HomeMy WebLinkAbout2012/04/09 - ADMIN - Agenda Packets - City Council - Study SessionAGENDA
APRIL 9, 2012
6:30 p.m. LOCAL BOARD OF APPEAL AND EQUALIZATION – Council Chambers
6:45 p.m. CITY COUNCIL STUDY SESSION – Council Chambers
Discussion Items
1. 6:45 p.m. Future Study Session Agenda Planning – April 16 and April 23, 2012
2. 6:50 p.m. Human Rights Commission Annual Report and Work Plan (w/ Commission)
3. 7:10 p.m. Police Advisory Commission (PAC) 2011 Annual Report and 2012 Work
Plan (w/ Commission)
4. 7:30 p.m. Housing Authority Annual Report and Work Plan (w/ Commission)
5. 7:50 p.m. Review of City’s Housing Goals
6. 8:35 p.m. Outdoor Lighting Ordinance
7. 9:05 p.m. Solid Waste Collection Program and Services
8. 9:50 p.m. Communications/Meeting Check-In
9:55 p.m. Adjourn
Written Reports
9. Westwood Villa HIA
10. Open to Business Update and Contract Renewal
11. Outstanding Citizen Awards Task Force
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.
2012 Local Board of Appeal and Equalization
April 9, 2012
City Council Chambers
6:30 p.m.
AGENDA
1. Convene the St. Louis Park Local Board of Appeal and Equalization
2. Roll Call – Declaration of Quorum
3. Appoint Chair
4. Acknowledgement of Trained Members (Sanger & Santa)
5. a. Accept Roster of Appellants
b. Call for Any Additions
6. Determination of Date and Time for Continued Proceedings (Reconvene)
Suggested as April 23, 2012 prior to Study Session
7. Instruct Assessor to:
a. Inform Appellants of Reconvene Date via Telephone and Certified Mail
b. Re-Inspect and Re-Appraise Parcels Under Appeal
8. Completion of the Local Board Certification Form
9. Recess
Meeting of April 9, 2012 Page 2
Subject: 2012 Local Board of Appeal and Equalization
2012 St. Louis Park Local Board of Appeal and Equalization
All property owners are entitled to the right of appeal regarding their classification and market
value. The City is required by statute to conduct a Local Board of Appeal and Equalization
meeting to hear appeals. The property classification is determined by the actual use of the
property. The market value is based on a) records maintained for every property and b) market
conditions as of the date of the assessment (January 2, 2012). Minnesota statute requires that all
properties are to be valued at full market value.
Recommended Action: Agenda as Indicated on Cover Sheet
BACKGROUND:
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, announce that appeals are
taken under advisement for further consideration at the reconvene meeting and to determine the
date/time for continuation of the proceedings. 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 Board must conclude its business within 20 days of convening, this year by April 28, 2012.
The Assessor’s Office will compile a roster of parcels under appeal which will be presented to
the Board once convened. The roster will be finalized at the Board meeting by calling for any
other appeals to be entered into the record. All parcels under appeal will be re-appraised by the
assessing staff. All property owners are requested to complete a form stating their basis of
appeal, their estimate of the market value and informed that they have the opportunity to present
information supporting their opinion of value and/or classification.
As part of the Local Board process, A Local Board of Appeal Certification Form must be signed
–at each Board meeting– by all Board members present. One trained and certified Board
member must be present at each meeting of the Board (either Sue Sanger or Sue Santa).
For 2012, it is suggested that the Board reconvene prior to the April 23, 2012 study session to
hear the appeals. All cases can be decided the same night they are heard or, if additional time is
needed, a second reconvene date can be set. Following a decision by the Local Board, the
property owner is notified of the decision with sufficient time allowed for the owner to appeal at
the County Board of Appeal and Equalization. The Hennepin County Board of Appeal and
Equalization begins June 18, 2012. An application is required no later than May 23, 2012. To
appear before the County Board, all appellants must first have appealed before the St. Louis Park
Board of Appeal and Equalization. Property owners may also appeal directly to the Minnesota
State Tax Court.
Attachment: Summary of Duties and Responsibilities
Memo from the Department of Revenue (2008)
Sample – Letter to be Sent to Each Property Owner on the Roster
LBAE Final Handbook 2009
Prepared by: Cory Bultema, City Assessor
Approved by: Nancy Deno, Deputy City Manager
Meeting of April 9, 2012 Page 3
Subject: 2012 Local Board of Appeal and Equalization
LOCAL BOARD OF APPEAL AND EQUALIZATION
SUMMARY OF DUTIES AND RESPONSIBILITIES
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 must have a quorum to convene. In
addition, the local assessor, the county assessor, or one of his/her assistants is required to attend.
• At least one member, present at each meeting of the Local Board of Appeals and Equalization
(beginning in 2006), must have attended and be certified in an appeals and equalization course as
developed and approved by the Commissioner of Revenue. It is recommended to have at least
two trained members in the event of an absence or illness.
• 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. 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 clerk shall give published and posted notice of the meeting at least ten days before the date
of the meeting.
• The purpose of the Local Board of Appeal and Equalization is to provide a fair and objective
forum for property owners to appeal their valuation or classification. The goal of the Board
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 changes must be justified because they have the effect of shifting the tax burden from one
property to others in the jurisdiction. Further, any changes made by the Board must meet
statutory guidelines.
• Also highly important to keep in mind, the valuation basis of each property should be consistent.
In a time period of unsettled markets this issue is of significant concern where the traditional and
distressed markets may indicate conflicting value indications. Judgment on the valuation should
be fact based and consistent with both the market and assessment standards.
• Local Boards of Appeal and Equalization must see that all taxable property is properly assessed,
valued, and classified for all current assessments. The board may consider both real and
personal property.
• 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.
Meeting of April 9, 2012 Page 4
Subject: 2012 Local Board of Appeal and Equalization
SUMMARY OF DUTIES AND RESPONSIBILITIES (Continued)
• 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.
• Although the Local Board of Appeal and Equalization has the authority to increase or decrease
individual assessments, the total of such adjustments must not reduce the aggregate assessment
by more than one percent. If the total reductions would lower the aggregate assessments 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. The board only considers assessments in the current year.
• 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 may then appear before the
board if they so wish.
• It is the primary duty of each local board to examine the assessment record to see that all taxable
property in the assessment district has been properly placed upon the list and valued by the
assessor. The local boards do not have the authority to address exemption issues. Only the
county assessor has the authority to exempt property.
• 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 books by the county assessor’s office.
• Further reference (attached separately) is provided by a complete copy of the
2009 LBAE training manual. This manual gives considerably greater detail
as to the process and role of the Board in the assessment process.
Meeting of April 9, 2012 Page 5
Subject: 2012 Local Board of Appeal and Equalization
Memo
Date: March 20, 2008
To: All County Assessors, Local Assessors, and
Members of Local and County Boards of Appeal and Equalization
From: Andrea Fish, State Program Administrator
Information and Education Section
Subject: New Law Affecting 2008 Local and County Boards of Appeal and Equalization
Important Information Regarding Changes in Minnesota Statutes for Local and County
Boards of Appeal and Equalization
Minnesota Statutes, section 274.01, subdivision 1(b) has been amended to include the following
concerning local boards of appeal and equalization:
“A board member shall not participate in any actions of the board which result in market
value adjustments or classification changes to property owned by the board member, the
spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister,
uncle, aunt, nephew, or niece of a board member, or property in which a board member
has a financial interest. The relationship may be by blood or marriage.”
We recommend that if a local board is faced with this scenario, the decision to continue with the
appeal shall be made by the remaining members of the board (assuming there is still a quorum).
If there is not a quorum, or the remaining board members feel that there may otherwise be a
conflict of interest, “No Change” should be marked on the record form and the property owner
shall be able to appeal to the county board.
Minnesota Statutes, section 274.13, subdivision 1 has been amended to include the following
concerning county boards of appeal and equalization:
“Members shall not participate in any actions of the board which result in market value
adjustments or classification changes to property owned by the board member, the
spouse, parent, stepparent, child, stepchild, grandparent, grandchild, brother, sister,
uncle, aunt, nephew, or niece of a board member, or property in which a board member
has a financial interest. The relationship may be by blood or marriage.”
The appeal shall be handled solely by the remaining members of the board who have no such
interest in the property.
These changes were effective the day following enactment. Consequently, they are effective for
2008 local and county boards of appeal and equalization. If you have any questions or concerns,
please contact our division.
Property Tax Division 651-556-6091
Mail Station 3340 Fax: 651-556-3128
St. Paul, MN 55146-3340 proptax.questions@state.mn.us
Meeting of April 9, 2012 Page 6
Subject: 2012 Local Board of Appeal and Equalization
SAMPLE LETTER TO ALL BOARD ROSTER PROPERTIES April 10, 2012
Address line 1
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 9 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 23, 2012 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 complete their revaluation and contact you prior to the April 23 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.
Where agreement cannot be reached, the Board determines how they will proceed and their 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, 2012. 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
locally competitive market information pertaining directly to your property (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 of April 9, 2012 Page 7
Subject: 2012 Local Board of Appeal and Equalization
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 18 to allow time for copying
or scanning. Otherwise, please prepare ten (10) copies of written materials to be brought to the
Board meeting on April 23.
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 on June 18, 2012. An application to appear
before the County Board is required no later than May 23, 2012.
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
Local Board
of Appeal and
Equalization Handbook
2009 Update
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 8
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 8
This handbook was created to satisfy the requirement under
Minnesota Statutes, Section 274.014, subdivision 1.
July 2009.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 9
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 9
Table of Contents
Introduction............................................................................................................................................3
Purpose of the local board...................................................................................................................................................3
Training for Local Boards of Appeal and Equalization.................................................................................................3
The impetus for the legislation.............................................................................................................................................................3
Compliance requirements.....................................................................................................................................................................4
Failure to comply..................................................................................................................................................................................4
Role of the local board in the assessment process.........................................................................4
Market value..........................................................................................................................................................................5
Estimated market value........................................................................................................................................................................5
Taxable market value............................................................................................................................................................................6
Classification..........................................................................................................................................................................6
Split-class property................................................................................................................................................................................7
Overview of the assessment process...................................................................................................................................7
Assessor estimates value......................................................................................................................................................................8
Three approaches to value....................................................................................................................................................................8
Assessor determines classification.......................................................................................................................................................9
Assessor reviews sales ratio.................................................................................................................................................................9
The sales ratio study............................................................................................................................................................................10
Assessor notifies taxpayer..................................................................................................................................................................10
Assessor meets with State Board of Equalization.............................................................................................................................10
Local board meeting...........................................................................................................................................................11
Who must attend the meeting.............................................................................................................................................................11
Meeting dates and times for the local board......................................................................................................................................11
Documenting local board actions.......................................................................................................................................................12
Required forms for documenting board actions ...............................................................................................................................12
Duties of the local board.....................................................................................................................................................13
Changes within 10 days of local board meeting...............................................................................................................................13
What the board can do........................................................................................................................................................................13
What the board can’t do......................................................................................................................................................................14
Recommendations for local board members..................................................................................................................15
Become familiar with sales information prior to local board meeting............................................................................................15
Duties of the clerk................................................................................................................................................................15
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 local board meetings.........................................................................................16
Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations........................................................................................17
Meeting procedures............................................................................................................................................................17
The board should run the meeting.....................................................................................................................................................17
Establish ground rules for the meeting..............................................................................................................................................17
All proceedings must be public..........................................................................................................................................................18
Make appellants feel comfortable......................................................................................................................................................18
Dealing with angry or difficult property owners...............................................................................................................................18
Hearing appeals...................................................................................................................................................................................18
1Table of Contents
Notes
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 10
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 10
Review process, not value-reduction process...................................................................................................................................19
Recess or adjourn................................................................................................................................................................................19
Decisions.............................................................................................................................................................................................19
Appeals must be substantiated by facts.............................................................................................................................................20
Best practices recommendations......................................................................................................................................21
Have appellants call for appointments...............................................................................................................................................21
Time limits for presenting appeals.....................................................................................................................................................21
Hear all appeals first............................................................................................................................................................................21
Conducting other business at the local board meeting.....................................................................................................................22
Notifying property owners of decisions............................................................................................................................................22
Quorum requirements for local boards............................................................................................22
Quorum must be present...................................................................................................................................................22
What constitutes a quorum?...............................................................................................................................................................22
Assessor’s role when a quorum is not present..................................................................................................................................23
Arrive on time for the meeting...........................................................................................................................................................23
Explanations of alternate methods of appeal..................................................................................23
Open book meetings ...........................................................................................................................................................23
Benefits for the local board ................................................................................................................................................................25
Benefits for the county........................................................................................................................................................................25
Option 1: Transferring assessment and local board duties to the county........................................................................................25
Option 2: Transferring local board duties to the county...................................................................................................................25
Special Boards of Appeal and Equalization......................................................................................................................................26
Tax Court.............................................................................................................................................................................................26
Appendix...............................................................................................................................................27
Glossary................................................................................................................................................................................27
Duties of local and county boards.....................................................................................................................................30
Frequently asked questions by property owners ...........................................................................................................34
Handouts for property owners .........................................................................................................................................34
Note: This handbook is designed to provide information to city and town boards or special boards serving as the Local
Board 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 local board has questions
about the division of assessor duties in the jurisdiction, please contact the county assessor for clarification.
2 Table of Contents
Other alternate methods of appeal...................................................................................................................................26
How value changes affect taxes.........................................................................................................................................31
Frequently asked questions by local board members...................................................................................................33
Benefits for the property owner.........................................................................................................................................................24
Recommended format to notify appellants of local board decisions..........................................................................32
Notes
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 11
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 11
3Introduction
Introduction
Purpose of the local board
The goal of the Local Board of Appeal and Equalization
should be to attempt to address property owners’ issues
efficiently, fairly and objectively.
The purpose of the Local 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. 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 local board must meet statutory
guidelines.
One of the most important duties placed by law upon the
governing body of a township or city is to serve as the
Local Board of Appeal and Equalization. Effective
actions taken by the local board may potentially make a
direct contribution to attaining assessment equality.
Training for Local Boards of Appeal and Equalization
Legislation enacted in the 2003 session requires that
there be at least one member at each meeting of a Local
Board of Appeal and Equalization (beginning with the
2006 local boards) who has attended an appeals and
equalization course developed or approved by the
Commissioner of Revenue within the last four years.
Many long-standing local board members are in their
second four-year certification cycle. They may have
also attended 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 2003 legislation was enacted 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 local boards. This training
will provide information and education for local board
members that will make the process more efficient and
result in a better overall experience for both property
owners and local board members.
Does “training” sound familiar?
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 local board to help ensure that
property owners receive a fair and impartial review
of their valuation and classification.
Minnesota Revenue, Understanding Your Assessment and the A ppeals Process 2
Remember, your assessor is not responsible for the dollar
amount of taxes that you pay. Tax rates are determined by
your local taxing authorities (the city, the county, school,
districts, etc.). If you think your taxes are too high, you
should make your opinion known to your taxing authorities
during the budget meetings in November and December.
Local Board of Appeal and Equalization
If you choose to appeal to your boards of appeal and
equalization, first must first meet with your Local (city or
town) Board of Appeal and Equalization. These are often
the same people as your city council or town board. The
board meets on a specified day in April or May. The exact
date is listed on your Notice of Valuation and Classification.
We strongly recommend that you contact your city or town
clerk to schedule your appearance. Some jurisdictions hold
an open book meeting instead of a Local Board of Appeal
and Equalization. Please check your Notice of Valuation
and Classification for date, time, and place.
You may make your appeal in person, by letter, or have
someone else appear for you. The assessor will be present
to answer questions. You must present your case to the city
or town board before going to the County Board
of Appeal and Equalization.
Cities and towns have the option of transferring their board
powers to the County Board of Appeal and Equalization. If
your municipality has elected to do this, your Notice of
Valuation and Classification will direct you where to begin
your appeal.
County Board of Appeal and Equalization
If you are not satisfied after your Local Board of Appeal
and Equalization or open book meeting, or if your city or
town has transferred its powers to the county, you may
appeal to the County Board of Appeal and Equalization.
This board meets in June. The exact date is listed on
your Notice of Valuation and Classification. The members
are usually the county board of commissioners or their
appointees. We strongly recommend that you contact your
county auditor or assessor to schedule your appearance
before the board. Many counties request that taxpayers
make appointments to appear.
You may make your appeal in person, by letter, or have
someone else appear for you. The assessor will be present to
answer questions. If you are not satisfied with the decision
of the County Board of Appeal and Equalization, you may
appeal to the Minnesota Tax Court.
Minnesota Tax Court
You have until April 30 of the year the tax becomes payable
to appeal your assessment to the Minnesota Tax Court. In
other words, you must appeal your 2009 valuation and
classification on or before April 30, 2010.
The Tax Court has two divisions: The Small Claims
Division and the Regular Division.
The Small Claims Division only hears appeals involving
one of the following situations:
The assessor’s estimated market value of your
property is less than $300,000.
Your entire parcel is classified as a residential
homestead (1a or 1b) and the parcel contains no
more than one dwelling unit.
Your entire property is classified as an agricultural
homestead.
You’re appealing the denial of a current year
application for homestead classification of your
property.
The proceedings of the Small Claims Division are
less formal and many people represent themselves.
Decisions made by the small claims division are final and
cannot be appealed further.
The Regula r Division will hear all appeals –including those
within the jurisdiction of the small claims division.
Decisions made here can be appealed to a higher court.
Most people who appeal to the regular division hire an
attorney because the hearing is conducted according to the
Minnesota Rules of Civil Procedure.
You may obtain complete information on Tax Court
appeals by writing or calling the court administrator in your
county or by contacting:
Minnesota Tax Court
Minnesota Judicial Center
Suite 245
25 Reverend Dr. Martin Luther King, Jr. Boulevard
St. Paul, MN 55115
(651) 296-2806
www.taxcourt.state.mn.us
Conclusion
In conclusion, it is essential that taxpayers understand that
assessors use historical sales data to estimate a property’s
market value. This estimate may be appealed informally by
speaking with the assessor or formally by appearing at the
Local or County Boards of Appeal and Equalization.
For additional information, please refer to Fact Sheet 12a
Understanding Property Taxes and Fact Sheet 12b How the
Assessor Estimates Your Market Value
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 12
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 12
The appeals and equalization course details the
responsibilities, procedures and requirements of the
Local 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 local 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 local boards; and
Explanations of alternate methods of appeal.
Compliance requirements
All cities and towns must certify to the county assessor
by December 1of each year that:
At least one voting member at each local board
meeting has attended the appeals and equalization
course within the last four years; and
A quorum was present at each local board meeting
in the prior year.
Failure to comply
Any city or town that fails to meet the compliance
requirements by December 1of each year is deemed to
transfer its powers to the County Board of Appeal and
Equalization for the following assessment year.
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 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 local board whose powers are transferred to the county
for failing to meet these requirements may be reinstated
by resolution of the governing body of the city or town
and upon proof that one of the members of its Local
Board of Appeal and Equalization has attended the
appeals and equalization course. The resolution and proof
must be provided to the county assessor by December 1
to be effective for the following assessment year.
Note: The citation for the appeals and equalization
course and meeting requirements for local boards is
Minnesota Statutes, Section 274.014.
Role of the local board in the assessment process 1
The Local 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 local board.
Any decisions made by the local 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.
4 Role of the local board in the assessment process
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this fact
sheet supersedes, alters, or otherwise changes any provisions of the tax law,
administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, Understanding Your Assessment and the A ppeals Process 1
Understanding Your Assessment and the
Appeals Process
Property Tax Fact Sheet 12c Fact Sheet
12c
www.taxes.state.mn.us
The role of the assessor
The assessor has an important role in the property tax
process in that it is very important to make sure all property
is valued at its market value and classified according to its
use so the property tax levy is divided correctly among all
taxable properties. The assessor does not determine your
property taxes. Likewise, assessors do not raise revenue by
increasing market values. This fact sheet discusses
estimated market value and classification. The assessor
determi nes these factors each year, and they are shown
annually on your Notice of Valuation and Classification.
This fact sheet also explains what you can do if you and the
assessor disagree about the value or classification of your
property.
How is my property value estimated?
Using a mass appraisal system and historical sales data, the
asses sor’s job is to estimate the market value of all
properties on the assessment date of January 2 each year.
The assessor will consider the location of your property, the
amount of land you own, any improvements to the land,
physical characteristics of the improvements (including
square footage, decks, porches, etc.), and the quality of
construction. The assessor will then compare your property
to similar properties in your area that have recently sold in
order to estimate what your property would sell for in an
open-market arm’s length transaction. This value is called
the estimated market value.
Classification and class rates
All property is classified by the assessor according to
its use. Each class of property (home, apartment, cabin,
farm, commercial) has its own classification rate. This class
rate is determined by the state legislature. Like market
value, the class rate of your property plays a role in how
much property tax you pay.
Notice of valuation and classification
Each spring, the assessor will mail you a Notice of
Valuation and Classification informing you of the market
value and classification of your property. If you believe the
classification or the estimated market value of your property
is incorrect, you have several appeal options.
What if I disagree with how my property
was assessed?
If you have a disagreement over valuation or classification
of your property, the first step is to contact your assessor.
Most issues can be resolved at this level.
Verify information about your property, such as its
dimensions, age, and condition of its structures.
Review records to determine the market values of
similar properties in your neighborhood.
Review sales data to find out what similar
properties in your area are selling for.
Ask the assessor to explain the criteria used for
classifying your property. You may also review the
classifications of other properties used in the same
manner as yours.
If your property has not be inspected recently, both interior
and exterior, ask the assessor to come out to review your
property. If your concern is not resolved after conferring
with the assessor, you may attend the annual Local Board of
Appeal and Equalization or Open Book meeting identified
on your valuation notice.
Appealing your assessment
There are formal methods of appeal available. Keep in mind
that,by law, the Local Board of Appeal and Equalization
cannot make a change favoring a taxpayer if the assessor is
not allowed to inspect the property.
You have the right to appeal your market value estimate
and/or property classification if you feel your property is:
Classified improperly.
Valued at an amount higher or lower than you
could sell your property for.
Valued at a level different from similar property in
your area.
This fact sheet is the third in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of
their annual assessment and property tax administration. Please see Fact Sheet s 12a and 12c for additional information.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 13
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 13
5Role of the local board in the assessment process
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.
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
Local 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
local board, even though taxpayers will also be
given a taxable market value.
The price that would tend to prevail under typical,
normal competitive open market conditions.
Market value
Minnesota Revenue, How the Assessor Estimates Your Market Value 2
assessor will use to value property for the 2010 assessment
for taxes payable in 2011.
This same lag time is also present in declining markets. For
example, if the assessor places a market value of $200,000
on a property for the 2009 assessment (again using sales that
occurred between October 2007 and September 2008), but
the property sells for $175,000 in August 2009, does it mean
the January 2, 2009 assessed value is incorrect? Not
necessarily. It could signal a downturn in the housing
market just began to occur between September 200 8 and
August 2009. The assessor will use the August 2009 sale as
well as others occurring in the market to estimate 2010
market values.
The assessor does not raise property tax revenues by
increasing values. Total property tax revenues are a function
of county, school district, and city/town spending as well as
state-paid local government aid and other factors. The value
and classification of the property are merely a way to divide
the total property tax levy among all taxpayers. The total
amount of the levy will be collected whether values increase
or decrease from one year to the next. An individual’s share
of the overall tax burden may change from year to year,
however.
What are sales ratio studies?
Sales ratios show the relationship between the assessor’s
estimated market value on a property and the actual sale
price of a property.
Each year the assessor performs sales ratio studies on
properties that have sold in their jurisdiction. These sales are
stratified many different ways including by location and
property type (residential, agricultural, commercial, etc.).
The sales can also be stratified further such as by home style,
subdivision, age of structure, location on or off water
frontage, price range, etc.
A single sale may not represent the true market activity.
Rather, sales of all properties are reviewed to determine
market trends. However, even if there are no sales occurring
within the sales ratio study period, assessors are still
expected to use their professional judgment and knowledge
of the local market to annually value properties in their
jurisdiction.
Whenever any real estate is sold for a consideration in excess
of $1,000, a Certificate of Real Estate Value (CRV) is filed.
These CRVs are the foundation of all sales ratio studies
because they contain important information about each
transaction. Assessors then verify the information contained
on the CRV in order to determine whether or not the sale
represents an open-market arm’s length transaction. If the
sale does not represent an open-market, arm’s length
transaction, it may not be used in the sales ratio study.
Simply having an extremely high or low sales ratio is not a
valid reason to remove a sale from the sales ratio study.
Rather, the extreme ratio indicates a need for additional
investigation by the assessor.
Again, sales ratio study periods are generally October 1 of a
given year to September 30 of the following year. For
example, for the 2010 assessment, assessors use sales that
took place between October 1, 2008 and September 30,
2009. This is the reason that assessors’ market values may
lag a bit behind current market activity.
Assessors will use the median sales ratio as the statistical
measure of the overall level of assessment. The median ratio
is the middle ratio of all the ratios when they are arranged in
order from highest to lowest (or vice versa). The median is
used because it is not affected by extreme ratios. Department
of Revenue guidelines indicate that the median ratio of a
sales ratio study should be between 90 and 105 percent.
Is it possible for the values of some
properties to decrease while others
increase?
Yes. Each segment of the market is different. Sales prices of
certain types of properties can vary widely. Currently, sales
of both farmland and recreational properties are strong and
show appreciation. However, the sales of residential
properties are stable or declining in some areas .
Sometimes it can be difficult to estimate the rate at which a
market is increasing or declining. Ideally, a property would
sell twice within a certain period of time, such as one year,
but all other characteristics of the property would remain the
same. That way an appraiser or assessor would be able to
isolate a time adjustment to indicate whether the market is
increasing or decreasing or simply remaining stable.
Do all areas increase or decline at the same
rate?
No. Some areas or neighborhoods are declining at a much
faster rate than others that are showing stable values or
values that are slightly increas ing.
Conclusion
In conclusion, it is essential that taxpayers understand that
there may be a legitimate reason for the assessor’s annual
market value to be different from current market conditions
due to the lag time between sales study periods and sales
taking place today.
For additional information, please refer to Fact Sheet 12a
Understanding Property Taxes and Fact Sheet 12c
Understanding Your Assessment and the Appeals Process.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 14
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 14
6 Role of the local board in the assessment process
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.
One provision in Minnesota law that often caused
significant differences between an EMV and a TMV was
the limited market value. This value was created by the
legislature as an attempt to “limit” the increase a
property owner could be taxed on each year. The
limited market value provisions expired starting with
the 2009 assessment.
An unintended consequence of limited market values is
that they caused unequal taxation on different types of
property – or even on similar properties. It was possible
for two very similar properties with identical EMVs to
have substantially different property tax bills due to this
limitation.
The local board cannot change the TMV of a
property. The only value the local 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 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
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
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota tax
laws and your rights and responsibilities under the laws. Nothing in this fact
sheet supersedes, alters, or otherwise changes any provisions of the tax law,
administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, How the Assessor Estimates Your Market Value 1
How the Assessor Estimates Your Market Value
Property Tax Fact Sheet 12b Fact Sheet
12b
www.taxes.state.mn.us
Property Tax Assessment Process
Minnesota has what is known as an ad valorem property tax.
This means property tax is divided among taxable properties
according to their value. The final amount of property tax
the owner of a property pays in any given year is the end
result of a process that begins over two years before property
tax statements are actually mailed to property owners.
The process begins with the assessor collecting data on sales
of properties within the market during a specific time period
between October of one year and September of the following
year (this period is known as a sales study period). Over the
next several months and by using mass appraisal techniques,
assessors analyze the data in order to estimate each
propert y’s market value for the next assessment (January 2).
Pursuant to Minnesota Statutes, section 273.11 assessors
must estimate the value of property at a value that would
represent what the property would sell for in an open-market
arm’s length transaction on January 2 of each year. The
assessor cannot adopt a higher or lower standard of value
because the value will be used for the purposes of taxation.
Assessors also classify property according to its use on
January 2. Between April and June, taxpayers have an
opportunity to appeal both the estimated market value and
the classification of their property. Values and classifications
are generally finalized July 1 of each year .
Local units of government then finalize their estimated
budgets for the upcoming year. Once the budgets are
finalized in December, the market values and classifications
are used to divide the overall tax levy among all taxable
properties. Tax statements are mailed by the following
March 31.
For example, sales of properties that occur between October
1, 2008 and September 30, 2009 are used by assessors to
estimate a property’s market value for the January 2, 2010
assessment. Following an appeal process that occurs between
April 1, 2010 and June 30, 2010, the valuations and
classifications generally become final on July 1, 2010.
This lengthy time frame may result in a significant difference
between actual sales prices occurring in the current market
and assessors’ estimated market values for the current year’s
assessment.
Using the final values and the local jurisdictions’ proposed
budgets, the auditor then estimates each property’s proposed
taxes payable for 2011. After public budget meetings are
held and final budget numbers are adopted, property tax
statements are mailed to taxpayers by March 31, 2011.
In summary, sales taking place from October 2008 to
September 200 9 are used to estimate a property’s market
value as of January 2, 2010 which will in turn be used to
calculate property taxes payable in 2011.
What is the role of the assessor?
