DEEPHAVEN CITY COUNCIL MEETING
MONDAY, APRIL
16, 2007
MINUTES
1.
CALL MEETING TO ORDER: Mayor Paul Skrede called the meeting to order
at 7:00 p.m.
PRESENT: Mayor Paul Skrede, Councilmembers Kim Crockett, Steve Adams, Keith Kask and John Wheaton
STAFF: Police Chief Virgil Gustafson, City
Assessor Dan Distel and City Administrator Dana Young
2.
PLEDGE OF ALEGIANCE
The
Council recited the Pledge of Allegiance.
3.
APPROVE CONSENT AGENDA
Motion
by Councilmember Wheaton to approve the Consent Agenda, consisting of the
following items:
A. Minutes of April 2, 2007
B. Authorize Purchase of a New
Holland Skidsteer from Carlson Tractor & Equipment in the amount of
$22,925.02.
Seconded
by Councilmember Crockett. Motion
carried 5-0.
4.
MATTERS FROM THE FLOOR
Russ
Bernard, 19370 Lake Avenue, was present to ask if someone is permitted to park
a truck with a boat trailer on city streets.
He stated that there is one parked on his block that is taking up at
least four parking spaces.
Police
Chief Gustafson stated that a truck and trailer are permitted to park in this
area until May 1st when permit parking goes into effect, unless the
truck and trailer are blocking driveways, stop signs or the intersection.
Russ
Bernard also asked whether City Ordinances could be accessed on the City web
page. Mayor Skrede stated that the
ordinances are available from the web page and that he would contact Russ
tomorrow to see if everything is working properly.
5.
UNFINISHED BUSINESS
A.
Reconvened Board of Appeals
& Equalization Meeting
Mayor
Skrede reconvened the Board of Appeals & Equalization meeting at 7:12
p.m. He stated that the Board of Appeals
had originally met on April 2nd, heard appeals from the public and
postponed a decision on the appeals until this evening. He also welcomed Bill Effertz, from the
Hennepin County Assessor’s Office.
City
Assessor Dan Distel stated that he had reinspected Mr. Haugsland house and
changed the calculation of the basement finish, resulting in a recommended
reduction in $26,000 on the value of the building.
Joe
Haugsland stated that he appreciated Mr. Distel’s proposed reduction but felt
that he came up with a number of good comparables to his property to show that
the value of his property should be between $643,000 - $650,000 rather than the
$688,000 proposed by Mr. Distel.
Assessor
Distel stated that in reviewing the comparable properties listed by Mr.
Haugsland, he stated that many of the comparisons were on two story homes
rather than on single story homes like Mr. Haugsland’s. He stated that single story homes have a
higher value than two story homes.
Councilmember
Kask and Wheaton shared their frustration with the substantial increases on
lake property and noted that it is a very difficult undertaking for the Council
to evaluate these properties without having much more extensive information and
knowledge of evaluating properties in order to make inform judgements.
Councilmember
Crockett stated that Mr. Haugsland has done an excellent job in providing a
number of comparisons with his home and felt that she would lean towards
favoring the valuation submitted by the homeowner in this case. She recommended that the Board split the
difference between the Assessor’s recommended value and Mr. Haugsland value.
Councilmember
Adams stated that if the Board is going to depart from the Assessor’s
recommendation, it should be done on a more principled basis than simply
splitting the difference in value.
Motion
by Councilmember Crockett to approve a value of $338,000 on the land and
$327,000 on the building for a total 2007 value of $665,000 at 4240 Northern
Road. Seconded by Councilmember
Wheaton. Mayor Skrede and Councilmembers
Wheaton and Crockett voted in support of the motion. Councilmembers Adams and Kask opposed. Motion carried 3-2.
Assessor
Distel stated that he had the opportunity to meet with Mr. Jewitt following the
first Board of Review meeting on April 2nd. He stated that Mr. Jewitt’s property is equal
to an effective 75’ lake frontage. He
stated that it compares very well to a similar property on Lakeview, which has
a land value of $1,427,000 as well with a comparably priced property on Linwood
Lane. He stated that the home has a
proposed value of $526,000 and that it is a nice home that he doesn’t believe
would be a teardown.
He
stated that there is an issue with a 40’ strip of property that is located
between the Jewitt and Swenson property that is owned by Ideville property
owners. He stated that this commonly
owned property could have an impact on the value of both adjoining properties
if it was heavily used by other property owners.
Mayor
Skrede asked how effective lake frontage is determined. Assessor Distel stated that it is a
calculation that is used by assessor’s to deal with irregular shaped lots that
are wider on the street than on the lake.
He stated that effective lake frontage takes into account the fact that
a lot benefits from its view and use of the lake and enjoys a lot that widens
out to allow for a wider building pad.
