DEEPHAVEN CITY COUNCIL MINUTES
BOARD OF
APPEALS & EQUALIZATION
Monday, April
3, 2006
6:30 p.m.
1.
CALL TO ORDER: Mayor Pro Tem Skrede called
the meeting to order at 6:33 p.m.
Keith Kask
STAFF: Police Chief Virgil Gustafson and
City Administrator Dana Young
ABSENT: Mayor Tom Anderson
2.
BOARD OF APPEALS &
EQUALIZATION
Chairman
Skrede stated that the purpose of tonight’s meeting is to review property
valuations and hear from property owners who would like to appeal their 2006
estimated market value set by the City Assessor.
Anna
Gross, 4905 Highcrest Drive, stated that her 2006 market value increased 17.5%,
well above what was reasonable. She
stated that Roger Fazendin Realtors
informed her that the average increase in Minnetonka
Assessor
Dan Distel stated that he had talked with Mark Gross about the market value
increase from $486,000 in 2005 to $571,000 in 2006 and about the accuracy of
the information contained in the market
listing service which had the property listed for sale. He stated that although there have been a
number of properties that have sold recently, there are not a lot properties
that would be comparable with the Gross
property. He stated that he was still
comfortable with the 2006 estimated market value of $571,000.
Councilmember
Crockett stated that she knows the neighborhood fairly well and felt that the
price might be out of whack. She stated
that she doesn’t have a precise measurement on how much the market value might
be too high. Assessor Distel stated that
the surrounding properties increased 8-10% in value, the exterior of the
Gross’s home is of higher quality, they have a screened porch, and the listing
states that it is a completely renovated home.
He stated that he believes the $571,000 estimated market value to be a
valid number.
Councilmember
Kask stated that the 2006 estimated market value of $571,000, which is payable
in 2007, represents only a 20% increase in value since the Gross’s purchased
the home five years ago for $470,000. He
stated that this is not an unreasonable increase over a five year period and
that according to the market service listing, the Gross’s were currently asking
$849,000 for the home.
Chairman
Skrede stated that you also could not compare Deephaven’s market value growth
with Minneapolis. Administrator Young
stated that the Assessor had distributed a handout that shows the increase in
the estimated market value of the surrounding lake communities. He stated that Minnetonka’s estimated 2006
market value on residential homes was proposed to increase 7.6% and not 3.6% as
indicated earlier.
Chairman
Skrede asked Hennepin County Representative Bill Efferts why cities out in this
area are experiencing a higher rate of growth.
Bill Efferts stated that the estimated market values are based on what
homes are actually selling for in that particular area.
Councilmember
Crockett stated that she could see the Gross’s getting $571,000 for the house
more than she could see them getting $849,000.
Mayor
Anderson enters at 6:53 p.m.
Mayor
Anderson gave a brief history on limited market value and stated that all
significant growth in market values have
been suppressed by the limited market value.
He stated that the Assessor tries to establish an estimated market value
that is within 5% of the real value of the home and asked Ms. Gross if $571,000
represents 95% of the market value of the property? Anna Gross stated that she was not sure if it
did. Mayor Anderson stated that she
resides in a nice neighborhood and the property would even be nicely valued at
$625,000. Councilmember Crockett stated
that she felt that Dan Distel was getting close to an accurate value at
$571,000. Councilmember Kask stated that
while he was sympathetic to a 17% increase, he felt it was ironic that the
house was listed for $849,000.
Hennepin
County Representative Bill Efferts stated that the limited market value would
limit the 17% market value increase on the Gross’s property to a 15% taxable
market value.
Chairman
Skrede recessed the Board of Appeals & Equalization at 7:05 p.m. and
requested that Anna Gross meet with Assessor Dan Distel and County
Representative Bill Efferts to try to reach a consensus on the proposed 2006
market value of $571,000. He noted that
the Board would reconvene later in the evening to make a decision on Anna &
Mark Gross’s appeal and on the other appeals that are before the Board this
evening.
The
Board of Appeals & Equalization reconvened at 7:57 p.m.
Assessor
Distel stated that after meeting with Mary Gross, he would still recommend an
estimated market value of $571,000 for 2006.
