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I I I City Council Minutes March 28, 1995 Page 2 Special Order of Business. continued The Minnesota Department of Revenue requires each County jurisdiction to value their county-wide sales ratio to an overall level of value between 90-105 % of true market values. If a County does not maintain this ratio, the State would step in and raise or lower property values by 5 % increments if the local assessor does not properly valuate properties. Such an occurrence has not happened in Ramsey County for at least 5 years. On an overall basis, Ramsey County is doing a good job of fulfilling its mandate. Von Rothkirch explained that there is no set percentage for which values are raised or lowered. The County arrives at a sales ratio within each area that will meet State requirements. This may require adjustments from one neighborhood or other, but a County-wide increase is never performed. The overall effort is to make sure the assessment is accurate and fairly applied to all properties. Benke asked if the County applies adjustments of any unique terms or financing issues occurring during a property sale which may have created a lower sales price because of a property's condition. Von Rothkirch said special conditions are reviewed and most financial issues seem to occur with commercial or apartment complexes. Von Rothkirch noted that when a sales price varies by a significant amount, a County appraiser would go out and review the actual conditions of the property. Benke noted that the mean ratio of home values and resale ratios show that the more expensive properties have a lower sales ratio. Yon Rothkirch noted that this happens nationwide because the lower valued properties tend to have higher resale transactions and higher sales ratio allows for a more accurate value being applied to the property. Benke noted that the 1993 sales ratio study showed the median ratio in New Brighton was 92.6 and the index of regressivity was 1.0. However, North Oaks was 87.7 and 1.05, respectively. Von Rothkirch said the County is broken down into 90 neighborhoods and sales markets indicate boundary location. Certain neighborhoods attract buyers looking for specific home features. The neighborhood where a property is located will have a factor on its property value. The County shows a relatively high median value for homes in New Brighton compared to other cities in the County. There are two factors which increase the median factor in a city: the median age of homes, and lakeshore property. Fulton noted that 27 % of the single family homes in New Brighton would see no change in property value, 49 % would see a 0-5 % change, and 24 % would see a 5- 10% change. Fulton asked if there is a relationship between the percentage increases and the year the buildings were built. Von Rothkirch would need to further research this. Von Rothkirch noted that the more sales an individual property has the more accurate the property valuation. Gunderman asked Von Rothkirch to define the three neighborhoods in New Brighton. Von Rothkirch noted that there are actually four neighborhoods: the area North of 694; lakeshore properties; the area South of 694 and west of the City boundary; and a small area near Roseville. Special Order of Business Property Valuation Process