Board of Equalization - April 10 and May 8, 2018 Minutes

The Board of City Commissioners met as the 2018 Board of Equalization at 7:30 o'clock a.m., Tuesday, April 10, 2018 in the City Commission Room at City Hall, Fargo, North Dakota, to consider the 2018 assessments of property in the City of Fargo for tax purposes.
Members present: Grindberg, Piepkorn, Strand, Mahoney.
Members absent: Gehrig.
Member Mahoney presiding.
2018 Property Tax Assessments:
City Assessor Ben Hushka submitted the 2018 Annual Report of the Fargo Assessment Department and summarized the various items in the report. He said his department spends an extensive amount of time analyzing factors affecting the value of all classes of properties. The property tax system is made up of three primary elements: budget, valuation and tax. The mill levy is calculated each year by the County Auditor and in recent years there has been a reduction in the mill levy. In addition, beginning in 2013 there was a state funded property tax credit of 12%; however, that ended in 2017, which is being recognized by the citizens of Fargo. Mr. Hushka said his department is continually analyzing sale prices of properties and how the appraised values relate to sales. The State Board of Equalization monitors assessments statewide, he said and annually determines the allowed tolerance level for sale ratios by class of property in each jurisdiction. This year, he said, median ratios need to be within the range of 90% to 100%. If the City of Fargo is outside of that range, the State Board of Equalization will order changes in values, he said. He said his office has received around 200 appeals and of those properties, around 115 have been reviewed and roughly 40 to 50 reductions have been made thus far.
In response to a question from Member Piepkorn regarding his 10% value increase and why that increase is much higher in comparison to what Zillow has listed, Mr. Hushka said what Zillow uses is much different and he is not certain of the exact science behind their numbers versus what the City of Fargo has listed.
Dave Obermiller, 2939 Peterson Parkway North:
Mr. Obermiller received his tax statement and he is receiving a 17% increase, while his neighbors are going up 10%.
Greg Danz, 420 Broadway North:
Mr. Danz said his value is going up 80%, which has nearly doubled the value of his property. He said he has spoken with the Assessor’s Office and they have decreased that down to 60%; however, since he bought the property in 2000 he has seen a 400% increase, which makes it extremely difficult to maintain a business. He said he is trying to run a successful business to pass on to his children; however, with increases like this he finds it very difficult to keep up.
Richard Schmit, 2838 Lilac Lane North:
Mr. Schmit asked that his value be looked at again. Mr. Schmit provided a list of comparable sales for review.
Jeff, Rabbit River LLC, 3450 38th Avenue South:
Jeff Weston asked that the value of this commercial property be looked at again.
Dennis Zimdars, 1814 12th Avenue South:
Mr. Zimdars said he took out a building permit that he never used and now his value is increasing. He asked that his property be looked at again.
Mr. Hushka said unfortunately his department is not notified if a building permit is cancelled. He said he will have someone take a look at this property again.
Michael Moberg, 3665 Pierce Street:
Mr. Moberg asked that the value be looked at again. He said there are a lot of inequalities that the City uses and something is not right.
Gene Wilhelmi, 3621 Pierce Street:
Mr. Wilhelmi said he has the same concerns as Mr. Moberg. He said last year his value increased 10% and this year it is going up 30%. He said there are huge variations in his development and he feels that there are a lot of inconsistencies with this whole process.
Austin Morris, Enclave Development:
Mr. Morris said from 2011 to 2014 there was a nice rent growth. Then in 2015 a new high was reached, he said; however, in the last two years there has been a steady decline. He said he wonders if the City analyzes the rent amounts, as they have not seen a lot of information on that.
Mr. Hushka said his department does keep an eye on apartments; however, they do not receive a lot of information on income and expenses, mostly rental vacancies, which makes it difficult to appraise properties based on the income approach.
Harold Pedersen, 6563 45th Avenue South:
Mr. Pedersen asked that his value be looked at again. Mr. Pedersen also asked that the value of the vacant lots near his home be looked at.
Igor Svidersky, 606 University Drive South:
Mr. Svidersky asked that his value be looked at again.
Jason Damlo, 4784 Lavonne Court South:
Mr. Damlo asked that his value be looked at again. He said he feels that his home is overvalued and is concerned with how the homes are being assessed. He said it is seriously making him consider selling his home and moving out of the community.
John Porter, 3688 Pierce Street South:
Mr. Porter asked that his value be looked at again.
Greg Thrall, 3609 Pierce Street South:
Mr. Thrall asked that his value be looked at again.
Betty Hastings, 3689 Pierce Street South:
Ms. Hastings asked that her value be looked at again. She said at the rate that her value is going up she is going to be taxed out of her home.
Paul Teunissen, 2511 18th Street South:
Mr. Teunissen said he wanted to thank the Assessor’s Office for taking the time to re-evaluate his home.
Member Grindberg said everyone here today has made some great points. He said his value has gone up 39%, making it very difficult to sell. He said the City cannot continue to spend what it takes in; however, the City needs to be sensitive about reducing the budget while still having the ability to protect the City.
