EYES. State Assessed Property. Sovereign Citizens Movement. Photo Contest Winners. Minnesota s Picturesque Parks W I T E R 2

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1 W I N T E R V o l u m e EQUAL 35 N u m b e r EYES 131 Also in this issue: Global Assessment Trends Property Tax Working Group Meet Lynn Krachmer IAAO Conference Review Words from President Keefe Visit with Dean Moller New Departments! PVC Course Review Official Publication of the Minnesota Association of Assessing Officers Plus much more! State Assessed Property Part III: Utilities & Pipelines Sovereign Citizens Movement Education and Safety First Minnesota s Picturesque Parks Photo Contest Winners

2 Volume 35 Number 131 Winter 2013 Features Photo Contest Winners CLICK ME! 22 Introductions: MAAO Officers I M INTERACTIVE! Article to suggest, letter to the editor, or any other correspondence for EQUAL EYES? Send to: Equal Eyes Managing Editor 16 3rd Ave E Ada, MN editor@mnmaao.org 33 IAAO Conference Review 35 PTWG Executive Summary 39 Global Assessment Trends: Japan 42 Education and Safety First 58 New MAAO Photo Contest 59 The BILLION Dollar Assessment PVC Review Departments 3 Boards, Directors, Chairs, and Representatives 6 In The Know 7 Presidential Perspective 9 Commissioner s Comments International Items 11 NCRAAO Update 12 MAAP Update 13 Out of the Past 14 Let s Get Acquainted 33 Cover Photo: White Gold While the land may be frozen in NW Minnesota; it continues to sell for record hot prices. The piece featured recently sold for $5200 / Acre. A sign that the land price boom is making its way north from Iowa. Visit the MAAO website at: The statements made or opinions expressed by authors in Equal Eyes do not necessarily represent a policy position of the Minnesota Association of Assessing Officers. 16 Minnesota Tax Court Abstract 25 Meet the new SAMA & AMA designees 27 Course Reviews 28 State Board of Assessors Minutes 37 Region Round Up 65 Transitions 66 Revisiting the Retirees 68 Classif-Eyeds 69 What s New on the MAAO Website 71 A Letter From the Editor 2 Equal Eyes Winter 2013

3 EQUAL EYES Editorial Board James Haley, AMA Norman County Managing Editor, Chair Lori Thingvold, AMA Wright County Associate Editor Solomon Akanki, AMA Scott County Corey Erickson, AMA Ramsey County Nancy Gunderson, SAMA Clay County Julie Gustafson, SAMA City of Maple Grove Jake Pidde, CMA City of Plymouth Michael Stalberger, SAMA Blue Earth County 3 Equal Eyes Winter 2013

4 2nd Vice President Dan Whitman, SAMA Martin County Assessor Security Bldg. 201 Lake Ave. #326 Farimont, MN MAAO Executive Board President John Keefe, SAMA Chisago County Assessor 313 N Main St, Room 246 Center City, MN Fax jekeefe@co.chisago.mn.us 1st Vice President Marvin Anderson, SAMA Brooklyn Park City Assessor th Ave N Brooklyn Park, MN Fax marvin.anderson@brooklynpark.org Finance Officer Bill Peterson, SAMA, CAE Dakota County Assessor 1590 Hwy 55, County Admin Center Hastings, MN Fax bill.peterson@co.dakota.mn.us Past President Stephen Baker, SAMA, CAE Ramsey County Assessor 90 West Plato Blvd, Suite 400 St. Paul, MN Fax stephen.l.baker@co.ramsey.mn.us Region 1 Ryan Rasmusson, SAMA Freeborn County Assessor ryan.rasmusson@co.freeborn.mn.us Region 4 Mark Peterson, SAMA Cass County Assessor mark.peterson@co.cass.mn.us Region 7 Bob Hansen, SAMA Hubbard County Assessor bob.hansen@co.hubbard.mn.us MAAO Region Directors Region 2 Bridget M. Olson, SAMA Nicollet County Deputy Assessor bolson@co.nicollet.mn.us Region 5 Gale Bondhus, SAMA Cottonwood County Assessor gale.bondhus@co.cottonwood.mn.us Region 8 Joseph Skerik, AMA Beltrami Chief Deputy County Assessor joe.skerik@co.beltrami.mn.us Region 3 Daryl Moeller, SAMA Chisago County Sr. Deputy Assessor djmoell@co.chisago.mn.us Region 6 Bob Anderson, SAMA Meeker County Assessor bob.anderson@co.meeker.mn.us Region 9 Angie Johnson, SAMA Carver County Assessor ajohnson@co.carver.mn.us Department of Revenue Property Tax Compliance Officers and the Areas They Represent Lloyd McCormick Appraisal Supervisor Gary Amundson Anoka, Benton, Carver, Chisago, Hennepin, Isanti, Mille Lacs, Morrison, Sherburne, Stearns, Wright Brad Averbeck Becker, Clay, Clearwater, Hubbard, Kittson, Mahnomen, Marshall, Norman, Otter Tail, Pennington, Polk, Red Lake, Roseau, Todd, Wadena Larry Austin Aitkin, Beltrami, Carlton, Cass, Cook, Crow Wing, Itasca, Kanabec, Koochiching, Lake, Lake of the Woods, Pine, St. Louis Steve Hurni Big Stone, Chippewa, Douglas, Grant, Kandiyohi, McLeod, Meeker, Pope, Renville, Stevens, Swift, Traverse, Wilkin (and compliance investigations) Sherri Kitchenmaster Brown, Cottonwood, Jackson, Lac qui Parle, Lincoln, Lyon, Martin, Murray, Nobles, Pipestone, Redwood, Rock, Watonwan, Yellow Medicnine Tom Nash Blue Earth, Dodge, Faribault, Fillmore, Freeborn, Houston, Le Sueur, Mower, Nicollet, Sibley, Steele, Wabasha, Waseca, Winona Tom Reineke Dakota, Goodhue, Olmsted, Ramsey, Scott, Washington, Rice (and complex properties) 4 Equal Eyes Winter 2013

5 Committee Chairs/Coordinators/Secretary/Treasurer Agricultural Chair Jeanne Henderson, CMAS Business Center Dr Elk River, MN Nominating Chair Michelle Moen, SAMA th Ave SW Cambridge, MN Secretary Thomas May, SAMA, AAS th Ave N Maple Grove, MN CAMA / GIS Chair Randy Lahr, SAMA 705 Courthouse Sq #37 St. Cloud, MN Online Administrator Lori Schwendemann, SAMA 600 6th Street Madison, MN Silent Auction Jane Grossinger, SAMA MN HWY 15 Kimball, MN Conference Coordinator Paul Knutson, SAMA, RES 320 NW 3rd St, Ste 4 Faribault, MN PVC Coordinator Dan Whitman, SAMA Security Bldg 201 Lake Ave #326 Fairmont, MN Site Selection Chair Luis Rosario, SAMA 90 West Plato Blvd St. Paul, MN Asst. Conf. Coordinator Tami Paulson, CMA 151 4th Street SE Rochester, MN Strategic Planning Chair Stephan Baker, SAMA, CAE 90 W. Plato Blvd St. Paul, MN Summer Seminar Coordinator Kim Jensen, SAMA, CAE A-2103 Government Center Minneapolis, MN Education Chair Bob Wilson, SAMA, CAE, ASA 4801 W 50th St Edina, MN Rules and Resolutions Chair Steve Sinell, SAMA 8080 Mitchell Road Eden Prairie, MN Tax Court & Valuations Chair Joshua Hoogland, SAMA A 2103 Govt Center Minneapolis, MN Information Systems Chair Kelly Baillet, SAMA 1590 Hwy 55, County Admin Center Hastings, MN Sales Ratio Chair Michael Thompson, SAMA 200 4th Ave W Shakopee, MN Treasurer Reed Heidelberger, SAMA 704 Broadway Alexandria, MN Legislative Chair William Effertz, SAMA PO Box 890, 630 Florence Ave Owatonna, MN Scholarship Chair Stephan Baker, SAMA, CAE 90 W. Plato Blvd St. Paul, MN Weeklong Course Chair David Armstrong, SAMA 88 South Park Avenue Le Center, MN Membership Coordinator Rebecca Malmquist, SAMA, RES Minnetonka Blvd Minnetonka, MN Scholarship Coordinator Tina Diedrich-Von Eschen, SAMA 705 Courthouse Square Room 37 St. Cloud, MN Weeklong Course Coordinators Bob Wilson, SAMA, CAE, ASA 4801 W 50th St Edina, MN Tina Diedrich-VonEschen, SAMA 705 Courthouse Sq Room 37 St. Cloud, MN Equal Eyes Winter 2013

6 Spring 2013 Equal Eyes Deadline is March 1 st Educational Opportunities Assessment Laws & Procedures January 14-17, 2013 Plymouth Assessment Laws & Procedures July 7-11, 2013 St. Cloud Appraisal Principles July 22-25, 2013 St. Cloud Mass Appraisal August 19-23, 2013 St. Cloud IAAO Income Approach Sept , 2013 Plymouth MN Assessment Administration Oct. 7-10, 2013 Plymouth Visit these websites for additional course offerings: The North Star Chapter of the Appraisal Institute Kaplan Professional Schools 6 Equal Eyes Winter 2013

7 Presidential Perspective Onward to 2013 Written by John Keefe, SAMA Chisago County Assessor MAAO President I d like to start by thanking the membership for allowing me the honor and privilege to be you president this year. I promise to serve you as best I can, and I m sure with your help and some hard work we ll have a very successful year is going to be a very busy and eventful year. We are going to be dealing with an entirely different legislature, which will keep our legislative committee busy. The property tax working group is delivering its report and it ll be interesting to find out where the recommendations go. Many thanks to Stephen Behrenbrinker and all the members of the working group for their hard work. We are exploring the possibility of sharing resources for mutual benefit with MACO. Members of our respective legislative teams have met to find shared interests and explore ways to work together to address those concerns. I ll be attending the MACO conference next month, and we ll be extending an invitation to MACO President Fran Windshitl to our Fall Conference. It s exciting to consider the possibilities of a closer association with MACO. Many Minnesota counties continue to experience unprecedented increases in value for tillable land throughout the agricultural regions of the state. Those increases are dramatically affecting time adjustments and sales ratios that should challenge our sales ratio and agriculture committees along with the DOR. The Green Acre benefits on non-productive (2b) land will expire for those who fail to sign up or qualify for Rural Preserve. The resultant paybacks may create a backlash, but let s hope for a quick and uneventful end to this. Education continues to be the focus of this great organization. Weeklong Courses is taking up the task to obtain approval of a new commercial course developed by Tom Reneike (PTCO) from the State Board of Assessors. The Commissioner of Revenue will soon appoint a new county assessor member to State Board of Assessors to replace retiring chairperson Doreen Pehrson. Doreen served as chair of the committee for the last four years. We want to thank her for her service in representing assessors. Not to be outdone, the Tax Court will be decidedly different with two new judges to address their burgeoning caseload. There will be challenge enough for all in this arena, and let us welcome and wish our new jurists all the best in their new role. There have been a number of transitions in our organization. We have a new Secretary (Past President) Tom May, a new Treasurer Reed Heidelberger (City of Alexandria Assessor) and a new Membership Coordinator Rebecca Malmquist (City of Minnetonka Assessor). Our many thanks to outgoing Secretary/ Treasurer Nancy Wojcek and Membership Coordinator Jan Olson. Both whom served with distinction. We wish Nancy and Jan all the best, and welcome Tom, Reed and Rebecca to their new roles. New committee chairpersons include; Michael Thompson (Scott County) takes over as chair of the Sales Ratio committee, Kelly Bailet (Dakota County) as chair of Informational Systems, Past President Stephen Baker as chair of Strategic Planning and Research, and, Josh Hoogland (Hennepin County) as chair of the Tax Court and Valuations Committee. Some new co-chairs have been assigned as well; Paul Sandvick (Hennepin County) to Information Systems Committee, Scott Lyons (Dakota County) to Tax Court and Valuations Committee, and Stephen Baker (Ramsey County) to Sales Ratio Committee. We are truly privileged to have those among us who give so much, and it is fit and proper that we extend thanks to all these wonderful people that serve us and our organization. I can t possibly express sufficient appreciation for all of you that make MAAO happen. Perhaps the most important things we do in our life is the act of giving to others. The act of giving cements a bond between and among individuals that s often passed forward. It s contagious and rewarding. People who give without taking, without expectation of material reward, whose only reward is a simple thank you or a pat on the back, are the finest among us. They are rightfully deserving of our praise and admiration. To those of you who have thought about joining a committee, writing an article, teaching a class or seminar or helping instruct a class or seminar, I strongly urge you to get involved. I think you ll find it rewarding and most certainly educational. The networking and friendship we share with one another are indispensable to our careers and are often priceless personal treasures. I urge you to get involved! We had a great organizational meeting last month. Some of the highlights in addition to welcoming the new members were additional instructions to the committees. Strategic Planning was assigned to move forward on last year s recommendations, and to make a handbook for incoming executive board members and committee chairs. Finance Director and Conference Coordinator are to get together and establish a conference budget. Weeklong Course is to get the new Commercial Industrial elective course approved. Tax Court and Valuations is to organize and start to assemble assessment comparisons 7 Equal Eyes Winter 2013

8 Presidential Perspective, continued for common intrastate commercial properties such as restaurants, big box retail, etc. At Fall Conferenced I challenged our organization to take up the business of providing online education to our membership. I issued this challenge for a couple of reasons. The first is that we must remain competitive with other education providers because education is the primary mission of our organization. I can foresee a day (not too distant) when online education is the training of choice because of the expenses incurred by travel to traditional education venues. If we do not provide an online alternative someone else will. Most fee appraisers now receive all of their continuing education online. The second reason is that the financial stability of this organization depends primarily on education revenue. If we do not provide this alternative then we ll lose that revenue to another provider. The third reason is that this will provide a lower cost education alternative to the membership. While the startup costs of this endeavor may be significant, the ongoing costs for future offerings will be increasingly less. This may ultimately allow for lower tuition. That coupled with lessened travel expenses will create not only lower cost educational offerings to our membership, but to other appraisers and real estate professionals as well. I hope that all of you can understand the reasoning behind my challenge. This is by no means decided. It is and remains at this point a challenge. The logical first step is to explore the process of how to develop online education, determining the costs and procedures required, and what type of course to use for a pilot project. The second step would be to take the committee recommendations and adopt a consensus among the Executive Board to proceed. At last months organizational meeting I asked the Education Committee to explore ways to provide an online course and to determine what type of course would be a good first step. I would like to encourage any who have expertise, knowledge or just plain enthusiasm toward the project to get involved. You can contact members of the committee or me. I d like thank you all again for your support and efforts and wish all of you and your families a Merry Christmas and a wonderful New Year! John Keefe MAAO President Minnesota Association of Assessing Officers Executive Board Meeting Calender: ~ February, 7-8, St. Cloud Kelly Inn ~ ~May 22nd, St. Cloud Holiday Inn ~ 8 Equal Eyes Winter 2013

9 Commissioner s Comments Working Together - The Minnesota Way Written by Myron Frans Minnesota Commissioner of Revenue Minnesota has a long tradition of helping people in need, and a number of tax provisions that assist our less fortunate residents and charitable groups that serve them. We also have a history of coming together to address our common challenges. Five years ago, the Minnesota Supreme Court issued a decision that raised concerns for many nonprofit groups in the state (Under the Rainbow Child Care Center v. County of Goodhue, Dec. 2007). Nonprofits worried the Rainbow decision would change the legal definition of a purely public charity, which is exempt from property taxes. The Department of Revenue felt the Court s decision was in line with our previous guidance, based on the six-factor test from North Star Research Institute v. County of Hennepin (1975). But we also saw a chance to improve consistency and clarify when a nonprofit qualifies for the property tax exemption. The Department, MAAO and Minnesota Council of Nonprofits requested a oneyear moratorium from the Legislature so we could come up with clearer rules and guidelines. After several discussions, we agreed on clarifying language to recommend to the legislators. Those discussions were not always easy. But they succeeded because we respected each other and focused on a common goal. The language we drafted together was meant to: Preserve the exemption for charities or other qualifying nonprofits, but avoid changes that could invite abuse. Clarify when the exemption is warranted, for both assessors and charities. Provide greater consistency for property tax treatment of charities across Minnesota. The Legislature adopted the new language, which more closely aligned the statute with the North Star test and current practice (M.S , subd. 7). These changes led to improved consistency for when an organization is a purely public charity and should get the property tax exemption. During our discussions, the Department, MAAO and MCN also agreed to form an advisory review board for cases where the answer isn t clear-cut. This board includes representatives from all three organizations. As assessors, it is your job to determine when a nonprofit is eligible, after considering the documentation the group submits with its application. Even if a group does not meet all six factors, you may still grant the exemption if you find reasonable justification for not meeting certain requirements. If you deny a nonprofit s application, the group may ask for its case to be reviewed by the public charity advisory board. The board considers the nonprofit s application materials and within 60 days of meeting, issues a non-binding opinion on whether the group qualifies for the exemption. No matter what the board says, you can allow or deny the exemption based on your understanding of the facts. And the nonprofit can appeal your decision to Tax Court. Either assessors or nonprofits can request an opinion from the board. All requests must be submitted in writing to the Department s Property Tax Division. However, the board does not hear cases that have already been appealed to Tax Court. The Public Charity Advisory Board tries to meet quarterly if there are appeals to consider. Since March 2010, the board has met 7 times and considered 9 organizations. So far, this experiment appears to be working well. Board members have generally been in agreement about which groups should, or should not, receive a property tax exemption. That may not always be true in the future, but even so the board can help ensure a detailed look at the facts and allow us to have a respectful discussion. The process that led to the new statutory language and the advisory board is a great example of cooperation between the Department and stakeholders in this case, property assessors, nonprofit groups and legislative staff. Together, we came up with a solution that is workable and supports our state s history of helping those in need. Similar path on tax reform We followed a similarly inclusive process as the Department has worked with Gov. Mark Dayton on tax reform. The governor s final reform package is still taking shape and will be unveiled in January when he presents his budget for FY With thoughtful reform, we can restore balance and fairness in our tax code, end Minnesota s chronic budget deficits, and support the values and priorities that make our state such a great place to live, work, and raise a family. To lay a foundation for tax reform, the Governor asked me to find out what Minnesotans think. Since October 2011, I have hosted or attended about 150 meetings in 50 cities across Minnesota, including 25 town halls. More than 7,000 people have attended these meetings. Participants include a wide range of Minnesotans, elected officials, policy experts, public interest groups, business owners including trade groups, labor unions, school officials and nonprofits. Tax reform is complicated. There are no one-size-fits-all solutions, and it may require some give and take. But this dialogue with Minnesotans is an important step to take in order to establish our priorities for improving our tax system in a way that restores balance and fairness, and does not leave anyone behind. 9 Equal Eyes Winter 2013