He added that a property with a 40’ lake frontage could sometimes be as
valuable as property with a 55’ lake frontage and the effective lake frontage
assists in making this determination.
County
Assessor Bill Effertz added that it is simply a guide or tool that an assessor
uses.
Mr.
Jewitt stated that the location of the Ideville property next to his property
resulted in a $100,000 reduction in the sale price of this property in
2002. He stated that his property was
originally purchased for $1,550,000 in 2002 but the deal fell through when the
buyer learned about the adjoining Ideville property. He stated that he purchased the property in
July 2003 for $1,450,000. He stated that
this is a $100,000 reduction due to the common property next to his. In addition, he stated that there is a
property in Greenwood that is very comparable to his that has a building value
of $440,000 as compared to his value of $526,000. He stated that he would like to see his total
value reduced by $120,000.
Councilmember
Kask stated that the $1.6 million value on Mr. Jewitt’s property looks right
for lakeshore property of this size and is comfortable with the assessed value
on the land. He added that he would be
uncomfortable in arbitrarily dropping the value in the building.
Councilmember
Adams agreed that he couldn’t see a principled reason from decreasing the value
of the property.
Councilmember
Wheaton stated that he could see other comparable properties that show that the
value on Mr. Jewitt’s property is in line.
Councilmember
Crockett stated that the land value assigned by the Assessor looks pretty
accurate and that she doesn’t have enough to work with to make a determination
on the value of the house other than the fact that a $160,000 building permit
was issued in 2004.
Motion
by Councilmember Adams to accept the total market value of $2,126,000 as
recommended by the City Assessor.
Seconded by Councilmember Kask.
Motion carried 5-0.
David Wheaton (20760 Linwood Road), Don and Jane Brattain (20700 & 20710 Linwood Road), Gary and Vicki Wyard (20720 Linwood Road), and Clint and Lois Mary Shaw (20730 & 20740 Linwood Road)
Mayor
Skrede stated that the issue that was brought to the Council on April 2nd
from David Wheaton and the other Linwood Road property owners was that the 25’
side setback requirements had an adverse impact on their vacant lots that
should be reflected in their proposed market value.
Assessor
Distel stated that he was conflicted over this appeal and recommended that it
was an issue that really should be decided by the Council. He stated that there were two comparable
sales in 2003, the first was a vacant lake front lot bought by David Wheaton
for $2.1 million and the other by Ms. Wyard for $1.9 million. He stated that another property sold on
Linwood Lane for $2.6 million in October 2005.
He stated that there are not many vacant lake front lots in Deephaven
but he keeps in pretty close contact with the Greenwood Assessor, who deals with
several vacant lake front lots in Greenwood.
Councilmember
Crockett stated that she would accept the argument that the more restrictive
setbacks in the R-2 District impact the price of the lots but doesn’t know what
that impact would be.
Councilmember
Adams asked the Assessor if he gave any discounts for lots with more
restrictive setbacks? Assessor Distel
stated that he believes that the value he has on these lots is equalized. He added that if there were a lot more vacant
lake front lots available you could make an easier determination if their value
is affected by the more restrictive setbacks.
David
Wheaton stated that he did not know what the zoning was on his property before
he purchased it. He stated that it is
his fault for assuming what the setbacks were and now feels like he overpaid
for the property. He stated that the
properties have 18% less property available for building area due to the more
restrictive setbacks and felt that these properties are overvalued by several
$100,000.
Councilmember
Wheaton stated that he agreed that a compelling argument has been made that
there should be some reduction but also doesn’t know what the reduction should
be.
Councilmember
Kask stated that an 8.5% reduction in the proposed 2007 land value would bring
the value of the vacant lots back to the $1.9 million that was spent on one of
the lots by Ms. Wyard, which he felt reflected a fair adjustment due to the
impact of the more restrictive setbacks on these properties.
Motion
by Councilmember Crockett to approve an 8.5% reduction on the properties owned
by Wheaton, Shaw, Wyard and Brattain in order to bring the properties closer to
the original purchase price of $1.9 million.
Seconded by Councilmember Adams.
Councilmember Wheaton abstained.
Motion carried 4-0.
Sandra
Swenson stated that her property value has increased 33% the last two
years. She stated that the value of her
house has increased $400,000 in two years when she has only made $200,000 in
improvements. She stated that she is
requesting a $200,000 reduction in the value of her house. She added that her land is slightly smaller
than her neighbor’s property and she has the Ideville Property abutting her
property. She requested that her land
value be decreased by $100,000.
