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Home My WebLink About4.F.3. Scott County Assessment Services Joint Powers Agreement for 2015 & 2016 Consent Business 4. F. 3. SHAKOPEE TO: Mayor and City Council Mark McNeill, City Administrator FROM: Julie Linnihan, Finance Director/City Clerk DATE: 11/18/2014 SUBJECT: Scott County Assessment Services Joint Powers Agreement for 2015 & 2016 (D) Action Sought Request approval of the 2015 and 2016 Joint Powers Agreement with Scott County for the cost allocation of assessment services provided by the Scott County Property and Customer Services Division. Background The City of Shakopee has participated in a Joint Powers Agreement with Scott County, along with the other cities and townships benefiting from this service. This service has undergone several reviews and adjustments during 2013 and 2014, and the recent agreement that will cover the 2015 and 2016 calendar years reflect even a greater analysis of costs and services based on several factors. In 2013, the original agreement amount specific to the City of Shakopee was increased by $31,000, from the original agreement amount of$178,200 to the revised amount of$209,200. The 2014 agreement provided for$178,200, which was increased to $244,800, an increase of$66,600. The new agreement that has been prepared following an extensive analysis of the overall assessment activities provided by Scott County. The process review provided for a review of costs specific to parcel counts per jurisdiction, tax court appeal petitions, indirect costs, salary and benefit costs, and oversight and administration. The compilation of these costs is presented on page 7 of the Scott County Assessment Services memo, from October 2nd, 2014. With these determinations completed, the proposed contract amount for City of Shakopee in 2015 is $248,400 and for 2016 is $258,300. The Joint Powers Agreement will require the approval of the City Council. Recommendation Request approval of the 2015 and 2016 Joint Powers Agreement with Scott County for Assessment Services. Budget Impact The 2015 budget provides for sufficient funding for the proposed cost of services Relationship to Vision Maintain improve and create strong partnerships with other public and private sector entities. Requested Action Move the consideration and approval of the Scott County Joint Powers Agreement for Assessment Services for 2015 and 2016. Attachments: Assessment Services i „sae, „.....\ ,....moivt, SCOTT COUNTY PROPERTY AND 3- i it CUSTOMER SERVICES DIVISION Z` GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 October 2, 2014 Julie Linnihan 129 Holmes St S Shakopee, MN 55379 Re:Scott County Assessment Services To Whom It May Concern: I recently conducted an in depth analysis to determine the costs associated with performing the assessment services for each jurisdiction within the County. Our departmental goals are always to conduct a fair and equitable assessment, comply with all statutory requirements, and ensure that we are providing excellent customer services, all at a reasonable cost. This letter will explain the methods utilized to determine the proposed 2015 and 2016 contract amounts, how the proposed rates compare to neighboring assessment jurisdiction costs, and a plan for administering assessment contracts going forward. Costs Determined 1. Assessment Activities We reviewed time entry records and identified all of the time coded for "assessment work" over a one year period. "Assessment work" includes time coded directly to tasks such as the annual property review, permit work, data entry, sales processing, customer service, processing applications,etc. To account for ebbs and flows that occur from year to year due to additional reviews or projects for individual jurisdictions, we then pooled the costs by four jurisdictional groupings: a. Eleven Townships=$128,083 b. Four Small Cities=$65,060 c. Three Large Cities=$294,211 d. Scott County = $148,697 (category utilized for assessment work that was global to the county and wasn't feasible to be split out and directly code to one jurisdiction) 1 /' SCOTT COUNTY PROPERTY AND i_j___.7 CUSTOMER SERVICES DIVISION IASXSGOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 We split out the costs for groups A, B, and C based on the parcel counts within those groups, and