10 International Items News and Information Written by Stephen Baker, SAMA, CAE Ramsey County Assessor Membership The two for $200 deal is still on; two years of IAAO membership for $200 is available to all new members (anyone not a current member for two years or more). Education New disaster reassessment research paper coming out Workshop 100 for new staff is rolling out Course 201, 331, and 551 being revised Course 112 changes due out by year end Library The IAAO Library collection contains: 17,000 cataloged books, articles, and government documents 100 current journals and newsletters, primarily assessment and appraisal materials LibraryLink is the online catalog of resources. All books, journals, state documents, international documents, conference proceedings and select articles are indexed in this catalog with links for electronic access to thousands of IAAO copyright-owned articles. Upcoming IAAO Meetings Executive Board Month Location January - Sacramento April - Kansas City July - Boston Nov - W Palm Beach Leadership Days February - TBD IAAO Scholarships and Grants Scholarships and Grants are now available for IAAO courses, conference registration and are available on the IAAO web site. Standards The Technical Standards Committee is presently working on updating the following standards: Assessment Appeals Standard, Mass Appraisal Standard, and the Rural Property Standard New for 2012: Standard on Digital Cadastral Maps and Parcel Identifiers Standard on Mass Appraisal of Real Property Opportunity Papers for the 2013 IAAO International Conference in Grand Rapids Michigan; submit potential educational session presentations via the online IAAO form by Tuesday, January 29, A short, specific title of your seminar/paper and an accurate two to four sentence description of the proposed session, and a more fully developed abstract are all that is required at this time. The 2013 Conference Content Committee has defined the following educational tracks as areas of focus for the annual conference: Commercial: Real and Personal Property Technology Residential Focus Management and Personal Development Tax Policy and Administration Special Issues KEY REASONS TO BECOME AN IAAO MEMBER Education: Cost effective education programs help you meet the challenges of an increasingly complex career. IAAO offers a range of educational opportunities for the beginner to seasoned professional. Textbooks are known for their depth and quality of information. Professional Designations: Receive certification that recognizes professionalism, and competency in matters regarding property appraisal and assessment for property tax purposes. Publications: Fair & Equitable and Journal of Property Tax Administration IAAO s monthly and quarterly publications bring you up-to-the-minute perspectives and research on today s assessment issues. Members-only Access and Discounts: Receive special rates on publications, text books, technical standards, seminars, and conference registration. Utilize special sections and resources on the IAAO Website including access to the library through memberlink and the Glossary for Property Appraisal and Assessment. Join IAAO Now! IAAO.org 10 Equal Eyes Winter 2013

11 NCRAAO News Greetings from NCRAAO Written by Kevin Ternes, CAE City of Minot, ND Assessor NCRAAO President Minnesota NCRAAO Directors Stephen Baker, Ramsey County Assessor, MAAO Past President Dave Armstrong, La Sueur County Assessor, MAAO Past President As President of the North Central Association of Assessing Officers, (NCRAAO), I would like to say hello and greetings to the members of the MAAO. The 2013 NCRAAO conference will be held in Fargo, ND on June 16-19, North Dakota would like to invite you to the conference or at least consider coming over for a day session if your schedule permits. So when the registration and education schedule is available in March, please review and consider making an appearance in Fargo, June The benefits of attending NCRAAO are affordability and networking with fellow assessors who have a common regional connection. I have been a regular attendee of our state conference, regional conference (NCRAA), and the IAAO annual conference. I have found each of these three to be very helpful. Of course we all know that whatever problem or challenge we come up against has usually been encountered by one of our colleagues already and I find the regional connection with attendees of NCRAAO that I ve met to be invaluable. Our conference tries to provide education and sessions for those of us who assess commercial, small and large residential properties, and agricultural properties. All NCRAAO conferences generally set up education programs that consist of two days of education and three concurrent breakout sessions. There is no annual membership fee to be part of NCRAAO, just the conference fee for the annual conference which moves from state to state in our region. Three directors from each state help to set up the conference and maintain the goal of affordability of continuing education for those of us in the Great Plains area. So please be sure to consider spending time with your friends from our region this coming June 2013 in Fargo, ND. And if you can t attend the whole conference, come and participate for one day. The link to the NCRAAO website is htm and once the schedule and education is finalized, the conference activities will be on this site. Should you have any questions about NCRAAO, please feel free to call me at , or me at kevin.ternes@minotnd.org. Kevin Ternes, CAE, has worked in the Minot City Assessor s Office for 21 Years, 8 Years as Department Manager and City Assessor. He is a graduate of Minot State University, certified as a North Dakota Class 1 City Assessor, a North Dakota Certified General Licensed Appraiser, and holds the IAAO CAE designation. He is a past member of the IAAO Professional Designations Subcommittee and is currently an IAAO Professional Designations Advisor and a Demonstration Appraisal Report Grader. Upcoming NCRAAO Conferences 2013 Fargo, North Dakota 2014 Deadwood, Souuth Dakota 2015 Wisconsin 2016 Iowa 11 Equal Eyes Winter 2013

12 MAAP Update MAAP Welcomes New Members Written by MItzi Wicklund CIty of Edina MAAP President MAAP welcomed fifteen new members to the August 16 & 17, 2012 Summer Seminar. Stacey Thorson, Carver County Debbie Maresch, Carver County Kim Walstad, Dodge County Julie Weitzel, Itasca County Mike Hammerschmidt, Kandiyohi County Susie Sohlman, Koochiching County Lori Wilhelmi, Olmsted County Brenda Shoemaker, Ottertail County JoAnne Fritsche, Ramsey County Lana Anderson, St. Louis County Margaret Dunsmore, St. Louis County Kris Kernz, Sibley County Marilee Peterson, Sibley County Laura Lutz, Washington County Renee Nett, Watonwan County Membership in MAAP is not only affordable at $10 a year, but provides opportunity to obtain continuing education credits each year at Summer Seminar. A winter business meeting with a program is held the first Friday each December. Interested in membership? Contact any MAAP Officer for details! MAAP Officers Mitzi Wicklund President City of Edina mwicklund@edinamn.gov Janet Kaschmitter Vice President Stearns County janet.kaschmitter@co.stearns.mn.us Shayla Strack Secretary/Treasurer Morrison County ShaylaS@co.morrison.mn.us Melissa Janzen Past President Wright County Melissa.janzen@co.wright.mn.us Christie Fox Education Committee Member at Large Blue Earth County Christie.fox@co.blue-earth.mn.us Michael Hammerschmidt Education Committee Member at Large Kandiyohi County mike_h@co.kandiyohi.mn.us Theresa Quinn Education Committee Member at Large Sherburne County Theresa.quinn@co.sherburne.mn.us Interested in Joining MAAP? Membership is only $10 Contact a MAAP Officer Joy Michaelson Conference Coordinator Stevens County joymichaelson@co.stevens.mn.us 12 Equal Eyes Winter 2013

13 Out of the Past Written by Corey Erickson, AMA Ramsey County Editorial Committee Member 5 Years Ago 2008 Fillmore County Assessor, Robert Pickett, wrote about the complexities of the Special Ag Homestead classification. He described his office receiving 11 forms of applications or reapplications for the upcoming assessment. Augie Zezulka retired from the Carlton County Assessor s office after more than 31 years of service to the county. Augie was a residential/ commercial appraiser assigned to the southwest corner of Carlton County. Steve Hurni of the Minnesota Department of Revenue wrote about the importance of consistent classification practices throughout the state. Specifically he addressed the need for uniform definitions of pasture, meadow, woods and waste land. Saint Cloud City Assessor Stephen Behrenbrinker was beginning his successful term as MAAO President.. 10 Years Ago 2003 City of Edina commercial appraiser Moreau Sankey was activated to military duty and was stationed at Fort McCoy in Wisconsin. Minnesota s effective commercial/ industrial property tax rate declined slightly from the previous year to 3.83 percent of assessed value, down from a 4.43 percent rate. Accredited and Senior Accredited assessors throughout the state were in the midst of the first round of the now hugely popular PACE course. Some comments were that there was too much time spent on tax calculations and that the test should be eliminated. City of Bloomington Assessor, Jack Pasternacki, wrote the first Tax Court Forum column in Equal Eyes. The column was meant to address current issues of interest to assessors who may be faced with the challenge of preparing an appraisal and testifying in Tax Court. Former Commissioner of the Minnesota Department of Corrections, Sheryl Ramstad, became the newest Judge of the Minnesota Tax Court. 15 Years Ago 1998 Bruce Munneke was named Senior Appraiser for Anoka County and Mark Krupski was appointed Olmstead County Assistant Assessor/ Recorder. The State Board of Assessors received several complaint letters from taxpayers regarding valuations. Jerry Garski of the Department of Revenue explained to the letter writers that assessors receive stringent training and are required to be licensed. Legendary Minnesota Assessor, Dan Franklin, passed away. During his 30 plus years in assessing, Dan had served as the Grant County Assessor, Wilkin County Assessor and President of MAAO. Jody Keyes of Wilkin County and Bridget Olson of Nicollet County both received their Senior Accreditations.. 20 Years Ago 1993 Lynn Duncan was appointed Assessor for the City of Duluth and Marvin Anderson was appointed the new editor of Equal Eyes. MAAO Region VII had developed and was selling a Tax Calc program to assessing jurisdictions throughout the state. The program was advertised in Equal Eyes as being designed for IBM and IBM compatible PC s using Basic Program Language. Donald Trump appealed the value of his 118 room Mar-a-Lago estate in Palm Beach, Florida. Governor Arne Carlson announced his appointment of Dorothy McClung, who was the acting Revenue Commissioner, to the Minnesota Tax Court. 25 Years Ago 1988 The MAAO Executive Board created a Computer Committee. The source of constant frustration at the time, it was determined that a computer was either a valuable tool or more likely a necessary evil. New County Assessor appointments included Erwin Siems in Ottertail County, Al Heim in Todd County, Orlin Schafer in Murray County, J. Scott Renne in Washington County and Farley Grunig in Cottonwood County. 40 Years Ago 1973 A big item of discussion in the winter of 1973 was job security for County Assessors in Minnesota since so many County Assessors had not been reappointed the previous fall. Dick Anderson (it s unclear for what jurisdiction Mr. Anderson worked at the time) felt that not only should letters be sent to County Boards in defense of the newly unemployed assessors, but a representative from the Department of Revenue should appear before each County Board in defense of the rejected County Assessors. 13 Equal Eyes Winter 2013

14 Let s Get Acquainted Lynn Krachmer Researched and Written by Julie Gustafson, SAMA City of Maple Grove Editorial Committee Member Big town verses small town. Is the grass really greener on the other side? Many people entertain these thoughts at some point in their lives. Small town residents may be intrigued by what the big city has to offer: arts, entertainment, and culture. Conversely, city residents may dream of the simpler life free of the hustle and bustle of the big city. Lynn Krachmer, Faribault County s recently appointed County Assessor, has experienced both and decided to return to his southern Minnesota roots. Lynn was raised in Austin Minnesota. He enlisted in the army right out of high school. After serving three years in the army, Lynn completed a two year drafting program at Detroit Lakes AVTI. Afterwards, he moved to the metro to attend the Minneapolis Business College where he studied Business Administration. His accounting background landed him a job with the Minneapolis Community Development Agency where he held several positions. His last position there, as a Rehabilitation Specialist, required a lot of coursework in housing inspections. It was this training and experience that led him to the field of appraisal. Lynn began working in the appraisal business in 1992 as a fee appraiser. For approximately six years he worked with two fee appraisers on a contract basis. One of them had a contract with HUD for most of the metro area counties. As a result, between 1992 and 1998 he mostly appraised HUD properties. When Lynn started in the appraisal business his ultimate goal was to enter the field of assessing and eventually become a county assessor. He envisioned assessing as a lasting career that would provide a steady income, job security, and a pension. His journey in the assessing field began in 1999 when he was hired by the city of Minneapolis as a residential appraiser. He worked for the city of Minneapolis until During this time, he was mentored by the late Scott Renne who encouraged him to take the coursework necessary for continued advancement in the assessing field. In 2002, Lynn was hired by the City of Fridley as a residential appraiser. Although he was hired as a residential appraiser, given the limited staff there, he was assigned other tasks such as assisting the city assessor with commercial/industrial work, exempt assessments, and Boards of Review. Keeping in mind his long term goal of becoming a county assessor, Lynn worked on obtaining his CMA, AMA, and eventually obtained his SAMA licensure in Knowing that eventually he would like to return to small town life, he also obtained as much agricultural training as possible. Lynn s career planning finally paid off when he was hired by Faribault County in June of Not an easy task given his limited agricultural experience. He believes his efforts to obtain as much agricultural training as possible, and his passion for farming and to return to southern Minnesota contributed to his success. Faribault County has 31 jurisdictions (20 townships and 11 cities) with 13,400 parcels. As of the 2010 census, total population in the county was 14,553 with 6,236 households. It is located in southern Minnesota on the Minnesota/Iowa border. The county seat is located in Blue Earth: birthplace of the ice cream sandwich and home of the world s largest statute of the Jolly Green Giant! According to Lynn, agricultural land is king in Faribault County with the majority of parcels being agricultural or agricultural related. Some of America s richest farmland is located in Faribault County. The Faribault County Assessor s Office is comprised of the County Assessor, two property appraisers, and one technical/ administrative assistant. As County Assessor, Lynn s primary duties are administrative, and valuation of all commercial, industrial, and apartment parcels in the county. Steve Robbins handles all of the agricultural valuations and has over 30 years of experience. Gertrude Johnson has been in the assessing field since 2011 and handles valuation of all residential parcels. Susan Cory is the technical/administrative assistant and has worked in the Assessor s Office since Despite his short tenure, Lynn has heard a lot of interesting stories from locals and what he refers to as his new family in Faribault County. Some of these stories intertwine with Lynn s childhood memories. Lynn grew up in the early 1960 s when Interstate 90 was being constructed in Austin. He recalled playing on the construction machinery, and sliding on the big mounds of sand brought in for construction with his friends. As well as other activities young boys enjoy, but perhaps neglect to share for fear of reprisal. Until now, Lynn didn t realize 14 Equal Eyes Winter 2013

15 Let s Get Acquainted, continued the historical significance of his childhood playground: he didn t realize that Interstate 90 wasn t completed until 1978 in Blue Earth and that it is America s longest interstate highway extending from Boston, Massachusetts to Seattle, Washington. Like the driving of the Golden Spike used to mark the completion of the nation s first transcontinental railroad, there is a rest stop located just outside Blue Earth on both sides of Interstate 90 where a section of the shoulder is painted gold to indicate the joining of the interstate from the east and west. If you re ever in the area, there are markers on both sides of the interstate telling the story. Former Vice President Walter Mondale and Miss America at the time were both on site for the interstate dedication. Lynn has been a member of MAAO for the past 12 years and is a member of the Eagles Club. When asked to describe himself he said reliable, someone you can count on, and a problem solver. He has been married to his wife, Cindy, for 26 plus years and has two children: Christopher, age 24 and Ellen, age 21. He spends most of his free time with his family and beloved dog, Rex, an old golden retriever. Lynn says he really is a home body. He and his wife recently purchased a property in Winnebago to fulfill his lifelong passion to farm. It has almost ten acres of land in which they plan on starting a small business growing flowers, vegetables, and herbs for sale to restaurants. According to Lynn, the land has a lot of potential and they can t wait to get started. There is already a small orchard of assorted fruit trees on the property. They still have their residence in Highland Park in St. Paul where they have lived for almost 24 years. They hope to have their St. Paul home on the market in the spring. One of his favorite places to visit is Fillmore County, in particular the Lanesboro area. If you ve ever been there you would understand why: the Root River, Bluff land s state trail, and unique shops and restaurants. One thing he would like to do but hasn t done before is win the Powerball lottery. He said when he wins the lottery (Oh, the power of positive thinking) he ll probably have to spend most of it paying off his children s student loans. On a more serious note, if he should be so lucky, he would like to set up some kind of foundation for veterans to help with their return home. When asked about any memorable situations on the job, Lynn said working with and getting to know Scott Renne. Lynn finds getting to know people and making new acquaintances as the most satisfying aspect of his job. More recently, he has enjoyed the new friendships he has made in Faribault County. Lynn has been asked many times why would an assessor from the Metro want to come to out-state Minnesota. The answer is quite simple. He loves the open spaces and small town lifestyle. There is such a strong sense of community there: everyone knows and cares about each other and how their families are doing. Although he isn t new to southern Minnesota, he is new to Faribault County. Despite his short tenure, he already feels welcome. Is there anything better than that? Do you have someone in mind for Let s Get Acquainted? Then we want to hear from you! your suggestion to: Editor@mnmaao.org 15 Equal Eyes Winter 2013

16 Tax Court Abstract Berry & Co. Inc. vs Hennepin County Compiled by Jake Pidde, CMA City of Plymouth Editorial Committee Member The Honorable Sheryl A. Ramstad, Judge of the Minnesota Tax Court, heard this matter, on September 27 and 28, 2010, at the Hennepin County District Court facilities, Minneapolis, Minnesota. William R. Skolnick and Amy D. Joyce, Attorneys at Law, represented the Petitioner. Michael Bernard, Assistant Hennepin County Attorney, represented the Respondent. Both parties submitted post-trial briefs. The matter was submitted to the Court for decision on November 10, The issue in this case is the market value of the Subject Property for assessment dates January 2, 2007, and January 2, The Court, having heard and considered the evidence adduced at the hearing, and upon all of the files, records and proceedings herein, now makes the following: Background This is a property tax valuation case concerning a single-story office/garage building (with no basement) and two pole buildings, located at 253 Lake Street East, Wayzata, Minnesota ( Subject Property ), as of January 2, 2007, and January 2, 2008 ( Assessment Dates ). The Petitioner, Berry and Co., Inc., is owned by Bradley A. Hoyt. The Subject Property is improved with three structures a one-story office/garage building with no basement, and two pole buildings. The office area is approximately 2,179 square feet, with carpeted flooring, painted gypsum walls, solid 7-foot doors, fluorescent lighting and a suspended ceiling. The parking lot is bituminous with 40 exterior parking stalls and 20 interior parking stalls. Analysis Highest and Best Use Here, despite the existence of the improvements, both experts agree that the highest and best use of the Subject Property is for redevelopment. Although both experts agree that the Subject Property could conceivably be sold for use as is with the existing improvements, they also agree that the Subject Property is worth more if the buildings are razed for development of new improvements. We find that the highest and best use of the Subject Property is for redevelopment after the buildings are razed. Valuation This Court considers the three traditional approaches (cost, income, and sales comparison) to determine market value as outlined in Equitable Life Assurance Soc y v. Ramsey County. Here, both experts considered the cost and income approaches to value, but did not rely upon either of these approaches in their analyses. Instead, they relied solely upon the sales comparison approach to value in their analyses of the Subject Property. Petitioner called Lawrence Kramer ( Mr. Kramer ), who testified regarding the appraisal report he prepared 16 Equal Eyes Winter 2013

