KOOCHICHING COUNTY BOARD OF EQUALIZATION
Opening Session 2008 – Tuesday, June 17, 2008; 1:30 p.m.

MEMBERS PRESENT: Commissioners Pavleck, Hanson, Adee, Lepper, Briggs
MEMBERS ABSENT: None

OTHERS ATTENDING: Auditor/Treasurer Bob Peterson, Assessor Marty Cody, Coordinator Teresa Jaksa; Dick and Jean Stadt, Conley Adams, Ladd Kocinski, Etta Erickson

Oaths of Office were conducted by the Auditor for members of the County Board of Equalization. The County Board Chairman opened the session to review, as needed, 2008 market valuation for taxes payable in 2009. The purpose of the Board of Equalization is to amend the final 2008 assessment of the Assessor (market value and classification) as of this point it is only the Board of Equalization that can do this, unless the change is an obvious error made by the Assessor. The County Assessor as stated in a previous report to the County Board stated the Office conducted a reassessment of the County under order by the Department of Revenue. As previously reported many property owners saw increases in their valuations but in comparison to area sales, the assessment values are still under sale prices. $6.8 million of new construction was picked up in the 2008 assessment with the majority of new construction occurring outside city limits. In response to questions, the Assessor stated that the sale of property for recreational purposes has caused the increase in the assessed valuation of most rural property as people are willing to pay high prices for seasonal/recreational property. With regards to the impact on farms, farmlands were also being sold at high prices for recreational purposes, which negatively impacted the remaining farmland.

The Board Chair called for appointments:

Dick and Jean Stadt: Own a lot on Grindstone Island and received their notice in the mail for a 2008 land and building valuation of $266,900 and do not feel their property is worth that value. They do not receive the same services as a property on the mainland and it is difficult to pay the escalating taxes on their property as they are retired and on fixed incomes. Their property valuation increased 81% in the 2007 assessment with another 29% increase for the 2008 assessment. The Assessor stated that people are buying lake property for high prices, which impacts all lake property owners. Mrs. Stadt did acknowledge that on the island, a person bought one acre for $300,000. The Board Chair stated that the County Board does its best to hold spending and therefore keep the County tax levy down. He stated that the added valuation overall, brings down the tax rates which reduces the tax burden overall for properties. The Board Chair did ask the Stadts to check the 2008 assessment figure in the Assessor’s Office since there seemed to be discrepancy at the meeting and that the Board will hold their appointment until the amount is confirmed. The Assessor also encouraged the Stadts to apply for the state circuit breaker for those on fixed incomes to see if they qualify for a tax break. Stadts verified with the Assessor’s Office the 2008 assessment amount of $266,900 and picked up the form for the tax credit application for eligible persons on fixed incomes.

Conley Adams: Mr. Adams owns about 290 acres in the Cingmars area and first questioned a one acre parcel that went from a $100 assessment to $2,800. Further, that his property value doubled in assessment value for the most part from 2007 to 2008. He stated that it is good land and could be farmed but most is not accessible. In addition, much of the land has been logged so there is no timber value. The Assessor stated that Mr. Adams has about 270 acres with 2.73 miles of river frontage. The Assessor made the assumption that the one acre parcel was assessed with river frontage but Mr. Adams stated that it is not on the river. In response to questions, the Assessor stated that river frontage is measured from maps and that timber value is not included in the assessment value. The Assessor again informed Mr. Adams to look at the Sustainable Forest Management Program which if he was willing to put his land into forest sustainability, he would receive credit payments for the investment. Based on the sales data for the area, the Assessor stands by their assessment of the property. However, it was agreed the one acre parcel will be reviewed.

Ladd Kocinski: Owns lots in the Brennan Beach area and he received a 52% valuation increase from 2007 to 2008. In preparing for his appointment, he did his own assessment comparison and from information he obtained, his property is being assessed differently than the other area lots. He stated that the Assessor’s formula charges $1,500 for the first 200 feet of shore land and thereafter, charges $450. Based on the lay out of his lots, he is being assessed the $1,500 but never gets the $450 break when he has shore land that exceeds 200 feet. He also stated that one of his parcels after taking into required set backs is questionable whether it is a conforming lot but it is being assessed as a separate lake shore lot. The Assessor inquired with zoning as to whether this is a sub standard lot but no determination has been presented to date, however, the lot does have an existing garage on it. Mr. Kocinski asked how this small point could be assessed more than one of the big lots in this area. In summary, Mr. Kocinski felt there was an inconsistent application of assessment in the Brennan Beach area as he has smaller lots that are assessed higher than the larger lots. The Board agreed to have the Assessor review the area with the information presented by Mr. Kocinski to determine if there was any inconsistency in assessment application for his property to the other property in the area and report back to the Board at the June 24 session with a recommendation. In addition, it was agreed that Mr. Kocinski would contact the Assessor prior to the June 24 session to find out what the Assessor determined and will recommend, since he will not be available to attend the 6/24 session.

Etta Erickson: Owns property in the Clementsen area. She stated that the Assessor has reviewed and resolved some of her valuation concerns and though not completely satisfied, had no items for review with the Board of Equalization.

000 The Board Chair recessed session until June 24, 2008 at 1:30 p.m.

KOOCHICHING COUNTY BOARD OF EQUALIZATION
Session 2008 continued – Tuesday, June 24, 2008; 1:45 p.m.