allocated the costs in group D to every jurisdiction based on parcel count. Step 1 Cost Detail: Jurisdiction- Step 1 Costs Belle Plaine TWP $8,894.57 Blakeley $5,628.80 Cedar Lake $20,152.17 Credit River $30,493.76 Helena $13,713.56 Jackson $9,545.06 Louisville $9,226.45 New Market $22,196.59 St. Lawrence $4,540.21 Sand Creek $12,054.13 Spring Lake $24,174.63 Belle Plaine City $29,533.58 Jordan $23,888.77 Elko New Market $17,370.94 New Prague $18,462.21 Prior Lake $114,970.65 Savage $116,946.87 Shakopee $154,257.84 2 /Si SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 2. Tax Court appeals We reviewed the work completed by assessors for tax court appeal petitions only. This included time coded directly to tasks such as reviewing information submitted for consideration by the petitioner, performing our own analysis of the property, meeting with tax attorneys or tax representatives, completing appraisals of the property, preparing for trial,trial, etc. To account for ebbs and flows that occur from year to year due to specific tax court cases,we then pooled the costs and divided the total Countywide costs by commercial, industrial, and apartment property allocations in each jurisdiction. Step 2 Cost Detail: Jurisdiction .Step 2 Costs Belle Plaine TWP $682.57 Blakeley $739.45 Cedar Lake $1,535.77 Credit River $2,104.58 Helena $1,251.37 Jackson $3,583.47 Louisville $3,981.64 New Market $3,697.23 St. Lawrence $1,365.13 Sand Creek $3,640.35 Spring Lake $2,445.86 Belle Plaine City $12,456.83 Jordan $11,091.70 Elko New Market $3,014.67 New Prague $8,247.68 Prior Lake $17,064.16 Savage $28,838.42 Shakopee $41,409.02 3 SCOTT COUNTY PROPERTY AND CI CUSTOMER SERVICES DIVISION GOVERNMENT CENTER-200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 3. Additional Indirect Costs This is the time coded to additional activities by those staff completing assessment duties. These indirect costs included time coded to activities such as vacation, holiday pay, breaks, training, staff meetings, countywide initiatives, recruitment, etc. To reflect the costs of these activities attributed to each jurisdiction we multiplied the total costs by each jurisdiction's percentage of the total parcel count. Step 3 Cost Detail: Jurisdiction _ St ep 3 Costs Belle Plaine TWP $4,405.12 Blakeley $2,787.72 Cedar Lake $9,980.56 Credit River $15,102.34 Helena $6,791.78 Jackson $4,727.29 Louisville $4,569.49 New Market $10,993.08 St. Lawrence $2,248.59 Sand Creek $5,969.93 Spring Lake $11,972.73 Belle Plaine City $19,573.21 Jordan $15,832.14 Elko New Market $11,512.49 New Prague $12,235.72 Prior Lake $66,938.15 Savage $68,088.74 Shakopee $89,811.91 4 it SCOTT COUNTY PROPERTY AND �, CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 4. Non Salary and Benefit Costs We reviewed the additional resources required to perform the assessment including facilities costs, travel expenses, equipment requirements, general office supplies, training registration fees, etc. To reflect the costs of these resources attributed to each jurisdiction we multiplied the total costs by each jurisdiction's percentage of the total parcel count. Step 4 Cost Detail: Jurisdiction Step 4 Costs Belle Plaine TWP $1,710.41 Blakeley $1,082.41 Cedar Lake $3,875.23 Credit River $5,863.91 Helena $2,637.10 Jackson $1,835.50 Louisville $1,774.23 New Market $4,268.37 St. Lawrence $873.08 Sand Creek $2,317.99 Spring Lake $4,648.75 Belle Plaine City $7,599.85 Jordan $6,147.27 Elko New Market $4,470.05 New Prague $4,750.86 Prior Lake $25,990.61 Savage $26,437.36 Shakopee $34,872.00 5 Se.oi�' `' SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 5. Costs Inherent in Performing the Duties of the County Assessor Understanding that regardless whether or not jurisdictions choose to contract with the County for their assessment services, the County Assessor's office is still responsible for the oversight and administration of certain assessment functions. To this end we attempted to quantify the costs that would be incurred by the county if all jurisdictions decided to contract for their own assessment services. This estimated$291,200 was subtracted for the running total of costs. In essence, this is a discount given to each jurisdiction in an effort to account for those inherent administrative and oversight costs. To reflect the credit