He stated that the property had been undervalued in the size of their
basement and the overall quality of the home.
He stated that the $571,000 would equalize the value of the home with
the neighboring properties.
Anna
Gross stated that there had been no upgrades to their basement, other than
installing a drain tile and new carpeting.
She stated that the Assessor made his decision based on the
embellishments made in the market listing service. She stated that the Assessor didn’t inspect
their home and just did a drive by. She
stated that her home is similar to their neighbor’s house and the Assessor
based his market value estimate on the market listing service.
Councilmember
Crockett stated that historically the increase to $571,000 is closer to the
range of the price of the house.
Assessor Distel provided comparisons on the market values of neighboring
properties stating that there was a property valued at $617,000 next door,
another nearby property at $573,000 and a third to the rear of the Gross’s
property that is valued at $657,000.
Mayor
Anderson stated that land values appreciate faster than home values and that
the value on the Gross’s home appears to have jumped more significantly than
the land value. He stated that raises a
red flag for him and that the value appears to be a little too aggressive on
the building. Assessor Distel stated
that he made a specific evaluation on the building and he believes the proposed
value of the building at $385,000 for 2006 is accurate.
Mayor
Anderson stated that he believes the $385,000 value on the home is too high and
recommended that it be lowered by $15,000 to $370,000. Mayor Anderson moved to adjust the 2006
estimated market value on Anna & Mark Gross’s property from $571,000 to
$556,000 by reducing the amount on the building by $15,000. Seconded by Councilmember Crockett. Mayor Anderson, Councilmember Crockett and
Wheaton voted in support of the motion.
Councilmember Kask and Skrede voted in opposition to the motion. Motion carried 3-2.
Assessor
Distel stated that the Council also had a letter from Thomas and Mary Pokonosky,
20100 Minnetonka Blvd, requesting that the 2006 market value on their home be
lowered from $245,000 to $150,000 due to structural problems with their
house. Assessor Distel stated that he
did not consider these structural problems when determining the value on the
house but noted that the $725,000 estimated market value may still be
accurate. He stated that he might have
considered doing something different with the value but all the homes in this
area have some problems in different ways.
Councilmember
Crockett stated that the overall value for that lot seems right and asked if
the Pokonosky’s land value is affected by being on two busy streets. Assessor Distel stated that this fact is
reflected in their land value.
Councilmember
Skrede stated that he didn’t think that the structural problems were sufficient
to justify a reduction in the value of their home and that the Pokonosky’s
might have to consider a more permanent repair to the sinking of their
foundation.
Councilmember
Wheaton noted that the requested market value of $150,000 seems unreasonable.
Motion
by Councilmember Crockett to accept the 2006 estimated market value on the
Pokonosky’s property as presented by the City Assessor. Seconded by Councilmember Wheaton. Motion carried 5-0.
Assessor
Distel stated that the Council has also received a letter from J. H. Strothman
of Lindquist & Vennum, who is representing the Lake Minnetonka Sailing
School and Minnetonka Yacht Club.
Assessor Distel stated that he had discussed the proposed 2006 estimated
market value with J. H. Strothman and noted that Hennepin County is taking the
lead in determining a uniform assessment on marinas and islands. He stated that the proposed 2006 estimated
market values for the properties owned by the Lake Minnetonka Sailing School
and Minnetonka Yacht Club were determined by Hennepin County and he was not in
disagreement with their assigned values.
Councilmember
Crockett stated that she didn’t have a big issue with the values, just with the
sharp increase.
Councilmember
Skrede stated that it might be better if this issue were brought forward to
Hennepin County since it was the County that established the rationale for the
market values and the City has no comparables on such unique property.
Motion
by Councilmember Wheaton to accept the 2006 estimated market value on the
property owned by the Lake Minnetonka Sailing School and Minnetonka Yacht Club
as presented by the City Assessor.
Seconded by Councilmember Skrede.
Motion carried 5-0.
Dick
Brown, 19155 Azure Road, asked what the City Council would have Assessor Distel
do if the Gross’s home did sell for around $700,000? Councilmember Crockett stated that since the
$700,000 would be a real sales figure, she would have no problem with the
property being readjusted to reflect the actual sale price.
