Scott County providing safe, healthy, and livable communities. Now, we're back to item 7.1, which is to receive information on Scott County delivers topic assessing property taxes. Go ahead. >> All right. Good morning. Thank you, Mr. Chair and commissioners. Today, we're here to discuss assessing and property taxes. So, I'd like to take a moment to thank the panelists for their time contributing to this packet. Um, I'll note that we have several people from property and taxation services, but that we also have Mr. Lens from our office of management and budget. Um, we'll take a moment just to introduce ourselves. My name is Katie Mllik. I work in quality improvement. >> I'm Jeff Smotish, employee relations director. >> Danielle Connie, income maintenance supervisor. >> Jen Schwarz, economic assistance director. >> Danny Lens, Office of Management and Budget. Christian Husky, Deputy County Assessor. >> Rhonda Otto, County Auditor, Treasurer. >> Michael Thompson, property and taxation services manager. >> With that, do you have any questions that you would like to ask uh before we get into the conversation? >> No, I don't think so. I think we've through a couple different forums, we've heard a lot of the the content, you know, whether it's at scale or with a workshop and so forth. But yeah, go ahead. Maybe questions I'm sure will emerge. Go ahead. Just one curiosity quench uh question. Um do you have a twin? I'm looking at Michael because you seem to be everywhere. >> I am on my world tour right now. >> Okay. Okay. I didn't know. >> Six cities left after today. >> The taxes tour. Got it. All right. Welcome. Good to see you again. >> He'll sign autographs after. Commissioner. >> All right. And Jen, if you'd like to ask our first question. >> Sure. Um, I think throughout the information there was several mentions of the complexity of the Minnesota tax system that we have one of the most complex systems. Um, I'm curious, are there things we are doing to advocate either at the state or local level to try and make changes and headway in that that area? Is are there things we can do to change the complexity and are we working towards that? >> Yes. Uh, thank you for the question. So, we work with through the Minnesota Association of Assessing Officers. They have a legislative uh subcommittee that deals with reviewing proposed legislation. And so, we through that we weigh in um on different uh proposals that might make the system more complex. And so, we tend to not get into policy type advocation. That's not our business. But if we can provide information as to the impacts of of the administrative costs and things like that, we do that. And then we also will look at individual proposals through our own legislative liaison and weigh in as a county when it's supported by leadership uh for th those same purposes. Um, we we're not directly involved in in like an a re an a e effort to reform the property tax system as it currently sits. Um, but I am aware of uh some of some different uh efforts along those lines that we can inform through AMC and some of our county and city associations that that we definitely uh provide information and opinions to. If we look at page 14, there is a chart that talks about the Minnesota State Board of Equalization order history. I was wondering if you could tell me what is the importance of avoiding a state board order change. >> Yeah. So, this goes back to 2006 and we take this out of the Department of Revenues um assessment practices report and it highlights that there are certain standards that have to be met with your assessed valuations uh to make sure that they're where they're supposed to be. They're they're matching up pretty well with what properties are selling for. And if we are not within the certain mandated range, the state board comes in and makes these changes. And what that can do is have the impact on our taxpayers of disenfranchising them through by eliminating some of their appeal rights in a sense because we send out notices in March and we say this is your property value, this is your classification. Property owners have a chance to call us to review that information informally. um informally appeal, exchange information, and potentially have a value reduction through that process. If if they're not satisfied through the informal appeals, they can then uh attend different various board options of appeal and potentially have a value uh change that way. And then the state board occurs in June after all that has already happened. So if the state determines that our original assessment didn't fall in line with where it needed to be, they can make across the board adjustments to all properties in a specific township or city, land or buildings or both. Um and this chart goes to show that they do that every year. And um at that point the appeals processes outside of tax court have concluded. So there's no negotiation after that. You just get a letter in the mail saying, "Hey, the state board stepped in and and changed your value and this is your new value." And and outside of a tax court appeal, that's what it will be. So we do everything we can to avoid that from happening. And I think 2006 where this data starts was the last time Scott County had any state court orders. So we're we're proud of that. I can jump in on page 17. Um really impressive the the work you've done since, you know, going back to say 2010 2011. Um really kept that consistently looking at the range between 90% and 105% for um the sales ratio. What do you attribute that? Like what have you done that's been successful to keep that just you know steady? Well, we've um implemented new technologies. We we have a much better um system that we're using now where we can run reports intermittently throughout all of our processes and make sure that essentially we can predict exactly um what the Department of Revenues reports will be after we submit our information. So, there's a ton of error reports. our our list of air reports grow every year to make sure that we're catching anything that that might stand out in a department revenue report and that we're able to calculate like within a a hundth of a percentage point basically what they're going to end up determining by using their own formulas in our system. So, it's technology has made our jobs a lot easier and of course the staff that we employ. Um, I think second to none with our assessing staff. They're, you know, as another uh as page 15 kind of highlights, we have the most uh senior accredited assessors uh per per employee in the metro area. I think we're able to retain really good uh educated and accredited staff that that know what they're doing. >> I just want to jump in here too. I think one of the things too is I can kind of point out is when I joined in 2023 I think we had about 35 38 uh error reports and since then I think this last assessment we had 63. So, one of the things we keep doing is anytime we identify a potential thing that could pop up through reviews or just even challenges or maybe this line item doesn't match with this one, we create an error report to make sure that we're always improving on those in the future. And not to say when you have 64,000 properties, there can be variabilities with different variables. But understanding how the data is structured and always improving on it, I think is one of the reasons too that we're able to kind of have more accurate values. Um, but then I'd also agree with Mike too that there's been some quality improvements uh with technology. We've been able to automate the process of reviewing our sales uh data and having it earlier. So, it gives us more time to actually refine those values. If I could jump in for a second and drag you all back somewhere that I care about because I heard you mention your people and as the employee relations director for the county, obviously that's dear to my heart. Uh, Michael Christian, if you could because the two of you all sort of touched on two ends of a thing. um if you could maybe unpack anything that you're