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Home My WebLink About4.F.7. Scott County Assessment Services Agreement Revision �� Consent Business 4. F. 7. SH�1KC)1't�I' TO: Mayor and City Council Mark McNeill, City Administrator FROM: Julie Linnihan, Finance Director/City Clerk DATE: 08/07/2013 SUBJECT: Scott County Assessment Services Agreement Revision. (C) Action Sought To approve the requested revisions for adjustment of the existing Joint Powers Agreement with Scott County. Background City staff has been involved in recent discussions regarding the increasing amount of property tax appeals that are being addressed by the Scott County Assessor office. These current appeals involve not only the County Assessor's office, but the Scott County Attorney's office as well. As indicated by the recent updates from Michael Thompson, Scott County Assessor, the backlog is at 140 and growing. After review of this situation with the SCALE group, it was determined that the existing Joint Powers Agreement (JPA) would require adjustment for the 2013 (current) and 2014 years. The adjustment would be as follows: Joint Powers Agreement - Scott County Year Original Revised Variance Agreement Agreement 2012 $177,700 $177,700 $0 2013 $178,200 $209,200 $31,000 2014 $178,200 $244,800 $66,600 Total $534,100 $631,700 $97,600 The current year increase of$31,000 would be covered through the use of fund balance. The anticipated increase for 2014 would be provided for in the budget process. The Finance department budget provides for these services in their annual professional services budgets. Recommendation To approve the requested revisions far adjustment of the existing Joint Powers Agreement with Scott County. Budget Impact Relationship to Vision Maintain the Cities strong financial health. Requested Action Move to approve the requested revisions for adjustment of the existing Joint Powers Agreement with Scott County. Attachments: Joint Powers A�reement Scott County Memo . .��\ \� � � � � / ', �� Z� � JOINT POWERS AGREEMENT FOR ASSESSMENT OF THE City of Shakopee THIS JOINT POWERS AGREEMENT is made and entered into by and between the City ' of Shakopee and the County of Scott, State of Minnesota,pursuant to Minnesota.Statute 273.072 '�, and Minnesota Statute 471.59. WHEREAS,the City of Shakopee wishes to enter into an agreement with the County of Scott to provide for the assessment of the property in said City of Shakopee by the County � Assessor's office;and WHEREAS,it is the wish of said County to cooperate with said City of Shakopee to , provide for a fair and equitable assessment of property; NOW THEREFORE,IN CONSIDERATION OF THE MUTUAL COVENANTS HEREIN i CONTAINED,IT IS AGREED AS FOLLOWS: 1. That the City of Shakopee,which lies within the County of Scott and constitutes a i separate assessment district, shall have its property assessed by the County Assessor of Scott County,for the assessment years 2012,2013,and 2014. All work done necessary to the establishment of the estimated market value for each parcel shall be performed by the Scott County Assessor or by one or more of the licensed assessors under his direction and supervision. � 2. It is hereby agreed that the City of Shakopee and all of its officers, agents,and ' employees shall render full cooperation and assistance to said County to facilitate the provision ! of the services contemplated hereby. 