17 to estimate the market value of the Subject Property for the Assessment Dates. Mr. Kramer placed a January 2, 2007 market value on the Subject Property of $1,620,000 and a January 2, 2008 market value on the Subject Property of $1,550,000. In his appraisal, Mr. Kramer calculated a value of $30.44 per square foot of total land area, calculating 34,598 square feet as usable. Mr. Kramer claimed that 23% of the Subject Property was designated wetlands by the City of Wayzata and then further reduced the usable land area by including 26.5 feet as a wetland buffer zone. As a result, he concluded that 35% of the Subject Property had diminished use due to wetlands. Respondent called Christopher Bennett as an expert witness. Mr. Bennett considered all twelve land sales occurring in the Lake Street Market Area between October of 2004 and January of He selected four comparables from those twelve sales, ranging in price from $900,000 to $2,000,000. After adjusting the four selected comparables, Mr. Bennett concluded to a value of $88.00 per square foot of usable land. After considering wetlands visible on the north end of the Subject Property, but including no wetland buffer zone or setback, he determined the usable portion of the site to be 53,227 square feet. Sales Comparison Approach Under the sales comparison approach, the appraiser evaluates sales of similar properties and adjusts for such factors as size, age, location, time of sale, terms of sale, land to building ratio and quality of construction. Using the sales comparison approach, Mr. Kramer valued the Subject Property at $1,620,000 as of January 2, 2007, and $1,550,000 as of January 2, He considered five comparable land sales and adjusted them for time/inflation, shape and slope, wetlands, location and area accessibility, on-site improvements and easements, environmental hazards, and zoning and use to the Subject Property. In his analysis, Mr. Kramer considered the Twin Cities metropolitan area market, which included all seven metropolitan counties. He generically referred to the collapse of the market stating that the commercial retail markets hit their peak in late 2006 based upon his personal experience. For the January 2, 2007 assessment date, Mr. Kramer adjusted four of his five sales for time, making a 5% (compounded) adjustment to his Comparable No. 1 (sale date October 27, 2004) and Comparable No. 2 (sale date May 1, 2003). That adjustment was also applied to sales in October, November, and December of During those same three months of 2006, Mr. Kramer opined that Comparable No. 3 just down the street was appreciating at a rate of 2%. In 2007, Mr. Kramer made no time adjustment to Comparable No. 4, which had a sale date of April 11, 2007, but applied a 5% adjustment to Comparable No. 5, which had a sale date of October 31, For the January 2, 2008 assessment date, Mr. Kramer adjusted four of his five sales for time. He adjusted Comparable No.1 downward by 4%, Comparable No. 2 downward by 3%, Comparable No. 3 by 0%, Comparable No.4 up by 5%, and Comparable No. 5 remained the same. Mr. Kramer opined that the subject site, which is rectangular in shape with approximately 108 feet of frontage on Lake Street and has level and low topography, resulted in a 10% adjustment for diminished use. Accordingly, he adjusted sales 3, 4, and 5 downward by 5%. Additionally, because the soils at the Subject Property are soft and include fill and peat, Mr. Kramer calculated the cost of necessary pilings based upon $15 per square foot of subsoils because of his understanding that that was the correction cost at the commercial development of the Lexus Dealership along I-394. Respondent s expert, Christopher Bennett ( Mr. Bennett ), considered twelve comparables in an area he described as the Lake Street Market Area ( LSMA ). This is an area 3/4 of a mile long, running along the north shore of Wayzata Bay (of Lake Minnetonka), which has a mix of retail, office and residential properties. Mr. Bennett contacted the buyer for each of the twelve sales related to redevelopment plans in the LSMA between October 27, 2004, and January 19, Relying upon seven actual sales of property in the LSMA between 2006 and 2008, Mr. Bennett testified that the LSMA was hot during that time. To adjust his comparables to the January 2, 2007 assessment date, for time Mr. Bennett applied a 7% annual time adjustment to each comparable based in part on the July 2, 2003 sale and October 2, 2007 re-sale of the Village Shopping Center, as well as December 22, 2004 sale and October 31, 2008 resale of the Wayzata Bay Center. He also considered actual commercial growth statistics, compiled by the Hennepin County Assessor s Office, showing that between January of 2005 and January of 2008, the market values of commercial property in suburban Hennepin County increased 26.6% for an average annual increase of 8.86%. The experts differences concern the adjustments for size, shape and slope, soil correction, unit of comparison, time, razing costs, and motivated sales. We will now address their positions regarding each of these adjustments. Conclusion After taking into account the experts differences concerning the adjustments for size, shape slope, soil correction, unit of comparison, time, razing costs, and motivated sales, we conclude that the testimony of Mr. Bennett is persuasive and internally consistent with the other evidence produced at trial. We also find him to have been a credible witness who responded with appropriate answers. Based upon the analysis and testimony of Mr. Bennett, we find that the market value for the Subject Property should be increased to $3,881,000 as of January 2, 2007, and increased to $4,153,000 as of January 2, This case was condensed to fit in Equal Eyes. The complete findings of fact, conclusions of law and order for judgment can be found here. 17 Equal Eyes Winter 2013

18 Equal Eyes Presents: The 2012 Photo Contest Winners Minnesota s Picturesque Parks! 1st Prize - Scott Sutherland - City of Duluth Waterfall at Tettegouche State Park Established in 1979 to preserve an outstanding example of the North Shore Highlands Biocultural Region, the 9,346 acres of Tettegouche State Park contain a unique combination of natural features: rugged, semi-mountainous terrain, one mile of Lake Superior shoreline, six inland lakes, cascading rivers and waterfalls, and an undisturbed northern hardwood forest. *MN DNR 2nd Prize - Wally Peterson - Wright County Beaver Creek Valley State Park 18 Equal Eyes Winter 2013 Beaver Creek Valley State Park is in the Blufflands Landscape Region. It is a nature lover s paradise because of the diversity of natural communities. Bottomland hardwoods such as black ash, willow, box elder, cottonwood, and elm grow in the valley while a mix of maple, walnut, basswood and oak thrive above the valley. Small patches of native prairie and oak savanna occupy some of the south and west-facing slopes in the park. *MN DNR

19 Aptly named, the Cascade River flows down one ledge after another for a total drop of 900 feet in the last three miles of its journey to Lake Superior. The park setting is a boreal hardwood-conifer forest of aspen, birch, fir, spruce and cedar. Visitors can stand on the footbridge that spans the river, or at any of the viewing spots above the river, and feel the vibration of the rushing torrent of water as it cascades down a volcanic canyon. *MN DNR 3rd Prize - Terry Morrow - Wright County Cascade River State Park Picture taken on May 14, 2012 at Tettegouche State Park. The picture was taken from Shovel Point looking towards the mouth of Baptism River and Palisade Head. 19 Equal Eyes Winter 2013 Runner Up - Bob Picket - Retired Tettegouche State Park

20 Runner Up - Greg Nelson - Steele County Frozen Waterfall My photo is of the dam and bridge located in Morehouse park here in Owatonna one very chilly morning. There wasn t a breeze and I believe the temperature was colder than 15 degrees below zero. The river typically flows year round but this day, with the assistance of the cold, the river has been brought to a complete standstill. As I drive to work at the Steele County Assessor s office, I use the bridge and dam in planning my work day. For instance, today it is telling us that measuring new construction will be an adventure. Then again, in other seasons, if the height of the water flowing past reaches the underside of the bridge, like it did in September of 2010, I know that there will be some flooding inspections soon and people will need our help moving forward in their lives. When the bridge is covered with warm sunshine and the temperatures are warm and spring like, the bridge reminds me that there is work to be done and fortunately, there are many more good days to be an assessor than bad. Kathio State Park is home to a variety of wildlife. Hawks, ospreys, owls, and eagles are common. The tracks of beaver, raccoon, mink, and deer are often seen on the trail or in the snow. Runner Up - Steve Chmielewksi - Stearns County Deer in Mille Lacs Kathio State Park The park name is steeped in plenty of history. The word Kathio has a dubious pedigree. Explorer Daniel Greysolon, collectively referred to the area as Izatys, a name the Mdewekanton Dakota people gave themselves. Sieur du Lhut s poor handwriting caused a wrong translation of the word Izatys. The Iz was transcribed as a K, and further error caused the name to be Kathio, a word that translates to nothing. Kathio became a name so attached to the area that the park bears that name today. *MN DNR 20 Equal Eyes Winter 2013

21 Runner Up - Jason Heitzinger - Scott County Lagoon Park after heavy rain The top photo was taken in June of 2012 at Lagoon Park, in Jordan, Minnesota. It was taken after several heavy rainfalls. While the top photo is after heavy rain, the bottom photo was taken nearly a year early and shows the difference in waterflow. This photo was taken at a boat launch off of Interstate 90. Photos like this prove that in Minnesota, natural beauty is never far away; even on the interstate! Runner Up - Carl Ask - Houston County I-90 Rest Stop, Upper Mississippi River National Wildlife Refuge 21 Equal Eyes Winter 2013

22 Introductions: Meet MAAO s New 2nd Vice President & Region Directors Compiled by James Haley, AMA Norman County Managing Editor / Chair Meet MAAO s new 2nd VP: Dan Whitman, Martin County At the 2012 Fall Conference, MAAO elected the next 2 nd Vice-President, Dan Whitman. Dan has an extensive career in the assessment profession and with MAAO. He will certainly be an excellent choice to work his way through the executive council and someday lead our organization. Dan has been in some form of government for over 30 years. He started as a township official in the 1980 s. After his township s local assessor retired in the 1996, Dan was given the opportunity to become the next local assessor. He continued in this role until he was approached by the Martin County Assessor for a full time position. Dan started working full time for Martin County in For several years after his children were born, Dan had been a stay at home dad before taking the full time position. While he was able to run a small business and work as a local assessor, he didn t have the time for full time employment. With his children now in school, he had the opportunity to work full time again. He began his work with Martin County as an Appraiser, before taking over as the County Assessor in Martin County sits along the Iowa Minnesota border in south - central Minnesota. The office has five staff members, plus Dan. There are 15,200 parcels, of which Martin County is responsible for 75%. Dan says he enjoys Martin County because it is where he grew up. He knows many people there and is able to relate to the taxpayers. Finally, Dan knows the area as well as anyone could. Dan has extensive experience with MAAO. In addition to his new role as 2 nd VP, Dan currently serves on the Legislative Committee, CAMA / GIS Committee, and is the PVC Coordinator. In the past, Dan has served as Region President and Region Secretary. He has also served on the IS Committee, Education Committee, and has instructed the Property Valuation Course and several other courses. Dan says he enjoys many aspects of MAAO. When asked, he cited networking as his favorite part of the organization. I really enjoy the networking, the exchange of information from county to county, region to region, and helping others. My focus issue is equity from one area to another, working hard to help everyone do things the same; it makes everyone s job easier if we do it the same. Dan also said he really enjoyed working on the Legislative Committee. As a township officer and former employee of the MN 2nd Congresional District Republican Party, Dan enjoys the legislative process and going to the State Capital to help keep things equitable. His goals going forward include helping assessors do a better job by equalizing throughout the state. He was also pleased to hear that Past President Baker formed the GIS / CAMA Committee. He looks forward to utilizing the new committee to create equity in all areas and to have information at their fingertips. Dan is especially interested in this committee because he also serves on the MCCC Executive Board. They too have recently formed a user group that focusses on GIS. GIS is a really good tool that is exploding right now. The biggest challenge is staying on top of the curve to move practices forward. GIS helps us do a better job and be more economical with time. Dan has been married for 33 years to his wife Terry. They have two grown children; Bart and wife Charmaine, and Emily and husband Evan. Most recently, he and Terry were blessed with grandson Jericho, who is now 18 months old. Dan has an extensive and diverse set of hobbies. He enjoys hunting deer and fishing trout. He remains very involved with charitable mission work through his church. He was been abroad five times; including three trips to an orphanage in Romania, and once to a hospital in Congo. In addition to the international travel, Dan enjoys serving local charities with his cooking skills. His son is a pastor who recently moved back to the area to establish a ministry serving young adults. Finally, he has been renovating his house; a 125 year old country grocery store. He has taken the main floor and turned it into a living space. He basically built a new house inside of the old store. Dan says that every screw, every wire, and every pipe was done by the Whitmans. He says it is fun, but looks forward to being done! We at Equal Eyes wish Dan the best of luck in his new role as 2 nd VP of MAAO! 22 Equal Eyes Winter 2013

23 Introductions, continued Meet Region 2 s new Director: Bridget Olson, Nicollet County Hi, I m Bridget Olson and I represent Region II as their newest Director. I work for Nicollet County which is located in South Central Minnesota, right in the bend of the Minnesota River. Nicollet County has 19 jurisdictions, 13 townships and 5 cities, St. Peter being the county seat. Oh wait that doesn t add up, we actually have one more jurisdiction with 13 parcels that is in the City of Mankato. The river does some funny things. Our staff includes the assessor, 5 appraisers and 2 clerical. When I started working as a clerk in the Assessor s office in 1979 (right out of elementary school), all I wanted was a full time job. I had never heard of a homestead or even what an assessor does. The rest is history. I also call Nicollet County my home as I have lived here all my life. My husband Kim and I live in rural St. Peter with our black lab Buck. We have 1 son, Jake (25). We enjoy hunting, fishing, camping and most outdoor activities. I want to thank Region II for letting me represent them as their Director to MAAO. Meet Region 3 s new Director: Daryl Moeller, Chisago County I always find the hardest part of writing is starting. At the most recent Executive Board meeting, I was asked to write an article to introduce myself. Not a problem I thought, until I sat down and was staring at a blank screen. So let s start simple. I am Daryl Moeller and I am the newest Region III Director on the Executive Board. I am one of seven appraisers for Chisago County, which is located in the East Central part of the state. For many years we claimed the prize for the smallest county seat, Center City, with a population of just over 600 people, but we are now #2. Our county has 19 tax jurisdictions, 9 townships and 10 cities, of which I appraise three townships. I grew up on the family farm south of Foley, MN where I was the 8 th child of nine in a house with three bedrooms. I learned at an early age that when Mom said it was time to eat, don t be late and make sure you grab enough the first time because there was never seconds. It was nice that we made meal time, family time, even though we couldn t fit at the table. Last year we hosted Christmas for my family, 47 people, and we all fit. Growing up I helped out on the farm (as little as I could) but eventually realized that working hard can go a long way. So I took the advice of my uncle: find a career that uses your head and not your back. I graduated from SCSU with a Mathematics degree, and became a math teacher. I taught in Pine City and then in the Chisago Lakes School District, before realizing that I was not made out to be a teacher. So with a good education behind me, I took a shot on a job posting that wanted a person with a strong math background. At the time I didn t even know what an assessor did, but Honorable David Johnson saw a farm kid that could work with people and who would be able to challenge and hopefully understand articles written by the then Pine County Assessor, John Keefe. I give all my thanks to David for taking a chance on me and introducing me to the assessing field. That was eleven plus years ago and I still LOVE my job. Unfortunately, due to David s health issues, I was able to work for him only five short months before John Keefe was hired by the county. So the man I was hired to challenge, now became my boss! Under John s direction I was able to earn my AMA and SAMA back in John has pushed me to continue to grow as an assessor. I was able to teach Mass Appraisal for one year, before the agricultural world was rearranged to being 2A and 2B. Being a country assessor, that legislation has consumed my days ever since. The one good thing that has come out of that legislation is that I have become a household name with the farmers. So I hung up my hat as a teacher of Mass Appraisal and am now educating the farmers about the legislative changes that occur on a yearly basis. 23 Equal Eyes Winter 2013

24 Introductions, continued In my spare time I love spending time with Lisa, my wife of 16 years, and our two awesome kids Audrey (15) and Brady (12). I am the proud dad that attends their different activities; track meets, soccer games, band concerts and scouting, no matter the distance. I also like to go camping, fishing, golfing and taking family vacations. I am a huge Minnesota sports fan, Vikings, Timberwolves, Twins, Wild, but especially attending Minnesota Swarm lacrosse games at the Xcel Center. I am honored to be representing Region III on the Executive Board and to be a part of this great organization, MAAO. It is no surprise that certain days we don t have the most desirable job, but I will end with a favorite saying after dealing with an angry taxpayer; Arguing with an assessor is like wrestling with a pig in the mud, after a while you realize he likes it! Meet Region 4 s new Director: Mark Peterson, Cass County Region IV has a new director. Replacing Kyle Holmes is Mark Peterson of Cass County. Mark has worked for Cass County since He started working there as a staff appraiser and was appointed to appraisal supervisor in Five years later he became the County Assessor. He has been a faithful MAAO member for the past 21 years. Prior to becoming the Region IV director, Mark served as the Region IV President. In addition, Mark serves on the Legislative Committee. Mark has been married for the past ten years to his wife, Bonnie. He has five children: one daughter, Brianna, age 25; and four step children: Kelley, age 23; Megan, age 19; Caitlin, age 16; and John, age 14. Mark also has two step grandchildren: Caden, age 4 and Trace, age 6 months. He lives seven miles east of Hackensack on Lost Lake. He and his wife own and operate a small seasonal resort called Sunny Spring Farm. Mark s hobbies include fishing, hunting, and golf. His favorite hunting activities are archery hunting for turkeys, and pheasant hunting in South Dakota. He also helps a friend with his bear guiding business a few days each fall. Last but not least, he is a licensed gunsmith. We wish Mark the best of luck in his new role as Region Director. NOTICE: The Nominating Committee is seeking Candidates for 2nd Vice-President of the MAAO Executive Board to be presented at the 2013 Fall Conference. If you are interested in working with an organization that strives to improve the assessment administration in Minnesota, then you are who we are seeking. Anyone interested in being a candiate for 2nd Vice-President of the MAAO Executive Board should contact: michelle.moen@co.isanti.mn.us msnoble@co.wilkin.mn.us 24 Equal Eyes Winter 2013

25 Meet Minnesota s New SAMA & AMA Designees Written by Jake Pidde, CMA City of Plymouth Editorial Committee Member New Senior Accredited Minnesota Assessors Nathan Stulc Nathan Stulc, City of Edina, was awarded the SAMA designation on July 24, His education includes Courses A, K, Mass Appraisal Basics, ProSource 105, successful exam challenge for MAAO Basic Income Approach, and Income Approach to Valuation. Mr. Stulc has a Bachelor of Science Degree in Real Estate from SCSU and he passed his Income Case Study Exam in April He had a successful oral interview with the board in January 2007 and has 8 years of assessment experience. Congratulations to you Nate!! Tamara Anderson Tamara Anderson, City of St. Cloud, was awarded the SAMA designation on September 17, Her education includes Assessment Law and Procedures, Bachelor of Real Estate Degree from St. Cloud State University, Mass Appraisal, Assessment Administration, USPAP, and MAAO Basic Income Approach. Tamara s Form Report passed the grading committee in July She passed the Residential Case Study Exam in August 2007 and the Income Case Study Exam in August Tamara had a successful oral interview with the Board in December Tamara has 9 years of assessment experience. Congratulations to you Tammy! Erik Skogquist Erik Skogquist, self-employed local assessor (in multiple counties), was awarded the SAMA designation on July 24, His education includes Assessment Laws/History and Procedures, Residential Appraisal Principles, Residential Appraisal Procedures, Mass Appraisal Basics, Basic Income Approach to Value, Appraisal Institute General Appraisal for Income Part 1, Management and Supervision and the 2-day USPAP from the Appraisal Institute. Mr. Skogquist s form report passed the grading committee in March He passed the Residential Case Study Exam in April 2009 and the Income Case Study Exam in March Erik had a successful oral interview with the board in July 2009 and has six years of assessment experience. Congratulations to you Erik! 25 Equal Eyes Winter 2013