doing to again retract uh retract attract retain those those highly qualified folks that you have and if you could expand a little bit on some of the quality improvements that may be related to to the talent you have in your personnel. That would be interesting to me. >> Well, I I do think that um we're competitive. We don't pay the most. uh you know there's uh there's definitely the cities tend to pay a little bit more than the counties uh >> in that regard but we all we do offer flexibility and I think that has helped immeasurably uh as far as retaining the good people that we have. Uh I think uh we we prioritize a work life balance that we understand that people that are happy at home are going to be better workers and um >> I think we've also got a little if I say if I might say a little bit of a reputation that people respect, you know, what we're doing at the Scott County office and um are interested in coming and finding out, you know, and learning from us uh how we're doing things. Yeah, I'll echo that. Uh I had joined in 2023 and Mike had been a resource for me just in understanding the profession, what things are really important to kind of study up on and sharpen your skills. And even at some of these summer seminars or uh different organizations that uh we're a part of as as an assessing career, you interact with people from different organizations. And you know, one thing I I try to kind of echo too is that uh make sure we're a resource even our partners down in Mstead or different areas when we talk about rates or if we developed a manual, how can we share that and how we triangulate what we're using to make sure everything's viewed the same way. Uh but you had kind of mentioned when it came to efficiency, I really I think our biggest strength is our people because um some of the improvements we made, you know, we just come out of the implementation, but we made a really great hire that actually used to work for our software vendor. So he's able to query many different data lits and things that, you know, to find out how we can convert or uh improve the product in general. So, um, really when it comes down to efficiency, I feel like we work together to identify the problem and then find something that's not going to take staff resource to maintain. I think that's a really important thing because uh sometimes you you only have so much time in a year. So, if you can automate things like sales downloads or the reproduction of reports that maybe took a week or two, um, we kind of gain some of that time back through additions. >> Thank you so much. Love to hear it. This connects well with I think page 29. I did have a question mark earmarked for asking about um this is taxable parcels per assessor and we have Scott County listed. I was going to ask you what contributes to this productivity but I think you went through some of that. Um so then I guess if you have anything else about that but also you mentioned um positions within cities. Can you explain the county's role with assessing in Scott County or cities can do this or just can you help explain that more? Yeah, absolutely. So throughout the 87 counties in Minnesota, it's done a little bit different from county to county. We do assess all of the property in Scott County. And um I think that's probably similar to about a third of the diff the other counties in the state. There's also a a segment of counties that rely more on cities to have their own assessing offices or even hiring local what they're called local assessors which are contracted uh independent contractors uh who may be responsible for a number of townships in a certain county. Uh so I think we are very fortunate that we have the control over the assessment of for the entire county because it it just lends to consistency and then just economies of scale. We have the ability to do it um at a much cheaper price than say if you now all of a sudden you have a city assessor leading up an assessing team and they maybe even have a different software system uh that they pay for. So I think uh studies have proven very clearly that when you have multiple different assessing offices in within one county it's more expensive for taxpayers. So, uh, that kind of answers your first question. And then just back to the, um, efficiencies of, if you look at that page 29, there's only, I think, one county in the 8,000 or more all the way on the right side and then maybe two counties in in that next echelon. And then, so we are in that third highest kind of grouping. So, if if you looked at it that way, I think we're probably ranked 82nd or something out of in the entire state for how many parcels each of our appraisals handles on an annual basis. And we've touched on a lot of the reasons for that with our efficiencies and technology improvements. Um, but we also have, you know, other things we could mention, we could go on, but we have mobile devices that we're able to collect data on rather than writing on a piece of paper and then coming back in and entering it into a system. Uh, we also are one of the only counties in the state that have leveraged uh high resolution street level imagery. So we contract for that every five years and it allows us to do alternative types of property reviews which save us a lot of money and still uh meet the state standards. >> Uh regarding the efficiency and technology that you mentioned, do you see any other opportunities for continuing? >> I think AI is going to be a big one that we just don't even know what it's going to the possibilities are going to be. Um, I'm aware that it's going to probably revolutionize what we do in the next five years or maybe even sooner. Uh, with predictive modeling, which is a lot of what we do for our valuation, AI is it lends itself very well to that. And then even things like customer service improvements. I mean, right now, you you call somebody when you want to appeal and you talk to that individual, you exchange information. I could see sometime down the road where you go online and attach whatever appraisal PDFs you might have or information that you want the the AI assistant to review and then get an answer immediately back with either yeah you know you're right the value can be changed here's your new value or did you consider this this and that and and maybe there's so there's just so many possibilities uh that we could imagine that that will be forthcoming due to AI improvements. >> Yeah. One of the things that we're doing currently also is uh I kind of think of it as a focus on future proofing because this we don't know exactly what we're going to need but uh right now we're using uh GIS is doing planetric data so we have aerial measurements also from topographical so we can measure roofs and different things but using that over time will be something that AI will leverage in order to have more accuracy. Another thing that we're looking at is that a lot of things are going cloud-based um just to kind of stay out of the weeds, but uh you can have it hosted by a service or you can have it on a cloud that's hosted by your vendor and that's where a lot of our software is going to be headed. So we're working on ways to make our data uniform. So that conversion process is easier because if you think about 64,000 properties, you can't look at them all at once. So we try to kind of think ahead about some of these things that we need to collect for data. Solar panels is another one too that we're picking up. Rhonda, what was uh surprising for you or interesting as you look through all of this data and what did you learn from um putting this together? >> Well, I guess I'm on the taxation side, but I have worked in assessing side. So for me, learning some of this stuff, I knew about the sales, but I didn't understand the usage of it to help the assessing side of it to help figure out where they have to be in that range. So that was an kind of a nice little thing to know and more information for me. So talking to customers, I can be a little bit more informed. But and just on my