Park Rapids Board of Equalization adjusts some property values
County and city assessors recommended decreases for six property owners, and planned to bring at least 267 more appeals to the Hubbard County Board of Equalization next month.
The Park Rapids Board of Equalization heard several requests Tuesday to reconsider property owners’ taxable market value for 2023.
Sitting on the board were Mayor Ryan Leckner and city council members Erika Randall and Bob Wills.
To start, Hubbard County Assessor Jamie Freeman and Deputy Assessor Maria Shepherd explained why so many parcels’ assessed valuation went up so steeply.
They noted that current valuations were based on what was on each parcel as of Jan. 2, 2022. Also, they explained, the Minnesota Department of Revenue requires adjustments keyed to a median sales ratio, comparing valuations of comparable properties sold during a study period from October 2020 through September 2021 to their actual sale prices.
The study excluded sales involving external influences on the sale price, such as estate sales and transactions between family members, Shepherd said.
She said they specifically looked at the median sales ratio, comparing the assessed valuation to the sale price of the properties in the middle of each category, ranked in order from greatest to least. Valuation rates were then adjusted to make this median sales ratio between 90 and 105%.
Freeman said Hubbard County saw property values increase between 25 and 100 percent during the past year.
However, Freeman stressed, a 50% increase in property valuation does not mean the owner’s taxes will increase by 50%. She also reminded the public that Minnesota offers property tax refunds, with eligibility based either on income or if one’s taxes go up more than 12% in one year.
Leckner and Randall were careful to remind members of the public that the meeting was about assessed valuation only, and that tax rates and the city’s tax levy are a separate issue that will be discussed in September. They repeatedly stated that the city council’s goal is to keep actual taxes about the same while continuing to provide the same municipal services.
What happened to property values
Shepherd said that during the sales study period, 443 residential and seasonal properties were sold countywide with a median sales ratio of 70.5%, adjusted to 94.4%.
For the 232 properties off the water, that ratio was about 75.6%, adjusted to 95.1%. For the 211 waterfront properties in the study, the median sales ratio was 67.6 percent, adjusted to 93.6%.
To close these gaps, the assessor’s office added 25% to the base building rate on residential land countywide, plus an additional 25% for homes smaller than 1,100 square feet.
Specifically in Park Rapids, Shepherd reported 60 qualifying sales of residential and seasonal properties during the study period (72.6% adjusted to 95%), including 51 off water (75.4%-94.3%) and nine on water (67.6%-95.9%).
The areas with the biggest increases, she said, were on-water properties on Fish Hook Lake, which saw a 21% increase in their base rate per front foot of shoreline, and the Fish Hook River, which went up 15% per front foot.
Also, Shepherd said, some of the city’s off-water neighborhoods saw additional building rate increases based on sales in those areas.
She concluded that residential/seasonal properties were significantly undervalued compared to the prices buyers were willing to pay.
“Just comparing one year to the next,” said Shepherd, “there was a huge difference in what those median ratios are, which tells me that properties are selling for way more than what they were even last year. The market has just been crazy.”
There were also 15 sales of commercial properties sold countywide, 12 of them within the city, but their values stayed relatively level with only minor adjustments.
Shepherd said this meant commercial property sales during the study period came relatively close to the assessed values.
The board of equalization responded to a number of property owners who appealed their assessed valuation, either in person or in writing. The board took the following actions:
- Approved City Assessor Loren Tolkkinen’s recommendation to change the valuation of Philip Campbell’s property at 18361 County Rd. 4 from $295,000 to $233,600.
- Approved Tolkkinen’s recommendation to lower Thomas Park’s property valuation at 808 Hollinger St. from $90,300 to $85,200.
- Approved Tolkkinen’s recommendation to lower the valuation of Deborah Chandler’s property at 809 Main Ave. N. from $155,500 to $142,000, based on corrections in the recorded dimensions of the garage and house and the amount of basement finish.
- Approved Tolkkinen’s recommendation to lower the valuation of Deborah Stearns’s property at 704 Riverside Ave. from $192,300 to $177,300, based on two additions being built on floating slabs rather than over a crawlspace and some depreciation.
- Approved Tolkkinen’s suggestion to revise the quality adjustment on the base rate for Fish Hook River frontage at Lynette Guida’s property at 1005 Bear Path Dr. from -35% to -50%, and agreed to make the same adjustment for 1007 Bear Path Dr., owned by Akason Management Inc.
- Made no change in about 18 other instances, in some cases with the understanding that Tolkkinen will re-inspect the properties toward a possible appeal at the Hubbard County Board of Equalization meeting, scheduled for 6:30 p.m. June 13 at the county administration building.
- Heard Tolkkinen and Shepherd explain that an error in the county assessor’s office’s Marshall and Swift Valuation Service software altered the value of 267 commercial properties – for example, over-valuing the Group Works Wellness building at 1003 Hollinger St. by about $86,000. Freeman said the local board cannot make a blanket change, but the assessors will appeal the valuations of all 267 properties at the county’s Board of Equalization meeting and their software is being replaced.
- Heard property owner Steve Eickman comment that rises in property values may hurt young families’ ability to afford housing in the city. Eickman did not enter an appeal.
The board also advised Robert Thomas, a resident of Hubbard Township, that he had come to the wrong meeting and his town’s board of appeal was scheduled for May 4 at the Hubbard Community Center.
Earlier in the meeting, Thomas had voiced frustration with “crooked” government officials, adding, “What we need’s a revolution to bring this down a little bit, or something. This is ridiculous.”