26 New SAMA s, AMA s, continued Cory Leinwander Cory Leinwander, St. Louis County, was awarded the SAMA designation on September 17, His education includes Assessment Law and Procedures, Bachelor of Science Degree in Real Estate Degree from St. Cloud State University, Mass Appraisal, IAAO Assessment Administration, USPAP and IAAO General Appraiser Income Approach Parts I and II. He passed the Income Case Study Exam in April Cory had a successful oral interview with the Board in July Cory has 5 years of assessment experience. Congratulations to you Cory! Amy Rausch Amy Rausch, Stearns County, was awarded the SAMA designation on September 17, Her education includes Assessment Law and Procedures, ProSource 100 through 105, Basic Income Approach to Value, Income Approach to Valuation, Management and Supervision and Mass Appraisal. Amy s Form Report passed the grading committee in August She passed the Residential Case Study Exam in September 2009 and the Income Case Study Exam in August Amy had a successful oral interview with the Board in October Amy has 7 years of assessment experience. Congratulations to you Amy!Dan Raboin New Accredited Minnesota Assessors Dan Raboin Dan Raboin, Chisago County, was awarded the AMA designation on July 24, His education includes: Courses A, B, H (elective), IAAO 102, IAAO 302, Assessment Administration (Course K) and ProSource/ Kaplan USPAP. Mr. Raboin s form report passed the grading committee in March 2012 and he passed the Residential Case Study Exam in May Mr. Raboin has assessment experience since September Congratulations to you Dan! Pam Friesen Pam Friesen, Pipestone County, was awarded the AMA on July 24, Her education includes: Courses A, B, H (elective), Income Approach to Valuation, Basic Income Approach to Value, Assessment Administration and Appraisal Institute USPAP. Ms. Friesen s form report passed the grading committee in November 2011 and she passed the Residential Case Study Exam in July Ms. Friesen has assessment experience since October Congratulations to you Pam! To recognize the accomplishments of new AMA and SAMA desginees, we are spotlighting them when awarded by the State Board of Assessors. Are you a new designee? Get your photo ready! 26 Equal Eyes Winter 2013

27 Course Reviews Summer Courses Mass Appraisal Basics Minnesota Association of Assessing Officers 2012 Programs in Assessment and Appraisal held the 30-hour Mass Appraisal Basics course October 1 st 5 th, 2012 at the Best Western-Kelly Inn Hotel in St. Cloud. There were 52 attendees, all of which took the final exam. As there were no qualified applicants, no scholarships were awarded for this course offering. This course is approved for 30 hours of continuing education with the State Board of Assessors and 30 hours of Department of Commerce credits. Of the 52 students 18 applied for Department of Commerce credits. This course was instructed by Nancy Wojcik, City of Brooklyn Center City Assessor, and Stephen Hacken, County Assessor from Winona County. MAAO is extremely grateful to Nancy and Stephen for instructing this course. Written by Tina Diedrich - Von Eschen, SAMA Stearns County Uniform Standards of Professional Appraisal Practice (USPAP) Minnesota Association of Assessing Officers 2012 Programs in Assessment and Appraisal held the 15-hour USPAP course October 23 rd and 24 th at the best Western-Kelly Inn Hotel in St. Cloud. There were 19 attendees, all of which took the final exam. This course is offered to meet requirements for the AMA designation or as a continuing education opportunity. Scholarship opportunities are not offered for this course. This course is approved for 15 hours of continuing education with the State Board of Assessor s as well as with the Department of Commerce. None of the students attending applied for Department of Commerce credits. MAAO is extremely grateful to Susanne Barkalow, IFA for instructing this course. These course offerings were coordinated by Tina Diedrich-Von Eschen, SAMA. As a reminder to the membership, MAAO does offer scholarships for Assessment Laws and Procedures, Appraisal Principles, Appraisal Procedures, and Mass Appraisal Basics on a yearly basis. These scholarships are offered to non-government employed assessment/ appraisal individuals and those interested in entering the assessment field on the basis of financial need. Please encourage interested individuals in applying for our upcoming 2013 offerings by June 1 st or July 1 st for our July and August offerings. EQUAL EYES Call for article submissions We are looking for creative and original content to feature in Equal Eyes. The topic can be on just about anything! From technical assessment related naratives, to light hearted personal stories, we want them all. So if you have been thinking about it in the past, now is your time to act. Go ahead and write that article and send it to us at: editor@mnmaao.org 27 Equal Eyes Winter 2013

28 State Board of Assessors Meeting Minutes Provided by Bobbi Spencer Minnesota Department of Revenue July 24th, 2012 Lake George Municipal Center Chairperson Doreen Pehrson convened the meeting at 9:30 am. Gregg Larson was unable to attend. All other members were present. Minutes of the May 21, 2012 meeting were reviewed. Dave Marhula moved to approve the minutes. Brian Koester seconded. The motion carried. Minutes of the March 20, 2012 closed meeting were reviewed. Steve Sinell moved to approve the minutes. Brian Koester seconded. The motion carried. Minutes of the April 30, 2012 closed meeting were reviewed. Mike Amo moved to approve the minutes. Deb Volkert seconded. The motion carried. Updates On Monday, March 26, the board mailed out 965 license renewal applications for fiscal year As of Wednesday, July 18, 2012, 795 licenses have been renewed; 42 are on record retention; 10 are on hold awaiting additional CEH data, 99 have not returned renewal application for active license and 19 have not responded to record retention letter. Deb Volkert and Bobbi Spencer are working on updating the website: Revised requirement documents have been posted. We are currently working on the list of approved courses and all applications. Revised policy document now on the website is included in your folders. A listing of all licensed assessors will go on the website once the list is sent out to the county assessors. We do not plan to continue the manual as it was in the past. Each part will be published on the website separately so information is easier to find. Board members were encouraged to review the website periodically and to feel free to make suggestions or recommendation. Board web address is: local_gov/prop_tax_admin/pages/mnboa. aspx Decision was made to send an to all licensed assessors informing them of the website (after first sending letters to all assessors with no address on record). Assessor licensing system: We have been given the go ahead for a new assessor licensing system. Deb Volkert and Bobbi Spencer are working with a business analyst consultant developing requirements for the new system. At this point it is anticipated that the new system will provide for online assessor applications, payments and CEH entry, as well as provide the ability for assessors to look up information regarding their license and continuing ed records. Paul Montgomery, Ramsey County, submitted required documentation for CEH s and was granted FY 2013 Assessors License. Melissa Bickman, Hennepin County, had requested SCSU course FIRE 378 Real Estate Principles as an alternate to Residential Appraisal Principles she had NOT requested it for CEHs as was on the agenda at the May meeting. However, she is taking Residential Appraisal Principles the week of our July meeting so it needs no further action. Requests for Continuing Education Hours: Steve H suggested that Bobbi send the board the CEH request material prior to the meeting so they can review prior to the meeting. Dan Whitman, Martin County Assessor, requested CEH s for the 2012 PVC seminars. Per board policy, 13 continuing education hours will be granted for assessors attending the 2012 PVC seminars. Discussion took place regarding the format for this course. Within the four-year cycle, the PVC seminars need to change each year in order for assessors to receive continuing ed for taking the PVC seminars more than once during the cycle. It was decided that Doreen would talk to Dan Whitman regarding the need for a changing format. It was also suggested that a letter be sent to Dan and the education committee. Tami Paulson, Olmsted County, requested CEH s for the MAAO Fall Conference seminars. Steve Hurni made a motion to approve the MAAO Fall Conference seminars except for the Hot Topics seminar. Deb second seconded the motion. The motion failed with only one vote to approve. After further discussion, Mike Amo made a motion to approve the MAAO Fall Conference seminars. Dave Marhula seconded. The motion carried with one nay vote. Susan Lohse, Grant County, requested CEH s for a RESAP mini seminar for office workers in Region 7. NOTE: This request was sent in on May 8, 2012 and should have been presented to the board at the May 21, 2012 board meeting. For some reason it was missed. The board approved 3 hours per board policy. Appointments with the Board Dan Raboin, Chisago County, met with the board for his Accreditation Oral Interview. His education includes: Courses A, B, H (elective), IAAO 102, IAAO 302, Assessment Administration (Course K) and ProSource/Kaplan USPAP. Mr. Raboin s form report passed the grading committee in March 2012 and he passed the Residential Case Study Exam in May Mr. Raboin has assessment experience since September 1992 and applied for the Accredited Minnesota Assessor License. Deb Volkert made a motion to award the Accredited Minnesota Assessor license to Dan Raboin. Steve Sinell seconded the motion. The motion carried. Pam Friesen, Pipestone County, met with the board for her Accreditation Oral Interview. Her education includes: Courses A, B, H (elective), Income Approach to Valuation, Basic Income Approach to Value, 28 Equal Eyes Winter 2013

29 State Board, continued Assessment Administration and Appraisal Institute USPAP. Ms. Friesen form report passed the grading committee in November 2011 and she passed the Residential Case Study Exam in July Ms. Friesen has assessment experience since October 2002 and she applied for the Accredited Minnesota Assessor License. Mike Amo made a motion to award the Accredited Minnesota Assessor license to Pam Friesen. Deb Volkert seconded the motion. The motion carried. Application for Certified Minnesota Assessor Brian Koester made a motion to award the following people the Certified Minnesota Assessor license: Alyssa Browne, City of Minneapolis. Her education includes: Assessment Laws and Procedures with Ethics for Minnesota, Mass Appraisal Basics, and a 4 year real estate degree from the University of St. Thomas. Ms. Browne has 2 years of appraisal experience & 8 months of assessment experience. Danielle Lee, Wright County. Her education includes: Assessment Laws and Procedures with Ethics for Minnesota, Residential Appraisal Principles, Residential Appraisal Procedures and Mass Appraisal Basics. Ms. Lee has 6 years of assessment experience. James Veurink, Scott County. His education includes: Assessment Law and Procedures with Ethics, Mass Appraisal Basics, and has Appraiser License number: Mr. Veurink has appraisal experience since Scott Whitman, Martin County. His education includes: Assessment Law and Procedures with Ethics, Residential Appraisal Principles, Residential Appraisal Procedures and Mass Appraisal Basics. Mr. Whitman has 21 months of assessment experience. Deb Volkert seconded the motion. The motion carried. Application for Certified Minnesota Assessor Specialist Lisa Will, Jackson County, applied for the Certified Minnesota Assessor Specialist license. Her education includes: Assessment Law and Procedures, Course B, Mass Appraisal, Basic Income Approach to Value, and Income Approach to Valuation. 29 Equal Eyes Winter 2013 Ms. Will s Form Report passed the grading committee in June 2011 and she has 7 years of assessment experience. Mike Amo made a motion to award the Certified Minnesota Assessor Specialist license to Lisa Will. Dave Marhula seconded the motion. The motion carried. Application for Senior Accredited Minnesota Assessor Nathan Stulc, City of Edina, applied for his SAMA license. His education includes Courses A, K, Mass Appraisal Basics, ProSource 105, successful exam challenge for MAAO Basic Income Approach, and Income Approach to Valuation. Mr. Stulc has a Bachelor of Science Degree in Real Estate from SCSU and he passed his Income Case Study Exam in April He had a successful oral interview with the board in January 2007 and has 8 years of assessment experience. Steve Sinell made a motion to award the SAMA license to Nathan Stulc. Brian Koester seconded the motion. The motion carried. Erik Skogquist, self-employed local assessor (in multiple counties), applied for his SAMA license. His education includes Assessment Laws/History and Procedures, Residential Appraisal Principles, Residential Appraisal Procedures, Mass Appraisal Basics, Basic Income Approach to Value, Appraisal Institute General Appraisal for Income Part 1, Management and Supervision and the 2-day USPAP from the Appraisal Institute. Mr. Skogquist s form Report passed the grading committee in March He passed the Residential Case Study Exam in April 2009 and the Income Case Study Exam in March Erik had a successful oral interview with the board in July 2009 and has six years of assessment experience. Mike Amo made a motion to award the SAMA license to Erik Skogquist. Brian Koester seconded the motion. The motion carried. Discussion Items CMAS: Discuss possible time frame for current CMAS to obtain current CMAS requirements. Much discussion occurred related to whether assessors who obtained their CMAS license before 7/1/11 should be required to meet the current CMAS requirements in order to keep their CMAS license. Most of them have the two income courses but may not have written the form report. There are also several that have not taken two income courses. Deb will check with the attorney to see what the board s options are. Appraiser License Equivalence: Current policy per motion at the September 2011 meeting states an appraiser license is equal to the two residential appraisal courses. Appraisers are also required to have 15 hour USPAP should the policy be changed so appraiser license also counts as USPAP. Dave Marhula made a motion that an appraiser s license equals the two residential appraisal courses and the USPAP requirement. Deb seconded the motion. The motion carried. (The policy document will be changed to reflect this.) Continuing Ed: Do we accept all Commerce approved courses? If Commerce approves a course for an Appraiser license do we automatically approve for Assessors. Past policy has been to approve any courses approved by Commerce. After much discussion, Steve Hurni made a motion that there is no carte blanche for any vendor and/or the MN Department of Commerce approved courses to be accepted as continuing ed. In addition, such requests for continuing ed should be sent to board members via before the meeting to give members a chance to review the requested education before the board meeting. Mike Amo seconded the motion. The motion carried with two nay votes. Week-long courses the board needs to periodically review these courses. Years back there was a week-long course committee. Is it time to do something like that again? Brian will check into whether the week-long course committee is or plans to be active. There being no further business, the chairperson set the next meeting date as September 17 & 18, 2012 at the Nicollet County Government Center in St. Peter. No interviews will be scheduled as it will be a working meeting with a focus on updating the license level list. Brian Koester moved to pay the expenses for the meeting. Dave Marhula seconded the motion. The motion carried. Brian Koester moved to adjourn the meeting. Dave Marhula seconded the motion. The motion carried.

30 State Board, continued September 17-18, 2012 Nicollet County Government Center Monday, September 17, 2012 Chairperson Doreen Pehrson convened the meeting at 9:30 am. Steve Hurni was unable to attend. All other members were present. Minutes of the July 24, 2012 meeting were reviewed. Brian Koester moved to approve the minutes. Deb Volkert seconded. The motion carried. Updates Conrad Anderson s SAMA license was re-instated on August 9, 2012 following a 90-day suspension. Duluth City Assessor the board planned to follow up on the qualifications of the Duluth City Assessor in September to ensure that the assessor is in compliance with the required license level. A press release issued on September 4, 2012 states that a proposed merger of the Assessor s Offices of the City of Duluth and St. Louis County is expected to occur by the end of this year if approved by the County Board. The board will continue to monitor the situation. MAAO PVC Course update Doreen spoke with Dan Whitman and Deb talked to DOR. DOR is very involved in establishing the agenda for the course. Both Dan Whitman and DOR were informed that the agenda needs to change each year or assessors cannot repeat the course for CEHs within a four-year cycle. DOR also stated that they are working to have more consistency each year between the various locations it is taught. Week-long course committee Brian indicated that Bob Wilson and Tina Diedrich- Von Eschen are the MAAO reps on the week-long course committee. The board asked Deb to contact John about appointing someone from the Department of Revenue to actively participate on the committee. Brian represents the board on the committee. The board would like to see this committee become more active in coming months. The board would also appreciate hearing directly from the committee regarding week-long courses, plans, etc. Brian will ensure the committee is aware of this. Deb checked with the board attorney 30 Equal Eyes Winter 2013 regarding whether the board could require current CMAS license holders who are not income qualified to meet current requirements for obtaining a CMAS license (becoming income qualified). Under current rules the board does not have that authority a rule change would be required. Requests for Continuing Education Hours 2012 Appraisal Industry Update Course: Board approved this course for continuing education hours on August 7, 2012 via with 6 of 8 voting members approving at 7.5 CEHs. Land and Site Valuation Online Course: Board approved this course for continuing education hours on August 10, 2012 via with 5 of 8 voting members approving at 7.00 CEHs. Residential Appraisal Review Online Course: Board approved this course for continuing education hours on August 10, 2012 via with 5 of 8 voting members approving at 7.00 CEHs. Charles Arbuckle, requested CEH s for Appraisal Applications of Regression Analysis course given by McKissock. Approved 7 CEH s per board policy. Jill Brenna, is requested CEH s for Cover Your Fannie May: Know the Guidelines course given by Kaplan. Approved 8 CEH s per board policy. Charles Pelzer, requested CEH s for Protect the Public or Keep the Client: When Fraud Creeps In course by Kaplan. Approved 4 CEH s per board policy. Scott Sutherland, requested CEH s for On Demand Webinar courses given by Land Development Training. Approved 3 hours (102 minutes + 97 minutes) CEH s per board policy. Request for Course Alternates Toni Hible, Freeborn County submitted her CMA license application. Her education includes Mass Appraisal Basics and ALP. The board discussed the question; are Fundamental Real Property Appraising from South Dakota and IAAO 101 Fundamental Real Property Appraisal considered alternates for Residential Appraisal Principles and Residential Appraisal Procedures? Steve Sinell made a motion to approve IAAO 101 Fundamental Real Property Appraisal to be used as an alternate course to Residential Appraisal Procedures. Mike seconded the motion. Motion carried. The board recommends Toni either take or challenge the exam for Residential Appraisal Principles course before a CMA license will be granted. Application for Certified Minnesota Assessor Susan Cory, Faribault County, applied for the Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Appraisal Procedures, Appraisal Principles and Mass Appraisal Basics. Assessment experience since August Susan Prill, Todd County, applied for the Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Appraisal Procedures, Appraisal Principles and Mass Appraisal Basics. Assessment experience since June Suzie Root, Waseca County, applied for the Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Appraisal Procedures, Appraisal Principles and Mass Appraisal Basics. Assessment experience since February Steve Sinell made a motion to award the Certified Minnesota Assessor license to Susan Cory, Susan Prill and Suzie Root. Brian Koester seconded the motion. The motion carried. Patricia Fondrick, MN Department of Revenue, applied for the Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Appraisal Procedures, Appraisal Principles and Mass Appraisal Basics. Patricia s experience includes ten months as a Revenue Tax Specialist in the State Assessed Property Section in the Property Tax and 5 years and 2 months in the Corporation Division at MDOR. Mike Amo made a motion to