side, uh the difference of the different programs. I have come from another county and we did probably utilize the green acres or rural preserve in the aspect that Scott County does. They a lot of the taxpayers did not know about those programs and they are state programs. They aren't county specific. They are state programs that are out there for anybody to apply for. >> Good. Thanks. Well, why we've got to pause here? I got a question. Um, you're supposed to go out once every x am 20 years, is it five years, and do an on-site inspection? I'm just curious about MLS data and pictures and so forth. If you if you said, "Well, this parcel we haven't been out there. it's due to go out there, but we we have a recent sale with 50 pictures and does that eliminate the need to go out and look or do you use MLS data? Is that fair game or >> Yep. That Thank you. That's a great question. Um I touched on our use of the high resolution street imagery, which is just one part of the Department of Revenues allowed alternative reviews for that once every 5-year requirement you're talking about. Um, if we have aerial photography that we can get measurements from, which we do, and if we have uh those street level imagery, which we do, uh, and we have a a connected permitting system in the county. So, we get all of the building permits from all the jurisdictions, including the ones that we administer forwarded to our department. Those are the main requirements for being able to conduct an alternative review that I mentioned. And when we do that, all of our appraisers also have access to MLS. We have accounts uh and we do use all of the information there. They will cycle through the pictures and review that looking for condition um quality type of determinations. We just can't take that those pictures and and use them in our systems necessarily. So we cannot save those off and use them that way, but we can reference them and look at them to to make determinations. That is part of our process. >> When you talk about AI, are they grabbing that stuff from MLS and creating their database of of what you get from AI? You think? >> I would think so. I know that um in order to download and use MLS information like you can go on the Dina realy site for example and see the same pictures usually uh I know that there are legal disclaimers and things of if you can and can't take those and use them but I would be surprised if there are not AI data collection systems out there acquiring information on properties through those those types of means. All right, I just jumped in because there was a pause there. >> That was perfect. >> Christian, did you have something to add to that? >> I was just going to say we've been exploring some of this uh at summer seminars and different uh gettogethers for our profession. And one of the ones that I saw recently is that they had 13 different models that all ran in conjunction to can triangulate it using AI. So they use things like u aerial imagery about the height of uh roof heights, how many windows are on a property, but the actual use of the private data, I would think that have to like Mike said, it would have to come with licensing, but that's probably in the future, I would think. So I mean, you already kind of see what Zestimon is doing with Zillow. Um the hard thing is is that if you notice historically, if unless there's a recent sale, a lot of those estimates are very close to the assessor value because they also use that as a data point, too. So there can be kind of some uh bias I guess that can go into that if you were to rely on it for assessing profession. But the contractors right now are are um kind of discussing about how they use these different things. And really what it would take is back testing if you were going to explore that. Um you know which one is better, how do you improve it and then get to a point where you have enough confidence in some kind of AI value that you can support it. But I think that's the big point is making sure you have confidence for the taxpayer. U Rhonda, you mentioned the homestead exclusions and some exclusions. Um, looking at page 27, can you talk to us about what impacts what those values are each year or help us understand this better? >> Okay. So, these are like your green acres and your real preserve are deferred. So basically what they are are programs that the state offers and if they they apply and if they're accepted so their val the value that they pay their tax on is going to be lower. So then their taxes are going to be lower and if they go to sell the property then they have to pay the current year in two years. So like three years of that deferred amount back your and that's what your green acres in your real preserve is. And that was to help what? Because of the urbanization to help farmers so they weren't losing and basically falling because of the taking of the properties and stuff. But and then the exclusions is your veterans one is for if they're 70% disabled, they get 150,000 taken off their actual value and so they only pay the tax on the remaining. And if they're 100% disabled, they get 300,000. I do know there is legislation because it hasn't changed since 2008 for the veterans exclusion, they want to bump it up to 200,000 for the 70% and 400,000 for the 100%. And that what they mean by that is when they're disabled, that means they it's a process that the veterans go through and then we have to get all this documentation from them before we can apply it. So, and then the homestead is just it changed in 2025, but before that, if your house was 4138 or higher, you actually did not get the homestead exclusion. You got homesteaded because that affects your property tax with the state, but you didn't really get any change in your taxes. So, anything lower than that, you would. And then in 25 it changed to 5172. So anything above that you won't get the exclusion. So we do get calls you know am I homesteaded? Yes you are. You know you just don't get it because the value of your home is higher than what they have out there. So, and basically when that happens, when you aren't when your value is lower and you're paying lower taxes, it spreads out to everybody else to pick up that. And >> to add to that, we saw that in just looking at our budgets for the year. So, we report on what is the increase or decrease to homes because of how this tax system is set up. Um, and a couple of years ago, we saw everybody's home going up just about that. we were um throwing property tax which was unusual for us and that's where we realized if you see that year where it's getting very small that homes were um basically getting value so they were outside of that. So we saw all of our homes getting impacted as opposed to it being more balanced where it's like a 60/40 split of homes uh seeing an increase in county taxes or a decrease. They were all seeing that increase because more and more of that value just wasn't counting towards an exclusion. And then obviously that happened across the state and you saw a legislative change where it spiked back up um as more homes were captured under that. So we even noticed it from a budget side, not even just the property tax side of how it was impacting our residents. I wanted to ask on page four you um talked about next steps and there um is not the right word but there there are a lot of you know pretty aggressive um big things that could help where where are you really focusing on those and what's really important to you as you look at that list? >> Well, thanks for the question. We we're actually we're pursuing all of those. So, um that that was actually uh developed from a list of things that we have in the works that that we're either planning uh or we've already started. So other than that last bullet where it kind of touches on your first question of the day uh which is just an ongoing um effort but all of those next steps listed there we've uh we've already basically we've already started on. >> Okay, >> impressive. >> Uh looking at page 16, this one is