Committee Minutes

MINUTES-Finance/Development Standby Committee
Wednesday, May 14, 2003 - 7:00 p.m._______________

Members present: Hamerlik, Kreun

Others attending: Council Member Gershman, Mel Carsen, John Herz.

Hamerlik stated that the purpose of the meeting is to hear the protests of the four individuals who officially protested at the city council meeting on May 5, 2003, protests were referred to this committee, with recommendations back to the Board of Equalization, which consists of the city council members.

2.1 PROTEST OF ASSESSOR'S 2003 VALUES:

a) Richard C. Soule, 3119 West Elmwood Street.
Mr. Soule asked if they received a copy of the appraisal of his property (they did); and stated that he received a copy of the assessed market value of his property which was $172,000 and was being increased to $191,000, that he called the assessor's office and talked to Mr. Jungles and asked why the value of his property go up $20,000, and was told that the value of a lot of those homes in the neighborhood hadn't been reassessed in several years plus there had been some home sales in the area and needed to take another look at it. He stated that he had an appraisal done with appraised value of $180,000, which he feels is fair. He stated he received notice back from the assessing department that stated they had reviewed and came up with new value of $184,100.00; when asked how they determined that value, they stated they had done a drive-by and of comparable properties. He said that a person certified by the State to do appraisals and who spent time in his house would have better idea of the value of the house.

Council Member Gershman reported present.

Mel Carsen, city assessor, stated they increased that area by 10% based on sales in the neighborhood, after Mr. Soule's initial call and sending the appraisal in, they reviewed the appraisal but did not reinspect the house at that time, they repriced it and did a market approach which searches for other homes that have sold and made the adjustments, and that indicated a value of $184,100.00; they sent another notice to Mr. Soule of the new number; he called and they reviewed numbers and offered to reinspect the house, that Mr. Soule was very busy and time did not work out, and their appraisal is based on what they knew about the property and not based on any interior inspection. He stated to address the difference between the Johnson appraisal of $180,000 and the assessor's appraisal of $184,100 is not uncommon for appraisers to have opinions of value, even by 5% difference. He stated in looking at the appraisal that Mr. Johnson made, that one of the comparables is outside the city, and no comparable sale of a home with a swimming pool. The assessor's adjustment for the swimming pool is $12,000, Johnson's adjustment is between $8 and 9,000, and that accounts almost for the difference. He stated they did studying on swimming pools - 94 outdoor residential swimming pools in Grand Forks, 17 of those have sold in the last 5 years and that's about 3.8% of the houses with pools that sold per year, on typical market homes would sell at about something over 5 %, but with pools only 3.7%. He stated they did some checking to see how their assessments on houses with pools compared to homes without pools to see if over-assessing, and conclusion based on those sales was that they are assessing almost equitably as they are without pools - and that their value of pools on an overall basis seems to be in line with the market and is consistent. He stated this pool is about 10 years old and have given it 25% depreciation. He stated he believes their comps are best comps that they could find. He stated the difference in value from $180,000 to $184,100 doesn't think that is margin of error that is alarming. Appraisals that are done for refinancing often have tendency of taking value at the bottom of the range, assessor's normally in the middle of the range.

Hamerlik asked Mr. Carsen to indicate how do drive-by with your model on the market approach. Mr. Carsen stated they do physical inspections inside and throughout the house on a certain number of homes each year, and on rest of the properties they rely basically on what sales are dictating and when compare sale against their value and adjust the market up or down, but not uncommon to set some of their values by drive-by, that he would be happy to take a look at this house before Monday to see if they are in error.

Kreun asked what difference is in values - about $95.00/year.

Mr. Soule stated that he had someone do appraisal who viewed inside of the house rather than someone who just drove by; he noted that the bank hired the appraiser; and noted that appraisers can vary by as much as 5% - and could be $171,000, and that he thinks that $180,000 is more than fair by someone who did appraisal inside the house. He also noted that these taxes have increased by $575 since the flood.

After further discussion it was moved by Kreun and seconded by Hamerlik to recommend to uphold the assessor's value of $184,100 unless the city assessor's office on visual inspection declared that it should be reduced in value and recommended to the city council.
Motion carried.

Mr. Carsen made arrangements with Mr. Soule to do an inspection on Thursday, May 15 at 1:00 p.m. and that results of the inspection would be e-mailed to council members.

b) Ann Smith (address withheld at owner's request)
Mr. Carsen stated they originally had value on this property of $73,400, that was arrived at by 8% neighborhood increase for 2003, that since the protest received they made a physical inspection of the property and found that the value should be reduced based on the cost approach of an indicated value of $53,700, a market approach with an indicated value of $58,100 and are recommending that it be reduced from $73,400 to $53,700. He also stated that in the summer of 2000 they physically inspected and re-appraised all the property in this neighborhood, that when came to the Smith home no one was there and put hang tag on the door, called several times, etc. and no response after sufficient time and estimated based on what they knew about the house and on exterior condition, that they now find that the interior condition is different than their estimate and is reason for the decrease. Home sales are comparable, but in better condition on inside and feel value of $53,700 is appropriate value.

Ms. Smith stated she finds reduction to $53,700 acceptable. She also requested that next week when this is televised that her address not be given over the airways, that she is being stalked. Committee stated this is reasonable request, and address will not be printed in the agenda.

It was moved by Kreun and Hamerlik to approve the recommendation of the assessing department's reduction from $73,400 to $53,700 in value. Motion carried.

c) Sarita Bansal, 4732 River Oaks Circle.
The protest was withdrawn, value remains at $643,500. It was moved by Kreun and Hamerlik to accept withdrawal of the protest and to receive and file. Motion carried.

d) Executive Corners, 300 North 5th Street
Mr. Carsen stated property had value of $237,800, that he made a new appraisal of this property in April with value of $205,500 based on the cost approach, and income approach of $208,000, and has included comparables of office buildings with indicated values based on sales. He stated he has shared this information with the attorney in Chicago and has not heard from him, he knew of tonight's meeting and of Monday's meeting, and can assume that he feels our values are right.

It was moved by Kreun and Hamerlik to uphold the assessor's value of $205,500. Motion carried.

The meeting adjourned at 7:50 p.m.

Alice Fontaine
City Clerk