park! Plan does indicate a bikeway on France Ave, north of CSAH 25, and Staff would like to see this extended to 31st St as a logical connection for the Encore Development and the surrounding neighborhood. In order to build the desired roadway segment, which allows two-way traffic, on-street parking on at least one side, and the above mentioned elements, use of the City of Minneapolis’s ROW is needed. St. Louis Park staff have recently met with staff from Minneapolis to discuss the potential of reconstructing France Ave in the Minneapolis ROW. Minneapolis staff are meeting with the Ward Councilmember, and intend to speak with the adjacent property owner regarding any construction within Minneapolis. If Minneapolis does not wish to have any roadway expanded into their ROW, France Ave would contain two vehicle travel lanes that are shared bikeways (sharrows), a six foot boulevard and a six foot sidewalk, exclusively in the St. Louis Park ROW. There would be no on-street parking. If Minneapolis ROW can be used, then France Ave could have dedicated bike lanes, on-street parking on at least one side, and a sidewalk and boulevard. St. Louis Park staff support the street, and associated elements described, to connect all the way to 31st Street, whether exclusively in St. Louis Park ROW or also in Minneapolis. Study Session Meeting of April 13, 2015 (Item No. 6) Page 3 Title: Encore Development – France Avenue Update The connection of France Ave to 31st St is supported to achieve the following St. Louis Park Livable Community Vision and Principles: • Walkable, mixed-use neighborhoods • Higher density, mixed-use development • Human scale development • Transit-oriented development • Multi-modal streets and pathways Additionally, connecting France Avenue to 31st Street results in the optimum block size promoted in the Subdivision Code. The existing block size slightly exceeds St. Louis Park’s maximum length and perimeter performance standards, which are intended to create more pedestrian friendly, or walkable, block sizes. NEXT STEPS: Staff will continue to work the City of Minneapolis and the developer on detailed design. This design would of course change based on the decision made by Minneapolis regarding their ROW. An opportunity for discussion and update will be provided to the Council at the April 27th Study Session. Staff would also propose holding a neighborhood meeting according to the tentative timeline below: April 13, 2015 City Council Report April 27, 2015 City Council Discussion Week of April 27, 2015 Neighborhood Meeting May 6, 2015 Public Hearing on Plat and PUD May 18, 2015 Council Action on Plat and PUD June 1, 2015 Second Reading for PUD Study Session Meeting of April 13, 2015 (Item No. 6) Title: Encore Development – France Avenue Update Page 4 Saint Louis Park, Minnesota March 02, 2015 13-098.0 ENCORE Exterior Perspective - Entry Study Session Meeting of April 13, 2015 (Item No. 6) Title: Encore Development – France Avenue Update Page 5 Saint Louis Park, Minnesota March 02, 2015 13-098.0 ENCORE Exterior Perspective - Townhomes Study Session Meeting of April 13, 2015 (Item No. 6) Title: Encore Development – France Avenue Update Page 6 UPUPUPUPUPA201C5A200D1A200D3C2C3C1C3142252120MEDICAL OFFICE10,000 SFRESIDENTIAL AMENITY5,200 SFOFFICE10,000 SFRESIDENTIALPATIOCOMMERCIAL PARKING41 STALLSCOMMERCIAL PARKING41 STALLSCOMMERCIAL PARKING6 STALLSBIKE PARKINGRETAINING WALLRETAINING WALLC1A310C3A310GUARDRAIL ONTOP OF WALLRAMPSETBACK 20'151'91'64'306'DOG EXCERCISE AREARAMP UPCOMMERCIALTRASH / RECYCLING475 SFARCHITECTURE, INCCopyright 2015 DJR Architecture, IncA6333 Washington Ave N, Suite 210Minneapolis, Minnesota 55401612.676.2700 www.djr-inc.comPRINT NAMESIGNATUREREGISTRATION NUMBER DATECLIENTBader Development5402 Parkdale Drive, #200Minneapolis, MN 55416Issue:Date:Project #:Date:Drawn by:Checked by:CONTRACTORTBDSTRUCTURALTBDCIVILSambatek12800 Whitewater Drive Suite 300Minnetonka, MN 55343Phone: (763) 476-6010BCDE54321I hereby certify that this plan, specification,or report was prepared by me or under