31 State Board, continued deny the request for CMA license due to not meeting the experience requirement. Gregg seconded the motion. The motion carried. Toni Hible, Freeborn County, applied for the Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Fundamental Real Property Appraising from South Dakota and IAAO 101 Fundamental Real Property Appraisal and IAAO 300 Fundamentals of Mass Appraisal. Mike Amo made a motion to deny the request for CMA license due to not meeting the requirement for a Residential Appraisal Principles course as determined previously in the meeting. Gregg seconded the motion. The motion carried. Application for Reinstatement of Certified Minnesota Assessor Martha Cote, Pine County, applied for reinstatement for a Certified Minnesota Assessor license. Her education includes Assessment Laws and Procedures, Residential Appraisal (Course B) and Mass Appraisal Basics (Course H). The board determined that Martha Cote needs ten additional continuing education hours and one year of assessing experience before her CMA license may be reinstated. Application for Certified Minnesota Assessor Specialist Todd Smith, Anoka County, applied for the Certified Minnesota Assessor Specialist license. His education includes Assessment Law and Procedures, Residential Appraisal (Course B), Mass Appraisal Basics (Course H), Basic Income Approach to Value (Course J) and ProSource Investment Property Appraisal & Investment and Fiscal Analysis. Todd s Form Report passed the grading committee in July Todd has 23 years of assessment experience. Brian Koester made a motion to award the Certified Minnesota Assessor Specialist license to Todd Smith. Dave Marhula seconded the motion. The motion carried. Michael Splonskowski Jr., Otter Tail County, applied for the Certified Minnesota Assessor Specialist license. His education includes Assessment Law and Procedures, Residential Appraisal Principles, Residential Appraisal Procedures, Mass Appraisal Basics, Basic Income Approach to Value and Income Approach to Valuation. Michael s Form Report passed the grading committee in August Todd has 3 years of assessment experience. Steve Sinell made a motion to award the Certified Minnesota Assessor Specialist license to Michael Splonskowski. Dave Marhula seconded the motion. The motion carried. Application for Senior Accredited Minnesota Assessor Tamara Anderson, City of St. Cloud, applied for her SAMA license. Her education includes Assessment Law and Procedures, Bachelor of Real Estate Degree from St. Cloud State University, Mass Appraisal, Assessment Administration, USPAP, and MAAO Basic Income Approach. Tamara s Form Report passed the grading committee in July She passed the Residential Case Study Exam in August 2007 and the Income Case Study Exam in August Tamara had a successful oral interview with the Board in December Tamara has 9 years of assessment experience. Brian Koester made a motion to award the SAMA license to Tamara Anderson. Mike Amo seconded the motion. The motion carried. Cory Leinwander, St. Louis County, applied for his SAMA license. His education includes Assessment Law and Procedures, Bachelor of Science Degree in Real Estate Degree from St. Cloud State University, Mass Appraisal, IAAO Assessment Administration, USPAP and IAAO General Appraiser Income Approach Parts I and II. He passed the Income Case Study Exam in April Cory had a successful oral interview with the Board in July Cory has 5 years of assessment experience. Gregg Larson made a motion to award the SAMA license to Cory Leinwander. Brian Koester seconded the motion. The motion carried. Amy Rausch, Stearns County, applied for her SAMA license. Her education includes Assessment Law and Procedures, ProSource 100 through 105, Basic Income Approach to Value, Income Approach to Valuation, Management and Supervision and Mass Appraisal. Amy s Form Report passed the grading committee in August She passed the Residential Case Study Exam in September 2009 and the Income Case Study Exam in August Amy had a successful oral interview with the Board in October Amy has 7 years of assessment experience. Jane Grossinger made a motion to award the SAMA license to Amy Rausch. Brian Koester seconded the motion. The motion carried. Discussion Items Dave made a motion that upon suspension or revocation of an assessor s license, that person is identified in the board minutes along with how long the license was suspended/revoked. Gregg seconded the motion. Motion carried with one nay vote. Schedule of Meetings for 2013 (all meetings start at 9:30 am): Tuesday, January 22 St. Cloud - Lake George Municipal Center Tuesday, March 26 Department of Revenue Monday, May 20 St. Cloud - Lake George Municipal Center Tuesday, July 23 St. Cloud Lake George Municipal Center Tuesday, September 17 Department of Revenue Tuesday, November 19 St. Cloud Lake George Municipal Center Do You Have Assessor Licensure Questions? Contact Bobbi Spencer Program Administrator for the State Board of Assessors or assessors.board@state.mn.us 31 Equal Eyes Winter 2013

32 State Board, continued Discussion took place regarding the old Course B. If someone took the old course B and was never licensed, it substitutes for Appraisal Procedures. If the person had been licensed at one time using Course B and is now applying for reinstatement, the person does not need to take Appraisal Principles. License Level discussion - the board started the discussion regarding license levels. Steve Sinell offered to develop a document that summed up the board s discussion to be used for further discussion the next day. Tuesday, September 18, 2012 Chairperson Doreen Pehrson convened the meeting at 9:30 am. All members were present. The board was asked to make a determination regarding Susan Rinehart s request to use a Tax Court Narrative she worked on for her Income Narrative Appraisal. After much discussion, Deb made a motion to deny Ms. Rinehart s request since the report was cowritten. Gregg seconded the motion. Motion carried. Deb will notify Ms. Rinehart of the board s decision. License Level discussion (cont. from September 17, 2012) The board reviewed Steve Hurni s latest draft of the board s proposed assessor licensing requirements and the accompanying sample counties. Brian made a motion that all residential, seasonal recreational residential and agricultural parcels with up to $1 million of structural value will require a minimum license level of CMA and those greater than $1 million will require a minimum license level of CMAS. Apartment and commercial-industrial parcels with up to $500,000 of structural value will require a minimum license level of CMA-Income Qualified. Apartment and commercial-industrial parcels with structural values greater than $500,000 and equal to or less than $2 million will require a minimum license level of an AMA. Apartments and commercial-industrial parcels with more than $2 million of structural value will require a license level of SAMA. Steve Sinell seconded the motion. Motion carried. Steve Hurni will update the proposed assessor licensing requirements draft for the next board meeting. Deb will check with the board s attorney to ensure that the board has the authority to allow different license levels per district. The board also reviewed Steve Sinell s draft Jurisdictional Licensing Proposed Policy. Some revisions were recommended. After a lengthy discussion of implementation details, the board directed staff to draft a revised version of the policy. Steve S, Deb and Bobbi will consult on the changes and then get a revised document out to board members via before the next board meeting. There being no further business, the chairperson set the next meeting date as November 20, 2012 at the Lake George Municipal Center in St. Cloud at 9:30am. Brian Koester moved to pay the expenses for the meeting. Mike Amo seconded the motion. The motion carried. Dave Marhula moved to adjourn the meeting. Brian Koester seconded the motion. The motion carried. Twin Cities Region Median Sales Price Time Frame: Rolling 12 Months Minnesota Real Estate Snapshot * Used by Permission. Chart obtained from the Minneapolis Area Association of REALTORS. All data come directly from Northstar MLS. Data are deemed reliable but not guaranteed and are subject to revision. Downloaded on January 1st, MAAO, its directors, staff and affiliates are in no way responsible for actions taken or not taken as a result of these data. 32 Equal Eyes Winter 2013

33 Feature Assessment Excellence In the Heartland A Review of the 2012 IAAO Conference: Kansas City, Missouri It was my pleasure and honor to attend this year s Conference as the President of the Minnesota IAAO Affiliate: MAAO. This year the conference was held in Kansas City, Missouri at the Kansas City Convention Center. I have been attending these conferences since 1996 and this one was one of the best organized that I can recall. Written by Stephen Baker, SAMA, CAE Ramsey County Assessor Some Conference Highlights included: Teriffic educational offerings Excellent Opening Reception at the National Negro Baseball League and National Jazz Museums - featuring fabulous BBQ by Jacks Stack BBQ featuring Burnt Ends, Beans, Cheesy Corn Bake, Ribs and Jacks great sauce. Motivating keynote address by Ken Miller on an Extreme Government Makeover. Inspiring address by NFL referee Walt Coleman titled Turning Boos into Cheers. Fun Awards Breakfast Closing Banquet and Installation of Officers As in past years, Minnesota Assessors were well represented with over twenty attendees from ten Minnesota jurisdictions. MAAO had in attendance our President, Vice President, 2 nd Vice President and Finance Director, and the Minnesota Department of Revenue was represented by the Director of Property Tax. Kansas City was an interesting city for the conference, a very walk-able downtown, not too much traffic, interesting museums and architecture, and some nice open space and entertainment venues near the conference hotels and the KC Convention Center. There was an outdoor jazz festival happening on Saturday with some great musicians; a very nice welcome. The opening reception was the best ever in this authors opinion. Really interesting museums, great food, and sweet live jazz. It was a terrific way to open up the Conference on a beautiful Sunday evening. The Conference got into full swing Monday morning with the opening Keynote address by Ken Miller focusing on how to streamline government, overcome obstacles, and become more efficient. Mr. Miller spoke about a philosophy of management focusing on teamwork, collaboration and building to utilize the best in all of us. Then it was off to seminars, and as always IAAO had many excellent seminars with topics for all interests. The sessions were organized loosely into tracks, focusing on Commercial Property, Kansas City Skyline Minnesota Attendees at the Banquet Personal Development, Residential Appraisal, Tax Policy and Assessment Standards, Technology, and Management. The sessions ran from Monday morning through Wednesday afternoon and were either 60 or 90 minutes long. Presenters included Peter Korpacz speaking to assessors about the state of the Real Estate markets. Peter was cautiously optimistic about real estate markets but concerned about the headwinds to our economy posed by the fiscal cliff, the European debt crisis, 33 Equal Eyes Winter 2013

34 IAAO Conference, continued weak job growth, low GDP growth, and declining exports. But Mr. Korpacz was encouraged by expanding durable goods orders, increasing retail sales, stable leasing markets and stable rents. Mr. Korpacz, who has long specialized in super-regional mall appraisal is now branching out into appraisal of net lease free standing retail, particularly drug stores. Another presenter familiar to many in the Minnesota assessment community was Mark Kenney; Mr. Kenney is an appraiser from Pennsylvania who specializes in retail mall and department store appraisal. Mark spoke to IAAO conference attendees about intangibles as they intersect and interact with the valuation of real property. He spent some time going over the ever changing terminology of this debate. The debate over the theories of Business Enterprise Valuation (AKA Capitalized Economic Profit CEP) rages on as experts attempt to define intangibles that are likely to be present in real estate, and how to measure and quantify these items in the appraisal process of real property. Authors note: The most recent anthology of Business Enterprise value 2 nd edition edited by David Lennhoff, largely ignores articles critical of BEV and continues the trend of methodology advocacy rather than meaningful academic exploration. Mr. Kenney is one of the few informed resonated voices left in this public debate that is so important to all assessors. Another excellent presentation was by Lloyd Hara the King County Assessor. Mr. Hara is a strong believer, and dedicated practitioner in customer outreach and he gave an inspiring presentation on the need and the wisdom of continually reaching out to our citizens to keep them informed. His office also presented on a very interesting Stephen Baker presenting MAAO check to IAAO President Deb Asbury remote field data collection system utilizing the ipad. His appraiser Jurgen Ramil presented on this topic. There were too many other presentations for me to discuss them all, but IAA has made all Mark Anderson, City of Bloomington and his wife the seminar PowerPoint s available on their web site for free to conference attendees and for $35/$55 to others. The conference awards breakfast was another highlight, after not being held for a couple of years it returned, and was very enjoyable. The Virginia cup was there to be viewed. The only disappointment was that Equal Eyes was beat out for the Zangerle Award by InstiNews, a publication of the Institute of Municipal Assessors and the Northeastern Regional Association of Assessing Officers. Better luck this coming year MAAO Editorial Board! In the words of NFL referee Walt Coleman: You can t control the future, all we can do is do the best you possibly can today, right now, and deal with what comes. Not bad words for an assessor to live by. See you in Michigan in 2013 at the 79 th Annual IAAO Conference. 34 Equal Eyes Winter 2013 MAAO Table at the banquet

35 FEATURE Property Tax Working Group: Executive Summary of the Final Report Created by the Minnesota Property Tax Working Group For several years, Equal Eyes has been providing updates for the Minnesota Property Tax Working Group. In November of 2012, the working group completed their objective and submitted their final report. This is an executive summary of the document. Equal Eyes would like to thank Stephen Behrenbrinker for his tireless contribution to the group on behalf of MAAO. The Property Tax Working Group was created in 2010 to examine the many facets of Minnesota s property tax system and develop recommendations on how to make the system more simple, understandable, transparent, accountable, and efficient. The Working Group held 20 meetings from October 2010 through November The following summary of Guiding Principles and Recommendations established by the Property Tax Working Group are the result of two years of extensive research and debate. Full details of the principles and recommendations are provided in the full report. Guiding Principles Defend the purpose The purpose of the property tax is to provide local revenue to pay for local services. The property tax is not a vehicle for state policies. The state s involvement should be limited. Base property taxes on market value (true ad valorem system) Property taxes should always be based on full estimated market value to minimize confusion, complexity, costs, and distortions. Base property taxes on property attributes, not ownership or occupancy The characteristics and use of a property should drive property tax levels, while the characteristics of an owner or occupant should be delivered via the income tax system. The 12-member working group consists of the following members: Kathleen Gaylord, Chairperson, Association of MN Counties Rep. Denise Dittrich, MN House Rep. Greg Davids, MN House Sen. Rod Skoe, MN Senate Sen. Warren Limmer, MN Senate Thomas Mould, Homeowner Eric Sorensen, Homeowner Luayn Murphy, League of MN Cities David Fricke, MN Association of Townships Matt Van Slooten, MN Chamber of Commerce Chris Radatz, MN Farm Bureau, MN Farmers Union; Thom Petersen, alternate Stephen Behrenbrinker, MN Association of Assessing Officers Jason Nord, MN Department of Revenue (non-voting) Defend broad-based goals from narrow interests Creating new classifications or benefits for individual or narrow subgroups of property should be avoided to preserve transparency, simplicity, and efficiency in the system. The cost of administering narrow preferences often outweighs the benefits received. Consider more transparent alternatives When evaluating new property tax proposals, legislators should consider why the special provision is needed and if there are other ways to deliver the benefit outside the property tax system. The property tax should not be used simply to avoid direct state costs. Provide sunsets to prompt review Any new changes in the property tax system should have a sunset date to force reevaluation over time and remove provisions that are no longer achieving their intended goals. Require value or intention statements on new legislation New property tax proposals should include a statement that describes why the change is necessary and valuable, what it intends to do, and what alternatives were considered. This will enrich reevaluation and decision-making when the provision is set to expire. Make simplicity and transparency a priority A transparent and understandable system facilitates trust and accountability. A simple system is more efficient and reduces errors, unintended outcomes, and high costs. Policymakers must defend these important principles. Require local impact notes for any property tax changes Local impact notes should be required for all proposed changes to the property tax system to increase accountability. 35 Equal Eyes Winter 2013

36 PTWG Update, continued 1. Reduce the number of classifications Consolidate the number of classifications from 55 to four (residential, agricultural, commercial, other). Do not target benefits to specific properties through micro classification. 2. Homestead benefits Expand the Property Tax Refund (PTR) program Expand the Property Tax Refund program as the primary method of homestead benefit. Standardize the definition of a homestead for both residential and agricultural properties. 3. Avoid or eliminate tiers and parcellinkage Eliminate value tiers to avoid needing to chain parcels based on ownership, thereby reducing confusion, complexity, and administrative costs. 4. Revamp the agricultural homestead classification process Enact Recommendations 1-3 (condense classifications, standardize the homestead definition, eliminate tiers/parcel linkage) to greatly simplify the agricultural homestead process. 5. Establish an agreed upon relationship ( ratio ) between classification rates Do not use classification rates to provide benefits to narrow groups. Establish and maintain consistent ratios; recognize that ratio changes shift burdens to other properties. 6. Consolidate reporting, application, and effective dates Consolidate the property tax calendar around a few key dates to increase understandability, predictability, and compliance. 7. Base assessments on the most current economic conditions Support recent sales analysis efforts that make the system more responsive. Encourage the transition to ecrv. Use a larger geographic area for sales comparisons. Our Recommendations 8. Make improvements to the Truth in Taxation (TNT) process Show basic budget information or provide links on TNT notices and direct the public to websites with more detailed information. Modernize the process and engage taxpayers electronically. 9. Make improvements to notices and statements Give notices consistent branding and distribute electronically. Include websites and contacts. Improve timing and coordination. Show estimated and taxable market values. 10. Investigate and plan for an eventual statewide computer system Explore the creation of a centralized tax system to support local administration of the tax, save total state and local costs, and improve accountability. 11. Convert the tax capacity system to an assessed value system Use assessed values and mill rates to make Minnesota s property tax system more understandable, transparent, and competitive across the nation. 12. Eliminate the use of property taxes for state funding Eliminate the state tax to restore property taxes as a local tax and reduce complexity. If not eliminated, designate revenues directly for local governments, not the general fund. 13. Avoid limits, caps, and freezes Do not impose limits, caps, or freezes on values, tax amounts or levies. This undermines budgeting and causes inequities. Let local governments be accountable to local voters. 14. Exclusions The state should not use exclusions to avoid paying for benefits it thinks are important, nor for short-term or onetime benefits. If used, tie exclusions to properties, not owners. See full report for recommendations on specific exclusions. 15. Credits Eliminate/phase out power line credit (high admin costs) and agricultural homestead credit (result of other recommendations). Keep disaster and disparity reduction credits. 16. Exemptions Be selective exemptions must accomplish public purposes, not serve special interests. Impose automatic review/sunset dates to improve accountability and verify success. See full report for recommendations on specific exemptions. 17. Aids Allow Utility Valuation Transition Aid to naturally phase out. Sunset or phase out Dis-parity Reduction Aid (1988 legacy aid, may no longer achieve intended goals). 18. Special Valuations and Deferrals These programs increase complexity and decrease efficiency, transparency, and account-ability. Impose sunset dates on all current/future programs to prompt review. 19. Refunds Expand the homeowner Property Tax Refund (PTR) program. Keep special targeting PTR as a tool to ease impacts of other reforms. Reevaluate renter PTR with respect to class consolidations in Recommendation 1. A downloadable copy of this report, along with meeting materials, research, and other in-formation related to the Working Group can be found online at: www. revenue.state.mn.us/propertytax/pages/ workgroup 36 Equal Eyes Winter 2013

37 Region Round Up Understanding Homestead Trust Linkage Written by Nancy Gunderson, SAMA Clay County Assessor Editorial Committee Member With each of our state-wide regions getting together monthly to discuss issues and current assessment concerns, a great deal of guidance and direction is given at that local level. Some of this fall s more frequent discussions have been about conservation easement valuations, increasing agricultural valuations, agricultural time adjustments, rural preserve property tax program, and the utility forum. But there was one topic that was discussed at nearly every region meeting and that was that of trust homesteads and how counties are handling them. This has become an extremely perplexing topic. Questions have arisen regarding linking and extending homestead to properties with different ownerships including trusts. The Minnesota Department of Revenue recently sent a letter that laid out multiple scenarios and the linking eligibility of parcels with different ownerships individuals and trust. Armed with the following scenarios, assessors with a bit of luck will be able to make more clear-cut decisions as to homestead linkage eligibility as it relates to trusts. Here is that letter in its entirety: Thank you for your question submitted to the Property Tax Division regarding homestead for properties owned by various trusts/ life estates/individuals. You have provided the following scenarios and are looking for verification of the homestead amount you have listed for each parcel. Before reviewing the scenarios presented, we will review the rules for homestead linkage. In order to be linked, properties must first be owned by the exact same ownership entity. It is not appropriate to link properties where the ownership entities differ such as individually-owned parcels to corporate- or partnership-owned parcels. Of course there are exceptions to this rule: 1. The homestead of a base parcel owned and occupied by an individual may be linked to a parcel of property that the owner owns with other individuals; 2. The homestead of a base parcel owned and occupied by an individual may be linked to a parcel of property that is owned by a trust and the individual owners of the base parcel are the grantors of the trust-held property (and vice versa); and 3. In the case of married couples, properties that are held solely in the name of one spouse may be linked to parcels that are held solely by the other spouse and parcels that are titled in both names. This does not apply to any entities of which the husband and/or wife are both members. It only applies to parcels owned by natural people. Parcel ownership Parcel #1 John Smith Trust (John Smith, grantor) Parcel #2 John Smith and June Smith Marital Trust (John Smith and June Smith, grantors) Parcel #3 Life Estate in John Smith Parcel #4 John Smith, individually Parcel #5 John Smith and June Smith, as individuals Parcel #6 Transfer on Death Deed - John Smith, Grantor Homestead established at Parcel #1: If the homestead was established at parcel 1, homestead would be granted in the following manner: Parcel #1 Base parcel - 100% homestead Parcel #2 No homestead (cannot link entity to entity) Parcel #3 100% homestead (Trust can link to property owned individually by the grantor of the trust) Parcel #4 100% homestead (Trust can link to property owned individually by the grantor of the trust) Parcel #5 50% homestead (Trust can link to property owned individually by the grantor; the grantor is 50% owner of parcel #5) Parcel #6 100% homestead (Trust can link to property owned individually by the grantor) Base Parcel #2: If homestead is established at parcel 2, homestead would be granted in the following manner: Parcel #1 No homestead (entity to entity) Parcel #2 Base parcel- 100% homestead 37 Equal Eyes Winter 2013