3. In consideration for said assessment services,the City of Shakopee hereby a�rees to pay the County of Scott the sum of$177,700 for assessment year 2012,$178,200 for assessment year 2013,and$178,200 for assessment year 2014. Such payments are to be made to the Scott County Treasurer on or before June 1,of the year of the assessment. 4. The County agrees that in each yeaz of this Agreement it shall,by its County Assessar or one or more of his appraisers,view and deternune the market value of at least twenty percent (20%)of the pazcels within this taxing jurisdiction. It is further agreed that the County shall have on file documentation of those parcels physically inspected for each year of this Agreement. , 5. Each namcd party to this Agreement shall be liable for its own acts to the extent provided for by law and hereby agrees to indemnify,hold harniless and defend the other named parties to this Agreement,its officers and employees against any and all liability,loss,costs, , s.�, � f�� d i y , , , • . ._ . i damages,expenses,claims or actions,including reasonable attorney's fees with the other,its i officers and employees may hereafter sustain,incur or be required to pay,arising out of or by �� reason of any act or omission of the party,its agents, servants,or employees, in the execution, � performance,or failure to adequately perform its obligations. This provision to indemnify and hold harmless does not constitute a waiver by any , named parly to limitations on liability provided by Minnesota Statute Chapter 466. Further, a11 , workers' compensation clauns shall be handled in the jurisdiction in which the agent is ,I employed. , IN WITNESS WHEREOF,the City of Shakopee has executed this Agreement by its Mayor and City Administrator or its Township Chairperson by the authority of its governing body and the County of Scott has executed this Agreement by its Chairperson, County Administrator,and County Assessor pursuant to the authority of the Board of Commissioners � intending to be bound thereby. 91ob �� City of Shakopee: , i 4 S' C, � Ci ayo ownship Chairperson Date � , � �,��,wt.JlQ ' j City Administrator Date -'," � ; Ci, �T�aeas�p Clerk(if a plicable) Date , V ' COUNTY OF SCOTT: J��1 '/�c� f , ,�/ Chairperson Date County oazd of Co ' sioners . ' '! — County A ' 'strator Date ; '---- _ �� ' -� � �� , County Assessor Date ' A roved as to form: �G�' � %� _ ' PP � �' �cott County Attorncy � i �- �.C4`>\�,� �� r � SCOTT COUNTY COMMUNITY SEPVICES - ' `� - - DIVISION L'"� ' GOVERNMENT CEN7ER•20Q FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 _ ��-:i..,.1� `i �r�i.-iat �`'lS-- � luly 1, 2013 , - J� �� ;�r �.��G'.c- � c:��✓%�-, .. � � � Re:Assessment Seivices Costs (�'�� Dear City Administrators and Managers, I would like to summarize our recent discussions surrounding the challenges Scott Counfy Assessor and Attorney staffs are facing due to the increasing amount of resources that are being allocated to investigate and resolve property tax appeals through the Minnesota Tax Court process. It has become difficulr to maintain the county's position regarding appeals and perform all of the necessary annual assessment duties with the existing compliment of resources. We currently have a backlog of approximately 140 pending tax court cases, many of which involve multiple assessment years. Although the majority of these cases will be settled