of these inherent costs attributed to each jurisdiction we multiplied the total cost by each jurisdiction's percentage of the total parcel count. Step 5 Credit Detail: Jurisdiction Step 5 Credit Belle Plaine TWP $3,528.55 Blakeley -$2,232.99 Cedar Lake -$7,994.53 Credit River -$12,097.13 Helena -$5,440.28 Jackson -$3,786.61 Louisville -$3,660.21 New Market -$8,805.57 St. Lawrence -$1,801.14 Sand Creek -$4,781.97 Spring Lake -$9,590.28 Belle Plaine City -$15,678.34 Jordan -$12,681.71 Elko New Market -$9,221.62 New Prague -$9,800.94 Prior Lake -$53,618.13 Savage -$54,539.76 Shakopee -$71,940.25 6 r"--N SCOtt SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST•SHAKOPEE,MN 55379-1220 . 1. Total Cost Breakdown: `. C -40. _4 *Step 1 Ste .Step 3 ,Ste 4 �SYW/ l ^°t S(R nd d)_.._ C a Belle Plaine TWP $8,895 $683 $4,405 $1,710 -$3,529 $12,200 $10,900 Blakeley $5,629 $739 $2,788 $1,082 -$2,233 $8,000 $6,600 Cedar Lake $20,152 $1,536 $9,981 $3,875 -$7,995 $27,500 $24,100 Credit River $30,494 $2,105 $15,102 $5,864 -$12,097 $41,500 $36,700 Helena $13,714 $1,251 $6,792 $2,637 -$5,440 $19,000 $16,100 Jackson $9,545 $3,583 $4,727 $1,836 -$3,787 $15,900 $11,200 Louisville $9,226 $3,982 $4,569 $1,774 -$3,660 $15,900 $10,900 New Market $22,197 $3,697 $10,993 $4,268 -$8,806 $32,400 $27,000 St.Lawrence $4,540 $1,365 $2,249 $873 -$1,801 $7,200 $5,300 Sand Creek $12,054 $3,640 $5,970 $2,318 -$4,782 $19,200 $19,800 Spring Lake $24,175 $2,446 $11,973 $4,649 -$9,590 $33,700 $28,400 1 Belle Plaine City $29,534 $12,457 $19,573 $7,600 -$15,678 $53,500 $37,700 Jordan $23,889 $11,092 $15,832 $6,147 -$12,682 $44,300 $30,800 Elko New Market $17,371 $3,015 $11,512 $4,470 -$9,222 $27,100 $21,900 New Prague $18,462 $8,248 $12,236 $4,751 -$9,801 $33,900 $27,000 Prior Lake $114,971 $17,064 $66,938 $25,991 -$53,618 $171,300 $132,500 Savage $116,947 $28,838 $68,089 $26,437 -$54,540 $185,800 $159,000 Shakopee $154,258 $41,409 $89,812 $34,872 -$71,940 $248,400 $244,800 TOTAL S z_1 . 636,051 x$147,150 $363,541 $141,155 -$291,200 $996,697 $850,700 7 SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 General Observations and Explanations All but one jurisdiction is receiving proposed increases for the 2015 assessment. Historically, costs associated with employee coded time listed under step three, such as vacation and training, have not been passed along through assessment contracts. However, those costs are necessary in order to employ qualified appraisers in the pursuit of completing the assessment functions for each jurisdiction. Tax petition costs are now allocated by commercial, industrial, and apartment property counts. This process was outlined in step two. In the past we've attempted to allocate these costs by historical petition counts, or total parcel counts. However, the tax appeal efforts actually required each year are very unpredictable and are not necessarily reflective of historical trends. In addition,total parcel counts are less reliable because tax court costs incurred each year are overwhelmingly related to the commercial,industrial,and apartment properties. 8 a SCOTT COUNTY PROPERTY AND / Ss , '- CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 Cost Comparisons The overall countywide costs under the proposed 2015 contract amounts averaged $18.03 per parcel. Each jurisdiction's individual cost per parcel is different based on various factors, but is most heavily influenced by their share of overall parcel counts involving commercial, industrial, and apartment property types. The question is often asked, "what would it cost us to conduct our own assessment". Although there is not good data regarding "local" assessors who are willing to contract with a jurisdiction independently and perform all of the statutorily required tasks, we do have reliable information regarding City Assessing Departments. The following cost analysis was put together by the City of Minneapolis and can be found in their"Results Minneapolis,September 17,2014, City Assessor"Report: City Operations are Efficient,Effective,Results Driven and Customer Focused Assessment Cost per Parcel in Hennepin County Cities,2013 $60 $51 $50 Municipal Average:$38 S42 S40 $42 $40 $33 $32 $32 $30 $29 $20 $10 - i SO Bloomington Brooklyn Park Eden Prairie Edina Maple Grove Minnetonka St.Louis Park Minneapolis 1111111112013 Cost per Parcel -City Average Source:Assessor's Office The average cost of doing business when the City completes their property assessment is $38.00 per parcel,with the best value being$29.00 per parcel. 