mydirect supervision and that I am a dulyLicensed Architect under the laws of theState of Minnesota.PRELIMINARY; NOT FOR CONSTRUCTIONA110LEVEL 1 FLOOR PLAN3915 HWY 7, SAINT LOUIS PARK, MNApprover03/18/1513-09803/18/15LMSBENCOREDesigner 1/16" = 1'-0"A1FLOOR PLAN - LEVEL 11 PDR03/02/152 PDR UPDATE03/18/15Study Session Meeting of April 13, 2015 (Item No. 6) Title: Encore Development – France Avenue UpdatePage 7 Meeting: Study Session Meeting Date: April 13, 2015 Written Report: 7 EXECUTIVE SUMMARY TITLE: Bridgewater Development Update RECOMMENDED ACTION: No action required at this time. The purpose of this item is to provide an update to the Council regarding the proposed development by Bridgewater Bank at the northeast corner of Monterey Dr. and Excelsior Blvd. POLICY CONSIDERATION: None at this time. SUMMARY: Bridgewater Bank has purchased property at 4424 and 4400 Excelsior Blvd, and is also pursuing the acquisition of 3743 Monterey Dr. from the Economic Development Authority. (A map is attached showing their locations.) The redevelopment concept was last discussed by the Council at the July 14, 2014 Study Session. At that time Bridgewater Bank was in the process of selecting a developer, so just a general site plan and development program was presented. Bridgewater Bank has selected Dominium for this redevelopment. The developer has applied for a Comprehensive Plan Land Use Map Amendment for the effected properties to change the land use guidance from COM-Commercial to MX-Mixed-Use. The development program and site plan are virtually the same as the concept that was presented to the Council in July. The concept includes 173 units, of which at least 10% are anticipated to be affordable, and approximately 50% of the units as two and three bedroom. There is also 10,000 square feet for a Bridgewater Bank branch and approximately 7,000 square feet of retail. The building would be six stories in height at Excelsior Blvd, with the sixth story set back from the front façade, and would maintain similar setbacks from Excelsior Boulevard. The site plan actually provides for a wider sidewalk and a boulevard along Monterey Dr. The development concept also includes three levels of structured parking. A traffic study is currently under way, and will be completed by the time of the neighborhood meeting, which is scheduled for April 21, 2015. Staff will continue to work with the developer on site plan and building design as well as storm water management and other development details. The Public Hearing for the Comprehensive Plan Amendment is tentatively scheduled for May 6, 2015. If the Council approves the Amendment request, the developer intends to apply for a plat and rezoning to a PUD. FINANCIAL OR BUDGET CONSIDERATION: The developer has indicated they would request City assistance. Details of that assistance will be worked out and presented to the Economic Development Authority at a future study session. VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and diverse housing stock. SUPPORTING DOCUMENTS: Aerial of Development Site and Surrounding Area Excerpt of Development Plans Prepared by: Ryan Kelley, Associate Planner Sean Walther, Senior Planner Reviewed by: Michele Schnitker, Housing Supervisor Approved by: Tom Harmening, City Manager Aerial Study Session Meeting of April 13, 2015 (Item No. 7) Title: Bridgewater Development Update Page 2 www.bkvgroup.comEXCELSIOR AND MONTEREY DRIVE12/15/2014Study Session Meeting of April 13, 2015 (Item No. 7) Title: Bridgewater Development UpdatePage 3 10219 SFBANK1107 SFLOUNGE7314 SFRETAILArea LegendBANKCONFFILESHOUSING COMMONLOBBYLOUNGEMAILOFFICEPACKAGEPARKINGRECEPTIONRETAILSERVICETOILETWORK/COPY603919294966476 SFSERVICE624 SFSERVICE5' - 0"5' - 8 3/8"3 6 ' - 0 "162.00°22' - 0"RETAILTRASHMAINENTRY137 SFMAILENTRYCANOPYCOVEREDDRIVE7767978 SFPACKAGE72 SFFILES273 SFCONF105 SFTOILET164 SFWORK/COPY126 SFOFFICE168 SFRECEPTIONCONCRETEPAVERSAPARTMENTSIGNAGE ABOVEVALLEYCURBCURBLESSENTRYBACK OF CURBSETBACK22' - 0"SETBACK16' - 0"GUEST/VISITOR PARKINGCOLONNADENEW