or dismissed without a formal trial,they all require varying amounts of dedicated resources in order to resolve. When a formal appraisal analysis and trial are required,the process becomes extremely time-consuming. This workload has been very challenging to balance over the past few years. There have also been recent changes to the Minnesota Tax court process, and we anticipate more to come. These changes have forced us to review our approacl�and options to determine how we move forward. In summary,the following three options were identified as potential solutions: 1. Outsource Minnesota Tax Court appeal work This is an approach currently being taken by some metro-area counties and cities whereby private appraisers and attorneys are contracted to defend the assessment throughout the trial process. fn these cases the county or city has already spent a great deal of time researching the appeal, but eventually have found that they are at an impasse with the petitioner and a trial is required. Information obtained from peer jurisdictions indicates that the typical private appraiser fee is around $30,000 to complete an appraisal, prepare for trial, testify during trial, and provide subsequent feedback. The typical private attorney fee is around $20,000. 2. Alter the county's position regarding Minnesota Tax Court appeals We believe that it is essential to the fairness and equitability of the assessment that we defend valuations when we have reviewed all of the relevant information and concluded the valuation to 6e accurate. If the required resources are not available to maintain this approach and complete the statutorily required assessment functions we would have to consider re(axing our general position when defending against appeals. 3. Nire additional Commercial Assessors on io the county staff An analysis was presented that illustrated the need for two additional Commercial Assessors. I his would ensure thaF the likelihood of having io outsource irial appraisal work �vill be very low. This approach would also provide additional staff fhat can assist in the ongoing annual assessment duties, informal appeals, and MN Tax Court ap�eals. County staff first presented this information along with more detailed explanations to city staFF members during ihe February 11th SCA�E meering in Belle Plaine. I he topic was subsequentiy discussed with city staff inembers at SCALE meetings on April 8th and June 10th. In addifion, the informarion was presenied fo the ScoYt County Board of Commissioners, who through board action appi•oved the option of hiring two additional commercial appraisers. Af�er presenting the existing and new concerns, along with the available options to the various affected parties, each group has come to the same conclusion that option three is the besf solution for this existing probiem. I have also included a copy oi the PowerPoinf show that was presented during the February SCALE meeting. This presentation includes additional information regarding the new and ongoing chalienges. P!ease feel free to share whatever information you deem necessary with your council. Enclosed you will find the invoice based on the original assessment fee. In addition, I have provided an amendment to the original contract to compensate for the increased 2013 and 2014 assessment costs. Once we have received the signed amendment and have fully executed it