City Council Minutes

Pursuant to due call and posted notice thereof, the Continuation of Board of Appeal and Equalization Meeting of the Victoria City Council was called to order at 6:30 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Members Present: Mayor: Mary Hershberger Thun; Councilmembers: Tim Amundsen, Jim Paulsen, Kim Roden, and Rick Tieden.

Absent: None.

Staff Present: David Urbia, Interim City Administrator; Mike Norton, City Attorney; and Jylan Johnson, Finance Director.

Others Present: Angie Johnson, Carver County Assessor’s Office; Unsie Zuege, Chanhassen Villager; Sue Orsen, The Victoria Gazette; and others.
 

Noted.

Angie Johnson, representing Carver County Assessor’s Office, advised that at the April 12, 2007 meeting, Mr. Scharmann had requested his property be inspected. However, the homeowner has now decided to not do anything at this time so she recommended the appeal be denied.

A motion was made by Councilmember Paulsen, seconded by Councilmember Roden, to deny John and Marlene Scharmann’s evaluation appeal for 875 Fribourg Court as recommended by the Carver County Assessor and retain a market value of $521,500. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ms. Johnson stated the Board was furnished with extra material regarding this property and offered to answer questions.

Stan Rud, 8828 Ridge Ponds Drive, read a prepared statement thanking the Board of Appeals and Equalization for hearing his request for a reduced valuation of his property by an amount equal to the remediation quote he provided last year rather than the standard reduction of 16 percent of the established market value as being recommended by the Carver County Assessor. Mr. Rud pointed out that the Assessor did not reduce his 2006 valuation (payable in 2007) but, rather, increased it by 13.2 percent. His 2007 valuation (payable in 2008) was increased by 16.3% to $890,800.

Mr. Rud stated he does not understand the reasoning used by the Carver County Assessor to recommend a 16% reduction, which may be too high for some homes, while too low for others. He explained his attempt to calculate a fair market value based on the cost to repair moisture damage and suggested the Assessor’s calculation is based on a single precedent that is both inequitable and indefensible. Mr. Rud presented a chart of 15 homes in Victoria with water damage and the permit valuation as a percentage of assessed market value, noting for his property it is 36%.

Councilmember Paulsen asked what is the land value. Ms. Johnson responded that Mr. Rud’s land value is $402,800.

Councilmember Paulsen pointed out that this reduction is only applicable until the home is repaired. He commented on the rapidly escalating value in waterfront properties, noting that some of the lots on Lake Bavaria have sold for over $700,000. He stated he is inclined to say that on balance, Mr. Rud’s tax bill is where it should be because it does not reflect the fair market value of the land.

Mr. Rud suggested it has nothing to do with the value of the land, but the cost of the water damage to the home.

Councilmember Paulsen explained that in the process of evaluating taxes, you need to look at the entire asset, which includes the land value.

Mr. Rud stated if you subtract the land value from the house it is more than 36%, closer to 50%, of the house value.

Councilmember Amundsen stated the land value at $402,800 may be significantly shy of what the land value really is. He asked Mr. Rud if he believes a $206,000 reduction is warranted.

Mr. Rud stated that is correct and should have been applied last year.

Councilmember Amundsen asked if he believes his land value is $402,800 minus $206,000.

Mr. Rud stated that is correct and he does not believe anyone would buy his house if they have to pay $276,000 to repair it. He explained there is significant structural damage resulting in the need to remove the stucco, doors, and windows. Mr. Rud stated some homes receiving a 16% reduction have damage of only several thousand dollars.

Mr. Johnson clarified that the County did not provide Mr. Rud with a list of 15 damaged homes. She explained the list being used by Mr. Rud is a list from the City of properties that made stucco repairs.

Councilmember Amundsen stated he may agree with a number between 16% and a higher percentage, but believes that $276,000 is a stretch. He asked whether Mr. Rud’s comment about the origin of 16% is accurate. Ms. Johnson answered that is how it started and the Department of Revenue does not have a formula but wants something done that is uniform and they feel this is accurate.

Mr. Rud asserted that applying a uniform percentage is not accurate.

Ms. Johnson explained that many estimates include very expensive repairs that are not the cost to cure. She also asked if one estimate is enough to say it is the correct amount to cure the problem.

Councilmember Tieden asked whether the County is implying that Mr. Rud cannot be properly accommodated because others have abused the process. He noted that Mr. Rud has documented his costs and asked if he should be penalized.

Ms. Johnson stated Mr. Rud has an exceptionally high market value so 16% of the number is higher than if the home were to have a lower market value.

Mr. Rud stated the entire repair estimate was detailed and itemized in full.

Councilmember Tieden asked if there are questions about Mr. Rud’s estimate. Mr. Johnson stated she has no questions about Mr. Rud’s estimate but does not know that it is accurate. She explained that Mr. Rud’s estimate may have minor adjustments but they have seen other estimates where 50 percent of the cost was not part of the cure.

Councilmember Amundsen noted that realtors significantly impact the State in how votes go with remediation. He stated this is action that has gone from being owner friendly to everyone else friendly. He stated the remediation and ability to take builders to court is woefully remiss and this was done with the State Legislature.

Mr. Rud stated he already has $70,000 in legal fees that are unrecoverable, his court case has been postponed many times, and it is now set for June 10, 2007.

Ms. Johnson stated the County re-evaluated the property value and with the new evaluation, recommends a 16 percent reduction.

Councilmember Paulsen asked how many damaged homes are in Victoria. Ms. Johnson stated that 15 homes have been identified with water damage in Victoria and nine have been repaired.

Councilmember Amundsen noted that the County recommended adjustment is well over half of the estimated repairs.

Mr. Rud stated the 16% being offered now brings it back to last year’s value.

Ms. Johnson advised that Mr. Rud did not bring this to the County’s attention until December of 2006.

Mr. Rud stated he thought the Assessor would make a change in December so it would impact the market valuation. However, that clearly was not done.

Ms. Johnson recommended a motion to accept the new established market value of $748,300.

Councilmember Amundsen reviewed the calculations and stated he believes the recommended adjustment appears to be logical and equitable. He commented that the estimate provided by Mr. Bur to the Council is from a reputable firm.

A motion was made by Councilmember Amundsen, seconded by Councilmember Tieden, to approve a 16 percent reduction in the 2007 estimated market value from $834,400 to $748,300, a reduction of $86,100, for 8828 Ridge Ponds Drive, as recommended by the Carver County Assessor. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ms. Johnson explained that Todd Brown could not be in attendance tonight and the County has supplied the Board with extra information.

Mayor Hershberger Thun reported that she talked to Mr. Brown’s representative and learned there was an emergency in Mr. Brown’s family. She stated she told Mr. Brown’s representative that the Board would deny and then Mr. Brown could appeal to the County and not miss any deadlines. Mr. Brown’s representative said he would convey that to Mr. Brown.

A motion was made by Councilmember Roden, seconded by Councilmember Paulsen, to deny Todd Brown’s evaluation appeal for 2460 Auburn Drive as recommended by the Carver County Assessor and retain a market value of $512,200. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

A motion was made by Councilmember Amundsen, seconded by Councilmember Tieden, to adjourn. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

The meeting adjourned at 7:00 p.m.
 

Respectfully submitted,

Carla Wirth
TimeSaver Off Site Secretarial, Inc.