TREEGRATES, TYP.6' BLVD6' SIDEWALKBENCHES22' - 0"RAISEDPLANTERRAISEDPLANTERSNEW TREES,TYP.TRANSFORMER939 SFLOBBY© 2014 BKV Group, Inc. EOESHEET NUMBERSHEET TITLEDATEDRAWN BYCHECKED BYCOMMISSION NUMBERKEY PLANPROJECT TITLECONSULTANTSKVGROUPArchitectureInterior DesignLandscape ArchitectureEngineeringBoarmanKroosVogelGroupInc.w w w. b k v g r o u p. c o mEOEBNOT FORCONSTRUCTIONCERTIFICATIONI hereby certify that this plan, specification orreport was prepared by me or under my directsupervision and that I am a duly LicensedProfessional Architect under the laws of theState of MinnesotaC:\Users\ddevos\Documents\1393.76_Excelsior Monterey_AIS_2014_ddevos.rvt2/19/2015 11:52:38 AMAuthor02/19/2015Checker1393.76U101LEVEL 1EXCELSIOR &MONTEREYU101 1/16" = 1'-0"1Level 1ISSUE # DATE DESCRIPTIONStudy Session Meeting of April 13, 2015 (Item No. 7) Title: Bridgewater Development UpdatePage 4 Meeting: Study Session Meeting Date: April 13, 2015 Written Report: 8 EXECUTIVE SUMMARY TITLE: Southwest LRT Update RECOMMENDED ACTION: No action at this time. POLICY CONSIDERATION: None at this time. SUMMARY: Advanced Design In SPO Staff’s efforts to complete 60% plans by September, they have been holding bi-weekly meetings with City Staff to finalize design of the elements for the project. These include items related to site access, park and ride layout, landscaping, trails, etc. SPO has also met with public safety officials from each city and is giving them a tour on LRT to see firsthand some of the safety considerations. Staff is also reviewing utilities along the line, and appropriate public works staff is working with Engineering on these items. Please see general list of issues that are being currently discussed and resolved under “Discussion.” Station Design Open Houses The SPO held an Open House on Station Design on Wednesday, April 8th at St. Louis Park City Hall. Approximately 35 people attended. An overview presentation was given, and the open house provided the opportunity to talk with neighbors and business folks about the SWLRT planning and station designs. The four station types were reviewed, including the architecture of the platforms and suggested station types for each of the stations. West Lake Multimodal Transportation Study We have been asked to participate in the West Lake Multimodal Transportation Study with the City of Minneapolis, as St. Louis Park borders this station area and has citizens and businesses that will likely use it. The purpose of the Study is to “improve safety, access, connectivity, and mobility for all modes of travel surrounding the West Lake Station area.” St. Louis Park Staff will participate on the Technical Advisory Committee throughout the nine month study. A walking tour of the area is scheduled for Tuesday, April 21st, from 4-6 p.m. A community workshop will be held on April 29th from 5-7 p.m. at the Jones-Harrison Residence facility, 3700 Cedar Lake Avenue. Staff will be working with to notify neighbors and neighborhood leaders of this workshop. A description of the Study is attached under “Discussion.” VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged community. SUPPORTING DOCUMENTS: Discussion Station Open House Flyer Prepared by: Meg McMonigal, Planning and Zoning Supervisor Reviewed by: Jack Sullivan, Senior Engineering Project Manager Michele Schnitker, Interim Community Development Director Approved by: Tom Harmening, City Manager Study Session Meeting of April 13, 2015 (Item No. 8) Page 2 Title: Southwest LRT Update DISCUSSION In SPO Staff’s effort to complete 60% plans by September, they have been engaging in by-weekly meetings with City Staff to finalize the design of the elements for the following locations and items. Advanced Design Issues List: 1. Louisiana Station Site update • Park-and-ride layout • Pedestrian underpass location • Oxford/Edgewood intersection 2. Wooddale Station • City Project coordination – Wooddale and 36th intersection improvements • Wooddale roadway design • Platform location and station access update 3. LRCIs • Louisiana Station to Brunswick Trail • Wooddale