titled net levy versus new construction and inflation combined. Um I was if you look at this chart you generally see that the net levy appears to kind of generally match the combined total of the CPI which is the consumer price index and then the new construction percentage change. Can you tell us more about that? And I noticed that the amounts seem to differ greatly in 2022 and 2023 and what might that look like if the amounts are different? So I wait on pins and needles every March for Michael to send me one email and it's like the same chain for like the last 10 years where he just updates it um on what our uh new construction uh growth rate was and the impact of taxable market value. So this has been um one of a number of indicators to say uh how is our levy impacting our residents and what does it mean for are we growing at the same rate as the growth of the county. Um so we use new construction and then we look at also the inflation because those are things that drive new demand in our organization whether it's the cost of uh the services we're delivering or the new residents that are needing the services. So that's where this comes from. If you look at 22 and 23 those were some years of very uh large inflation growth. um if you kind of take the trajectory and we've mapped this out in the past, our levy actually if we had stayed at that level and kind of match that um would probably still be tracking somewhat further down than where we are right now. Um so of a number of things including the impact of state and federal legislation. One of the things that impact is uh that inflation did catch up to us. If you look at uh 24 25 26 we actually made changes to our budgeting and forecasting practice because we were having so much impact from inflation um on the contracts we have on the services we are purchasing that we are seeing significant 10 15% increases on like technology services contracts those sorts of things so um even as a trailing impact we do see that inflation flow through and when we're looking at our levy and have tried to uh address that through our financial modeling as well. Did that answer your question or did I ramble too much? >> No, that's perfect. Thank you. I was just thinking too, if we look at page 19, this talks about the percent of taxpayers who are delinquent. You mentioned budgeting for programs. How might this impact that? >> So, it doesn't have a massive impact in our budgeting. We do have some discrepancies in how much tax is collected due to delinquencies. Um, but it's typically not enough to impact the overall budget. like uh we've done for a long time, we try and take a conservative budgeting approach where we're always going to end up in the black at the end of the year. Um so typically, at least since I've been here, this has not had a significant impact. Um I would have to look to people who were here further back and Steve Jones unfortunately is in the room as we got into uh the Great Recession and people potentially falling down. So I don't know if um that had an impact in the past, but um typically our budget can do that. We also um do enough touching base with our different partners where we would be um communicating saying, "Hey, revenues aren't coming in. There's property tax issues um where we would know probably ahead of time that we needed to start tightening our belts throughout the course of the year to make sure we could make that." The other piece of that and uh particularly in the last 10-15 years, we've tried to have a healthy fund balance um because that has to cover our costs until we get those property tax payments and we try and manage that. So if there are some discrepancies in here, um we can use that fund balance to address any shortfalls and then um make adjustments for the next following year into the gap. Uh I'm based on some of the conversation we've just had, I keep coming back to page 13. Um slide 13, right? Um which is Scott County taxable market value compared to total personal income and the explanation is lovely about why we would be concerned with seeing that split but I mean we've also talked about its assessment not necessarily can can you in your role sort of connect what are we looking for is there points where are there decision points or spread that is concerning >> uh so I look at this actually I looked at this with another slide at the same time that kind of stood out to me so sorry to make everyone won't jump around. >> We'll never forgive you for this. >> Yeah, there was also one about the median uh home value. I can't find that one. The average home value. There we go. >> So, if you go have page 10 and you look at it compared to page 13, um that median home value is spiking up pretty substantially. Uh or the average home value, then the median household income is actually staying pretty flat. So that goes to me to talk about affordability within our community and we are not the only driver of affordability but property taxes are a piece of that affordability. Um I think one of the stories we wanted to tell and the personal income um and market value that tracks pretty closely but personal income you see is actually tailing up more than the median household income. Um which tells me that there's a larger growth on the upper end of the spectrum um but not necessarily in that median income. So average income would be higher than that median income. Um but for me this talks about affordability and then also where is our growth coming from to afford it. The other thing about taxable market value and total personal income not necessarily aligned um because it can talk about industrial and commercial that may not be that residential home. So, we have those homes that are becoming harder to afford, income not keeping up. Um, but our market value is still growing at a large rate, which does tell me that there is some commercial and indust commercial and industrial growth within there. Um, but that actually I look to Michael then to talk about how commercial and industrial growth actually is taxed in the county because that's another complex piece of our tax code. um which is one of the things we want to make sure we're having residents understand is this the complexity of the in the property tax um assessments here in the state. >> How does that work, Michael? >> Taxation of commercial property types. Uh well, we do I think we have a slide that breaks out um >> two and 23 >> hypothetical commercial tax bills which is maybe 24. >> Yep. And so it's I mean the process is the same. They just are subject to different uh additional taxes and different tax rate tiers. So um they have a bit higher class rate. So they're going to pay more than residential uh just as a a principle. But then they also pay into the state general fund. So, if you look on the on the left hand side, uh 18% of this actual uh example tax bill goes to the state general fund. 36% goes to fiscal disparities, which um a lot of property owners when they see that they they mistake that that money goes off into a pool and and it just goes away. but it's part of a bigger formula that we contribute into it and then we get something back. We don't always get everything back. Uh and and that's kind of what we tried to adjust for on the right hand side is >> in actuality about 10% of the total tax bill did go to the pool and never came back to our county. It didn't come back to a city count or a school. Um so then we adjusted the different portions for what did come back. Is that consistent across cities and townships? >> It's not necessarily consistent. The formula, you know, was was made back in the 70s and I think it was in the effort to uh curtail competition between cities to give all kinds of goodies to get a business to come to their specific city. um to to kind of dampen that um desire or maybe willingness to give those goodies to get there. They wanted to create a shared tax base to kind of eliminate at least part of that desire. Um just because they thought that it would uh I think u make make growth more stable for