Mayor
Anderson stated that even with the $15,000 decrease in the value of the
building, there still was a significant increase in the overall market value of
the Gross’s property and house.
Councilmember Skrede noted that the 2006 estimated market value on the
Gross’s property still increased $70,000 - $54,000 on the building and $16,000
on the land.
There
being no further business, Mayor Anderson adjourned the Board of Appeals &
Equalization at 8:38 p.m. and reconvened the regular Council meeting at 8:41
p.m.
Monday, April
3, 2006
3. CALL TO ORDER: Mayor
Anderson called the City Council meeting to order at 7:15 p.m.
PRESENT: Mayor Tom Anderson, Councilmembers Paul
Skrede, John Wheaton, Kim Crockett and
Keith Kask
STAFF: Police Chief Virgil Gustafson and
City Administrator Dana Young
4. APPROVE CONSENT AGENDA
Councilmember
Wheaton moved to approve the consent agenda, which consists of the minutes of
March 6, 2006 and the April Verified Accounts.
Councilmember Crockett seconded.
Councilmember Crockett had questions regarding three invoices that were
explained by Administrator Young. Motion
carried 5-0.
5.
MATTERS FROM THE FLOOR
Darel
Gustafson, Deephaven’s liaison to Minnetonka Community Education, was present
to provide an update on five recent MCE activities.
·
The spring summer brochure has been printed and should be out shortly.
·
Lynn Johnson was nominated and chosen as the South Lake-Excelsior
Community Hero. The award will be presented
on Friday, April 7th at The Party of the Year by the Chamber.
·
The Youth Triathlon is Saturday, May 6th at the MME.
·
New ECFE Coordinator interviews will be on April 11th. The current coordinator, Deb Hughes, has
chosen to go back to the classroom.
·
The new Community Education budget should be completed by mid May.
Councilmember
Crockett asked if children not enrolled in the Minnetonka Public School system
could still compete in the triathlon.
Darel Gustafson stated that he is almost 100% sure that they would be
able to enter the event.
Councilmember
Skrede asked Darel Gustafson about the proposed Community Education
budget. Darel Gustafson stated that the
Advisory Council does not participate in the budget process although they will
have the opportunity to review it in mid-May.
Councilmember Skrede asked if Darel could receive an advanced copy to
see if he had any questions or concerns regarding the budget.
Hearing
no further comments, the Matters from the Floor portion of the meeting was
closed.
6. NEW BUSINESS
A.
Approve 2007 Capital
Equipment Plan for Excelsior Fire District
Councilmember
Skrede stated that the letter that is attached to the Capital Equipment Plan
was generated by Interim Fire Chief Dana George. He stated there were several items that were
included in the Capital Equipment Fund such as boat items and truck maintenance
costs that should have been expended from the Operating Budget rather than the
Capital Equipment Fund. He stated that
these items were not reported to the Board or included in the
Capital Equipment Plans prior to their approval. He stated that this resulted in the fund showing a surplus of
excess revenues, which in turn lead to the decision to drop the amount of the
annual contribution to the fund by $45,000.
He stated that he hoped that the Operating Committee and fiscal agent
for the District would produce more accurate numbers in the future. He stated that this would prevent the cities
from having to kick in more money than would be actually
neededin subsequent years for unapproved items.
Mayor
Anderson asked if money is being spent by the District that shouldn’t have been
spent. Councilmember Skrede stated that
the expenditures on the boat items and truck maintenance occurred two several
years ago. He stated that
it was not poor planning that resulted in these expenditures, it was poor
procedure.
Councilmember
Skrede gave a brief summary of the Capital Equipment Plan. He stated that the proposed purchase of
Engine 22 in 2007 would replace the 1986 fire vehicle and that $70,000 has been
budgeted for Engine 21 for a five-year period beginning in 2009. He added that he doesn’t really know what is the exact expected life of these vehicles. are other than you don’t want to hold on to
these vehicles too long.
Councilmember
Skrede recommended approval of the 2007 Capital Equipment Plan subject to the
consideration that some costs should be budgeted from the Operating Budget not
the Capital Equipment Fund and any additional equipment purchased by the
firefighters from the Orono Contract revenue should not be automatically
included in the Capital Equipment Plan.