Assessors use historical sales in order to estimate each
property’s market value as of the assessment date (January 2)
of each year. The assessor also classifies the property
according to its use on January 2 of each year.
Assessors also review other quantifiable data such as
supply/demand, marketing times, sales concessions, vacancy
rates, etc. to help in analyzing whether a market is increasing,
stable, or decreasing.
During increasing markets, this may benefit some property
owners because a buyer may pay a price that is significantly
higher than the assessor placed on the property for the last
assessment. For example, if a property is valued by the
assessor at $180,000 for the 2009 assessment (based on sales
that occurred between October 2007 and September 2008),
and it sells for $230,000 in August 2009, the new property
owner is benefiting from the lower market value for the 2009
assessment which will be used to calculate taxes payable in
2010.
The August 2009 sale of the proper ty will be included in the
study period of October 2008 to September 2009 which the
This fact sheet is the second in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts
of their annual assessment and property tax administration. Please see Fact Sheets 12a and 12c for additional information.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 15
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 15
7Role of the local board in the assessment process
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 2009 for the January 2, 2010
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, 2008 to September 30, 2009 are included in
the study for the 2010 assessment. The Department of
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 2010 assessment, once
finalized, is used to determine the taxes paid in 2011.
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
Minnesota Revenue, Understanding Property Taxes 2
The final step is to calculate the local property tax
rate by dividing the property tax revenue needed in a
jurisdiction by its total tax capacity.
(Property tax revenue needed)Local
Tax Rate =(Total Tax Capacity)
The county auditor will also calculate and apply any
homestead credits, referendum levies, and the state
general tax (for certain types of property).
Combining the above calculations, the basic formula
to determine an individual property’s tax amount is:
What is a “Truth in Taxation” notice?
Every year, after November 10, but before November
25, all property owners receive a “Truth-in-Taxation”
notice by mail. The notice contains:
valuation and classification information on
your property for the current and previous
assessment years;
your current -year property tax amounts ; and
an estimate of how your taxes may change
based on your taxing district and local
budget decisions for the following year.
The Truth-in-Taxation notices are required to show
dates, times, and places for the scheduled meetings in
which the budget and levy will be discussed and
finalized. These meetings must occur after
November 24. The public must be allowed to speak
at these meetings for the city, county, and school
district and they must not be held prior to 6 p.m.
These meetings are held to give taxpayers an
opportunity to voice their concerns over the
jurisdiction’s proposed budget. They are not a forum
for taxpayers to appeal their market value or their
individual proposed property tax amounts.
Property Tax Statement
The County Treasurer’s Office mails a tax statement
to property owners by March 31 of each year. The
statement provides an itemized list of the property tax
due to each taxing authority. The dollar amounts
must be listed separately for the state general tax (if
applicable), county, municipality or township, voter-
approved school tax, other local school tax, and other
special taxing districts. The statement must also
include any tax on contamination value and any other
special assessments on the property.
Real property taxes are due in equal installments on
May 15 and October 15 of each year (unless the
amount is $50 or less [$250 or less starting with taxes
payable in 2010] in which case taxes are due in full
on May 15). If a property is classified as agricultural
property, the 2nd half is not due until November 15.
Conclusion
In conclusion, it is essential that taxpayers understand that
there is no direct relationship between estimated market
value and property tax revenue. It is possible to have your
property tax increase while your market value decreases
and vice versa. Government spending and revenues will
affect your tax bill the most.
For additional information, please refer to Fact Sheet 12b
How the Assessor Estimates Your Market Value and Fact
Sheet 12c Understanding Your Assessment and the
Appeals Process.
Taxable Market Value
x Class Rate
=Tax Capacity
x Local Tax Rate =Base Tax
-- Homestead Credits
+ Referendum Amounts
+ State General Tax
=Total Property Tax Payable
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 16
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 16
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.”
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.
Three approaches to value
8 Role of the local board in the assessment process
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this
fact sheet supersedes, alters, or otherwise changes any provisions of the tax
law, administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, Understanding Property Taxes 1
Understanding Property Taxes
Property Tax Fact Sheet 12a Fact Sheet
12a
www.taxes.state.mn.us
Why do we have property taxes?
The money raised by property taxes is a major source
of funding for school districts, cities and townships,
counties, and special taxing districts. Local property
taxes help fund many programs and services
including public schools, fire stations, police
protection, streets, libraries, and more.
Certain types of properties – including
seasonal/cabin, commercial/industrial, and un-mined
iron ore – are also subject to a state-level property
tax. Receipts from this “state general tax” go into the
general fund.
A key benefit of the property tax system is that the
revenue it raises tends to remain stable. Compared
with sales or income taxes, the property tax is less
susceptible to recessions or other changes in income
or spending trends. In addition, since local
jurisdictions only levy what they need to cover their
annual needs, there is no surplus or deficit.
What affects my property tax bill?
Government spending and revenues will affect your
tax bill the most. If spending increases or revenues
from other sources such as state aid decrease, your
property taxes may increase. Conversely, if spending
decreases or revenue from other sources increases,
you may see a decrease in your property tax bill.
Since property taxes are levy-based, it is possible to
have your property tax increase while your market
value decreases and vice versa.
Your share of the overall property tax levy is
determined by the market value and classification of
your property. The esti mated market value and
classification of your home are determined by the
assessor as of January 2 of each year. Assessors
estimate the value of your property using historical
sales of similar properties.
There is no direct relationship between estimated
mark et value and property tax liability. Instead, your
property’s taxable market value is used to determine
how much property tax is due. These two values may
differ for a number of reasons, including tax deferral
programs, exclusions or reductions for specific types
of property.
The classification of your property is based on its use
on January 2. Each class of property (residential,
apartment, cabin, farm, commercial, etc.) has a
different classification rate. These rates are set by the
Legislature and calibrated so that some property
types pay a greater share of the property tax than
others. For example, commercial properties pay more
than residential homesteads and agricultural
properties.
How are my taxes determined?
First, each local jurisdiction will determine the revenue
needed from property taxes. This amount – the levy – is
calculated by subtracting all non-property tax revenue
from the total proposed budget.
The levy is then spread among all taxable properties
according to their net tax capacity. A property’s tax
capacity is calculated by multiplying the taxable market
value by the state-mandated classification rate.
This fact sheet is the first in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of
their annual assessment and property tax administration. Please see Fact Sheet s 12b and 12c for additional information.
Total Proposed Local Budget--All non-property tax revenue (state aid, fees, etc.)
=Property tax revenue needed (levy)
(Taxable Market Value) x (Class Rate) = Tax Capacity
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 17
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 17
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
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,
2010 assessment, the assessor reviews sales that occur
between October 1, 2008 and September 30, 2009. 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.
EMV Sale Ratio =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.
One sale is not enough evidence for the assessor to
change values. The assessor uses other tools when there
are limited sales to 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.
The sales ratio study
9Role of the local board in the assessment process Revised 07/04 Minnesota Revenue, Preparing an Appeal to your Local and County Boards of Appeal and Equalization 2
Presenting your case
Remember, how you present your case may affect the
outcome of your appeal – you want to be sure you get
your point across as effectively as possible.
Make a list of key points you may wish to present.
The board has never seen your
property. Describe your property so
they will understand your arguments
more fully. Photos can be helpful to
support your argument.
Keep your presentation brief and factual.
Be prepared to discuss your case with the board or
answer any questions that the board may have.
Written appeals
You may also appeal your value or classification by
submitting a letter of appeal to the board instead of
appearing in person.
You will want to do your research and
explain your appeal in writing. Your letter
should state the facts and include supporting
documentation. You may want to include your daytime
phone number so you can be reached in case the board
has any questions.
Other helpful information
Please keep in mind that taxes are not the issue. To
strengthen your appeal, you should present evidence
about your property’s value or classification,
not how much you are paying in taxes.
This fact sheet is not meant to give you
legal advice. It is intended to be a helpful tool with
general information for presenting your property tax
appeal at your Local and County Boards of Appeal and
Equalization.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Subject: 2012 Local Board of Appeal and Equalization Page 18
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.
10 Role of the local board in the assessment process
Property Tax Division – Mail Station 3340 – St. Paul, MN 55146-3340 This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this
fact sheet supersedes, alters, or otherwise changes any provisions of the tax
law, administrative rules, court decisions, or revenue notices. Alternative formats
available upon request.
www.taxes.state.mn.us
Preparing an Appeal to Your Local and County
Boards of Appeal and Equalization
Property Tax Fact Sheet 10 Fact Sheet
10
Revised 07/04 Minnesota Revenue, Preparing an Appeal to your Local and County Boards of Appeal and Equalization 1
You have decided to appeal the valuation and/or
classification of your property to your Local or County
Boards of Appeal and Equalization. You must appeal to
the Local Board of Appeal and Equalization before
appealing to your County Board of Appeal and
Equalization.
If you haven’t done so already, you should contact your
assessor’s office before making a formal appeal to discuss
changing your assessment. Often issues
and concerns can be resolved at this level.
If you and the assessor were unable to agree
on your valuation or classification you may
decide to appeal to your Local and/or County Boards of
Appeal and Equalization.
The general information contained in this fact sheet is
applicable to preparing for appeals to both the Local and
County Boards of Appeal and Equalization.
Successfully appealing your assessment
Minnesota law assumes that the County Assessor has
correctly valued and classified your property. You must
present factual evidence to convince the Board otherwise
in order to win your appeal. Make sure all facts are
presented, and the board understands the
information presented, so a decision can
be made based on facts.
Successfully appealing your value or
classification at your Local or County Board of Appeal
and Equalization can mean a number of things.
It does not necessarily mean that the board ruled in your
favor and lowered your value or changed your
classification.
Whether or not the local board decides to make a change
in your estimated market value or classification, you can
still be successful in appealing to your local board. The
ultimate result you want to achieve is to make sure your
value is warranted and the classification of your property
is correct based on its use.
Preparing for your appeal
The first step is to do some research to collect information
to show why you believe your estimated market value or
classification is incorrect. Begin by
contacting the assessor’s office.
Verify information about your property,
such as its dimensions, age and
condition of its structures.
Review records to determine the market value of
similar property in your neighborhood.
Review sales data to find out what similar property in
your area is selling for.
Check real estate ads in your newspaper to get an
idea of the asking price of local properties.
Ask the assessor to explain the criteria used for
classifying your property. You may also review the
classification of other property used in the same
manner as yours.
Gathering supporting evidence
You must have documentation to support your
appeal. Items you may wish to bring to the
meeting include:
A recent appraisal of your property.
Recent sales of similar property.
Documentation supporting the use of
your property (if you are appealing the
classification).
Copies of other property owners’ field cards/property
information.
Photos of your property.
Photos or exhibits comparing neighboring properties
to yours.
If you should have questions, please don’t hesitate to
contact your assessor’s office. Staff members are always
willing to answer questions and give you information that
will help you understand your assessment.
See page 2 for helpful hints o
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Subject: 2012 Local Board of Appeal and Equalization Page 19
Local board meeting
Who must attend the 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 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 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 da
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.
11Role of the local board in the assessment process
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.
When will my value stop changing so much?
This is impossible to predict. Estimated market values
are dictated by the market. If sale prices are increasing,
estimated market values will increase. If sale prices are
decreasing, estimated market values will decrease.
Why are my taxes so high?
Taxes are not within the authority of the local 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 local 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 credit directly reduces the property
taxes on a parcel. 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.taxes.state.mn.us).
Handouts for property owners
The following pages contain information for property
owners to help them with the appeal process. You
may photocopy these pages and provide them to
property owners who seek to appeal their property
value or classification.
34 Appendix
(http://www.taxes.state.mn.us).
BoardsofAppealandEquilization,""Understanding
propertytaxes,""Howtheassessorestimatesyour
DepartmentofRevenuewebsite
The“PreparinganappealtoyourLocalandCounty
marketvalue," and"Understandingyourassessment
andtheappealsprocess" fact sheets are also on the
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 20
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 20
Documenting local board actions
Before adjourning, the Local Board of Appeal and
Equalization must prepare an official record of all actions
taken by the board. Minnesota Statutes 274.01,
subdivision 1, paragraph (e) requires, in part, that:
“The board shall list separately, on a form appended
to the assessment book, all omitted property added to
the list by the board and all items of property
increased or decreased, with the market value of
each item of property, added or changed by the
board, placed opposite the item.”
This means that the local board must prepare an official
record of the proceedings. The record must reflect all
board actions. Therefore, the record must list all:
Assessments of property added to the tax rolls with
the market value for each;
Appeals brought before the board, indicating the
action taken by the board (including all appeals in
which the board voted “no change”);
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.
After the changes have been completed, the record must
be signed and dated by the members of the local board
who were present at the meeting. The record must also list
the names and titles of all voting members of the local
board, including those who are present and those who are
absent, to verify that the quorum requirement was met.
The county assessor is to make all changes ordered by the
local 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 within 10
working days following final action of the local board.
The information must be filed in the manner prescribed
by the Commissioner of Revenue (Minnesota Statutes,
Chapter 270C).
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 also is requiring that
the local board complete the following two forms for
each Local Board of Appeal and Equalization meeting:
Local 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
Local 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 local
board. The local 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 also
must be present at the reconvene meeting for the local
board to take valid action. To verify that the quorum
requirement was met, the local board must complete and
sign a Certification Form for each reconvene meeting.
The local 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). The date and time for the reconvene
meeting must be determined before the initial meeting is
recessed. Once the Local Board of Appeal and
Equalization has adjourned, they cannot reconvene.
12 Role of the local board in the assessment process 33Appendix
Frequently asked questions by local board members
What is the purpose of the Local 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 Local 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 local 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 local
board’s decision?
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.
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-,
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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 21
Duties of the local board
The local board is to determine whether all of the taxable
property in the town or city 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. 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 with the city or town clerk or county assessor prior
to the meeting of the Local 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 property or improvements that
are not on the tax rolls. When property or 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 property or
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.
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 local 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 local 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 local
board. After the hearing, the local board should make
any corrections that it deems just.
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.
13Role of the local board in the assessment process
Recommended format to notify appellants of local board decisions
April 29, 2010
{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} Local 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 2010 value or classification
______ Change the 2010 classification from ______________________ to _____________________
______ Reduce the 2010 value from $___________________ to $ ___________________
______ Increase the 2010 value from $___________________ to $ ___________________
Comments:
If you are not satisfied with the outcome of the Local Board of Appeal and Equalization, you may appeal to the County
Board of Appeal and Equalization. {Add details about scheduling appointments or how to appeal to the county board.}
You may also appeal to Tax Court. For more information on the Tax Court, go to http://www.taxcourt.state.mn.us.
Sincerely,
{insert name}
{insert title}
32 Appendix
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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
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.
What the board can’t do
The local board can’t consider prior year assessments.
The Local 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 local board can’t order percentage increases or
decreases for an entire class of property. The authority
of the local board extends over the individual
assessments of real and personal property. The board
cannot increase or decrease by percentage all of the
assessments in the district of a given class of property.
Changes in the aggregate assessments by classes are
made by the County Board of Appeal and Equalization.
The local board can’t reduce the aggregate assessment
by more than 1 percent. Although the Local Board of
Appeal and Equalization has the authority to increase or
reduce individual assessments, the total of such
adjustments must not reduce the aggregate assessment
of the jurisdiction by more than 1 percent. The
“aggregate assessment” is the total EMV that the local
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
board actions must be
at least $1,980,000.
Assessor’s EMV
+ Total board EMV increases
- Total board EMV reductions
EMV after board actions
If the total amount of adjustments made by the local
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 local board can’t exempt property. The Local
Board of Appeal and Equalization does not have the
authority to grant an exemption or to order property
removed from the tax rolls.
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.
A member of the local 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
14 Role of the local board in the assessment process
How value changes affect taxes
31Appendix
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15Role of the local board in the assessment process
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 County
Board of Appeal and Equalization.
The local 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.
Recommendations for local board members
Become familiar with sales information prior to
local board meeting
Most local 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 local board meeting. If
this information is not provided, the local 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 local 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 local board should work
with the assessor to determine the specific information
to be supplied to the local 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 local 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.
As a local 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
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.
Duties of local and county boards
30 Appendix
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Legal and policy reasons for fair and impartial
appeal and equalization hearings 2
Legal reasons for fair and impartial local board meetings
Minnesota Statutes, Section 274.01, subdivision 1,
paragraph (b) states:
“The 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.”
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 Local 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.
Policy reasons for fair and impartial local board meetings
Property owners expect and deserve a fair and impartial
hearing. Serving as the Local Board of Appeal and
Equalization is an important duty. As one step –
generally the first step – in the appeal process, 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.
16 Legal and policy reasons for fair and impartial appeal and equalization hearings 29Appendix
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.
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, 2010 assessment, the assessor reviews sales
that occur between October 1, 2008 and September 30,
2009. 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.
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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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3 Local board meeting procedures that foster
fair and impartial assessment reviews and
other best practices recommendations
Each local board meeting is conducted differently.
While there are not any 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 for local boards. We acknowledge
that some cities or townships may have bylaws or rules
of procedures that may preclude some of these
recommendations. Keep in mind that these are
recommended procedures for the local 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 Local 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 local 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 local 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 local board at the
reconvene meeting.
17Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
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
credit. 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.
Market value homestead credit – Residential
homestead property receives a credit which is equal to
0.4 percent of the market value of the property. The
amount may not exceed $304 and is reduced by
0.09 percent of the market value in excess of $76,000.
Agricultural homestead property receives the residential
credit for the house, garage and one acre value plus an
agricultural credit of 0.3 percent of the agricultural class
2a and rural vacant land class 2b market value not to
exceed $345. It is reduced by 0.05 percent of the
market value in excess of $115,000 but may not be
reduced to less than $230.
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.
28 Appendix
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All proceedings must be public
The local board meeting is 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 local 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 local board meeting(s).
Make appellants feel comfortable
Presenting an appeal to the Local 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 local
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.taxes.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.
18 Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
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.
27Appendix
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19Local 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 Local 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.
The next (reconvene) meeting must be held within 20
calendar days (including the day of the initial meeting)
unless the 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 Local Board of Appeal
and Equalization has adjourned, they 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 local board
at a reconvene meeting. Ultimately, it is the local 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 local board (within the 20-day 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
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
December 1 to be effective for the following
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 December 1 to be effective
for the following assessment year.
Other alternate methods of appeal
Special Boards of Appeal and Equalization
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.
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.
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.
26 Explanations of alternate methods of appeal
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20 Local 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 20 days for the
assessor to review. In such instances, the 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 local board should keep
two things in mind:
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 local 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.taxes.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.
25Explanations of alternate methods of appeal
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.
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
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 December 1 of any year to be effective
for the following 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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Best practices recommendations
Have appellants call for appointments
It is recommended that the local 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 local 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 local board also must hear
any appeals by property owners who come to the
meeting without having scheduled an appointment prior
to the meeting. 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 20 calendar days) 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.
21Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
24 Explanations of alternate methods of appeal
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 property owners who feel the need to appeal
to the County Board of Appeal and 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, and an appraiser will
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
Local 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.
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 and/or to Tax Court.
It is only a recommendation that the property owner
attend the open book meeting to discuss concerns prior
to the County Board of Appeal and Equalization. In a
jurisdiction that 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.
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
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 Local
Board of Appeal and Equalization 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 and/or to
Tax Court if not satisfied with the outcome.
Benefits for property owners
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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22 Quorum requirements for local boards
Conducting other business at the local
board meeting
It is best to hold a special meeting for the Local
Board of Appeal and Equalization and not conduct
the regular council meeting (or other business) at the
local 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
Local 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 local board decisions” in the Appendix).
Quorum requirements for local boards
Quorum must be present
A majority of the voting members of the Local Board of
Appeal and Equalization must be in attendance in order
for any valid action to be taken. When a local board
meets and conducts business without a quorum, it is
conducting an illegal meeting. This means that any
changes made by a local 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.1
1 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 Local Board of Appeal and Equalization, a
majority of the voting members of the board must be
present to meet the quorum requirement.
Quorum
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.
Assessor’s role 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 local 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.
Arrive on time for the meeting
It is also very important that the board members and
all required attendees (county assessor, local assessor,
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 alternate methods of appeal 5
Open book meetings
Open book meetings are an alternative to the Local
Board of Appeal and Equalization. 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 local
board meeting held at one place and time.
23Explanations of alternate methods of appeal
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 31
22 Quorum requirements for local boards
Conducting other business at the local
board meeting
It is best to hold a special meeting for the Local
Board of Appeal and Equalization and not conduct
the regular council meeting (or other business) at the
local 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
Local 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 local board decisions” in the Appendix).
Quorum requirements for local boards
Quorum must be present
A majority of the voting members of the Local Board of
Appeal and Equalization must be in attendance in order
for any valid action to be taken. When a local board
meets and conducts business without a quorum, it is
conducting an illegal meeting. This means that any
changes made by a local 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.1
1 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 Local Board of Appeal and Equalization, a
majority of the voting members of the board must be
present to meet the quorum requirement.
Quorum
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.
Assessor’s role 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 local 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.
Arrive on time for the meeting
It is also very important that the board members and
all required attendees (county assessor, local assessor,
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 alternate methods of appeal 5
Open book meetings
Open book meetings are an alternative to the Local
Board of Appeal and Equalization. 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 local
board meeting held at one place and time.
23Explanations of alternate methods of appeal
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 32
Best practices recommendations
Have appellants call for appointments
It is recommended that the local 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 local 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 local board also must hear
any appeals by property owners who come to the
meeting without having scheduled an appointment prior
to the meeting. 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 20 calendar days) 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.
21Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
24 Explanations of alternate methods of appeal
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 property owners who feel the need to appeal
to the County Board of Appeal and 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, and an appraiser will
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
Local 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.
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 and/or to Tax Court.
It is only a recommendation that the property owner
attend the open book meeting to discuss concerns prior
to the County Board of Appeal and Equalization. In a
jurisdiction that 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.
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
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 Local
Board of Appeal and Equalization 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 and/or to
Tax Court if not satisfied with the outcome.
Benefits for property owners
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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20 Local 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 20 days for the
assessor to review. In such instances, the 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 local board should keep
two things in mind:
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 local 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.taxes.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.
25Explanations of alternate methods of appeal
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.
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
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 December 1 of any year to be effective
for the following 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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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19Local 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 Local 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.
The next (reconvene) meeting must be held within 20
calendar days (including the day of the initial meeting)
unless the 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 Local Board of Appeal
and Equalization has adjourned, they 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 local board
at a reconvene meeting. Ultimately, it is the local 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 local board (within the 20-day 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
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
December 1 to be effective for the following
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 December 1 to be effective
for the following assessment year.
Other alternate methods of appeal
Special Boards of Appeal and Equalization
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.
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.
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.
26 Explanations of alternate methods of appeal
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 35
All proceedings must be public
The local board meeting is 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 local 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 local board meeting(s).
Make appellants feel comfortable
Presenting an appeal to the Local 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 local
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.taxes.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.
18 Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
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.
27Appendix
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3 Local board meeting procedures that foster
fair and impartial assessment reviews and
other best practices recommendations
Each local board meeting is conducted differently.
While there are not any 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 for local boards. We acknowledge
that some cities or townships may have bylaws or rules
of procedures that may preclude some of these
recommendations. Keep in mind that these are
recommended procedures for the local 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 Local 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 local 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 local 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 local board at the
reconvene meeting.
17Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations
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
credit. 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.
Market value homestead credit – Residential
homestead property receives a credit which is equal to
0.4 percent of the market value of the property. The
amount may not exceed $304 and is reduced by
0.09 percent of the market value in excess of $76,000.
Agricultural homestead property receives the residential
credit for the house, garage and one acre value plus an
agricultural credit of 0.3 percent of the agricultural class
2a and rural vacant land class 2b market value not to
exceed $345. It is reduced by 0.05 percent of the
market value in excess of $115,000 but may not be
reduced to less than $230.
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.
28 Appendix
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Legal and policy reasons for fair and impartial
appeal and equalization hearings 2
Legal reasons for fair and impartial local board meetings
Minnesota Statutes, Section 274.01, subdivision 1,
paragraph (b) states:
“The 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.”
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 Local 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.
Policy reasons for fair and impartial local board meetings
Property owners expect and deserve a fair and impartial
hearing. Serving as the Local Board of Appeal and
Equalization is an important duty. As one step –
generally the first step – in the appeal process, 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.
16 Legal and policy reasons for fair and impartial appeal and equalization hearings 29Appendix
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.
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, 2010 assessment, the assessor reviews sales
that occur between October 1, 2008 and September 30,
2009. 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.
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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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15Role of the local board in the assessment process
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 County
Board of Appeal and Equalization.
The local 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.
Recommendations for local board members
Become familiar with sales information prior to
local board meeting
Most local 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 local board meeting. If
this information is not provided, the local 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 local 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 local board should work
with the assessor to determine the specific information
to be supplied to the local 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 local 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.
As a local 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
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.
Duties of local and county boards
30 Appendix
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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
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.
What the board can’t do
The local board can’t consider prior year assessments.
The Local 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 local board can’t order percentage increases or
decreases for an entire class of property. The authority
of the local board extends over the individual
assessments of real and personal property. The board
cannot increase or decrease by percentage all of the
assessments in the district of a given class of property.
Changes in the aggregate assessments by classes are
made by the County Board of Appeal and Equalization.
The local board can’t reduce the aggregate assessment
by more than 1 percent. Although the Local Board of
Appeal and Equalization has the authority to increase or
reduce individual assessments, the total of such
adjustments must not reduce the aggregate assessment
of the jurisdiction by more than 1 percent. The
“aggregate assessment” is the total EMV that the local
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
board actions must be
at least $1,980,000.
Assessor’s EMV
+ Total board EMV increases
- Total board EMV reductions
EMV after board actions
If the total amount of adjustments made by the local
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 local board can’t exempt property. The Local
Board of Appeal and Equalization does not have the
authority to grant an exemption or to order property
removed from the tax rolls.
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.
A member of the local 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
14 Role of the local board in the assessment process
How value changes affect taxes
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Duties of the local board
The local board is to determine whether all of the taxable
property in the town or city 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. 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 with the city or town clerk or county assessor prior
to the meeting of the Local 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 property or improvements that
are not on the tax rolls. When property or 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 property or
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.
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 local 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 local 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 local
board. After the hearing, the local board should make
any corrections that it deems just.
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.
13Role of the local board in the assessment process
Recommended format to notify appellants of local board decisions
April 29, 2010
{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} Local 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 2010 value or classification
______ Change the 2010 classification from ______________________ to _____________________
______ Reduce the 2010 value from $___________________ to $ ___________________
______ Increase the 2010 value from $___________________ to $ ___________________
Comments:
If you are not satisfied with the outcome of the Local Board of Appeal and Equalization, you may appeal to the County
Board of Appeal and Equalization. {Add details about scheduling appointments or how to appeal to the county board.}
You may also appeal to Tax Court. For more information on the Tax Court, go to http://www.taxcourt.state.mn.us.
Sincerely,
{insert name}
{insert title}
32 Appendix
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 41
Documenting local board actions
Before adjourning, the Local Board of Appeal and
Equalization must prepare an official record of all actions
taken by the board. Minnesota Statutes 274.01,
subdivision 1, paragraph (e) requires, in part, that:
“The board shall list separately, on a form appended
to the assessment book, all omitted property added to
the list by the board and all items of property
increased or decreased, with the market value of
each item of property, added or changed by the
board, placed opposite the item.”
This means that the local board must prepare an official
record of the proceedings. The record must reflect all
board actions. Therefore, the record must list all:
Assessments of property added to the tax rolls with
the market value for each;
Appeals brought before the board, indicating the
action taken by the board (including all appeals in
which the board voted “no change”);
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.
After the changes have been completed, the record must
be signed and dated by the members of the local board
who were present at the meeting. The record must also list
the names and titles of all voting members of the local
board, including those who are present and those who are
absent, to verify that the quorum requirement was met.
The county assessor is to make all changes ordered by the
local 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 within 10
working days following final action of the local board.
The information must be filed in the manner prescribed
by the Commissioner of Revenue (Minnesota Statutes,
Chapter 270C).
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 also is requiring that
the local board complete the following two forms for
each Local Board of Appeal and Equalization meeting:
Local 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
Local 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 local
board. The local 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 also
must be present at the reconvene meeting for the local
board to take valid action. To verify that the quorum
requirement was met, the local board must complete and
sign a Certification Form for each reconvene meeting.
The local 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). The date and time for the reconvene
meeting must be determined before the initial meeting is
recessed. Once the Local Board of Appeal and
Equalization has adjourned, they cannot reconvene.
12 Role of the local board in the assessment process 33Appendix
Frequently asked questions by local board members
What is the purpose of the Local 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 Local 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 local 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 local
board’s decision?
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.
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-,
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.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 42
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 42
Local board meeting
Who must attend the 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 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 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 da
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.
11Role of the local board in the assessment process
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.
When will my value stop changing so much?
This is impossible to predict. Estimated market values
are dictated by the market. If sale prices are increasing,
estimated market values will increase. If sale prices are
decreasing, estimated market values will decrease.
Why are my taxes so high?
Taxes are not within the authority of the local 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 local 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 credit directly reduces the property
taxes on a parcel. 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.taxes.state.mn.us).