Councilmember
Crockett stated that Ms. Swenson does have the burden of the Ideville property
next to hers but it might also provide for a little breathing room in
comparison to the Nelson’s property, which has Ms. Swenson’s home in very close
proximity to their property.
Assessor
Distel also noted that Ms. Swenson made some substantial improvements to her
house for only $200,000.
Councilmember
Wheaton stated that he has a problem with reducing the land value of the
property and the house since Ms. Swenson has an additional 800 s.f. more than
her neighbor’s who have a value of $534,000 on their home.
Councilmember
Crockett stated that she doesn’t have any evidence before her that Ms.
Swenson’s property is overvalued and it appears that the substantial increase
on the value of her home is due to the significant improvements that were made
the last two years.
Motion
by Councilmember Kask to approve the total valuation of $1,806,000 as
recommended by the City Assessor.
Seconded by Councilmember Wheaton.
Motion carried 5-0.
Steven
Schectman stated that he would like to see his total valuation reduced to
$630,000 based on the fact that his cost per square foot is so much higher than
other comparable property, including Joe Haugsland’s property that was reduced
earlier this evening. He stated that he
would like to see his property brought back in line with other comparable
properties.
Assessor
Distel stated that he is somewhat frustrated that Mr. Schectman has come in so
late with his appeal and did not take the opportunity to meet with him much
earlier in the process. He stated that
as a result he has not had the opportunity to review Mr. Schectman’s latest
letter that shows a number of comparable properties. He stated that some of the difference in
valuation is due to Mr. Schectman’s new garage, which is atypical and has a
significant upstairs in addition to the garage area. He stated that he would add $90,000 in value
to his home simply with the garage addition.
Mr.
Schectman stated that he has been in several of the other homes in his
neighborhood that he has listed as comparable to his house and doesn’t see much
of a different in the cost per square foot between these homes and his house.
Councilmember
Crockett and Wheaton both noted that comparing homes on a cost per square foot
is an interesting and compelling analysis and might be a useful way to analyze
comparable properties. Councilmember
Wheaton added that Mr. Haugsland certainly made a very persuasive argument
using a square foot cost analysis.
Councilmember
Kask stated that he is not comfortable with using a cost per square foot
analysis all by itself and added that there is no question that the garage adds
significant value to Mr. Schectman’s property.
Councilmember
Adams stated that square footage is a good starting point for discussion and
that the square footage above the garage would have to be included in with the
overall footage of the house. He stated
that including this square footage, Mr. Schectman’s building value is
approximately $130 per square footage and asked if his property was worth a
premium over the neighboring properties.
Councilmember
Wheaton suggested splitting the value as was done with Mr. Haugsland’s request.
Motion
by Councilmember Wheaton to approve a land value of $299,000 and a building
value of $366,000 for a total assessed value of $665,000. Seconded by Councilmember Crockett. Councilmembers Wheaton, Crockett and Kask
voted in support of the motion. Mayor
Skrede and Councilmember Adams opposed the motion. Motion carried 3-2.
Ed
Oliver stated that he believes the assessed value of his land should be no more
than $500,000, which would make it comparable and proportional to the assessed
value of his neighbor’s land and lake frontage.
Mayor
Skrede asked the Assessor if there is an adjustment made for the diminishing
value of lake frontage if it is less than 50’?
Assessor Distel presented a number of properties along Cottagewood Road
that showed comparable lake frontage and land values. He stated that Mr. Oliver’s property has only
40’ of shoreline but the lot widens out to over 100’ on the street. He added that Mr. Oliver’s property also
abuts a fire lane, which provides an additional buffer. He stated that there could be some effect on
Mr. Oliver’s property and neighboring properties due to their location across
from City Hall, a parking lot and a tennis court.
Councilmember
Kask stated that the Board needs to determine equalization and it appears that
the Assessor has demonstrated this with the comparable properties provided on
Mr. Oliver’s property. He stated that
while he shares Mr. Oliver’s frustration with these increases, he doesn’t agree
with Mr. Oliver’s argument that the value of a lakefront property can be
determined solely by lake frontage.
Motion
by Councilmember Kask to approve a total valuation of $926,000 as recommended
by the City Assessor. Seconded by
Councilmember Adams. Mayor Skrede
opposed the motion. Motion carried 4-1.
Ed
Oliver stated that he also has a vacant lot at 3880 Honeysuckle Road that is
proposed to increase in value from $62,000 to $225,000, with a limited market
value of $115,700. He stated that he
thought that State Statutes limited the increase of a parcel to a 15%
increase. He also stated that a
neighboring vacant lot owned by the Buxbaum’s has been on the market for
$200,000 for several years without selling.
County
Assessor Bill Effertz stated that the limited market value of $115,700 is
correct because State Statutes permit an annual increase of 33% of the
difference between the new and prior year value.