we will send an additional invoice for the prorated difference in 2013. I vdill be �ut c�the office, returning on Wednesday, July 10th. If you any questions please email or call and i will reply as soon as possible upon my reiurn. Sincerely, �-_- _-'' __ ` _ _._ - - -- . ____- -- �<:-- Michael Thompson Scott County Assessor mthompson@co.scott.mn.us 952.496.8972 ° Page 1 of 1 '<<a\�� -��, tnvoice Number:IN19846 - � - Due Date:dl/28/2013 � tnvoice Date:07/01l2013 '��'�� Customar Number:1109 AMOUNT EMCLOSED $ Bill 70: MAIL PAYMENT TO: Scotf Counfiy Treasurer SHAKOFEE,CITY OF Aftn:AR Accounting Al'TN CITY ADMINISTRA�ION 200 Fourth Avenue West 129 HOLMES STiZEE�SOUTH Shakopee MN 55379 SHAKOREE MN 55379 United States of America PLEASE DETACH AND RETURN THIS PORTION WITH REMITTANCE Line Item Description Quantity Unit Price Gredit Plet AmounE 1 fAX-ASSESSMENl"S lOCAL 1.00 EA 178,200.00 EA 0.00 178,200.00 AMOUNT 2013 CONTRACT ASS�SSMENT FEE � � .�`'1 � �� . �;, TERMS: Net 30 Days MAIL PAYMENT TO: Customer PO:VAT Nbr. 1'ax Amount: $0.00 Scott Counfy 7reasurer [3own Payment: $0.00 Attn:AR Accounting Gross Amount: $178,200.OU Invoice Credit: $0.00 200 Fourth Avenue West NetAmount: $178,200.00 Shakopee MN 55379 United States of America Invoice Number: IN11846 invoice Date:07/01/2013 Payment Due Dato:07I28/2013 Net Atnotant �tae: ��,�00.00 IN WITNESS WHEREOF,the parties hereto have set their hands on the date written below. SCOTT COUNTY I i BY: � • , Chair of the Board � �, DATE: I ATf EST: Gary Shelton, County Administrator APPROVED AS TO FORM: ' I Jeanne Andersen for Pat Cilibe�to i Scott County Attorney DATE: � CITY OF SHAKOPEE , BY: Name and Title j DATE: i � I � 2 :zs�.:�= � ?��... .,.. ...... . .. . .�,.� ��.�ro:��:a..w,.::.. � � .::�.,..;', _. .,;. ..,,,� ��# ��. ��` I' `� :; �^ � _�` '� �t' �� a `"Fd: Y� :!. r.��,::: �R �� - ��... _.. �� ' . � . . ��.�� ro �es � TAX COURT Sole, exclusive & final authority COUNTY BOARD OF APPEAL Ensures equalization among the taxing districts Can make changes to class or value OPEN �OOI� LOCAL BOARD OF Less Formal Process REVIEW Verifies Assessment ; C�n make changes to class or value , � ! i j �eO �'_'._—___.__...—__—_ ___.._. ____.—_—____�_' INFORMAL APPEALS Addresses concerns or issues of taxpayers. � Q3 1'�tition Comparison �; Pay 2008 Pay 2009 �-�.��, Pay 2010 5090 ■ Pay 2011 �� Pay 2012 ;� i'.��.539 411� -� � f ' �� ,� , '`s � ; ��. 252 � 2379 �� " G:: ��2094 1882 � ; 828 fi � I � i � �; 123 � � : � ,�- � ��; 1 i I r,.' 936�3�p € F, ' 2838 � � `� I � � 497463 55?,530542 � � 611 ` � � �.; 197 G� 213 25, _._ ;.. i � � � 281327280275 �� yi , :.� : ; 56 9g 139 93 91 ' _ � E I '' � �� ''� 76�142165177151 138 �� ,. �, , � ..�T ._ > s. , � � ,. �.�� . ,� � . � ., � �. . .ro �� e: � � � � �� iAnoka Carver Dakota Hennepin Ranzsey Scot� Washington Totals ( —100% —2% 2% —13% —7% —15% —2% —100% Eagle Creelc Townhomes LLP vs. Scotfi County ; �"�"�il�f.�r�u�,^a 1�6�mB"�"'��c��:@5'D6�0: - � �,��i�r "io�rv»izom�s � � �.�� r�ias � i�,.�i�� i r� ?998-99 � a_c�c��t�c� ii� Sha�opee ,� 1_----_ , _ �"" "°�� '.'""�c._?"r ' ,, « . � R � � r="*`t+*+r+.,•" � +y��.� ' `�'� ��. � �«y r �e'�� K r .��r e '. dN�µ':? G.NU C.,•'�,��Q_""".dl�G� �,.'�: �'�l1�(�L'�0 ,_ r „�7�,�M ��''F: ��"� � �—+'"„��.�t �x r�'�`�1��r�L .� �::: It.�C, ,' �x-+�" ��F� r,��„'� °{,.`b t.,w� r �� P raQ��-. _ ..� '' l, . , . .. �^a.