equal eyes - Minnesota Association of Assessing Officers

Transcription

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EQUAL
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Official Publication of the Minnesota Association of Assessing Officers
www.mnmaao.org
Also in this issue:
Global Assessment Trends
Property Tax Working Group
Meet Lynn Krachmer
IAAO Conference Review
Words from President Keefe
Visit with Dean Moller
New Departments!
PVC Course Review
Plus much more!
Sovereign Citizens Movement
State
Assessed
Property
Education and Safety First
Minnesota’s Picturesque Parks
Photo Contest Winners
Part III: Utilities & Pipelines
Volume 35 Number 131 Winter 2013
Article to suggest, letter to the editor, or any
other correspondence for EQUAL EYES?
Features
Send to:
Equal Eyes
Managing Editor
16 3rd Ave E
Ada, MN 56510
18
2012 Photo Contest Winners
22
Introductions: MAAO Officers
33
IAAO Conference Review
35
PTWG Executive Summary
39
Global Assessment Trends: Japan
42
58
New MAAO Photo Contest
59
The BILLION Dollar Assessment
67
Departments
2013 PVC Review
3
Boards, Directors, Chairs, and Representatives
6
In The Know
7
Presidential Perspective
9
Commissioner’s Comments
10
International Items
11
NCRAAO Update
12
MAAP Update
13
Out of the Past
14
Let’s Get Acquainted
16
Minnesota Tax Court Abstract
25
Meet the new SAMA & AMA designees
27
Course Reviews
28
State Board of Assessors Minutes
37
Region Round Up
65
Transitions
66
Revisiting the Retirees
68
Classif-Eyeds
69
What’s New on the MAAO Website
71
A Letter From the Editor
CLICK ME!
I’M INTERACTIVE!
18
33
Cover Photo: White Gold
While the land may be frozen in NW Minnesota;
it continues to sell for record hot prices. The
piece featured recently sold for $5200 / Acre. A
sign that the land price boom is making its way
north from Iowa.
Visit
the MAAO website at:
www.mnmaao.org
The statements made or opinions expressed by authors in
Equal Eyes do not necessarily represent a policy position of
the Minnesota Association of Assessing Officers.
2
Equal Eyes | Winter 2013
[email protected]
39
68
EQUAL EYES
Editorial Board
James Haley, AMA
Norman County
Managing Editor, Chair
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Lori Thingvold, AMA
Wright County
Associate Editor
Solomon Akanki, AMA
Scott County
Corey Erickson, AMA
Ramsey County
Nancy Gunderson, SAMA
Clay County
Julie Gustafson, SAMA
City of Maple Grove
Jake Pidde, CMA
City of Plymouth
Michael Stalberger, SAMA
Blue Earth County
MAAO Executive Board
2nd Vice President
1st Vice President
President
Dan Whitman, SAMA
Martin County Assessor
Security Bldg. 201 Lake Ave. #326
Farimont, MN 56301
507.238.3210
[email protected]
Marvin Anderson, SAMA
Brooklyn Park City Assessor
5200 85th Ave N
Brooklyn Park, MN 55443
763.493.8173 Fax 763.493.8391
[email protected]
John Keefe, SAMA
Chisago County Assessor
313 N Main St, Room 246
Center City, MN 55012
651.213.8555 Fax 651.213.8551
[email protected]
Past President
Finance Officer
Stephen Baker, SAMA, CAE
Ramsey County Assessor
90 West Plato Blvd, Suite 400
St. Paul, MN 55117
651.266.2005 Fax 651.266.2001
[email protected]
Bill Peterson, SAMA, CAE
Dakota County Assessor
1590 Hwy 55, County Admin Center
Hastings, MN 55033
651.438.4208 Fax 651.438.4469
[email protected]
MAAO Region Directors
Region 1
Ryan Rasmusson, SAMA
Freeborn County Assessor
507.377.5176
[email protected]
Region 3
Region 2
Daryl Moeller, SAMA
Chisago County Sr. Deputy Assessor
651.213.8552
[email protected]
Bridget M. Olson, SAMA
Nicollet County Deputy Assessor
507.934.0245
[email protected]
Region 5
Region 4
Region 6
Gale Bondhus, SAMA
Cottonwood County Assessor
507.831.2458
[email protected]
Mark Peterson, SAMA
Cass County Assessor
218.547.7239
[email protected]
Region 7
Bob Hansen, SAMA
Hubbard County Assessor
218.732.3452
[email protected]
Bob Anderson, SAMA
Meeker County Assessor
320.693.5205
[email protected]
Region 8
Joseph Skerik, AMA
Beltrami Chief Deputy County Assessor
218.333.4146
[email protected]
Region 9
Angie Johnson, SAMA
Carver County Assessor
952.361.1961
[email protected]
Department of Revenue Property Tax Compliance Officers
and the Areas They Represent
Lloyd McCormick
612.791.4957
Appraisal Supervisor
Brad Averbeck
218.575.3183
Anoka, Benton, Carver,
Chisago, Hennepin, Isanti,
Mille Lacs, Morrison, Sherburne,
Stearns, Wright
218.439.3673
Becker, Clay, Clearwater, Hubbard,
Kittson, Mahnomen, Marshall,
Norman, Otter Tail, Pennington, Polk,
Red Lake, Roseau, Todd, Wadena
Steve Hurni
320.632.3949
Big Stone, Chippewa, Douglas,
Grant, Kandiyohi, McLeod, Meeker,
Pope, Renville, Stevens, Swift,
Traverse, Wilkin
(and compliance investigations)
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Larry Austin
Gary Amundson
Sherri Kitchenmaster
651.230.8387
Brown, Cottonwood, Jackson,
Lac qui Parle, Lincoln, Lyon, Martin,
Murray, Nobles, Pipestone, Redwood,
Rock, Watonwan, Yellow Medicnine
651.556.6098
Aitkin, Beltrami, Carlton, Cass,
Cook, Crow Wing, Itasca,
Kanabec, Koochiching, Lake,
Lake of the Woods, Pine, St. Louis
Tom Nash
507.359.7022
Blue Earth, Dodge, Faribault,
Fillmore, Freeborn, Houston,
Le Sueur, Mower, Nicollet, Sibley,
Steele, Wabasha, Waseca, Winona
Tom Reineke
651.230.5819
Dakota, Goodhue, Olmsted,
Ramsey, Scott, Washington,
Rice (and complex properties)
Committee Chairs/Coordinators/Secretary/Treasurer
Agricultural Chair
Nominating Chair
Secretary
Jeanne Henderson, CMAS
13880 Business Center Dr
Elk River, MN 55330
763.765.4903
Michelle Moen, SAMA
555 18th Ave SW
Cambridge, MN 55008
763.689.2752
Thomas May, SAMA, AAS
17935 75th Ave N
Maple Grove, MN 55311
763.424.1202
CAMA / GIS Chair
Online Administrator
Randy Lahr, SAMA
705 Courthouse Sq #37
St. Cloud, MN 56303
320.656.6559
Lori Schwendemann, SAMA
600 6th Street
Madison, MN 56256
320.598. 3187
Silent Auction
Conference Coordinator
PVC Coordinator
Site Selection Chair
Asst. Conf. Coordinator
Strategic Planning Chair
Summer Seminar Coordinator
Education Chair
Rules and Resolutions Chair
Steve Sinell, SAMA
8080 Mitchell Road
Eden Prairie, MN 55344
952.949.8510
Tax Court & Valuations Chair
Bob Wilson, SAMA, CAE, ASA
4801 W 50th St
Edina, MN 55424
952.826.0426
Information Systems Chair
Sales Ratio Chair
Michael Thompson, SAMA
200 4th Ave W
Shakopee, MN 55379
952.496.8972
Treasurer
Kelly Baillet, SAMA
1590 Hwy 55, County Admin Center
Hastings, MN 55033
651.438.4216
Legislative Chair
Scholarship Chair
Stephan Baker, SAMA, CAE
90 W. Plato Blvd
St. Paul, MN 55107
651.266.2005
Weeklong Course Chair
William Effertz, SAMA
PO Box 890, 630 Florence Ave
Owatonna, MN 55060
507.444.7445
Membership Coordinator
Scholarship Coordinator
Weeklong Course Coordinators
Paul Knutson, SAMA, RES
320 NW 3rd St, Ste 4
Faribault, MN 55021-6100
507.332.6102
Tami Paulson, CMA
151 4th Street SE
Rochester, MN 55904
507.328.7668
Rebecca Malmquist, SAMA, RES
14600 Minnetonka Blvd
Minnetonka, MN 55345
952.939.8222
Dan Whitman, SAMA
Security Bldg 201 Lake Ave #326
Fairmont, MN 56031
507.238.3210
Stephan Baker, SAMA, CAE
90 W. Plato Blvd
St. Paul, MN 55107
651.266.2005
Tina Diedrich-Von Eschen, SAMA
705 Courthouse Square Room 37
St. Cloud, MN 56303
320.656.3690
Jane Grossinger, SAMA
33872 MN HWY 15
Kimball, MN 55353
320.398.6705
Luis Rosario, SAMA
90 West Plato Blvd
St. Paul, MN 55107
651.266.2137
Kim Jensen, SAMA, CAE
A-2103 Government Center
Minneapolis, MN 55487
612.348.6106
Joshua Hoogland, SAMA
A 2103 Govt Center
Minneapolis, MN 55487
612.348.8853
Reed Heidelberger, SAMA
704 Broadway
Alexandria, MN 56308
320.763.6678
David Armstrong, SAMA
88 South Park Avenue
Le Center, MN 56057
507.357.8215
Bob Wilson, SAMA, CAE, ASA
4801 W 50th St
Edina, MN 55424
952.826.0426
Tina Diedrich-VonEschen, SAMA
705 Courthouse Sq Room 37
St. Cloud, MN 56303
320.656.3690
5
Spring 2013 Equal Eyes
Deadline is March 1st
Educational Opportunities
Assessment Laws & Procedures
January 14-17, 2013
Plymouth
Assessment Laws & Procedures
July 7-11, 2013
St. Cloud
Appraisal Principles
July 22-25, 2013
St. Cloud
Mass Appraisal
August 19-23, 2013
St. Cloud
IAAO Income Approach
Sept. 16-20, 2013
Plymouth
MN Assessment Administration
Oct. 7-10, 2013
Plymouth
Visit these websites for additional course offerings:
The North Star Chapter of the Appraisal Institute
www.northstarai.org/pages/education
Kaplan Professional Schools
www.kaplanprofessionalschools.com
6
Presidential Perspective
Onward to 2013
Written by John Keefe, SAMA
Chisago County Assessor
MAAO President 2012-2013
I’d like to start by thanking the membership
for allowing me the honor and privilege
to be you president this year. I promise to
serve you as best I can, and I’m sure with
your help and some hard work we’ll have
a very successful year.
2013 is going to be a very busy and
eventful year. We are going to be dealing
with an entirely different legislature,
which will keep our legislative committee
busy. The property tax working group is
delivering its report and it’ll be interesting
to find out where the recommendations go.
Many thanks to Stephen Behrenbrinker
and all the members of the working group
for their hard work.
We are exploring the possibility of sharing
resources for mutual benefit with MACO.
Members of our respective legislative
teams have met to find shared interests
and explore ways to work together to
address those concerns. I’ll be attending
the MACO conference next month,
and we’ll be extending an invitation to
MACO President Fran Windshitl to our
Fall Conference. It’s exciting to consider
the possibilities of a closer association
with MACO.
Many Minnesota counties continue to
experience unprecedented increases in
value for tillable land throughout the
agricultural regions of the state. Those
increases are dramatically affecting time
adjustments and sales ratios that should
challenge our sales ratio and agriculture
committees along with the DOR.
The Green Acre benefits on non-productive
(2b) land will expire for those who fail to
sign up or qualify for Rural Preserve. The
resultant paybacks may create a backlash,
but let’s hope for a quick and uneventful
end to this.
Education continues to be the focus of this
great organization. Weeklong Courses is
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taking up the task to obtain approval of a
new commercial course developed by Tom
Reneike (PTCO) from the State Board of
Assessors.
The Commissioner of Revenue will soon
appoint a new county assessor member to
State Board of Assessors to replace retiring
chairperson Doreen Pehrson. Doreen
served as chair of the committee for the
last four years. We want to thank her for
her service in representing assessors.
Not to be outdone, the Tax Court will be
decidedly different with two new judges to
address their burgeoning caseload. There
will be challenge enough for all in this
arena, and let us welcome and wish our
new jurists all the best in their new role.
There have been a number of transitions
in our organization. We have a new
Secretary (Past President) Tom May,
a new Treasurer Reed Heidelberger
(City of Alexandria Assessor) and a
new Membership Coordinator Rebecca
Malmquist (City of Minnetonka Assessor).
Our many thanks to outgoing Secretary/
Treasurer Nancy Wojcek and Membership
Coordinator Jan Olson. Both whom served
with distinction. We wish Nancy and Jan
all the best, and welcome Tom, Reed and
Rebecca to their new roles.
New committee chairpersons include;
Michael Thompson (Scott County)
takes over as chair of the Sales Ratio
committee, Kelly Bailet (Dakota County)
as chair of Informational Systems, Past
President Stephen Baker as chair of
Strategic Planning and Research, and, Josh
Hoogland (Hennepin County) as chair of
the Tax Court and Valuations Committee.
Some new co-chairs have been assigned
as well; Paul Sandvick (Hennepin County)
to Information Systems Committee, Scott
Lyons (Dakota County) to Tax Court
and Valuations Committee, and Stephen
Baker (Ramsey County) to Sales Ratio
Committee.
We are truly privileged to have those
among us who give so much, and it is fit
and proper that we extend thanks to all
these wonderful people that serve us and
our organization. I can’t possibly express
sufficient appreciation for all of you that
make MAAO happen.
Perhaps the most important things we do
in our life is the act of giving to others.
The act of giving cements a bond between
and among individuals that’s often passed
forward. It’s contagious and rewarding.
People who give without taking, without
expectation of material reward, whose
only reward is a simple thank you or a pat
on the back, are the finest among us. They
are rightfully deserving of our praise and
admiration.
To those of you who have thought about
joining a committee, writing an article,
teaching a class or seminar or helping
instruct a class or seminar, I strongly urge
you to get involved. I think you’ll find it
rewarding and most certainly educational.
The networking and friendship we share
with one another are indispensable to our
careers and are often priceless personal
treasures. I urge you to get involved!
We had a great organizational meeting last
month. Some of the highlights in addition
to welcoming the new members were
additional instructions to the committees.
Strategic Planning was assigned to move
forward on last year’s recommendations,
and to make a handbook for incoming
executive board members and committee
chairs. Finance Director and Conference
Coordinator are to get together and
establish a conference budget. Weeklong
Course is to get the new Commercial
Industrial elective course approved. Tax
Court and Valuations is to organize and
start to assemble assessment comparisons
Presidential Perspective, continued
for common intrastate commercial
properties such as restaurants, big box
retail, etc.
At Fall Conferenced I challenged our
organization to take up the business
of providing online education to our
membership. I issued this challenge for
a couple of reasons. The first is that
we must remain competitive with other
education providers because education is
the primary mission of our organization.
I can foresee a day (not too distant) when
online education is the training of choice
because of the expenses incurred by travel
to traditional education venues. If we do
not provide an online alternative someone
else will. Most fee appraisers now receive
all of their continuing education online.
The second reason is that the financial
stability of this organization depends
primarily on education revenue. If we do
not provide this alternative then we’ll lose
that revenue to another provider.
The third reason is that this will provide
a lower cost education alternative to the
membership. While the startup costs of
this endeavor may be significant, the
ongoing costs for future offerings will
be increasingly less. This may ultimately
allow for lower tuition. That coupled with
lessened travel expenses will create not
only lower cost educational offerings to
our membership, but to other appraisers
and real estate professionals as well.
I hope that all of you can understand the
reasoning behind my challenge. This is
by no means decided. It is and remains
at this point a challenge. The logical first
step is to explore the process of how to
develop online education, determining the
costs and procedures required, and what
type of course to use for a pilot project.
The second step would be to take the
committee recommendations and adopt
a consensus among the Executive Board
to proceed.
At last months’ organizational meeting I
asked the Education Committee to explore
ways to provide an online course and to
determine what type of course would be a
good first step. I would like to encourage
any who have expertise, knowledge or just
plain enthusiasm toward the project to get
involved. You can contact members of the
committee or me.
I’d like thank you all again for your
support and efforts and wish all of you
and your families a Merry Christmas and
a wonderful New Year!
John Keefe
MAAO President
Minnesota Association of Assessing Officers
Executive Board Meeting Calender:
~ February, 7 - 8, 2013 - St. Cloud Kelly Inn ~
~May 22nd, 2013 - St. Cloud Holiday Inn ~
8
Commissioner’s Comments
Working Together - The Minnesota Way
Written by Myron Frans
Minnesota Commissioner of Revenue
Minnesota has a long tradition of helping
people in need, and a number of tax
provisions that assist our less fortunate
residents and charitable groups that
serve them. We also have a history of
coming together to address our common
challenges.
Five years ago, the Minnesota Supreme
Court issued a decision that raised
concerns for many nonprofit groups in
the state (Under the Rainbow Child Care
Center v. County of Goodhue, Dec. 2007).
Nonprofits worried the Rainbow decision
would change the legal definition of a
“purely public charity,” which is exempt
from property taxes.
The Department of Revenue felt the
Court’s decision was in line with our
previous guidance, based on the six-factor
test from North Star Research Institute v.
County of Hennepin (1975). But we also
saw a chance to improve consistency and
clarify when a nonprofit qualifies for the
property tax exemption.
The Department, MAAO and Minnesota
Council of Nonprofits requested a oneyear moratorium from the Legislature so
we could come up with clearer rules and
guidelines. After several discussions,
we agreed on clarifying language to
recommend to the legislators.
Those discussions were not always easy.
But they succeeded because we respected
each other and focused on a common
goal. The language we drafted together
was meant to:
Preserve the exemption for charities or
other qualifying nonprofits, but avoid
changes that could invite abuse.
Clarify when the exemption is warranted,
for both assessors and charities.
Provide greater consistency for property
tax treatment of charities across Minnesota.
The Legislature adopted the new language,
which more closely aligned the statute with
the North Star test and current practice
9
(M.S. 272.02, subd. 7). These changes
led to improved consistency for when an
organization is a “purely public charity”
and should get the property tax exemption.
During our discussions, the Department,
MAAO and MCN also agreed to form an
advisory review board for cases where
the answer isn’t clear-cut. This board
includes representatives from all three
organizations.
As assessors, it is your job to determine
when a nonprofit is eligible, after
considering the documentation the group
submits with its application. Even if a
group does not meet all six factors, you
may still grant the exemption if you find
“reasonable justification” for not meeting
certain requirements.
If you deny a nonprofit’s application, the
group may ask for its case to be reviewed
by the public charity advisory board.
The board considers the nonprofit’s
application materials and within 60 days
of meeting, issues a non-binding opinion
on whether the group qualifies for the
exemption. No matter what the board says,
you can allow or deny the exemption based
on your understanding of the facts. And
the nonprofit can appeal your decision to
Tax Court.
Either assessors or nonprofits can request
an opinion from the board. All requests
must be submitted in writing to the
Department’s Property Tax Division.
However, the board does not hear cases that
have already been appealed to Tax Court.
The Public Charity Advisory Board tries
to meet quarterly if there are appeals
to consider. Since March 2010, the
board has met 7 times and considered 9
organizations.
So far, this experiment appears to be
working well. Board members have
generally been in agreement about which
groups should, or should not, receive a
property tax exemption. That may not
always be true in the future, but even so
the board can help ensure a detailed look at
the facts and allow us to have a respectful
discussion.
The process that led to the new statutory
language and the advisory board is a
great example of cooperation between
the Department and stakeholders – in this
case, property assessors, nonprofit groups
and legislative staff. Together, we came
up with a solution that is workable and
supports our state’s history of helping
those in need.
Similar path on tax reform
We followed a similarly inclusive process
as the Department has worked with
Gov. Mark Dayton on tax reform. The
governor’s final reform package is still
taking shape and will be unveiled in
January when he presents his budget for
FY 2014-15.
With thoughtful reform, we can restore
balance and fairness in our tax code, end
Minnesota’s chronic budget deficits, and
support the values and priorities that make
our state such a great place to live, work,
and raise a family.
To lay a foundation for tax reform, the
Governor asked me to find out what
Minnesotans think. Since October 2011,
I have hosted or attended about 150
meetings in 50 cities across Minnesota,
including 25 town halls.
More than 7,000 people have attended
these meetings. Participants include
a wide range of Minnesotans, elected
officials, policy experts, public interest
groups, business owners including trade
groups, labor unions, school officials and
nonprofits.
Tax reform is complicated. There are
no one-size-fits-all solutions, and it may
require some give and take. But this
dialogue with Minnesotans is an important
step to take in order to establish our
priorities for improving our tax system in
a way that restores balance and fairness,
and does not leave anyone behind.