Handouts for property owners
The following pages contain information for property
owners to help them with the appeal process. You
may photocopy these pages and provide them to
property owners who seek to appeal their property
value or classification.
34 Appendix
(http://www.taxes.state.mn.us).
BoardsofAppealandEquilization,""Understanding
propertytaxes,""Howtheassessorestimatesyour
DepartmentofRevenuewebsite
The“PreparinganappealtoyourLocalandCounty
marketvalue," and"Understandingyourassessment
andtheappealsprocess" fact sheets are also on the
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 43
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 43
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.
10 Role of the local board in the assessment process
Property Tax Division – Mail Station 3340 – St. Paul, MN 55146-3340 This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this
fact sheet supersedes, alters, or otherwise changes any provisions of the tax
law, administrative rules, court decisions, or revenue notices. Alternative formats
available upon request.
www.taxes.state.mn.us
Preparing an Appeal to Your Local and County
Boards of Appeal and Equalization
Property Tax Fact Sheet 10 Fact Sheet
10
Revised 07/04 Minnesota Revenue, Preparing an Appeal to your Local and County Boards of Appeal and Equalization 1
You have decided to appeal the valuation and/or
classification of your property to your Local or County
Boards of Appeal and Equalization. You must appeal to
the Local Board of Appeal and Equalization before
appealing to your County Board of Appeal and
Equalization.
If you haven’t done so already, you should contact your
assessor’s office before making a formal appeal to discuss
changing your assessment. Often issues
and concerns can be resolved at this level.
If you and the assessor were unable to agree
on your valuation or classification you may
decide to appeal to your Local and/or County Boards of
Appeal and Equalization.
The general information contained in this fact sheet is
applicable to preparing for appeals to both the Local and
County Boards of Appeal and Equalization.
Successfully appealing your assessment
Minnesota law assumes that the County Assessor has
correctly valued and classified your property. You must
present factual evidence to convince the Board otherwise
in order to win your appeal. Make sure all facts are
presented, and the board understands the
information presented, so a decision can
be made based on facts.
Successfully appealing your value or
classification at your Local or County Board of Appeal
and Equalization can mean a number of things.
It does not necessarily mean that the board ruled in your
favor and lowered your value or changed your
classification.
Whether or not the local board decides to make a change
in your estimated market value or classification, you can
still be successful in appealing to your local board. The
ultimate result you want to achieve is to make sure your
value is warranted and the classification of your property
is correct based on its use.
Preparing for your appeal
The first step is to do some research to collect information
to show why you believe your estimated market value or
classification is incorrect. Begin by
contacting the assessor’s office.
Verify information about your property,
such as its dimensions, age and
condition of its structures.
Review records to determine the market value of
similar property in your neighborhood.
Review sales data to find out what similar property in
your area is selling for.
Check real estate ads in your newspaper to get an
idea of the asking price of local properties.
Ask the assessor to explain the criteria used for
classifying your property. You may also review the
classification of other property used in the same
manner as yours.
Gathering supporting evidence
You must have documentation to support your
appeal. Items you may wish to bring to the
meeting include:
A recent appraisal of your property.
Recent sales of similar property.
Documentation supporting the use of
your property (if you are appealing the
classification).
Copies of other property owners’ field cards/property
information.
Photos of your property.
Photos or exhibits comparing neighboring properties
to yours.
If you should have questions, please don’t hesitate to
contact your assessor’s office. Staff members are always
willing to answer questions and give you information that
will help you understand your assessment.
See page 2 for helpful hints o
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
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Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 44
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
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,
2010 assessment, the assessor reviews sales that occur
between October 1, 2008 and September 30, 2009. 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.
EMV Sale Ratio =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.
One sale is not enough evidence for the assessor to
change values. The assessor uses other tools when there
are limited sales to 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.
The sales ratio study
9Role of the local board in the assessment process Revised 07/04 Minnesota Revenue, Preparing an Appeal to your Local and County Boards of Appeal and Equalization 2
Presenting your case
Remember, how you present your case may affect the
outcome of your appeal – you want to be sure you get
your point across as effectively as possible.
Make a list of key points you may wish to present.
The board has never seen your
property. Describe your property so
they will understand your arguments
more fully. Photos can be helpful to
support your argument.
Keep your presentation brief and factual.
Be prepared to discuss your case with the board or
answer any questions that the board may have.
Written appeals
You may also appeal your value or classification by
submitting a letter of appeal to the board instead of
appearing in person.
You will want to do your research and
explain your appeal in writing. Your letter
should state the facts and include supporting
documentation. You may want to include your daytime
phone number so you can be reached in case the board
has any questions.
Other helpful information
Please keep in mind that taxes are not the issue. To
strengthen your appeal, you should present evidence
about your property’s value or classification,
not how much you are paying in taxes.
This fact sheet is not meant to give you
legal advice. It is intended to be a helpful tool with
general information for presenting your property tax
appeal at your Local and County Boards of Appeal and
Equalization.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 45
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 45
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.”
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.
Three approaches to value
8 Role of the local board in the assessment process
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this
fact sheet supersedes, alters, or otherwise changes any provisions of the tax
law, administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, Understanding Property Taxes 1
Understanding Property Taxes
Property Tax Fact Sheet 12a Fact Sheet
12a
www.taxes.state.mn.us
Why do we have property taxes?
The money raised by property taxes is a major source
of funding for school districts, cities and townships,
counties, and special taxing districts. Local property
taxes help fund many programs and services
including public schools, fire stations, police
protection, streets, libraries, and more.
Certain types of properties – including
seasonal/cabin, commercial/industrial, and un-mined
iron ore – are also subject to a state-level property
tax. Receipts from this “state general tax” go into the
general fund.
A key benefit of the property tax system is that the
revenue it raises tends to remain stable. Compared
with sales or income taxes, the property tax is less
susceptible to recessions or other changes in income
or spending trends. In addition, since local
jurisdictions only levy what they need to cover their
annual needs, there is no surplus or deficit.
What affects my property tax bill?
Government spending and revenues will affect your
tax bill the most. If spending increases or revenues
from other sources such as state aid decrease, your
property taxes may increase. Conversely, if spending
decreases or revenue from other sources increases,
you may see a decrease in your property tax bill.
Since property taxes are levy-based, it is possible to
have your property tax increase while your market
value decreases and vice versa.
Your share of the overall property tax levy is
determined by the market value and classification of
your property. The esti mated market value and
classification of your home are determined by the
assessor as of January 2 of each year. Assessors
estimate the value of your property using historical
sales of similar properties.
There is no direct relationship between estimated
mark et value and property tax liability. Instead, your
property’s taxable market value is used to determine
how much property tax is due. These two values may
differ for a number of reasons, including tax deferral
programs, exclusions or reductions for specific types
of property.
The classification of your property is based on its use
on January 2. Each class of property (residential,
apartment, cabin, farm, commercial, etc.) has a
different classification rate. These rates are set by the
Legislature and calibrated so that some property
types pay a greater share of the property tax than
others. For example, commercial properties pay more
than residential homesteads and agricultural
properties.
How are my taxes determined?
First, each local jurisdiction will determine the revenue
needed from property taxes. This amount – the levy – is
calculated by subtracting all non-property tax revenue
from the total proposed budget.
The levy is then spread among all taxable properties
according to their net tax capacity. A property’s tax
capacity is calculated by multiplying the taxable market
value by the state-mandated classification rate.
This fact sheet is the first in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of
their annual assessment and property tax administration. Please see Fact Sheet s 12b and 12c for additional information.
Total Proposed Local Budget--All non-property tax revenue (state aid, fees, etc.)
=Property tax revenue needed (levy)
(Taxable Market Value) x (Class Rate) = Tax Capacity
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 46
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 46
7Role of the local board in the assessment process
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 2009 for the January 2, 2010
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, 2008 to September 30, 2009 are included in
the study for the 2010 assessment. The Department of
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 2010 assessment, once
finalized, is used to determine the taxes paid in 2011.
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
Minnesota Revenue, Understanding Property Taxes 2
The final step is to calculate the local property tax
rate by dividing the property tax revenue needed in a
jurisdiction by its total tax capacity.
(Property tax revenue needed)Local
Tax Rate =(Total Tax Capacity)
The county auditor will also calculate and apply any
homestead credits, referendum levies, and the state
general tax (for certain types of property).
Combining the above calculations, the basic formula
to determine an individual property’s tax amount is:
What is a “Truth in Taxation” notice?
Every year, after November 10, but before November
25, all property owners receive a “Truth-in-Taxation”
notice by mail. The notice contains:
valuation and classification information on
your property for the current and previous
assessment years;
your current -year property tax amounts ; and
an estimate of how your taxes may change
based on your taxing district and local
budget decisions for the following year.
The Truth-in-Taxation notices are required to show
dates, times, and places for the scheduled meetings in
which the budget and levy will be discussed and
finalized. These meetings must occur after
November 24. The public must be allowed to speak
at these meetings for the city, county, and school
district and they must not be held prior to 6 p.m.
These meetings are held to give taxpayers an
opportunity to voice their concerns over the
jurisdiction’s proposed budget. They are not a forum
for taxpayers to appeal their market value or their
individual proposed property tax amounts.
Property Tax Statement
The County Treasurer’s Office mails a tax statement
to property owners by March 31 of each year. The
statement provides an itemized list of the property tax
due to each taxing authority. The dollar amounts
must be listed separately for the state general tax (if
applicable), county, municipality or township, voter-
approved school tax, other local school tax, and other
special taxing districts. The statement must also
include any tax on contamination value and any other
special assessments on the property.
Real property taxes are due in equal installments on
May 15 and October 15 of each year (unless the
amount is $50 or less [$250 or less starting with taxes
payable in 2010] in which case taxes are due in full
on May 15). If a property is classified as agricultural
property, the 2nd half is not due until November 15.
Conclusion
In conclusion, it is essential that taxpayers understand that
there is no direct relationship between estimated market
value and property tax revenue. It is possible to have your
property tax increase while your market value decreases
and vice versa. Government spending and revenues will
affect your tax bill the most.
For additional information, please refer to Fact Sheet 12b
How the Assessor Estimates Your Market Value and Fact
Sheet 12c Understanding Your Assessment and the
Appeals Process.
Taxable Market Value
x Class Rate
=Tax Capacity
x Local Tax Rate =Base Tax
-- Homestead Credits
+ Referendum Amounts
+ State General Tax
=Total Property Tax Payable
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 47
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 47
6 Role of the local board in the assessment process
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.
One provision in Minnesota law that often caused
significant differences between an EMV and a TMV was
the limited market value. This value was created by the
legislature as an attempt to “limit” the increase a
property owner could be taxed on each year. The
limited market value provisions expired starting with
the 2009 assessment.
An unintended consequence of limited market values is
that they caused unequal taxation on different types of
property – or even on similar properties. It was possible
for two very similar properties with identical EMVs to
have substantially different property tax bills due to this
limitation.
The local board cannot change the TMV of a
property. The only value the local 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 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
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
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota tax
laws and your rights and responsibilities under the laws. Nothing in this fact
sheet supersedes, alters, or otherwise changes any provisions of the tax law,
administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, How the Assessor Estimates Your Market Value 1
How the Assessor Estimates Your Market Value
Property Tax Fact Sheet 12b Fact Sheet
12b
www.taxes.state.mn.us
Property Tax Assessment Process
Minnesota has what is known as an ad valorem property tax.
This means property tax is divided among taxable properties
according to their value. The final amount of property tax
the owner of a property pays in any given year is the end
result of a process that begins over two years before property
tax statements are actually mailed to property owners.
The process begins with the assessor collecting data on sales
of properties within the market during a specific time period
between October of one year and September of the following
year (this period is known as a sales study period). Over the
next several months and by using mass appraisal techniques,
assessors analyze the data in order to estimate each
propert y’s market value for the next assessment (January 2).
Pursuant to Minnesota Statutes, section 273.11 assessors
must estimate the value of property at a value that would
represent what the property would sell for in an open-market
arm’s length transaction on January 2 of each year. The
assessor cannot adopt a higher or lower standard of value
because the value will be used for the purposes of taxation.
Assessors also classify property according to its use on
January 2. Between April and June, taxpayers have an
opportunity to appeal both the estimated market value and
the classification of their property. Values and classifications
are generally finalized July 1 of each year .
Local units of government then finalize their estimated
budgets for the upcoming year. Once the budgets are
finalized in December, the market values and classifications
are used to divide the overall tax levy among all taxable
properties. Tax statements are mailed by the following
March 31.
For example, sales of properties that occur between October
1, 2008 and September 30, 2009 are used by assessors to
estimate a property’s market value for the January 2, 2010
assessment. Following an appeal process that occurs between
April 1, 2010 and June 30, 2010, the valuations and
classifications generally become final on July 1, 2010.
This lengthy time frame may result in a significant difference
between actual sales prices occurring in the current market
and assessors’ estimated market values for the current year’s
assessment.
Using the final values and the local jurisdictions’ proposed
budgets, the auditor then estimates each property’s proposed
taxes payable for 2011. After public budget meetings are
held and final budget numbers are adopted, property tax
statements are mailed to taxpayers by March 31, 2011.
In summary, sales taking place from October 2008 to
September 200 9 are used to estimate a property’s market
value as of January 2, 2010 which will in turn be used to
calculate property taxes payable in 2011.
What is the role of the assessor?
Assessors use historical sales in order to estimate each
property’s market value as of the assessment date (January 2)
of each year. The assessor also classifies the property
according to its use on January 2 of each year.
Assessors also review other quantifiable data such as
supply/demand, marketing times, sales concessions, vacancy
rates, etc. to help in analyzing whether a market is increasing,
stable, or decreasing.
During increasing markets, this may benefit some property
owners because a buyer may pay a price that is significantly
higher than the assessor placed on the property for the last
assessment. For example, if a property is valued by the
assessor at $180,000 for the 2009 assessment (based on sales
that occurred between October 2007 and September 2008),
and it sells for $230,000 in August 2009, the new property
owner is benefiting from the lower market value for the 2009
assessment which will be used to calculate taxes payable in
2010.
The August 2009 sale of the proper ty will be included in the
study period of October 2008 to September 2009 which the
This fact sheet is the second in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts
of their annual assessment and property tax administration. Please see Fact Sheets 12a and 12c for additional information.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 48
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 48
5Role of the local board in the assessment process
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.
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
Local 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
local board, even though taxpayers will also be
given a taxable market value.
The price that would tend to prevail under typical,
normal competitive open market conditions.
Market value
Minnesota Revenue, How the Assessor Estimates Your Market Value 2
assessor will use to value property for the 2010 assessment
for taxes payable in 2011.
This same lag time is also present in declining markets. For
example, if the assessor places a market value of $200,000
on a property for the 2009 assessment (again using sales that
occurred between October 2007 and September 2008), but
the property sells for $175,000 in August 2009, does it mean
the January 2, 2009 assessed value is incorrect? Not
necessarily. It could signal a downturn in the housing
market just began to occur between September 200 8 and
August 2009. The assessor will use the August 2009 sale as
well as others occurring in the market to estimate 2010
market values.
The assessor does not raise property tax revenues by
increasing values. Total property tax revenues are a function
of county, school district, and city/town spending as well as
state-paid local government aid and other factors. The value
and classification of the property are merely a way to divide
the total property tax levy among all taxpayers. The total
amount of the levy will be collected whether values increase
or decrease from one year to the next. An individual’s share
of the overall tax burden may change from year to year,
however.
What are sales ratio studies?
Sales ratios show the relationship between the assessor’s
estimated market value on a property and the actual sale
price of a property.
Each year the assessor performs sales ratio studies on
properties that have sold in their jurisdiction. These sales are
stratified many different ways including by location and
property type (residential, agricultural, commercial, etc.).
The sales can also be stratified further such as by home style,
subdivision, age of structure, location on or off water
frontage, price range, etc.
A single sale may not represent the true market activity.
Rather, sales of all properties are reviewed to determine
market trends. However, even if there are no sales occurring
within the sales ratio study period, assessors are still
expected to use their professional judgment and knowledge
of the local market to annually value properties in their
jurisdiction.
Whenever any real estate is sold for a consideration in excess
of $1,000, a Certificate of Real Estate Value (CRV) is filed.
These CRVs are the foundation of all sales ratio studies
because they contain important information about each
transaction. Assessors then verify the information contained
on the CRV in order to determine whether or not the sale
represents an open-market arm’s length transaction. If the
sale does not represent an open-market, arm’s length
transaction, it may not be used in the sales ratio study.
Simply having an extremely high or low sales ratio is not a
valid reason to remove a sale from the sales ratio study.
Rather, the extreme ratio indicates a need for additional
investigation by the assessor.
Again, sales ratio study periods are generally October 1 of a
given year to September 30 of the following year. For
example, for the 2010 assessment, assessors use sales that
took place between October 1, 2008 and September 30,
2009. This is the reason that assessors’ market values may
lag a bit behind current market activity.
Assessors will use the median sales ratio as the statistical
measure of the overall level of assessment. The median ratio
is the middle ratio of all the ratios when they are arranged in
order from highest to lowest (or vice versa). The median is
used because it is not affected by extreme ratios. Department
of Revenue guidelines indicate that the median ratio of a
sales ratio study should be between 90 and 105 percent.
Is it possible for the values of some
properties to decrease while others
increase?
Yes. Each segment of the market is different. Sales prices of
certain types of properties can vary widely. Currently, sales
of both farmland and recreational properties are strong and
show appreciation. However, the sales of residential
properties are stable or declining in some areas .
Sometimes it can be difficult to estimate the rate at which a
market is increasing or declining. Ideally, a property would
sell twice within a certain period of time, such as one year,
but all other characteristics of the property would remain the
same. That way an appraiser or assessor would be able to
isolate a time adjustment to indicate whether the market is
increasing or decreasing or simply remaining stable.
Do all areas increase or decline at the same
rate?
No. Some areas or neighborhoods are declining at a much
faster rate than others that are showing stable values or
values that are slightly increas ing.
Conclusion
In conclusion, it is essential that taxpayers understand that
there may be a legitimate reason for the assessor’s annual
market value to be different from current market conditions
due to the lag time between sales study periods and sales
taking place today.
For additional information, please refer to Fact Sheet 12a
Understanding Property Taxes and Fact Sheet 12c
Understanding Your Assessment and the Appeals Process.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 49
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 49
The appeals and equalization course details the
responsibilities, procedures and requirements of the
Local 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 local 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 local boards; and
Explanations of alternate methods of appeal.
Compliance requirements
All cities and towns must certify to the county assessor
by December 1of each year that:
At least one voting member at each local board
meeting has attended the appeals and equalization
course within the last four years; and
A quorum was present at each local board meeting
in the prior year.
Failure to comply
Any city or town that fails to meet the compliance
requirements by December 1of each year is deemed to
transfer its powers to the County Board of Appeal and
Equalization for the following assessment year.
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 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 local board whose powers are transferred to the county
for failing to meet these requirements may be reinstated
by resolution of the governing body of the city or town
and upon proof that one of the members of its Local
Board of Appeal and Equalization has attended the
appeals and equalization course. The resolution and proof
must be provided to the county assessor by December 1
to be effective for the following assessment year.
Note: The citation for the appeals and equalization
course and meeting requirements for local boards is
Minnesota Statutes, Section 274.014.
Role of the local board in the assessment process 1
The Local 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 local board.
Any decisions made by the local 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.
4 Role of the local board in the assessment process
Property Tax Division - Mail Station 3340 St. Paul, MN 55146-3340
Revised 07/09
This fact sheet is intended to help you become more familiar with Minnesota
tax laws and your rights and responsibilities under the laws. Nothing in this fact
sheet supersedes, alters, or otherwise changes any provisions of the tax law,
administrative rules, court decisions, or other revenue notices.
Alternative formats available upon request.
Minnesota Revenue, Understanding Your Assessment and the A ppeals Process 1
Understanding Your Assessment and the
Appeals Process
Property Tax Fact Sheet 12c Fact Sheet
12c
www.taxes.state.mn.us
The role of the assessor
The assessor has an important role in the property tax
process in that it is very important to make sure all property
is valued at its market value and classified according to its
use so the property tax levy is divided correctly among all
taxable properties. The assessor does not determine your
property taxes. Likewise, assessors do not raise revenue by
increasing market values. This fact sheet discusses
estimated market value and classification. The assessor
determi nes these factors each year, and they are shown
annually on your Notice of Valuation and Classification.
This fact sheet also explains what you can do if you and the
assessor disagree about the value or classification of your
property.
How is my property value estimated?
Using a mass appraisal system and historical sales data, the
asses sor’s job is to estimate the market value of all
properties on the assessment date of January 2 each year.
The assessor will consider the location of your property, the
amount of land you own, any improvements to the land,
physical characteristics of the improvements (including
square footage, decks, porches, etc.), and the quality of
construction. The assessor will then compare your property
to similar properties in your area that have recently sold in
order to estimate what your property would sell for in an
open-market arm’s length transaction. This value is called
the estimated market value.
Classification and class rates
All property is classified by the assessor according to
its use. Each class of property (home, apartment, cabin,
farm, commercial) has its own classification rate. This class
rate is determined by the state legislature. Like market
value, the class rate of your property plays a role in how
much property tax you pay.
Notice of valuation and classification
Each spring, the assessor will mail you a Notice of
Valuation and Classification informing you of the market
value and classification of your property. If you believe the
classification or the estimated market value of your property
is incorrect, you have several appeal options.
What if I disagree with how my property
was assessed?
If you have a disagreement over valuation or classification
of your property, the first step is to contact your assessor.
Most issues can be resolved at this level.
Verify information about your property, such as its
dimensions, age, and condition of its structures.
Review records to determine the market values of
similar properties in your neighborhood.
Review sales data to find out what similar
properties in your area are selling for.
Ask the assessor to explain the criteria used for
classifying your property. You may also review the
classifications of other properties used in the same
manner as yours.
If your property has not be inspected recently, both interior
and exterior, ask the assessor to come out to review your
property. If your concern is not resolved after conferring
with the assessor, you may attend the annual Local Board of
Appeal and Equalization or Open Book meeting identified
on your valuation notice.
Appealing your assessment
There are formal methods of appeal available. Keep in mind
that,by law, the Local Board of Appeal and Equalization
cannot make a change favoring a taxpayer if the assessor is
not allowed to inspect the property.
You have the right to appeal your market value estimate
and/or property classification if you feel your property is:
Classified improperly.
Valued at an amount higher or lower than you
could sell your property for.
Valued at a level different from similar property in
your area.
This fact sheet is the third in a series of three fact sheets that were designed to assist taxpayers in the understanding of the basic concepts of
their annual assessment and property tax administration. Please see Fact Sheet s 12a and 12c for additional information.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 50
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 50
3Introduction
Introduction
Purpose of the local board
The goal of the Local Board of Appeal and Equalization
should be to attempt to address property owners’ issues
efficiently, fairly and objectively.
The purpose of the Local 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. 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 local board must meet statutory
guidelines.
One of the most important duties placed by law upon the
governing body of a township or city is to serve as the
Local Board of Appeal and Equalization. Effective
actions taken by the local board may potentially make a
direct contribution to attaining assessment equality.
Training for Local Boards of Appeal and Equalization
Legislation enacted in the 2003 session requires that
there be at least one member at each meeting of a Local
Board of Appeal and Equalization (beginning with the
2006 local boards) who has attended an appeals and
equalization course developed or approved by the
Commissioner of Revenue within the last four years.
Many long-standing local board members are in their
second four-year certification cycle. They may have
also attended 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 2003 legislation was enacted 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 local boards. This training
will provide information and education for local board
members that will make the process more efficient and
result in a better overall experience for both property
owners and local board members.
Does “training” sound familiar?
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 local board to help ensure that
property owners receive a fair and impartial review
of their valuation and classification.
Minnesota Revenue, Understanding Your Assessment and the A ppeals Process 2
Remember, your assessor is not responsible for the dollar
amount of taxes that you pay. Tax rates are determined by
your local taxing authorities (the city, the county, school,
districts, etc.). If you think your taxes are too high, you
should make your opinion known to your taxing authorities
during the budget meetings in November and December.
Local Board of Appeal and Equalization
If you choose to appeal to your boards of appeal and
equalization, first must first meet with your Local (city or
town) Board of Appeal and Equalization. These are often
the same people as your city council or town board. The
board meets on a specified day in April or May. The exact
date is listed on your Notice of Valuation and Classification.
We strongly recommend that you contact your city or town
clerk to schedule your appearance. Some jurisdictions hold
an open book meeting instead of a Local Board of Appeal
and Equalization. Please check your Notice of Valuation
and Classification for date, time, and place.
You may make your appeal in person, by letter, or have
someone else appear for you. The assessor will be present
to answer questions. You must present your case to the city
or town board before going to the County Board
of Appeal and Equalization.
Cities and towns have the option of transferring their board
powers to the County Board of Appeal and Equalization. If
your municipality has elected to do this, your Notice of
Valuation and Classification will direct you where to begin
your appeal.
County Board of Appeal and Equalization
If you are not satisfied after your Local Board of Appeal
and Equalization or open book meeting, or if your city or
town has transferred its powers to the county, you may
appeal to the County Board of Appeal and Equalization.
This board meets in June. The exact date is listed on
your Notice of Valuation and Classification. The members
are usually the county board of commissioners or their
appointees. We strongly recommend that you contact your
county auditor or assessor to schedule your appearance
before the board. Many counties request that taxpayers
make appointments to appear.
You may make your appeal in person, by letter, or have
someone else appear for you. The assessor will be present to
answer questions. If you are not satisfied with the decision
of the County Board of Appeal and Equalization, you may
appeal to the Minnesota Tax Court.
Minnesota Tax Court
You have until April 30 of the year the tax becomes payable
to appeal your assessment to the Minnesota Tax Court. In
other words, you must appeal your 2009 valuation and
classification on or before April 30, 2010.
The Tax Court has two divisions: The Small Claims
Division and the Regular Division.
The Small Claims Division only hears appeals involving
one of the following situations:
The assessor’s estimated market value of your
property is less than $300,000.
Your entire parcel is classified as a residential
homestead (1a or 1b) and the parcel contains no
more than one dwelling unit.
Your entire property is classified as an agricultural
homestead.
You’re appealing the denial of a current year
application for homestead classification of your
property.
The proceedings of the Small Claims Division are
less formal and many people represent themselves.
Decisions made by the small claims division are final and
cannot be appealed further.
The Regula r Division will hear all appeals –including those
within the jurisdiction of the small claims division.
Decisions made here can be appealed to a higher court.
Most people who appeal to the regular division hire an
attorney because the hearing is conducted according to the
Minnesota Rules of Civil Procedure.
You may obtain complete information on Tax Court
appeals by writing or calling the court administrator in your
county or by contacting:
Minnesota Tax Court
Minnesota Judicial Center
Suite 245
25 Reverend Dr. Martin Luther King, Jr. Boulevard
St. Paul, MN 55115
(651) 296-2806
www.taxcourt.state.mn.us
Conclusion
In conclusion, it is essential that taxpayers understand that
assessors use historical sales data to estimate a property’s
market value. This estimate may be appealed informally by
speaking with the assessor or formally by appearing at the
Local or County Boards of Appeal and Equalization.
For additional information, please refer to Fact Sheet 12a
Understanding Property Taxes and Fact Sheet 12b How the
Assessor Estimates Your Market Value
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 51
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 51
Review process, not value-reduction process...................................................................................................................................19
Recess or adjourn................................................................................................................................................................................19
Decisions.............................................................................................................................................................................................19
Appeals must be substantiated by facts.............................................................................................................................................20
Best practices recommendations......................................................................................................................................21
Have appellants call for appointments...............................................................................................................................................21
Time limits for presenting appeals.....................................................................................................................................................21
Hear all appeals first............................................................................................................................................................................21
Conducting other business at the local board meeting.....................................................................................................................22
Notifying property owners of decisions............................................................................................................................................22
Quorum requirements for local boards............................................................................................22
Quorum must be present...................................................................................................................................................22
What constitutes a quorum?...............................................................................................................................................................22
Assessor’s role when a quorum is not present..................................................................................................................................23
Arrive on time for the meeting...........................................................................................................................................................23
Explanations of alternate methods of appeal..................................................................................23
Open book meetings ...........................................................................................................................................................23
Benefits for the local board ................................................................................................................................................................25
Benefits for the county........................................................................................................................................................................25
Option 1: Transferring assessment and local board duties to the county........................................................................................25
Option 2: Transferring local board duties to the county...................................................................................................................25
Special Boards of Appeal and Equalization......................................................................................................................................26
Tax Court.............................................................................................................................................................................................26
Appendix...............................................................................................................................................27
Glossary................................................................................................................................................................................27
Duties of local and county boards.....................................................................................................................................30
Frequently asked questions by property owners ...........................................................................................................34
Handouts for property owners .........................................................................................................................................34
Note: This handbook is designed to provide information to city and town boards or special boards serving as the Local
Board 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 local board has questions
about the division of assessor duties in the jurisdiction, please contact the county assessor for clarification.