Trail Underpass • Xenwood Underpass • Beltline LRCIs Station Design Open Houses in April 2015 From the Southwest Project Office: “The Southwest LRT Project has developed several different station architecture concepts to fit into different settings. This open house is an opportunity to learn about station design and give feedback to project staff. You can also hear a brief presentation on station design at the beginning of each open house.” See attached flyer for the list of open houses in each city. West Lake Multimodal Transportation Study From the City of Minneapolis: “As a result of the Memorandum of Understanding between the Metropolitan Council and the City of Minneapolis for the Southwest Light Rail Transit project, the City will be leading an area wide multimodal transportation study for the West Lake Station area. The West Lake Multimodal Transportation Study is being conducted to assess opportunities to improve safety, access, connectivity, and mobility for all modes of travel surrounding the West Lake Station area. Study efforts will be coordinated with partner agencies, with an emphasis on bicycle and pedestrian modes to identify non-motorized needs, challenges, and opportunities in the vicinity of the West Lake Station. Motorized travel will also be analyzed to guide intersection and roadway modifications that were identified as part of the preliminary designs for the West Lake Station area. The goal of the study is to identify opportunities to address non-motorized and motorized travel within the West Lake Station area with projects that can be implemented as a part of the construction of the Southwest LRT or as part of other capital initiatives. The first of three community workshops that will be conducted as a part of the study will be held on April 29th from 5-7pm at the Jones-Harrison Residence facility, 3700 Cedar Lake Avenue. This workshop will consist of a series of interactive activities during which participants can help the project team identify issues and priorities for the West Lake area. We look forward to seeing you there. Additional information regarding the study and upcoming meetings will be provided on the City’s project website, which can be accessed at: http://www.ci.minneapolis.mn.us/cip/2015/index.htm. Community Open Houses SOUTHWEST LRT STATION DESIGN Come to a community open house to see LRT station architecture concepts and learn about what goes into designing a light rail station. Metropolitan Council project staff will be on hand to receive public input and answer questions. WWW.SWLRT.ORG MINNEAPOLIS STATIONS Thursday, April 2, 2015, 5:30 – 7:30 p.m. Wednesday, April 8, 2015, 7:30 – 9:30 a.m. Dunwoody College of Technology 818 Dunwoody Blvd., Minneapolis Map: https://goo.gl/maps/Vhs71 ST. LOUIS PARK STATIONS Wednesday, April 8, 2015, 5:30 – 7:30 p.m. St. Louis Park City Hall 5005 Minnetonka Blvd., St. Louis Park Map: https://goo.gl/maps/j64JQ EDEN PRAIRIE STATIONS Thursday, April 9, 2015, 5:30 – 7:30 p.m. Eden Prairie City Center 8080 Mitchell Road, Eden Prairie Map: https://goo.gl/maps/w0rJX HOPKINS & MINNETONKA STATIONS Tuesday, April 14, 2015, 5:30 – 7:30 p.m. Hopkins City Hall 1010 First Street South, Hopkins Map: https://goo.gl/maps/XdxGq The Southwest LRT Project has developed several different station architecture concepts to fit into different settings. This open house is an opportunity to learn about station design and give feedback to project staff. You can also hear a brief presentation on station design at the beginning of each open house. If you can’t come in person, meeting materials and a comment form will be available online at www.swlrt.org. Anyone who requires assistance to participate should contact Southwest LRT Assistant Public Involvement Manager Dan Pfeiffer at least seven business days before the scheduled meeting: Email: Daniel.Pfeiffer@metrotransit.org Phone: 612-373-3897 One of four station design concepts developed for the Southwest LRT project. Study Session Meeting of April 13, 2015 (Item No. 8) Title: Southwest LRT Update Page 3