International Items
News and Information
Written by Stephen Baker, SAMA , CAE
Membership
The two for $200 deal is still on; two years of IAAO membership for $200 is available to all
new members (anyone not a current member for two years or more).
Education
•
•
•
•
New disaster reassessment research paper coming out
Workshop 100 for new staff is rolling out
Course 201, 331, and 551 being revised
Course 112 changes due out by year end
Library
The IAAO Library collection contains:
•
•
•
17,000 cataloged books, articles, and government documents
100 current journals and newsletters, primarily assessment and appraisal materials
LibraryLink is the online catalog of resources. All books, journals, state documents,
international documents, conference proceedings and select articles are indexed in this
catalog with links for electronic access to thousands of IAAO copyright-owned articles.
Upcoming IAAO Meetings
Executive Board
MonthLocation
January -
Sacramento
April -
Kansas City
July -
Boston
Nov -
W Palm Beach
February
Leadership Days
-
TBD
IAAO Scholarships and Grants
Scholarships and Grants are now available for IAAO courses, conference registration and are
available on the IAAO web site.
Standards
The Technical Standards Committee is presently working on updating the following standards:
Assessment Appeals Standard, Mass Appraisal Standard, and the Rural Property Standard
New for 2012:
•
•
KEY REASONS TO BECOME
AN IAAO MEMBER
Education: Cost effective education
programs help you meet the challenges
of an increasingly complex career.
IAAO offers a range of educational
opportunities for the beginner to
seasoned professional. Textbooks are
known for their depth and quality of
information.
Professional Designations: Receive
c e r t i f i c a t i o n t h a t re c o g n i z e s
professionalism, and competency in
matters regarding property appraisal and
assessment for property tax purposes.
Publications: Fair & Equitable and
Journal of Property Tax Administration
I A A O ’s m o n t h l y a n d q u a r t e r l y
publications bring you up-to-the-minute
perspectives and research on today’s
assessment issues.
Members-only Access and Discounts:
Receive special rates on publications,
text books, technical standards,
seminars, and conference registration.
Utilize special sections and resources
on the IAAO Website including access
to the library through memberlink and
the Glossary for Property Appraisal and
Assessment.
Standard on Digital Cadastral Maps and Parcel Identifiers Standard on Mass Appraisal of Real Property
Opportunity
Papers for the 2013 IAAO International Conference in Grand Rapids Michigan; submit potential
educational session presentations via the online IAAO form by Tuesday, January 29, 2013. A
short, specific title of your seminar/paper and an accurate two to four sentence description of
the proposed session, and a more fully developed abstract are all that is required at this time.
The 2013 Conference Content Committee has defined the following educational tracks as areas
of focus for the annual conference: •
•
•
•
•
•
Commercial: Real and Personal Property Technology
Residential Focus Management and Personal Development
Tax Policy and Administration
Special Issues
10
Join IAAO Now!
IAAO.org
NCRAAO News
Greetings from NCRAAO
Written by Kevin Ternes, CAE
City of Minot, ND Assessor
NCRAAO President
Minnesota NCRAAO Directors
Stephen Baker, Ramsey County Assessor, MAAO Past President
Dave Armstrong, La Sueur County Assessor, MAAO Past President
As President of the North Central Association of Assessing Officers, (NCRAAO), I
would like to say hello and greetings to the members of the MAAO. The 2013 NCRAAO
conference will be held in Fargo, ND on June 16-19, 2013. North Dakota would like to
invite you to the conference or at least consider coming over for a day session if your
schedule permits. So when the registration and education schedule is available in March,
please review and consider making an appearance in Fargo, June 2013.
The benefits of attending NCRAAO are affordability and networking with fellow assessors
who have a common regional connection. I have been a regular attendee of our state
conference, regional conference (NCRAA), and the IAAO annual conference. I have
found each of these three to be very helpful. Of course we all know that whatever problem
or challenge we come up against has usually been encountered by one of our colleagues
already and I find the regional connection with attendees of NCRAAO that I’ve met to be
invaluable. Our conference tries to provide education and sessions for those of us who
assess commercial, small and large residential properties, and agricultural properties. All
NCRAAO conferences generally set up education programs that consist of two days of
education and three concurrent breakout sessions. There is no annual membership fee to
be part of NCRAAO, just the conference fee for the annual conference which moves from
state to state in our region. Three directors from each state help to set up the conference
and maintain the goal of affordability of continuing education for those of us in the Great
Plains area.
So please be sure to consider spending time with your friends from our region this coming
June 2013 in Fargo, ND. And if you can’t attend the whole conference, come and participate
for one day. The link to the NCRAAO website is http://www.ncraao.org/2013ConfLocation.
htm and once the schedule and education is finalized, the conference activities will be on
this site.
Should you have any questions about NCRAAO, please feel free to call me at 701-8574160, or email me at [email protected].
Kevin Ternes, CAE, has worked in the Minot City Assessor’s Office for 21 Years, 8 Years
as Department Manager and City Assessor. He is a graduate of Minot State University,
certified as a North Dakota Class 1 City Assessor, a North Dakota Certified General
Licensed Appraiser, and holds the IAAO CAE designation. He is a past member of the
IAAO Professional Designations Subcommittee and is currently an IAAO Professional
Designations Advisor and a Demonstration Appraisal Report Grader.
Upcoming NCRAAO Conferences
2013
2014
2015
2016
11
Fargo, North Dakota
Deadwood, Souuth Dakota
Wisconsin
Iowa
MAAP Update
MAAP Welcomes New Members
Written by MItzi Wicklund
CIty of Edina
MAAP President 2012 - 2013
MAAP welcomed fifteen new members to the August 16 & 17, 2012 Summer Seminar.
Stacey Thorson, Carver County
Debbie Maresch, Carver County
Kim Walstad, Dodge County
Julie Weitzel, Itasca County
Mike Hammerschmidt, Kandiyohi County
Susie Sohlman, Koochiching County
Lori Wilhelmi, Olmsted County
Brenda Shoemaker, Ottertail County
JoAnne Fritsche, Ramsey County
Lana Anderson, St. Louis County
Margaret Dunsmore, St. Louis County
Kris Kernz, Sibley County
Marilee Peterson, Sibley County
Laura Lutz, Washington County
Renee Nett, Watonwan County
Membership in MAAP is not only affordable at $10 a year, but provides opportunity to
obtain continuing education credits each year at Summer Seminar. A winter business
meeting with a program is held the first Friday each December. Interested in membership?
Contact any MAAP Officer for details!
MAAP Officers
Mitzi Wicklund
President
City of Edina
952-826-0424
[email protected]
Janet Kaschmitter
Vice President
Stearns County
320-656-6557
[email protected]
Shayla Strack
Secretary/Treasurer
Morrison County
320-632-0102
[email protected]
Melissa Janzen
Past President
Wright County
763-682-7369
[email protected]
Christie Fox
Education Committee Member at Large
Blue Earth County
507-304-4238
[email protected]
Michael Hammerschmidt
Kandiyohi County
320-231-6200
[email protected]
Theresa Quinn
Sherburne County
763-765-4912
[email protected]
Interested in Joining MAAP?
Membership is only $10
Contact a MAAP Officer
12
Joy Michaelson
Conference Coordinator
Stevens County
320-208-6550
[email protected]
Out of the Past
Written by Corey Erickson, AMA
Ramsey County
Editorial Committee Member
5 Years Ago – 2008
•
•
•
•
Fillmore County Assessor, Robert
Pickett, wrote about the complexities
of the Special Ag Homestead
classification. He described his office
receiving 11 forms of applications
or reapplications for the upcoming
assessment.
Augie Zezulka retired from the
Carlton County Assessor’s office
after more than 31 years of service to
the county. Augie was a residential/
commercial appraiser assigned to the
southwest corner of Carlton County.
Steve Hurni of the Minnesota
Department of Revenue wrote
about the importance of consistent
classification practices throughout
the state. Specifically he addressed
the need for uniform definitions of
pasture, meadow, woods and waste
land.
Saint Cloud City Assessor Stephen
Behrenbrinker was beginning his
successful term as MAAO President. .
column was meant to address current
issues of interest to assessors who
may be faced with the challenge of
preparing an appraisal and testifying
in Tax Court.
•
•
Bruce Munneke was named Senior
Appraiser for Anoka County and
Mark Krupski was appointed
Olmstead County Assistant Assessor/
Recorder.
•
The State Board of Assessors received
several complaint letters from
taxpayers regarding valuations. Jerry
Garski of the Department of Revenue
explained to the letter writers that
assessors receive stringent training
and are required to be licensed.
•
Legendary Minnesota Assessor, Dan
Franklin, passed away. During
his 30 plus years in assessing, Dan
had served as the Grant County
Assessor, Wilkin County Assessor
and President of MAAO.
•
•
•
•
13
City of Edina commercial appraiser
Moreau Sankey was activated to
military duty and was stationed at
Fort McCoy in Wisconsin.
Minnesota’s effective commercial/
industrial property tax rate declined
slightly from the previous year to 3.83
percent of assessed value, down from
a 4.43 percent rate.
Accredited and Senior Accredited
assessors throughout the state were in
the midst of the first round of the now
hugely popular PACE course. Some
comments were that there was too
much time spent on tax calculations
and that the test should be eliminated.
City of Bloomington Assessor, Jack
Pasternacki, wrote the first Tax Court
Forum column in Equal Eyes. The
Former Commissioner of the
Minnesota Department of Corrections,
Sheryl Ramstad, became the newest
Judge of the Minnesota Tax Court.
•
Jody Keyes of Wilkin County
and Bridget Olson of Nicollet
County both received their Senior
Accreditations. .
•
Ly n n D u n c a n w a s a p p o i n t e d
Assessor for the City of Duluth and
Marvin Anderson was appointed the
new editor of Equal Eyes.
•
MAAO Region VII had developed
and was selling a “Tax Calc” program
to assessing jurisdictions throughout
the state. The program was advertised
in Equal Eyes as being designed for
“IBM and IBM compatible PC’s
using Basic Program Language”.
•
Donald Trump appealed the value of
his 118 room Mar-a-Lago estate in
Palm Beach, Florida.
•
Governor Arne Carlson announced his
appointment of Dorothy McClung,
who was the acting Revenue
Commissioner, to the Minnesota Tax
Court.
•
The MAAO Executive Board created
a Computer Committee. The source
of constant frustration at the time, it
was determined that a computer was
either a “valuable tool or more likely
a necessary evil”.
•
New County Assessor appointments
included Erwin Siems in Ottertail
County, Al Heim in Todd County,
Orlin Schafer in Murray County, J.
Scott Renne in Washington County
and Farley Grunig in Cottonwood
County.
•
A big item of discussion in the winter
of 1973 was job security for County
Assessors in Minnesota since so
many County Assessors had not been
reappointed the previous fall. Dick
Anderson (it’s unclear for what
jurisdiction Mr. Anderson worked
at the time) felt that not only should
letters be sent to County Boards in
defense of the newly unemployed
assessors, but a representative from
the Department of Revenue should
appear before each County Board
in defense of the rejected County
Assessors.
Let’s Get Acquainted
Lynn Krachmer
Researched and Written by Julie Gustafson, SAMA
City of Maple Grove
Faribault County has 31 jurisdictions
(20 townships and 11 cities) with 13,400
parcels. As of the 2010 census, total
population in the county was 14,553 with
6,236 households. It is located in southern
Minnesota on the Minnesota/Iowa border.
The county seat is located in Blue Earth:
birthplace of the ice cream sandwich
and home of the world’s largest statute
of the Jolly Green Giant! According
to Lynn, agricultural land is king in
Faribault County with the majority of
parcels being agricultural or agricultural
related. Some of America’s richest
farmland is located in Faribault County.
Big town verses small town. Is the
grass really greener on the other side?
Many people entertain these thoughts at
some point in their lives. Small town
residents may be intrigued by what the
big city has to offer: arts, entertainment,
and culture. Conversely, city residents
may dream of the simpler life free of
the hustle and bustle of the big city.
Lynn Krachmer, Faribault County’s
recently appointed County Assessor,
has experienced both and decided to
return to his southern Minnesota roots.
Lynn was raised in Austin Minnesota.
He enlisted in the army right out of
high school. After serving three years
in the army, Lynn completed a two year
drafting program at Detroit Lakes AVTI.
Afterwards, he moved to the metro to
attend the Minneapolis Business College
where he studied Business Administration.
His accounting background landed him
a job with the Minneapolis Community
Development Agency where he held
several positions. His last position there,
as a Rehabilitation Specialist, required a
lot of coursework in housing inspections.
It was this training and experience
that led him to the field of appraisal.
Lynn began working in the appraisal
business in 1992 as a fee appraiser. For
approximately six years he worked with
two fee appraisers on a contract basis.
One of them had a contract with HUD
for most of the metro area counties.
As a result, between 1992 and 1998
he mostly appraised HUD properties.
When Lynn started in the appraisal
business his ultimate goal was to enter the
field of assessing and eventually become a
county assessor. He envisioned assessing
as a lasting career that would provide a
steady income, job security, and a pension.
14
His journey in the assessing field began
in 1999 when he was hired by the city of
Minneapolis as a residential appraiser. He
worked for the city of Minneapolis until
2002. During this time, he was mentored by
the late Scott Renne who encouraged him to
take the coursework necessary for continued
advancement in the assessing field. In
2002, Lynn was hired by the City of Fridley
as a residential appraiser. Although he was
hired as a residential appraiser, given the
limited staff there, he was assigned other
tasks such as assisting the city assessor
with commercial/industrial work, exempt
assessments, and Boards of Review.
Keeping in mind his long term goal
of becoming a county assessor, Lynn
worked on obtaining his CMA, AMA, and
eventually obtained his SAMA licensure in
2006. Knowing that eventually he would
like to return to small town life, he also
obtained as much agricultural training as
possible. Lynn’s career planning finally
paid off when he was hired by Faribault
County in June of 2012. Not an easy task
given his limited agricultural experience.
He believes his efforts to obtain as much
agricultural training as possible, and his
passion for farming and to return to southern
Minnesota contributed to his success.
The Faribault County Assessor’s Office
is comprised of the County Assessor, two
property appraisers, and one technical/
administrative assistant. As County
Assessor, Lynn’s primary duties are
administrative, and valuation of all
commercial, industrial, and apartment
parcels in the county.
Steve Robbins
handles all of the agricultural valuations
and has over 30 years of experience.
Gertrude Johnson has been in the assessing
field since 2011 and handles valuation of
all residential parcels. Susan Cory is the
technical/administrative assistant and has
worked in the Assessor’s Office since 1975.
Despite his short tenure, Lynn has heard
a lot of interesting stories from locals
and what he refers to as his “new family”
in Faribault County. Some of these
stories intertwine with Lynn’s childhood
memories. Lynn grew up in the early
1960’s when Interstate 90 was being
constructed in Austin. He recalled playing
on the construction machinery, and sliding
on the big mounds of sand brought in for
construction with his friends. As well
as other activities young boys enjoy,
but perhaps neglect to share for fear of
reprisal. Until now, Lynn didn’t realize
Let’s Get Acquainted, continued
the historical significance of his childhood
playground: he didn’t realize that Interstate
90 wasn’t completed until 1978 in Blue
Earth and that it is America’s longest
interstate highway extending from Boston,
Massachusetts to Seattle, Washington.
Like the driving of the “Golden Spike”
used to mark the completion of the nation’s
first transcontinental railroad, there is a
rest stop located just outside Blue Earth
on both sides of Interstate 90 where a
section of the shoulder is painted gold
to indicate the joining of the interstate
from the east and west. If you’re ever
in the area, there are markers on both
sides of the interstate telling the story.
Former Vice President Walter Mondale
and Miss America at the time were both
on site for the interstate dedication.
Lynn has been a member of MAAO for the
past 12 years and is a member of the Eagles
Club. When asked to describe himself he
said reliable, someone you can count on,
and a problem solver. He has been married
to his wife, Cindy, for 26 plus years and
has two children: Christopher, age 24
and Ellen, age 21. He spends most of
his free time with his family and beloved
dog, Rex, an old golden retriever. Lynn
says he really is a home body. He and
his wife recently purchased a property in
Winnebago to fulfill his lifelong passion
to farm. It has almost ten acres of land
in which they plan on starting a small
business growing flowers, vegetables, and
herbs for sale to restaurants. According to
Lynn, the land has a lot of potential and
they can’t wait to get started. There is
already a small orchard of assorted fruit
trees on the property. They still have
their residence in Highland Park in St.
Paul where they have lived for almost
24 years. They hope to have their St.
Paul home on the market in the spring.
One of his favorite places to visit is
Fillmore County, in particular the
Lanesboro area. If you’ve ever been
there you would understand why: the
Root River, Bluff land’s state trail, and
unique shops and restaurants. One thing
he would like to do but hasn’t done before
is “win the Powerball lottery”. He said
when he wins the lottery (Oh, the power
of positive thinking) he’ll probably have to
spend most of it paying off his children’s
student loans. On a more serious note,
if he should be so lucky, he would like
to set up some kind of foundation for
veterans to help with their return home.
with and getting to know Scott Renne.
Lynn finds getting to know people and
making new acquaintances as the most
satisfying aspect of his job. More recently,
he has enjoyed the new friendships
h e h a s m a d e i n F a r i b a u l t C o u n t y.
Lynn has been asked many times why
would an assessor from the Metro want to
come to out-state Minnesota. The answer
is quite simple. He loves the open spaces
and small town lifestyle. There is such a
strong sense of community there: everyone
knows and cares about each other and
how their families are doing. Although
he isn’t new to southern Minnesota, he
is new to Faribault County. Despite his
short tenure, he already feels welcome.
Is there anything better than that?
When asked about any memorable
situations on the job, Lynn said working
Do you have someone in mind for
“Let’s Get Acquainted?”
Then we want to hear from you!
E-mail your suggestion to:
[email protected]
15
Tax Court Abstract
Berry & Co. Inc. vs
Hennepin County
Compiled by Jake Pidde, CMA
City of Plymouth
The Honorable Sheryl A. Ramstad, Judge
of the Minnesota Tax Court, heard this
matter, on September 27 and 28, 2010,
at the Hennepin County District Court
facilities, Minneapolis, Minnesota. William
R. Skolnick and Amy D. Joyce, Attorneys
at Law, represented the Petitioner. Michael
Bernard, Assistant Hennepin County
Attorney, represented the Respondent.
Both parties submitted post-trial briefs.
The matter was submitted to the Court for
decision on November 10, 2010. The issue
in this case is the market value of the Subject
Property for assessment dates January 2,
2007, and January 2, 2008. The Court,
having heard and considered the evidence
adduced at the hearing, and upon all of the
files, records and proceedings herein, now
makes the following:
Background
This is a property tax valuation case
concerning a single-story office/garage
building (with no basement) and two pole
buildings, located at 253 Lake Street East,
Wayzata, Minnesota (“Subject Property”),
as of January 2, 2007, and January 2, 2008
(“Assessment Dates”). The Petitioner, Berry
and Co., Inc., is owned by Bradley A. Hoyt.
The Subject Property is improved with
three structures—a one-story office/garage
building with no basement, and two pole
buildings. The office area is approximately
2,179 square feet, with carpeted flooring,
painted gypsum walls, solid 7-foot doors,
fluorescent lighting and a suspended ceiling.
The parking lot is bituminous with 40
exterior parking stalls and 20 interior
parking stalls.
Analysis
Highest and Best Use
Here, despite the existence of the
improvements, both experts agree that
the highest and best use of the Subject
Property is for redevelopment. Although
both experts agree that the Subject Property
16
could conceivably be sold for use as is with
the existing improvements, they also agree
that the Subject Property is worth more if
the buildings are razed for development of
new improvements. We find that the highest
and best use of the Subject Property is for
redevelopment after the buildings are razed.
Valuation
This Court considers the three traditional
approaches (cost, income, and sales
comparison) to determine market value as
outlined in Equitable Life Assurance Soc’y
v. Ramsey County. Here, both experts
considered the cost and income approaches
to value, but did not rely upon either of
these approaches in their analyses. Instead,
they relied solely upon the sales comparison
approach to value in their analyses of the
Subject Property. Petitioner called Lawrence
Kramer (“Mr. Kramer”), who testified
regarding the appraisal report he prepared
to estimate the market value of the Subject
Property for the Assessment Dates.
Mr. Kramer placed a January 2, 2007
market value on the Subject Property
of $1,620,000 and a January 2, 2008
market value on the Subject Property
of $1,550,000. In his appraisal, Mr.
Kramer calculated a value of $30.44 per
square foot of total land area, calculating
34,598 square feet as usable . Mr. Kramer
claimed that 23% of the Subject Property
was designated wetlands by the City of
Wayzata and then further reduced the
usable land area by including 26.5 feet
as a wetland buffer zone. As a result,
he concluded that 35% of the Subject
Property had diminished use due to
wetlands.
Respondent called Christopher Bennett as
an expert witness. Mr. Bennett considered
all twelve land sales occurring in the Lake
Street Market Area between October of
2004 and January of 2010. He selected
four comparables from those twelve
sales, ranging in price from $900,000
to $2,000,000. After adjusting the four
selected comparables, Mr. Bennett
concluded to a value of $88.00 per square
foot of usable land. After considering
wetlands visible on the north end of the
Subject Property, but including no wetland
buffer zone or setback, he determined the
usable portion of the site to be 53,227
square feet.