9 SCOTT COUNTY PROPERTY AND /' SYS CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 County assessment costs compare favorably to those City costs. The following data was compiled by Scott County for our"Delivering What Matters"initiative: Page 5 (Scott Delivering What Matters Assessing About this measure: Assessment Cost per Parcel $as This measure displays the overall. $40 '-- budget of each assessing $35 — r dcsed part l count T the $30 T Average:$26 Average:$32— countiesdlis listed to the right on the appraised p' display graph do not appraise [ $25 � 100%of the parcels within their boundaries,becasue jurisdictions $20 t within those Counties have With their own"local $15 _ _ r s ._ "fa- assessors. However,county staff '° are still involved with the locally $i0 _ .,_ assessed parcels in many I $6 — different ways which involve additional administrative costs. i $- n ,r Ramsey Carver Scott Dakota Hennepin Washington Anoka 100%County Assessed Partially Assessed by Local Jurisdictions Source: County's Budget Summary and Parcel Count Survey Why does this matter? Taxpayers must be confident that not only are the assessors doing a good job,but they are also being responsible with the taxpayer dollars. MEW rOtaSWOERREMWEnf As is visible in the data above, overall it is more efficient to have all of the assessing functions performed by one office. It is also apparent that Scott County is one of the most efficient in the business. Each County's ability to complete all statutory requirements under their current budget is not analyzed within the data. Scott County is able to achieve those requirements while remaining efficient and cost effective. 10 SCOTT COUNTY PROPERTY AND Ittlaritika ItCUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 Costs Not Included The following is a listing of some, but not all, of the expenses incurred by the County which were not included in the proposed 2015 contract amounts: • County Attorney Costs o 0.5 FTE, salary and benefit costs for one County Attorney staff member who spends approximately half of their time on property tax appeal work. • Additional County Staff Resources employed outside of the Taxation Department o Planning and Zoning—Reporting for analyses related to assessing functions(Highest and Best Use analysis, building eligibilities,etc.) o Admin-Escalated issue resolution,work planning,etc. o GIS—Mapping and other analyses,etc. • Valuation Software Replacement o Cost of software upgrade o Cost of backfill support staff throughout conversion Contract Timing For the 2015 and 2016 assessment services contract we are proposing a two year agreement. Going forward,we would like to revert back to one year agreements:' Our business is constantly changing and the County is constantly growing. It is too difficult to predict costs two or three years out, and it is almost equally difficult to reopen existing contracts and renegotiate after the fact. Understanding each jurisdiction's need to budget in advance for assessment services we are proposing the following schedule going forward: Timeline Example for One Assessment Cycle(2017 Assessment) 5/2015 2017 Contract 5/2Q17 Amount 9/2016 Send Billing Finalized End Sale Study Invoices 10/2015 3/2017 Begin Sale Study Finalize 2017 Assessed Values and Mall Notices 11 -: `` J r SCOTT COUNTY PROPERTY AND �., e1,4 CUSTOMER SERVICES DIVISION GOVERNMENT CENTER-200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 2015 and 2016 Proposed Contracts As stated previously,due to the timing of the 2015 and 2016 assessment work being completed,we are proposing a two year agreement covering both of these years. Subsequently, starting with the 2017 contract we will begin one year contracts as outlined in the timeline above (with a new agreement to be reached by August of 2015). The proposal for the 2015 contract has been outlined in detail in this letter. For 2016 we are proposing increasing the 2015 figures by 4%. This increase attempts to account for known scheduled increases in our greatest costs (employee salary and benefit compensation), as well as the unknown increases in costs due to various