the general region and area and and kind of curtail some of that competition. In doing so, they created the formula that is based in part on your commercial value at that time locked in compared to what it is now. And and then there's also a population factor that goes into it. Um, and basically to to really try to simplify it what I'm trying to explain areas that have had substantial commercial industrial growth in value new mainly due to new uh developments are going to pay in more and get back less just generally speaking. So, uh, a city like Shakapei is going to is probably going to lose quite a bit each year, whereas, uh, another city where maybe the population has grown, more of a bedroom community that doesn't have a lot of commercial growth could be a winner. So, the county overall, when you look at all the money we put in to what we get out, I think that's on the next page 25. Um, and I think if we focus on the blue and purple lines, that's just dollars all together. Uh, the blue line is what we paid into the pool and the purple line is what we got back. So, you can kind of see that that that started diverging quite a bit in 2019 2020 and it's kind of grown to the biggest gap countywide that we've seen. And we think that that's in part just because of the the phenomenal amount of growth we have seen. Uh there's I could list off I don't know just so many projects over the last 5 years that the county has seen come in and build. And then we also have some areas that are not doing as well in the metro area. You know, we we've probably all seen some of the news articles regarding office buildings in downtown Minneapolis and St. ball and how those values have plummeted over the last, you know, four or five years. So, I think it's a combo factor um that's that's impacting that. But overall, the county is is definitely paying in more and getting out less than than ever we have before. So, >> can you add to that? Can you speak to apartment living? You know, you're hearing how younger generations aren't necessarily buying homes anymore, and I live in Carver County. Victoria's put up three huge apartment buildings. How do those factor into your tax equation if if that starts to shift and there's less one family homes and apartments or doesn't it? >> Well, uh apartments multif family generally have a similar tax rate to residential. It they they do not pay on the much higher commercial industrial rates. >> Okay. Um there there have been studies done as far as uh when you build an industrial building in in an area versus a single family home versus a multifamily home, which ones pay into the tax base the most as compared to demand on your services. So >> y >> in other words, you know, a a multifamily building, an apartment building is probably going to increase demand on schools and um you know, different services, ambulance, you know, just you can go down the list. Whereas a industrial building is going to pay the higher tax rate may you know, it's not like a commercial business that the police are going to be out there all the time. And so there's just those kind of studies go kind of beyond what we do anything like that internally. But um multifamily projects tend to have the lower rate like similar to residential and and tend to increase more burden generally speaking I would say >> on services. >> From your respective areas what has you most concerned going forward? And we'll start with Danny and we'll go left to right. you don't mind. >> Um, if I go just to the first few pages, that has the most concern for me. Um, as an organization, we focused on efficiency. We focused on providing the most value for our residents for the taxes they pay. Um, we focused on not increasing and actually trying to decrease the cost of our service as we see growth so that we have more efficiency and capture that. Um, and up until the last year or two, that has been the history of Scott County over the last 10-15 years at least. And just in these last few years, um, driven largely by state federal requirements, by lack of funding for statemandated services, I'm starting to see that go the other way where more and more, uh, the mandated burdens are coming from the state and being put on our residents um, and our board and our staff having very little control over what to do about that. So if you look at our uh personal income for the first time since I've been here, the percentage personal income that we take as an organization has gone up. Um the levy as a percentage of the annual budget has gone up and stayed up above 50% where we've kind of hovered back and forth based on trends. Um we see that county program a has stayed flat and gone down. Um our tax rate has started to go up the last two years after a long steady work to keep that going down. Um and yet we're seeing that affordability is becoming an issue in our community as well and we're not helping that at this moment. Um despite cutting $1.6 million and looking to cut another million dollars from our budget because of other things that are happening. So right now the affordability of the community and um our control of that affordability is what's concerning to me the most right now. >> Thank you. Yeah, when I look ahead, I have kind of a different lens because it's more of a ground level one, but when I think ahead, I I I really struggle with whether or not legislation guidelines will be able to keep up with evolving technology. Um, as you might understand with the development of the physical capabilities of computers paired with uh software, paired with at one point maybe it's going to be able to accelerate itself. um are we able to keep up with legislation that will be able to take advantage of these um alleviate possible staffing constraints in the future? And then also even maybe a bigger thing is where does it go in the future and making sure that uh we're preserving the rights to appeal and to be able to have accurate values. That's one thing I really want to get clear is that we always care about having an accurate value, not so much about up or down. Um, and I think use leveraging tools and then even with possible restrictions on when we would have to view things or what tools we are allowed to use could be a big concern just because if there's advantages in the marketplace or in the industry, I want to make sure that we're able to leverage them the best we can. >> I just go off of him as legislation for me for the taxation part. So like your tax forfeited properties because of Henipin and versus Tyler all our tax forfeited process now has changed by legislation and now we've been told that there is another case in Michigan that might affect our legislation again regarding our tax forfeited properties because of that case that's going on and it's just to me and the other thing too is they're trying to get all counties to be consistent which is never going to happen because every county has their own way of doing things. So like with us, we have 78 different taxing districts. So that means there's 78 different things that we have to figure a rate for. So, you know, it's just different for each county, but yet legislation seems to think that we all do the same thing and everybody has a different interpretation of the statute. So when you reach out to one county, they're doing it this way. they reach out to another county, they're doing it this way. But your thought is not either one of those maybe, you know. So just more of that, just more consistency and I guess a little bit more guidance, not just giving us a broader thing, maybe being more specific in what so that counties can be a lot more consistent across the board. So you aren't going from one county saying, "Well, this county does it this way." Well, we don't. Well, why not, you know, and we've gotten those calls where they're upset, well, this county has allowed us to do it this way. Well, our policy is not allowing us. So, it's just more that is what I feel is a lot of a issue and it's not really getting addressed. >> I'm going to stick with the