Sales Comparison Approach
Under the sales comparison approach,
the appraiser evaluates sales of similar
properties and adjusts for such factors as
size, age, location, time of sale, terms of
sale, land to building ratio and quality of
construction. Using the sales comparison
approach, Mr. Kramer valued the Subject
Property at $1,620,000 as of January 2,
2007, and $1,550,000 as of January 2,
2008. He considered five comparable land
sales and adjusted them for time/inflation,
shape and slope, wetlands, location and
area accessibility, on-site improvements
and easements, environmental hazards,
and zoning and use to the Subject Property.
In his analysis, Mr. Kramer considered
the Twin Cities metropolitan area market,
17
which included all seven metropolitan
counties. He generically referred to the
“collapse” of the market stating that the
commercial retail markets hit their peak
in late 2006 based upon his personal
experience.
For the January 2, 2007 assessment date,
Mr. Kramer adjusted four of his five sales
for time, making a 5% (compounded)
adjustment to his Comparable No. 1 (sale
date October 27, 2004) and Comparable
No. 2 (sale date May 1, 2003). That
adjustment was also applied to sales in
October, November, and December of
2006. During those same three months of
2006, Mr. Kramer opined that Comparable
No. 3 just down the street was appreciating
at a rate of 2%. In 2007, Mr. Kramer made
no time adjustment to Comparable No. 4,
which had a sale date of April 11, 2007, but
applied a 5% adjustment to Comparable
No. 5, which had a sale date of October
31, 2008.
For the January 2, 2008 assessment date,
Mr. Kramer adjusted four of his five
sales for time. He adjusted Comparable
No.1 downward by 4%, Comparable No.
2 downward by 3%, Comparable No. 3
by 0%, Comparable No.4 up by 5%, and
Comparable No. 5 remained the same. Mr.
Kramer opined that the subject site, which
is rectangular in shape with approximately
108 feet of frontage on Lake Street and
has level and low topography, resulted
in a 10% adjustment for diminished use.
Accordingly, he adjusted sales 3, 4, and 5
downward by 5%. Additionally, because
the soils at the Subject Property are soft
and include fill and peat, Mr. Kramer
calculated the cost of necessary pilings
based upon $15 per square foot of subsoils
because of his understanding that that
was the correction cost at the commercial
development of the Lexus Dealership
along I-394.
Respondent’s expert, Christopher Bennett
(“Mr. Bennett”), considered twelve
comparables in an area he described as
the Lake Street Market Area (“LSMA”).
This is an area 3/4 of a mile long, running
along the north shore of Wayzata Bay (of
Lake Minnetonka), which has a mix of
retail, office and residential properties. Mr.
Bennett contacted the buyer for each of
the twelve sales related to redevelopment
plans in the LSMA between October 27,
2004, and January 19, 2010. Relying
upon seven actual sales of property in
the LSMA between 2006 and 2008,
Mr. Bennett testified that the LSMA
was “hot” during that time. To adjust
his comparables to the January 2, 2007
assessment date, for time Mr. Bennett
applied a 7% annual time adjustment to
each comparable based in part on the July
2, 2003 sale and October 2, 2007 re-sale
of the Village Shopping Center, as well as
December 22, 2004 sale and October 31,
2008 resale of the Wayzata Bay Center. He
also considered actual commercial growth
statistics, compiled by the Hennepin
County Assessor’s Office, showing that
between January of 2005 and January of
2008, the market values of commercial
property in suburban Hennepin County
increased 26.6% for an average annual
increase of 8.86%.
The experts’ differences concern the
adjustments for size, shape and slope,
soil correction, unit of comparison, time,
razing costs, and motivated sales. We will
now address their positions regarding each
of these adjustments.
Conclusion
After taking into account the experts’
differences concerning the adjustments
for size, shape slope, soil correction, unit
of comparison, time, razing costs, and
motivated sales, we conclude that the
testimony of Mr. Bennett is persuasive
and internally consistent with the other
evidence produced at trial. We also find
him to have been a credible witness who
responded with appropriate answers.
Based upon the analysis and testimony
of Mr. Bennett, we find that the market
value for the Subject Property should be
increased to $3,881,000 as of January 2,
2007, and increased to $4,153,000 as of
January 2, 2008.
This case was condensed to fit in Equal
Eyes. The complete findings of fact,
conclusions of law and order for judgment
can be found here.
Equal Eyes Presents:
The 2012 Photo Contest Winners
Minnesota’s Picturesque Parks!
1st Prize - Scott Sutherland - City of Duluth
“Waterfall at Tettegouche State Park”
Established in 1979 to preserve an outstanding example of the North Shore Highlands Biocultural Region, the
9,346 acres of Tettegouche State Park contain a unique combination of natural features: rugged, semi-mountainous terrain, one mile of Lake Superior shoreline, six inland lakes, cascading rivers and waterfalls, and an
undisturbed northern hardwood forest. *MN DNR
Beaver Creek Valley State Park is in
the Blufflands Landscape Region. It
is a nature lover’s paradise because
of the diversity of natural communities. Bottomland hardwoods such
as black ash, willow, box elder, cottonwood, and elm grow in the valley
while a mix of maple, walnut, basswood and oak thrive above the valley. Small patches of native prairie
and oak savanna occupy some of the
south and west-facing slopes in the
park. *MN DNR
2nd Prize - Wally Peterson - Wright County
“Beaver Creek Valley State Park”
18
Aptly named, the Cascade River
flows down one ledge after another
for a total drop of 900 feet in the
last three miles of its journey to
Lake Superior. The park setting is
a boreal hardwood-conifer forest of
aspen, birch, fir, spruce and cedar.
Visitors can stand on the footbridge
that spans the river, or at any of the
viewing spots above the river, and
feel the vibration of the rushing torrent of water as it cascades down a
volcanic canyon. *MN DNR
3rd Prize - Terry Morrow - Wright County
“Cascade River State Park”
Picture taken on May 14, 2012
at Tettegouche State Park. The
picture was taken from Shovel
Point looking towards the mouth
of Baptism River and Palisade
Head.
Runner Up - Bob Picket - Retired
Tettegouche State Park
19
Runner Up - Greg Nelson - Steele County
“Frozen Waterfall”
“My photo is of the dam and bridge located in Morehouse park here in Owatonna one very chilly morning. There
wasn’t a breeze and I believe the temperature was colder than 15 degrees below zero. The river typically flows year
round but this day, with the assistance of the cold, the river has been brought to a complete standstill.
As I drive to work at the Steele County Assessor’s office, I use the bridge and dam in planning my work day. For
instance, today it is telling us that measuring new construction will be an adventure. Then again, in other seasons, if
the height of the water flowing past reaches the underside of the bridge, like it did in September of 2010, I know that
there will be some flooding inspections soon and people will need our help moving forward in their lives.
When the bridge is covered with warm sunshine and the temperatures are warm and spring like, the bridge reminds
me that there is work to be done and fortunately, there are many more good days to be an assessor than bad.”
Kathio State Park is home to a variety of wildlife.
Hawks, ospreys, owls, and eagles are common. The
tracks of beaver, raccoon, mink, and deer are often
seen on the trail or in the snow.
The park name is steeped in plenty of history. The
word “Kathio” has a dubious pedigree. Explorer
Daniel Greysolon, collectively referred to the area
as “Izatys,” a name the Mdewekanton Dakota people gave themselves. Sieur du Lhut’s poor handwriting caused a wrong translation of the word “Izatys.” The “Iz” was transcribed as a K, and further
error caused the name to be Kathio, a word that
translates to nothing. “Kathio” became a name so
attached to the area that the park bears that name
today. *MN DNR
Runner Up - Steve Chmielewksi - Stearns County
“Deer in Mille Lacs Kathio State Park”
20
Runner Up - Jason Heitzinger - Scott County
“Lagoon Park after heavy rain”
The top photo was taken in June of 2012 at
Lagoon Park, in Jordan, Minnesota. It was
taken after several heavy rainfalls.
While the top photo is after heavy rain, the
bottom photo was taken nearly a year early
and shows the difference in waterflow.
This photo was taken at a boat
launch off of Interstate 90.
Photos like this prove that in
Minnesota, natural beauty is
never far away; even on the
interstate!
Runner Up - Carl Ask - Houston County
“I-90 Rest Stop, Upper Mississippi River National Wildlife Refuge”
21
Introductions:
Meet MAAO’s New 2nd Vice President & Region Directors
Compiled by James Haley, AMA
Norman County
Managing Editor / Chair
Meet MAAO’s new 2nd VP: Dan Whitman, Martin County
At the 2012 Fall Conference, MAAO
elected the next 2nd Vice-President, Dan
Whitman. Dan has an extensive career
in the assessment profession and with
MAAO. He will certainly be an excellent
choice to work his way through the
executive council and someday lead our
organization.
Dan has been in some form of government
for over 30 years. He started as a
township official in the 1980’s. After
his township’s local assessor retired in
the 1996, Dan was given the opportunity
to become the next local assessor. He
continued in this role until he was
approached by the Martin County
Assessor for a full time position.
Dan started working full time for Martin
County in 1999. For several years after
his children were born, Dan had been a
stay at home dad before taking the full
time position. While he was able to run
a small business and work as a local
assessor, he didn’t have the time for full
time employment. With his children now
in school, he had the opportunity to work
full time again. He began his work with
Martin County as an Appraiser, before
taking over as the County Assessor in
2005.
Martin County sits along the Iowa –
Minnesota border in south - central
Minnesota. The office has five staff
members, plus Dan. There are 15,200
parcels, of which Martin County is
responsible for 75%. Dan says he enjoys
Martin County because it is where he
grew up. He knows many people there
and is able to relate to the taxpayers.
Finally, Dan knows the area as well as
anyone could.
Dan has extensive experience with
MAAO. In addition to his new role
22
as 2 nd VP, Dan currently serves on the
Legislative Committee, CAMA / GIS
Committee, and is the PVC Coordinator.
In the past, Dan has served as Region
President and Region Secretary. He
has also served on the IS Committee,
Education Committee, and has instructed
the Property Valuation Course and several
other courses.
to create equity in all areas and to have
information at their fingertips.
Dan is especially interested in this
committee because he also serves on
the MCCC Executive Board. They too
have recently formed a user group that
focusses on GIS. “GIS is a really good
tool that is exploding right now. The
biggest challenge is staying on top of
the curve to move practices forward.
GIS helps us do a better job and be more
economical with time.”
Dan has been married for 33 years to
his wife Terry. They have two grown
children; Bart and wife Charmaine, and
Emily and husband Evan. Most recently,
he and Terry were blessed with grandson
Jericho, who is now 18 months old.
Dan says he enjoys many aspects of
MAAO. When asked, he cited networking
as his favorite part of the organization. “I
really enjoy the networking, the exchange
of information from county to county,
region to region, and helping others. My
focus issue is equity from one area to
another, working hard to help everyone
do things the same; it makes everyone’s
job easier if we do it the same.” Dan also
said he really enjoyed working on the
Legislative Committee. As a township
officer and former employee of the MN
2nd Congresional District Republican
Party, Dan enjoys the legislative process
and going to the State Capital to help keep
things equitable.
His goals going forward include helping
assessors do a better job by equalizing
throughout the state. He was also pleased
to hear that Past President Baker formed
the GIS / CAMA Committee. He looks
forward to utilizing the new committee
Dan has an extensive and diverse set
of hobbies. He enjoys hunting deer and
fishing trout. He remains very involved
with charitable mission work through his
church. He was been abroad five times;
including three trips to an orphanage in
Romania, and once to a hospital in Congo.
In addition to the international travel,
Dan enjoys serving local charities with
his cooking skills. His son is a pastor
who recently moved back to the area to
establish a ministry serving young adults.
Finally, he has been renovating his house;
a 125 year old country grocery store. He
has taken the main floor and turned it into
a living space. He basically built a new
house inside of the old store. Dan says
that every screw, every wire, and every
pipe was done by the Whitmans. He says
it is fun, but looks forward to being done!
We at Equal Eyes wish Dan the best of
luck in his new role as 2nd VP of MAAO!
Introductions, continued
Meet Region 2’s new Director: Bridget Olson, Nicollet County
Hi, I’m Bridget Olson and I represent
Region II as their newest Director. I work
for Nicollet County which is located in
South Central Minnesota, right in the bend
of the Minnesota River. Nicollet County
has 19 jurisdictions, 13 townships and 5
cities, St. Peter being the county seat. Oh
wait that doesn’t add up, we actually have
one more jurisdiction with 13 parcels that
is in the City of Mankato. The river does
some funny things.
Our staff includes the assessor, 5 appraisers
and 2 clerical. When I started working as a
clerk in the Assessor’s office in 1979 (right
out of elementary school), all I wanted
was a full time job. I had never heard of a
homestead or even what an assessor does.
The rest is history.
I also call Nicollet County my home as I
have lived here all my life. My husband
Kim and I live in rural St. Peter with our
black lab Buck. We have 1 son, Jake (25).
We enjoy hunting, fishing, camping and
most outdoor activities.
I want to thank Region II for letting me
represent them as their Director to MAAO.
Meet Region 3’s new Director: Daryl Moeller, Chisago County
I always find the hardest part of writing
is starting. At the most recent Executive
Board meeting, I was asked to write an
article to introduce myself. Not a problem
I thought, until I sat down and was staring
at a blank screen. So let’s start simple. I
am Daryl Moeller and I am the newest
Region III Director on the Executive
Board. I am one of seven appraisers for
Chisago County, which is located in the
East Central part of the state. For many
years we claimed the prize for the smallest
county seat, Center City, with a population
of just over 600 people, but we are now
#2. Our county has 19 tax jurisdictions,
9 townships and 10 cities, of which I
appraise three townships.
I grew up on the family farm south of
Foley, MN where I was the 8th child of
nine in a house with three bedrooms. I
learned at an early age that when Mom
said it was time to eat, don’t be late and
make sure you grab enough the first time
because there was never seconds. It was
nice that we made meal time, family time,
even though we couldn’t fit at the table.
Last year we hosted Christmas for my
family, 47 people, and we all fit.
23
a farm kid that could work with people
and who would be able to challenge and
hopefully understand articles written
by the then Pine County Assessor, John
Keefe. I give all my thanks to David for
taking a chance on me and introducing me
to the assessing field. That was eleven
plus years ago and I still LOVE my job.
Unfortunately, due to David’s health
issues, I was able to work for him only five
short months before John Keefe was hired
by the county. So the man I was hired to
challenge, now became my boss!
Growing up I helped out on the farm (as
little as I could) but eventually realized
that working hard can go a long way. So I
took the advice of my uncle: “find a career
that uses your head and not your back.” I
graduated from SCSU with a Mathematics
degree, and became a math teacher. I
taught in Pine City and then in the Chisago
Lakes School District, before realizing
that I was not made out to be a teacher. So
with a good education behind me, I took a
shot on a job posting that wanted a person
with a strong math background. At the
time I didn’t even know what an assessor
did, but “Honorable” David Johnson saw
Under John’s direction I was able to
earn my AMA and SAMA back in 2007.
John has pushed me to continue to grow
as an assessor. I was able to teach
Mass Appraisal for one year, before the
agricultural world was rearranged to being
2A and 2B. Being a “country” assessor,
that legislation has consumed my days
ever since. The one good thing that
has come out of that legislation is that I
have become a household name with the
farmers. So I hung up my hat as a teacher
of Mass Appraisal and am now educating
the farmers about the legislative changes
that occur on a yearly basis.
Introductions, continued
In my spare time I love spending time
with Lisa, my wife of 16 years, and our
two awesome kids Audrey (15) and Brady
(12). I am the proud dad that attends
their different activities; track meets,
soccer games, band concerts and scouting,
no matter the distance. I also like to go
camping, fishing, golfing and taking family
vacations. I am a huge Minnesota sports
fan, Vikings, Timberwolves, Twins, Wild,
but especially attending Minnesota Swarm
lacrosse games at the Xcel Center.
I am honored to be representing Region III
on the Executive Board and to be a part of
this great organization, MAAO. It is no
surprise that certain days we don’t have
the most desirable job, but I will end with a
favorite saying after dealing with an angry
taxpayer; “Arguing with an assessor is like
wrestling with a pig in the mud, after a while
you realize he likes it!”
Meet Region 4’s new Director: Mark Peterson, Cass County
Region IV has a new director. Replacing
Kyle Holmes is Mark Peterson of Cass
County.
Mark has worked for Cass County since
1989. He started working there as a staff
appraiser and was appointed to appraisal
supervisor in 2005. Five years later he
became the County Assessor. He has been
a faithful MAAO member for the past 21
years. Prior to becoming the Region IV
director, Mark served as the Region IV
President. In addition, Mark serves on the
Legislative Committee.
Mark has been married for the past ten years
to his wife, Bonnie. He has five children:
one daughter, Brianna, age 25; and four
step children: Kelley, age 23; Megan,
age 19; Caitlin, age 16; and John, age 14.
Mark also has two step grandchildren:
Caden, age 4 and Trace, age 6 months.
He lives seven miles east of Hackensack on
Lost Lake. He and his wife own and operate
a small seasonal resort called Sunny Spring
Farm. Mark’s hobbies include fishing,
hunting, and golf. His favorite hunting
activities are archery hunting for turkeys,
and pheasant hunting in South Dakota. He
also helps a friend with his bear guiding
business a few days each fall. Last but not
least, he is a licensed gunsmith.
We wish Mark the best of luck in his new
role as Region Director.
NOTICE:
The Nominating Committee is seeking Candidates for 2nd Vice-President of the MAAO Executive Board to
be presented at the 2013 Fall Conference. If you are interested in working with an organization that strives to
improve the assessment administration in Minnesota, then you are who we are “seeking”.
Anyone interested in being a candiate for 2nd Vice-President of the MAAO Executive Board should contact:
[email protected]
[email protected]
24
Meet Minnesota’s New
SAMA & AMA Designees
Written by Jake Pidde, CMA
City of Plymouth
New Senior Accredited Minnesota Assessors
Nathan Stulc
Tamara Anderson
Nathan Stulc, City of Edina,
was awarded the SAMA
designation on July 24, 2012.
His education includes Courses
A, K, Mass Appraisal Basics,
ProSource 105, successful exam
challenge for MAAO Basic
Income Approach, and Income
Approach to Valuation. Mr.
Stulc has a Bachelor of Science
Degree in Real Estate from
SCSU and he passed his Income
Case Study Exam in April 2012. He had a successful oral
interview with the board in January 2007 and has 8 years of
assessment experience. Congratulations to you Nate!!
Tamara Anderson, City of St.
Cloud, was awarded the SAMA
designation on September 17, 2012.
Her education includes Assessment
Law and Procedures, Bachelor of
Real Estate Degree from St. Cloud
State University, Mass Appraisal,
Assessment Administration,
USPAP, and MAAO Basic Income
Approach. Tamara’s Form Report
passed the grading committee
in July 2007. She passed the
Residential Case Study Exam in August 2007 and the Income
Case Study Exam in August 2012. Tamara had a successful oral
interview with the Board in December 2009. Tamara has 9 years
of assessment experience. Congratulations to you Tammy!
Erik Skogquist
Erik Skogquist, self-employed
local assessor (in multiple
counties), was awarded the
SAMA designation on July 24,
2012. His education includes
Assessment Laws/History
and Procedures, Residential
Appraisal Principles, Residential
Appraisal Procedures, Mass
Appraisal Basics, Basic Income
Approach to Value, Appraisal
Institute General Appraisal for
Income Part 1, Management and Supervision and the 2-day
USPAP from the Appraisal Institute. Mr. Skogquist’s form
report passed the grading committee in March 2009. He passed
the Residential Case Study Exam in April 2009 and the Income
Case Study Exam in March 2012. Erik had a successful oral
interview with the board in July 2009 and has six years of
assessment experience. Congratulations to you Erik!
25
New SAMA’s, AMA’s, continued
Cory Leinwander
Amy Rausch
Cory Leinwander, St. Louis
County, was awarded the SAMA
designation on September 17,
2012. His education includes
Assessment Law and Procedures,
Bachelor of Science Degree in
Real Estate Degree from St.
Cloud State University, Mass
Appraisal, IAAO Assessment
Administration, USPAP and
IAAO General Appraiser Income
Approach Parts I and II. He passed
the Income Case Study Exam in April 2011. Cory had a
successful oral interview with the Board in July 2010. Cory has
5 years of assessment experience. Congratulations to you Cory!