38 Region Round Up, continued Parcel #3 50% homestead (Trust can link to property owned individually by the grantor; John Smith is 50% of the grantors of the trust that has homesteaded Parcel 2) Parcel #4 50% homestead (Trust can link to property owned individually by the grantor; John Smith is 50% of the grantors of the trust that has homesteaded Parcel 2) Parcel #5 100% homestead (Trust can link to property owned individually by the grantors 50% for John Smith and 50% for June Smith) Parcel #6 50% homestead (Trust can link to property owned individually by the grantor; John Smith is 50% of the grantors of the trust that has homesteaded Parcel 2) Base Parcel #3: If homestead is established at Parcel 3, homestead would be granted in the following manner: Parcel #1 100% homestead (Trust can link to property owned individually by the grantor) Parcel #2 50% homestead (Trust link to property owned individually by the grantor; John Smith is 50% of the grantors of this trust) Parcel #3 Base parcel- 100% homestead Parcel #4 100% homestead (Life Estate as individual ownership linked to individual ownership) Parcel #5 100% homestead (base parcel is in individual ownership; may be linked to parcels owned by that individual and his/ her spouse) Parcel #6 100% homestead (Life estate as individual ownership can link to transfer on death deed as individual ownership) Base Parcel #4: If homestead is established at Parcel 4, homestead would be granted in the following manner: Parcel #1 100% homestead (individual to trust) Parcel #2 50% homestead (individual to trust of which John is 50% of grantors) Parcel #3 100% homestead (Life estate as individual ownership to individual) Parcel #4 Base parcel- 100% homestead Parcel #5 100% homestead (individual to individuals who are spouses) Parcel #6 100% homestead (individual to transfer on death deed as individual ownership) Base Parcel #5: If homestead is established at Parcel 5, homestead would be granted in the following manner: Parcel #1 50% homestead (individual to trust; John is 50% owner of the base parcel and grantor of this trust) Parcel #2 100% homestead (individual to trust that has the same grantors as the base parcel) Parcel #3 100% homestead (Life estate as individual ownership to property owned by the individuals and his/her spouse) Parcel #4 100% homestead (individuals to property owned by the individual and his/her spouse) Parcel #5 Base parcel- 100% homestead Parcel #6 100% homestead (property owned by transfer on death deed as individual ownership to property owned by that individual and his/her spouse) Base Parcel #6: If homestead is established at Parcel 6, homestead would be granted in the following manner: Parcel #1 100% homestead (transfer on death deed as individual ownership to a trust where that individual is grantor) Parcel #2 50% homestead (transfer on death deed as individual ownership to trust; John is 50% of grantors of this trust) Parcel #3 100% homestead (transfer on death deed as individual to life estate as individual) Parcel #4 100% homestead (transfer on death deed as individual to individual) Parcel #5 100% homestead (transfer on death deed as individual to property owned by that individual and his/her spouse) Parcel #6 Base parcel- 100% homestead After completing review of the above scenarios, we believe the confusion is in regard mostly to the life estate and transfer upon death deed ownerships. In determining the homestead status of a property, life estates and transfer upon death deeds do not affect homestead eligibility of the individual who continues to own and occupy the property. This is because the ownership of the property is still with the individual until the terms of the life estate or transfer on death deed are met. Life estates and transfer upon death deeds are arrangements made on the property prior to an owner s death and determine what will happen to the ownership of the property once the owner is deceased. These are not considered entities as they are not trusts; therefore, these properties are considered as being owned by an individual for determining homestead on a property and linking eligibility. If you have any other questions, please feel free to contact our division at proptax.questions@state.mn.us. 38 Equal Eyes Winter 2013

39 Global Assessment Trends Japan Real Estate in Japan is still substantially below the price it commanded 30 years ago- even in nominal terms. It has just entered its fifth recession in 15 years, the government is the most indebted in the world and the stock market has proven a perennial disappointment. Administrative divisions Japan consists of forty-seven states, each overseen by an elected governor, legislature and administrative bureaucracy. Each state is further divided into cities, towns and villages. The nation is currently undergoing administrative reorganization by merging many of the cities, towns and villages with each other. This process will reduce the number of sub-state administrative regions and is expected to cut administrative costs. Written by Solomon Akanki, SAMA Scott County Editorial Committee Member This issue we fall into the ring of fire and examine assessment practices in Japan Geography Japan has a total of 6,852 islands extending along the pacific coast of East Asia that together have an area slightly smaller than the state of California.. About 73 percent of Japan is forested, mountainous, and unsuitable for agricultural, industrial, or residential use. As a result, the habitable zones, mainly located in coastal areas, have extremely high population densities. It is one of the most densely populated countries in the world. Commercial Real Estate in Japan of some 65.9 million workers. Japan has a low unemployment rate of around 4 percent. Housing in Japan is characterized by limited land supply in urban areas. Commercial Real Estate in Japan Economy As of 2011, Japan is the third largest national economy in the world, after the United States and China, in terms of nominal GDP and purchasing power parity. As of January 2011, Japan s public debt was more than 200 percent of its annual gross domestic product, the largest of any nation in the world. The service sector accounts for three quarters of the gross domestic product. Japan has a large industrial capacity, and is home to some of the largest and most technologically advanced producers of motor vehicles, electronics, ships, textiles and processed foods among others. Agricultural businesses in Japan cultivate 13 percent of Japan s land, and Japan accounts for nearly 15 percent of the global fish catch, second only to China. As of 2010, Japan s labor force consisted Infrastructure Japan s road spending has been extensive. Its 750,000 miles of paved road are the main means of transportation. Some 250 high-speed trains connect major cities and Japanese trains are known for their safety and punctuality. There are 173 airports in Japan; the largest domestic airport, Haneda Airport, is Asia s second busiest airport. Demographics Japan s population is estimated at around million. It has the longest overall life expectancy at birth of any country in the world: 83.5 years for persons born in the period The Japanese population is rapidly aging as a result of a post-world war II baby boom followed by a decrease in birth rates. In 2009, about 22.7 percent 39 Equal Eyes Winter 2013

40 Assessment Trends, continued of the population was over 65, by 2050 almost 40 percent of the population will be aged 65 and over, as projected in December The changes in demographic structure have created a number of social issues, particularly a potential decline in workforce population and increase in the cost of social security benefits like public pension plan. A growing number of younger Japanese prefer not to marry or have families. In 2011, Japan s population dropped for a fifth year, falling by 204,000 people. This is the greatest decline since at least 1947, the first year for which government data are available. Japan s population is expected to drop to 95 million by 2050, demographers and government planners are currently in a heated debate over how to cope with this problem. Immigration and birth incentives are sometimes suggested as a solution to provide younger workers to support the nations aging population. Inflation Deflation has been a concern over most of the last 10 years, except from mid-2007 to mid-2008 when the economy showed consistent and relatively strong growth. However, this period ended as the world financial crisis caught up with the country. The relative stability of prices has had a strong influence on how discounted cash flow analysis is conducted as its frequency of use has increased over the past 10 years. Typically, rents will be projected to increase nominally or not at all. A conservative approach to estimating expenses is to hold them flat over the projection period. It is common to find that capitalization rates and discount rates are the same, with terminal cap rate being slightly higher. Licensing/Certification The Japanese Association of Real Estate Appraisal was established in 1965 and falls under the control of the Ministry of Land, Infrastructure and Transportation. It is the only government-approved entity responsible for the administration of appraisal practice. All appraisers in Japan must be licensed by the government through this association. As of April 2009, there were approximately 5,900 association members. The association also oversees the compilation of the Land indexes. (LAREA). The holder of either license is considered qualified to value any type of property, but only an LREA can complete an appraisal report independently. An LAREA must always work with an LREA. Building Codes, land leases, recording system Building regulations include requirements for earthquake resistance. Specific laws governing most land leases date back to What is unique to most land leases in Japan is that the tenant effectively has the perpetual right to renew the lease as long as there are improvements on the land. There is a separate registry system for land and buildings in Japan, but there is no title system. Ownership is perfected through a boundary confirmation process, which should be performed with each property sale. The process is completed by having every adjoining property owner sign a document similar to a site plan that shows each boundary of the property. By signing the document, the adjoining owners are indicating that they agree that the boundary lines between their properties and the property being sold are correct. The boundary confirmation process can be timeconsuming and costly. Appraisal Reporting Requirements Appraisal practice in Japan is based on the United States model. Self-contained narrative appraisals are standard in Japan. Most appraisers will not complete a report until they receive a finalized engineering report, particularly when value in use must be considered. The engineering report is typically relied on for building cost and depreciation estimates, information on deferred maintenance, cost estimates relating to any building code or zoning issues, and for capital reserve estimates. Appraisers in Japan are expected to explain the rationale behind their analysis and value conclusion. However, unlike reports in the United States, an appraisal report in Japan may not incorporate all of the data necessary to understand the conclusion. The enhancement of privacy laws several years ago has impacted the inclusion of comparable data details in appraisal reports. It is common for appraisers in Japan to omit addresses or other information that would allow a specific lease or sale transaction to be identified. Since information on acquisitions by private entities is not public information, this market data may never be discovered or make its way into appraisal reports due to concerns about violating privacy laws. This lack of disclosure can lead to an inaccurate picture of the overall market. Until the late 1990s, the income producing capacity of properties in Japan was not greatly considered. Until this point, the cost approach was most commonly relied upon because land value in Japan represents a high percentage of overall property value. At the start of this shift from a cost to an income focus, direct capitalization was most There are two levels of licensing, the licensed real estate appraiser (LREA) and the licensed assistant real estate appraiser Residential Real Estate in Japan 40 Equal Eyes Winter 2013

41 Assessment Trends, continued commonly applied because comparable data for capitalization rates was available. While discounted cash flow (DCF) analysis was used, it was not widespread. This changed dramatically with the 2007 appraisal standards changes, which required DCF analysis for all appraisals of securitized properties. As a result of these changes, the conclusion of the DCF analysis is always given some weight, and often the most weight, in reaching a final value conclusion. The difficulty is in obtaining the necessary market data to construct a DCF analysis with assumptions that are fully supportable. The most common application of the sales comparison approach is to estimate land value. For improved properties, a complete analysis of the comparable sales may not be included in the appraisal. The main use of the comparable sale is to obtain cap rate data. Availability of Data Market data can be difficult to obtain in Japan. Asking rents and vacancy rates for office space in major cities are most accessible data, as this data has historically been the focus of property investors. Industrial and rental apartment data have become somewhat more available over the past 10 years, but that information is not available in all markets. Information on retail properties and hotels is still difficult to come by. Comparable sales data has become more accessible in recent years with the advent of the J-REIT (Japanese Real Estate Investment Trust) database, which provides fairly detailed information on property transactions involving J-REITs. Sales data for private transactions is more difficult to obtain because it is not considered public information and there are very stringent privacy laws in Japan. As a result, sharing data among appraisers is not common. If data is shared, it will typically exclude some information so that the property cannot be specifically identified. This is true for both comparable sales and lease data. Income and expense data about the subject property are virtually never disclosed. Also lacking are complete, reliable sources for information on supply and demand, operating expenses, growth rate expectations and expected discount rates for most property types. Services that offer supply and demand data for major markets have recently been launched, but there is not the depth or breadth of information found in the United States. Tax Assessment System Property tax is levied on real property and personal property. There are million parcels and million buildings. Property Exempt from Taxation Property owned by organizations working for public benefit and used for public benefit are exempt from taxation; these include property owned by governments, schools, religious institutions, agricultural non-profit organization and foreign embassies. Also tax is not applied in principle where the value of the property owned by a taxpayer is below the following threshold: land value is 300,000 Yen ($3,536), residential improvement value is 200,000 Yen ($2,357). Period between Re-assessments and Property tax payments All properties are re-assessed every 3 years. There are four property tax payments per year and they are due June, September, December, and February. Tax payers Persons listed as owners of property as of January 1 st each year must pay the property tax. The obligation for payment remains even if ownership is transferred during the year. Residential Real Estate in Japan Tax Base The base of taxation is imposed in accordance with appropriate market value. Land values are based on the sales comparison approach. Residential improvements are based on the cost approach, and the tax amount depends on costs for rebuilding. Appeal Process Tax payers can appeal assessed values within 60 days after the assessment roll is made public. After discussing value opinions with staff at the assessment department of the municipal government, the owner of the property needs to submit an appeal request form to the Fixed Asset Assessment Appeal Board. When an appeal request is judged legitimate in terms of ownership and deadline, the appeal request form is forwarded to the assessment department. A response to the appeal request is prepared by the assessment department and handed in to the Appeal Board. The members of the Appeal Board review the written opinions of both sides. When necessary, they provide both parties with opportunities to explain and argue in front of them before reaching their decision. If the owner of the property disagrees with the Appeal Board s decision, he/she could file a lawsuit within 60 days after the decision. 41 Equal Eyes Winter 2013

42 FEATURE Education and Safety First Sovereign Citizen Movement Are we safe at work?? As county, city and local assessors we have to be prepared for many unusual and unique activities that happen as we are out viewing properties; from the angry taxpayer that gives us a bad time, to Meth Labs that may be in houses, garages, or out buildings and mean dogs for which we always have to be on the lookout. Recently another issue has arisen and that is meeting people that are involved in the Sovereign Citizens Movement. These individuals own property and may work and be citizens in your community. However as we learn more about these individuals it becomes clear that they are individuals that can and have become violent against government officials. Originally I looked into the land patents they were recording as documents that were supposedly going to make their land not taxable for real estate taxes. Although this is happening here in our county it is not a major push by the movement overall and little reference to land patents being used by sovereign citizens across the United States is occurring. It seems like a very limited action currently taken on a local basis. Written by Joe Skerik, SAMA Beltrami County The Sovereign Citizen Movement began in the early 1970 s and spurred up from the Posse Comitatus groups of the past. Sovereign citizens are a loosely-organized collection of groups and individuals who believe they are above the law and true defenders of the Constitution. The movements centered on a massive conspiracy theory that our government is working to enslave all Americans. They are an anti-government organization that is against taxation, do not adhere to our laws and believe our current governments are illegitimate and have no power over their actions. This includes Federal, State and Local laws and government. They believe laws do not pertain to them, they do not need a driver s license, they do not vote 42 Equal Eyes Winter 2013 in our elections, they do not have a social security card anymore and they ve created their own license plates and currency. They have started their own government and elected their own leaders in the Republic of the United States of America. Thus there have been numerous conflicts over the years with law enforcement from individuals that are part of the movement. The FBI considers the Sovereign Citizens Movement in the top three groups as a domestic terror threat. With the movement growing rapidly in the last ten years, it is believed they have well over 300,000 members. Some of their members have become extremist and turned to violence, such as Terry Nichols who helped Timothy Mc Veigh in the Oklahoma City bombing, and Jerry and Joe Kane who, after a routine traffic stop in Arkansas, shot and killed two officers. They were then cornered 90 minutes later and killed in a gun battle in a Wal-Mart parking lot wounding two more officers. Many other incidents of violence have occurred with little reference

43 Education & Safety, continued to their ties with the Sovereign Citizens ever being mentioned. This may be in part that the name is somewhat an umbrella term used to describe many radical groups, Sovereign Citizen Group being the largest of all of them. Many twisted beliefs all relate back to the main belief of the Sovereign Citizens Movement. Many of the individuals that are new to the movement are unemployed and desperate in these tough economic times. They may be having their home foreclosed on or are searching for a quick fix to their dire financial situation. Paper terrorism is also another means with which they have attacked many individuals; they ve put leans on victim s properties making it very hard for them to refinance or buy a property, or they may file meaningless paper work and documents that County Recorders question as legitimate documents - such as trying to use ones birth certificate to record and filing themselves as property such as real estate. They also engage in fraudulent scams like trying to eliminate mortgages or hide ones income in a series of trusts. In these tough economic times many of their members have tried get rich schemes and gotten individuals involved by the lure of making money. Many have defrauded banks with no intensions of paying them back. All of which has led to many individuals being imprisoned for fraudulent scams and tax evasion. Many of these individuals later have threatened violence against the courts and law enforcement. Attached you will find a document that was recorded by an assumed member at a County Recorder s Office. It illustrates the unique language used by individuals in the Sovereign Citizen Movement to help you further identify these individuals. With the use of the internet and text messaging the movement has gained momentum in numbers with the ability to communicate and get there word out across the United States much easier. This has allowing individuals to become more engaged in the day to day activities of their movement. Numbers have grown in the last few years and are believed to a direct reflection of their increased use of the internet to recruit people. So, what should Assessors be on the lookout for when they are out at a property? Any reference to the Sovereign Citizens organizations or their belief in common law Members will regularly say that they do not recognize our government as having any control over them (the conspiracy theory of government control) Signing of documents in red ink as they believe that shows a canceling of the document They may issue fake checks from the secret National Treasury they believe exists There can also be conflict in the office as Sovereign Citizens try to record documents or due to back taxes their property may be taken for lack of payment. In some counties, assessor office staff work directly with the recording staff and treasures office staff and have direct contact with these individuals. All our staff should be informed about these individuals and how to deal with them. Offices may want to set their own policies and review what course of action to be taken when talking to these members. Front office staff may be directed to get a supervisor to deal with individuals that want to discuss matters in our offices. Our appraisal staff is being directed to do not enter these properties if they are known Sovereign Citizen Members and the individual appraisal process for those individuals will be discussed on a case by case basis. If faced with talking to an individual that is believed to be part of these movements try to disengage as quickly as possible and leave the property. It is an unwinnable conversation as they will just continue to turn the comments or twist the statements to form questions for you to their belief and continued discussion could escalate the situation. They have also been known to secretly video tape confrontations with public officials and the post them on the internet. Once you have left the property, discuss the situation with your county assessor as to the actions your county will proceed with. So in conclusion it is wise the handle these individuals with caution if they are determined to be part of the movement. As many other radical groups of the past this group also will probably diminish somewhat or disband over time. Till then keep your eyes open and ears listening for the signs of these individuals. Additional Reading: Search the internet for Sovereign Citizen Movement Example - The Lawless Ones Special Report put out in August 9 th of Also search Sovereign Citizens on You Tube. 43 Equal Eyes Winter 2013