legislative theme. Um, you know, I've been in the industry over 20 years and I've seen us like get close to this happening, you know, time and time again. It never happens, but it's the simplification. It grows the the the statutes become more voluminous every year. Just little by little though. If one person didn't qualify for egg, they contacted their state legislature and they got exotic birds and ducks added as an egg product kind of in like they had a sentence or two written in for this one property in the entire state. And those little things happen every cycle. the big things that everyone seems to agree on about simplification. And we even had a a property tax working group eight or nine years ago that was bipartisan, had experts from all different industries, and they came up with a really good consolidation of ideas for how we could simplify the the tax code. It would make it easier to administer, more understandable for taxpayers. And it was all just this really great piece of work, and it just died. And it's it's like it's still out there on the website. You can go find it and read it and it still makes sense today. Uh but those types of efforts, that's my biggest fear is that we're just going to keep adding little by little to the complexity intricacies of it and we're never going to have that one thing, the big bang kind of thing happen that everyone seems to agree on should and needs to happen. >> Michael, in some of these classifications, how many parcels are actually utilizing it? statewide. It's hard to know in the example I just gave you. So that's an agricultural property, but that's probably the only instance in the entire state where someone's qualifying for that class based on that additional requirement they added. So I would say we could get a report on statewide how many parcels are classified in each category as well, but some of them are just variations of the same thing. So residential versus uh you know just blind disabled residential. At some point they decided that should be a benefit. But could it be an income tax benefit or are we really um you know adjusting property taxes for the the owner or the the person who lives there? Should that be done somewhere else versus the property tax system? So there's a lot of different examples like that, too. >> Thank you. When you're considering livability, how does uh how do the numbers in Scott County compare >> when you're uh talking about livability? How does Scott County compared to the near metro and then the little larger metro area? >> I don't think we pulled that data. If you're talking about like um income versus home average home value, um it's something we could pull, but we didn't pull that specifically to look at all this. >> Michael may have something. I think the only comparison that we put into the materials that compares a tax amount maybe, which is as close as we can get, is on page 30 where we we used the same valued house and applied it to the different county tax rates. And and I think it's important to note that someone might say, well, the average value in your county is different than the average value in other counties. And that's fair and we can we can do a different analysis to look at those things. This one is specifically saying we do have areas like for example New Prague. It's split. It's this the city is split between two counties and there's a $300,000 house that's very similar to a $300,000 house on either side of the county line. And this is illustrating their county portion of their tax difference. So, I think this this particular slide shows the county portion impact on maybe livability in some way because it's impacting your property taxes. And I think it shows Scott County in a in a pretty favorable comparison there. >> To my to my co-f facilitators, do you have any additional questions before we pass? Okay. And then to the panelists, is there anything else you would like to to say before we pass it back to the board to ask their questions? >> I would there were two when we were preparing this that were fascinating to me, page 20 and 21 that I just would see if Michael or Christian or Rhonda would kind of walk us through what's happening here. Um, they were very interesting just to look at when we were prepping this material. >> Sure. I can uh tell you what we're looking at here. So, we fixed a a the same value home similar to the the measure I just talked about. Um, it's it's controlling for the same value across all of our unique taxing areas. And and this is kind of a summary of our unique taxing areas. There's actually a few more when you look at special districts, but what we wanted to show is every city and school city or township and school combination in the county. what is the portion of your tax bill for each different segment entity? And and that's based on the same house value. So then people again would respond back, well the average house value in Credit River is a lot different than Bel Plain City, for example. So on the on the next slide on page 21, that's where we applied the average value for that city or township. It's not unique to the school district, but it is unique to the city or township. And then we applied that to the same set of uh of observations. And so there you can see with the actual average in that area, what is the tax bill for for those the breakouts for those different um tax authorities? And the other category, you know, includes things like waterheds and mosquito control. And um we put the household hazardous waste fee in there. So it's just a kind of a collection of all the miscellaneous special uh taxing districts and entities. >> Michael, that is interesting because it's the school district that defers the biggest, isn't it? When you have those same value average in those cities. Um, look at the difference between Lakeville and Prior Lake, what they contribute for school. Are those voter levies then? You wouldn't know that. I suppose >> the the school portion is including the the general and the voter approved. >> It does have the voter approved in there. >> They're both in there together. >> Perfect. Anything? >> Okay, good. Mr. Sure. Can I just This does all these taxes on here like let's say prior like that doesn't include all the fees and um franchise fees and stuff that they pay >> through utilities. >> No. If if it's not on their property tax bill, it's not included. >> Okay. So, this would kind of if you were just looking at nothing but property taxes, it's a little bit skewed because they haven't included all the taxes that they'd really pay. Is that right? Okay. >> Generally speaking, yes. I mean, we've we have heard that, you know, different cities maybe collect money in different ways that is is uh not a part of the property tax. >> Okay. >> Thank you, Mr. Bren. Go ahead. >> How does tax increment financing affect these numbers and and uh does it have a negative or or a positive effect on the communities? Maybe that's too much detail in >> kind of >> but it's it's to help with housing. So what they do is they they put the money on the tax parcels that are affected by the tiffs which is your tax increment financing and it's for development of redevelopment and development right and then there is other areas but your most popular are your um re housing and redevelopment. So basically it's to help pay for that so it's not spread ac across the tax base. Correct. >> Yep. So there's going to be we determine like our base for each unit and then we determine >> microphone. >> And if you don't mind introducing yourself. >> Sure. I am Dana Anderson, principal tax specialist. um we determine each agreement is going to have a base assessment year and a base rate year. So we determine what that base um amount is going to be and then we are calculating the difference between what the current value is of the property using the base and the current year. So we're calculating that difference. So the amount of tax is still being collected just a a portion of that is going into the district to make sure that