Amy Rausch, Stearns County,
was awarded the SAMA
designation on September 17,
2012. Her education includes
Assessment Law and Procedures,
ProSource 100 through 105,
Basic Income Approach to Value,
Income Approach to Valuation,
Management and Supervision
and Mass Appraisal. Amy’s
Form Report passed the grading
committee in August 2009. She
passed the Residential Case Study
Exam in September 2009 and the Income Case Study Exam
in August 2012. Amy had a successful oral interview with
the Board in October 2009. Amy has 7 years of assessment
experience. Congratulations to you Amy!Dan Raboin
New Accredited Minnesota Assessors
Dan Raboin
Pam Friesen
Dan Raboin, Chisago County, was
awarded the AMA designation on
July 24, 2012. His education
includes: Courses A, B, H
(elective), IAAO 102, IAAO
302, Assessment Administration
(Course K) and ProSource/
Kaplan USPAP. Mr. Raboin’s
form report passed the grading
committee in March 2012 and
he passed the Residential Case
Study Exam in May 2012. Mr.
Raboin has assessment experience since September 1992.
Congratulations to you Dan!
Pam Friesen, Pipestone County,
was awarded the AMA on July
24, 2102. Her education includes:
Courses A, B, H (elective),
Income Approach to Valuation,
Basic Income Approach to Value,
Assessment Administration and
Appraisal Institute USPAP. Ms.
Friesen’s form report passed
the grading committee in
November 2011 and she passed
the Residential Case Study Exam
in July 2012. Ms. Friesen has assessment experience since
October 2002. Congratulations to you Pam!
To recognize the accomplishments of new AMA and SAMA desginees,
we are spotlighting them when awarded by the State Board of Assessors.
Are you a new designee? Get your photo ready!
26
Course Reviews
Summer Courses
Written by Tina Diedrich - Von Eschen, SAMA
Stearns County
Mass Appraisal Basics
Uniform Standards of Professional Appraisal Practice (USPAP)
Minnesota Association of Assessing Officers’ 2012 Programs in
Assessment and Appraisal held the 30-hour Mass Appraisal Basics
course October 1st – 5th, 2012 at the Best Western-Kelly Inn Hotel
in St. Cloud. There were 52 attendees, all of which took the final
exam. As there were no qualified applicants, no scholarships were
awarded for this course offering. This course is approved for 30
hours of continuing education with the State Board of Assessors
and 30 hours of Department of Commerce credits. Of the 52
students 18 applied for Department of Commerce credits. This
course was instructed by Nancy Wojcik, City of Brooklyn Center
City Assessor, and Stephen Hacken, County Assessor from Winona
County. MAAO is extremely grateful to Nancy and Stephen for
instructing this course.
Minnesota Association of Assessing Officers’ 2012 Programs in
Assessment and Appraisal held the 15-hour USPAP course October
23rd and 24th at the best Western-Kelly Inn Hotel in St. Cloud. There
were 19 attendees, all of which took the final exam. This course
is offered to meet requirements for the AMA designation or as a
continuing education opportunity. Scholarship opportunities are
not offered for this course. This course is approved for 15 hours of
continuing education with the State Board of Assessor’s as well as
with the Department of Commerce. None of the students attending
applied for Department of Commerce credits. MAAO is extremely
grateful to Susanne Barkalow, IFA for instructing this course.
These course offerings were coordinated by Tina Diedrich-Von Eschen, SAMA.
As a reminder to the membership, MAAO does offer scholarships for Assessment Laws and
Procedures, Appraisal Principles, Appraisal Procedures, and Mass Appraisal Basics on
a yearly basis. These scholarships are offered to non-government employed assessment/
appraisal individuals and those interested in entering the assessment field on the basis of
financial need. Please encourage interested individuals in applying for our upcoming 2013
offerings by June 1st or July 1st for our July and August offerings.
EQUAL EYES
Call for article submissions
We are looking for creative and original content to feature in
Equal Eyes. The topic can be on just about anything! From
technical assessment related naratives, to light hearted personal stories, we want them all. So if you have been thinking
about it in the past, now is your time to act. Go ahead and write
that article and send it to us at:
[email protected]
27
State Board of Assessors Meeting Minutes
Provided by Bobbi Spencer
Minnesota Department of Revenue
July 24th, 2012
Lake George Municipal Center
Chairperson Doreen Pehrson convened the
meeting at 9:30 am. Gregg Larson was
unable to attend. All other members were
present.
the website (after first sending letters to all
assessors with no email address on record).
Minutes of the March 20, 2012 closed
meeting were reviewed. Steve Sinell moved
to approve the minutes. Brian Koester
seconded. The motion carried.
Assessor licensing system: We have been
given the go ahead for a new assessor
licensing system. Deb Volkert and Bobbi
Spencer are working with a business analyst
consultant developing requirements for the
new system. At this point it is anticipated
that the new system will provide for online
assessor applications, payments and CEH
entry, as well as provide the ability for
assessors to look up information regarding
their license and continuing ed records.
Minutes of the April 30, 2012 closed
meeting were reviewed. Mike Amo moved
to approve the minutes. Deb Volkert
seconded. The motion carried.
Paul Montgomery, Ramsey County,
submitted required documentation for
CEH’s and was granted FY 2013 Assessors
License.
Updates
On Monday, March 26, the board mailed out
965 license renewal applications for fiscal
year 2013. As of Wednesday, July 18, 2012,
795 licenses have been renewed; 42 are on
record retention; 10 are on hold awaiting
additional CEH data, 99 have not returned
renewal application for active license and 19
have not responded to record retention letter.
Melissa Bickman, Hennepin County,
had requested SCSU course FIRE 378
Real Estate Principles as an alternate to
Residential Appraisal Principles – she had
NOT requested it for CEHs as was on the
agenda at the May meeting. However, she
is taking Residential Appraisal Principles
the week of our July meeting so it needs no
further action.
Deb Volkert and Bobbi Spencer are
working on updating the website: Revised
requirement documents have been posted.
We are currently working on the list of
approved courses and all applications.
Revised policy document now on the
website is included in your folders. A
listing of all licensed assessors will go on
the website once the list is sent out to the
county assessors. We do not plan to continue
the manual as it was in the past. Each part
will be published on the website separately
so information is easier to find. Board
members were encouraged to review the
website periodically and to feel free to make
suggestions or recommendation. Board web
address is: http://www.revenue.state.mn.us/
local_gov/prop_tax_admin/Pages/mnboa.
aspx Decision was made to send an email
to all licensed assessors informing them of
Requests for Continuing Education
Hours:
Steve H suggested that Bobbi send the
board the CEH request material prior to
the meeting so they can review prior to the
meeting.
Minutes of the May 21, 2012 meeting were
reviewed. Dave Marhula moved to approve
the minutes. Brian Koester seconded. The
motion carried.
28
Dan Whitman, Martin County Assessor,
requested CEH’s for the 2012 PVC seminars.
Per board policy, 13 continuing education
hours will be granted for assessors attending
the 2012 PVC seminars.
Discussion took place regarding the format
for this course. Within the four-year cycle,
the PVC seminars need to change each year
in order for assessors to receive continuing
ed for taking the PVC seminars more than
once during the cycle. It was decided
that Doreen would talk to Dan Whitman
regarding the need for a changing format.
It was also suggested that a letter be sent to
Dan and the education committee.
Tami Paulson, Olmsted County, requested
CEH’s for the MAAO Fall Conference
seminars. Steve Hurni made a motion
to approve the MAAO Fall Conference
seminars except for the Hot Topics seminar.
Deb second seconded the motion. The
motion failed with only one vote to approve.
After further discussion, Mike Amo made
a motion to approve the MAAO Fall
Conference seminars. Dave Marhula
seconded. The motion carried with one
nay vote.
Susan Lohse, Grant County, requested
CEH’s for a RESAP mini seminar for office
workers in Region 7. NOTE: This request
was sent in on May 8, 2012 and should have
been presented to the board at the May 21,
2012 board meeting. For some reason it
was missed. The board approved 3 hours
per board policy.
Appointments with the Board
Dan Raboin, Chisago County, met with
the board for his Accreditation Oral
Interview. His education includes: Courses
A, B, H (elective), IAAO 102, IAAO
302, Assessment Administration (Course
K) and ProSource/Kaplan USPAP. Mr.
Raboin’s form report passed the grading
committee in March 2012 and he passed the
Residential Case Study Exam in May 2012.
Mr. Raboin has assessment experience
since September 1992 and applied for the
Accredited Minnesota Assessor License.
Deb Volkert made a motion to award the
Accredited Minnesota Assessor license to
Dan Raboin. Steve Sinell seconded the
motion. The motion carried.
Pam Friesen, Pipestone County, met
with the board for her Accreditation Oral
Interview. Her education includes: Courses
A, B, H (elective), Income Approach to
Valuation, Basic Income Approach to Value,
State Board, continued
Assessment Administration and Appraisal
Institute USPAP. Ms. Friesen form report
passed the grading committee in November
2011 and she passed the Residential Case
Study Exam in July 2012. Ms. Friesen
has assessment experience since October
2002 and she applied for the Accredited
Minnesota Assessor License. Mike Amo
made a motion to award the Accredited
Minnesota Assessor license to Pam Friesen.
Deb Volkert seconded the motion. The
motion carried.
Application for Certified Minnesota
Assessor
Brian Koester made a motion to award the
following people the Certified Minnesota
Assessor license:
Alyssa Browne, City of Minneapolis. Her
education includes: Assessment Laws and
Procedures with Ethics for Minnesota, Mass
Appraisal Basics, and a 4 year real estate
degree from the University of St. Thomas.
Ms. Browne has 2 years of appraisal
experience & 8 months of assessment
experience.
Danielle Lee, Wright County. Her education
includes: Assessment Laws and Procedures
with Ethics for Minnesota, Residential
Appraisal Principles, Residential Appraisal
Procedures and Mass Appraisal Basics. Ms.
Lee has 6 years of assessment experience.
James Veurink, Scott County. His education
includes: Assessment Law and Procedures
with Ethics, Mass Appraisal Basics, and has
Appraiser License number: 20142109. Mr.
Veurink has appraisal experience since 1998.
Scott Whitman, Martin County. His
education includes: Assessment Law
and Procedures with Ethics, Residential
Procedures and Mass Appraisal Basics.
Mr. Whitman has 21 months of assessment
experience.
Deb Volkert seconded the motion. The
motion carried.
Assessor Specialist
Lisa Will, Jackson County, applied for the
Certified Minnesota Assessor Specialist
license. Her education includes: Assessment
Law and Procedures, Course B, Mass
Appraisal, Basic Income Approach to
Value, and Income Approach to Valuation.
29
Ms. Will’s Form Report passed the grading
committee in June 2011 and she has 7 years
of assessment experience. Mike Amo made
a motion to award the Certified Minnesota
Assessor Specialist license to Lisa Will.
Dave Marhula seconded the motion. The
motion carried.
Application for Senior Accredited
Minnesota Assessor
Nathan Stulc, City of Edina, applied for
his SAMA license. His education includes
Courses A, K, Mass Appraisal Basics,
ProSource 105, successful exam challenge
for MAAO Basic Income Approach, and
Income Approach to Valuation. Mr. Stulc
has a Bachelor of Science Degree in Real
Estate from SCSU and he passed his Income
Case Study Exam in April 2012. He had a
successful oral interview with the board in
January 2007 and has 8 years of assessment
experience. Steve Sinell made a motion to
award the SAMA license to Nathan Stulc.
Brian Koester seconded the motion. The
motion carried.
Erik Skogquist, self-employed local assessor
(in multiple counties), applied for his SAMA
license. His education includes Assessment
Laws/History and Procedures, Residential
Procedures, Mass Appraisal Basics, Basic
Income Approach to Value, Appraisal
Institute General Appraisal for Income Part
1, Management and Supervision and the
2-day USPAP from the Appraisal Institute.
Mr. Skogquist’s form Report passed the
grading committee in March 2009. He
passed the Residential Case Study Exam
in April 2009 and the Income Case Study
Exam in March 2012. Erik had a successful
oral interview with the board in July 2009
and has six years of assessment experience.
Mike Amo made a motion to award the
SAMA license to Erik Skogquist. Brian
Koester seconded the motion. The motion
carried.
Discussion Items
CMAS: Discuss possible time frame for
current CMAS to obtain current CMAS
requirements. Much discussion occurred
related to whether assessors who obtained
their CMAS license before 7/1/11 should
be required to meet the current CMAS
requirements in order to keep their CMAS
license. Most of them have the two income
courses but may not have written the form
report. There are also several that have not
taken two income courses. Deb will check
with the attorney to see what the board’s
options are.
Appraiser License Equivalence: Current
policy per motion at the September 2011
meeting states an appraiser license is equal
to the two residential appraisal courses.
Appraisers are also required to have 15 hour
USPAP – should the policy be changed so
appraiser license also counts as USPAP.
Dave Marhula made a motion that an
appraiser’s license equals the two residential
appraisal courses and the USPAP requirement.
Deb seconded the motion. The motion
carried. (The policy document will be
changed to reflect this.)
Continuing Ed: Do we accept all Commerce
approved courses? If Commerce approves
a course for an Appraiser license do we
automatically approve for Assessors. Past
policy has been to approve any courses
approved by Commerce. After much
discussion, Steve Hurni made a motion that
there is no carte blanche for any vendor and/or
the MN Department of Commerce approved
courses to be accepted as continuing ed. In
addition, such requests for continuing ed
should be sent to board members via email
before the meeting to give members a chance
to review the requested education before the
board meeting. Mike Amo seconded the
motion. The motion carried with two nay
votes.
Week-long courses – the board needs to
periodically review these courses. Years back
there was a week-long course committee. Is
it time to do something like that again? Brian
will check into whether the week-long course
committee is or plans to be active.
There being no further business, the
chairperson set the next meeting date as
September 17 & 18, 2012 at the Nicollet
County Government Center in St. Peter. No
interviews will be scheduled as it will be a
working meeting with a focus on updating
the license level list.
Brian Koester moved to pay the expenses
for the meeting. Dave Marhula seconded the
Brian Koester moved to adjourn the meeting.
Dave Marhula seconded the motion. The
motion carried.
September 17 - 18, 2012
Nicollet County Government Center
Monday, September 17, 2012
meeting at 9:30 am. Steve Hurni was unable
to attend. All other members were present.
Minutes of the July 24, 2012 meeting were
reviewed. Brian Koester moved to approve
the minutes. Deb Volkert seconded. The
motion carried.
Updates
Conrad Anderson’s SAMA license was
re-instated on August 9, 2012 following a
90-day suspension.
regarding whether the board could require
current CMAS license holders who are
not income qualified to meet current
requirements for obtaining a CMAS license
(becoming income qualified). Under current
rules the board does not have that authority
– a rule change would be required.
Requests for Continuing Education
Hours
2012 Appraisal Industry Update Course:
Board approved this course for continuing
education hours on August 7, 2012 via email
with 6 of 8 voting members approving at
7.5 CEHs.
Duluth City Assessor – the board planned
to follow up on the qualifications of the
Duluth City Assessor in September to ensure
that the assessor is in compliance with the
required license level. A press release issued
on September 4, 2012 states that a proposed
merger of the Assessor’s Offices of the City
of Duluth and St. Louis County is expected
to occur by the end of this year if approved
by the County Board. The board will
continue to monitor the situation.
Land and Site Valuation Online Course:
Board approved this course for continuing
education hours on August 10, 2012 via
email with 5 of 8 voting members approving
at 7.00 CEHs.
MAAO PVC Course update – Doreen spoke
with Dan Whitman and Deb talked to DOR.
DOR is very involved in establishing the
agenda for the course. Both Dan Whitman
and DOR were informed that the agenda
needs to change each year or assessors
cannot repeat the course for CEHs within
a four-year cycle. DOR also stated that
they are working to have more consistency
each year between the various locations it
is taught.
Charles Arbuckle, requested CEH’s for
Appraisal Applications of Regression
Analysis course given by McKissock.
Approved 7 CEH’s per board policy.
Week-long course committee – Brian
indicated that Bob Wilson and Tina DiedrichVon Eschen are the MAAO reps on the
week-long course committee. The board
asked Deb to contact John about appointing
someone from the Department of Revenue
to actively participate on the committee.
Brian represents the board on the committee.
The board would like to see this committee
become more active in coming months. The
board would also appreciate hearing directly
from the committee regarding week-long
courses, plans, etc. Brian will ensure the
committee is aware of this.
Deb checked with the board attorney
30
Residential Appraisal Review Online
Course: Board approved this course for
continuing education hours on August 10,
2012 via email with 5 of 8 voting members
approving at 7.00 CEHs.
Jill Brenna, is requested CEH’s for Cover
Your Fannie May: Know the Guidelines
course given by Kaplan. Approved 8
CEH’s per board policy.
Charles Pelzer, requested CEH’s for Protect
the Public or Keep the Client: When Fraud
Creeps In course by Kaplan. Approved 4
CEH’s per board policy.
Scott Sutherland, requested CEH’s for On
Demand Webinar courses given by Land
Development Training. Approved 3 hours
(102 minutes + 97 minutes) CEH’s per
board policy.
Request for Course Alternates
Toni Hible, Freeborn County submitted her
CMA license application. Her education
includes Mass Appraisal Basics and ALP.
The board discussed the question; are
Fundamental Real Property Appraising from
South Dakota and IAAO 101 Fundamental
Real Property Appraisal considered alternates
for Residential Appraisal Principles and
Residential Appraisal Procedures?
Steve Sinell made a motion to approve
IAAO 101 Fundamental Real Property
Appraisal to be used as an alternate course
to Residential Appraisal Procedures. Mike
seconded the motion. Motion carried.
The board recommends Toni either take or
challenge the exam for Residential Appraisal
Principles course before a CMA license will
be granted.
Assessor
Susan Cory, Faribault County, applied for
the Certified Minnesota Assessor license.
Her education includes Assessment Laws
and Procedures, Appraisal Procedures,
Appraisal Principles and Mass Appraisal
Basics. Assessment experience since August
2011.
Susan Prill, Todd County, applied for the
Certified Minnesota Assessor license. Her
education includes Assessment Laws and
Procedures, Appraisal Procedures, Appraisal
Principles and Mass Appraisal Basics.
Assessment experience since June 2011.
Suzie Root, Waseca County, applied for the
Certified Minnesota Assessor license. Her
education includes Assessment Laws and
Procedures, Appraisal Procedures, Appraisal
Principles and Mass Appraisal Basics.
Assessment experience since February 2011.
Steve Sinell made a motion to award the
Certified Minnesota Assessor license to
Susan Cory, Susan Prill and Suzie Root.
motion carried.
Patricia Fondrick, MN Department of
Revenue, applied for the Certified Minnesota
Assessor license. Her education includes
Assessment Laws and Procedures, Appraisal
Procedures, Appraisal Principles and Mass
Appraisal Basics. Patricia’s experience
includes ten months as a Revenue Tax
Specialist in the State Assessed Property
Section in the Property Tax and 5 years
and 2 months in the Corporation Division
at MDOR. Mike Amo made a motion to
deny the request for CMA license due to not
meeting the experience requirement. Gregg
seconded the motion. The motion carried.
Toni Hible, Freeborn County, applied for
the Certified Minnesota Assessor license.
Her education includes Assessment Laws
and Procedures, Fundamental Real Property
Appraising from South Dakota and IAAO
101 Fundamental Real Property Appraisal
and IAAO 300 Fundamentals of Mass
Appraisal. Mike Amo made a motion to
deny the request for CMA license due to not
meeting the requirement for a Residential
Appraisal Principles course as determined
previously in the meeting. Gregg seconded
the motion. The motion carried.
Application for Reinstatement of Certified
Minnesota Assessor
Martha Cote, Pine County, applied for
reinstatement for a Certified Minnesota
Assessor license. Her education includes
Assessment Laws and Procedures,
Residential Appraisal (Course B) and Mass
Appraisal Basics (Course H). The board
determined that Martha Cote needs ten
additional continuing education hours and
one year of assessing experience before her
CMA license may be reinstated.
Assessor Specialist
Todd Smith, Anoka County, applied for
the Certified Minnesota Assessor Specialist
license. His education includes Assessment
Law and Procedures, Residential Appraisal
(Course B), Mass Appraisal Basics (Course
H), Basic Income Approach to Value (Course
J) and ProSource 202-203 Investment
Property Appraisal & Investment and Fiscal
Analysis. Todd’s Form Report passed the
grading committee in July 2012. Todd
has 23 years of assessment experience.
Brian Koester made a motion to award the
Certified Minnesota Assessor Specialist
license to Todd Smith. Dave Marhula
Michael Splonskowski Jr., Otter Tail
County, applied for the Certified Minnesota
Assessor Specialist license. His education
includes Assessment Law and Procedures,
Residential Appraisal Principles, Residential
Appraisal Procedures, Mass Appraisal
Basics, Basic Income Approach to Value and
Income Approach to Valuation. Michael’s
Form Report passed the grading committee
in August 2012. Todd has 3 years of
assessment experience. Steve Sinell made
31
a motion to award the Certified Minnesota
Assessor Specialist license to Michael
Splonskowski. Dave Marhula seconded the
Application for Senior Accredited
Minnesota Assessor
Tamara Anderson, City of St. Cloud,
applied for her SAMA license. Her education
Bachelor of Real Estate Degree from St.
Cloud State University, Mass Appraisal,
Assessment Administration, USPAP, and
MAAO Basic Income Approach. Tamara’s
Form Report passed the grading committee
in July 2007. She passed the Residential
Case Study Exam in August 2007 and the
Income Case Study Exam in August 2012.