Member Piepkorn moved the Board of Equalization adjourn to allow the Assessor’s Office an opportunity to review the appeals presented to date and that the Board reconvene sometime in May.
Second by Grindberg. All Members present voted aye and the motion was declared carried.
The time at adjournment was 8:36 o’clock a.m.

2018 Board of Equalization
May 8, 2018
Agreeable with adjournment, the Board of City Commissioners reconvened as the 2018 Board of Equalization at 12:00 o'clock p.m., Tuesday, May 8, 2018, in the City Commission Room at City Hall, Fargo, North Dakota, to consider the 2018 assessments of property in the City of Fargo for tax purposes.
Members present: Gehrig, Grindberg, Piepkorn, Strand, Mahoney.
Members absent: None.
Member Mahoney presiding.
City Assessor Ben Hushka said in the packet of information provided are three lists that represent the status of the follow-up appraisal review requests his office has received.
Michael Moberg, 3665 Pierce Street South:
Mr. Moberg said he would like to thank the Assessor’s Office for responding to his request to relook at his home. He said he feels that the Commission needs to find a way to address the impact on the citizens who are living in Fargo. He said his value has increased $90,000.00 in 2 years and suggests an offset in taxes when there is such an increase.
Member Strand moved the value of $337,700.00 on 3665 Pierce Street South be retained for the 2018 assessment.
Second by Piepkorn. On call of the roll Members Strand, Piepkorn, Grindberg, Gehrig and Mahoney voted aye.
No Member being absent and none voting nay, the motion was declared carried.
Nichole Hensen, Coneflower Farmhouse LLC, 13-15 8th Street South:
Ms. Hensen said she owns Nichole’s Fine Pastry in Fargo, a business that began in January 2003. She said in 2010 she expanded into a second building and in the fall of 2015, she purchased the building. She said someone from the Assessor’s Office came out to the building on April 13th and from that meeting she saw a decrease in her value of 10%, which she appreciates; however, that still puts her above the average per square foot and she is not located on Broadway. She said she has built a reputation that extends beyond the Downtown location, which is flattering; however, that does not mean a person can pay the bills. She said she is to the point of selling her business due to the fact that the City is taking away the incentive to make a profit, as she has to sell a lot of cake to pay the bills. She said she thinks it is time to think outside the box on how property values are calculated.
Mr. Hushka said his office has been seeing a lot of increases in the Downtown and have been trying to monitor it. He said some properties have been undervalued in relation to what the properties have been selling for.
Member Grindberg moved the current value on the property at 13-15 8th Street South be reduced from $937,000.00 to $879,000.00 for the 2018 assessment.
Second by Gehrig. On call of the roll Members Grindberg, Gehrig, Piepkorn and Mahoney voted aye.
Member Strand voted nay.
The motion was declared carried.
Greg Danz, Danz Brothers Partnership, 420 Broadway North:
Mr. Danz said his original assessment was up 80% from this year to last year and with the Assessor’s Office coming out to his property it was lowered to about 60.4%; however, he would like to take this opportunity to say that something needs to be done. He said his value has gone up 400% since 2000, which is a huge increase when operating as a small business. He said he would suggest caps so business owners know what to expect. The Renaissance Zone has been a great thing for the Downtown, he said; however, he feels that small businesses are being punished because of it.
Member Grindberg moved the current value on the property at 420 Broadway North be reduced from $1,060,000.00 to $946,000.00 for the 2018 assessment.
Second by Gehrig. On call of the roll Members Grindberg, Gehrig, Piepkorn and Mahoney voted aye.
Member Strand voted nay.
The motion was declared carried.
Member Grindberg moved the recommended value changes on List A be approved as presented.
Second by Gehrig. On call of the roll Members Grindberg, Gehrig, Piepkorn and Mahoney voted aye.
Member Strand voted nay.
The motion was declared carried.
Member Piepkorn moved the recommended value changes on List B be approved as presented.
Second by Grindberg. On call of the roll Members Piepkorn, Grindberg, Gehrig Strand and Mahoney voted aye.
No Member being absent and none voting nay, the motion was declared carried.
List of Review Appraisals to be Forwarded to the County Board of Equalization:
Mr. Hushka stated there is a list of about 41 properties his office is still working with and recommended the list be received and forwarded to the County Board of Equalization for consideration.
Member Grindberg moved the list of properties, List C, submitted by the City Assessor’s Office be received and forwarded to the County Board of Equalization for consideration.
Second by Piepkorn. On call of the roll Members Grindberg, Piepkorn, Gehrig, Strand and Mahoney voted aye.
No Member being absent and none voting nay, the motion was declared carried.
Member Gehrig moved the 2018 assessments of property in the City of Fargo for tax purposes as prepared by the Assessment Department be approved and that the City Auditor's Office be directed to certify the 2018 assessments to the County.
Second by Grindberg. On call of the roll Members Gehrig, Grindberg, Piepkorn, Strand and Mahoney voted aye.
No Member being absent and none voting nay, the motion was declared carried.
Member Piepkorn moved the 2018 Board of Equalization adjourn.
Second by Gehrig. All Members voted aye and the motion was declared carried.
The time at adjournment was 1:05 o’clock p.m.