2 Table of Contents
Other alternate methods of appeal...................................................................................................................................26
How value changes affect taxes.........................................................................................................................................31
Frequently asked questions by local board members...................................................................................................33
Benefits for the property owner.........................................................................................................................................................24
Recommended format to notify appellants of local board decisions..........................................................................32
Notes
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 52
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 52
Table of Contents
Introduction............................................................................................................................................3
Purpose of the local board...................................................................................................................................................3
Training for Local Boards of Appeal and Equalization.................................................................................................3
The impetus for the legislation.............................................................................................................................................................3
Compliance requirements.....................................................................................................................................................................4
Failure to comply..................................................................................................................................................................................4
Role of the local board in the assessment process.........................................................................4
Market value..........................................................................................................................................................................5
Estimated market value........................................................................................................................................................................5
Taxable market value............................................................................................................................................................................6
Classification..........................................................................................................................................................................6
Split-class property................................................................................................................................................................................7
Overview of the assessment process...................................................................................................................................7
Assessor estimates value......................................................................................................................................................................8
Three approaches to value....................................................................................................................................................................8
Assessor determines classification.......................................................................................................................................................9
Assessor reviews sales ratio.................................................................................................................................................................9
The sales ratio study............................................................................................................................................................................10
Assessor notifies taxpayer..................................................................................................................................................................10
Assessor meets with State Board of Equalization.............................................................................................................................10
Local board meeting...........................................................................................................................................................11
Who must attend the meeting.............................................................................................................................................................11
Meeting dates and times for the local board......................................................................................................................................11
Documenting local board actions.......................................................................................................................................................12
Required forms for documenting board actions ...............................................................................................................................12
Duties of the local board.....................................................................................................................................................13
Changes within 10 days of local board meeting...............................................................................................................................13
What the board can do........................................................................................................................................................................13
What the board can’t do......................................................................................................................................................................14
Recommendations for local board members..................................................................................................................15
Become familiar with sales information prior to local board meeting............................................................................................15
Duties of the clerk................................................................................................................................................................15
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 local board meetings.........................................................................................16
Local board meeting procedures that foster fair and impartial assessment reviews and
other best practices recommendations........................................................................................17
Meeting procedures............................................................................................................................................................17
The board should run the meeting.....................................................................................................................................................17
Establish ground rules for the meeting..............................................................................................................................................17
All proceedings must be public..........................................................................................................................................................18
Make appellants feel comfortable......................................................................................................................................................18
Dealing with angry or difficult property owners...............................................................................................................................18
Hearing appeals...................................................................................................................................................................................18
1Table of Contents
Notes
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 53
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 53
This handbook was created to satisfy the requirement under
Minnesota Statutes, Section 274.014, subdivision 1.
July 2009.
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 54
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 54
Local Board
of Appeal and
Equalization Handbook
2009 Update
Meeting of April 9, 2012 Subject: 2012 Local Board of Appeal and Equalization
Page 55
Meeting of April 9, 2012
Subject: 2012 Local Board of Appeal and Equalization Page 55
Meeting Date: April 9, 2012
Agenda Item #: 1
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Future Study Session Agenda Planning – April 16 and April 23, 2012.
RECOMMENDED ACTION:
The City Council and the City Manager to set the agenda for a Special Study Session scheduled
for April 16 and for the regularly scheduled Study Session on April 23, 2012.
POLICY CONSIDERATION:
Does the Council agree with the agendas as proposed?
BACKGROUND:
At each study session approximately five minutes are set aside to discuss the next study session
agenda. For this purpose, attached please find the tentative agenda and proposed discussion
items for a Special Study Session scheduled for April 16 and for the regularly scheduled Study
Session on April 23, 2012.
FINANCIAL OR BUDGET CONSIDERATION:
None.
VISION CONSIDERATION:
None.
Attachment: Future Study Session Agenda Planning – April 16 and April 23, 2012
Prepared by: Kay Midura, Office Assistant
Reviewed by: Nancy Stroth, City Clerk
Approved by:
Study Session Meeting of April 9, 2012 (Item No. 1) Page 2
Subject: Future Study Session Agenda Planning – April 16 and April 23, 2012
Special Study Session, April 16, 2012 – 6:30 p.m.
Tentative Discussion Item
1. Sidewalks & Trails – Public Works (45 minutes)
Council will be asked to review and provide direction on proposed sidewalk, trail, and
bikeway segments and proposed sidewalk classifications.
Study Session, 23, 2012 – 6:30 p.m.
Tentative Discussion Items
1. Future Study Session Agenda Planning – Administrative Services (5 minutes)
2. Elections – Ranked Choice Voting – Administrative Services (30 minutes)
Staff will provide council with basic information regarding Ranked Choice Voting and
Ramsey County Elections Manager Joe Mansky will be present to provide an update on the
recent 2011 Ranked Voting Election held in St. Paul and answer questions along with City
Attorney Roger Knutson.
3. Gambling Premises Permit Application from Hopkins Raspberry Festival – Administrative
Services (30 minutes)
Staff will provide council with information and options for discussion regarding
consideration of a premises permit application received from Hopkins Raspberry Festival
Association to conduct gambling in the form of pull tabs at Toby Keith’s I Love This Bar &
Grill, 1623 Park Place Blvd. City Attorney Roger Knutson will also be in attendance.
4. City Council Electronic Communications – Administrative Services (30 minutes)
City Attorney Roger Knutson will review regulations in the areas of open meeting law and
data practices, along with how to handle general communication, sharing information and
electronic communication.
5. Boards & Commissions Rules & Procedures – Administrative Services (30 minutes)
Based on feedback from council, staff will provide information for council consideration and
discussion of proposed amended language to the current Boards & Commissions Rules &
Procedures regarding membership requirements.
6. Sidewalks & Trails – Public Works (30 minutes)
Council will be asked to review and comment on project priorities in the proposed CIP and
related policy issues.
7. Project Update – Hwy 100 Reconstruction Project – Public Works (30 minutes)
Staff will provide an update on this Mn/DOT project and discuss the “final” draft geometric layout.
8. 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
9. Environmental Input Outline – Administrative Services
10. March 2012 Financial Report
11. Quarterly Investment Report
End of Meeting: 9:40 p.m.
Meeting Date: April 9, 2012
Agenda Item #: 2
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Human Rights Commission Annual Report and Work Plan
RECOMMENDED ACTION:
The purpose of this report is to provide the City Council with the 2012 Work Plan and the 2011
Annual Report prepared by the Human Rights Commission (HRC) in preparation for meeting
with the HRC at the study session.
POLICY CONSIDERATION:
Are the actions of the HRC in alignment with the expectations of City Council?
BACKGROUND:
The City Council reviewed the HRC 2011 Annual Report and 2012 Work Plan at the February
13, 2012 study session. It was the consensus of the City Council to meet with the Human Rights
Commission to discuss the annual report and work plan.
FINANCIAL OR BUDGET CONSIDERATION:
Not applicable.
VISION CONSIDERATION:
Not applicable.
Attachments: Human Rights Commission 2011 Annual Report
Human Rights Commission 2012 Work Plan
Prepared by: Marney Olson, Community Liaison
Reviewed by: John Luse, Chief of Police
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 2) Page 2
Subject: Human Rights Commission Annual Report and Work Plan
Human Rights Commission 2011 Annual Report
The Human Rights Commission Mission: The purpose of the Human Rights Commission shall
be to advise the city council in its efforts to ensure all citizens protection of their human rights
and full and equal opportunity for participation in the affairs of this community. The
commission assists individuals and groups in cultivating a community that embraces principles
of equity and respect for all of its citizens.
Community Involvement: In partnership with the Police Advisory Commission (PAC), the
HRC staffed a booth at the Children First Ice Cream Social and the Community Open House.
Commissioners distributed HRC brochures, the Diversity Lens magnet and brochure, and other
human rights related materials. These materials were also available at the West End One World
Many Cultures event.
Police Advisory Commission: PAC Commission Rashmi Seneviratne attended the HRC
meetings as a liaison between the two commissions. Rashmi shared the domestic violence
awareness posters created by PAC. The HRC members reviewed the posters and gave feedback
to be shared with the PAC. HRC commissioners also helped PAC and the Police Department
with planning for police outreach classes with the ELL program.
Bias/Hate Crimes: The HRC reviews all Bias/Hate Crimes and responds to the victims with a
letter and HRC brochure when appropriate. The HRC was notified of the following Bias/Hate
Crimes in 2011.
Offense Date Police Case # Summary
1/3/11 11000049 Assault – Victim was involved in a hit and run accident and
was assaulted by impaired suspect who also used racial slurs.
2/12/11 11000815 Road Rage/Disorderly Conduct – racial slurs yelled at victim.
4/11/11 11001916 Vandalism/Possible Harassment
5/11
11003588 Damage to Property – Graffiti in Elliot Community Center
included a swastika resulted in the arrest of juveniles.
8/3/11 11004416 Bias Motivated Harassment
9/5/11 11005014 Assault Motivated by Bias – assault took place in a business
between two customers.
9/22/11 11005369 Damage to Property – a swastika was painted on the asphalt in
the back lot of property.
10/3/11 11005581 Unwanted Person/Harassment – juveniles in stairway
harassing tenant.
Bullying: The HRC began discussions on how to address the issue of bullying in St. Louis Park.
Commissioner Lordia Fok is a current MBA student and she worked with her MBA team to
create a campaign to reach out to the different constituencies who may play a role in helping to
promote anti-bullying. The creation of the campaign served as the final project for the MBA
team comprised of 5 additional MBA students from around the country.
Commissioner Fok presented her findings to the HRC in January, 2012. During 2011, the HRC
attended a Youth Development Committee (YDC) meeting to discuss bullying with youth grades
6-12 to seek their input. The HRC also began partnering with the District Parent Advisory
Council (DPAC) and will continue to partner with DPAC and PAC on bullying in 2012.
Study Session Meeting of April 9, 2012 (Item No. 2) Page 3
Subject: Human Rights Commission Annual Report and Work Plan
Human Rights Commission
2012 Work Plan
Mission: The purpose of the human rights commission shall be to advise the city council in its
efforts to ensure all citizens protection of their human rights and full and equal opportunity for
participation in the affairs of this community. The commission assists individuals and groups in
cultivating a community that embraces principles of equity and respect for all of its citizens.
Bullying - The HRC plans to focus attention on education and addressing the issue of bullying in
our community.
• Partner with other groups such as the District Parent Advisory Council (DPAC), Police
Advisory Commission (PAC), Community Education Advisory Commission (CEAC),
Youth Development Committee (YDC), etc.
• Anti-Bullying film community showing (The Bully Project or similar movie)
• Develop anti-bullying resources for community use
HRC Participation in Community Events:
• In 2012, the HRC plans to partner with and participate in many existing community
events including:
o Children First Ice Cream Social
o National Night Out
o Other events as appropriate
• Identify human rights and diversity events that are available to the residents of St. Louis
Park in the metro area. Rather than duplicating efforts that already exist, find ways to
notify our residents of these events such as through the use of an HRC webpage.
Vision St. Louis Park – The Diversity Lens
• Use the Diversity Lens as a tool at community events to talk to residents about the
Human Rights Commission and Diversity.
Connecting with our community and surrounding communities
• Partner with other boards and commissions as appropriate.
• Connect with local (metro & state) Human Rights Commissions
Ongoing Commission Work
• Respond to bias crimes as they occur in partnership with the Police Department
• Select annual Human Rights Award winner(s) for St. Louis Park
Meeting Date: April 9, 2012
Agenda Item #: 3
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Police Advisory Commission (PAC) 2011 Annual Report and 2012 Work Plan.
RECOMMENDED ACTION:
The purpose of this report is to provide the City Council with the 2011 Annual Report and 2012
Work Plan prepared by the Police Advisory Commission (PAC).
POLICY CONSIDERATION:
Are the actions of the PAC in alignment with the expectations of the City Council?
BACKGROUND:
The City Council reviewed the PAC 2011 Annual Report and the 2012 PAC Work Plan at the
February 13, 2012, study session. Subsequent to this review, Council requested the opportunity
to meet with the Police Advisory Commission to discuss the 2011 Annual Report and the 2012
Work Plan.
FINANCIAL OR BUDGET CONSIDERATION:
Not applicable.
VISION CONSIDERATION:
Not applicable.
Attachments: PAC 2011 Annual Report and 2012 Work Plan
Prepared by: John D. Luse, Chief of Police
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 3) Page 2
Subject: Police Advisory Commission (PAC) 2011 Annual Report and 2012 Work Plan
Police Advisory Commission
2011 Annual Report
The Police Advisory Commission mission: There are several main purposes of the PAC. They
include the following:
1) Enhance the awareness of the police department’s capabilities and services.
2) Provide an opportunity for citizen involvement in police services.
3) Promote exchange between the police department and the community.
In partnership with the Human Rights Commissioners, several PAC Commissioners staffed a
booth at the Children First Ice Cream Social and the Community Open House. Commissioners
made available informative pamphlets to the public about Traffic Safety (cut-through traffic,
speeding…) and Current Road Construction Projects; also available were child and bike safety
guides and information regarding the police department. Furthermore, this function allowed PAC
and HRC commissioners an opportunity to get to know one other and the activities of each
Commission.
In an effort to work more closely with the Human Rights Commission on police related issues,
Commissioner Rashmi Seneviratine attended the Human Rights Commission meetings.
Commissioner Seneviratine participated in Human Rights Commission activities and is
encouraging their Commissioners to participate in Police Advisory Commission activities. In
partnership these two Commissions worked with the Police Department and the Community
Education Department to present several classes for the students of the English as a Second
Language classes. The classes were designed to educate immigrants on police services and what
to expect during an interaction with the police.
Several Commissioners were involved with the Department’s National Night Out.
Commissioners rode with officers to block parties and also helped organize or host block parties
in their neighborhood.
Commissioner Widmer has been attending the city staff Traffic Advisory Meetings. The Traffic
Advisory group is comprised of members of the Public Works, Community Development, and
Police Departments. The group meets monthly to discuss traffic related issues within the
community. Commissioner Widmer actively provides citizen input on traffic related issues and
street projects.
PAC members have assisted in content development of several Public Service Announcement
videos to be aired on the Inside the Park Community Television and at other times throughout
the day on local cable access channel. These videos are designed to bring heightened awareness
to community members of police related matters. Unfortunately time constraints on the Civic TV
Coordinator have not allowed for the filming, editing, and production of these PSA’s.
Commissioners Cushman and Hoffman have worked closely with Cornerstone in creating a
Domestic Violence Education and Information program. With the assistance of city staff the
Commission produced domestic violence awareness posters which have been distributed to
public entities within the city. These posters were also shared with the HRC for review and
input. We believe this will enhance the relationship between the city and Cornerstone and
provide information on valuable resources available to the community.
Study Session Meeting of April 9, 2012 (Item No. 3) Page 3
Subject: Police Advisory Commission (PAC) 2011 Annual Report and 2012 Work Plan
The Fifth Annual St. Louis Park Crime Prevention Fund Golf Tournament was held on
September 9th, 2011. It was another successful year, earning $3,924.96 dollars for the Crime
Prevention Fund. The goal of the tournament is to bring the business community together with
the police department for a day of fun and recreation, and to raise funds for the Crime Prevention
Fund. We would not be able to do this without the support of our local businesses. PAC will
continue with this effort in 2012 and plan to publicize the event in early 2012. Your participation
and promotion is welcomed.
2012 Work Plan
The 2012 Work Plan for the PAC is as follows:
• Continue to support and attend the Children First Ice Cream Social, and National Night
Out with the goal of providing information to the public about the police department and
the commission.
• Work with the HRC on producing an anti-bullying program.
• Produce quarterly public safety information programs for the Inside the Park Community
TV or other media streams.
• Continue the Annual St. Louis Park Police Department Crime Prevention Crime Fund
Golf Tournament, with the goal of increasing participation.
• Complete the distribution of the Domestic Violence Awareness poster project.
• Explore additional opportunities to build trust with the community.
Meeting Date: April 9, 2012
Agenda Item #: 4
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE: Housing Authority Annual Report and Work Plan.
RECOMMENDED ACTION:
The purpose of this report is to provide the City Council with the HA’s 2012 Work Plan prior to
the Council’s study session meeting with the Housing Authority Board. The Annual Report was
presented to the Council at the February 13 study session.
POLICY CONSIDERATION:
Are the activities of the Housing Authority aligned with the City Councils expectations?
BACKGROUND:
The City Council reviewed the Housing Authority’s (HA) Annual report at its February 13
Study Session. The Housing Authority Board will meet with the City Council at the April 9,
2012 Study Session to discuss past and future activities.
Attached is a copy of the 2012 proposed Work Plan and a copy of the February 13 Study Session
report which will assist the Council in preparing for the discussion with the HA Board.
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
The HA’s Work Plan has incorporated activities and initiatives that are reflective of the Housing
Authority’s Mission Statement and City’s Housing Goals and that will support the strategic
direction and vision of the City of St. Louis Park.
Attachments: 2012 HA Work Plan
February 13, 2012 Study Session Report
Prepared by: Michele Schnitker, Housing Supervisor
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 4) Page 2
Subject: Housing Authority Annual Report and Work Plan
St. Louis Park Housing Authority
2012 Work Plan
Housing Authority Mission: The Housing Authority develops, integrates, and operates housing
and housing assistance policies and programs to ensure the availability of safe, affordable and
desirable housing options that meet the diverse, lifecycle housing needs of all of the residents of
St. Louis Park.
Housing Authority Vision:
The Community:
1. Desirable housing choices exist for families and individuals of all incomes.
2. There is a balance of housing choices for households at all phases of the life cycle.
3. St. Louis Park is a unique, safe, pedestrian- and transit-oriented community. Housing
policies and planning embrace livable communities principles to ensure this vision.
Goal:
a. Apply for additional “Fair Share” Section 8 units, Shelter Plus Care or other
assisted housing resources based on community need, community goals and staff
capacity to administer additional units when available. Support for profit
developers and nonprofit service and housing agencies efforts to secure additional
affordable housing units.
Agency Administration and Programs:
1. The public housing stock is well-maintained and a positive community asset.
2. The Housing Authority is financially solvent and strives for greater financial capacity.
3. The administration of Housing Authority programs is efficient, effective and productive.
4. The Housing Authority has a good professional image as a developer, property manager
and policy maker in St. Louis Park.
Goals:
a. Continue to administer the federally assisted rental assistance programs
maximizing both budgetary and occupancy utilization under HUD’s Annual
Contribution Contract.
b. Develop budgets for agency programs that reflect prudent fiscal operation and are
responsive to HUD’s federal funding policies. Review financial principles and
policies related to HA reserve funds as appropriate. Maintain adequate
accounting systems and internal control procedures to comply with HUD’s asset
management and audit requirements; review and improve accounting processes
and procedures as appropriate. Explore the option of fee accounting versus the
current contractual arrangement for finance services provided by the City.
c. Continue to assess maintenance operation and activities ensuring the most
effective and efficient use of staff and resources to ensure that the HA maintains a
Study Session Meeting of April 9, 2012 (Item No. 4) Page 3
Subject: Housing Authority Annual Report and Work Plan
Public Housing Assessment System (PHAS) property inspection indicator score at
a level that ensures we meet the highest PHAS property inspection standards.
d. Assess capital improvement needs and implement improvements as noted in the
PH Capital Improvement Fund plan to ensure properties are safe and an asset to
the community and the neighborhoods where they are located. Utilize formula
allocated Capital Improvement grant funds within HUD’s designated guidelines
and apply for MN Housing State allocated rehab funds for PH units when
available. Continue to revise 5 year Plan to assist in planning for future Capital
improvement needs. Combine with goal above
e. Seek opportunities to improve the environmental design and energy efficiencies
of our PH properties. Utilize energy saving and environmentally friendly
equipment, appliances and building techniques.
The Agency as Partner
1. The Housing Authority seeks opportunities to work in partnership with for profit and
nonprofit organizations to address housing and related social service needs in St. Louis
Park.
2. The Housing Authority has a strong relationship with the City Council, City staff and the
citizens of St. Louis Park.
Goals:
a. Collaborate with Louisiana Court to administer the 12 Metropolitan Housing
Opportunity Units (MHOP) units and seek opportunities to work in partnership
with for profit and nonprofit organizations to address housing and related social
service needs in St. Louis Park.
b. Administer the Shelter Plus Care program in collaboration with community
partners, Perspectives, Community Involvement Program and Pillsbury Untied
Community. Collaborate with CIP and Perspectives to continue maximizing use
of S+C grant funds through an agreement to subsidize units at Wayside
supportive housing program. Submit application for additional S+C allocation of
10 units for Wayside House, Inc.
c. Continue to collaborate with Excelsior & Grand, Wayside House Inc. and Vail
Place to administer 40 units of project-based Housing Choice Vouchers providing
affordable units in a project that would otherwise not be affordable to Voucher
participants and subsidizing rents in two supportive housing projects.
Our Residents
1. Current and past residents of subsidized housing have improved their economic status
and are less dependent on public assistance.
2. Residents unable to achieve economic independence because of age, disability or
circumstance have improved their quality of life and are contributing members of the
community.
Study Session Meeting of April 9, 2012 (Item No. 4) Page 4
Subject: Housing Authority Annual Report and Work Plan
Goals:
a. Continue to apply for HUD grant opportunities to ensure continuation of Training
& Resources to Attain Long term Success (TRAILS) Family Self Sufficiency
Program to assist residents in improving their economic status and reduce their
dependency on public assistance.
b. Continue to apply for HUD grant opportunities to ensure continuation of
providing a service coordinator position at Hamilton House to assist elderly and
disabled residents address social service needs and improve their quality of life.
c. Seek opportunities to collaborate with community agencies and partners to
provide/inform residents of services and opportunities to meet social and
economic needs.
Study Session Meeting of April 9, 2012 (Item No. 4) Page 5
Subject: Housing Authority Annual Report and Work Plan
Meeting Date: February 13, 2012
Agenda Item #: 9
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
2011 Housing Authority Annual Report.
RECOMMENDED ACTION:
To provide the Council with the Housing Authority’s (HA) 2011 Annual Report. No action necessary.
POLICY CONSIDERATION:
Does the work of the Housing Authority continue to meet the expectations of the City Council?
Does the City Council desire to meet with representatives of the HA Board?
BACKGROUND:
The Housing and Redevelopment Authority (HRA) was created in 1970. In 1988 the Council
created the Economic Development Authority (EDA) to exercise economic and redevelopment
powers and reorganized the HRA to an HA allowing it to exercise powers related to low and
moderate income housing programs and projects. The HA is a separate legal entity governed by
the HA Board of Commissioners exercising all the powers granted under Minnesota Statutes
469.001 to 469.047 and the Department of Housing and Urban Development (HUD) for the
purposes of managing, planning and implementing the City’s low and moderate income housing
programs. The five Commissioners are appointed by the Mayor and approved by the City
Council. The Commissioners are responsible for overseeing the administration of the low
income housing programs managed by the HA including setting policy, approving budgets,
entering into contracts and ratifying expenses. The HA has a separate financial audit from the
City and the HA currently contracts with the City for the provision of financial services.
The HA’s primary mission is to administer programs that ensure the availability of safe and
desirable affordable housing options in the St. Louis Park community. These programs include:
• Public Housing (PH),
• Section 8 Housing Choice Voucher Program (Voucher),
• Shelter Plus Care Rental Assistance Program (S+C),
• Training and Resources to Attain Individual Long-Term Success (TRAILS) Family Self-
Sufficiency (FSS) Program, and
• Hamilton House Elderly and Disabled Service Coordinator grant.
Funding for these programs is received from HUD. The Authority currently serves
approximately 525 eligible, low-income households through the rental assistance housing
programs.
The HA also oversees the administration of a number of City housing programs including the
Discount Loan Program, Move-up in the Park programs, Green Remodeling Program and
Louisiana Court Max 200 Program. The City Council delegated the administration of these
Study Session Meeting of April 9, 2012 (Item No. 4) Page 6
Subject: Housing Authority Annual Report and Work Plan
programs to the HA by resolution. The HA also provides input to the Council on the use of
CDBG funds.
HA Board members include:
• Catherine Courtney, Chairperson
• Justine Kaufman, Vice-chair
• Renee DuFour, Secretary
• Trinicia Hill
• Susan Metzger
Community Development Department staff serve as the staff for the HA. Staff members include:
• Kevin Locke, Executive Director
• Michele Schnitker, Housing Supervisor
• Teresa Schlegel, Housing Manager
• Cindy Stromberg, Section 8 Manager
• Tanya Warren, Public Housing Specialist
• Kathy Larsen, Housing Programs Coordinator (coordinates administration of City housing
programs)
• Abe Shariff, Maintenance Coordinator
• Joe Wellentin, Maintenance Technician
HA Housing/Service Programs
Public Housing
PH is a rental assistance program in which the HA owns and manages the property. Rent is
income based with each household paying approximately 30% of their income for rent. The HA
owns and manages 147 PH units; a low-rise apartment building (108 one-bedroom units and 2
two-bedroom caretaker units) built in 1975, and 37 scattered site single-family units (3 to 5
bedrooms). Although the low-rise building is designated for general occupancy, priority is given
to elderly and disabled applicants. The single-family scattered units house larger families with
children. The HA also holds the HUD Annual Contributions Contract (ACC) and maintains the
waiting list for 12 two-bedroom PH apartment units located at Louisiana Court. These units are
owned and managed by Project for Pride in Living. Eligibility is limited to households at or
below 80% of the area median income.
PH units and occupancy rates are noted in the table.
Public Housing Total
Units 1-BR 2-BR 3-BR 4-BR 5-BR
Occupancy
December 31,
2011
Hamilton House 108 108 99%
Scattered Site Single Family 37 0 0 17 17 3 99%
Louisiana Court, Metropolitan
Housing Opportunity (MHOP) Units 12 12 100%
Total (bedroom size) 108 12 17 17 3
Total 157
HUD provides annual operating subsidy and capital funding for the PH program. These funds
are combined with rent revenues to finance the operational expenses of the program and
maintenance and rehab of the properties. The annual budget for the PH is approximately
$1,020,000.
Study Session Meeting of April 9, 2012 (Item No. 4) Page 7
Subject: Housing Authority Annual Report and Work Plan
Section 8 Housing Choice Voucher Program
The Voucher rental assistance program provides income based rental assistance to participants in
privately owned market rate rental units. Participants pay approximately 30% of their income
for rent and the HA pays a rent subsidy directly to the owner of the rental property. HUD has
allocated the HA the authority to administer up to 268 Vouchers. The HA administers both
tenant-based and project-based Vouchers. Forty Vouchers of the HA’s allocation are designated
for “project based” use in three privately owned developments; Excelsior & Grand, Vail Place
and Wayside. In addition, the HA administers 50 to 80 Vouchers at any one time from other
jurisdictions for participants that have moved to St. Louis Park. Eligibility for the program is
limited to households at or below 50% of median area income adjusted for family size.
HUD provides Housing Assistance Payments (HAP) funding to support rent assistance payments
and Administrative Funds to finance administrative costs. The program has an annual budget of
approximately $2,200,000.
Shelter Plus Care
The Shelter Plus Care (S + C) Program is designed to link rental assistance with supportive
services for hard-to-reach homeless persons with disabilities. The program serves primarily
those who are seriously mentally ill or have chronic problems with alcohol, drugs or both and
their families. Grants are provided by HUD to be used for permanent housing which must be
matched with supportive services that are appropriate to the needs of population to be served. St.
Louis Park is the grant recipient for the program and we partner with three sponsor organizations
that administer supportive housing programs; Perspectives, Community Involvement Program
(CIP) and Pillsbury United Communities. Perspectives and CIP have also formed a partnership
with Wayside that enables Wayside to utilize a portion of their unexpended S + C funding to
support five units of S + C in Wayside’s supportive housing development. The HA is currently
collaborating with Wayside on a S + C application submission for an allocation five units of S +
C rental assistance in the next funding cycle. The HA is currently administering 43 units of S +
C. Eligibility is limited to households at or below 50% of median area income. The annual
budget for the S + C program is approximately $330,000.
Section 8 Housing Choice Vouchers and Shelter
Plus Care Units Utilization YTD
December 31, 2011
Tenant-Based (68 are Port-Outs) 219 100%
Tenant-Based Port - Ins 68 Avg./month
Project-Based: (40)
Wayside House 15 100%
Excelsior & Grand 18 83%
Vail Place 7 100%
Shelter Plus Care Rental Assistance:
Perspectives Inc. 11 97%
Community Involvement Program (CIP) Scatts 11 94%
CIP- Clear Spring Road 8 100%
Project for Pride In Living (PPL) 8 100%
Wayside 5
Total 370
Study Session Meeting of April 9, 2012 (Item No. 4) Page 8
Subject: Housing Authority Annual Report and Work Plan
Training and Resources to Attain Individual Long-Term Success (TRAILS) Family Self-
Sufficiency Program (FSS)
HUD designed the FSS Program in conjunction with the Voucher and PH programs to enable
families to improve their educational and employment status to achieve greater economic
independence and self-sufficiency. Each family that commits to participate in TRAILS explores
their individual job or educational goals with the help of the Program Coordinator Case
Manager. As the family’s rent increases due to increased earned income, the HA establishes an
escrow account on the participants behalf and credits it with a portion of the monies from their
increased rent payment. Upon successful completion of the TRAILS program, the participant
receives the escrow account balance.
The program is voluntary and open to all current Section 8 participants and PH residents. The
program has an annual budget of approximately $38,600 for the service coordinator position.
