2010 Property Valuation Update

Marvin AndersonCity Assessor

April 5, 2010

What is Estimated Market Value

A snapshot of the value of a property as of January 2, of each year. Main items that attribute to value

Size of building Style of building Quality and condition of building

Other factors that attribute to value Lower level finish Extra bathrooms Fireplaces Porches, patios, decks Location

The Assessor Sets Value By Comparing properties to similar properties which have sold Following the trends of the sales on different properties to

make sure they are equalized Style Size Age

Who is involved in the Process?

State Legislature sets the rules of the property tax system.

Local Taxing Jurisdictions Sets budgets

Assessor Sets value, which calculates the Distribution of the tax you pay.

Ratio Studies What Defines Market Value?

Market Value is the most probable price expressed in terms of money that a property would bring if exposed for sale in the open market in an arm’s length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning all the issues to which it is adapted and for which it is capable of being used.

What is a Ratio Study?

Estimated Market Value/Sale Price Sales That Occur During Set Time Period Measure Median Ratio

Ratio Studies2010 Assessment

Rejected Sales Sales to avoid foreclosure – Short Sales

○ Can be used if deemed open market Sales involving legal action – divorces, bankruptcies, foreclosures

○ Can be used if deemed open market Deed in Lieu of Foreclosure Sheriff’s Sale Bank sales

Sales Comparable Time Line 2009 Assessment Value

Sale period October 1, 2007 to September 30, 2008

2010 Assessment ValueSale period October 1,

2008 to September 30, 2009

This time period for ratio studies is set by State Statute and is used throughout the State.

January 2nd

2008

January 2nd

2009

January 2nd

2010

Assessment Date

Assessment Timeline

Oct 1st

2006

Sept 30

2007

Oct 1st

2007

Sept 30

2008

Oct 1st

2008Sept 30

2009Oct 1st2009

Sept 3020010

Ratio Studies

Monitored by the Department of Revenue. Ratio median must meet acceptable levels.

90 percent to 105 percent. Hennepin County set target percentage at 95

percent

Ratio Studies

Department of Revenue will take corrective action if ratio is not in acceptable range.

Percent change to all properties. While this corrects equalization across jurisdictional

lines, it does the opposite with a jurisdiction by increasing inequity.

Assessment Review Areas

Median Residential Sale Price Change for 2008 - 2009

Percent Change-25

-20

-15

-10

-5

0

-22.7

-11.5

-14.2

-19

-9-8.1-10.1

-22.4

Brooklyn Park

Maple Grove/Osseo

Coon Rapids

Champlin

Plymouth

Minnetonka

Eden Prairie

Brooklyn Center

Source: Regional Multiple Listing Service

Includes all sales

Median Residential Sale Price Change for 2008 - 2009

Percent Change-14

-12

-10

-8

-6

-4

-2

0

-12.8

-12.3-10.7

-4.8

-6.3

-4.1

-7.1

-10.4

Brooklyn Park

Maple Grove/Osseo

Coon Rapids

Champlin

Plymouth

Minnetonka

Eden Prairie

Brooklyn Center

Source: Regional Multiple Listing Service

Traditional sales only

Final 2009 Valuation Changes

Percent Change-30

-25

-20

-15

-10

-5

0

-11.6-13.9

-21.2-21.8

-25.1

-6.8-5.5

-2.8 Residential

Townhomes

Condominiums

Doubles

Split Doubles

Commercial

Industrial

Apartments

Source: Brooklyn Park Assessor’s Office

Residential Value History

Percent Change Single Family Residential-15

-10

-5

0

5

10

1513.6

8.38.3 8 6.6

2.2

-4-10.2-11.6

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: Brooklyn Park Assessor’s Office

Brooklyn Park Market Value History

2002 2003 2004 2005 2006 2007 2008 2009 2010$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$3.81$4.27

$4.89$5.51

$6.17$6.64

$6.54$6.09

$5.47

Assessment Year

$ (

Billio

ns)

Source: Brooklyn Park Assessor’s Office

The Tax Equation

Tax = Value X Rate

Tax Revenue = Tax Base X Rate

From the perspective of the individual taxpayer:

From the perspective of the Tax Authority:

True or False?

An increase in the income tax basewill result in higher income tax revenuefor the taxing authority.

True

True or False?

An increase in the sales tax basewill result in higher sales tax revenuefor the taxing authority.

True

True or False?

An increase in the property tax basewill result in higher property tax revenuefor the taxing authority.

False

The Sales or Income Tax Equation

Government levies a Rate defined in statute

Market activity determines Tax Base

Result is Tax Revenue

=Tax Revenue Rate Tax BaseX

The Property Tax Equation

Government levies Tax Revenue by Resolution

Market activity determines Tax Base

Result is the Rate

Rate = Tax Revenue / Tax Base

Brooklyn ParkEstimated Market ValueTaxes Payable 2010-Preliminary 2011

Apartment 5%

Residen-tial 75%

Commercial/ In-dustrial 20%

Other 1%Chart TitleOther

1% Apartment5%

Residential73%

Commercial/Industrial21%

Final 2009

$6,086,199,900

Preliminary 2010

$5,468,972,700

Brooklyn ParkNet Tax CapacityTaxes Payable 2010-Preliminary 2011

Residential62%

Apartment5%

Other1%

Commercial/Industrial32%

Residential61%

Apartment5%

Other1%

Commercial/Industrial34%

Final 2009

$73,292,004Preliminary 2010

$66,392,405

Informational Meeting

April 13 City Hall Council Chambers 7:00 pm

City of Brooklyn Park

Valuation notices mailed March 25Please call Assessor’s Office with any questions

Board of Appeal and Equalization to be held April 19, 2010 7:00 pm in the Council Chambers