�^i�' 4a:x"�`.:'T 4 .J . y .4�y. , , �� , , � January 2, 2009 — $14,550,000 i�� .. ��` " ��, "`:3s ,�=}��- :� � a �� : � January 2, 2010 — $14,000,000 -.�.�;.� � ,��;;;C `�' ��,� ., .;� � �� , ��.` ��"'---�� --..,.�S`. r,,, ... -� � ' Ag E `�"" ^ t ��]''.�C.a�.��d��'6�� 6y�y�.��G�.1. �.,.,� � � � � '..., "�,� d ,i,�,• , .� .'" � r k'�� s` �". �r "�,;� ` .�c�illlc�l'0� �, �� --- ,��.�,b��rl7Q� E�' �,� - .�: `;;` �' •"'�. � � <�,� ...-.:.�.,. �. - _ �:,,-_.. .. . .- _+_.., . _ . � ` ��r�l.4�r'+,� 2r 2�J.�— �:�.�;GQQ,�::uG Judge's Decision: ��,9�•�;��'� 4.��b•��,�,�e • January 2, 2009 — Decrease from $14,550,000 to $13,378,000 � ��o�aas°�,j ?_, 2Q�� — ��_4.,��,GjO� • January 2, 2010 — Decrease from $14,000,000 to $12,815,000 � ��a��y 2, 203C — �1�±�,�JQ�,QCC� Refund Difference in Real Estate Taxes for Payable 2010 & 2011: ,;�;�,r�u-��;r, �o�� ,�.�.��:��.o � Pefiitioner's Counter Offer = $60,079 � ��E-,��;y �� p� _ $��;��Q • County's Final Offer = $29,265 �� y��ua;y 2, 2030 — $13,0��,�GO • Judge's Decision = $33,676 ��0��a��Ds r��,y�•��_,��; • Appraiser Wages/Benefits = $9,000 � ��nuary 2, 2009 — $12,550,000 ° Property owner dismissed petitions that were set for date � ��uar�,� 2, 2010 — �1�,8C�G,00� certain in other metro counties F�, c�7 Southcross Shoppes LLC vs. Scott County , ��x��r-�:••� ��ti��L�-��"s��: . �,,.., F:..��il.C�n•i�rjConveniencc Siore �'�''J�^C�-_�. , � .� . �.o.a� �' �>uii'i: Ir� 19�3% ,�'=`-�`"`�'n�e 1.i'F'• " L.00;c1l'CC� Ill r3c7Vc�Q,�E' � "r'zr�,nc•a.,.. � .:'r�1,..4; , �� =�)SiiC� `",, qI lS .1'G..' ^u' atG:,l�l1C379�'?a"� . rii3i.i6��t.��..� . �';up.�':' " � • /Janua 2, 2008 4,306,800 ��r��'s.P��f:`" �Y —� � GRO�Fp��r D �•.�i� ,. '��'�.��'�T:�crr..�� y,�.�- • January 2, 2009 —$4,350,000 ,. ,.�.�.k ...�.°„� �" ��>.�.�'-� °'.�.. �� JG��uciry 2, 2010 — :��1�,0�0,000 � IDA'S CLEANERS ;�:.�- 1 �' � y ' r'i:�9'iB�feGa6'r�a .=y!=�r�T6'c'a��i. ;.T'��" ''^� � January 2, 2008 — :i»,�60,�00 ,,�,,;r�: � �� Ja��uc�� 2 2009 — <r� . ...< ��.,r ;.� �,.� ,. y , .,», I 90,000 � _ �- - � � <�� w._" -�-�-�� : � J�nuc!ry �; 2010 — .i>3,�I 90,OOG `" _ �� ,,� .. , � �, �: �+�.�'�r� i ��.�'x--ri , � _ ._ . . - .� �� . .. `".�G�4.?4r� '��»i..6.��...�,;. � ,rs^';;�""' JGnuGry 2, 200�3 —:�5,100,000 ludge's Decision: � Januc�ry 2, 2009 —:�4�,350,000 • January 2, 2008 — Increase from $4,306,800 to $4,690,000 ° Januc=.ry ?_, 2010 — .°;>3,550,000 • .lanuary 2, 2009 — Decrease from $4,350,000 to $3,937,000 • January 2, 2010 — Decrease from $4,050,000 to $3,407,000 �.�:RR.93'1��4�� E'06"a�� "��i: °� lcinucu�y 2, 2008 — i�lo Cl�iang�/Disrniss R�fund Difference in Real Estate Taxes for Payable 2009, 2010, &2011: � Janucny 2, 2009 — ;�3,800,000 • Petifiioner's Counter Offer= $82,426 ° Jcinuary 2, 2C10 — 9�?,200,000 • County's Final Offer = $48,998 • Judge's Decision = $24,401 E�'�19°tl:if�i��6''S ':�D@,5�'�t�C°�'n n�t': � JGnucary 2, 2008 — �3,700,000 • Appraiser Wages/Benefits = $10,000 �• JcinuGry 2, 2009 — a3,�I00,000 ° JanuGry 2, 2010 —�3,200,000 � 09 �„ � �� r, ,��. � �� ,�� >`�,�,�� ,� � � �; ��_��,�� >a , :� ��,b • � �r11. : �.Se 1 � 1Y1�' e � �. � �� '�� '}�''�` ��'' ��"'�' � �� { �� } _�� i��. ! +��. �' r,��. .�,. ;:�' A � �c�i�di�u�iti�aG (�a:cil�i�� ii�ial P°r�� ; f � ; ��1,��a� �1,,�'�� a�,�ia ��a��,�'�a� .�,�iai �� t��re�6c�r�a�� ,��.� � n��ic� �r��Ju�dg� � � � ; a i �3�,�'�1 ! ��l�l'� �'L��C� �hlE� E�¢h�11�i� kr'�`itn��s. 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