Participant escrow contributions averaging $35,000 annually are funded with HAP and PH rent
revenue.
Hamilton House Service Coordinator
The HA received a three year HUD ROSS PH Elderly and Persons with Disabilities grant to fund
a service coordinator position to coordinate services and other activities designed to help the
residents at Hamilton House remain living independently. Services include assessment and
referral, on-going case management, wellness education programs and education regarding
personal safety and housekeeping. The service coordinator position is provided through a
contract with Vail Place. The program has an annual budget of $79,000.
Program Waiting Lists
The number of people that qualify for HUD PH rental assistance and Voucher programs far
exceed the number of PH and Vouchers available. Selection criteria and procedures are
established in accordance with HUD regulations to distribute rental assistance to the most
deserving applicants in as fair a process as possible. Waiting lists are kept for the HA’s PH and
Voucher rental assistance programs. The number of people on the lists is significant and the HA
receives requests for rental assistance every day. Due to the excessive length of the lists, the lists
are only opened to accept new applications when the number of applications on a specific list
nears depletion. When lists are opened, we typically limit the opening to 2 to 3 days and then
close the list again. We have even implemented a lottery system to limit the number of
applications taken since it is unmanageable for staff to administer waiting lists containing
thousands of applications and the wait for applicants, even if they were to be placed on the list, is
unrealistic.
During a typical two day opening, the HA receives thousands of requests for applications. The
Voucher waiting list was last opened in 2005 at which time the HA received over 3000 requests
for applications. Of the original 3000 requests, over 450 applicants have kept their application
status current and are still waiting for housing seven years later. In 2011, the HA opened the
waiting list for Hamilton House for 2 days and received over 1000 applications.
Waiting lists for the project based voucher programs are managed separately. Wayside and Vail
Place coordinate list management for their programs with the HA since their residents must meet
specific criteria to be eligible for their supportive housing. The HA manages the waiting list for
Excelsior and Grand.
In 2011, the Public Housing Program experienced 37 turnovers, 27 at Hamilton House and 10 in
the Scattered Site units. Typically, the annual turnover for PH is closer to 15 to 20 units but in
Study Session Meeting of April 9, 2012 (Item No. 4) Page 9
Subject: Housing Authority Annual Report and Work Plan
2011, Hamilton House experienced an unusually high number of turnovers due to lease
violations, deaths and nursing home placements.
In the Voucher Program, 14 participants left the program in 2011. Typically, the number of new
tenant based vouchers issued by the HA is limited to the number of program participants that
leave the program. In 2011, the HA received an unexpected one-time funding award mid-year
enabling the issuance of additional vouchers. Due to this additional funding, the HA was able to
issue 36 vouchers in 2011.
Housing Waiting Lists - December 31, 2011
1-BR 1-BR
Handicap 2-BR 3-BR 3-BR
Handicap 4-BR 5-BR Total
Public Housing 1,025 78 343 320 17 97 64 1943
Section 8 466
Excelsior & Grand 78 78
Annual Funding Sources
The assisted housing programs are federally funded through HUD. HUD provides an annual
funding allocation for the PH Program and the Section 8 Voucher program which is formula
based and prorated based on annual congressional budget appropriations. Funds for the Family
Self-sufficiency and Shelter Plus Care programs are provided by grants that require annual
application submissions.
Program 2011 Funding
(approx.)
Public Housing
• Operating Contribution $300,000
• Capital Fund Program $177,000
• Rent Revenue $545,000
Section 8 Voucher Program
• Housing Assistance Programs (HAP) $2,020,000
• Administrative Funding $169,000
Shelter Plus Care
• Rental Assistance $330,000
Family Self-Sufficiency Program $38,600
Hamilton House Service Coordinator $79,000
Total Annual Federal Funding $3,658,000
Final 2012 Funding Levels Still Pending
Like all federal programs, HUD has implemented funding decreases over the last couple of years
making it more of a challenge for the HA to meet administrative and housing related expenses.
In the PH program, the HA’s 2012 operating subsidy is estimated to be 13% less than what the
Study Session Meeting of April 9, 2012 (Item No. 4) Page 10
Subject: Housing Authority Annual Report and Work Plan
HA’s received in 2011. 2011’s Capital Fund Program funding for PH capital improvements was
17% less than that received in 2010 and HUD is projecting an additional 8% cut for 2012.
Although HAP funding for the Voucher program has remained relatively flat, significant
decreases are projected for administrative funding in 2012. HUD is estimating to prorate
Voucher administrative funding as low as 75% of the HA’s eligibility. This is the lowest
funding proration level ever proposed by HUD.
At this time, HUD’s final 2012 prorations have not been determined. There is the possibility that
HUD will supplement the projected funding levels with internal department resources resulting
in an increase to some of the estimated prorations, in particular the voucher admin funding. Staff
will continue to monitor funding levels closely and adjust spending levels accordingly.
2012 HA Highlights
• Provided rental assistance to over 500 low-income households under the PH Program, Voucher
Program and S + C Program.
• Completed approximately $370,000 in capital improvements on the PH units including significant
renovations at Hamilton House; the HA received a $218,000 grant from the state in 2010 to use
for PH capital improvements.
• Continued to administer 40 units of Project Based Vouchers at Wayside’s and Vail Place’s
supportive housing developments and at Excelsior and Grand. Facilitated partnership
between Wayside, Perspectives and CIP to utilize unexpended S+C funds to support 5 units
with rental assistance at Waysides supportive housing development.
• Exceeded 99% annual occupancy in the PH Program and 100% annual utilization in the
Voucher Program.
• 37 families participated in the FSS program in 2011 with nine participants graduating from the
program. Successfully submitted two HUD grant applications to fund the Family Self-Sufficiency
(FSS) program coordinator services for participants of the Voucher and PH programs.
• Utilized an off-site call center for the first time when opening waiting list for Hamilton House.
Center efficiently handled the 2000+ calls eliminating both staffing and technology capacity issues
experienced with previous waiting list openings.
• The end of 2011 marked completion of a 21 month Fiscal Year as the HA transitioned to a Fiscal
Year that corresponds to the calendar year. Previously, the HA’s FY ran from April thru March.
FINANCIAL OR BUDGET CONSIDERATION:
The HA is funded through annual contractual contributions from HUD, state and federal grants
and rent revenues. The HA pays for all direct program costs and costs related to administering
the programs including staffing, office space and computer support.
VISION CONSIDERATION:
The activities of the Housing Authority have a direct relationship to the Strategic Direction that
Council adopted related to “St. Louis Park is committed to a well maintained and diverse
housing stock”.
Attachment: Income Limit Table
Prepared By: Michele Schnitker, Housing Supervisor
Reviewed By: Kevin Locke, Community Development Director
Approved By: Tom Harmening, City Manager
Study Session Meeting of April 9, 2012 (Item No. 4) Page 11
Subject: Housing Authority Annual Report and Work Plan
ASSISTED HOUSING INCOME LIMITS
Effective December 1, 2011
FAMILY EXTREMELY LOW VERY LOW LOW
SIZE 30% OF MEDIAN 50% OF MEDIAN 80% OF MEDIAN
1 $ 17,650 $ 29,400 $ 45,500
2 $ 20,150 $ 33,600 $ 52,000
3 $ 22,650 $ 37,800 $ 58,500
4 $ 25,150 $ 41,950 $ 65,000
5 $ 27,200 $ 45,350 $ 70,200
6 $ 29,200 $ 48,700 $ 75,400
7 $ 31,200 $ 52,050 $ 80,600
8 $ 33,200 $ 55,400 $ 85,800
Meeting Date: April 9, 2012
Agenda Item #: 5
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Review of City’s Housing Goals
RECOMMENDED ACTION:
None at this time. This report is intended to provide the Council with a review of the Housing
Goals and the Housing Directions developed at the January Council Workshop. Draft updated
Housing Goals incorporating the January Housing Directions are attached for your consideration
and future Council Action.
POLICY CONSIDERATION:
What should the City’s housing goals be? Do the draft updated housing goals appropriately
incorporate the City’s current housing policy as well as the Housing Directions developed by the
Council at the January Workshop?
BACKGROUND:
Housing was one of the topics discussed at the Council Workshop held in January. Based on the
discussion, Council developed a list of Housing Directions reflective of where the Council
thought the City should focus its efforts to meet the housing needs of the Community in the
future. Council also directed staff to return to a future meeting to discuss updated goals that
incorporate the newly developed Housing Directions.
Staff compared the January Housing Directions with the City’s adopted Housing Goals. The
Housing Directions are very consistent with the policies and ideas of the Housing Goals.
In an effort to capture the new Directions developed by the Council, a draft updated staff has
amended the Housing Goals have been prepared for Council’s consideration. At the same time,
the goals were reformatted to improve organization by consolidating similar topics. The revised
goals maintain the policy direction of the originally adopted Housing Goals while incorporating
the new Directions and streamlining the format.
Current Goals
Comprehensive (Comp) Plan: The City’s current Housing Goals were adopted as part of the
Comp Plan adopted in December 2009. The Comp Plan is the City’s official statement used to
guide development, redevelopment and preservation of the city by setting forth policies, plans
and programs governing land use, public facilities, economic development and urban form. The
2010 Comp Plan documents the City’s housing plan incorporating Vision St. Louis Park, the
City’s Strategic Plan, and the Housing Goals developed as part of the 2003 -2005 Housing
Summit process.
Housing Summit: The City’s current Housing Goals were developed during the 2003-2005
Housing Summit process and adopted by the City Council in March 2005. The Housing Summit
was held as a means to educate, revisit, and consider any necessary changes to the City’s housing
Study Session Meeting of April 9, 2012 (Item No. 5) Page 2
Subject: Review of City’s Housing Goals
policies, strategies, and goals. The Summit consisted of a series of meetings with a broad base of
stakeholders that included the City Council, Planning Commission, Housing Authority Board,
School Board, County Commissioner, and a business representative. The stakeholders evaluated
how existing policies were meeting the needs of current residents and neighborhoods. As a
result of the discussions held at these meetings, the current housing goals were developed and
approved by the City Council. The Housing Goals are attached.
Vision Strategic Direction: In 2006, the City began a second Visioning process. More than
1000 community participants were involved in the initial process, followed by hundreds that
attended town meetings and others who joined Vision Action Teams. One of the Vision Action
Teams focused on Housing. The Action Team developed goals, specific objectives and action
plans.
In a workshop held by the Council in 2007, the Council reviewed the work of the Action Team
and developed the four strategic directions as a guide for the City for the future. These four
strategic directions continue to be key guideposts for City actions. One of those directions
addressed housing and stated the following:
St. Louis Park is committed to providing a well-maintained and diverse housing stock. In
particular, the City’s focus will be on the three following strategies:
• Remodeling and expanding move-up, single-family, owner-occupied homes.
• Property maintenance to foster quality housing and community aesthetics.
• Working towards affordable single-family home ownership throughout the
City.
Context for St. Louis Park Housing Goals
Our housing goals do not exist in a vacuum any more than the City itself is a blank slate or an
independent island isolated from the rest of our region. The characteristics of St. Louis Park and
the housing trends of the region influence greatly both what our housing goals need to be and
what our housing opportunities are. Our current housing goals and the January Housing
Directions need to and indeed do grow from those realities. Background material highlighting
demographic, societal, economic and housing demand trends that provide context for St. Louis
Park’s housing goals is attached. Some of the key directions that are supported by the basic
characteristics of St. Louis Park and the emerging housing trends are:
1. Single-family homes are the dominant land use in St. Louis Park. Over 60% of the
private land in St. Louis Park is occupied by single-family homes. Virtually all of our
single-family homes are over 40 years old and most of it is over 50 years
old. Maintaining the vast majority of this housing stock and the strong neighborhoods in
which they are located is a critical goal. It doesn’t mean no single-family home will ever
be removed, some homes maybe in locations that really aren’t appropriate for single-
family homes, but ensuring the vast majority of our single family homes are well
maintained has been and should continue to be a core community goal. This includes
making sure our single-family home has the characteristics that people want in a
home. Encouraging both attractive, quality updating and where appropriate expansion of
homes should be considered part of maintaining our single-family housing stock.
2. Opportunities for new housing in St. Louis Park will predominantly be for mixed-use and
higher density housing. St. Louis Park’s location central location in the metro area, its
proximity to downtown Minneapolis; proximity to lakes, parks and trails; its connections
Study Session Meeting of April 9, 2012 (Item No. 5) Page 3
Subject: Review of City’s Housing Goals
to the rich network of often frustratingly busy regional highways; our compact, relatively
pedestrian friendly development patterns that support urban amenities like restaurants and
retailors; and, our existing transit service and future LRT line, all combine to make us a
very attractive place for higher density compact development. Demographic trends,
energy and environmental issues, the need for healthier living environments, the trend to
smaller families, the emerging preferences of “Millennials” and Gen Y for urban housing
where the neighborhood coffee shop or restaurant is their living room, for the type of
housing St. Louis Park is well suited to provide; and, has demonstrated it can be done to a
very high standard. This housing maybe or may not be owner-occupied housing. Many
people are understandably cautious about buying homes in light of economic problems of
the last few years; others are at points in their lives when they need the flexibility that
renting provides. For the city the critical issue is really how to ensure all housing built in
St. Louis Park is high quality housing, rather than whether it is owner occupied or not. In
the end we have limited opportunities to control whether a home is owner occupied or
renter occupied whether it is a single family home or unit in a high-rise multi-family
building. We should focus on ensuring housing quality.
The city’s housing and land use goals have reflected and should continue to reflect an
intent to capitalize on the opportunity we have to accommodate mixed-use and higher
density housing development at key redevelopment opportunity areas like the future
SWLRT station areas, the Park Commons area and the West End. Capitalizing on these
opportunities is a means of increasing the diversity of housing options in St. Louis Park
and integrating housing with employment opportunities.
3. Affordability of housing continues to be an issue in the region. The recent economic
recession and downturn in the housing market reduced home prices significantly, but it
also reduced household incomes even more making housing ownership less affordable
overall. Meanwhile increased demand for rental housing has reduced rental housing
vacancy rates and led to increasing rents. The net result is less rental housing
affordability in the region. St. Louis Park has significant supplies of affordable single-
family homes and apartments. The portion of this housing that meets standards for
affordability changes, as has been shown in recent years, is effected as much or more by
conditions beyond the City’s control as by any policies or programs the city might
implement; and, decisions we don’t generally consider to be about affordability also have
impacts on affordability. Choices about allowable density, minimum housing unit size,
parking requirements, etc. all impact the ultimate price of housing in St. Louis Park.
Draft Updated Housing Goals
Attached is an attempt to integrate the City Council’s January Housing Directions with our
current Housing Goals and create a draft Updated Housing Goals for the City Council’s
consideration. As stated previously, the January Housing Directions were very consistent with
the existing Goals. The January Housing Directions representing new ideas and polices
directions not previously captured in the existing goals are highlighted in yellow. We took some
liberty with the precise wording of the Housing Directions in order to fit them into the existing
housing goals, but we have attempted to capture the meaning and intent of each Housing
Direction and incorporate them fully into the draft goals. Also attached are the existing goals in
their current form and the Housing Direction list from the January Workshop so that you can see
the original sources that were used to create the draft goals.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 4
Subject: Review of City’s Housing Goals
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
Through the Visioning process, the following Housing Vision Statement was developed, “St.
Louis Park’s diverse housing options enable citizens to remain in the City through all stages of
life. Providing living arrangements to accommodate all generations’ needs enhances the chances
of building a strong community and sense of ownership.”
This Vision for housing reflects Vision St. Louis Park, the City’s Strategic Plan, and the adopted
Housing Goals. The revised goals, incorporating the Housing Directions developed at the City
Council Workshop, are consistent with the City’s Vision Statement.
Attachments: 2010 Housing Goals
Housing Direction, Council Workshop, January 20 & 21
Draft Housing Goals: Incorporating Housing Directions
Trends Affecting Housing Needs and Opportunities
Prepared by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 5) Page 5
Subject: Review of City’s Housing Goals
2010 Housing Goals
City of St. Louis Park
City of St. Louis Park Housing Goals
The Housing Summit resulted in a set of Housing Goals that were adopted by the City Council in
April 2005 and incorporated as part of the City’s 2010 Comp Plan. The goals reflect the city’s
housing policy and will serve as guides to direct officials, staff, and advisory boards now and
into the future.
Housing Production
• Promote & facilitate a balanced and sustainable housing stock to meet diverse needs both
today and in the future
• The City should establish target numbers of units by housing types needed to ensure life
cycle housing options, with housing types disbursed throughout the city.
• The City acknowledges that there is demand for different types and sizes of housing
units, but due to limitations of available space and other resources, all demands cannot be
fully satisfied. At the present time, the greatest deficit and need is for the creation and
maintenance of detached, owner-occupied single family housing which are large enough
to accommodate families. City housing efforts and resources should primarily address
this need.
Housing Condition and Preservation
• Ensure housing is safe and well maintained.
• Preserve and enhance housing quality through proactive promotional and educational
activities and housing programs related to home rehab, code, and design and safety
issues.
Owner / Rental Ratio
• The ratio of owner/rental housing should be approximately 60% owner occupied and
40% rental.
• Explore traditional and non-traditional owner occupied housing options such as, but not
limited to: row houses, courtyard housing, alternative housing, cluster housing, hi-rises,
3-story homes, multi-generational housing, etc.
Affordable, Workforce and Supportive Housing
• Promote and facilitate a mix of housing types, prices and rents that maintains a balance of
affordable housing for low and moderate income households. Future affordability goals
with the Met Council should be negotiated to reflect the average percentages for other
first ring suburbs in Hennepin County.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 6
Subject: Review of City’s Housing Goals
Note: In 2004, the City’s negotiated goal for housing affordability with the Met
Council was that 60-77% of the city’s owner occupied homes should be affordable
for households with incomes at or below 80% of the area median income and that 37-
41% of the city’s rental homes should be affordable for households with incomes at
or below 50% of the area median income.
• Mixed income units should be disbursed throughout the City and not concentrated in any
one area of the City or any one development.
Large Homes for Families
• Promote and facilitate expansion of existing homes through remodeling which adds more
bedrooms and more bathrooms, 2+ car garages and other amenities.
• Promote and facilitate construction of large family-size homes with more bedrooms and
more bathrooms, (e.g. minimum 3+ bedrooms and 2+ bathrooms, 2+ car garage and
additional amenities such as den/fourth bedroom or porch or superior architecture)
suitable for families with children.
Senior Housing
• Promote and facilitate more housing options for seniors.
Land Use
• Planning Goals:
o Use infill and redevelopment opportunities to help meet housing goals.
o Promote higher density housing near transit corridors & employment
centers.
o Encourage housing density in commercial mixed use districts.
• Explore and, if appropriate promote ordinances to allow development of non-
traditional housing types and increased density in single family neighborhood that is
compatible with surrounding neighborhood.
• Explore and promote reclassification of non-residential properties and designate for
housing and other purposes.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 7
Subject: Review of City’s Housing Goals
Housing Direction
Council Workshop
January 20 and 21, 2012
• A Continuum of a diversity of housing choices:
o Scattered sites
o Affordable housing
o Senior Housing
o Mixed income
• Well Maintained housing stock:
o Aesthetic diversity such as less cluster of housing in any area, not all designed the
same way with the same materials
o Ensure homes are maintained
• Remember that the backbone of this community is single family homes:
o More family sized move up housing bigger than 1500 square feet
o Continued emphasis on more owner occupied homes/ not rental
o More newer homes to replace older homes that are in ill-repair and not fixable
o Continue to help with single family improvements, enlargements, and move-up
housing
• More purposeful coordination and integration of housing employment and education.
• We must ensure that we have the policies in place to support these efforts
Study Session Meeting of April 9, 2012 (Item No. 5) Page 8
Subject: Review of City’s Housing Goals
Revised St. Louis Park Housing Goals – Draft
1. Promote and facilitate a balanced and enduring housing stock that offers a continuum of
diverse life-cycle housing choices including affordable, senior and mixed income housing
disbursed throughout the City.
2. The City places a high priority on the City’s single family housing stock.
• Ensure housing is safe and well maintained and take proactive actions through
housing improvement programs related to home rehabilitation and design, code
enforcement and housing safety.
• The City is committed to the creation of family sized, large, owner-occupied, single-
family housing homes with more bedrooms, more bathrooms, more amenities and 2+
car garages through the expansion of existing homes and through construction of new
homes.
• Proactively address blighted housing properties that are beyond repair through
redevelopment activities such as acquisition, demo and housing replacement.
• Promote aesthetic diversity through the use of good design, quality materials and
superior construction.
3. The City is committed to continuing to promote home ownership options throughout the
city and quality high density developments located near transit centers, retail and
employment centers and in commercial mixed use districts.
4. Explore traditional and non-traditional owner-occupied housing options such as; row
houses, courtyard housing, high-rises, 3-story homes, land trust homes and multi-
generational housing, etc.
5. Promote and facilitate a mix of housing types, prices and rents suitable for households of
all household income levels including affordable housing for low and moderate income
households.
• Future affordability goals with the Metropolitan Council should be reflective of the
City’s existing affordable housing stock as well as future needs and be proportional to
other first ring suburbs.
• Affordable housing units should be disbursed throughout the City and not
concentrated in any one area of the City or any one development.
6. The City’s Land Use Plans will provide guidance for the provision of housing choices to
meet resident needs through all stages of life.
• Use infill and redevelopment opportunities to help meet housing goals.
• Promote higher density housing near transit corridors, employment centers and in
commercial mixed use districts.
• Explore and, where appropriate, amend ordinances to allow development of non-
traditional housing types and increased density in single family neighborhood that is
compatible with surrounding neighborhood.
• Explore and implement where appropriate reclassification of non-residential
properties and designate for housing and other purposes in order to achieve a more
purposeful coordination and integration of housing, employment and education.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 9
Subject: Review of City’s Housing Goals
Trends Effecting Housing Needs and Opportunities
In most markets, sales of distressed residential properties have temporarily diminished the
demand for new housing, distorting what actually drives housing demand. Determining what
future housing consumers will want is more complicated than what their stated housing choices
would indicate.
It’s not simply preferences that change, it’s how the consumers are at any particular time, how
many of them there are that are active in the market and their resources and needs at that
particular lifestyle. For example, twice as many people in the Generation X age range moved
last year compared to those in the Baby Boomer age range, so despite their smaller size, their
impact was greater.
Listed below is a collection of a variety articles and resources addressing the range of factors
influencing housing choices.
I. Rethinking Housing November 2009 Workshop: Present by Family Housing Fund
in partnership with the Metropolitan Council, Minnesota Housing, Twin Cities
LISC and The McKnight Foundation, www.rethinkinghousingmn.org
Top Eight Game Changers:
• Demise and collapse of the housing finance system - as we knew it.
• Lowered housing values and rates of appreciation – a trend that will continue, some say,
for a decade or more.
• Diminished income, personal wealth, and resources - for many individuals and families,
and a cultural shift toward living within one’s means.
• Energy and climate change issues - are coming to the forefront.
• Demographic changes within the population – aging, increase in one-person households,
increasing diversity.
• Changing housing needs, such as multi-generational households, to accommodate
cultural groups and immigrants.
• Changing lifestyles and an increasing preference by many, including Millennial and
aging Baby Boomers to live within walking distance or easy access by public
transportation to jobs, services and recreation.
• Shrinking public and philanthropic resources, requiring us to be smarter with our
resources to provide needed housing in the right locations.
Demographic Changes: Changes in demographics are dramatically affecting housing
demand and production. Current demographic realities we face:
• Increase in older persons – 456,000 more age 65+ from 2010 to 2025.
• Single person households are the growth game – large numbers of older people live
alone.
• Households are smaller, fewer families with children.
• Household incomes and resources have declined.
• Homeownership rate is declining.
• Increasing diversity – individuals from emerging markets, including immigrants and
minorities, will make-up an increasing percentage of the total population, reaching 25
percent by 2035.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 10
Subject: Review of City’s Housing Goals
II. Urban Land Institute – Terwillinger Center for Housing, America’s Housing Policy-
the Missing Piece: Affordable, Workforce, Rentals, www.uli.org
Shifts in Preferences: With the bursting of the housing bubble, the country is witnessing a
continued decline in the homeownership rate that first began in 2004. Not surprisingly, the
number of renting households has increased substantially over the same period. In the
coming decade, the demand for rental housing will dramatically surge to reflect changing
demographics, economic conditions, and housing preferences. The 78 million–strong echo
boom generation (those born after 1986) is about to hit the rental market. Many of these
echo boomers will seek rental housing in city centers, close to employment and
transportation. In addition, minorities and households without children—two groups more
traditionally likely to rent—are expected to make up an even larger share of new household
growth moving further into the decade. These demographic changes will put tremendous
pressure on the demand for affordable rental housing.
These demographic trends will be amplified by other factors. Tighter mortgage underwriting
standards, impaired credit stemming from the wave of foreclosures, continued economic
uncertainty, and a heightened appreciation of the benefits of renting will, at least in the near
term, put added pressure on the demand for affordable rental housing.
In recent years, construction of multifamily apartments dropped to historic lows as
unemployment spiked, wages stagnated, and construction financing evaporated. Although
multifamily construction has picked up recently, it is likely to fall far short of what is needed:
(a) to replace units that have become obsolete and
(b) to match the explosion in demand anticipated over the coming decade.
III. RCLCO Forecast: Understanding the Demand for New Housing, www.rclco.com
Millennium Lifestyle: As job growth continues to slowly improve, the 85 million
Generation Y’s (18 to 29 year olds) impact on the housing market will steadily increase, and
not just for rental housing. Young people in their early 20’s today have found themselves in
a tougher job market, contending with higher unemployment at point in time where they
would traditionally be seeking their economic independence. Many had to move back with
their parents. This has temporarily depressed their impact on the housing demand. Others
that remained out on their own made lifestyle compromises that included a stronger tendency
to rent versus buying. As they obtain more resources, their needs will evolve and they will
likely make different housing choices.
IV. U.S. Department of Transportation, Federal Highway Administration:
Transportation and Housing Costs, www.fhwa.dot.gov/livability
Energy, Transportation, Housing: Transportation is the second largest expense for most
households after housing. Households living in auto-dependent locations spend 25 percent of
their income on transportation costs. Housing that is located closer to employment,
shopping, restaurants and other amenities can reduce household transportation costs to 9
percent of household income allowing for greater disposable income to improve your quality
of life. In fact, living in a location where only one car per home is needed can reduce your
total housing and transportation costs to 50% of income or less with the following benefits:
Study Session Meeting of April 9, 2012 (Item No. 5) Page 11
Subject: Review of City’s Housing Goals
• Transportation Savings. Compact, connected communities allow residents to use less
energy and spend less money to get around – whether by making fewer or shorter car
trips, or using other less expensive modes of transportation like bicycling, walking, or
transit.
• Combined Transportation and Affordability. In places with fewer transportation choices,
savings on housing costs can be more than offset by increased transportation expenses. If
households can reduce their necessity to drive through better housing and transportation
options, commute times and household energy costs will drop.
• Stable or Higher Housing Values: Housing mixed use neighborhoods with access to
transit generally retain their value better than those in traditional suburban developments.
V. Urban Land Institute – Terwillinger Center for Housing, America’s Housing Policy-
the Missing Piece: Affordable, Workforce, Rentals, www.uli.org
Metropolitan Council, www.metrocouncil.org
What is Affordable Housing: The commonly accepted definition of affordability is that a
household should pay no more than 30 percent of its annual income on housing (including
utilities). Families paying more than 30 percent of their income on housing are viewed as
“cost burdened.” Families paying between 30 and 50 percent of their income are considered
“moderately cost burdened,” while those paying more than 50 percent are considered
“severely cost burdened.” Cost burdened families may have difficulty paying for non-
housing necessities such as food, clothing, transportation, and medical care.
As noted above, many experts now recognize that affordable housing by itself is insufficient
if it means that families must make long and expensive car trips to get to jobs and other key
locations. These experts suggest that the combined cost of housing and transportation is a
more appropriate gauge of “affordability.”
The ULI Terwilliger Center for Housing defines a workforce household as one earning
between 60 and 120 percent of AMI. Many workforce households include police officers,
firefighters, and workers in high-growth industries such as education, health care, and
professional services. Rental housing is a key form of affordable housing for many workforce
families, particularly in those communities where the existing stock of for-sale properties
continues to be priced well above what they can afford.
The Metropolitan Council is responsible for forecasting the regional affordable housing need
and for allocating that need to individual communities. The Metropolitan Council considers
a unit affordable if it is priced at or below 30% of gross income of household earning 60% of
the Twin City's median family income (or $50,340 in 2012). Factors utilized in their
methodology include the current affordable housing stock, anticipated household growth, the
number of vacant units, the proximity to low-wage jobs and availability of transit level
service. Based on these factors, the Metropolitan Council determined the 2011 – 2020
allocation of affordable housing need in St. Louis Park to be 501 new units.
The Met Council affordable home purchase price is $160,250 and the monthly rent is $1,116
or less for a 2 bedroom apartment for a family of four. At the end of 2011, 10% (2,264)
owner occupied units met the affordability guidelines. In addition, based on the date
provided in the annual Rental Survey, approximately 13% (2990) rental units are considered
affordable.