the district is funded. Okay, >> Commissioner, the increase. It's not that that's not being taxed, it's that those taxes are going back to the development in some fashion. Sometimes it's for infrastructure or something along those lines. So, >> it wouldn't show up here as an impact. Um, it's how it's spent on the back end once it's collected. >> Okay. Thank you. >> And we'll pass it back to you. I do have well I'll I'll lead up with one and then I I'm sure the board has a bunch of questions. You know, as a commissioner, as commissioners, trust is very important. You know, we want to be um trustworthy to the public that we want to be able to explain why we make decisions and what goes into that and is it reasonable? Is it understandable? We want a high level of trust. So, I'm I'm curious how that works out with somebody that comes in with a complaint about their property tax uh or their assess value or whatever it is. I've said in a few of them over the years and um and I think you you convey, you know, what the reasonable approach taken and and you make it understandable and you're not combative and so forth. But um for those that don't go away with feeling that what what are the some of the causes or that somebody would feel well I still don't really trust the county or the taxation. I I the reason I asked that is because I'm aware in other jurisdictions around the state where the county is not really trusted much, you know, or the taxation department is not trusted at all hardly. And I I think we have a high level of trust, but do you want to comment on just that theme of trust and how that works out when you meet with people? >> Yes, that's a great question. We we go through training with our appraisers who are kind of the frontline people in those scenarios when when people are upset and they a lot of times the tax impact is is having a serious impact on their lives. And so we train our staff to be, you know, factual in our response that we can only do what's right. We can only change the values when it's appropriate. But being able to explain how we got their the timelines, what how the system works, giving them comparable sales that we hope will explain that yet your value is appropriate when we can't make a change. Uh explaining how the can potentially impact other taxpayers if everybody if you know the squeaky wheel always got to change, how that impacts everybody else. Uh but we also teach on you know just being empathetic and listening and letting people vent and um trying to address their concerns as best as we can. So uh one of the measures that's in our our packet is has to do with when you appealed your property value did you feel like the process was fair or not? and we strive and we as I said we train with our staff every year that the way that they interact with the taxpayers hopefully we'll have them walk away even if they didn't get a change and say I disagree but I still at least thought the process was fair um so I don't know of any other jurisdictions that's one example where we kind of go above and beyond that even care to ask people after that appeal process did you think it was there. Another question we asked that's not in the materials is do you feel like you learned anything like were educated or learned anything about how the property tax system works. That's another thing that's important to us that we train with our staff on. So hopefully those efforts are having that impact that maybe there's more trust. We also, you know, have gone out of our way, I think Rhonda mentioned before that some programs aren't utilized much in other counties that maybe are statewide programs and in her experience in other counties as much as they are here. And it's probably because we've reached out to taxpayers when we thought maybe they were eligible for something that they weren't taking advantage of uh and and try to get those programs in front of them as well. So, those are some of the efforts that we undertake. >> Yeah. And I appreciate that. thankful for that. Okay, other board members, go ahead. >> Thank you, Mr. Chair. Um, thanks everybody. I I think uh really good presentation. Um, love the uh slide about how many parcels each assessor has here in Scott County compared to others because even though your work is just so so very important, we shouldn't be spending a lot of money to figure out how to get the money to run the program. So I I really appreciate it and I I think um that's a that's a gift to understand how important something is but need to we can't spend a lot of money getting the money. Um one one question that I just wonder if this is an air or I just don't understand something on page 21 where we have these comparisons for Helina Township between the two school districts. The township portion is different. Does Helena Township tax differently if the property is in a different school district or is that I feel like that should be consistent there, not a different number? >> May I address it? >> Yes, please. So, within Helena Township, there are multiple fire districts within that. >> So, each of the fire districts has their own rate within the township rate itself. >> Thank you. Thank you. That makes sense. And there I and I'm just saying this for the townships and so like Belplain Township has different fire districts but they must somehow equalize it among their different or different Belplain township has different fire districts but they must somehow equalize it among their fire districts. >> I think they're closer. >> Okay. Okay. Cuz it's 608 all across. Thank you. And and uh I'm sure some people might have wondered about that. Um, on page 29, Michael, you talked about how, you know, it's only a few counties who are carrying more parcels per assessor. Um, and and I loved how you and Christian talked about, you know, what what's going to come in the future to even change this number. Any ideas of what those several counties who they are and what they're doing to get to because that just seems amazing to get to that number. I can give a little bit of insight and Michael might be able to elaborate, but um one thing I do want to point out is that we're a very diverse county. You know, we have a spread out, you know, probably with our farther western reaches and east and everything. Um but we also have a lot of urban areas up and coming entertainment district and more concentrated housing. And so if you kind of think about that is we don't have as much lock and grid um type neighborhood. So the parcels per appraiser if you're walking next door to every house and it's only you know you can look next door and you see the house whereas a lot of them might be spread out around the county. So one year um out of our cycle we actually go and we drive to all the township parcels because economically it didn't make sense to drive cyclia or our street level imagery for those because also we probably won't be able to see them from the road. So, I'm guessing uh without knowing specifically that it probably has to do with more urban setting and being able to have more parcels per appraiser because you have less transit and things too as well. >> That makes sense. Thank you. Thank you. And then finally, I I think I I um appreciated how all of you spoke about legislation, and I think there's there's often really well-intended legislation about property tax relief for certain populations of people. But I I do think it's um important for all of us to understand whenever we do that, we're reallocating the tax burden. And I don't think that legislators even understand that. I don't think that some people advocating for tax relief for certain groups of people understand that. So, the more we can help explain that and make sure sometimes it's still the right decision, but I think we need to acknowledge we're reallocating and if somebody gets a to pay less in property taxes, somebody else is paying more. So, that's important. Um, and then I just wanted to have you confirm or tell me I'm doing something wrong for homestead applications. a