other factors such as parcel count growth. The proposed contracts that were included in this mailing reflect each jurisdiction's 2015 and 2016 assessment costs as outlined in the following table: Total Proposed 2015 Total Proposed 2016 Belle Plaine TWP $12,200 $12,700 Blakeley $8,000 $8,300 Cedar Lake $27,500 $28,600 Credit River $41,500 $43,200 Helena $19,000 $19,800 Jackson $15,900 $16,500 Louisville $15,900 $16,500 New Market $32,400 $33,700 St. Lawrence $7,200 $7,500 Sand Creek $19,200 $20,000 Spring Lake $33,700 $35,000 Belle Plaine City $53,500 $55,600 Jordan $44,300 $46,100 Elko New Market $27,100 $28,200 New Prague $33,900 $35,300 Prior Lake $171,300 $178,200 Savage $185,800 $193,200 Shakopee $248,400 $258,300 12 SCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 Please feel free to contact me with any questions that you may have. Thank you for your attention to this matter,Michael Thompson Taxation Department Manager County Assessor 952.496.8972 mthompson @co.scott.mn.us 13 .1' 'e It SCOTT COUNTY PROPERTY AND ,, �- a CUSTOMER SERVICES DIVISION GOVERNMENT CENTER 200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 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 Taxation Department; 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 CONTAINED,IT IS AGREED AS FOLLOWS: 1. That the City of Shakopee,which lies within the County of Scott and constitutes a separate assessment district,shall have its property assessed by the County Assessor of Scott County,for the assessment years 2015 and 2016. 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 agrees to pay the County of Scott the sum of$248,400.00 for assessment year 2015 and $258,300.00 for assessment year 2016. 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 year of this Agreement it shall, by its County Assessor or one or more staff appraisers, actually review at least twenty percent(20%)of the parcels within this taxing jurisdiction according to statute. It is further agreed that the County shall have on file documentation of those parcels physically inspected for each year of this Agreement. ItSCOTT COUNTY PROPERTY AND CUSTOMER SERVICES DIVISION � GOVERNMENT CENTER 200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 5. The County agrees that in each year of this Agreement it shall provide the following data summarized by property usage class(i.e. residential,commercial,industrial,utility, apartments,etc.)for each assessment year of 2015 and 2016: 1) Taxable Market Valuation 2) Tax Capacity 3) Taxable Market Valuation—New Construction 4) Referenda Market Value 5) Number of Parcels Such data will be available per the following schedule: April 1,2015—Assessment Year 2014/Payable Year 2015 Final Data April 1,2015—Assessment Year 2015/Payable Year 2016 Preliminary Data August 1,2015—Assessment Year 2015/Payable Year 2016 Preliminary Data(updated) April 1,2016—Assessment Year 2015/Payable Year 2016 Final Data April 1,2016—Assessment Year 2016/Payable Year 2017 Preliminary Data August 1,2016—Assessment Year 2016/Payable Year 2017 Preliminary Data(updated) April 1,2017—Assessment Year 2016/Payable Year 2017 Final Data 6. Each named party to this Agreement shall be liable for its own acts to the extent provided for by law and hereby agrees to indemnify, hold harmless and defend the other named parties to this Agreement, its officers and employees against any and all liability, loss,costs, damages, expenses,claims or actions,including reasonable attorney's fees with the other, its 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 party to limitations on liability provided by Minnesota Statute Chapter 466. Further, all workers' compensation claims shall be handled in the jurisdiction in which the agent is employed. __. IN WITNESS WHEREOF,the City of Shakopee has executed this Agreement by its Mayor and City Administrator/Manager,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. SCOTT COUNTY PROPERTY AND / cgt CUSTOMER SERVICES DIVISION t._ ' GOVERNMENT CENTER•200 FOURTH AVENUE WEST •SHAKOPEE,MN 55379-1220 City of Shakopee: City Mayor/Township Chairperson Date City Administrator/Manager Date City/Township Clerk(f applicable) Date COUNTY OF SCOTT: Chairperson Date County Board of Commissioners County Administrator Date County Assessor Date Approved as to form: Scott County Attorney