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58 Equal Eyes Presents: The 2013 MAAO Photo Contest! REFLECTIONS... REFLECTIONS... The 2013 contest is intended to be abstract! Send us original, high resolution work to be eligible. The subject can be reflection of anything you feel is appropriate to the theme! No need to explain, just give it a title... 1st Prize: $100; 2nd & 3rd Prize: $50 The winning photos will be chosen by the Editorial Committee and announced in a future issue of Equal Eyes. PHOTOS TO: editor@mnmaao.org no later than 06/01/ Equal Eyes Winter 2013

59 FEATURE The BILLION-dollar Assessment State Assessed Property: Part III: Utilities & Pipelines Written by Michael Stalberger, SAMA Blue Earth County Assessor The work of the State Assessed Property work unit results in a total estimated market valuation of over $11 billion annually for the approximately 145 companies that are valued as state assessed property. While many steps and terms in their valuation are familiar to assessors statewide and the appraisers in the unit are at least income-qualified Certified Minnesota Assessors like many of their colleagues in counties and cities, the valuation process truly is a specialized one that many other assessors do not fully understand. This article describes the assessment of Utilities and Pipelines in Minnesota and starts to describe the differences and similarities in the assessment processes. It is the third in a series to be included in Equal Eyes designed as an informal introduction to the State Assessed Property unit and its unique role in the assessment practices of the state. Please review the first and second articles to learn more about the Airflight Production Tax and Wind Energy Production Tax and for additional background information. Introduction As described in the first article in this series, Minnesota state law requires the Commissioner of Revenue to value several types of real and personal property. State statutes describe the requirements for these valuations, and Minnesota Rules provide the administrative framework for the process of the valuations by the Commissioner and therefore the State Assessed Property (SAPs) unit. The property types related to state assessed property include flight property, railroad property, pipeline property, and utility property. Additionally, the Commissioner determines the Wind Energy Production Tax annually. The SAPs unit conducted a Utilities Forum on October 24, 2012, where industry representatives and county officials were brought together to learn about the assessment of utility and pipeline property. The forum was an opportunity for everyone involved to ask questions and better understand this complex subject. There was time for questions and networking to connect company representatives with counties that host their property. The assessments of utility and pipeline properties made by the SAPs unit follows a process that is most similar to what assessors do throughout the state. It is essentially a valuation of the property 59 Equal Eyes Winter 2013 through the income, cost, and (a version of the) market approaches which are then reconciled. Of course, this is an oversimplification, and there are numerous differences that make the assessment of utility and pipeline properties unique. First, a refresher of some commonly used terms (see the first article for more detailed definitions): Allocation The process of distributing a company s total unit valuation (its going concern value) to the portion of the company located in Minnesota. Apportionment The process of distributing the Minnesota allocated market value (called apportionable value ) to the specific locations and taxing districts throughout the state in which the company operates. Capitalization Rate and Cap Rate Studies The capitalization rate is the relationship of income to capital investment or value, expressed as a percentage. For state assessed property, the work unit has different capitalization rates for different industries that are determined annually based on cap rate studies that are completed. Minnesota Rules Rules are general statements adopted by agencies to make the laws it enforces or administers more specific. They are also used to govern the agency s organization or procedures and are only adopted after a public rulemaking process. The State Assessed Property unit utilizes rules for its valuation processes. The rules for assessing utility property are located in Chapter Pollution Control Exemption This exemption, which reduces the allocated values of companies in certain industries, is determined by the Minnesota Pollution Control Agency. It can only be granted for real or personal property/equipment operated primarily for control or abatement of air, water, or land pollution. Operating Property Operating property has different meanings depending on the industry, but generally it is any tangible property owned or leased by a state-assessed company that is directly associated with the production or operation of the company or its product. It is generally assessed by the state. Going Concern The value of the going concern refers to the total value of the property (including both real property and intangible personal property attributed to the business. The State Assessed Property unit values the going concern for all the businesses as this value most accurately represents their values as operating business enterprises.

60 SAP in Minnesota, continued Non-operating Property Non-operating property may be owned by a state-assessed company, but it is not used in the operation of the company or its product. Generally, it is assessed locally. Sliding Scale Market Value Exclusion This exclusion is provided for by Minnesota Statute ( ) and is determined by the Minnesota Department of Commerce. It is only for electric generation facilities (excluding wind energy) and excludes a portion of the market value associated with equipment (no land or buildings) depending on the efficiency of the facility as long as it exceeds the standard that is in law. Sixty-Day Rule Allows the Commissioner to issue corrections to values that are required by August 1 through October 1 (thus the 60 days ) for most values determined by the unit. Unitary Valuation Also referred to as unit valuation, it is a valuation process that utilizes three approaches: cost, income, and market (the State Assessed Property unit often uses the stock and debt approach). It is used for properties assessed by the state because it correctly accounts for/captures the going concern value. Assessment of Utility and Pipeline Property The responsibility for the valuation and assessment of the real and personal property, tools and machinery, and transmission and distribution lines of Timeline for the Valuation Process electric companies is divided between local or county assessors and the Commissioner of Revenue. Since the Commissioner of Revenue by law must assess some of the utility property in the state of Minnesota and has general oversight responsibilities for all assessments of property, the commissioner will estimate the valuation of the entire system of utility companies operating in Minnesota pursuant to Minnesota Administrative Rule The local or county assessor will be responsible for assessing the non-operating property. Minnesota Rules, Chapter , subpart 11 defines operating property as any tangible property that is owned or leased, except land, which is directly associated with the generation, transmission, or distribution of electricity, natural gas, gasoline, petroleum products, or crude oil. Examples of operating property include, but are not limited to, substations, transmission and distribution lines, generating plants, and pipelines. Property that is located on the same or contiguous parcels of land as operating property is presumed to also be operating property. Land is always nonoperating property. Non-formula-assessed property is defined in subpart 10 of the same chapter as property of a utility which is valued by the local or county assessor rather than by the commissioner of revenue. The unit values for operating property are provided to counties so taxes can Jan 2: Assessment Date Early Jan: Property record forms and annual returns are mailed to companies Jan/Feb: SAPs work unit conducts annual cap rate studies Mar 31: Filing deadline for companies (Apr 15 extension possible) Mar 31 June 15: SAPs unit completes appraisals and hears appeals June 30: Preliminary apportionment reports sent to counties for review/corrections July 15: Deadline for counties to respond with corrections Aug 1: Final orders of value sent to counties After Aug 1: Final apportionment reports sent to companies Fall: Annual Revenue Utilities Forum be collected as part of the property tax process. Some of these values are referred to as ordered and must be used by counties while others are recommended and are provided to counties but they can determine their own valuations for that portion if they so choose. The Commissioner may also increase or decrease values as necessary to achieve equalization. Rule states that the Commissioner establishes the unit value for each utility company operating within the state. The entire system is valued utilizing data relating to the cost of the property, the earnings of the company owning or operating the property, as well as other indicators of value if applicable. The resulting valuation is allocated to each state in which the utility company operates. The value of the property located in Minnesota that is exempt from property tax or that is locally assessed is subtracted from the value allocated to Minnesota. Next, the portion allocated to Minnesota is distributed by the process of apportionment to the individual parcels owned by the company within the state. The data used in the valuation, allocation, and apportionment process is drawn from reports submitted to the Department of Revenue by the utility companies on or before March 31. The department conducts periodic examinations of the supporting data for these reports. Finally, the value is equalized based on sales/assessment ratios determined by the Department of Revenue. The commissioner s values for the properties that are assessed by local or county assessors are strictly advisory in nature. The commissioner must certify the assessments to the county auditors on or before August 1 of each year (with corrections possible through October 1). The assessment process is generally the same for different segments of companies in the overall utility industry. There are some differences, however, depending on the business type as well as the type of property. 60 Equal Eyes Winter 2013

61 SAP in Minnesota, continued Electric Light and Power Utilities Property All non-operating property of electric light and power utilities should be assessed by the city or township assessor of the taxing district where the real property is located. Where structures are situated on land that is owned by a utility, both the land and structures should be assessed as real estate. The same rule applies where the structures are situated upon land held by the utility by virtue of a lease for a term of three or more years from the state or from any religious, scientific or benevolent society or institution, and where the structures are situated upon land held by the utility by virtue of a lease for any period of time from a private individual or private corporation. It is only when the structures are situated on a leased portion of railroad right-of-way or on land leased from the state for a term of less than three years that the structures should be assessed as personal property. The term structures includes all buildings, fences, concrete foundations, substation poles and supporting frames. It also includes all electric substations, generating stations, transformer stations, and switching stations. All such structures are to be assessed as real estate. The appropriate classification is class 3a commercial-industrial property. All tools, implements and machinery which are fixtures to real property are assessed as part of the real estate. These should also be class 3a property. Minnesota Statutes, section , subdivision 24, paragraph (a), clauses (2) and (3), states: (2) All personal property that is: (i) part of an electric generation, transmission, or distribution system; or (ii) part of a pipeline system transporting or distributing water, gas, crude oil, or petroleum products; and (iii) not described in clause (3), and all railroad operating property has a class rate as provided under clause (1) for the first tier of market value and the remaining market value. In the case of multiple parcels in one county that are owned by one person or entity, only one first tier amount is eligible for the reduced rate. (3) The entire market value of personal property that is: (i) tools, implements, and machinery of an electric generation, transmission, or distribution system; (ii) tools, implements, and machinery of a pipeline system transporting or distributing water, gas, crude oil, or petroleum products; or (iii) the mains and pipes used in the distribution of steam or hot or chilled water for heating or cooling buildings, has a class rate as provided under clause (1) for the remaining market value in excess of the first tier. Personal Property of Utilities Minnesota law defines as personal property, all gas, electric, and water mains, pipes, conduits, subways, poles, and wires of gas, electric light, water, heat or power companies, and all tracks, roads, conduits, poles, and wires of street railway Ordinarily, personal property is exempt from ad valorem property tax. However, the law also indicates that personal property which is part of an electric generating, transmission, or distribution system or pipeline system transporting or distributing water, gas, crude oil, or petroleum products or mains and pipes used in the distribution of steam or hot or chilled water for heating or cooling buildings and structures; and personal property listed in the above paragraph are taxable personal property. Therefore, only that personal property which is operational and part of the utility s system is taxable. The personal property of gas and water companies shall be listed and assessed in the town or district where it is located, without regard to where the principal or other place of business of the company may be located. The commissioner certifies the values to county auditors on or before August 1 of each year (corrections can be issued through October 1). Note: Electric power distribution lines and their attachments and appurtenances that are used primarily for supplying electricity to farmers at retail are exempt from taxation pursuant to Minnesota Statutes, section , subdivision 19. (As such utility companies receive exclusion for their rural distribution lines on their annual return.) Cooperative Electric Light and Power Associations The majority of cooperatively-owned electric utilities are financed by the federal government under the Rural Electrification Administration (REA). These REA cooperatives are not exempt from taxation simply by reason of being federally financed. Their property should be assessed on the same basis as that of other cooperative electric light and power associations. All real and personal property of cooperative electric light and power associations, which is located within the boundaries of any incorporated city is subject to assessment in the same manner as the real and personal property of privately-owned electric light and power utilities. It is valued and assessed by the appropriate assessor. Rural in this case means any area of the state not included within the boundaries of any incorporated city, and shall also include both farm and nonfarm population thereof. Cooperative associations that are organized under the provisions of Laws 1923, chapter 326 and are engaged in electrical heat, light or power business upon a mutual, non-profit and cooperative plan in rural areas are recognized as quasi-public in nature and purpose. Such cooperative associations must pay an annual membership tax of $10 per one hundred members and fraction thereof, which is imposed annually by the Commissioner of Revenue on December 31 of each tax year. The membership tax is due and payable on or before March 1 of the succeeding year. This tax is in lieu of all personal property taxes, state, county or local, that are made upon distribution lines and the attachments and appurtenances thereto of such associations located in rural areas. If the tax is not paid by the deadline, a penalty may be charged. 61 Equal Eyes Winter 2013

62 SAP in Minnesota, continued All property of cooperative associations that are organized as referenced above, including both transmission and distribution lines, located within the corporate limits of cities, continues to be subject to ad valorem assessment and taxation. All real property of cooperative electric light and power associations situated in rural areas should be assessed in the same manner as real property owned by a privately-owned electric light and power utilities is assessed. Assessment of Privately-Owned Gas, Water, Sewer, and Central Heating Systems All real and personal property owned by privately-owned gas, water, sewer and heating systems should be assessed by the city, township or county assessor of the taxing district where the property is located. This property is assessed and taxed in the same manner as other real property. Assessment of Municipally-Owned Light, Heat, Power, Gas and Water Systems Generally, both real and personal property of municipally-owned utilities is exempt from taxation as public property used for a public purpose in both the Minnesota Constitution and Minnesota Statutes, section , subdivision 8. Numerous municipally-owned utilities extend their lines outside the boundaries of the municipality for the purpose of serving private customers, and are exempt from taxation if they convey electricity, heat, gas or water, which is surplus, and the sale of which is incidental to the public purpose of supplying the municipality. However, if the lines are used to convey utility services to a substantial extent to customers outside the corporate limits, they may be subject to assessment. Municipally-owned property that is leased to private parties becomes subject to taxation. Pipeline Property The Commissioner of Revenue is also charged with assessing the personal property consisting of pipeline systems of mains, pipes, and attached equipment DID YOU KNOW Did you know there is a National Pipeline Mapping System (NPMS)? It is a geographic information system sponsored by various government agencies. The NPMS consists of geospatial data, attribute data, public contact information, and metadata pertaining to various types of pipelines. Its primary purpose is pipeline safety, but the locational information may help assessors in identifying pipeline property. There is a public view with limited information. There is also potential access to more sensitive information and that allows downloading the GIS layer. It is available by application of the local unit of government. Visit here for more information or here for a more specific query. of pipeline companies and others engaged in the business of transporting natural gas, gasoline or other petroleum products via pipelines. These pipeline systems are sometimes visible, running through fields in greater Minnesota and other times the only visible portion is a single terminal pipe and associated buildings enclosed in a fenced-in area at a terminal location. After the valuations are determined by the SAPs unit, they are certified to the counties so taxes can be collected as part of the property tax process. The responsibility for the valuation and assessment of pipeline systems of gas, water and petroleum companies is divided between local or county assessors and the Commissioner of Revenue. All land and non-operating real property of natural gas, crude oil, and petroleum pipeline companies should be assessed by the local assessor of the taxing district in which the real property is located. Real property does not include the pipeline itself. The Commissioner of Revenue is responsible for assessing the operating real property and the personal property which consists of the pipeline system of mains, pipes, and equipment attached thereto of pipeline companies and others engaged in the operations or business of transporting natural gas, gasoline, crude oil, or other petroleum products by pipelines. The Commissioner will provide those values to the city or county assessor by order, on or before August 1 of each year. The Department of Revenue can issue a correction for pipeline assessments through October 1, if it is determined that the amount certified on or before August 1 is in error. This does not apply to the assessment of either the products transported through the pipelines. Additionally, the lines of local commercial gas companies engaged primarily in the business of distributing gas to consumers for retail purposes do not get assessed as pipelines. They are considered utility property. Pipelines used by the owner thereof to supply natural gas or other petroleum products exclusively for said owners own consumption and not for the resale to others is also not assessed as a pipeline. Example of the Utility/Pipeline Valuation Process For the 2012 assessment, the State Assessed Property work unit valued 94 utilities and pipelines. Of these, 51 were valued using the unitary valuation process (that process is described below). These 51 companies values were then apportioned to approximately 10,400 parcels. The other 43 companies were valued utilizing the Cost Less Depreciation (CLD) approach (which will be summarized later). As you ll recall, the SAPs unit appraises companies as a single unit (the going concern value) including real property and tangible personal property that is part of the company s operating property. The non-operating property is locally-assessed. Land is always locally assessed for utility and pipeline companies. The valuation process is dictated by Minnesota Statutes and Rules. The rules were last rewritten in The SAPs unit applies all three approaches to value (cost, income, and market (using stock and debt)) and always considers them all even though certain approaches carry more weight depending on characteristics of the company. 62 Equal Eyes Winter 2013

63 SAP in Minnesota, continued DID YOU KNOW? The State Assessed Property work unit generates about 24,000 pages of valuation information each year for all company and county reports. It is quite a process to stuff this information into envelopes and complete the annual mailing. If there are any revisions, the number of pages is quickly multiplied! With the new implementation of the GenTax processing system, the work unit hopes to go to a paperless process to save resources paper, and time. where they meet as a group to review the appraisals and determine the weightings for each company. Once a final valuation estimate has been made, the unit value for the entire system is allocated so that the only value remaining is for the portion in Minnesota. This allocation is made using two ratios: Much like our assessment process, the SAPs appraisal process incorporates multiple years. The 2012 assessment value is for 2013 taxes. It is based on 2011 financial year reporting from the companies. Cost Approach. Minnesota Rules subpart 3 direct the use of the cost approach. The companies provide information to the SAPs unit that they also have to file with various government entities. They provide additional information for the property in Minnesota to be used for the apportionment process, as well. Essentially, the cost approach indicated value formula is: Total Plant Cost Total Depreciation = Cost Indicator of Value. The total plant cost includes the actual plant in operation, as well as any newly constructed plant that is still being completed (construction work in progress), any contributions in aid of construction, and any leased property. The total depreciation includes the book depreciation as reported by the company, and any additional depreciation for the contributions in aid of construction and on the leased property. The company s book depreciation is verified and audited by the various governmental regulating agencies. Income Approach. Minnesota Rules, Chapter , subpart 4 directs the use of the income approach. The companies provide information to the SAPs unit that they also have to file with various government entities. They provide additional information for the property in Minnesota, as well. Essentially, a weighted average of three years of net operating income is capitalized to arrive at an income indicator of value. Net operating income is operating revenues minus various expenses (operating, maintenance, depreciation, amortization, income and other taxes, plus other qualifying expenses). Any deferred taxes are added back into operating revenue 63 Equal Eyes Winter 2013 before arriving at the net income. The capitalization rate is determined on an industry-specific basis. Each year, the SAPs unit conducts cap rate studies for Electric Utilities, Gas Distribution, Gas Transmission, and Pipelines. The resulting rates are industry-derived and are not company-specific. Various methodologies are utilized to develop capitalization rate estimates, and the SAPs unit weights the results of the methodologies to arrive at a single cap rate to be applied to all companies within that industry segment. Market Approach. The SAPs work unit utilizes a market approach that is different than the sales comparison approach common to most assessors. The unit relies on the stock and debt approach, which has been supported by the United States Supreme Court. It relies on an accounting principle that states that the value of the assets = the value of the liabilities plus stockholders equity. The formula incorporates the number of outstanding stock shares and their price as of a given period of time. It also incorporates the value of long-term debt and current liabilities and assets. The resulting value is then adjusted based on percentage of operating property to arrive at a value for the company. The underlying concept is that the value of the company is no greater than what a group of investors would be willing to pay for it by buying stock shares in the company. Final Valuation Estimate. To arrive at a final valuation estimate, the SAPs unit reconciles the three approaches by applying different weightings based on specific considerations for the industry segment and for the specific company being valued. This is where the art and science of appraisal come together and it is also where the expertise and experience of the appraiser is necessary. The SAPs unit conducts regular meetings during the valuation season 1: a ratio of the portion of the cost of the system in Minnesota compared to the cost of the entire system, and 2: a ratio of the portion of the operating revenues generated in Minnesota compared to the total operating revenues After the value has been allocated to the Minnesota-only value, the next step is to deduct for property/value not assessed in Minnesota based on state laws (such as pollution control, office furniture, and uninstalled meters) as well as to deduct for property/value that is excluded from the SAPs generated value because it is locally-assessed (such as land). This remaining value is then apportioned to each taxing jurisdiction. The apportioned values (which may also be equalized if needed) are determined similar to how the allocation occurs. They are based on ratios of the total cost within Minnesota, which is then multiplied by the original cost of the system on each parcel as reported by the company. The apportioned value is reported to the local assessors. Cost Less Depreciation As noted previously, most companies are valued using the three approaches to value, but some have elected to be valued utilizing the Cost Less Depreciation method. Cost Less Depreciation (CLD) is used as the valuation process for 43 utility companies encompassing 1,100 parcels. The total value for the 2012 assessment was nearly $467 million. Most of the companies valued on a CLD basis are smaller municipal or rural cooperatives. The cost of the property (including structures and machinery) new is depreciated at a rate of 2.5% annually until it reaches a maximum of 75% depreciation. The resulting value is then apportioned and reported to the local assessor. County and City Role in Assessment of Utility and Pipeline Property As is evident in this article, the assessment of utility and pipeline property is quite