Study Session Meeting of April 9, 2012 (Item No. 5) Page 12
Subject: Review of City’s Housing Goals
VI. St. Louis Park: Property Values and Median & Average Rents
Median Value by Property Type
Property Type Median Value
Residential – Single Family $210,400
Residential - Lake $337,100
Residential – Zero Lot Line $178,550
Condo $110,100
Townhome $132,000
* January 2012 Assessed Market Values
Properties Based on Value and Type
Assessed Market Value Single Family Condo Townhome Total
$0 to $50,000 1 62 0 63
$50,001 - 75,000 2 417 37 456
$75,001 - 100,000 10 708 38 756
$100,001 - 130,000 162 417 225 804
$130,001 – 161,000 1,288 265 194 1,747
*Sub Total 1,463 1,869 494 3826
$161,001 – 200,000 3,323 294 83 3,700
$200,001 – 250,000 3,319 282 33 3,634
$250,001 – 300,000 1,213 104 95 1,412
$300,001+ 2,275 85 22 2,382
Total 11,593 2,634 727 14,954
*Number of properties/units that meet the Metropolitan Council affordable purchase price
guidelines for households with incomes at or below 60% median area income.
Multi Family Rents: 2011 St. Louis Park Rental Survey*
Bedroom Size Median Rent Average rent
0 $570 $651
1 $650 $817
2 $780 $1152
3 $1005 $1141
*The rental information is based on the units reported to the St. Louis Park Housing Authority in
its annual rental survey. The survey response rate was 62% of the buildings including 72% of
the units.
The Metropolitan Council’s definition of an affordable rent is housing that is affordable to a
household at 60% of the median area income paying thirty percent of their income for housing
costs. The affordable monthly rent for a 2 bedroom unit for a 4 person household is $1,116.
St. Louis Park: Housing Characteristics & Opportunities
Desirable Location: The location of St. Louis Park near transit, jobs, and easy access to
downtown Minneapolis make our community a desirable destination to live. The City’s close
proximity to the Uptown area and the Minneapolis lakes also enhance the City’s location,
especially for the generation X and Y demographic groups. The new West End development,
along with Excelsior & Grand, provides residents with easy access to unique retail, restaurants
Study Session Meeting of April 9, 2012 (Item No. 5) Page 13
Subject: Review of City’s Housing Goals
and entertainment destinations. Our location provides easy access to multiple major highways
and freeways and extensive public transit, sidewalks and trails providing an energy efficient
transportation alternative.
Wide Housing Choice: The City offers a wide variety of housing types at values and rents
affordable to all household incomes. The City has made substantial progress in adding to the
number of larger, family size, single family homes, primarily through rehab of existing
properties, but the substantial number of modest smaller single family homes continues to attract
young singles and family households just entering the homeownership market. The smaller
homes offer an affordable homeownership option located near the urban core and community
amenities that the Generation X and Y’s are seeking.
A number of apartment complexes have also been developed in recent years. Although, these
properties are primarily serving the upper end rental market, the majority of the rental housing
stock in the City is more modest with almost half of the rental properties built prior to 1970. The
median 2 bedroom rent based on the 2011 rent Survey was $780, and the average is rent is
$1152. The median is well within the Metropolitan’s affordability threshold and the average rent
slightly above.
Future: The proposed light rail transit line will provide future opportunity for the City to
maximize the benefits and desirability to live close to convenient transit. Housing development
along the transit corridor will provide affordable and convenient access to employment, retail
and education centers and will be an ideal location for higher density and mixed use and mixed
income projects.
Meeting Date: April 9, 2012
Agenda Item #: 6
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Outdoor Lighting Ordinance.
RECOMMENDED ACTION:
The purpose of this agenda item is to discuss the evaluation and potential revisions to the
Outdoor Lighting standards in the Zoning Ordinance.
POLICY CONSIDERATION:
• Is Council interested in proceeding with the Ordinance Considerations and process for
next steps as outlined in this report?
• Does the Council need any additional information or have any revisions?
• Is the City Council comfortable with moving the ordinance revisions to the Planning
Commission?
BACKGROUND:
Recent concerns by citizens in relation to outdoor recreational lighting have prompted staff to
evaluate our ordinance provisions. In particular, the following items were identified to be
addressed:
• The feasibility of achieving the city’s requirements related to seeing a light source from off-site;
• The glare and spillover light requirements;
• How to regulate a wide variety of types of outdoor lighting;
• Clarifying the measurement methods.
ORDINANCE CONSIDERATIONS:
To address these items, the City hired HKGi to research issues and practices of regulating
outdoor lighting, and draft a revised ordinance. Attached are the existing ordinance provisions
(Section 36-363), and a background memo sent to the City Council on March 26th highlighting
the research HKGi has completed including recommendations for amending the ordinance.
The memo suggests the revised ordinance address such items as:
• Best practices for outdoor lighting
• Common measurement methods
• Achievable requirements
• Standards for lighting: distribution; maximum levels; shielding; heights and hours for lighting
HKGi is beginning to draft standards and requirements for the city to consider in amending the
zoning ordinance. These items include:
• Improve the definitions in the ordinance rather than referring to a lighting handbook.
Definitions to be added would include: glare, luminaire, full cutoff, semi-cutoff, fully
shielded, flood light, maintained foot-candles/luminance level, light trespass, indirect
light and spill light.
• Remove the requirement that a light source or its reflected image cannot be viewed from
off-site. It appears this requirement is nearly impossible to meet.
Study Session Meeting of April 9, 2012 (Item No. 6) Page 2
Subject: Outdoor Lighting Ordinance
• Replace the viewing requirement with new standards for the type of fixtures, shielding of
lights, aiming the standards appropriately and measures for glare control.
• Treat outdoor recreational lighting as a specialized use and consider other outdoor
lighting, such as service station canopies, outdoor display areas, etc. should be treated in
a specialized way also.
• Add sections for exempt, temporary, and prohibited lights.
• Add new regulations for maximum levels of illumination, measure methods, fixture
shielding and aiming, maximum fixture heights and higher spillover lighting maximums.
DISCUSSION FOR THIS EVENING:
Jeff Miller, HKGi, our Consultant will assist with discussion as follows:
1. Consultant will provide an overview of information and be available to answer questions
on the research and proposed ordinance ideas.
2. Council to discuss policy questions.
3. Council provides direction to staff on the next steps for moving forward with the above
suggested ordinance provisions.
4. If no additional study session is needed staff will plan to move this to the Planning
Commission to further develop an ordinance amendment.
NEXT STEPS:
With City Council direction, staff will develop specific ordinance provisions with the Planning
Commission, and set a public hearing. The proposed ordinance may be reviewed again with
Council at a study session.
A revised ordinance requires a public hearing and recommendation from the Planning
Commission, two readings before the City Council, publication and is effective 15 days after
being published.
FINANCIAL OR BUDGET CONSIDERATION:
The consulting fees will be paid from the Development Fund.
VISION CONSIDERATION:
Not applicable.
Attachments: Current Zoning Ordinance (Section 36-363. Special provisions regulating
exterior lighting.)
Outdoor Lighting Summary Memo from HKGi
Prepared by: Meg J. McMonigal, Planning and Zoning Supervisor
Reviewed by: Kevin Locke, Community Development Director
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 6) Page 3
Subject: Outdoor Lighting Ordinance
Current Zoning Ordinance:
Sec. 36-363. Special provisions regulating exterior lighting.
(a) Purpose. The purpose of this section is to minimize the adverse effect of light and glare on
operators of motor vehicles, pedestrians, and on residential and other land uses in the vicinity of
a light source in order to promote traffic safety and to prevent the nuisances associated with the
intrusion of spillover light and glare.
(b) Applicability. The requirements of this section apply to all exterior lighting except lighting
for signs which is covered under section 36-362 and street lighting within public rights-of-way.
(c) General provisions.
(1) The city shall require submission of a light distribution plan to ensure compliance with
the intent of this section for all new development, redevelopment, and additions other
than single-family and two-family dwelling units, which exceed 20 percent of the floor
area of the principal structure after the effective date of the ordinance from which this
section is derived. This plan shall include the type and arrangement of proposed lighting
and proposed lighting levels in foot-candles at all locations on the site including its
property boundaries.
(2) Upon completion of any lighting project, measurement of lighting levels of properties
within the project must be shown to be within Illuminating Engineering Society (IES)
standards as specified in the IES Handbook 5th Addition and shall comply with the
provisions of this section. Mitigative measures shall be employed to limit glare and spill
light to protect neighboring parcels and to maintain traffic safety on public streets and
roadways. These measures shall include lenses, shields, louvers, prismatic control
devices and limitations of the height and type of fixtures used.
(3) Measurements shall be made after dark at the property line.
(4) Exterior lighting shall be designed and arranged to limit direct illumination and glare in
any contiguous parcel of land. Reflected glare or spill light shall not exceed five-tenths
foot-candle when the source of light abuts any residential parcel or one foot-candle
when the source of light abuts any commercial or industrial parcel or any public right-
of-way measured at one foot above the ground.
(5) The city may limit the hours of operation of outdoor lighting equipment if the city
believes it necessary to reduce the impact of light on the surrounding neighborhood.
(6) No flickering or flashing lights shall be permitted.
(7) Lighting equipment shall not be placed or permitted to remain on a site if the light
source or its reflected image can be viewed directly from a location off the site unless
ornamental light fixtures are installed in the manner provided in a site and building plan
approved by the city. Ornamental fixtures shall only be approved when the developer
can demonstrate that undesirable off-site impacts stemming from direct or reflected
Study Session Meeting of April 9, 2012 (Item No. 6) Page 4
Subject: Outdoor Lighting Ordinance
views of the light source are eliminated by the fixture design or location of the lighting
fixture.
(8) Light poles or standards for exterior lighting shall not exceed a height of 45 feet, except
that poles or standards on the top level of parking structures shall not exceed 25 feet.
(d) Outdoor recreational lighting.
(1) Outdoor recreational facilities, such as baseball diamonds and other athletic playing
fields which are in existence at the time of the ordinance from which this section is
derived, are exempted from the exterior lighting standards of this section because of
their unique requirements for nighttime visibility and their limited hours of operation.
Outdoor recreational lights shall only operate between the hours of 4:00 p.m. and 11:00
p.m.
(2) Any new lighting or replacement lighting shall meet the provisions of this chapter
except for subsection (c) (9) of this section. Lighting facilities for these outdoor
recreational uses shall not exceed a maximum height of 80 feet.
(Code 1976, §§ 14:6-3.0--14:6-3.4)
Hoisington Koegler Group Inc.
Creating Places that Enrich People’s Lives
Page 1 of 5
To: St. Louis Park Planning Staff
From: Jeff Miller (HKGi)
Date: March 5, 2012
Re: Exterior Lighting Ordinance Study
As part of the City’s Exterior Lighting Ordinance Study, Hoisington Koegler Group Inc.’s (HKGI) work has
included review and clarification of the City’s critical exterior lighting ordinance issues, research of
national/local lighting best practices and model ordinances, and summarization of findings relevant to
St. Louis Park’s issues. Although our research has been focused on outdoor recreational lighting, in
particular, we also identified general opportunities for improving the City’s Exterior Lighting Ordinance.
This literature review and analysis of the City’s ordinance establishes the basis for general
recommendations of potential amendments to the City’s Exterior Lighting Ordinance. Based on these
general recommendations, we are preparing an updated Exterior Lighting Ordinance for consideration
by the City.
I. Critical Issues Related to Exterior Lighting Ordinance
As a result of recent concerns expressed by neighbors of the new Benilde-St. Margaret’s outdoor
recreational facilities and the City’s recent field survey of outdoor recreational facilities throughout the
community, the City has identified potential issues with its Exterior Lighting Ordinance. Based on
consultation with City Staff and our preliminary review of this ordinance, it is our understanding that the
critical issues to be addressed by the Exterior Lighting Ordinance Study include the following:
a. Feasibility of achieving the City’s ordinance requirement (c)(7) under General Provisions which
states that “Lighting equipment shall not be placed or permitted to remain on a site if the light
source or its reflected image can be viewed directly from a location off the site…” for both
outdoor recreational lighting and other lighting situations.
b. Appropriateness of the current glare or spillover light requirement when applied to the
specialized and complex needs of outdoor recreational lighting, since the City’s field survey
found that most of the existing outdoor recreational lighting is not meeting this requirement.
c. Since outdoor recreational lighting involves a wide variety of unique viewing needs, technical
complexities, and limited days/hours of operation, the City’s current ordinance designates it as a
separate section. However, new or replacement outdoor recreational lighting is required to
meet most of the same standards as all other exterior lighting. Need to determine what types of
standards are desirable and achievable for outdoor recreational lighting.
Study Session Meeting of April 9, 2012 (Item No. 6)
Subject: Outdoor Lighting Ordinance Page 5
Page 2 of 5
d. The current ordinance contains measurement requirements that are scattered across multiple
standards and reference an outside source – IES Handbook 5th Addition. This situation fails to
establish a clear measurement method. Additionally, since outdoor recreational lighting is often
intended to illuminate vertical surfaces rather than horizontal surfaces, measurement methods
and standards may differ from other lighting situations.
II. Best Practices Literature Reviewed
HKGi has conducted a review and evaluation of the best practices literature for exterior lighting
ordinances relevant to the City of St. Louis Park exterior lighting issues. This review encompassed other
cities’ lighting ordinances, model lighting ordinances, and other best practices literature, including the
following:
a. Batinsey, John, “New Jersey Outdoor Lighting Ordinance Guide”, 2008.
b. Chittenden County (VT) Regional Planning Commission, “Outdoor Lighting Manual for Vermont
Municipalities”, May 1996.
c. City of Mankato, MN, “Exterior Lighting Ordinance”.
d. City of Plymouth, MN, “Exterior Lighting Ordinance”.
e. City of Raleigh (NC), “Code of Ordinances (Part 10 – Planning and Development, Chapter 2 –
Zoning, Article E – Supplementary Regulations and Exemptions, Section 10-2089 – Lighting)”,
2001.
f. City of Redmond (WA), “Community Development Guide (Part 20D – Citywide Regulations,
Section 20D.90 – Exterior Lighting Standards)”, 2001.
g. City of Rochester, MN, “Exterior Lighting Standards Ordinance”.
h. County of Coconino (AZ), “Zoning Ordinance (Section 17 – Lighting)”, 2001.
i. County of Fairfax (VA), “Zoning Ordinance (Article 14 – Performance Standards, Part 9 - Outdoor
Lighting Standards)”, 2003.
j. County of Fort Bend (TX), “Orders for Regulation of Outdoor Lighting in the Unincorporated
Areas of Fort Bend County, Texas”, 2004.
k. Crawford, David L., “Bright Days, Dark Nights: Regulating Light”, Zoning Practice, July 2004.
l. International Dark-Sky Association, “Outdoor Lighting Code Handbook” (Version 1.14),
September 2002.
m. International Dark-Sky Association, “Simple Guidelines for Lighting Regulations for Small
Communities, Urban Neighborhoods, and Subdivisions”.
n. International Dark-Sky Association (IDA) and Illuminating Engineering Society (IES), “Joint IDA-IES
Model Lighting Ordinance with User’s Guide”, June 15, 2011.
o. Metropolitan Government of Louisville-Jefferson County (KY), “Land Development Code
(Chapter 4 - Generally Applicable Development Standards, Part I – General Compatibility
Standards, Section 4.1.3 – Lighting)”, 2010.
p. Pennsylvania Outdoor Lighting Council, “Model Outdoor Lighting Ordinance for Inclusion in
Zoning Ordinances”, September 2011.
Study Session Meeting of April 9, 2012 (Item No. 6)
Subject: Outdoor Lighting Ordinance Page 6
Page 3 of 5
q. Prince William County (VA), “Zoning Ordinance (Article II Part 250 – General Performance
Standards, Section 32-250.200 – Outdoor Lighting)”, 2004.
r. Town of Holly Springs (NC), “Unified Development Ordinance (Section 7 – Special Regulations,
Chapter 7.02 – Lighting Standards)”, 2010.
s. Village of East Hampton (NY), “Village Code (Chapter 188 – Outdoor Lighting”, 2005.
t. Virginia Outdoor Lighting Taskforce (VOLT), “VOLT Simple Model Lighting Ordinance”, 2010.
III. Findings Relevant to SLP’s Exterior Lighting Issues
Our research and evaluation resulted in the following findings:
a. Due to the unique needs, technical complexities, and limited days/hours of operation of outdoor
recreational lighting, it is typically not subject to all of the general standards of an exterior
lighting ordinance. Municipal ordinances typically treat outdoor recreational lighting in one of
three ways:
1. an exempt use with special regulations;
2. an exempt use with special regulations and requirement of a lighting plan;
3. a conditional use requiring a permit.
b. The City’s ordinance requirement (c)(7) under General Provisions of “Lighting equipment shall
not be placed or permitted to remain on a site if the light source or its reflected image can be
viewed directly from a location off the site…” seems to be very atypical. In particular, this
requirement was not found in any of the Outdoor Recreational Lighting sections of ordinances.
c. The City’s ordinance (c)(4) under General Provisions requires that glare or spillover light be
limited to 0.5 FC at the property line of any abutting residential parcel and 1.0 FC at the
property line of any abutting commercial or industrial parcel or public right-of-way. New or
replacement outdoor recreational lighting is subject to this requirement. Our research found
that these traditional glare/spillover light standards vary somewhat by place. For residential
property lines, they range from 0.1 to 2.0. For non-residential property lines and public right-of-
way, they range from 0.75 to 2.0. Some city ordinances and model ordinances do not include
specific numeric limits; instead, the focus is on requirements for the types of fixtures required
(e.g. full cut-off), shielding and maximum wattage allowed. In particular, the model ordinances
do not favor the traditional method of defining spillover light with maximum FC standards. By
focusing on the maximum light level at the property line, the traditional method fails to address
light that is not directed toward the ground and glare. Rather than relying on spillover light
maximums, the model ordinances recommend addressing outdoor recreational lighting issues
with the requirement of submission of a lighting plan prepared by a qualified lighting designer.
d. Best practice and model ordinances contain stronger requirements for shielding, certain types of
light fixtures, aiming, and glare control packages, in general and for outdoor recreational
lighting. The City’s ordinance language is not very specific on this issue.
e. The model ordinances advise against the inclusion of references to outside sources. For
instance, the City’s ordinance refers to the IES Handbook 5th Addition. It is preferable to include
Study Session Meeting of April 9, 2012 (Item No. 6)
Subject: Outdoor Lighting Ordinance Page 7
Page 4 of 5
definitions in the lighting ordinance. The City’s Zoning Ordinance does not appear to include any
definitions related to exterior lighting.
f. Many best practice and model ordinances contain standards for controlling the maximum
allowed lighting levels on outdoor recreational areas rather than spillover lighting levels, which
can ultimately contribute to reducing spillover lighting levels.
g. Many best practice and model ordinances contain clear and specific descriptions of the required
measurement methods for lighting levels. Currently, the City’s measurement method
requirements are scattered between three standards – (c)(2), (c)(3), and (c)(4). It may be
appropriate for measurement methods to differ between outdoor recreational lighting and
other lighting situations.
h. The establishment of “lighting zones” offers a method for establishing lighting levels for
different types of areas within a community based upon the types of activities located there,
e.g. natural areas, predominately low density residential areas, business districts, transportation
corridors, and recreational areas. The City of Plymouth has three lighting zones and an official
Lighting Zone Map that essentially functions like an overlay district.
IV. General Recommendations for SLP’s Ordinance
Based on our finding from the literature review of exterior lighting best practices and model ordinances,
we have identified some general recommendations that the City should consider for improving its
Exterior Lighting Ordinance, including the following:
a. Remove the reference requirement (c)(2) to the outside source, IES Handbook 5th Addition, and
add a Definitions section to the ordinance, such as glare, luminaire, full cutoff, semi-cutoff, fully
shielded, flood light, maintained footcandles/luminance level, light trespass, indirect light and
spill light. Alternatively, definitions relating to exterior lighting could be added to the Zoning
Ordinance’s general definitions section (Section 36-4).
b. Remove requirement (c)(7) under General Provisions of “Lighting equipment shall not be placed
or permitted to remain on a site if the light source or its reflected image can be viewed directly
from a location off the site…” and replace with more specific standards for required fixtures
types, shielding, aiming, and glare control.
c. Treat outdoor recreational lighting as a special use with its own special regulations and require
submission of a lighting plan prepared by a qualified lighting designer. Consider the benefits of
treating outdoor recreational lighting as a conditional use permit. In addition to submission of a
lighting plan, special regulations for outdoor recreational lighting to consider are maximum
levels of illumination allowed, appropriate measurement methods for outdoor recreational
lighting (e.g. vertical measurements), fixture shielding/aiming, fixture heights, and higher
spillover lighting maximums.
d. Consider whether other types of lighting should be treated as special uses with unique
regulations, such as service station canopies, outdoor display areas, building façade lighting, etc.
e. Consider adding sections for exempt lighting uses, temporary lights, and prohibited lights.
Study Session Meeting of April 9, 2012 (Item No. 6)
Subject: Outdoor Lighting Ordinance Page 8
Page 5 of 5
f. Consolidate the various measurement method requirements into a separate section.
g. Preliminary recommendation for the ordinance sections is as follows:
i. Purpose/intent
ii. Applicability
iii. Definitions
iv. General provisions/standards for exterior lighting
• Light distribution plan submission
• Maximum lighting levels
• Shielding, aiming, glare controls
• Fixture heights
• Curfews/hours of operation
v. Special uses (outdoor recreational lighting, others?)
vi. Exempt uses
vii. Temporary uses
viii. Prohibited uses
ix. Measurement
Study Session Meeting of April 9, 2012 (Item No. 6)
Subject: Outdoor Lighting Ordinance Page 9
Meeting Date: April 9, 2012
Agenda Item #: 7
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Solid Waste Collection Program and Services.
RECOMMENDED ACTION:
The purpose of this discussion is to provide Council with requested information and seek
Council input on the policy questions below.
POLICY CONSIDERATION:
Staff seeks City Council input on the following policy questions:
1. What does being No. 1 or being a leader in the industry mean or look like?
2. Are the program changes identified in Exhibit 5 acceptable to the Council? Should some
services (or requirements) be removed or other services (requirements) added?
3. Does Council desire information regarding resources needed to implement the changes
identified in Exhibit 5?
4. Do these changes align with the city adopted waste program "Purpose, Goals &
Objectives"?
BACKGROUND:
History
On January 9, 2012, staff presented the 2011 Solid Waste Program Survey report. The purpose
of the program survey was to gauge resident satisfaction and understanding of the solid waste
program, and to solicit suggestions for program improvements. The results indicated significant
resident satisfaction with contractor / staff performance and with the overall program.
On February 13, 2012, staff presented the Solid Waste Program documents (History of the
Program, Purpose, Goals & Objectives, Current Program Summary, and 2011 Program Annual
Report). Staff asked if the following program "Purpose, Goals & Objectives" were still relevant:
1. High Quality Service
2. Environmental Stewardship
3. Cost Effective Services
4. Effective Communication
5. Continual Evaluation of Program and Industry
On March 12, 2012 staff presented a summary of Best Management Practice (BMP) program
elements shared by local governments with high recycling/diversion rates, a matrix showing
which of the BMP elements are being used by 19 leading environmental cities, a matrix showing
materials collected curbside in high-yielding communities, and a list of recommended BMP's and
cutting edge practices that the city should consider for our various waste streams (residential,
institutional, multi-family, and commercial).
Study Session Meeting of April 9, 2012 (Item No. 7) Page 2
Subject: Solid Waste Collection Program and Services
Council discussed some of their ideas for changing the program and their desire to once again be
an “industry leader” in the solid waste field. Council directed staff to:
1. determine what materials are being collected and what BMP's are being performed by
surrounding cities
2. determine what recycling opportunities are currently available in our community
3. revise the staff recommended BMP’s so all waste generators are required to meet
residential program requirements
4. provide additional information better describing what “drop off / reuse centers” are and
what services they provide
5. provide the pros and cons associated with single stream recycling
6. assess or evaluate the ease or difficulty associated with possible program changes
Research Findings (Exhibit Descriptions)
Attached to this report are exhibits that describe staff findings. The information found in each
exhibit is briefly described below:
Exhibit 1 (attached) provides a summary of advantages and disadvantages for single stream
recycling along with a list of surrounding cities showing which have single sort and which have
dual sort service.
Exhibit 2 (attached) provides a matrix showing which of the BMP elements are being used by
St. Louis Park and surrounding cities (this is the same BMP element list previously presented to
Council for the 19 leading environmental cities in the United States). The matrix is set-up with
the number of BMP’s used for each program type arranged from most (top) to least (bottom) as
well as showing the cities with the number of BMP’s used from most (left) to least (right).
Summary counts are shown for informational purposes. Event recycling is defined as any event
held on a city property or in a city facility.
Exhibit 3 (attached) provides a matrix showing materials collected curbside by St. Louis Park
and surrounding cities (this is the same material list previously presented to Council for
high-yielding communities in the United States). The matrix is set-up similarly to Exhibit 2 with
material types being collected arranged from most (top) to least (bottom) as well as having the
cities arranged from most (left) to least (right) for materials collected. Summary counts are
shown for informational purposes.
Exhibit 4 (attached) provides a list of best practices that could be added to the program. The list
is broken down into Levels 1-3 for each type of waste stream based upon ease of implementation
and cost.
• Level 1 - Short-Term Projects (easiest to implement, existing staff, minimum cost, can do
3-12 months)
• Level 2 - Mid-Term Projects (moderately challenging to implement, more staff/outside
help and additional resources needed, can do 12-24 months)
• Level 3 - Long-Term Projects - (most challenging to implement, more staff/outside help
and additional resources needed, can do 24+ months)
Adding new work tasks/programs will have implications on both staff resources and budget
allocations. Future analysis will be needed for the items Council desires adding.
Exhibit 5 (attached) lists materials collected at city Recycling Centers in the metro area. The
items are colored coded to designate if they are free or if there is a cost. The matrix is set-up
Study Session Meeting of April 9, 2012 (Item No. 7) Page 3
Subject: Solid Waste Collection Program and Services
similarly to Exhibits 2 & 3 with material types being collected arranged from most (top) to least
(bottom) as well as having the cities arranged from most (left) to least (right) for materials
collected. Summary counts are shown for informational purposes.
Exhibit 6 (attached) lists free retail drop-off sites in St. Louis Park or surrounding communities.
The matrix is set-up by material groups (automotive, household, electronics, metals, and
appliances) with the stores listed alphabetically.
Staff also surveyed surrounding cities to determine if construction and demolition (C&D)
recycling is being required of contractors and homeowners. No surrounding or metro cities
currently requiring C&D recycling, however several thought it was a good idea and something
they may consider in the future.
Public Works staff talked with Community Development and the Inspections Department staff
regarding current recycling area requirements for new development. Currently, state building
code requirements are followed where the minimum amount of recycling space provided is based
on a calculation of the gross square footage times a “use” factor. These appear to be minimal
requirements; additional requirements could easily be added into project requirements.
Proposed Process for Solid Waste Collection Contracts / Timeline
The current residential refuse/yard waste and recycling collection contracts expire September 30,
2013. New contracts should be awarded before the end of March 2013 to allow contractors time
to adequately prepare for the work. If that deadline cannot be met, extensions of the current
contracts will likely need to be negotiated.
Below is a draft schedule showing major steps necessary to develop and award new collection
contracts.
Item Completion Date
Staff / Council review of current & proposed collection program & services Feb - May 2012
Solicitation of public input (if desired by Council) Mar - May 2012
Staff / Council determine future collection program and services Jun - Jul 2012
Staff / Council determine contract and proposal requirements July - Sep 2012
Draft contract and RFP completed Sep 2012
Ordinance changes, if any needed, are identified Sep 2012
Ordinance revisions made (if needed) Sep 2012 - Jun 2013
Council authorizes solicitation of proposals Sep - Oct 2012
Proposals received by Staff Nov 2013
Proposals and staff recommendations reviewed with Council Jan 2013
Staff negotiates collection contracts with vendors Jan - Feb 2013
Council approves new collection contracts Mar 2013
Staff conducts public education outreach with residents Apr - Aug 2013
New collection contracts begin Oct 1 2013
Study Session Meeting of April 9, 2012 (Item No. 7) Page 4
Subject: Solid Waste Collection Program and Services
Note: A separate schedule or schedules for considering and implementing collection services beyond
current curbside residential collection will be developed if Council wants to consider providing any of
those services; any such efforts, if undertaken, may have an impact on the schedule listed above.
Next Steps
Staff desires Council input on program requirements at this study session. Based on that input,
staff will present the following information at the next study session:
• A proposed final list of materials that will be collected curbside with the residential
collection program
• A proposed final list of solid waste program elements, for the entire community, listing
both what is currently being done and what enhancements will be added
• A proposed public involvement plan for presenting the program and collection changes to
the public
FINANCIAL OR BUDGET CONSIDERATION:
None.
VISION CONSIDERATION:
The City’s refuse and recycling activities support or complement the following Strategic
Direction adopted by the City Council.
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.
Focus areas:
• Educating staff / public on environmental consciousness, stewardship, and best practices.