MEMBERS PRESENT: Commissioners Pavleck, Hanson, Adee, Lepper, Briggs
MEMBERS ABSENT: None

OTHERS ATTENDING: Auditor/Treasurer Bob Peterson, Assessor Marty Cody, Appraiser Len Peterson, Coordinator Teresa Jaksa; Tim Johnson, Byrne Johnson

000 The Board Chair reconvened the 2008 County Board of Equalization at 1:45 p.m. and called for appointments.

Tim Johnson: Owns a triangular lot on Red Crest Island and feels his lot is overvalued in comparison to the standard lots on the island because he is charged for more lake shore because of the shape of his lot. His valuation increase from 2007 to 2008 is 265%. Mr. Johnson provided a 6 page handout supporting his appeal for a reduction in his land valuation, (did not have an issue with the building valuation) and proposed two solutions to adjust the land valuation for lots of irregular shape on the island, recommending the formula based on valuing only buildable shoreline property. The Assessor stated that the original formula for valuating lake shore properties was a straight across method but lake shore property is marketed based on every front foot of lake shore and determines the selling price, which is why the current formula is based on lake shore footage. The Assessor did not dispute that lots with more lake frontage are assessed higher. But based on what lot is more valuable in the market, the formula is justified as the more lake shore the higher the sale price and no one in attendance disputed this fact. Both the Assessor and Appraiser informed the Board that a base formula was used to equate the property value on the lake and they recognize that formulas may have to be adjusted in some areas but they needed to start and create the base and work from there. The Assessor explained that because of limited market value, the $180,000 increase in valuation for Mr. Johnson’s land will result in only one half being assessed for 2008 for taxes payable in 2009 with the full adjustment the next assessment year (2009 for 2010 taxes). A Board member asked if the Assessor’s formulas are verified in the state assessment system. The Assessor stated that formulas were based on sales and our lake area is unique to other lake areas in the State as many do not have islands and irregular lots. However, his office does consult with other counties and the state to review formulas where needed. The Assessor stated that at this point it is up to the Board to adjust valuation but that his Office intends to review formulas for the lake area as the next step to see if adjustments are needed for areas where market and sales do not support the valuation. However, this will occur for next year’s assessment and at that time the Office can review Mr. Johnson’s proposed buildable lakeshore formula. The Appraiser stated that equalizing values on the lake was needed and at this time, the base is done. Understanding the Board can make adjustments, the application needs to be consistent or the base will be lost. It would be better to look forward and verify formula applications as the next step. With regards to Mr. Johnson’s land valuation, there is 919 feet of lake shore but only 700 feet was assessed so an adjustment was applied in the formula. Mr. Johnson was agreeable to have the Assessor review their formula applications to the lot differences on this island and rectify for all the property owners with irregular size lots, not just his. However, he will be back next year if there is no satisfying outcome for him as he does not feel his lot is worth over $100,000 more than the standard lots on the island. The Board requested the Assessor to review the information presented by Mr. Johnson when reviewing the lake property valuation for next year’s assessment.

Byrne Johnson: First property is a small parcel at the end of Forest Point which is used for parking and boat landing. It is an unbuildable lot and the County uses the property to turn around their equipment when maintaining CSAH 94. The land valuation went up 15%. The Appraiser stated that the area was assessed at $900 per foot for lake shore but because this parcel is a non-buildable lot it was put on for $500 per foot.

The second property is Norway Island, which he is concerned he will lose the island because of the escalating valuation and anticipated tax increases. Appraiser stated that because there was no sale history for this island, the Assessor used a formula from St. Louis County which is based on acreage of islands, so the island was not assessed by the full lake shore footage and overall the formula falls within other comparable island sales. The land valuation went from $153,000 to $301,000 and the building valuation decreased. Mr. Johnson stated that he was concerned because the assessment was based on full lake shore footage when a strip of the island is not buildable. Knowing now it is based on acreage, he has no issue with the application.

BOE2008/06-01 Motion by Hanson, seconded by Lepper that due to Parcel #15-065-0072, owned by Byrne Johnson, being utilized by the County as a turnaround for Highway equipment for maintenance of CSAH 94 and therefore benefiting the County, to adjust the Assessor’s 2008 land assessment from $50,000 to $31,500 ( a reduction of $18,500 to retain it at the 2007 assessment). Voting yes: Pavleck, Hanson, Adee, Lepper, Briggs. Motion carried.

Robert Thompson: The Board received a letter from Mr. Thompson dated June 12, 2008. The Assessor stated that prior to the letter date, he did review Mr. Thompson’s property and after comparing his property to other property in the area, the Assessor lowered the land valuation by $3,000.

Assessors follow up from last session: Conley Adam’s one acre parcel was reviewed and the Assessor determined that no change in valuation was merited. Ladd Kocinski’s property was reviewed and a recommended adjustment for one parcel was submitted by the Assessor.

BOE2008/06-02 Motion by Adee, seconded by Lepper approving the following recommendations of the County Assessor for 2008 assessment adjustments by the County Board of Equalization: Parcel #15-059-00390 for Ladd Kocinski for a land valuation of $168,000 (reduced $94,500 from Assessor’s land assessment); Parcel #78-017-21000 for Etta Erickson for a land valuation of $112,000 (reduced $33,000 from Assessor’s land assessment); Parcel #78-018-11000 for Etta Erickson for a land valuation of $84,700 (reduced $8,000 from Assessor’s land assessment); Parcel #52-011-41000 for Jim Olson for a land valuation of $79,140 (reduced Assessor’s land assessment by $32,860); Parcel #22-051-00151 for Robert Thompson for a land valuation of $10,500 (reduced Assessor’s land assessment by $4,100); Parcel #63-007-11000 for Roger Danielson for a land and building valuation of $39,300 (reduced $16,400 from Assessor’s land and building assessment); Parcel #15-035-13300 for Boundary Waters Land for a land valuation of $2,000 (reduced $40,000 from Assessor’s land assessment). Voting yes: Pavleck, Hanson, Adee, Lepper, Briggs. Motion carried.

000 With no further business to come before the 2008 County Board of Equalization, the Board Chair adjourn the 2008 session at 3:20 p.m.