He added that the District should be asked to show what internal
controls will be used in the future or should be admonished
on
for past accounting practices.
Councilmember
Crockett asked if similar problems hadn’t occurred with the construction
expenses and asked who were the responsible parties.
Councilmember
Kask stated that he was not particularly interested in admonishing the District
and added that it appears the District needs to clean up some of its financing
in the future.
Councilmember
Crockett asked if there were any economic consequences with the construction
expenditures. Councilmember Skrede
stated that the information is still being pulled together.
Mayor
Anderson stated that the District Board should adopt a policy where any item
that is spent that is not included in the budget should trigger an equal
reduction elsewhere in the budget.
Administrator
Young noted that the Operating Committee reviews and approves those monthly
bills that are included within the Operating Budget and the District Board must
approve any expenditure that is not included in the budget. Councilmember Skrede quoted from Section 2.7
of the Joint Powers Agreement for the District, by stating “The Operating
Committee shall have authority to approve budgeted expenditures during monthly
meetings. Non-budgeted expenditures must
be approved by the Board.” He stated
that he would discuss the ramifications of this section with the Board and
would hopefully reconfirm the Board’s commitment to this section.
Mayor
Anderson stated that he would like this brought forth in a resolution that
non-budgeted items should be deducted in an equal amount from the budget. Councilmember Skrede added that he would also
continue to re-evaluate the proposed 2009 vehicle and keeping the
1986 fire vehicle as a backup.
Mayor
Anderson moved to adopt a resolution stating that Section 2.7 of the Joint
Powers Agreement should be adhered to by the Board and any expenditure that
would impact the District budget would be deducted by a similar amount. Seconded by Councilmember Crockett. Motion carried 5-0.
Councilmember
Wheaton moved to approve the 2007 Capital Equipment Plan for the Excelsior Fire
District to authorize the member city’s contribution of $150,000 to the Capital
Equipment Fund in 2007. Seconded by
Councilmember Kask. Motion carried 5-0.
B.
Approve 2006-2008 Assessor
Agreement with Dan Distel
City
Administrator Young briefly reviewed the 2006-2008 Assessor Contract with Dan
Distel. He stated that the Agreement
requires the assessor to pay all business expenses including social security,
health insurance, travel expenses, liability insurance and other business
related expenses. He stated that Dan
Distel would be paid $43,628 from June 1, 2006 to May 31, 2007 and $44,937 from
June 1, 2007 to May 31, 2008.
Dick
Brown, 19155 Azure Road, stated that he has worked with Dan Distel around
for about ten years ago to reduce the
disparity between the estimated value versus the real
value of a property to around 10%. He
stated that Dan has done a good job in working the values up and has done a
great job.
Councilmember
Skrede stated that Dan has a difficult job as it is occasionally difficult to
justify certain valuations and the typically low turnouts for Deephaven are due
to Dan’s hard work in meeting with residents to explain their valuations.
Councilmember
Crockett agreed that Dan does an excellent job but there are a lot of people who
are not getting a 3% increase in salary as the agreement proposes. She added that she also doesn’t want there to
be an increase in the number of people who have concerns with their valuations
just to save some cost.
Councilmember
Skrede moved to approve the 2006-2008 Assessor Contract with Dan Distel that
proposes a 3% salary increase from June 1, 2006 to May 31, 2007 and a 3%
increase from June 1, 2007 to May 31, 2008.
Seconded by Councilmember Crockett.
Motion carried 5-0.
C.
Approve 2007-2008 Lifeguard
Contract
Administrator
Young stated that at the March 6, 2006 Council meeting, the City Council
approved the bid submitted by Minnetonka Community Education for 2006 lifeguard
services and further requested the submission of bids for 2007 & 2008 lifeguard
services. He stated that Minnetonka
Community Education submitted the lone bid in the amount of $31,612.00 for 2007
and $32,876.48 for 2008. He stated that
the bid includes a 4% annual increase and covers 21.5 hours per day of
lifeguard services for a period of 88 days.
Councilmember
Crockett stated that she would prefer to lock in lifeguard services at 4% per
year and would like to receive some clarification on the number of guards who
work a shift at the Main Beach.