• Working in areas such as…environmental innovations.
Attachments: Exhibit 1 – Single Stream Collection Advantages & Disadvantages (Page 1)
Single Sort and Dual Sort Communities (Page 2)
Exhibit 2 – Solid Waste Program Elements in Nearby Cities
Exhibit 3 – Materials Collected Curbside in Nearby Cities
Exhibit 4 – Potential Solid Waste Program Enhancements
Exhibit 5 – Materials Collected at City Recycling Centers
Exhibit 6 - Free Retail Drop-off Sites (3 Pages)
Prepared by: Scott Merkley, Public Works Coordinator
Reviewed by: Michael P. Rardin, Director of Public Works
Approved by: Nancy Deno, Deputy City Manager/HR Director
EXHIBIT 1
Single Stream Collection Advantages & Disadvantages
03/28/12
Single Stream Advantages Single Stream Disadvantages
• Potential for Adding More Material Types
• Collection Cost Savings
• Customer Convenience –easy in home and at curb (especially if it’s
on wheels and can easily be rolled to the curb)
• Potential Increased Customer Participation
• Potential Gross Increase in Materials Collected
• Potentially Higher Diversion Rates (less material being burned)
• Less Litter
• Hauler Benefits:
o Reduced Worker Compensation Claims (when using rear-
load collection)
o Shorter Stops and Every-Other Week Collection – Less
Wear and Tear and Fuel Savings
o Fuel Savings
o Competitive Advantage for Providers Offering this Service
(Marketable Service)
• Initial Capital Costs for:
o New Carts,
o Different Collection Vehicles,
o Processing Facility Equipment
o Education of Residents;
• Processing and Overall Contract Costs may Increase
• Potential for Less Net Material Recovery
• Can Lead to Public Confusion –Blurring the Lines Between
Garbage & Recycling
• Competitive Disadvantage for Small Haulers Unable to Offer
Single Sort
• Difficult to Go Back
• Potential Reduced Personal Commitment to Recycling
• Increase the Costs for Manufacturers, as well as materials lost to
plastics, glass and aluminum
• Potential Reduced Commodity Prices from Contamination
• Glass breakage is more prevalent in single-stream processing
systems.
• Increased Residual Rates
o The amount of processing residuals (including mixed,
broken glass) generated at the single-stream facilities
serving the Minneapolis/St. Paul metro area varies
significantly from approximately 2% of throughput up to
17% of throughput.
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 5
EXHIBIT 1
Single Sort and Dual Sort Communities
03/27/12
Organized
Garbage
Organized
Recycling
Dual
Sort
Single
Sort
Edina
X X
Minneapolis (multi sort) X X X
Roseville
X X
St. Louis Park X X X
Wayzata X X X
Blaine X X X
Columbia Heights X X
X
Excelsior X X
X
Golden Valley
X
X
Hopkins X X
X
Minnetonka
X
X
Plymouth
X
X
Robbinsdale X X
X
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 6
Solid Waste Elements in Nearby Cities EXHIBIT 2
PlymouthMinnetonkaSt. Louis ParkMinneapolisEdinaGolden ValleyColumbia HeightsHopkinsRosevilleCOUNTSingle Family
Variable Rate – PAYT X X X X X X X X X 9
Yard waste/leaf drop off site X X X X X 5
Food Waste Collection X X X X X 5
Mandatory Recycling X 1
Recycling Incentives X 1
Disposal Ban 0
Multi‐family
Required Recycling Svc.X X X X X X X X X 9
Mandatory Recycling 0
Food Waste Service 0
Other 0
Commercial
Required Recycling Svc.X X 2
Mandatory Recycling X X 2
Plastic Bag Ban 0
Mandatory Food Waste Service 0
Styrofoam Ban 0
Recyclable/compostable food/bev. pkging req.0
Other 0
Construction/Demo
Disposal Ban 0
Mandatory recycling % 0
Must use certified facility 0
Economic incentive – refundable deposit fee with permit 0
Other 0
Waste Reduction
Recycling Center/Drop-off Sites X X X X 4
Opt out (yellow pages, junk mail)X X X 3
Green purchasing X X X 3
Extended Producer Responsibility X 1
City provided waste assessments X 1
Other - New drinking fountains X 1
Grants 0
Event Recycling
City provides containers/services X X X 3
Recyclable/compostable food/bev. pkging req.X X 2
Recycling requirement 0
COUNT 10 8 6 6 5 5 4 4 4
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 7
Materials Collected Curbside Golden ValleyMinnetonkaPlymouthMinneapolisRosevilleSt. Louis ParkEdinaHopkinsColumbia HeightsCOUNTGlass bottles and jars X X X X X X X X X 9
Paper, news, mag.X X X X X X X X X 9
Paperboard boxes X X X X X X X X X 9
Corrugated cardboard X X X X X X X X X 9
Aluminum/Steel cans X X X X X X X X X 9
Shredded paper X X X X X X X X X 9
Plastics - 1 & 2 bottles X X X X X X X X X 9
Yard waste X X X X X X X X X 9
Pop/Beer boxes X X X X X X X X 8
Electronics X X X X X X X X 8
Cartons-Gable Top (1/2 gallon
milk/orange juice cartons) *X X X X X X *X 7
Aseptic packaging (juice boxes) *X X X X X X *X 7
Metal jar lids & steel bottle caps X X X X X X X 7
Plastic lids (3" or wider)X X X X X X 6
Plastics - 1-5 + 7 bottles *X X X X *X 5
Aluminum foil/trays X X X X X 5
Plastics - 1-7 incl. clamshells, deli trays,
except Styrofoam X X X X X 5
Food waste (organics - veggie only)X X X X 4
Plastic bags (bagged not loose) *X X X *3
Food waste (organics - w/meat, dairy)X X X 3
Textiles X X X 3
Pizza Boxes - carryout, not frozen X X 2
Paperboard boxes - Refrig X 1
Plastics - large rigid 0
Scrap metal (2'x2'x2' or 30lbs)0
Aerosol cans (empty)0
Oil filters 0
Used motor oil 0
Fluorescent bulbs 0
COUNT 19 19 19 17 16 16 15 13 12
* Edina will collect in 2013
EXHIBIT 3
Materials Collected Curbside in Nearby Cities
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 8
EXHIBIT 4
Potential Solid Waste Program Enhancements
03/28/12
Page 1 of 2
Recycling Garbage Construction & Demolition Debris Other
Residential
Level 1
• Consider single stream recycling
• Large colored sticker on recycling cart that shows what
materials can be recycled
• Review national partnership opportunities to expand
local recycling efforts (Curbside Value Partnership)
• Consider curbside metal collection (2’ or less)
Level 2
• Develop a waste reduction messaging campaign
• Develop and implement a community education
program
• Offer curbside organics collection
Level 1
• No charge for downsizing cart size
• Utilize PAYT (Pay-as-you-Throw)
• Reduce/limit number of service levels
• Offer smaller carts (<30 gallons)
• Raise fees on Extra Refuse Stickers to encourage
recycling
• Revise rates to encourage recycling
Level 3
• Create a Residential Construction & Demolition Program
• Waste management plans submitted with construction
permit application
• Economic incentive – fee required with permit, 100% fee
returned if recycling quota met (50‐65%)
Level 1
• Consider accepting
hazardous materials at
cleanup events
Multi‐family
Level 1
• Improve code requirements
• Improve monitoring and enforcement of existing codes
• Include information about recycling opportunities on
city’s Web site
• Create ordinance that requires all MF submit a
recycling improvement plan
• Mandatory recycling/making hauler permits contingent
on offering recycling
• Require hauler provide tonnage reports to city
Level 2
Create recycling education plan/program
Level 2
• City conduct waste audits and recommend strategies to
reduce waste
Commercial
Level 1
• Include information about recycling opportunities on
city’s Web site
• Create ordinance requiring the availability of recycling
• Mandatory recycling/making hauler permits contingent
on offering recycling
• Require hauler provide tonnage reports to city
Level 2
• City conduct waste audits and recommend strategies to
reduce waste
• Create education program for businesses
• Collaborate w/local artists to design recycling bins in
city parks (Mears Park, Saint Paul)
Level 3
• Honor outstanding businesses that recycle above the
norm
Level 3
• Create a Commercial Construction & Demolition Program
• Waste management plans submitted with construction
permit application
• Economic incentive – fee required with permit, 100% fee
returned if recycling quota met (50‐65%)
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 9
EXHIBIT 4
Potential Solid Waste Program Enhancements
03/28/12
Page 2 of 2
Recycling Garbage Construction & Demolition Debris Other
Institutional
(school, church,
hospital)
Level 1
• Include information about recycling opportunities on
city’s Web site
Level 3
• Create a recycling program for schools and provide
assistance
• Encourage mixed paper and cardboard recycling
City
Level 3
• Consider a city-owned and operated recycling drop-off
facility
• Product Reuse Center
Level 1
• Require all city-initiated construction projects to
incorporate construction and demolition waste recycling
or recovery practices based on project size
Level 1
• Work with haulers to reduce
collection system footprint
• Promote opt‐out of yellow
pages and junk mail
• Promote green purchasing
(buy recycled)
Level 3
• Create an event recycling
program
• City provides containers or
collection services for events
• Require recycling at events
(through permits)
• Encourage compostable
food/beverage packaging
• Grants
Short-Term Projects/Level 1 - (easiest to implement, existing staff, minimum cost, can do in 3-12 months)
Mid-Term Projects /Level 2 - (moderately challenging to implement, more staff/outside help and additional resources needed, can do in 12-24 months)
Long-Term Projects /Level 3 - (most challenging to implement, more staff/outside help and additional resources needed, can do in 24+ months)
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 10
Materials Collected at City Recycling Centers Coon RapidsHennepin CountyAndoverColumbia HeightsMaple GrovePlymouthHopkins/MinnetonkaBrooklyn ParkCOUNTGlass bottles and jars X X X X X X X 7
Paper, news, mag, shredded.X X x X X X X 7
Paperboard boxes X X x X X X X 7
Corrugated cardboard X X x X X X X 7
Aluminum/Steel cans X X x X X X X 7
Plastics #1 & 2 x x x x X x x 7
Books/Phone Books X X x x x X 6
Used motor oil X x x X x x 6
Oil filters x X x x x 5
Plastics 1-7 incl. clamshells, deli trays, except Styrofoam x X x X 4
Scrap metal x X x X 4
Batteries -Auto/Rchrg/House x x x X 4
Anti-Freeze x x x x 4
Plastic bags (bagged not loose)x x x x 4
Cartons-Gable Top (1/2 gallon milk/orange juice cartons)x X X X 4
Aseptic packaging (juice boxes)x x x x 4
Tires x x x 3
Fluorescent bulbs x x x 3
Plastic flower pot x x 2
Aluminum foil x x 2
Metal jar lids & steel bottle caps X X 2
Electronics x x 2
Mattresses x x 2
Fire Extinguisher x x 2
Appliances x x 2
Aerosol cans (empty)X 1
Food waste (organics - w/meat, dairy)x 1
Veg Oil x 1
Packing Peanuts x 1
Styrofoam x 1
Carpet x 1
Textiles x 1
Bicycles x 1
Propane Tanks x 1
Car Seats x 1
Paint/Chemicals x 1
Media/Computer Disks/Game Cartridges x 1
Count 32 23 15 13 12 11 10 3
Yellow - Cost Associated
MATERIALS COLLECTED AT CITY RECYCLING CENTERS
EXHIBIT 5
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 11
Free Retail Drop-off Sites EXHIBIT 6
Ink and Toner CartridgesAluminum CansPlastic BagsPlastic Bottles #1 and #2Batteries - RechargeableAlarm ClocksBatteries - OtherVacuumsWeather StationsCalculatorsCorks - Natural (wine)FansGlass BottlesPlastics #5Plastics #3 - #7Lawn MowersLight Bulbs - CFL'sLight Bulbs - Tubes, etc.BBQ GrillsSnowblowersStainless Steel SinksStainless Steel CountertopsBicyclesClothing Donation BoxesExercise EquipmentSteel (all)Best Buy Kiosks
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Best Buy
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Byerly's
3777 Park Center Blvd, St. Louis Park (952) 929-2100
Cub Foods
3620 Texas Ave S, St. Louis Park (952) 938-5959
East Side Food Coop
2551 Central Ave NE, Minneapolis (612) 843-5401
Express Metals
8094 Excelsior Blvd, Hopkins (952) 516-6066
Home Depot
5800 Cedar Lake Rd, St. Louis Park (952) 512-0109
Office Max
5600 Cedar Lake Dr, St. Louis Park (952) 417-0755
Radio Shack
8126 Hwy 7, St. Louis Park (952) 935-5963
Sam's Club Kiosks
3745 Louisiana Ave S, St. Louis Park (952) 929-9158
Staples
11500 Wayzata Blvd, Mtka (952) 545-6165
Target Kiosks
3601 Hwy 100 S, St. Louis Park (952) 926-8855
8900 Hwy 7, St. Louis Park (952) 935-6941
Verizon Wireless Store
8504 Hwy 7, St. Louis Park (952) 938-0465
WF Industries
8000 Powell Rd, Hopkins (952) 405-9289
Whole Foods
3060 Excelsior Blvd, Minneapolis (612) 927-8141
1001 Plymouth Rd, Minnetonka (952) 797-5600
Xcel Energy
MN Customers Only 1-800-599-5795
COUNT 65544222222222111111111111
HOUSEHOLD
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 12
Free Retail Drop-off Sites EXHIBIT 6
Cell PhonesComputers - BatteriesCell Phones - BatteryMusic - PlayersComputers Computers - MonitorsComputers - AccessoriesComputers - PrintersShreddersCables & ConnectorsCameras/CamcordersCameras/CamcordersCell Phones GPS UnitsE-ReadersMovies - DVD, Blu-rayMusic - CDsMusic - Portable Music - Systems Televisions TV - Wall MountsTV - Tuners/ConvertersVideo - PlayersVideo - Games RefrigeratorsAir ConditionersDehumidifiersDishwashersDryersFreezersFurnacesHot Water HeatersStovesRefrigeratorsWashersBest Buy Kiosks
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Best Buy
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Byerly's
3777 Park Center Blvd, St. Louis Park (952) 929-2100
Cub Foods
3620 Texas Ave S, St. Louis Park (952) 938-5959
East Side Food Coop
2551 Central Ave NE, Minneapolis (612) 843-5401
Express Metals
8094 Excelsior Blvd, Hopkins (952) 516-6066
Home Depot
5800 Cedar Lake Rd, St. Louis Park (952) 512-0109
Office Max
5600 Cedar Lake Dr, St. Louis Park (952) 417-0755
Radio Shack
8126 Hwy 7, St. Louis Park (952) 935-5963
Sam's Club Kiosks
3745 Louisiana Ave S, St. Louis Park (952) 929-9158
Staples
11500 Wayzata Blvd, Mtka (952) 545-6165
Target Kiosks
3601 Hwy 100 S, St. Louis Park (952) 926-8855
8900 Hwy 7, St. Louis Park (952) 935-6941
Verizon Wireless Store
8504 Hwy 7, St. Louis Park (952) 938-0465
WF Industries
8000 Powell Rd, Hopkins (952) 405-9289
Whole Foods
3060 Excelsior Blvd, Minneapolis (612) 927-8141
1001 Plymouth Rd, Minnetonka (952) 797-5600
Xcel Energy
MN Customers Only 1-800-599-5795
COUNT 65443333322222222222222221111111111
APPLIANCESELECTRONICS
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 13
Free Retail Drop-off Sites EXHIBIT 6
AluminumBrassCopper LeadStainless SteelWireCarbideCobalt-TantalumCordsIron/Cast IronNickle AlloysPlumbing PipeTitaniumCar Audio DVD PlayersElectic MotorsTire RimsLead Wheel WeightsRadiatorsBrake Rotor, DrumsEnginesTransmissionsLead Acid BatteriesBest Buy Kiosks
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Best Buy
13513 Ridgedale Dr, Mtka (952)-544-0377
3200 Southdale Circle, Edina (952) 925-4425
Byerly's
3777 Park Center Blvd, St. Louis Park (952) 929-2100
Cub Foods
3620 Texas Ave S, St. Louis Park (952) 938-5959
East Side Food Coop
2551 Central Ave NE, Minneapolis (612) 843-5401
Express Metals
8094 Excelsior Blvd, Hopkins (952) 516-6066
Home Depot
5800 Cedar Lake Rd, St. Louis Park (952) 512-0109
Office Max
5600 Cedar Lake Dr, St. Louis Park (952) 417-0755
Radio Shack
8126 Hwy 7, St. Louis Park (952) 935-5963
Sam's Club Kiosks
3745 Louisiana Ave S, St. Louis Park (952) 929-9158
Staples
11500 Wayzata Blvd, Mtka (952) 545-6165
Target Kiosks
3601 Hwy 100 S, St. Louis Park (952) 926-8855
8900 Hwy 7, St. Louis Park (952) 935-6941
Verizon Wireless Store
8504 Hwy 7, St. Louis Park (952) 938-0465
WF Industries
8000 Powell Rd, Hopkins (952) 405-9289
Whole Foods
3060 Excelsior Blvd, Minneapolis (612) 927-8141
1001 Plymouth Rd, Minnetonka (952) 797-5600
Xcel Energy
MN Customers Only 1-800-599-5795
COUNT 22222211111112222221111
METALS AUTOMOTIVE
Study Session Meeting of April 9, 2012 (Item No. 7)
Subject: Solid Waste Collection Program and Services Page 14
Meeting Date: April 9, 2012
Agenda Item #: 8
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Communications/Meeting Check-In (Verbal).
RECOMMENDED ACTION:
Not Applicable.
POLICY CONSIDERATION:
Not Applicable.
BACKGROUND:
At every Study Session, verbal communications will take place between staff and Council for the
purpose of information sharing.
FINANCIAL OR BUDGET CONSIDERATION:
Not Applicable.
VISION CONSIDERATION:
Not Applicable.
Attachments: None
Prepared and Approved by: Tom Harmening, City Manager
Meeting Date: April 9, 2012
Agenda Item #9
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Update on request by Westwood Villa Condominium Association to Establish Westwood Villa
Association Housing Improvement Area (HIA).
RECOMMENDED ACTION:
No action is required at this time. This report is intended to update the City Council on this
project. The Westwood Villa Association is requesting that the City Council hold a Public
Hearing on April 16, 2012 to consider establishing the Westwood Villa HIA and imposing fees.
POLICY CONSIDERATION:
The City is authorized by the state to establish HIAs as a finance tool for private housing
improvements. The City adopted an HIA policy in 2001, and has established six HIA’s to date
(see attachment). In 2009, the state legislature extended the HIA statute through June 2013.
BACKGROUND:
Westwood Villa Condominium Association is
located at 2200 Nevada Ave S.
• The single, 3-story building has 66 units.
• It was built in 1970 and converted to condos
in 1973.
• 88% of the units are owner occupied.
• The 2012 median estimated market value of
the units is $68,900.
• The 2012 estimated market value of units
range from $61,000 - $97,800.
A. History
The Westwood Villa Association has been working on a potential improvement project for
several years. The board had a physical needs assessment and financial plan review known as a
Reserve Study conducted in 2008 to provide a background for making decisions related to
property improvement. The Board along with its management company and a consultant began
the process of determining the scope of work, identifying contractors and communicating with
membership.
In November 2010 the association submitted a preliminary application for the HIA and by spring
of 2011 the association was planning to distribute petitions to have the HIA established. The
scope of improvements was finalized in February 2012.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 2
Subject: Update on Request by Westwood Villa Association to Establish HIA
The Board has determined that while costly, the work needs to be done and further delay of the
work will only result in further deterioration of the building. In February petitions were
distributed petitions to owners requesting that the Council hold a Public Hearing to consider
establishing the HIA and imposing fees. As required by state statute and the City’s HIA policy a
majority of owners, 38 of the 66 owners, or 58% of the owners signed petitions requesting the
Public Hearing.
B. Analysis of Application
The City’s policy requires that only associations where the median unit value is less than or
equal to MN Housing’s First Time Home Buyers limit of $298,000 (2012) may apply. The
median condo value of $68,900 is within policy guidelines.
The following analysis describes how the current proposal meets the HIA policy and intentions
of the statute. The Association’s preliminary application has been reviewed by staff and the
City’s financial advisor, Ehlers and Associates.
1. The Association contracted with a third party to conduct a reserve study.
In 2008, the Association had a reserve study conducted by Reserve Advisors, Inc. The study
includes a physical needs assessment, thirty year capital improvement plan and a financial
analysis of the existing and projected financial situation. The scope of work is consistent
with the recommendations of the reserve study. The funding plan indicates that projected
association fee increases will meet operational needs and the Association will be capable of
funding future improvements with their reserves.
2. Project Costs are reasonable and eligible for use of the HIA.
To ensure the proposed scope and cost was the most responsible possible, the Association
hired consultants to assist with evaluating the needed repairs. These consultants include
Ambe Ltd and M & E Engineering, Inc., Consulting Engineers. The Board and consultants
worked through winter of 2011/2012 to refine the scope of work and budget.
The proposed scope of work is estimated at $2,185,000.00 and includes the following basic
improvements which are eligible uses for the HIA and are noted in the following table.
• The Decks are interconnected with the mansard roof and thus, the roof. The decks have
shifted from their concrete supports, there is rotting wood and holes in the base beams
and railings, and other deterioration. When the base supports and beams are replaced,
individual decks and railing will be brought up to current building code.
• The Flat Roof needs to be replaced. The original singly ply rubber membrane is in poor
condition – it is shrinking towards the middle and can cause leaking in the future. Water
has gotten behind the mansard roof and leaking has occurred.
• The Mansard Roof is leaking and causing moisture intrusion. The best way to connect the
roof and the mansard is to replace them at the same time.
• Bathroom Vents on the roof need to be replaced to allow proper ventilation through each
unit. These are on the roof and best replaced at the same time as the roof. City
Inspections has written correction notice for this work. .
• Elevator hydraulic jack needs to be replaced and brought up to State Code.
• Mold Removal on the garage pipes is required for contractors to work on the pipes.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 3
Subject: Update on Request by Westwood Villa Association to Establish HIA
• The Chiller system is the original, and each year there are significant repair costs to
keeping this chiller running. The “chiller” scope includes removal, purchase and
replacement of the roof mounted chiller, the evaporator tube bundle in the boiler room,
the two (2) roof mounted cooling air units, the hydronic piping insulation and valve
replacement in the garage, and all installation costs.
• Replace pipe risers. This piping is part of the hydronic system that distributes cooling
and heating water from the boiler room to the fan-coil units in each of the condo units.
Replacement will reduce condensation and make the system more efficient for both
cooling and heating.
• Repair Garage Floor. The garage floor is in disrepair.
• Spa room is currently unused space with a locked door. The spa will be filled in, the
piping removed, and the electrical wiring removed. Removing the spa will allow the
Westwood Villa residents to decide how to use this space in the future.
Table 1. Westwood Villa – Renovation Scope and Budget
Decks/Soffits/Roof $684,200
Decks $297,200
Soffit - Mansard roof $136,000
Flat roof $251,000
Bathroom Vents $66,000
Bathroom fans and balancing dampers $66,000
Elevator $53,259
Hydraulic jack replacement $28,259
Drain, sump and pump $15,000
Elevator ventilation $10,000
Mold Removal $59,960
Mold Removal garage piping $59,960
Chiller System $309,000
Chiller $51,106
Pipe Riser Replacement $237,600
Garage Floor $60,968
Spa Removal $31,700
Project Total without contingency $1,502,687
Estimated Contingency 30% $450,806
Total Project Costs $1,953,493
The next table shows the total project cost, which is estimated to be $2,185,000. The project
costs includes the cost of issuing bonds, financing costs, the city’s administrative fee and the
city’s cost of legal and financial advisors. The association’s soft costs include consultants as
noted in the following table.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 4
Subject: Update on Request by Westwood Villa Association to Establish HIA
Table 2. Greensboro Total Project Costs
Project Use of Funds Budget
Total Construction Costs $1,953,493
Underwriter's Discount for Bond Issuance $32,775
Cost of Issuance (Bond Counsel, Financial Advisor) $36,000
Rounding for Bond Issuance $1,598
Capitalized Interest $47,459
City Admin Fee (1/2 1 percent project cost) $10,925
Soft Costs $102,750
Total Soft and Loan Costs $231,507
TOTAL $2,185,000
Breakdown of Soft Costs
Construction Management Fee $24,250
Mechanical Engineer $55,000
Chiller Engineer $13,000
Legal $7,000
Financial Advisor $3,000
Total Soft Costs 102,750
3. The HIA Meets City Goals
The proposed improvements meet the City goals in that they will upgrade the existing
housing stock in a neighborhood, stabilize the owner-occupancy level within the association,
and preserve existing affordable housing stock. The use of the HIA to assist with property
improvements is consistent with VISION direction to preserve existing housing stock and
affordable ownership opportunities.
4. The Association’s Process, Timeline and Communication Exceed Statutory Requirements.
The Association’s communication regarding the HIA began in 2010. The Association has
continued to ensure owners have been aware of the status of the proposed project, and that
residents have been afforded opportunities to provide input. The relatively small size of this
complex, 66 units in one building also contributed to word-of-mouth communication.
On March 20, 2012 the City Clerk received signed petitions from 38 Westwood owners
requesting the Council schedule a public hearing to establish the HIA and impose fee.
Petitions have been signed by 58% of the owners, which is higher than other HIAs. City
policy and State Statute requires that 50% of the owners sign petitions. Prior to submitting
the petitions the association completed the following steps which meet statutory
requirements.
a. On November 3, 2010 at the request of the Association, city staff attended an Association
meeting to discuss the HIA as a tool to assist with financing improvements.
b. Throughout 2011, in January, February, March, May, June, September and October
Association Board meetings were held and the improvements discussed. From December
2011 through February the Board met regularly to review findings, communicate status
with residents and take input.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 5
Subject: Update on Request by Westwood Villa Association to Establish HIA
c. During January 2012, the board met with consultants and interested owners to finalize the
project scope. During this time the Board also decided to seek proposals to replace the
existing management company based on owner input.
d. On February 15 and February 23 the Association conducted a full membership meeting to
inform owners of the final proposed project. Meetings were held on different nights of
the week to ensure owners could attend.
5. The HIA Financing is Necessary for This Project.
The Westwood Villa Association applied for credit from Signature and Klein Banks as well
as M &I Bank. Their requests were denied based on insufficient income for the amount of
credit requested, the type of collateral was insufficient and the exposure amount was
considered too large.
The HIA is designed to be a last resort finance tool for associations. It is also designed to
address obstacles some associations confront when applying for financing – generally
associations are limited by their lack of collateral, and fund larger projects through short term
assessments to owners. The HIA provides more affordable payment options than association
special assessments, which generally are paid in a short time frame of a few months. The
HIA fee would average $242 per month, per unit. This payment will still allow association
fees to increase gradually to ensure adequate funds for operation and long term maintenance.
6. Fees and Loan Term.
The average fee per unit will be $33,106 with an annual average cost per unit of $2,909
including interest, payable over 20 years. The range of the unit fees is from $26,812 to
$48,573. Ehlers and Associates have suggested estimating a conservative interest rate of
5.50%, which may be decreased when bonds are actually sold and the city’s interest rate is
known. The following table outlines the loan terms.
Table 3. Loan Terms
Total Loan Amount $2,185,000
Term (years) 20
Interest Rate 5.50%
Average Annual Debt Service at 105% $191,981
Total Units 66
Cost/Unit – Annual (Average) $2,909
Cost/Unit - Monthly (Average) $242
Average Assessment - Per/Unit if prepaid $33,106
If the HIA is approved, owners would begin making payments with the 2013 real estate tax
payments. Owners will have the option to prepay the fee and avoid interest payments over
the 20 year term. The percentage of prepayments for the existing HIAs has been: forty
percent for the Cedar Trails HIA; twenty-five percent for the Sungate One; sixteen percent
for the Wolfe Lake; and seven percent for the Westmoreland Hills HIA, twenty-one percent
for the Sunset Ridge HIA and twenty-seven percent for the Greensboro HIA. Preliminary
Study Session Meeting of April 9, 2012 (Item No. 9) Page 6
Subject: Update on Request by Westwood Villa Association to Establish HIA
estimates based on completed owner questionnaires indicate that less than ten percent of the
owners are considering pre-paying the fee if the HIA is approved.
7. Association's Desired Method of Fee Imposition
The newly enacted legislation amending the HIA State Statute requires that if the fee be
imposed “on a basis other than the tax capacity or square footage of the housing unit, the
Council must make a finding that the alternative basis for the fee is more fair and
reasonable.” The Westwood Hill fee meets this standard - all common building areas
improvements would be assessed to each unit based on the percentage of building common
area ownership, which is based on square feet of units.
C. Homeowner risks and issues
Financial burden and debt load of owners. An HIA loan’s relatively low interest rate and
long term provides modest income homeowners an affordable means to pay for the
improvements.
1. The Board conducted a survey of owners to determine the number of low income seniors
and low income disabled persons that might be eligible for the hardship special
assessment deferral. The hardship deferral allows deferred payment until the sale or title
transfer of their unit for qualifying owner/residents. Five owners have indicated they
may be eligible for the deferred assessment.