Tamara had a successful oral interview with
the Board in December 2009. Tamara has
9 years of assessment experience. Brian
Koester made a motion to award the SAMA
license to Tamara Anderson. Mike Amo
Cory Leinwander, St. Louis County,
applied for his SAMA license.
His
education includes Assessment Law and
Procedures, Bachelor of Science Degree
in Real Estate Degree from St. Cloud
State University, Mass Appraisal, IAAO
Assessment Administration, USPAP and
IAAO General Appraiser Income Approach
Parts I and II. He passed the Income Case
Study Exam in April 2011. Cory had a
successful oral interview with the Board in
July 2010. Cory has 5 years of assessment
experience. Gregg Larson made a motion
to award the SAMA license to Cory
Leinwander. Brian Koester seconded the
Amy Rausch, Stearns County, applied
for her SAMA license. Her education
ProSource 100 through 105, Basic Income
Approach to Value, Income Approach to
Valuation, Management and Supervision
and Mass Appraisal. Amy’s Form Report
passed the grading committee in August
2009. She passed the Residential Case
Study Exam in September 2009 and the
Income Case Study Exam in August 2012.
Amy had a successful oral interview with
the Board in October 2009. Amy has 7 years
of assessment experience. Jane Grossinger
made a motion to award the SAMA license
to Amy Rausch. Brian Koester seconded
the motion. The motion carried.
Discussion Items
Dave made a motion that upon suspension
or revocation of an assessor’s license, that
person is identified in the board minutes
along with how long the license was
suspended/revoked. Gregg seconded the
motion. Motion carried with one nay vote.
Schedule of Meetings for 2013 (all meetings
start at 9:30 am):
Tuesday, January 22 – St. Cloud - Lake
George Municipal Center
Tuesday, March 26 – Department of
Revenue
Monday, May 20 – St. Cloud - Lake George
Municipal Center
Tuesday, July 23 – St. Cloud – Lake George
Municipal Center
Tuesday, September 17 – Department of
Revenue
Tuesday, November 19 – St. Cloud – Lake
George Municipal Center
Do You Have Assessor Licensure Questions?
Contact Bobbi Spencer
Program Administrator for the State Board of Assessors
651-556-6086 or [email protected]
Discussion took place regarding the old Course
B. If someone took the old course B and was
never licensed, it substitutes for Appraisal
Procedures. If the person had been licensed at
one time using Course B and is now applying
for reinstatement, the person does not need to
take Appraisal Principles.
License Level discussion - the board started
the discussion regarding license levels. Steve
Sinell offered to develop a document that
summed up the board’s discussion to be used
for further discussion the next day.
Tuesday, September 18, 2012
meeting at 9:30 am. All members were
present.
The board was asked to make a determination
regarding Susan Rinehart’s request to use a
Tax Court Narrative she worked on for her
Income Narrative Appraisal. After much
discussion, Deb made a motion to deny Ms.
Rinehart’s request since the report was cowritten. Gregg seconded the motion. Motion
carried. Deb will notify Ms. Rinehart of the
board’s decision.
License Level discussion (cont. from
September 17, 2012)
The board reviewed Steve Hurni’s latest draft
of the board’s proposed assessor licensing
requirements and the accompanying sample
counties.
Brian made a motion that all residential,
seasonal recreational residential and
agricultural parcels with up to $1 million
of structural value will require a minimum
license level of CMA and those greater than $1
million will require a minimum license level of
CMAS. Apartment and commercial-industrial
parcels with up to $500,000 of structural
value will require a minimum license level
of CMA-Income Qualified. Apartment and
commercial-industrial parcels with structural
values greater than $500,000 and equal to or
less than $2 million will require a minimum
license level of an AMA. Apartments and
commercial-industrial parcels with more than
$2 million of structural value will require a
license level of SAMA. Steve Sinell seconded
the motion. Motion carried.
Steve Hurni will update the proposed assessor
licensing requirements draft for the next board
meeting.
Deb will check with the board’s attorney to
ensure that the board has the authority to allow
different license levels per district.
The board also reviewed Steve Sinell’s draft
Jurisdictional Licensing Proposed Policy.
Some revisions were recommended. After a
lengthy discussion of implementation details,
the board directed staff to draft a revised
version of the policy. Steve S, Deb and Bobbi
will consult on the changes and then get a
revised document out to board members via
email before the next board meeting.
There being no further business, the chairperson
set the next meeting date as November 20,
2012 at the Lake George Municipal Center in
St. Cloud at 9:30am.
Brian Koester moved to pay the expenses for
the meeting. Mike Amo seconded the motion.
The motion carried.
Dave Marhula moved to adjourn the meeting.
motion carried.
Minnesota Real Estate Snapshot
This information was prepared by:
Twin Cities Region
Median Sales Price
Time Frame: Rolling 12 Months
Based on dataArea
available
as of January 1, 2013
* Used by Permission.
Chart obtained from the Minneapolis
Association
of REALTORS®. All data come directly from Northstar
Data comes from the Regional Multiple Listing Service of Minnesota, Inc. Data deemed reliable but not guaranteed. Powered by 10K Research and Marketing.
MLS. Data are deemed reliable but not guaranteed and are subject to revision. Downloaded on January 1st, 2013. MAAO, its directors, staff and affiliates are in no way responsible for actions taken or not taken as a result of these data.
32
Feature
Assessment Excellence In the Heartland
A Review of the 2012 IAAO Conference: Kansas City, Missouri
Written by Stephen Baker, SAMA, CAE
It was my pleasure and honor to attend
this year’s Conference as the President of
the Minnesota IAAO Affiliate: MAAO.
This year the conference was held in
Kansas City, Missouri at the Kansas City
Convention Center. I have been attending
these conferences since 1996 and this one
was one of the best organized that I can
recall.
Some Conference Highlights included:
•
Teriffic educational offerings
•
Excellent Opening Reception at the
National Negro Baseball League and
National Jazz Museums - featuring
fabulous BBQ by Jacks Stack BBQ
featuring Burnt Ends, Beans, Cheesy
Corn Bake, Ribs and Jacks great sauce.
•
Motivating keynote address by Ken
Miller on an “Extreme Government
Makeover”.
•
Inspiring address by NFL referee Walt
Coleman titled “Turning Boos into
Cheers”.
•
Fun Awards Breakfast
•
Closing Banquet and Installation of
Officers
As in past years, Minnesota Assessors were
well represented with over twenty attendees
from ten Minnesota jurisdictions. MAAO
had in attendance our President, Vice
President, 2nd Vice President and Finance
Director, and the Minnesota Department of
Revenue was represented by the Director
of Property Tax.
Kansas City was an interesting city for the
conference, a very walk-able downtown,
not too much traffic, interesting museums
and architecture, and some nice open
space and entertainment venues near the
conference hotels and the KC Convention
Center. There was an outdoor jazz festival
happening on Saturday with some great
musicians; a very nice welcome. The
opening reception was the best ever in
this authors opinion. Really interesting
museums, great food, and sweet live
jazz. It was a terrific way to open up the
Conference on a beautiful Sunday evening.
33
Kansas City Skyline
The Conference got into full swing
Monday morning with the opening Keynote
address by Ken Miller focusing on how
to streamline government, overcome
obstacles, and become more efficient.
Mr. Miller spoke about a philosophy
of management focusing on teamwork,
collaboration and building to utilize the
best in all of us. Then it was off to seminars,
and as always IAAO had many excellent
seminars with topics for all interests.
The sessions were organized loosely into
tracks, focusing on Commercial Property,
Personal Development, Residential
Appraisal, Tax Policy and Assessment
Standards, Technology, and Management.
The sessions ran from Monday morning
through Wednesday afternoon and were
either 60 or 90 minutes long.
Presenters included Peter Korpacz speaking
to assessors about the state of the Real Estate
markets. Peter was cautiously optimistic
about real estate markets but concerned
about the headwinds to our economy posed
by the fiscal cliff, the European debt crisis,
Minnesota Attendees at the Banquet
IAAO Conference, continued
weak job growth, low GDP growth, and
declining exports. But Mr. Korpacz was
encouraged by expanding durable goods
orders, increasing retail sales, stable leasing
markets and stable rents. Mr. Korpacz,
who has long specialized in super-regional
mall appraisal is now branching out into
appraisal of net lease free standing retail,
particularly drug stores.
Another presenter familiar to many in the
Minnesota assessment community was
Mark Kenney; Mr. Kenney is an appraiser
from Pennsylvania who specializes in
retail mall and department store appraisal.
Mark spoke to IAAO conference attendees
about intangibles as they intersect and
interact with the valuation of real property.
He spent some time going over the ever
changing terminology of this debate.
The debate over the theories of Business
Enterprise Valuation (AKA Capitalized
Economic Profit CEP) rages on as “experts”
attempt to define intangibles that are
likely to be present in real estate, and
how to measure and quantify these items
in the appraisal process of real property.
Authors note: The most recent anthology
of Business Enterprise value 2nd edition
edited by David Lennhoff, largely ignores
articles critical of BEV and continues the
trend of “methodology advocacy” rather
than meaningful academic exploration.
Mr. Kenney is one of the few informed
resonated voices left in this public debate
that is so important to all assessors.
Another excellent presentation was by
Lloyd Hara the King County Assessor. Mr.
Hara is a strong believer, and dedicated
practitioner in customer outreach and he
gave an inspiring presentation on the need
and the wisdom of continually reaching out
to our citizens to keep them informed. His
office also presented on a very interesting
Stephen Baker presenting MAAO check to IAAO President Deb Asbury
Mark Anderson, City of Bloomington and his wife
remote field data collection system utilizing
the iPad. His appraiser Jurgen Ramil
presented on this topic.
the seminar PowerPoint’s available on their
web site for free to conference attendees
and for $35/$55 to others.
There were too many other presentations for
me to discuss them all, but IAA has made all
The conference awards breakfast was
another highlight, after not being held for
a couple of years it returned, and was very
enjoyable. The Virginia cup was there to be
viewed. The only disappointment was that
Equal Eyes was beat out for the Zangerle
Award by InstiNews, a publication of the
Institute of Municipal Assessors and the
Northeastern Regional Association of
Assessing Officers. Better luck this coming
year MAAO Editorial Board!
In the words of NFL referee Walt Coleman:
“You can’t’ control the future, all we can do
is do the best you possibly can today, right
now, and deal with what comes”. Not bad
words for an assessor to live by.
See you in Michigan in 2013 at the 79th
Annual IAAO Conference.
MAAO Table at the banquet
34
FEATURE
Property Tax Working Group:
Executive Summary of the Final Report
Created by the Minnesota Property Tax Working Group
For several years, Equal Eyes has been providing updates for the Minnesota Property Tax Working Group. In November of 2012,
the working group completed their objective and submitted their final report. This is an executive summary of the document.
Equal Eyes would like to thank Stephen Behrenbrinker for his tireless contribution to the group on behalf of MAAO.
The Property Tax Working Group was
created in 2010 to examine the many facets
of Minnesota’s property tax system and
develop recommendations on how to make
the system more simple, understandable,
transparent, accountable, and efficient.
The Working Group held 20 meetings from
October 2010 through November 2012.
The following summary of Guiding
Principles and Recommendations
established by the Property Tax Working
Group are the result of two years of
extensive research and debate. Full details
of the principles and recommendations are
provided in the full report.
Guiding Principles
•
Defend the purpose
The purpose of the property tax is to
provide local revenue to pay for local
services. The property tax is not a vehicle
for state policies. The state’s involvement
should be limited.
The 12-member working group consists of the following members:
Kathleen Gaylord, Chairperson, Association of MN Counties
Rep. Denise Dittrich, MN House
Rep. Greg Davids, MN House
Sen. Rod Skoe, MN Senate
Sen. Warren Limmer, MN Senate
Thomas Mould, Homeowner
Eric Sorensen, Homeowner
Luayn Murphy, League of MN Cities
David Fricke, MN Association of Townships
Matt Van Slooten, MN Chamber of Commerce
Chris Radatz, MN Farm Bureau, MN Farmers Union; Thom Petersen, alternate
Stephen Behrenbrinker, MN Association of Assessing Officers
Jason Nord, MN Department of Revenue (non-voting)
•
Creating new classifications or benefits
for individual or narrow subgroups of
property should be avoided to preserve
transparency, simplicity, and efficiency
in the system. The cost of administering
narrow preferences often outweighs the
benefits received.
•
•
Base property taxes on market
value (true ad valorem system)
Property taxes should always be based on
full estimated market value to minimize
c o n f u s i o n , c o m p l e x i t y, c o s t s , a n d
distortions.
•
Base property taxes on property
attributes, not ownership or
occupancy
The characteristics and use of a property
should drive property tax levels, while the
characteristics of an owner or occupant
should be delivered via the income tax
system.
35
Defend broad-based goals from
narrow interests
Consider more transparent
alternatives
When evaluating new property tax
proposals, legislators should consider
why the special provision is needed and if
there are other ways to deliver the benefit
outside the property tax system. The
property tax should not be used simply to
avoid direct state costs.
•
New property tax proposals should
include a statement that describes why the
change is necessary and valuable, what it
intends to do, and what alternatives were
considered. This will enrich reevaluation
and decision-making when the provision
is set to expire.
•
Provide sunsets to prompt review
Any new changes in the property tax
system should have a sunset date to
force reevaluation over time and remove
provisions that are no longer achieving their
intended goals.
Make simplicity and transparency
a priority
A transparent and understandable system
facilitates trust and accountability. A
simple system is more efficient and
reduces errors, unintended outcomes, and
high costs. Policymakers must defend
these important principles.
•
•
Require value or intention
statements on new legislation
Require local impact notes for any
property tax changes
Local impact notes should be required for
all proposed changes to the property tax
system to increase accountability.
PTWG Update, continued
Our Recommendations
1. Reduce the number of classifications
Consolidate the number of classifications
from 55 to four (residential, agricultural,
commercial, other). Do not target benefits
to specific properties through micro
classification.
2. Homestead benefits – Expand the
Property Tax Refund (PTR) program
Expand the Property Tax Refund program
as the primary method of homestead
benefit. Standardize the definition of
a homestead for both residential and
agricultural properties.
3. Avoid or eliminate tiers and parcellinkage
Eliminate value tiers to avoid needing to
chain parcels based on ownership, thereby
reducing confusion, complexity, and
administrative costs.
4. Revamp the agricultural homestead
classification process
Enact Recommendations 1-3 (condense
classifications, standardize the homestead
definition, eliminate tiers/parcel linkage)
to greatly simplify the agricultural
homestead process.
8. Make improvements to the Truth in
Taxation (TNT) process
Show basic budget information or provide
links on TNT notices and direct the
public to websites with more detailed
information. Modernize the process and
engage taxpayers electronically.
9. Make improvements to notices and
statements
Give notices consistent branding and
distribute electronically. Include websites
and email contacts. Improve timing and
coordination. Show estimated and taxable
market values.
10. Investigate and plan for an eventual
statewide computer system
Explore the creation of a centralized tax
system to support local administration of
the tax, save total state and local costs, and
improve accountability.
11. Convert the tax capacity system to
an assessed value system
Use assessed values and mill rates to
make Minnesota’s property tax system
more understandable, transparent, and
competitive across the nation.
5. Establish an agreed upon relationship
(“ratio”) between classification rates
Do not use classification rates to provide
benefits to narrow groups. Establish and
maintain consistent ratios; recognize
that ratio changes shift burdens to other
properties.
12. Eliminate the use of property taxes
for state funding
Eliminate the state tax to restore property
taxes as a local tax and reduce complexity.
If not eliminated, designate revenues
directly for local governments, not the
general fund.
6. Consolidate reporting, application,
and effective dates
Consolidate the property tax calendar
around a few key dates to increase
understandability, predictability, and
compliance.
13. Avoid limits, caps, and freezes
Do not impose limits, caps, or freezes
on values, tax amounts or levies. This
undermines budgeting and causes
inequities. Let local governments be
accountable to local voters.
7. Base assessments on the most current
economic conditions
Support recent sales analysis efforts
that make the system more responsive.
Encourage the transition to eCRV.
Use a larger geographic area for sales
comparisons.
14. Exclusions
The state should not use exclusions to
avoid paying for benefits it thinks are
important, nor for short-term or onetime benefits. If used, tie exclusions to
properties, not owners. See full report for
recommendations on specific exclusions.
36
15. Credits
Eliminate/phase out power line credit (high
admin costs) and agricultural homestead
credit (result of other recommendations).
Keep disaster and disparity reduction
credits.
16. Exemptions
Be selective – exemptions must accomplish
public purposes, not serve special interests.
Impose automatic review/sunset dates to
improve accountability and verify success.
See full report for recommendations on
specific exemptions.
17. Aids
Allow Utility Valuation Transition Aid to
naturally phase out. Sunset or phase out
Dis-parity Reduction Aid (1988 legacy
aid, may no longer achieve intended
goals).
18. Special Valuations and Deferrals
These programs increase complexity and
decrease efficiency, transparency, and
account-ability. Impose sunset dates on all
current/future programs to prompt review.
19. Refunds
Expand the homeowner Property Tax
Refund (PTR) program. Keep special
targeting PTR as a tool to ease impacts
of other reforms. Reevaluate renter PTR
with respect to class consolidations in
Recommendation 1.
A downloadable copy of this report, along
with meeting materials, research, and
other in-formation related to the Working
Group can be found online at: www.
revenue.state.mn.us/propertytax/pages/
workgroup
Region Round Up
Understanding Homestead Trust Linkage
Written by Nancy Gunderson, SAMA
Clay County Assessor
With each of our state-wide regions getting together monthly to
discuss issues and current assessment concerns, a great deal of
guidance and direction is given at that local level. Some of this
fall’s more frequent discussions have been about conservation
easement valuations, increasing agricultural valuations,
agricultural time adjustments, rural preserve property tax
program, and the utility forum. But there was one topic that was
discussed at nearly every region meeting and that was that of
trust homesteads and how counties are handling them. This has
become an extremely perplexing topic.
Questions have arisen regarding linking and extending homestead
to properties with different ownerships including trusts. The
Minnesota Department of Revenue recently sent a letter that
laid out multiple scenarios and the linking eligibility of parcels
with different ownerships – individuals and trust. Armed with the
following scenarios, assessors with a bit of luck will be able to make
more clear-cut decisions as to homestead linkage eligibility as it relates
to trusts. Here is that letter in its entirety:
Thank you for your question submitted to the Property Tax Division regarding homestead for properties owned by various trusts/
life estates/individuals. You have provided the following scenarios and are looking for verification of the homestead amount you
have listed for each parcel. Before reviewing the scenarios presented, we will review the rules for homestead linkage. In order
to be linked, properties must first be owned by the exact same ownership entity. It is not appropriate to link properties where
the ownership entities differ such as individually-owned parcels to corporate- or partnership-owned parcels. Of course there
are exceptions to this rule:
1. The homestead of a base parcel owned and occupied by an individual may be linked to a parcel of property that the owner
owns with other individuals;
2. The homestead of a base parcel owned and occupied by an individual may be linked to a parcel of property that is owned by
a trust and the individual owners of the base parcel are the grantors of the trust-held property (and vice versa); and
3. In the case of married couples, properties that are held solely in the name of one spouse may be linked to parcels that are held
solely by the other spouse and parcels that are titled in both names. This does not apply to any entities of which the husband
and/or wife are both members. It only applies to parcels owned by natural people.