64 SAP in Minnesota, continued specialized, and most of the work is completed by the SAPs work unit. However, there is a role for county and city assessment professionals. The primary role is that of on-the-ground local observers. It is important for local assessors to be aware of changes or new construction that they identify in their areas. This information is essential so that valuations for the companies can be placed on the appropriate parcel and in the appropriate taxing jurisdiction. Additionally, the SAPs unit relies on local assessment professionals to provide feedback on the preliminary apportionment reports that are mailed in July of each year. These reports provide a first look at how the valuations for the companies will be apportioned to each taxing jurisdiction based on the most current information the work unit has. They should account for new construction or changes in company operations. They are the last time for the local assessor to report changes or concerns so they can be efficiently handled by the SAPs unit. Please remember the overall assessment for each company is only as good as the verification completed by each county since the assessments of each company are usually shared by numerous counties as the property is located in more than one county. A late change due to a discovered error results in valuation changes for all host counties that share that company. Proceedings and Appeals for Utility Valuations The policies and procedures for appealing the valuation and classification of stateassessed property are slightly different from the appeals process provided for other properties subject to ad valorem taxation. An appeal by a utility company regarding property for which the Commissioner of Revenue has provided the city or county assessor with ordered or recommended values must be brought against the commissioner and not against the county or taxing district where the property is located. Utility and pipeline companies can make administrative appeals - as well as court appeals - when they claim the utility property has been partially, unfairly, or unequally assessed; assessed at a valuation greater than its real or actual value; misclassified; or that the property is exempt. This applies to pipelines, gas and water companies and electric light and power companies and only with regard to taxable net tax capacities that have been provided to the local jurisdiction by the commissioner and which have not been changed by the local jurisdiction. This appeals process does not apply if the taxable net tax capacity being appealed is different from that established by the commissioner, or if the appeal claims that the tax rate applied against the property is incorrect or that the tax has been paid. In those cases, the appeal is made to the local jurisdiction. The SAPs unit prefers court appeals to be a last resort for utility and pipeline companies. There are administrative appeal options that are available and oftentimes are enough to resolve the issues. In cases where a court appeal is necessary and it is filed due to the implementation of the commissioner s order, certification or recommendation, the petition must be brought against the Commissioner of Revenue under Minnesota Statutes, chapter 278 (Tax Court). The appeal petition that initiates the appeal against the commissioner must be filed with the Minnesota Tax Court in Ramsey County. The court petition must include all parcels encompassed by that order which the petitioner is objecting to. An order of the commissioner is either: a certification or notice of valuation by the commissioner for the utility property types described above; or the final determination by the commissioner of either an administrative appeal conference or informal administrative appeal. The court petition must be filed within 60 days of the date of the valuation notice. Companies may request a 30-day extension from the court if they believe they have a good cause for the extension. Like all other ad valorem taxpayers, the companies also have until April 30 of the year the tax is payable to also file the court petition. As an alternative to a court petition, companies that submit their required reports by the required due dates may appeal administratively to the commissioner prior to court action. The administrative appeal must be submitted in writing within 10 days after the date of the commissioner s valuation certification or notice to the company or by June 15, whichever is earlier. After a written request for appeal is received, the commissioner shall conduct the conference upon the commissioner s entire file and record and any additional information that may be offered by the company. The conference must be held no later than 20 days after the date of the commissioner s valuation certificate or notice to the company, or by the date specified in an extension. Within 60 days after the conference the commissioner shall make a final determination of the matter and shall notify the company of the final determination. The conference is not a contested case hearing. In addition to the opportunity for a conference, the commissioner shall also provide the railroad and utility companies the opportunity to discuss any questions or concerns relating to the values established by the commissioner through certification or notice in a less formal manner. The SAPs unit prefers companies direct these less formal information requests and discussions start with an to sa.property@state. mn.us. This is the best way to discuss any concerns with valuation determinations or possible errors. This does not change or modify the deadline for requesting a conference, the deadline to appeal an order of the commissioner or the deadline for appealing to Tax Court. This has been a continuation in an introductory review of the State Assessed Property work unit and the work they do to determine the assessment of utility and pipeline property in the State of Minnesota. In a future issue of Equal Eyes, the focus will shift to the one additional industry assessed by the work unit railroad property. Stephanie Nyhus, Property Tax Compliance Officer in the State Assessed Property work unit, provided statistical information and background assistance for this article. Thank you, Steph! 64 Equal Eyes Winter 2013

65 Assessor Retirements Transitions Suzie Lohse s grandfather, Isaac Berg, was the first Grant County Assessor. He was elected in 1947 on write-in votes while he was actively running for the County Auditor s position in that election. She didn t know what his duties were as the Assessor; she only knew that he worked at the courthouse. He also held the positions of County Recorder and County Auditor before he retired. Suzie was a displaced school teacher. Her teaching position was terminated when Title IX came into the public school systems. She searched for teaching jobs, but there were no openings in the schools surrounding where she was living, so she did the next best thing and became a substitute teacher and coach for the school in her home town. In the summer of 1979, she saw a help wanted ad in the local newspaper for a Deputy/Office Manager for the Grant County Assessor s office. Compiled by Nancy Gunderson, SAMA Clay County Assessor Editorial Committee Member Suzie Lohse retires from Grant County Suzie applied for that job, not because she wanted to be an assessor or even knew what they did, but because she needed a full time job and a regular pay check. Vern Johnson had just been hired to replace Dan Franklin as the County Assessor and he was looking for a staff member. After two interviews and many questions, the position was given to another. About a month later Suzie got a call from Mr. Johnson asking her to come to work part time. He had gotten his state orders and was given permission to hire three part time people to help get the state orders processed and assessed value calculations done in a timely manner so the Auditor could get the taxes calculated and the Treasurer could get them all typed up and sent out on time. That s how it all started for her. She worked part time as needed for the assessor s office, auditor s office and the treasurer s office through Suzie started working full time in the Assessor s office on December 27, Suzie earned her CMA in 1988, AMA in 1991, and SAMA in She was a member of WCMAP where she held the office of Secretary/Treasurer, Vice President, President, and Chair of Education Committee. She also was an instructor for Property Valuation Short Course for ten years. Vern retired from the position of Grant County Assessor in March of She applied for the job and was given an interview. The night of the interview, the café` across the street from the courthouse had a huge fire and took the attention away from the interview. Very few questions were asked of her as the majority of the Commissioners were looking out the window at the fire and Suzie Lohse activity over there. They eventually voted 3-2 to hire her for the County Assessor position to complete Vern s term. Her first day as Grant County Assessor was April 1, 1994, and her first duty was to take on the Local Boards of Appeals that began that day, and a tax court petition shortly after. Suzie has been a member of MAAO since She has been a very active member within Region VII. She feels so fortunate to be a part of this group. They are her friends and advisors, counselors and soundboards. Without them she would never have lasted in this profession all these years. Suzie retired December 31, Her retirement plans are uncertain at this time - maybe find a part time job with less stress. She plans to spend as much time as possible with her youngest grandson, volunteer at the elementary school up the block, do a lot of fishing, enjoy staying home on those stormy days and get reacquainted with her sewing machine. Suzie and her husband, Bob will celebrate their 40 th wedding anniversary next summer. They have four children: Trevor & wife Tonya, son Anthony; Trisha & husband John, son Jonah; Tom; and Tana. They will enjoy family time with all of them since they are her reason for living, laughing and loving. 65 Equal Eyes Winter 2013

66 Revisiting the Retirees: Dean Moller I have been writing this column for close to two years now, and have tried my best to find retirees from a variety of areas throughout the state. I have covered the metro area fairly well, as well as the northern part of the state but until this issue, have only managed to include one retiree from southern Minnesota. Well, in searching old issues of Equal Eyes for retirement notices, I found one announcing the retirement of the longtime Faribault County assessor back in Because of my finely honed assessor geography skills, I immediately knew that Faribault County is not in the metro area or northern Minnesota, so I was good. Researched and Written by Corey Erickson, AMA Ramsey County Editorial Committee Member This issue we catch up with Dean Moller, Former City of Faribault County Assessor So for this issue, our retiree is none other than Dean Moller, the head honcho of Faribault County s assessing crew from 1979 to Dean started his illustrious assessing career only six years prior to becoming a County Assessor. Back in 1973, Dean needed a job, and with a background in real estate, answered an ad for a Deputy Assessor in Martin County. With a real estate sales license and previous experience working for a farm management company selling farms, it was no surprise that Dean got the job with Martin County. A quick six years later, Dean found himself as the Faribault County Assessor. Soon after arriving in Faribault County, Dean had a very challenging situation on his hands. It turned out that Faribault County had very limited information on their properties. This meant that Dean s first big assignment was picking up the physical data and likely everything else on over 13,000 parcels. Yikes. If you have even a remote interest in becoming a County Assessor someday, and you had planned to just skim this column, I recommend that you attempt to read closely for at least the next paragraph. So, Dean had a big project on his hands. Actually, he recalls that he had two challenges to overcome: the first was collecting all of the data, and the second was properly communicating this undertaking to the public. The first challenge, although plenty daunting, may have been the easier of the two, because picking up property data is a fairly straight forward process. But to prevent World War III from breaking out in Faribault County back in 1979, Dean handled the not-to-be-ignored public relations part like a seasoned pro. First, he made sure the upcoming reassessment (actually complete redo is the more accurate description) was known to all the property owners of the county by putting articles and notices in all of the local newspapers. He didn t stop there though. Dean also recognized the importance of getting the local government officials on board with the undertaking. Think about it. Mayor John Doe from Anytown, Minnesota needed to properly respond to his constituents who called asking why county assessors were out measuring every building on every parcel, including those structures that had been around for decades. According to Dean, once the different city councils and other officials understood the value to them in the project, they were completely behind the undertaking. So how did it turn out? Well, Dean recalls that 95% of the county s residents cooperated with his staff, which I think we can agree is a huge success. With only three appraisers in the Faribault office at this time, the project took a few years to complete, and included at least one Board of Review Meeting that went until 2 am. However, after the project was completed, and Faribault County had exemplary property records, it made for an easy (or maybe I should say easier ) tenure for Dean Moller as the County Assessor. According to Dean, We took some heat for a couple of years, and then it was quiet. After all, perfect data means perfect values, right? Well, slight exaggeration here, but I think we all know good data helps. It was clear in talking to Dean that he thoroughly enjoyed his career in assessing. His favorite part of the job was the actual appraisal work, which it sometimes seems is crowded out by all of our other duties as assessors. Dean also enjoyed witnessing how MAAO evolved over his career from having a limited role for Minnesota s assessors to being the prime source of education and information for the state s assessors. Dean was a proponent of the more stringent assessor licensing requirements that took place over his career, and enjoyed the many educational offerings from MAAO that resulted from those new requirements. On the personal side, Dean and his wife Marilyn will celebrate their 50 th wedding anniversary in April. They have two sons, one daughter and 13 grandchildren. Dean and Marilyn are very lucky in that all of their children and grandchildren live in Minnesota, so they see each other very often. In addition to spending time with his family, Dean enjoys many hobbies, including hunting, fishing and wood working. In fact, Dean has his own wood working shop in his garage at home, and with the increased free time afforded in retirement, he has used his wood working skills to make an occasional Christmas gift for members of his family. Even though Dean has been retired for nearly twelve years, he still manages to make frequent visits to his old office in Blue Earth. He enjoys visiting with the staff, some of whom were around when Dean was the assessor. I really enjoyed my time in assessing. It was good to me, said Dean. Well, after 22 years as the Faribault County Assessor and among other things, completing an entire reassessment, Dean was undoubtedly good to assessing too. 66 Equal Eyes Winter 2013

67 Feature Reviewing the 2013 Property Valuation Course Written by Dan Whitman, SAMA PVC Coordinator & MAAO 2nd VP Martin County The 2012 Property Valuation Courses were completed during the 1 st week of November. There were 130 people who attended this year, which is a nice increase in attendance from last year. PVC continues to be successful; the study guide and power point presentation format developed by the MN DOR was added last year and is very popular with the attendees. Last year s new instructors hit the ground running this time around. All of them added greatly to the success of this year s classes. We added another instructor for 2012: Catherine Arth, Chisago County, sat in and assisted with some instruction at one of our courses. The addition of Catherine greatly positions us for success next year. PVC is a great way to get your feet wet instructing classes. Anyone interested in doing some teaching should please contact me. Our weather was great once again this year. We always have at least a couple schedule challenges, but I think we worked through most of them without any major issues. Some of the items covered at this year s courses were: Assessor duties local vs county Timeline for the assessment cycle Basic laws and principles Assessment and Appraisal terminology and definitions Defining market value New law summary Public relations and dealing with difficult taxpayers Manufactured homes, park trailers and travel trailers Sales ratio studies and CRV s Classification review Overview on special property tax programs Homesteads Avenues for appealing the assessment, Open Book, Local Boards, County Boards Technology, assessor resources and useful websites Ag Market and current trends Regional topics The reviews for all classes were very good and attendees seemed to very much enjoy both the instructors and guest speakers. The most often mentioned positive comment is the amount of interaction and discussion that takes place. The networking and hearing how others deal with the same issues always proves to be very helpful. There were also many comments on PVC Guest Speakers. The special guests bring a wide variety of information, experience and knowledge to our classes. They proved to be very popular again. Some of the other most enjoyed items listed in the reviews this year were: Best practices Humor Discussion about Ag / Rural land classes Residential valuation discussion Law change updates Classification How cute the instructors were (luckily that was one of the courses we had two young ladies instructing and not a couple of our older well-seasoned guys) We have already discussed updating the course plan next year to keep it fresh while still providing a great take home reference guide. So we are anticipating another great year in PVC Attendance by Location Location Instructors Attendance Waite Park Gary Grossinger & Greg Kramber 14 Fergus Falls Bob Hansen & Reed Heidelberger 26 Marshall Kelly Schroeder & Sue Schulz 36 New Ulm Anne Grunert & Joy Kanne 25 Thief River Falls Nancy Amberson & Bruce Dahlin Equal Eyes Winter 2013

68 SOLD!! Maple Grove Mansion Sale Price: $1,125, Eagle Lake Drive North, Maple Grove Bringing new meaning to the definition of overbuilt! One-of-a-kind two story 8,200 square foot contemporary style home built in 2005 Located on Eagle Lake in Maple Grove on a.71 acre double site with 100 feet of shoreline in the midst of significantly older inferior housing stock. Built with entertainment in mind. Specialty rooms throughout home: 55 foot long art gallery, theatre room, billiards/bar room, private porch featuring a fireplace, wet bar, hot tub, flat screen TV and drop down projection screen for movies, roof level deck with spectacular lake views to name a few. Custom finishes throughout with 12 ft + ceilings. 4+ bedrooms 6 baths Original List Price: $1,695,000 Sold 10/12 $1,125, Cumulative days on the market 2012 Estimated Market Value: $1,251, Taxes: $21,400 If located in a neighborhood of similar housing stock, how much more would this home would sell for? 68 Equal Eyes Winter 2013

69 What s New on the MAAO Website: New enhancements are coming to your fingertips MAAO website vendor is in the final stages of BETA testing on new search features available to you as a member! Enhanced Searching Written by Kelly Baillet, SAMA Dakota County Information Systems Committee, Chair It s always a pleasure to find something that matters. Don Cornelius This year, our vendor has been working on improving the search capabilities to members across our website. One of those tools is the ability to search documents we have stored on the website in our media manager. The media manager is where we store all the documents, PDF s, images etc. As this product moves out of the BETA version, we should be able to index all documents stored in our media manager. We see this as a very nice enhancement to our membership. Members will be able to search documents specific to the topic of interest. This information could be stored in research documents, Equal Eyes Articles or just meeting minutes. To date, we have indexed the majority of the Region meeting minutes to test this feature. Figure 1 One might be searching for example, wanting to find out when a particular topic was discussed or noted such as, discussion on classification of ethanol storage tanks. Unlike a typical site search, our new feature allows us to search based on permissions. This was a critical part of the search feature for our organization to maintain security of documents shared across the membership. If you search the topic as a non-member not logged in, you utilize the search entry box in the top right hand corner, entering discussion on classification of ethanol storage tanks (Figure 1). Since Google is the preferred search engine utilized by our vendor solutions, the results are displayed directly onto a Google platform and offering you choices that are links to that reference MAAO and the search to anyone that goes to our website (Figure 2) Figure 2 69 Equal Eyes Winter 2013

70 However, once logged onto your MAAO account, your search tool transforms itself into something much more useful to the end user, YOU! (Figure 3) Notice the search appears the same, but... When you enter that same search in the same search box in the upper right hand corner, you retrieve a much more useful search result (Figure 4). If you open that document, you can pan to see that yes, in fact, Region 9 had that discussion (Figure 5) This is merely an example to show you how powerful your searches become as a logged in end user. As more documents and PDF s become indexed, you will see your search capabilities greatly enhanced. You can see that this search result provides you with an internal document that only members that are logged in can view. So when you want to find out when a specific topic was discussed or someone that may have specific knowledge about that topic.. SURPRISE, you have it at your fingertips! Figure 3..Stay tuned for many more coming enhancements to this feature! Figure 4 Figure 5 70 Equal Eyes Winter 2013