Councilmember
Kask moved to approve the 2007 & 2008 Lifeguard Service Agreement submitted
by Minnetonka Community Education.
Seconded by Councilmember Crockett.
Motion carried 5-0.
D. Adopt Resolution No. 07-06, Approving Seal Coating Bid
& Awarding Contract
Administrator Young stated that bids for 2006 Seal Coating were received on March 15, 2006 and the following bids were received:
Bidder Bid
Pearson Bros., Inc. $113,769.04
Allied Blacktop Company $125,688.76
Astech Corporation $143,028.20
He
stated that the bids came in substantially higher than the 2006 budget of
$75,000 due to the fact that the unit cost per square yard was $.30 or 33%
higher than last year’s unit cost. He
recommended that the Council proceed with the project in order to maintain the
schedule of annual seal coating that is needed on the streets and that the
additional cost of the seal coating could be partially offset by postponing the
purchase of a $30,000 pickup truck that is scheduled to be replaced this year.
Councilmember
Skrede moved to adopt Resolution No. 07-06, A Resolution Approving the Seal
Coating Bid & Awarding a Contract to Pearson Bros., Inc. in the amount of
$113,769.04. Seconded by Councilmember
Kask. Motion carried 5-0.
7. REPORTS
FROM STANDING COMMITTEES
Administrator
Young stated that the Public Works Committee met on March 1, 2006 and discussed
the purchase of safety equipment from the $2,200 emergency management grant
provided by CenterPoint Energy, discussed the comments of the City Council at
the February 21st Work Session on the Storm Water Plan, and
discussed the Metropolitan Council on Environmental Services sewer surcharge
plan where those cities contributing excess storm water to the sewer system
would be billed a surcharge fee. He
stated that the City of Deephaven is not on the list of cities required to
submit a surcharge fee.
Administrator
Young stated that the Park Committee met on March 1, 2006 and discussed several
proposed Eagle Scout Projects, Deephaven Days, the Boat Committee’s dock proposal
at the Main Beach, Arbor Day activities and recommended the reappointment of
Hans Larson, Lucy Hicks and Bryan Sykora.
He stated that the City Council reappointed all three members on March 6th.
Administrator
Young stated that the Boat Committee met on March 8, 2006 and discussed their
meeting with the City Council on February 21st to review the
Comprehensive Dock Plan. He stated that
the Boat Committee spent the remainder of their meeting reviewing a new dock
plan submitted by member Marc Anderson.
8. DEPARTMENT REPORTS
A.
Police Department
Police
Chief Virgil Gustafson provided a review of the March 2006 Police Department
report. Specific discussion was held
regarding identity theft concerns and emergency management plans for dealing
with the potential threat of Avian Flu.
Mayor Anderson recommended that the Chief insert an informational piece
on identity theft in the next newsletter.
Councilmember Crockett stated that she would like to keep on top of the
City’s responsibilities on this issue and would like additional information
concerning the planning on Avian Flu, as more information becomes available.
B.
Excelsior Fire District
Councilmember
Skrede noted that he informed the Fire District Board that Deephaven would be
willing to host the firefighters if they would be interested in holding a
Station #1 vs. Station #2 softball game at Village Hall Park.
C.
Public Works
Administrator
Young presented the monthly report of activities for the Public Works
Department. He also stated that he had
received a complaint from a resident on Rosedale Court that the Storm Sewer Fee
of $5.00 was too large an increase.
D.
Administration
Administrator
Young stated that the auction of several city items, including the 1987 Ford
Dump Truck, 1979 Yamaha snowmobile and 1988 Chevy Van, seemed to go very
well. He stated that the City sold these
and other items for $7,702.50 and after paying the auctioneer his 10% fee has
received payment of $6,932.25. In other
news, he noted that City Staff has been making significant progress in
improving the storage of files in the meeting room, has been working with a
number of residents towards their Eagle Scout project, sent off a number of
mailings to the residents in April and will be switching phone service from XO
Communications to Qwest later this month.
Councilmember
Skrede provided a brief update on the purchase of new Council chairs.
9. ADJOURNMENT
The
meeting adjourned at 9:30 p.m.
Respectfully
submitted,
Dana
H. Young
City
Administrator