lot. I have residents tell me, you know, maybe they purchased a new parcel or or something, well, my property value is so high, I'm not going to get any relief anyways. I'm not even going to fill out and apply for homestead. My answer has always been, I think you should anyways. Um, because we don't know when the law I think the the recent change in valuation is a good example, like some people probably didn't get around to applying and then are missing that. Is there any reason I shouldn't be telling people that? Absolutely not. I agree 100% that you should apply whether or not your home value already exceeds the threshold to get an annual value reduction benefit. I mean, there's just a number of different reasons, but as you already pointed out, property tax refunds would require that things of that nature. And sometimes, uh, maybe there's a big surplus and there's a one-time refund and you but you have it only goes to Homestead or something like that. Uh it's just good if if it's your primary residence and it's legitimately uh you know your primary residence. There really is no downside to homesteading. So take the time and do that because we can't predict what what benefits you and me out on if you don't. >> Thank you. And and I think as we continue to advocate or encourage people to apply, that's a that's even a good tagline. Even if even if you're not eligible for an exclusion, please apply. And it's just in my mind, let's be accurate. Let's have accurate measures of what kind of property. >> But they should anyway. We we tell them to even though like you said, they don't get that. >> But the state has that the property tax refund program. There's also one is if your property goes up a percentage and they are looking at legislation or they did change legislation on what your um income >> is, am I right on that, Dana? I remember correctly. your income changed if it's I think they went higher with it. So then you are now able to >> get that you know if it changed in that amount and then you can get a refund. >> Good in that aspect. So >> good. Thank you. >> Thank you. Go ahead. >> Thank you. Uh on that homestead um question in 2025 I think Ronnie you mentioned that that the only change there was the valuation change right from like four something to five. So, uh, when did that bigger hammer drop? Um, when they really made that change, when that letter came out in in the mail, was that like the '9s or early 2000s >> or when they went from the tax from they went from a credit to the homestead exclusion? >> Maybe it it felt like >> that was in 2011 they had the credit in 2012. They went to the homestead exclusion >> because it seemed like that was one of those times where, oh, you actually did get something for claiming homestead. Now, it's the valuation. You might get it, you might not, but it even if you should do it because you never know what legislation might be coming. Um, so I I was just curious on that one. And then um so apparently I need to get exotic ducks. Did I hear that right? Exotic ducks and other animals to uh claim egg deductions for my >> son the checklist. You're going to need some acreage to go along with that. >> Okay. Well, um see what I can do on that. What do you you know, one of the questions we always ask or gets asked in this um these types of sessions is where would we like to be in a year? What would we like to see in a year? I'm going down to the capital tomorrow, so legislation is always a big thing. Um where would we like to be? What would we what would we like to see uh this time next year? I know what I'd like to see, but I'm just curious. I go back to the the concern question and I think I referenced the um property tax working group paper that they did. I would love for uh that to be resurrected and maybe updated a bit, but the the hard work that already went into it is a great road map, great template. maybe could use some tweaks for for changes over the last decade, but I'd love to see that all approved a year from now >> because did I hear we in this county we have 78 different >> distinctions? What's the what's the correct >> taxing districts? >> And so and so if I remember right in different uh meetings there's been did the state have like 60 classifications looking at Michael >> there's 61 if you count the lines on uh on page >> on that. Okay. Yeah. 30 or whatever. >> 28. >> 28. >> So, yes. 61 classifications, 78 taxing districts. Clear as mud. Super easy. Um, yeah. So, so if that working paper might lead to some level of reform, it'd be great to see that in this state because we, you know, just on last night they talked about on TV news, uh, rent is up 2.6% um, over I don't know what I think it was like over February or something like that. people moving from the city out to the suburbs um because it's more affordable which I'm like where is anything more affordable so I guess more commentary that that we talk about the collective we not specifically here in Scott County we talk about it of course but a lot of those decisions are in St. Paul affordability. Looking at some of these reports, um where do you think we're going from a tax that again that collectively from a taxing um capacity taxing number? Are we trending higher generally speaking >> as in how much we tax? >> Yeah. And again, it's not specific to Scott County because we get the mandates kicked down from St. Paul. We have to enact them. Uh I I should I should should mention this. You know, one of my trips to St. Paul last week or two could see the Capitol in the background. I said, "Hey, you know, we're we're trying to partner with you here in St. Paul. Like we we're the hands and feet of your decisions um down here at the county." And the comment was, "But we're the brains." Pointing to the capital. To which, you know, I said, "Well, we could debate that to some extent." We both chuckled and I wasn't trying to be funny, right? The reality is they're making the decisions that we have to enact down here. So, with what we see in the pipeline, what is going to be coming that we already know of, where do you see taxes trending just in general? >> I think when you look at counties, and I'm going to stick to that because that's what Sure. >> it's going to continue to increase. We're not seeing increases in our revenue for statemandated services and we're seeing more requirements pushed down on us and so that means more of it's going on to the property tax levy >> and those are decisions that are rolling downhill to us, not decisions that we're making to arbitrarily raise taxes. So, we need to get people involved. However, however we can do that. Call your representative, call your senator, call us. We're carrying water down the at the capital every week. Um, with >> I would like to answer your one legislative thing. HHS system modernization. >> Oh, I feel like there's a button laying around here or something like that that that we will be hearing that water. And and I just do want to say um to to uh Chair Alrich's discussion about being a trusted commodity, we have our TNT. We call it still um in December. You know, Michael and your you and your crew are down there. Uh people think they're going to come and and talk about values and it's more of just a presentation. You catch them, have great conversations. I always say, look, look at your tax notice. They were just mailed out this week. I got mine. Um there's an assessor name, there's an assessor number to uh you know, find out more information to figure out is this a mass appraisal system? Was there an error? Was there not an error? Or taking the time to educate. Sometimes the answer is no. It is what it is. But just having uh the care and concern to convey that to people, I think goes a a long way. So, thank you and your crew for for doing that. >> Thank you. >> Well, thank you. Uh we really appreciate the work you do. It's a it's a tough job. It's it's a lot of work and but you do it well and I think you are completely trustworthy in your approach. So, thank you. >> Thank you, Commissioner. Thank you.