2. Community Action Partnership of Suburban Hennepin (CAPHS) provides financial
counseling at no cost to St. Louis Park residents and owners have received information to
access this service.
3. There are three units in foreclosure – the bank and investor owners of these units will be
obligated to pay the fee, just as they are obligated to pay real estate taxes on their
properties.
4. By funding the HIA with a combination of bonds and internal funding, owners could
have more flexibility in paying off the assessment in the future.
The high cost of this project is due to the poor condition of major building components: roof,
mansard roof siding; decks, the A.C. / mechanical system and elevator, plus the contingency.
The costs are spread over only 66 units, so the per unit fee is high. The estimated market
values and sale values of condo units has been hit hard by the downturn in the housing
market. Staff has done an analysis of the market values, fee to unit value, and the difference
of current owners purchase price and current values, and foreclosures (3). Forty units are
currently valued at less than the sale price paid by the owners, and despite this, over half of
these 40 owners support the petition to move forward with the HIA loan.
City Issues
1. How best to fund HIA loans.
This project is proposed to be funded like the Greensboro HIA with a mix of internal
funding and bonds. This funding combination allows owners to prepay their assessment
and it ties up very little of the city reserves. If the timing of the Westwood Villa project
stays on track, it will be possible for the city to do a single bond issuance for both the
Greensboro HIA and Westwood Hills HIA, which will reduce the cost of issuance.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 7
Subject: Update on Request by Westwood Villa Association to Establish HIA
2. The firewalls to reduce the City’s financial risk are significant and include:
a. Repayment of the loan is made through owner’s real estate tax payments.
b. In foreclosure events, tax liabilities including special assessments, must be paid by
any party that purchases the unit. In this arena, HIA fees have been treated the same
as special assessments.
c. There is 105% debt coverage.
d. The development agreement allows the City to obtain assignment of association’s
assets. The agreement also can require associations to pay on behalf of delinquent
members if payments are not made.
e. The delinquency rate of existing HIA fees is low and consistent with the citywide
property tax delinquency rate of less than 1%.
f. Finally, the association, as required by statute conducted a reserve study of capital
needs and long term financials. The financial plan has been reviewed by staff and the
city’s financial advisor, Ehlers and Associates to ensure long term feasibility of
financing future improvements.
g. The Development Agreement provides additional contractual conditions to ensure
financial stability of associations. The agreement will require that the association:
• Use professional property management.
• Submit annual audits and update financial plans to demonstrate capability for
ongoing maintenance & operations.
• Demonstrate increases in monthly association dues to build reserves to a
sustainable level.
3. On-going maintenance of townhomes and condos a critical community need.
There are roughly 2700 townhome and condo units in St. Louis Park. The majority of them
are over 20 years old. For the strength of our neighborhoods and the whole community, it is
important that these homes be well maintained. Deteriorating housing would be a huge risk
for the community if allowed to happen.
NEXT STEPS:
April 16, 2012 Public Hearing at Council Meeting
May 7, 2012 2nd Reading of HIA Ordinance
June 21, 2012 Veto Period Ends
Effective Date of Ordinance
July 20, 2012 Prepayment Period Ends
Hardship Deferment Applications
August 2012 Sale of Bonds
2013 Fee will appear on property tax statements beginning 2013.
BUDGET CONSIDERATION:
Staff will be reviewing using a combination of bonds and internal funds to fund this project.
Using bonds will alleviate the concern that city reserve funds be tied up for a twenty year period
and will ensure that city has sufficient dollars available for other more immediate needs. While
using internal funds will allow owners the ability to pay-off the balance of their fee at any time.
Use of internal funds also generates interest revenue on the internal funds used.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 8
Subject: Update on Request by Westwood Villa Association to Establish HIA
The project fund covers costs incurred by the city; the city would receive an administrative fee of
one-half one percent of the project cost, or $10,925. The legal and financial advisor fees
incurred by the city are included in projects budget.
VISION CONSIDERATION:
This project is consistent with the VISION’s commitment to ensure a diversity of well-
maintained housing and affordable single-family home ownership.
Attachments: City HIA Policy
Summary of Established HIAs (2012)
Prepared by: Kathy Larsen, Housing Programs Coordinator
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 9) Page 9
Subject: Update on Request by Westwood Villa Association to Establish HIA
CITY OF ST. LOUIS PARK
HOUSING IMPROVEMENT AREA POLICY
1. PURPOSE
1.01 The purpose of this policy is to establish the City's position relating to the use of Housing
Improvement Area (HIA) financing for private housing improvements. This policy shall
be used as a guide in processing and reviewing applications requesting HIA financing.
1.02 The City shall have the option of amending or waiving sections of this policy when
determined necessary or appropriate.
2. AUTHORITY
2.01 The City of St. Louis Park has the authority to establish HIAs under 1994 Minnesota
Laws, Chapter 587, Article 9, Section 22 through 3 1, and extended in 2000, M.S.
428A.21
2.02 Within a HIA, the City has the authority to:
A. Make housing improvements
B. Levy fees and assessments
C. Issue bonds to pay for improvements
2.03 The City Council has the authority to review each HIA petition, which includes scope of
improvements, association’s finances, long term financial plan, and membership support.
3. ELIGIBLE USES OF HIA FINANCING
3.01 As a matter of adopted policy, the City of St. Louis Park will consider using HIA
financing to assist private property owners only in those circumstances in which the
proposed private projects address one or more of the following goals:
A. To promote neighborhood stabilization and revitalization by the removal of blight
and/or the upgrading of the existing housing stock in a neighborhood.
B. To correct housing or building code violations as identified by the City Building
Official.
C. To maintain or obtain FHA mortgage eligibility for a particular condominium or
townhome association or single family home within the designated HIA.
D. To increase or prevent the loss of the tax base of the City in order to ensure the
long-term ability of the City to provide adequate services for its residents.
E. To stabilize or increase the owner-occupancy level within a neighborhood or
association.
Study Session Meeting of April 9, 2012 (Item No. 9) Page 10
Subject: Update on Request by Westwood Villa Association to Establish HIA
F. To meet other uses of public policy, as adopted by the City of St. Louis Park from time
to time, including promotion of quality urban design, quality architectural design, energy
conservation, decreasing the capital and operating costs of local government, etc.
4. HIA APPROVAL CRITERIA
4.01 All HIA financed through the City of St. Louis Park should meet the following minimum
approval criteria. However, it should not be presumed that a project meeting these criteria would
automatically be approved. Meeting these criteria creates no contractual rights on the part of any
association.
A. The project must be in accordance with the Comprehensive Plan and Zoning
Ordinances, or required changes to the Plan and Ordinances must be under active
consideration by the City at the time of approval.
B. The HIA financing shall be provided within applicable state legislative restrictions,
debt limit guidelines, and other appropriate financial requirements and policies.
C. The project should meet one or more of the above adopted HIA Goals of the City of
St. Louis Park.
D. The term of the HIA should be the shortest term possible while still making the annual
fee affordable to the association members. The term of any bonds or other debt incurred
for the area should mature in 20 years or less.
E. The association in a HIA should provide adequate financial guarantees to ensure the
repayment of the HIA financing and the performance of the administrative requirements
of the development agreement. Financial guarantees may include, but are not limited to
the pledge of the association's assets including reserves, operating funds and/or property.
F. The proposed project, including the use of HIA financing, should be supported by a
majority of the owners within the association. The association should include the results
of a membership vote along with the petitions to create the area.
G. The Association must have adopted a financial plan that provides for the Association
to finance maintenance and operation of the common elements within the Association
and a long-range plan to conduct and finance capital improvements therein, which does
not rely upon the subsequent use of the HIA tool.
H. HIA financial assistance is last resort financing and should not be provided to projects
that have the financial feasibility to proceed without the benefit of HIA financing.
Evidence that the association has sought other financing for the project should be
provided and should include an explanation and verification that an assessment by the
association is not feasible along with letters from private lenders or other evidence
indicating a lack of financing options.
I. The homeowner's association must be willing to enter into a development agreement,
which may include, but is not limited to, the following terms:
establishment of a reserve fund
staffing requirements
Study Session Meeting of April 9, 2012 (Item No. 9) Page 11
Subject: Update on Request by Westwood Villa Association to Establish HIA
annual reporting requirements
conditions of disbursement
required dues increases
notification to new owners of levied fees
J. The improvements financed through the HIA should primarily be exterior
improvements and other improvements integral to the operation of the project, e.g.
boilers. In the case of a homeowner's association, the improvements should be restricted
to common areas. The improvements must be of a permanent nature.
The association must have a third party conduct a facility needs assessment to determine
and prioritize the scope of improvements.
K. HIA financing should not be provided to those projects that fail to meet good public
policy criteria as determined by the Council, including: poor project quality; projects that
are not in accord with the Comprehensive Plan, zoning, redevelopment plans, and the
City policies; projects that provide no significant improvement to the neighborhood
and/or the City; and projects that do not provide a significant increase in the tax base
and/or prevent the loss of tax base.
L. The financial structure of the project should receive a favorable review by the City's
Financial Advisor and Bond Counsel. The review will include a review of performance
and level of outstanding debt of previous HIAs.
M. The average market value of units in the association should not exceed the maximum
home purchase price for existing homes under the State’s first time homebuyer program.
(In 2001, the metro amount is $175,591)
N. The association is to submit an application along with application fee as set from time
to time by resolution of the City Council.
Adopted by the City of St. Louis Park on the 16th day of July 2001.
St. Louis Park HIA Summary - 2012
04/04/2012
Association
Number
of Units
Loan
Amount
Avg. Est.Market
Value - date HIA
Estab.
Year
Established
Avg
Fee/Unit
Interest
Rate
Term
Years Expiration
Source
of
Funds
#
Hardship
Deferrals
#
Prepayment
Cedar Trails Condominium
Association 280 $1,366,000 $112.80 2002 $4,878 6.30%10 2012 HRF 0 50
Sungate One Association 20 $183,884 $131,700 2006 $9,194 5.90%10 2016 HRF 0 2
Wolfe Lake Condominiums 130 $1,238,000 $127,300 2007 $9,754 5.85%15 2022 HRF 0 10
Westmoreland Hills
Owners Association 72 $1,026,125 $101,400 2008 $14,250 5.85%15 2023 HRF 7 12
2009 EMV
$118,500
Greensboro Condominium
HIA 260 $3,835,000
condos $75,300
townhomes
$151,500 2011 $13,500 6.03%20 2032
HRF &
Bonds 15 69
Totals 1002 $11,584,204
2012 Pending HIA's
Number
of Units
Estimated
Loan
Amount
2012Average
EMV
Estimate
Year to be
Establish
Avg
Fee/Unit
Interest
Rate
Term
Years Expiration
Source
of
Funds
# of
Hardship
Deferrals
Estimated #
Prepayment
Westwood Villa
Condominium 66 $2,185,000 $67,069 2012 $33,106 5.5 20 2032
HRF &
Bonds 4 4
50$16,625 5.60%20 2031 Bonds 6
Sunset Ridge
Condominium Association 240 $3,935,195 2009
Meeting Date: April 9, 2012
Agenda Item #: 10
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Open to Business Program Update and Contract Renewal.
RECOMMENDED ACTION:
Staff wishes to provide an update on the Open to Business Program and receive feedback on the
renewal of the EDA’s annual contract with the Metropolitan Consortium of Community
Developers (MCCD).
POLICY CONSIDERATION:
Does the EDA wish to renew its contract with the MCCD to continue the Open to Business
program in St. Louis Park? Barring any objections, Staff will proceed with renewal of the
EDA’s contract with the MCCD through March 31, 2013.
BACKGROUND:
The EDA approved the Open to Business program on March 14, 2011. Through this program the
EDA contracted with the Metropolitan Consortium of Community Developers (MCCD) to
provide one-on-one technical assistance to existing St. Louis Park business, local aspiring
entrepreneurs, and parties interested in opening a business in St. Louis Park. Through the Open
to Business program prospective and existing entrepreneurs receive counseling with a business
advisor from MCCD who provides help with planning and organizing business ideas, financial
management, marketing, regulatory compliance, and assistance with leases or property
purchases. The program began in St. Louis Park in August. Counseling sessions are now
scheduled the fourth Monday of each month from 9 a.m.to 11 a.m. at City Hall.
Open to Business Update
Under its contract, MCCD is required to provide updates detailing the services provided in St.
Louis Park. Listed below are the program services rendered between August 2011 and March
2012.
Number of clients: 31
Technical assistance hours provided: 138
Types of businesses or ideas from clients:
• Restaurant
• Medical professional staffing agency
• Dog apparel
• Marketing consulting
• Coffee shop
• Tailor
• Life coach
• Photographer
• Rock n Roll camp
• Window Manufacturer
• Guitar shop
Study Session Meeting of April 9, 2012 (Item No. 10) Page 2
Subject: Open to Business Program Update and Contract Renewal
Types of services delivered:
• Bookkeeping assistance
• Real estate analysis
• Financial planning
• Cash flow analysis
• Business plan development
• Helping with strategic alliances
The Open to Business program also provided a $40,000 loan to CenterPoint Massage and Shiatsu
Therapy School and Clinic. The school provides massage therapy training. It recently moved to
5300 35th St W (north side of 35th St W., visible on the east side of Hwy 100) from Minneapolis.
The MCCD loan financed the remainder of the school’s build-out. In addition, the Open to
Business program helped a Minneapolis business expand into St. Louis Park and helped a
struggling coffee shop access a $1,000 grant to fix an espresso machine.
The “Test Drive Your Business Idea” counseling sessions are becoming more frequent and are
likely to accelerate as the program becomes more widely known.
The Open to Business Program was recently recognized at last month’s TwinWest State-of-the-
City program. This new initiative is a cost effective method for St. Louis Park to spur business
formations and help them grow and expand. The program is off to a good start and usage is
expected to increase as the program becomes better known. Open to Business is the kind of
program that will generate greater benefits for the city the longer it is in place.
Contract Terms
The annual cost to contract with MCCD for the provision of the Open to Business program is
$10,000. There are performance measures included within the contract which include reporting
requirements so as to monitor and evaluate the program’s effectiveness. The term of the contract
is for one year. This past fall, the EDA applied for and was awarded a Hennepin County
Housing and Redevelopment Authority grant in the amount of $5,000 so as to offset half of this
year’s program cost. Thus, the EDA’s total cost to continue the Open to Business program in
2012 is $5,000. The program is a good value and it is recommended that it be renewed.
FINANCIAL OR BUDGET CONSIDERATION:
The EDA is being asked to renew its annual contract with the Metropolitan Consortium of
Community Developers (MCCD) for the provision of small business assistance services within
St. Louis Park. The cost of these services for the April 1, 2012 to April 1, 2013 term is $10,000.
This amount would be offset by a $5,000 grant from the Hennepin County Housing and
Redevelopment Authority (HCHRA). The remaining $5,000 cost would be drawn from the
Development Fund.
VISION CONSIDERATION:
This project supports the strategic direction of providing a well-maintained and diverse
[building] stock.
Attachment: Staff Report of March 14, 2012
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Kevin Locke, Community Development Director
Approved by: Nancy Deno, EDA Deputy Executive Director/Deputy City Manager
Study Session Meeting of April 9, 2012 (Item No. 10) Page 3
Subject: Open to Business Program Update and Contract Renewal
Meeting Date: March 14, 2011
Agenda Item #: 3
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Proposed St. Louis Park Open to Business Program.
RECOMMENDED ACTION:
Staff requests EDA approval to enter into a one year contract with the Metropolitan Consortium
of Community Developers (MCCD) for the provision of small business technical assistance
services within St. Louis Park.
POLICY CONSIDERATION:
Does the EDA wish to contract with the MCCD to bring its Open to Business program to St.
Louis Park?
BACKGROUND:
The Metropolitan Consortium of Community Developers (MCCD) is an association of 43 non-
profit community development agencies that work to improve housing and economic opportunity
throughout the Twin Cities area. It has offered enterprise facilitation services through staff
member Rob Smolund since 2004. In the years since, the MCCD program has added specialists
in the areas of business accounting, finance, real-estate development, and regulatory compliance.
This team of business development specialists and former business owners provide real world
advice and counseling to area small business clients on a customized basis. MCCD staff works
with more than 250 entrepreneurs every year, providing more than 1,500 hours of direct business
assistance. In so doing, MCCD also has substantial experience working with ethnic minorities,
and clients with household incomes below 50% of the area median.
Open to Business Technical Assistance Services
MCCD recently launched a n ew initiative called the Open to Business program in which it
contracts with selected cities in Hennepin County to provide small business assistance services
on behalf of the municipality. Through this program MCCD would provide one-on-one technical
assistance to existing St. Louis Park businesses, local aspiring entrepreneurs and parties
interested in opening a business in St. Louis Park. Technical assistance would include, but not
be limited to, the following:
• Free, confidential, small business consulting every month on a walk-in basis at City Hall.
MCCD staff can also meet clients by appointment at their place of business. Such
consulting will occur in the form of one-on-one assistance customized to meet the
individual needs of small business owners or operators.
• Guidance for prospective entrepreneurs who are considering opening a business in St.
Louis Park so as to allow them to “test drive” their new business idea.
Study Session Meeting of April 9, 2012 (Item No. 10) Page 4
Subject: Open to Business Program Update and Contract Renewal
• Help with feasibility studies, business plan development, marketing plans, cash flow and
financing projections, start-up financing, loan packaging, financial management and
tracking systems, operational analysis, lease reviews, as well as licensing and regulatory
compliance.
• Access to non-traditional financing for existing businesses and resident entrepreneurs.
• Draw on the diversity of backgrounds and expertise of the MCCD team of experts.
In addition MCCD would develop strategic alliances with local banks so as to help formulate
loan packages involving multiple financing partners in order to move more small business
projects forward. Even if the client can obtain all their financing from a bank, MCCD staff can
assist in preparing their loan request and can advocate for the client with the bank. In essence,
MCCD staff members become an advisor, an advocate, and a partner on which that entrepreneur
may rely.
Open to Business provides access to Capital
MCCD also operates an Emerging Small Business Loan Program that can provide local
entrepreneurs access to micro-loans to help start or grow their businesses in partnership with
community banks. MCCD has engaged in direct lending to start-up and expanding small
businesses, in a wide variety of industries since 1989. As a participant in the Open to Business
program, the City can help local businesses secure small loans which can be difficult to obtain
and administer. Loans can be for as little as $1,000, and up to $25,000, for terms of up to 5 years.
Loan proceeds can be used for working capital, inventory, equipment and general business
operations.
Last year, MCCD started a new 4% Loan Program. This program is aimed at helping metro area
business owners finance production equipment and commercial building improvements. Under
this new lending initiative, MCCD will provide up to $40,000 in loan funds at an interest rate of
4%, provided that its funds are matched by an equal or greater amount by a bank. The program
is open to businesses that own their own facilities as well as to tenant businesses that intend to
purchase equipment and/or make leasehold improvements.
Other Services
While MCCD’s primary goal through the Open to Business program is to assist existing
businesses and better prepare prospective entrepreneurs for business success, it can also help
avoid expensive failures. MCCD, in its role as “trusted advisor”, has led many clients to realize
that starting a business may not be for them. By meeting with MCCD staff before signing leases
or purchasing equipment, these clients avoid spending life savings or incurring large sums of
debt on dubious ventures. Helping prevent business failures (which can, at times, result in
problems for the City) can also be considered a successful outcome.
Contract Terms
The cost to contract with MCCD for the provision of its Open to Business program is $10,000.
There are performance measures included within the contract which include quarterly reporting
requirements so as to monitor and evaluate the program’s effectiveness. The term of the contract
is for one year at the conclusion of which the EDA can decide whether it wishes to continue the
contract for another year.
Study Session Meeting of April 9, 2012 (Item No. 10) Page 5
Subject: Open to Business Program Update and Contract Renewal
Overview
Currently MCCD has contracts with the cities of Minnetonka and Brooklyn Park both of which
provided favorable reviews for the Open to Business program. Staff is familiar with MCCD’s
services as it has been referring entrepreneurs and small business owners to them for counseling
and small business loan assistance for several years. Staff has found Mr. Smolund to be a
valuable resource for such referrals. The general concept of the bringing the Open to Business
program to St. Louis Park on a monthly basis is to make it more convenient for local businesses
to avail themselves of the services and resources offered through the MCCD instead of sending
them to Minneapolis.
By contracting with MCCD, St. Louis Park can offer a “city-branded” one-stop shop for small
business support services. This arrangement can provide the City with a “turnkey”, in-house
small business development program without having to hire additional staff. The Open to
Business program would augment the City’s other economic development initiatives and fulfill a
need for additional small business assistance within the community.
Given St. Louis Park’s central location and economic strength, entrepreneurs have considerable
interest in starting and growing businesses in the city. By providing business assistance services
and access to other sources of financing, the City can encourage additional small business
development that further grows its tax base, creates local jobs and increases community vitality.
Next Steps
Should the EDA wish to collaborate with MCCD on its Open to Business program, staff will take
steps to publicize the new initiative within the community. A news release will be distributed and
announcements will be placed on the City’s website and in utility mailings. Mr. Smolund will
also be asked to introduce the program at upcoming St. Louis Park Business Council and Rotary
meetings.
FINANCIAL OR BUDGET CONSIDERATION:
The EDA is being asked to consider a contract with the Metropolitan Consortium of Community
Developers (MCCD) for the provision of small business assistance services within St. Louis Park
for one year. The cost of these services is $10,000 which would be drawn from the Development
Fund.
VISION CONSIDERATION:
This project supports the strategic direction of providing a well-maintained and diverse
[building] stock.
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Kevin Locke, Community Development Director
Approved by: Nancy Deno, EDA Deputy Executive Director/Deputy City Manager
Meeting Date: April 9, 2012
Agenda Item #: 11
Regular Meeting Public Hearing Action Item Consent Item Resolution Ordinance
Presentation Other:
EDA Meeting Action Item Resolution Other:
Study Session Discussion Item Written Report Other:
TITLE:
Outstanding Citizen Award Program Task Force
RECOMMENDED ACTION:
No formal action required. This report is to provide Council with past information about the
Outstanding Citizen Awards Program implemented in November 2011 and Commission
members who are interested in serving on the Task Force scheduled for council consideration by
consent on April 16, 2012.
POLICY CONSIDERATION:
Does Council need any additional information regarding this topic?
Does Council wish to appoint the three interested Commissioners to serve on the Task Force?
BACKGROUND:
On August 8, 2011, Council discussed the concept of an Outstanding Citizen Award program
and on September 26, 2011, Council received a draft of the program. On October 3, 2011,
Council approved an Outstanding Citizen Award Program to recognize individuals throughout
the year for their contributions to the community. The major program components are as follows:
• The individual may be nominated by anyone.
• Nominations may be made anytime throughout the year.
• Council selects a Task Force of three current board or Commission members to review
nominations and make recommendations to Council.
All Board and Commission members were contacted regarding possible interest in serving on
this Task Force. Staff had difficulties getting volunteers for this type of task force. Many
solicitations were made to our board and commission members and after extensive
communication and requests for participation we’ve finally received 3 volunteers. We are
pleased to inform Council that the following three commissioners were interested and staff is
forwarding information to Council for appointment to serve on the Task Force for the St. Louis
Park Outstanding Citizen Award Program for a term to expire based on their respective
commission term or a three year maximum, whichever is reached first:
Marjorie Douville, Fire Civil Service Commission
James Gainsley, Board of Zoning Appeals
Justin Kaufman, Housing Authority
Next step: If Council accepts this report, formal approval as a consent item could be done at the
April 16th Council meeting. After formal Council appointment of the task force, they will review
three nominations that have been received. Task Force members will meet for an orientation with
staff and begin reviewing the three nominations received for recommendations to Council for
Outstanding Citizen Awards. The Task Force will then meet on their own at a time designated
by them to review future nominations and submit recommendations for Council to
Administrative Services staff. Their recommendations will be forwarded to Council.
Study Session Meeting of April 9, 2012 (Item No. 11) Page 2
Subject: Outstanding Citizen Award Program Task Force
FINANCIAL CONSIDERATION:
Not applicable.
VISION CONSIDERATION:
This program provides an opportunity for recognition of the contributions and accomplishments
of our citizens which supports our commitment of creating a connected and engaged community.
Attachment: Outstanding Citizen Award Program
Nomination Form and Selection Criteria
Task Force Interest Forms
Prepared by: Nancy Stroth, City Clerk
Approved by: Nancy Deno, Deputy City Manager/HR Director
Study Session Meeting of April 9, 2012 (Item No. 11) Page 3
Subject: Outstanding Citizen Award Program Task Force
Outstanding Citizen Award Program
The City of St. Louis Park has established an Outstanding Citizen Award Program that
is intended to provide the community with an opportunity to publicly acknowledge
the contributions made by certain individuals who have worked and dedicated their
time for the betterment of our community.
The City believes it is important to recognize St. Louis Park community members for
extraordinary accomplishments, contributions to the community, heroic and
courageous efforts, and/or perseverance despite incredible odds. To honor these
outstanding efforts, the City has developed a community recognition program to
recognize and honor our Outstanding Citizens.
Nominations are based on the following criteria:
• The individual may be nominated by anyone. There are no restrictions on who
can nominate the individual.
• A nomination form is provided by the City to serve as a cover and guideline for
the submission of nominations. The nomination must include a statement by
the nominator, either on the form or attached to it, specifically explaining why
the nominated individual is worthy of receiving the award. The nomination
must also include adequate supporting documents to substantiate the efforts
and conditions under which they occurred. These may include official reports,
stories, news articles, and information on any other awards or recognition for
the individual.
• The total nomination submission may not exceed six pages (8.5” x 11”) of
material in 12 pt. font.
• All nominations should be typewritten.
Nominations may be made anytime. There is no deadline for submittals. If, in the
judgment of the City, the nomination is incomplete, not adequately substantiated or
illegible, it will be returned to the nominator for further information and
resubmission. To receive additional consideration, it must be resubmitted within 30
days.
Nominations are to be submitted to:
City of St. Louis Park
Outstanding Citizen Award
Attn: City Manager’s Office
5005 Minnetonka Boulevard
St. Louis Park, MN 55416
Study Session Meeting of April 9, 2012 (Item No. 11) Page 4
Subject: Outstanding Citizen Award Program Task Force
Outstanding Citizen Award
Nomination Form
SELECTION CRITERIA
This award is conferred to members of the general public who have made a significant
contribution to the community and/or individuals who have worked and dedicated
their time for the betterment of our city.
NOMINATIONS
1. The individual may be nominated by anyone. There are no restrictions on who can
nominate the individual.
2. A nomination form is provided by the City to serve as a cover and guideline for the
submission of nominations. The nomination must include a narrative statement by
the nominator, either on the form or attached to it, specifically explaining why
the nominated individual is worthy of receiving the award. The nomination must
also include adequate supporting documents to substantiate the efforts and
conditions under which they occurred. These may include official reports,
narratives, news articles and information on any other awards or recognition.
3. The total nomination submission may not exceed six pages (8.5” x 11”) of material
in 12 pt. font.
4. All nominations should be typewritten.
5. Nominations may be made at anytime. There is no deadline for submittals.
6. If, in the judgment of the City, the nomination is incomplete, not adequately
substantiated or illegible, it will be returned to the nominator for further
information and resubmission. To receive additional consideration, it must be
resubmitted within 30 days.
7. Nominations must be submitted to:
City of St. Louis Park
Outstanding Citizen Award
Attn: City Manager’s Office
5005 Minnetonka Boulevard
St. Louis Park, MN 55416
Study Session Meeting of March 9, 2012 (Item No. 11)
Subject: Outstanding Citizen Award Program Task Force Page 5
Study Session Meeting of March 9, 2012 (Item No. 11)
Subject: Outstanding Citizen Award Program Task Force Page 6
12-2011
BOARD AND COMMISSION MEMBER
OUTSTANDING CITIZEN AWARD
TASK FORCE
INTEREST FORM
The City of St. Louis Park has established an Outstanding Citizen Award Program to recognize
community members for extraordinary accomplishments, contributions to the community, heroic
and courageous efforts, and/or perseverance despite incredible odds. The City Council will
select a Task Force of three current Board or Commission members to review nominations and
make recommendations. The Task Force will be called upon as needed and will meet on their
own time designated by them for no more than 3 years. Please complete this form and return to
your Commission Liaison or the City Clerk’s office at 5005 Minnetonka Blvd. 55416, or FAX to
952-924-2170, or EMAIL to nstroth@stlouispark.org
Name: Justin Kaufman
Board/Commission: Housing Authority
Term expiring: 6/30/2014
Please write a brief statement about why you are interested in serving on the Task Force to
review nominations and make recommendations for recognition of Outstanding Citizens.
Over the course of the past year, I had the privilege of not only continuing to serve of the
Housing Authority, but also to speak with numerous people in our great community.
Through that experience, it is clear to me that we live in a city full of outstanding citizens.
I am interested in serving of the Task Force in order to assist the city in identifying and
recognizing just a few of the many deserving individuals in St. Louis Park.
/s/ Justin Kaufman 04/04/2012
______________________________________ ________________________
SIGNATURE DATE
Study Session Meeting of March 9, 2012 (Item No. 11)
Subject: Outstanding Citizen Award Program Task Force Page 7