Parcel ownership
Parcel #1 John Smith Trust (John Smith, grantor)
Parcel #2 John Smith and June Smith Marital Trust (John Smith and June Smith, grantors)
Parcel #3 Life Estate in John Smith
Parcel #4 John Smith, individually
Parcel #5 John Smith and June Smith, as individuals
Parcel #6 Transfer on Death Deed - John Smith, Grantor
Homestead established at Parcel #1:
If the homestead was established at parcel 1, homestead would be granted in the following manner:
Parcel #1 Base parcel - 100% homestead
Parcel #2 No homestead (cannot link entity to entity)
Parcel #3 100% homestead (Trust can link to property owned individually by the grantor of the trust)
Parcel #4 100% homestead (Trust can link to property owned individually by the grantor of the trust)
Parcel #5 50% homestead (Trust can link to property owned individually by the grantor; the grantor is 50% owner of parcel #5)
Parcel #6 100% homestead (Trust can link to property owned individually by the grantor)
Base Parcel #2:
If homestead is established at parcel 2, homestead would be granted in the following manner:
Parcel #1 No homestead (entity to entity)
Parcel #2 Base parcel- 100% homestead
37
Region Round Up, continued
Parcel #3 50% homestead (Trust can link to property owned individually by the grantor; John Smith is 50% of the grantors of
the trust that has homesteaded Parcel 2)
Parcel #5 100% homestead (Trust can link to property owned individually by the grantors – 50% for John Smith and 50% for
June Smith)
Base Parcel #3:
If homestead is established at Parcel 3, homestead would be granted in the following manner:
Parcel #1 100% homestead (Trust can link to property owned individually by the grantor)
Parcel #2 50% homestead (Trust link to property owned individually by the grantor; John Smith is 50% of the grantors of this trust)
Parcel #4 100% homestead (Life Estate as individual ownership linked to individual ownership)
Parcel #5 100% homestead (base parcel is in individual ownership; may be linked to parcels owned by that individual and his/
her spouse)
Parcel #6 100% homestead (Life estate as individual ownership can link to transfer on death deed as individual ownership)
Base Parcel #4:
Parcel #1 100% homestead (individual to trust)
Parcel #2 50% homestead (individual to trust of which John is 50% of grantors)
Parcel #3 100% homestead (Life estate as individual ownership to individual)
Parcel #5 100% homestead (individual to individuals who are spouses)
Parcel #6 100% homestead (individual to transfer on death deed as individual ownership)
Base Parcel #5:
Parcel #1 50% homestead (individual to trust; John is 50% owner of the base parcel and grantor of this trust)
Parcel #2 100% homestead (individual to trust that has the same grantors as the base parcel)
Parcel #3 100% homestead (Life estate as individual ownership to property owned by the individuals and his/her spouse)
Parcel #4 100% homestead (individuals to property owned by the individual and his/her spouse)
Parcel #6 100% homestead (property owned by transfer on death deed as individual ownership to property owned by that
individual and his/her spouse)
Base Parcel #6:
Parcel #1 100% homestead (transfer on death deed as individual ownership to a trust where that individual is grantor)
Parcel #2 50% homestead (transfer on death deed as individual ownership to trust; John is 50% of grantors of this trust)
Parcel #3 100% homestead (transfer on death deed as individual to life estate as individual)
Parcel #4 100% homestead (transfer on death deed as individual to individual)
Parcel #5 100% homestead (transfer on death deed as individual to property owned by that individual and his/her spouse)
After completing review of the above scenarios, we believe the confusion is in regard mostly to the life estate and transfer upon
death deed ownerships. In determining the homestead status of a property, life estates and transfer upon death deeds do not
affect homestead eligibility of the individual who continues to own and occupy the property. This is because the ownership
of the property is still with the individual until the terms of the life estate or transfer on death deed are met. Life estates and
transfer upon death deeds are arrangements made on the property prior to an owner’s death and determine what will happen
to the ownership of the property once the owner is deceased. These are not considered entities as they are not trusts; therefore,
these properties are considered as being owned by an individual for determining homestead on a property and linking eligibility.
If you have any other questions, please feel free to contact our division at [email protected].
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Global Assessment Trends
Japan
Written by Solomon Akanki, SAMA
Scott County
This issue we fall into the ring of fire and examine assessment practices in Japan
Real Estate in Japan is still substantially
below the price it commanded 30 years
ago- even in nominal terms. It has just
entered its fifth recession in 15 years, the
government is the most indebted in the world
and the stock market has proven a perennial
disappointment.
Administrative divisions
Japan consists of forty-seven states, each
overseen by an elected governor, legislature
and administrative bureaucracy. Each state
is further divided into cities, towns and
villages. The nation is currently undergoing
administrative reorganization by merging
many of the cities, towns and villages with
each other. This process will reduce the
number of sub-state administrative regions
and is expected to cut administrative costs.
Geography
Japan has a total of 6,852 islands extending
along the pacific coast of East Asia that
together have an area slightly smaller than
the state of California.. About 73 percent
of Japan is forested, mountainous, and
unsuitable for agricultural, industrial, or
residential use. As a result, the habitable
zones, mainly located in coastal areas, have
extremely high population densities. It is one
of the most densely populated countries in
the world.
of some 65.9 million workers. Japan has a
low unemployment rate of around 4 percent.
Housing in Japan is characterized by limited
land supply in urban areas.
Infrastructure
Japan’s road spending has been extensive.
Its 750,000 miles of paved road are the
main means of transportation. Some 250
high-speed trains connect major cities and
Japanese trains are known for their safety
and punctuality. There are 173 airports in
Japan; the largest domestic airport, Haneda
Airport, is Asia’s second busiest airport.
Commercial Real Estate in Japan
Economy
As of 2011, Japan is the third largest national
economy in the world, after the United
States and China, in terms of nominal GDP
and purchasing power parity. As of January
2011, Japan’s public debt was more than 200
percent of its annual gross domestic product,
the largest of any nation in the world. The
service sector accounts for three quarters
of the gross domestic product. Japan has
a large industrial capacity, and is home to
some of the largest and most technologically
advanced producers of motor vehicles,
electronics, ships, textiles and processed
foods among others. Agricultural businesses
in Japan cultivate 13 percent of Japan’s land,
and Japan accounts for nearly 15 percent of
the global fish catch, second only to China.
As of 2010, Japan’s labor force consisted
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Commercial Real Estate in Japan
Demographics
Japan’s population is estimated at around
127.3 million. It has the longest overall life
expectancy at birth of any country in the
world: 83.5 years for persons born in the
period 2010-2015. The Japanese population
is rapidly aging as a result of a post-world
war II baby boom followed by a decrease
in birth rates. In 2009, about 22.7 percent
Assessment Trends, continued
of the population was over 65, by 2050
almost 40 percent of the population will be
aged 65 and over, as projected in December
2006. The changes in demographic structure
have created a number of social issues,
particularly a potential decline in workforce
population and increase in the cost of social
security benefits like public pension plan.
A growing number of younger Japanese
prefer not to marry or have families. In
2011, Japan’s population dropped for a
fifth year, falling by 204,000 people. This
is the greatest decline since at least 1947,
the first year for which government data are
available. Japan’s population is expected to
drop to 95 million by 2050, demographers
and government planners are currently in a
heated debate over how to cope with this
problem. Immigration and birth incentives
are sometimes suggested as a solution to
provide younger workers to support the
nations aging population.
Inflation
Deflation has been a concern over most of
the last 10 years, except from mid-2007
to mid-2008 when the economy showed
consistent and relatively strong growth.
However, this period ended as the world
financial crisis caught up with the country.
The relative stability of prices has had a
strong influence on how discounted cash
flow analysis is conducted as its frequency
of use has increased over the past 10 years.
Typically, rents will be projected to increase
nominally or not at all. A “conservative”
approach to estimating expenses is to hold
them flat over the projection period. It is
common to find that capitalization rates and
discount rates are the same, with terminal
cap rate being slightly higher.
(LAREA). The holder of either license is
considered qualified to value any type of
property, but only an LREA can complete an
appraisal report independently. An LAREA
must always work with an LREA.
Building Codes, land leases, recording
system
Building regulations include requirements
for earthquake resistance.
Specific laws governing most land leases
date back to 1921. What is unique to most
land leases in Japan is that the tenant
effectively has the perpetual right to renew
the lease as long as there are improvements
on the land.
There is a separate registry system for
land and buildings in Japan, but there is
no title system. Ownership is perfected
through a boundary confirmation process,
which should be performed with each
property sale. The process is completed
by having every adjoining property owner
sign a document similar to a site plan that
shows each boundary of the property.
By signing the document, the adjoining
owners are indicating that they agree that
the boundary lines between their properties
and the property being sold are correct. The
boundary confirmation process can be timeconsuming and costly.
Appraisal Reporting Requirements
Appraisal practice in Japan is based on
the United States model. Self-contained
narrative appraisals are standard in Japan.
Most appraisers will not complete a report
until they receive a finalized engineering
report, particularly when value in use must
be considered. The engineering report
is typically relied on for building cost
and depreciation estimates, information
on deferred maintenance, cost estimates
relating to any building code or zoning
issues, and for capital reserve estimates.
Appraisers in Japan are expected to explain
the rationale behind their analysis and
value conclusion. However, unlike reports
in the United States, an appraisal report in
Japan may not incorporate all of the data
necessary to understand the conclusion.
The enhancement of privacy laws several
years ago has impacted the inclusion of
comparable data details in appraisal reports.
It is common for appraisers in Japan to omit
addresses or other information that would
allow a specific lease or sale transaction to be
identified. Since information on acquisitions
by private entities is not public information,
this market data may never be discovered or
make its way into appraisal reports due to
concerns about violating privacy laws. This
lack of disclosure can lead to an inaccurate
picture of the overall market.
Until the late 1990s, the income producing
capacity of properties in Japan was not
greatly considered. Until this point, the cost
approach was most commonly relied upon
because land value in Japan represents a
high percentage of overall property value.
At the start of this shift from a cost to an
income focus, direct capitalization was most
Licensing/Certification
The Japanese Association of Real Estate
Appraisal was established in 1965 and
falls under the control of the Ministry of
Land, Infrastructure and Transportation.
It is the only government-approved entity
responsible for the administration of
appraisal practice. All appraisers in Japan
must be licensed by the government through
this association. As of April 2009, there
were approximately 5,900 association
members. The association also oversees the
compilation of the Land indexes.
There are two levels of licensing, the
licensed real estate appraiser (LREA) and
the licensed assistant real estate appraiser
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Residential Real Estate in Japan
Assessment Trends, continued
commonly applied because comparable data
for capitalization rates was available. While
discounted cash flow (DCF) analysis was
used, it was not widespread. This changed
dramatically with the 2007 appraisal
standards changes, which required DCF
analysis for all appraisals of securitized
properties. As a result of these changes, the
conclusion of the DCF analysis is always
given some weight, and often the most
weight, in reaching a final value conclusion.
The difficulty is in obtaining the necessary
market data to construct a DCF analysis
with assumptions that are fully supportable.
The most common application of the sales
comparison approach is to estimate land
value. For improved properties, a complete
analysis of the comparable sales may not
be included in the appraisal. The main use
of the comparable sale is to obtain cap rate
data.
Availability of Data
Market data can be difficult to obtain in Japan.
Asking rents and vacancy rates for office
space in major cities are most accessible
data, as this data has historically been the
focus of property investors. Industrial and
rental apartment data have become somewhat
more available over the past 10 years, but that
information is not available in all markets.
Information on retail properties and hotels is
still difficult to come by. Comparable sales
data has become more accessible in recent
years with the advent of the J-REIT (Japanese
Real Estate Investment Trust) database,
which provides fairly detailed information
on property transactions involving J-REITs.
Tax Assessment System
Property tax is levied on real property and
personal property. There are 179.03 million
parcels and 58.94 million buildings.
Sales data for private transactions is more
difficult to obtain because it is not considered
public information and there are very
stringent privacy laws in Japan. As a
result, sharing data among appraisers is not
common. If data is shared, it will typically
exclude some information so that the
property cannot be specifically identified.
This is true for both comparable sales and
lease data. Income and expense data about
the subject property are virtually never
disclosed. Also lacking are complete, reliable
sources for information on supply and
demand, operating expenses, growth rate
expectations and expected discount rates
for most property types. Services that offer
supply and demand data for major markets
have recently been launched, but there is not
the depth or breadth of information found in
the United States.
Period between Re-assessments and Property
tax payments
All properties are re-assessed every 3 years.
There are four property tax payments per
year and they are due June, September,
December, and February.
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Residential Real Estate in Japan
Property Exempt from Taxation
Property owned by organizations working
for public benefit and used for public benefit
are exempt from taxation; these include
property owned by governments, schools,
religious institutions, agricultural non-profit
organization and foreign embassies. Also
tax is not applied in principle where the
value of the property owned by a taxpayer
is below the following threshold: land
value is 300,000 Yen ($3,536), residential
improvement value is 200,000 Yen ($2,357).
Tax payers
Persons listed as owners of property as of
January 1st each year must pay the property
tax. The obligation for payment remains
even if ownership is transferred during the
year.
Tax Base
The base of taxation is imposed in accordance
with “appropriate market value”. Land
values are based on the sales comparison
approach. Residential improvements are
based on the cost approach, and the tax
amount depends on costs for rebuilding.
Appeal Process
Tax payers can appeal assessed values
within 60 days after the assessment roll is
made public. After discussing value opinions
with staff at the assessment department
of the municipal government, the owner
of the property needs to submit an appeal
request form to the Fixed Asset Assessment
Appeal Board. When an appeal request is
judged legitimate in terms of ownership
and deadline, the appeal request form is
forwarded to the assessment department. A
response to the appeal request is prepared
by the assessment department and handed
in to the Appeal Board. The members of the
Appeal Board review the written opinions
of both sides. When necessary, they provide
both parties with opportunities to explain
and argue in front of them before reaching
their decision. If the owner of the property
disagrees with the Appeal Board’s decision,
he/she could file a lawsuit within 60 days
after the decision.
FEATURE
Sovereign Citizen Movement
Written by Joe Skerik, SAMA
Beltrami County
Are we safe at work?? As county, city and
local assessors we have to be prepared for
many unusual and unique activities that
happen as we are out viewing properties;
from the angry taxpayer that gives us a bad
time, to Meth Labs that may be in houses,
garages, or out buildings and mean dogs
for which we always have to be on the
lookout. Recently another issue has arisen
and that is meeting people that are involved
in the Sovereign Citizens Movement. These
individuals own property and may work and
be citizens in your community. However
as we learn more about these individuals
it becomes clear that they are individuals
that can and have become violent against
government officials.
Originally I looked into the land patents
they were recording as documents that were
supposedly going to make their land not
taxable for real estate taxes. Although this
is happening here in our county it is not a
major push by the movement overall and
little reference to land patents being used by
sovereign citizens across the United States is
occurring. It seems like a very limited action
currently taken on a local basis.
The Sovereign Citizen Movement began
in the early 1970’s and spurred up from
the Posse Comitatus groups of the past.
Sovereign citizens are a loosely-organized
collection of groups and individuals
who believe they are above the law and
“true defenders of the Constitution”.
The movements centered on a massive
conspiracy theory that our government is
working to enslave all Americans. They
are an anti-government organization that is
against taxation, do not adhere to our laws
and believe our current governments are
illegitimate and have no power over their
actions. This includes Federal, State and
Local laws and government. They believe
laws do not pertain to them, they do not
need a driver’s license, they do not vote
42
in our elections, they do not have a social
security card anymore and they’ve created
their own license plates and currency. They
have started their own government and
elected their own leaders in the Republic
of the United States of America. Thus there
have been numerous conflicts over the years
with law enforcement from individuals that
are part of the movement.
The FBI considers the Sovereign Citizens
Movement in the top three groups as a
domestic terror threat.
With the movement growing rapidly in
the last ten years, it is believed they have
well over 300,000 members. Some of their
members have become extremist and turned
to violence, such as Terry Nichols who
helped Timothy Mc Veigh in the Oklahoma
City bombing, and Jerry and Joe Kane who,
after a routine traffic stop in Arkansas, shot
and killed two officers. They were then
cornered 90 minutes later and killed in a gun
battle in a Wal-Mart parking lot wounding
two more officers. Many other incidents of
violence have occurred with little reference
Education & Safety, continued
to their ties with the Sovereign Citizens
ever being mentioned. This may be in part
that the name is somewhat an umbrella
term used to describe many radical groups,
Sovereign Citizen Group being the largest
of all of them.
Many twisted beliefs all relate back to
the main belief of the Sovereign Citizens
Movement. Many of the individuals that are
new to the movement are unemployed and
desperate in these tough economic times.
They may be having their home foreclosed
on or are searching for a quick fix to their
dire financial situation. Paper terrorism is
also another means with which they have
attacked many individuals; they’ve put leans
on victim’s properties making it very hard
for them to refinance or buy a property, or
they may file meaningless paper work and
documents that County Recorders question
as legitimate documents - such as trying to
use ones birth certificate to record and filing
themselves as property such as real estate.
They also engage in fraudulent scams like
trying to eliminate mortgages or hide ones
income in a series of trusts. In these tough
economic times many of their members
have tried get rich schemes and gotten
individuals involved by the lure of making
money. Many have defrauded banks with
no intensions of paying them back. All of
which has led to many individuals being
imprisoned for fraudulent scams and tax
evasion. Many of these individuals later
have threatened violence against the courts
and law enforcement.
Attached you will find a document that
was recorded by an assumed member at a
County Recorder’s Office. It illustrates the
unique language used by individuals in the
Sovereign Citizen Movement to help you
further identify these individuals.
43
With the use of the internet and text
messaging the movement has gained
momentum in numbers with the ability
to communicate and get there word out
across the United States much easier. This
has allowing individuals to become more
engaged in the day to day activities of their
movement. Numbers have grown in the
last few years and are believed to a direct
reflection of their increased use of the
internet to recruit people.
So, what should Assessors be on the
lookout for when they are out at a
property?
• Any reference to the Sovereign
Citizens organizations or their belief
in common law
•
Members will regularly say that they
do not recognize our government as
having any control over them (the
conspiracy theory of government
control)
•
Signing of documents in red ink as
they believe that shows a canceling of
the document
•
They may issue fake checks from the
secret National Treasury they believe
exists
There can also be conflict in the office as
Sovereign Citizens try to record documents
or due to back taxes their property may
be taken for lack of payment. In some
counties, assessor office staff work directly
with the recording staff and treasures
office staff and have direct contact with
these individuals. All our staff should be
informed about these individuals and how
to deal with them. Offices may want to set
their own policies and review what course
of action to be taken when talking to these
members. Front office staff may be directed
to get a supervisor to deal with individuals
that want to discuss matters in our offices.
Our appraisal staff is being directed to
“do not enter” these properties if they are
known Sovereign Citizen Members and
the individual appraisal process for those
individuals will be discussed on a case by
case basis.
If faced with talking to an individual that
is believed to be part of these movements
try to disengage as quickly as possible
and leave the property. It is an unwinnable
conversation as they will just continue to
turn the comments or twist the statements
to form questions for you to their belief
and continued discussion could escalate
the situation. They have also been known
to secretly video tape confrontations with
public officials and the post them on the
internet. Once you have left the property,
discuss the situation with your county
assessor as to the actions your county will
proceed with. So in conclusion it is wise the
handle these individuals with caution if they
are determined to be part of the movement.
As many other radical groups of the past this
group also will probably diminish somewhat
or disband over time. Till then keep your
eyes open and ears listening for the signs of
these individuals.
Additional Reading: Search the internet
for Sovereign Citizen Movement
Example - The Lawless Ones – Special
Report put out in August 9th of 2010.
Also search Sovereign Citizens on You Tube.
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Equal Eyes Presents:
The 2013 MAAO Photo Contest!
REFLECTIONS...
The 2013 contest is intended to be abstract! Send us original, high
resolution work to be eligible. The subject can be “reflection” of
anything you feel is appropriate to the theme! No need to explain,
just give it a title. . .
1st Prize: $100; 2nd & 3rd Prize: $50
The winning photos will be chosen by the Editorial Committee and announced in a future issue of Equal Eyes.
E-MAIL PHOTOS TO: [email protected] no later than 06/01/2012
58
FEATURE
The BILLION-dollar Assessment
State Assessed Property:
Part III: Utilities & Pipelines
Written by Michael Stalberger, SAMA
Blue Earth County Assessor
The work of the State Assessed Property work unit results in a total estimated market valuation of over $11 billion annually for the
approximately 145 companies that are valued as state assessed property. While many steps and terms in their valuation are familiar
to assessors statewide and the appraisers in the unit are at least income-qualified Certified Minnesota Assessors like many of their
colleagues in counties and cities, the valuation process truly is a specialized one that many other assessors do not fully understand.
This article describes the assessment of Utilities and Pipelines in Minnesota and starts to describe the differences and similarities
in the assessment processes. It is the third in a series to be included in Equal Eyes designed as an informal introduction to the State
Assessed Property unit and its unique role in the assessment practices of the state. Please review the first and second articles
to learn more about the Airflight Production Tax and Wind Energy Production Tax and for additional background information.
Introduction
As described in the first article in this
series, Minnesota state law requires the
Commissioner of Revenue to value several
types of real and personal property. State
statutes describe the requirements for
these valuations, and Minnesota Rules
provide the administrative framework
for the process of the valuations by the
Commissioner and therefore the State
Assessed Property (SAPs) unit. The
property types related to state assessed
property include flight property, railroad
property, pipeline property, and utility
property. Additionally, the Commissioner
determines the Wind Energy Production
Tax annually.
The SAPs unit conducted a Utilities Forum
on October 24, 2012, where industry
representatives and county officials
were brought together to learn about
the assessment of utility and pipeline
property. The forum was an opportunity
for everyone involved to ask questions
and better understand this complex
subject. There was time for questions
and networking to connect company
representatives with counties that host
their property.
The assessments of utility and pipeline
properties made by the SAPs unit follows
a process that is most similar to what
assessors do throughout the state. It is
essentially a valuation of the property
59
through the income, cost, and (a version
of the) market approaches – which are
then reconciled. Of course, this is an oversimplification, and there are numerous
differences that make the assessment of
utility and pipeline properties unique.
First, a refresher of some commonly used
terms (see the first article for more detailed
definitions):
Allocation – The process of distributing a
company’s total unit valuation (its “going
concern” value) to the portion of the
company located in Minnesota.
Apportionment – The process of
distributing the Minnesota allocated
market value (called “apportionable
value”) to the specific locations and taxing
districts throughout the state in which the
company operates.