Assessor
Distel stated that he increased the value to $225,000 due to the fact that the
vacant lot is not landlocked, as he originally thought, but access to the lot
is available through an easement across a neighboring property. He added that he has seen vacant lots selling
for between $250,000 - $300,000 in this area.
Councilmember
Kask stated that the limited market value of $115,700 is an appropriate value
for the property and recommended that Ed Oliver return to next year’s Board of
Review to see if the value of the property is affected by the sunset of the
limited market value law.
Assessor
Distel stated that he reviewed the appraisal given for Mr. Dupont’s property
and did not agree with its findings due to the unrealistically low value given
to lake front property.
Councilmember
Kask stated that the Board had assigned values of $1.9 million earlier this
evening on vacant lots that are similar in lake frontage to Mr. Dupont’s
property. He stated that Mr. Dupont’s
proposed land value is proposed to be $1,792,000 for 2007.
Motion
by Councilmember Kask to approve the total value of $1,907,000 as recommended
by the City Assessor. Seconded by
Councilmember Adams. Motion carried
5-0.
Assessor
Distel noted that Mr. Rogers’s main concern was in regards to rising taxes and
property values.
Motion
by Councilmember Wheaton to approve the total value of $1,294,000 as
recommended by the City Assessor.
Seconded by Councilmember Adams.
Motion carried 5-0.
Assessor
Distel noted that Mr. Allen’s main concerns was in regards to rising taxes,
property values, his unique lot configuration and an easement across his
property.
Motion
by Councilmember Kask to approve the total value of $2,149,000 as recommended
by the City Assessor. Seconded by
Councilmember Crockett. Motion carried
5-0.
Assessor
Distel stated that he has reevaluated Mr. Flanigan’s home and is recommending
that the condition of his home warrant a $96,000 reduction in its value.
Mr.
Flanigan stated that he agrees with the revised value recommended by the
Assessor.
Motion
by Councilmember Wheaton to approve a land value of $1,340,000 and a building
value of $150,000 for a total value of $1,490,000 as recommended by the
Assessor. Seconded by Councilmember
Kask. Motion carried 5-0.
Mayor
Skrede closed the Board of Review at 11:08 p.m.
B.
Approve Excelsior Fire
District 2008 Capital Equipment Plan
Councilmember
Crockett stated that the Council had a question in regards to the new budget
item for technology that was included in the 2008 District Capital Equipment
Plan at the initial review of the plan on April 2nd. She stated that the City of Shorewood had a
similar concern and both cities tabled action on the plan until additional
information on the proposed purchases could be reviewed.
She
stated that the additional information presented this evening raises even
further questions in regards to the why the District has so many computers,
printers and copiers. She stated that
the proposed budget of $35,000 for new technology seems very unusual with so
many outstanding issues and stated that it would be irresponsible to approve
the budget as presented.
Motion
by Mayor Skrede to veto the District 2008 Capital Equipment Plan as
presented. Seconded by Councilmember
Adams. Motion carried 5-0.
Motion
by Mayor Skrede to approve the District 2008 Capital Equipment Plan subject to
deleting the technology budget in the amount of $35,000 and its $15,000 City
Contribution and establishing a 2008 City Contribution in the amount of
$155,000. Seconded by Councilmember
Adams. Motion carried 5-0.
6.
NEW BUSINESS
A.
Approve Promotion of
Sergeant Cory Johnson to Police Chief
Dick
Brown, with the Deephaven Civil Service Commission, stated that the Commission
met on March 31st to interview internal candidates for the position
of Police Chief. He stated that the
Commission unanimously recommended the promotion of Cory Johnson to Police
Chief effective July 1, 2007.
Motion
by Councilmember Kask to approve the promotion of Sergeant Cory Johnson to
Police Chief, effective July 1, 2007.
Seconded by Councilmember Adams.
Motion carried 5-0.
B.
Presentation of 2006
Financial Statements (David Stene)
David
Stene, the City Auditor with EideBailly, presented the 2006 Financial
Statements for Council review.
C.
Discuss Request for
Reimbursement from the City of Minnetonka
The
Council tabled discussion of this item until next month.
7.
DEPARTMENT REPORTS
A.
Public Works Committee
Motion
by Councilmember Wheaton to approve the sale and disposal of police equipment
as presented by Police Chief
Gustafson. Seconded by Councilmember
Crockett. Motion carried 5-0.
The
Council dispensed with the formal review of the monthly Park and Boat Committee
meetings.
8.
ADJOURNMENT
Motion
to adjourn by Councilmember Kask, seconded by Councilmember Wheaton. Motion carried 5-0. The meeting adjourned at 11:50 p.m.