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5. Public Hearing to Consider Changing the Local Bd of Appeals & Equilization Process to an Open Book Process CITY OF CHANHASSEN 7700 Market Bouievard PO Sex 147 Chanhassell MN 55317 Administration Phrj:12 952 227 1100 Fax 952227 1110 Building Inspections Pllone 95~! 227 1180 Fax 952 227 1190 Engineering Phone 952 227 1160 Fax 952 227 1170 Finance Phone 952 227 11 dO Fax 9522271110 Park & Recreation Phorle 952 227 1120 Fax 9522271110 Recreatlorl Cerlter 2310 Cou Iter Bou levard Phone 952 227 1400 Fax 952 227 1404 Planning & Natural Resources Phone 952 227 1130 Fax 9522271110 Public Works 1591 Park Road Phone 952 227 1300 Fax 9522271310 Senior Center Phone 952 227 1125 Fax 952 227 1110 Web Site www CI charlhassen mn us 5 ---- MEMORANDUM TO: Mayor & City Council FROM: Todd Gerhardt, City Manager ,5' /+-r , ~; . DA TE: November 27,2006 SUBJ: Public Hearing to Consider Changing the Local Board of Appeals and Equalization Process Each year the City Council serves as the Board of Appeals and Equalization to hear appeals from property owners who disagree with their proposed assessed value. Over the years, I believe this process has frustrated both the City Council and property owners. To try and simplify the process, I have asked Angie Johnson, Carver County Assessor to attend our City Council meeting to explain an altemati ve method called the "Open Book Process." Attached is an explanation of the Open Book Process and the benefits to property owners, the City Council, and the County. After Angie has completed her overview of the "Open Book Process", staff would ask that you open the public hearing for citizen comments. RECOMMENDA TION Staff is recommending approval of the "Open Book Process" for the next two years with staff providing annual progress reports on how the new process was received by the public. ATTACHMENTS 1. Minnesota Department of Revenue Explanation on the Open Book Method of Appeal. 2. Public Hearing Notice. c: Angie Johnson, Carver County Assessor g:\admin\tg\open book appeals-cc.doc The City of Chanhassen . A growing community with clean lakes. quai ity schoois a eilarmlng downtown. bUSinesses Winding tralis and beautilul parks A great place to live work. and play ~ 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 votmg 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 quonun 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 constitutes a quonun. 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. 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 won't 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. Assessor's role when a quorum isn't present Rather than simply sending home angry and frustrated property owners, it is recommended that the format change to an "open book" meeting with the assessor. 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 you value their time. * B Explanations of alternate methods of appeal 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. //]// J tr 1 1~~h/1t~/JI ~ 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 nmnber 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 fmd 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 appeal to Tax Court. - - -..:"~,,,;'_-:' Open book meetings o An operi 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. Benefits for property.owners . ~ "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 ifnot satisfied with the outcome. 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. 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 shall give public notice of the meeting at which the proposal for transfer is to be considered (the public notice shall 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 COlUlty 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 wasn't 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 quonnn requirements may retain its local assessor. Explanations of alternate methods of appeal B 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 cOlUlcil 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 ~he 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 COlUlty Board of Appeal and Equalization and/or to Tax Court. . Appendix Glossary 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. 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. 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. 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. Defmed in Minnesota Statutes as Class 2a agricultural homestead or Class 2b agricultural non-homestead property. 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. Defmed in Minnesota Statutes as Class 4a rental housing. fI Appendix CITY OF CHANHASSEN CARVER AND HENNEPIN COUNTIES, MINNESOTA NOTICE OF PUBLIC HEARING TO CONSIDER CHANGING THE ANNUAL BOARD OF APPEALS AND EQUALIZATION PROCESS NOTICE IS HEREBY GIVEN that the Chanhassen City Council will hold a public hearing on Monday, November 27,2006 at 7:00 p.m. in the Council Chambers at 7700 Market Boulevard, to consider changing the current process used by Board of Appeals and Equalization to review and correct market valuations and classifications in the city. Rather than the City Council holding a public hearing to review appeals, it is proposed that the County Assessor conduct an "open book" process that allows residents to work directly with the County Assessor and County Board on valuation and classification appeals. All interested persons may appear and express their opinions regarding this proposed change at said time and place. If you have any questions, please feel free to contact City Hall. Todd Gerhardt City Manager Phone: 952-227-1119 (Published in the Chanhassen Villager on November 23,2006) /1 / 1- / f -#-'2 /1flacVl~~i1 ;_ --