Capitalization Rate and Cap Rate
Studies – The capitalization rate is
the relationship of income to capital
investment or value, expressed as a
percentage. For state assessed property,
the work unit has different capitalization
rates for different industries that are
determined annually based on cap rate
studies that are completed.
Minnesota Rules – Rules are general
statements adopted by agencies to make
the laws it enforces or administers more
specific. They are also used to govern the
agency’s organization or procedures and
are only adopted after a public rulemaking
process. The State Assessed Property unit
utilizes rules for its valuation processes.
The rules for assessing utility property are
located in Chapter 8100.
Pollution Control Exemption – This
exemption, which reduces the allocated
values of companies in certain industries,
is determined by the Minnesota Pollution
Control Agency. It can only be granted
for real or personal property/equipment
operated primarily for control or abatement
of air, water, or land pollution.
Operating Property – Operating property
has different meanings depending on
the industry, but generally it is any
tangible property owned or leased by a
state-assessed company that is directly
associated with the production or operation
of the company or its product. It is
generally assessed by the state.
Going Concern – The value of the “going
concern” refers to the total value of the
property (including both real property and
intangible personal property attributed to
the business. The State Assessed Property
unit values the “going concern” for all the
businesses as this value most accurately
represents their values as operating
business enterprises.
SAP in Minnesota, continued
Non-operating Property – Non-operating
property may be owned by a state-assessed
company, but it is not used in the operation
of the company or its product. Generally,
it is assessed locally.
Sliding Scale Market Value Exclusion
– This exclusion is provided for by
Minnesota Statute (272.0211) and is
determined by the Minnesota Department
of Commerce. It is only for electric
generation facilities (excluding wind
energy) and excludes a portion of the
market value associated with equipment
(no land or buildings) depending on the
efficiency of the facility as long as it
exceeds the standard that is in law.
Sixty-Day Rule – Allows the
Commissioner to issue corrections to
values that are required by August 1
through October 1 (thus the “60 days”)
for most values determined by the unit.
Unitary Valuation – Also referred to as
“unit valuation,” it is a valuation process
that utilizes three approaches: cost,
income, and market (the State Assessed
Property unit often uses the stock and
debt approach). It is used for properties
assessed by the state because it correctly
accounts for/captures the “going concern”
value.
Assessment of Utility and Pipeline
Property
The responsibility for the valuation
and assessment of the real and personal
property, tools and machinery, and
transmission and distribution lines of
electric companies is divided between local
or county assessors and the Commissioner
of Revenue. Since the Commissioner
of Revenue by law must assess some
of the utility property in the state of
Minnesota and has general oversight
responsibilities for all assessments of
property, the commissioner will estimate
the valuation of the entire system of
utility companies operating in Minnesota
pursuant to Minnesota Administrative
Rule 8100.0200. The local or county
assessor will be responsible for assessing
the non-operating property.
Minnesota Rules, Chapter 8100.0100,
subpart 11 defines operating property
a s “ a n y t a n g i b l e p ro p e r t y t h a t i s
owned or leased, except land, which is
directly associated with the generation,
transmission, or distribution of electricity,
natural gas, gasoline, petroleum products,
or crude oil. Examples of operating
property include, but are not limited to,
substations, transmission and distribution
lines, generating plants, and pipelines.
Property that is located on the same or
contiguous parcels of land as operating
property is presumed to also be operating
property. Land is always nonoperating
property.”
Non-formula-assessed property is defined
in subpart 10 of the same chapter as
“property of a utility which is valued by
the local or county assessor rather than
by the commissioner of revenue.”
The unit values for operating property
are provided to counties so taxes can
Timeline for the Valuation Process
Jan 2: Assessment Date
Early Jan: Property record forms and annual returns are mailed to companies
Jan/Feb: SAPs work unit conducts annual cap rate studies
Mar 31: Filing deadline for companies (Apr 15 extension possible)
Mar 31 – June 15: SAPs unit completes appraisals and hears appeals
June 30: Preliminary apportionment reports sent to counties for review/corrections
July 15: Deadline for counties to respond with corrections
Aug 1: Final orders of value sent to counties
After Aug 1: Final apportionment reports sent to companies
Fall: Annual Revenue Utilities Forum
60
be collected as part of the property tax
process. Some of these values are referred
to as “ordered” and must be used by
counties while others are “recommended”
and are provided to counties but they
can determine their own valuations
for that portion if they so choose. The
Commissioner may also increase or
decrease values as necessary to achieve
equalization.
Rule 8100.0200 states that the
Commissioner establishes the unit value
for each utility company operating within
the state. The entire system is valued
utilizing data relating to the cost of the
property, the earnings of the company
owning or operating the property, as well
as other indicators of value if applicable.
The resulting valuation is allocated to
each state in which the utility company
operates. The value of the property located
in Minnesota that is exempt from property
tax or that is locally assessed is subtracted
from the value allocated to Minnesota.
Next, the portion allocated to Minnesota is
distributed by the process of apportionment
to the individual parcels owned by the
company within the state. The data
used in the valuation, allocation, and
apportionment process is drawn from
reports submitted to the Department of
Revenue by the utility companies on or
before March 31. The department conducts
periodic examinations of the supporting
data for these reports.
Finally, the value is equalized based
on sales/assessment ratios determined
by the Department of Revenue. The
commissioner’s values for the properties
that are assessed by local or county
assessors are strictly advisory in nature.
The commissioner must certify the
assessments to the county auditors on
or before August 1 of each year (with
corrections possible through October 1).
The assessment process is generally the
same for different segments of companies
in the overall utility industry. There are
some differences, however, depending
on the business type as well as the type
of property.
Electric Light and Power Utilities Property
All non-operating property of electric light
and power utilities should be assessed by
the city or township assessor of the taxing
district where the real property is located.
Where structures are situated on land that
is owned by a utility, both the land and
structures should be assessed as real estate.
The same rule applies where the structures
are situated upon land held by the utility
by virtue of a lease for a term of three or
more years from the state or from any
religious, scientific or benevolent society
or institution, and where the structures
are situated upon land held by the utility
by virtue of a lease for any period of
time from a private individual or private
corporation. It is only when the structures
are situated on a leased portion of railroad
right-of-way or on land leased from the
state for a term of less than three years
that the structures should be assessed as
personal property.
The term “structures” includes all
buildings, fences, concrete foundations,
substation poles and supporting frames.
It also includes all electric substations,
generating stations, transformer stations,
and switching stations. All such structures
are to be assessed as real estate. The
appropriate classification is class 3a
commercial-industrial property.
All tools, implements and machinery
which are fixtures to real property are
assessed as part of the real estate. These
should also be class 3a property. Minnesota
Statutes, section 273.13, subdivision 24,
paragraph (a), clauses (2) and (3), states:
“(2) All personal property that is: (i) part
of an electric generation, transmission, or
distribution system; or (ii) part of a pipeline
system transporting or distributing water,
gas, crude oil, or petroleum products; and
(iii) not described in clause (3), and all
railroad operating property has a class
rate as provided under clause (1) for the
first tier of market value and the remaining
market value. In the case of multiple
parcels in one county that are owned by
one person or entity, only one first tier
amount is eligible for the reduced rate.
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(3) The entire market value of personal
property that is: (i) tools, implements,
and machinery of an electric generation,
transmission, or distribution system;
(ii) tools, implements, and machinery
of a pipeline system transporting or
distributing water, gas, crude oil, or
petroleum products; or (iii) the mains and
pipes used in the distribution of steam or
hot or chilled water for heating or cooling
buildings, has a class rate as provided
under clause (1) for the remaining market
value in excess of the first tier.”
Personal Property of Utilities
Minnesota law defines as personal
property, “all gas, electric, and water
mains, pipes, conduits, subways, poles,
and wires of gas, electric light, water,
heat or power companies, and all tracks,
roads, conduits, poles, and wires of street
railway…”
Ordinarily, personal property is exempt
from ad valorem property tax. However,
the law also indicates that “personal
property which is part of an electric
generating, transmission, or distribution
system or pipeline system transporting
or distributing water, gas, crude oil, or
petroleum products or mains and pipes
used in the distribution of steam or hot
or chilled water for heating or cooling
buildings and structures; and personal
property” listed in the above paragraph are
taxable personal property. Therefore, only
that personal property which is operational
and part of the utility’s system is taxable.
The personal property of gas and water
companies shall be listed and assessed in
the town or district where it is located,
without regard to where the principal or
other place of business of the company
may be located.
The commissioner certifies the values to
county auditors on or before August 1
of each year (corrections can be issued
through October 1).
Note: Electric power distribution lines and
their attachments and appurtenances that
are used primarily for supplying electricity
to farmers at retail are exempt from
taxation pursuant to Minnesota Statutes,
section 272.02, subdivision 19. (As such
utility companies receive exclusion for
their rural distribution lines on their annual
return.)
Cooperative Electric Light and Power
Associations
The majority of cooperatively-owned
electric utilities are financed by the
federal government under the Rural
Electrification Administration (REA).
These REA cooperatives are not exempt
from taxation simply by reason of being
federally financed. Their property should
be assessed on the same basis as that
of other cooperative electric light and
power associations. All real and personal
property of cooperative electric light
and power associations, which is located
within the boundaries of any incorporated
city is subject to assessment in the same
manner as the real and personal property of
privately-owned electric light and power
utilities. It is valued and assessed by the
appropriate assessor.
“Rural” in this case means any area of the
state not included within the boundaries
of any incorporated city, and shall also
include both farm and nonfarm population
thereof.
Cooperative associations that are
organized under the provisions of Laws
1923, chapter 326 and are engaged in
electrical heat, light or power business
upon a mutual, non-profit and cooperative
plan in rural areas are recognized as
quasi-public in nature and purpose.
Such cooperative associations must
pay an annual membership tax of $10
per one hundred members and fraction
thereof, which is imposed annually by the
Commissioner of Revenue on December
31 of each tax year. The membership tax
is due and payable on or before March 1 of
the succeeding year. This tax is in lieu of
all personal property taxes, state, county or
local, that are made upon distribution lines
and the attachments and appurtenances
thereto of such associations located in
rural areas. If the tax is not paid by the
deadline, a penalty may be charged.
All property of cooperative associations
that are organized as referenced above,
including both transmission and
distribution lines, located within the
corporate limits of cities, continues to
be subject to ad valorem assessment and
taxation. All real property of cooperative
electric light and power associations
situated in rural areas should be assessed
in the same manner as real property owned
by a privately-owned electric light and
power utilities is assessed.
Assessment of Privately-Owned Gas,
Water, Sewer, and Central Heating Systems
All real and personal property owned by
privately-owned gas, water, sewer and
heating systems should be assessed by
the city, township or county assessor of
the taxing district where the property is
located. This property is assessed and
taxed in the same manner as other real
property.
Assessment of Municipally-Owned Light,
Heat, Power, Gas and Water Systems
Generally, both real and personal property
of municipally-owned utilities is exempt
from taxation as public property used for
a public purpose in both the Minnesota
Constitution and Minnesota Statutes,
section 272.02, subdivision 8.
Numerous municipally-owned utilities
extend their lines outside the boundaries of
the municipality for the purpose of serving
private customers, and are exempt from
taxation if they convey electricity, heat,
gas or water, which is surplus, and the sale
of which is incidental to the public purpose
of supplying the municipality. However, if
the lines are used to convey utility services
to a substantial extent to customers outside
the corporate limits, they may be subject
to assessment.
Municipally-owned property that is leased
to private parties becomes subject to
taxation.
Pipeline Property
The Commissioner of Revenue is also
charged with assessing the personal
property consisting of pipeline systems
of mains, pipes, and attached equipment
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DID YOU KNOW
Did you know there is a National Pipeline Mapping System (NPMS)? It is a geographic
information system sponsored by various government agencies. The NPMS consists
of geospatial data, attribute data, public contact information, and metadata pertaining
to various types of pipelines. Its primary purpose is pipeline safety, but the locational
information may help assessors in identifying pipeline property. There is a public view
with limited information. There is also potential access to more sensitive information
and that allows downloading the GIS layer. It is available by application of the local
unit of government. Visit here for more information or here for a more specific query.
of pipeline companies and others engaged
in the business of transporting natural
gas, gasoline or other petroleum products
via pipelines. These pipeline systems are
sometimes visible, running through fields
in greater Minnesota and other times the
only visible portion is a single terminal
pipe and associated buildings enclosed
in a fenced-in area at a terminal location.
After the valuations are determined by
the SAPs unit, they are certified to the
counties so taxes can be collected as part
of the property tax process.
This does not apply to the assessment of
either the products transported through
the pipelines. Additionally, the lines of
local commercial gas companies engaged
primarily in the business of distributing
gas to consumers for retail purposes do
not get assessed as pipelines. They are
considered utility property. Pipelines used
by the owner thereof to supply natural gas
or other petroleum products exclusively
for said owners’ own consumption and not
for the resale to others is also not assessed
as a pipeline.
The responsibility for the valuation and
assessment of pipeline systems of gas,
water and petroleum companies is divided
between local or county assessors and the
Commissioner of Revenue. All land and
non-operating real property of natural
gas, crude oil, and petroleum pipeline
companies should be assessed by the local
assessor of the taxing district in which the
real property is located. Real property does
not include the pipeline itself.
Example of the Utility/Pipeline Valuation
Process
For the 2012 assessment, the State
Assessed Property work unit valued 94
utilities and pipelines. Of these, 51 were
valued using the unitary valuation process
(that process is described below). These 51
companies’ values were then apportioned
to approximately 10,400 parcels. The other
43 companies were valued utilizing the
Cost Less Depreciation (CLD) approach
(which will be summarized later).
The Commissioner of Revenue is
responsible for assessing the operating
real property and the personal property
which consists of the pipeline system
of mains, pipes, and equipment attached
thereto of pipeline companies and others
engaged in the operations or business
of transporting natural gas, gasoline,
crude oil, or other petroleum products by
pipelines. The Commissioner will provide
those values to the city or county assessor
by order, on or before August 1 of each
year. The Department of Revenue can
issue a correction for pipeline assessments
through October 1, if it is determined that
the amount certified on or before August
1 is in error.
As you’ll recall, the SAPs unit appraises
companies as a single unit (the going
concern value) – including real property
and tangible personal property that is part
of the company’s operating property. The
non-operating property is locally-assessed.
Land is always locally assessed for utility
and pipeline companies. The valuation
process is dictated by Minnesota Statutes
and Rules. The rules were last rewritten
in 2007. The SAPs unit applies all three
approaches to value (cost, income, and
market (using stock and debt)) and always
considers them all – even though certain
approaches carry more weight depending
on characteristics of the company.
DID YOU KNOW?
The State Assessed Property work unit generates about 24,000 pages of valuation
information each year for all company and county reports. It is quite a process to stuff
this information into envelopes and complete the annual mailing. If there are any
revisions, the number of pages is quickly multiplied! With the new implementation of
the GenTax processing system, the work unit hopes to go to a paperless process to save
resources – paper, and time.
Much like our assessment process, the SAPs
appraisal process incorporates multiple
years. The 2012 assessment value is for
2013 taxes. It is based on 2011 financial
year reporting from the companies.
C o s t A p p ro a c h . M i n n e s o t a R u l e s
8100.0300 subpart 3 direct the use of the
cost approach. The companies provide
information to the SAPs unit that they also
have to file with various government entities.
They provide additional information for
the property in Minnesota to be used
for the apportionment process, as well.
Essentially, the cost approach indicated
value formula is: Total Plant Cost – Total
Depreciation = Cost Indicator of Value.
The total plant cost includes the actual
plant in operation, as well as any newly
constructed plant that is still being
completed (construction work in progress),
any contributions in aid of construction, and
any leased property. The total depreciation
includes the book depreciation as reported
by the company, and any additional
depreciation for the contributions in aid of
construction and on the leased property. The
company’s book depreciation is verified
and audited by the various governmental
regulating agencies.
Income Approach. Minnesota Rules,
Chapter 8100.0300, subpart 4 directs
the use of the income approach. The
companies provide information to the
SAPs unit that they also have to file with
various government entities. They provide
additional information for the property in
Minnesota, as well. Essentially, a weighted
average of three years of net operating
income is capitalized to arrive at an income
indicator of value.
Net operating income is operating revenues
minus various expenses (operating,
maintenance, depreciation, amortization,
income and other taxes, plus other
qualifying expenses). Any deferred taxes
are added back into operating revenue
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before arriving at the net income.
The capitalization rate is determined on
an industry-specific basis. Each year, the
SAPs unit conducts cap rate studies for
Electric Utilities, Gas Distribution, Gas
Transmission, and Pipelines. The resulting
rates are industry-derived and are not
company-specific. Various methodologies
are utilized to develop capitalization rate
estimates, and the SAPs unit weights the
results of the methodologies to arrive
at a single cap rate to be applied to all
companies within that industry segment.
Market Approach. The SAPs work unit
utilizes a market approach that is different
than the sales comparison approach
common to most assessors. The unit relies
on the stock and debt approach, which
has been supported by the United States
Supreme Court. It relies on an accounting
principle that states that the value of the
assets = the value of the liabilities plus
stockholders’ equity.
The formula incorporates the number
of outstanding stock shares and their
price as of a given period of time. It also
incorporates the value of long-term debt
and current liabilities and assets. The
resulting value is then adjusted based on
percentage of operating property to arrive
at a value for the company. The underlying
concept is that the value of the company is
no greater than what a group of investors
would be willing to pay for it by buying
stock shares in the company.
Final Valuation Estimate. To arrive at
a final valuation estimate, the SAPs unit
reconciles the three approaches by applying
different weightings based on specific
considerations for the industry segment and
for the specific company being valued. This
is where the art and science of appraisal
come together and it is also where the
expertise and experience of the appraiser is
necessary. The SAPs unit conducts regular
meetings during the valuation season
where they meet as a group to review the
appraisals and determine the weightings for
each company.
Once a final valuation estimate has been
made, the unit value for the entire system
is allocated so that the only value remaining
is for the portion in Minnesota. This
allocation is made using two ratios:
1: a ratio of the portion of the cost of the
system in Minnesota compared to the cost
of the entire system, and
2: a ratio of the portion of the operating
revenues generated in Minnesota compared
to the total operating revenues
After the value has been allocated to the
Minnesota-only value, the next step is to
deduct for property/value not assessed
in Minnesota based on state laws (such
as pollution control, office furniture, and
uninstalled meters) as well as to deduct
for property/value that is excluded from
the SAPs generated value because it is
locally-assessed (such as land). This
remaining value is then apportioned to
each taxing jurisdiction. The apportioned
values (which may also be equalized if
needed) are determined similar to how the
allocation occurs. They are based on ratios
of the total cost within Minnesota, which is
then multiplied by the original cost of the
system on each parcel as reported by the
company. The apportioned value is reported
to the local assessors.
Cost Less Depreciation
As noted previously, most companies are
valued using the three approaches to value,
but some have elected to be valued utilizing
the Cost Less Depreciation method. Cost
Less Depreciation (CLD) is used as the
valuation process for 43 utility companies
encompassing 1,100 parcels. The total
value for the 2012 assessment was nearly
$467 million. Most of the companies valued
on a CLD basis are smaller municipal or
rural cooperatives. The cost of the property
(including structures and machinery) new is
depreciated at a rate of 2.5% annually until
it reaches a maximum of 75% depreciation.
The resulting value is then apportioned and
reported to the local assessor.
County and City Role in Assessment of
Utility and Pipeline Property
As is evident in this article, the assessment
of utility and pipeline property is quite
specialized, and most of the work is
completed by the SAPs work unit.
However, there is a role for county and city
assessment professionals. The primary role
is that of on-the-ground local observers.
It is important for local assessors to be
aware of changes or new construction
that they identify in their areas. This
information is essential so that valuations
for the companies can be placed on the
appropriate parcel and in the appropriate
taxing jurisdiction.
Additionally, the SAPs unit relies on
local assessment professionals to provide
feedback on the preliminary apportionment
reports that are mailed in July of each year.
These reports provide a first look at how
the valuations for the companies will be
apportioned to each taxing jurisdiction
based on the most current information the
work unit has. They should account for
new construction or changes in company
operations. They are the last time for the
local assessor to report changes or concerns
so they can be efficiently handled by the
SAPs unit.
Please remember the overall assessment
for each company is only as good as the
verification completed by each county
since the assessments of each company
are usually shared by numerous counties
as the property is located in more than one
county. A late change due to a discovered
error results in valuation changes for all
host counties that share that company.
Proceedings and Appeals for Utility
Valuations
The policies and procedures for appealing
the valuation and classification of stateassessed property are slightly different
from the appeals process provided for other
properties subject to ad valorem taxation.
An appeal by a utility company regarding
property for which the Commissioner of
Revenue has provided the city or county
assessor with ordered or recommended
values must be brought against the
commissioner and not against the county or
taxing district where the property is located.
Utility and pipeline companies can make
administrative appeals - as well as court
appeals - when they claim the utility
property has been partially, unfairly,
or unequally assessed; assessed at a
valuation greater than its real or actual
value; misclassified; or that the property
is exempt. This applies to pipelines, gas
and water companies and electric light and
power companies and only with regard to
taxable net tax capacities that have been
provided to the local jurisdiction by the
commissioner and which have not been
changed by the local jurisdiction.
This appeals process does not apply if the
taxable net tax capacity being appealed
is different from that established by the
commissioner, or if the appeal claims that
the tax rate applied against the property is
incorrect or that the tax has been paid. In
those cases, the appeal is made to the local
jurisdiction.
The SAPs unit prefers court appeals to
be a last resort for utility and pipeline
companies. There are administrative appeal
options that are available and oftentimes
are enough to resolve the issues. In cases
where a court appeal is necessary and
it is filed due to the implementation of
the commissioner’s order, certification
or recommendation, the petition must
be brought against the Commissioner
of Revenue under Minnesota Statutes,
chapter 278 (Tax Court). The appeal
petition that initiates the appeal against
the commissioner must be filed with the
Minnesota Tax Court in Ramsey County.
The court petition must include all parcels
encompassed by that order which the
petitioner is objecting to. An order of the
commissioner is either:
 a certification or notice of valuation
by the commissioner for the utility
property types described above; or
 the final determination by the
commissioner of either an
administrative appeal conference or
informal administrative appeal.
The court petition must be filed within 60
days of the date of the valuation notice.
Companies may request a 30-day extension
from the court if they believe they have a
good cause for the extension. Like all other
ad valorem taxpayers, the companies also
have until April 30 of the year the tax is
payable to also file the court petition.
As an alternative to a court petition,
companies that submit their required reports
by the required due dates may appeal
administratively to the commissioner prior
to court action. The administrative appeal
must be submitted in writing within 10
days after the date of the commissioner’s
valuation certification or notice to the
company or by June 15, whichever is earlier.
After a written request for appeal is
received, the commissioner shall conduct
the conference upon the commissioner’s
entire file and record and any additional
information that may be offered by the
company. The conference must be held
no later than 20 days after the date of
the commissioner’s valuation certificate
or notice to the company, or by the date
specified in an extension. Within 60 days
after the conference the commissioner shall
make a final determination of the matter
and shall notify the company of the final
determination. The conference is not a
contested case hearing.
In addition to the opportunity for a
conference, the commissioner shall also
provide the railroad and utility companies
the opportunity to discuss any questions or
concerns relating to the values established
by the commissioner through certification
or notice in a less formal manner. The SAPs
unit prefers companies direct these less
formal information requests and discussions
start with an email to sa.property@state.
mn.us. This is the best way to discuss any
concerns with valuation determinations
or possible errors. This does not change
or modify the deadline for requesting a
conference, the deadline to appeal an order
of the commissioner or the deadline for
appealing to Tax Court.
This has been a continuation in an introductory review of the State Assessed Property work unit and the work they do to determine
the assessment of utility and pipeline property in the State of Minnesota. In a future issue of Equal Eyes, the focus will shift to the
one additional industry assessed by the work unit – railroad property.
Stephanie Nyhus, Property Tax Compliance Officer in the State Assessed Property work unit, provided statistical information and
background assistance for this article. Thank you, Steph!
64
Assessor Retirements
Transitions
Compiled by Nancy Gunderson, SAMA
Clay County Assessor
Suzie Lohse retires from Grant County
Suzie Lohse’s grandfather, Isaac Berg, was the first Grant County
Assessor. He was elected in 1947 on write-in votes while he was
actively running for the County Auditor’s position in that election.
She didn’t know what his duties were as the Assessor; she only
knew that he worked at the courthouse. He also held the positions
of County Recorder and County Auditor before he retired.
Suzie was a displaced school teacher. Her teaching position was
terminated when Title IX came into the public school systems.
She searched for teaching jobs, but there were no openings in the
schools surrounding where she was living, so she did the next best
thing and became a substitute teacher and coach for the school in
her home town. In the summer of 1979, she saw a help wanted ad
in the local newspaper for a Deputy/Office Manager for the Grant
County Assessor’s office.
Suzie applied for that job, not because she wanted to be an assessor
or even knew what they did, but because she needed a full time
job and a regular pay check. Vern Johnson had just been hired to
replace Dan Franklin as the County Assessor and he was looking
for a staff member. After two interviews and many questions, the
position was given to another. About a month later Suzie got a
call from Mr. Johnson asking her to come to work part time. He
had gotten his state orders and was given permission to hire three
part time people to help get the state orders processed and assessed
value calculations done in a timely manner so the Auditor could get
the taxes calculated and the Treasurer could get them all typed up
and sent out on time. That’s how it all started for her. She worked
part time as needed for the assessor’s office, auditor’s office and the
treasurer’s office through 1980. Suzie started working full time in
the Assessor’s office on December 27, 1982.
Suzie earned her CMA in 1988, AMA in 1991, and SAMA in
1993. She was a member of WCMAP where she held the office
of Secretary/Treasurer, Vice President, President, and Chair of
Education Committee. She also was an instructor for Property
Valuation Short Course for ten years.
Vern retired from the position of Grant County Assessor in March
of 1994. She applied for the job and was given an interview.
The night of the interview, the café` across the street from the
courthouse had a huge fire and took the attention away from the
interview. Very few questions were asked of her as the majority
of the Commissioners were looking out the window at the fire and
65
Suzie Lohse
activity over there. They eventually voted 3-2 to hire her for the
County Assessor position to complete Vern’s term. Her first day
as Grant County Assessor was April 1, 1994, and her first duty
was to take on the Local Boards of Appeals that began that day,
and a tax court petition shortly after.
Suzie has been a member of MAAO since 1994. She has been a
very active member within Region VII. She feels so fortunate
to be a part of this group. They are her friends and advisors,
counselors and soundboards. Without them she would never
have lasted in this profession all these years.
Suzie retired December 31, 2012. Her retirement plans are
uncertain at this time - maybe find a part time job with less stress.
She plans to spend as much time as possible with her youngest
grandson, volunteer at the elementary school up the block, do a
lot of fishing, enjoy staying home on those stormy days and get
reacquainted with her sewing machine.
Suzie and her husband, Bob will celebrate their 40th wedding
anniversary next summer. They have four children: Trevor &
wife Tonya, son Anthony; Trisha & husband John, son Jonah;
Tom; and Tana. They will enjoy family time with all of them
since they are her reason for living, laughing and loving.
Revisiting the Retirees:
Dean Moller
Researched and Written by Corey Erickson, AMA
Ramsey County
This issue we catch up with Dean Moller, Former City of Faribault County Assessor
exemplary property records, it made for an
easy (or maybe I should say “easier”) tenure
for Dean Moller as the County Assessor.
According to Dean, “We took some heat
for a couple of years, and then it was quiet.”
After all, perfect data means perfect values,
right? Well, slight exaggeration here,
but I think we all know good data helps.
I have been writing this column for close
to two years now, and have tried my best
to find retirees from a variety of areas
throughout the state. I have covered the
metro area fairly well, as well as the northern
part of the state but until this issue, have
only managed to include one retiree from
southern Minnesota. Well, in searching old
issues of Equal Eyes for retirement notices,
I found one announcing the retirement of the
longtime Faribault County assessor back in
2001. Because of my finely honed assessor
geography skills, I immediately knew that
Faribault County is not in the metro area
or northern Minnesota, so I was good.
So for this issue, our retiree is none other
than Dean Moller, the head honcho of
Faribault County’s assessing crew from
1979 to 2001. Dean started his illustrious
assessing career only six years prior to
becoming a County Assessor. Back
in 1973, Dean needed a job, and with
a background in real estate, answered
an ad for a Deputy Assessor in Martin
County. With a real estate sales license and
previous experience working for a farm
management company selling farms, it was
no surprise that Dean got the job with Martin
County. A quick six years later, Dean found
himself as the Faribault County Assessor.
Soon after arriving in Faribault County,
Dean had a very challenging situation
on his hands. It turned out that Faribault
County had very limited information on their
properties. This meant that Dean’s first big
assignment was picking up the physical data
and likely everything else on over 13,000
parcels. Yikes. If you have even a remote
interest in becoming a County Assessor
someday, and you had planned to just skim
this column, I recommend that you attempt
to read closely for at least the next paragraph.
So, Dean had a big project on his hands.
Actually, he recalls that he had two
challenges to overcome: the first was
collecting all of the data, and the second was
properly communicating this undertaking
to the public. The first challenge, although
plenty daunting, may have been the easier
of the two, because picking up property data
66
is a fairly straight forward process. But to
prevent World War III from breaking out
in Faribault County back in 1979, Dean
handled the not-to-be-ignored public
relations part like a seasoned pro. First, he
made sure the upcoming “reassessment”
(actually “complete redo” is the more
accurate description) was known to all the
property owners of the county by putting
articles and notices in all of the local
newspapers. He didn’t stop there though.
Dean also recognized the importance of
getting the local government officials on
board with the undertaking. Think about
it…. Mayor John Doe from Anytown,
Minnesota needed to properly respond to
his constituents who called asking why
county assessors were out measuring every
building on every parcel, including those
structures that had been around for decades.
According to Dean, once the different city
councils and other officials understood
the value to them in the project, they
were completely behind the undertaking.
So how did it turn out? Well, Dean recalls
that 95% of the county’s residents cooperated
with his staff, which I think we can agree is a
huge success. With only three appraisers in
the Faribault office at this time, the project
took a few years to complete, and included
at least one Board of Review Meeting that
went until 2 am. However, after the project
was completed, and Faribault County had
It was clear in talking to Dean that he
thoroughly enjoyed his career in assessing.
His favorite part of the job was the actual
appraisal work, which it sometimes seems
is crowded out by all of our other duties as
assessors. Dean also enjoyed witnessing
how MAAO evolved over his career from
having a limited role for Minnesota’s
assessors to being the prime source of
education and information for the state’s
assessors. Dean was a proponent of the more
stringent assessor licensing requirements
that took place over his career, and enjoyed
the many educational offerings from MAAO
that resulted from those new requirements.
On the personal side, Dean and his wife
Marilyn will celebrate their 50th wedding
anniversary in April. They have two sons,
one daughter and 13 grandchildren. Dean
and Marilyn are very lucky in that all of
their children and grandchildren live in
Minnesota, so they see each other very often.
In addition to spending time with his family,
Dean enjoys many hobbies, including
hunting, fishing and wood working. In fact,
Dean has his own wood working shop in his
garage at home, and with the increased free
time afforded in retirement, he has used his
wood working skills to make an occasional
Christmas gift for members of his family.
Even though Dean has been retired for
nearly twelve years, he still manages to
make frequent visits to his old office in
Blue Earth. He enjoys visiting with the
staff, some of whom were around when
Dean was the assessor. “I really enjoyed my
time in assessing. It was good to me,” said
Dean. Well, after 22 years as the Faribault
County Assessor and among other things,
completing an entire reassessment, Dean
was undoubtedly good to assessing too.
Feature
Reviewing the 2013 Property Valuation Course
The 2012 Property Valuation Courses
were completed during the 1 st week
of November. There were 130 people
who attended this year, which is a nice
increase in attendance from last year.
PVC continues to be successful; the
study guide and power point presentation
format developed by the MN DOR was
added last year and is very popular with
the attendees.
Written by Dan Whitman, SAMA
PVC Coordinator & MAAO 2nd VP
Martin County
Some of the items covered at this year’s
courses were:
•
•
•
•
•
•
•
Last year’s new instructors hit the ground
running this time around. All of them
added greatly to the success of this year’s
classes. We added another instructor for
2012: Catherine Arth, Chisago County,
sat in and assisted with some instruction
at one of our courses. The addition of
Catherine greatly positions us for success
next year. PVC is a great way to get your
feet wet instructing classes. Anyone
interested in doing some teaching should
please contact me.
•
Our weather was great once again this
year. We always have at least a couple
schedule challenges, but I think we worked
through most of them without any major
issues.
•
Location
Waite Park
Fergus Falls
Marshall
New Ulm
Thief River Falls
67
•
•
•
•
•
•
•
Assessor duties – local vs county
Timeline for the assessment cycle
Basic laws and principles
Assessment and Appraisal
terminology and definitions
Defining market value
New law summary
Public relations and dealing with
difficult taxpayers
Manufactured homes, park
trailers and travel trailers
Sales ratio studies and CRV’s
Classification review
Overview on special property tax
programs
Homesteads
Av e n u e s f o r a p p e a l i n g t h e
assessment, Open Book, Local
Boards, County Boards
Technology, assessor resources
and useful websites
Ag Market and current
trends
Regional topics
The reviews for all classes were very good
and attendees seemed to very much enjoy
both the instructors and guest speakers.
The most often mentioned positive
comment is the amount of interaction
and discussion that takes place. The
networking and hearing how others deal
with the same issues always proves to
be very helpful. There were also many
comments on PVC Guest Speakers. The
special guests bring a wide variety of
information, experience and knowledge
to our classes. They proved to be very
popular again.
Some of the other most enjoyed items
listed in the reviews this year were:
• Best practices
• Humor
• Discussion about Ag / Rural land
classes
• Residential valuation discussion
• Law change updates
• Classification
• How cute the instructors were
(luckily that was one of the
courses we had two young ladies
instructing and not a couple of
our older well-seasoned guys)
We have already discussed updating the
course plan next year to keep it fresh while
still providing a great take home reference
guide. So we are anticipating another
great year in 2013.
PVC Attendance by Location
Instructors
Gary Grossinger & Greg Kramber
Bob Hansen & Reed Heidelberger
Kelly Schroeder & Sue Schulz
Anne Grunert & Joy Kanne
Nancy Amberson & Bruce Dahlin
Attendance
14
26
36
25
29
L
O
S
!
!
D
Maple Grove Mansion
Sale Price: $1,125,000
6509 Eagle Lake Drive North, Maple Grove
Bringing new meaning to the definition of overbuilt!
One-of-a-kind two story 8,200 square foot contemporary style home built in 2005
Located on Eagle Lake in Maple Grove on a .71 acre double site with 100 feet of shoreline in the midst of significantly
older inferior housing stock.
Built with entertainment in mind. Specialty rooms throughout home: 55 foot long art gallery, theatre room, billiards/bar
room, private porch featuring a fireplace, wet bar, hot tub, flat screen TV and drop down projection screen for movies, roof
level deck with spectacular lake views to name a few.
Custom finishes throughout with 12 ft + ceilings.
4+ bedrooms
6 baths
Original List Price: $1,695,000
Sold 10/12 $1,125,000
141 Cumulative days on the market
2012 Estimated Market Value: $1,251,200
2012 Taxes: $21,400
If located in a neighborhood of similar housing stock,
how much more would this home would sell for?
68
What’s New on the MAAO Website:
Enhanced Searching
Written by Kelly Baillet, SAMA
Dakota County
Information Systems Committee, Chair
“It’s always a pleasure to find something that matters.” Don Cornelius
New enhancements are coming to your
fingertips
MAAO website vendor is in the final stages
of BETA testing on new search features
available to you as a member!
This year, our vendor has been working
on improving the search capabilities to
members across our website. One of those
tools is the ability to search documents we
have stored on the website in our media
manager. The media manager is where we
store all the documents, PDF’s, images etc.
As this product moves out of the BETA
version, we should be able to index all
documents stored in our media manager.
We see this as a very nice enhancement to
our membership. Members will be able to
search documents specific to the topic of
interest. This information could be stored
in research documents, Equal Eyes Articles
or just meeting minutes. To date, we have
indexed the majority of the Region meeting
minutes to test this feature.
Figure 1
One might be searching for example,
wanting to find out when a particular topic
was discussed or noted such as, “discussion
on classification of ethanol storage tanks”.
Unlike a typical site search, our new feature
allows us to search based on permissions.
This was a critical part of the search feature
for our organization to maintain security of
documents shared across the membership.
If you search the topic as a non-member
not logged in, you utilize the search entry
box in the top right hand corner, entering
“discussion on classification of ethanol
storage tanks” (Figure 1).
Since Google is the preferred search
engine utilized by our vendor solutions, the
results are displayed directly onto a Google
platform and offering you choices that are
links to that reference MAAO and the search
to anyone that goes to our website (Figure 2)
69
Figure 2
However, once logged onto your MAAO
account, your search tool transforms itself
into something much more useful to the end
user, YOU! (Figure 3) Notice the search
appears the same, but...
When you enter that same search in the
same search box in the upper right hand
corner, you retrieve a much more useful
search result (Figure 4).
If you open that document, you can pan
to see that yes, in fact, Region 9 had that
discussion (Figure 5)
This is merely an example to show you how
powerful your searches become as a logged
in end user. As more documents and PDF’s
become indexed, you will see your search
capabilities greatly enhanced. You can see
that this search result provides you with
an internal document that only members
that are logged in can view. So when
you want to find out when a specific topic
was discussed or someone that may have
specific knowledge about that topic…..
SURPRISE, you have it at your fingertips!
Figure 3
…..Stay tuned for many more coming
enhancements to this feature!
Figure 4
Figure 5
70
A Letter From the Editor
Written by James Haley, AMA
Norman County Assesor
Equal Eyes Managing Editor
Back in 2010, I was appraising commercial
property in one of my small town
jurisdictions. Fisher, MN sits off of
US Highway 2 and serves as a bedroom
community to both Grand Forks, ND / East
Grand Forks, MN areas and Crookston,
MN. The close knit community of about
450 people has a strong residential real
estate market. Its commercial market
is nearly non-existent. The commercial
parcels needed a quintile review, and
hadn’t been thoroughly reviewed since the
county implemented its CAMA system.
Thus, many value changes were likely
since the new system would have different
adjustments and pricing tables based on a
grade and depreciation level.
One parcel in particular experience a
significant value change. The parcel was
an old grocery store that had not been
an operating business for many years.
Unknowing to me, the owner was using
this as a shop and personal storage area.
The parcel had been valued at around
$10,600 for many years. I relisted the
property using the new pricing tables the
county had recently implemented. After
looking at limited sales, I adjusted the
area factor for all parcels to try to set
a reasonable value for the ambiguous
commercial district. The property ended
up being valued at $17,400 for the 2011
Assessment. This was an increase of
about 65%. The old grocery store had
been converted into a 3,250 square foot
heated shop. The building value placed
on this shop was $10,500 with the land
being $6,900. Could you build a heated,
insulated, 3,250 square foot shop with
concrete and plumbing for $10,500?
As we know, value is relative. If a parcel
is valued at $650,000 and that value
increases to $660,000 the next year; no one
will make too much of a fuss. However, if
71
a parcel is valued at $1,000 and that value
increases to $10,000 the next year; you can
bet you will be hearing about it. I learned
quickly that people are going to complain
no matter what their value is. In one day,
I’ve gone from appraising an $800,000
lake home to appraising a $6,000 mobile
home. And I’ve had both types of owners
in by the time the valuation notices go out.
As an assessor, you can’t win. You can
just do the best you can to get it right.
Even with statutes and best practices to
fall back on, sometimes the end result of
an appraisal; combined with the specific
situation of the owner can make the
assessor question his judgment. I’ve
heard a few examples of this in the
past. A colleague of mine had an elderly
widow weep in front of him because her
homesteaded farm was valued highly
enough to jeopardize her ability to own
the property. Another colleague needed to
place a site value on a property improved
with a homesteaded 10’ x 12’ yard shed.
It seems to me that most Assessors have
a story like this. Mine surrounds the
aforementioned shop in Fisher.
After value notices went out in the spring
of 2011, I didn’t give much thought to my
commercial revalue in Fisher; until Earl
called anyway. Earl was furious. A burly,
work hardened old man, he seemed used
to getting what he wanted. I reviewed his
property. He was not only angry with the
new value, but also with the tax system
in general, and with decisions made in
local government. The field visit ended
up taking several hours due to Earl’s
relentless monologue. And it wouldn’t
end there.
Earl ended up taking the issue through
all phases of local review. I did adjust
his value; downward slightly. But Earl
was not satisfied. He continued on,
even directing my superiors and county
commissioners to review the property.
Everyone involved seemed to say the same
thing: “well Earl it’s a big value jump, but
the value seems reasonable”. Defeated,
for that assessment, Earl waited it out for
another year and appealed again at the
local board in 2012. Earl presented his
case again for the local board of review.
They thanked him, and said they would
decide on the value later in the meeting,
after all appeals were heard.
Earl left and the appeals ended. His value
came up and no one could agree how to
proceed. The council did lower his value
again, slightly. Shortly after the meeting
adjourned I overheard a few council
members discussing Earl and his health.
They both seemed to think that this issue
had been stressing him out so much that
it was contributing to his declining health.
Whether or not it was true, the fact was
that Earl passed away several weeks later.
When I heard about it, I was shocked.
I remembered the conversation that I
“overheard”. I don’t feel in any way
responsible, I don’t get defensive; and
really, I don’t often think about it. I just
think it’s a strange thing that happened.
You just can’t be trained for something like
that. And I don’t want to be melodramatic
here, but did I get it right?
EQUAL EYES
PUBLISHED BY THE MINNESOTA CHAPTER OF IAAO AND
THE MINNESOTA ASSOCIATION OF ASSESSING OFFICERS
16 3rd Ave E
Ada, MN 56510
72

equal eyes - Minnesota Association of Assessing Officers

Transcription

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