CR 2003-143 Approve Assessiong Services Contract
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October 7, 2003
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Council Report 2003-143
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APPROVE ASSESSING SERVICES CONTRACT
Proposed Action
Staff recommends that the Council approve the following motion: Move approval of the Contract with
Hennepin County for the provision of Assessing Services.
This action will transfer assessing to Hennepin County.
Overview
Staff has contacted Hennepin County regarding providing assessing services for Hopkins. Hennepin
County submitted a bid of $85,000. By turning over the service to the County, the City could eliminate two
positions: Assessor and Appraiser. Approximate annual savings to the City: $75,000. The standard term of
the contract is for six years. The County requires this in order to ensure the work will be there should they
have to hire additional personnel.
Primary Issues to Consider
. What services would the County provide?
. . What responsibilities would the City have?
. What kind of service could Hopkins' residents expect?
. How would the Board of Review be handled?
. What has been the experience of other cities that contract with Hennepin County?
Supportin2: Information
. Analysis of the Issues
. A copy of the contract is attached.
J es A. Genellie
ssistant City Manager
Financial Impact: $ $85,000 Budgeted: YIN Yes
Related Documents (CIP, ERP, etc.):
Notes: The City will save approximately $75,000 annually.
Source: General Fund
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Council Report 2003-143
Page 2
Analvsis of the Issues:
What services would the County provide?
The County would be doing all the appraisals. During the contract term, the County shall:
1. Physically inspect and revalue 20% of the real property, as required by law.
2. Physically inspect and value all new construction, additions and renovation.
3. Conduct valuation reviews prior to Board of Review - approximate dates: March through May 15.
.4. Attend Board of Review. Per Board request, make all necessary review appraisals. Approximate
dates: April 1 - May 31
5. Keep updated field card file - current values, homestead and classification data.
6. Print, mail and post valuation notices and homestead cards.
7. Respond to taxpayers regarding assessment or appraisal problems or inquiries periodically.
8. Make divisions and combinations periodically.
9. Administer the abatement process pursuant to Minn. Stat. 9 375.192.
10. Make appraisals, defend and/or negotiate all Tax Court cases.
11. Post values from appraisal cards to assessment rolls.
12. Adjust estimated market values on those properties not physically inspected as needed as per sales
analysis.
What responsibilities would the City have?
The City would retain the services of the Special Assessment Clerk. All the current work that is done on
special assessments would remain with the City. Homesteading would still be handled by the City.
What kind of service could Hopkins' residents expect?
The current clerk, who is very knowledgeable about assessing, would be able to answer questions about the
assessment process. Questions regarding individual appraisals would have to be answered by Hennepin
County.
During most of the year County staff would be available at City Hall at various times during the week.
County staff would always be available by phone.
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Council Report 2003-143
Page 3
How would the Board of Review be handled?
Hennepin County has said that they are willing to continue to use the process currently used by the City of
Hopkins where the City Council acts as the Board of Review but makes its decisions based upon reviews by
real estate professionals.
Alternatively, the City .can turn over the Board of Review to the County. Appraisers would conduct an
"open book" process where they would be available to discuss valuations with property owners. Appeals
would be made to the County board of equalization. Hennepin County would provide the City with a report
on all appeals.
If the City decides to continue as the Board of Review, a new law requires at least one member of the
Council to annually attend an appeals and equalization course developed by the Commissioner of Revenue.
What has been the experience of other cities that contract with Hennepin County?
The following cities have their assessing performed by Hennepin County:
GREENWOOD HANOVER MINNETRISTA OSSEO SHOREWOOD
HASSAN
CHANHASSEN TOWNSHIP MOUND RICHFIELD SPRING PARK
CRYSTAL INDEPENDENCE NEW HOPE ROCKFORD ST. ANTHONY
GOLDEN VALLEY LORETTO ORONO ROGERS TONKA BAY
GREENFIELD MEDICINE LAKE
Staff:has contacted several of the larger cities on this list. These cities are very satisfied with the service that
they receive from the County.
The annual increase in costs has generally been well under the 10% allowed by the contract. Annual
increases are based upon increased personnel costs and any increase in the number of appraised properties:
New Hope
.2001 increase = 1.7%
2002 increase = 4.0%
2003 increase = 2.9%
2004 decreases 7.0% with the new five year appraisal requirement as opposed to the old four year
requirement.
Crystal
Avg6-8%
t.
Richfield
2001
2002
2003
2004( est)
3.0%
1.3%
4.8%
-6.3%
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Council Report 2003-143
Page 4
Alternatives
1. Approve the contract.
2. Do not approve the contract. The City of Hopkins would have hire another Assessor.
Staff recommends Alternative #1.
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Contract No. A031167
AGREEMENT
THIS AGREEMENT, Made and entered into by and between the COUNTY OF
HENNEPIN, a political subdivision of the State of Minnesota, hereinafter referred to as
the "COUNTY", and the CITY OF HOPKINS, a political subdivision of the State of
Minnesota, hereinafter referred to as "CITY";
WHEREAS, said CITY lies wholly within the COUNTY OF HENNEPIN and
constitutes a separate assessment district; and
WHEREAS, under such circumstances, the provisions of Minnesota Statutes,
Section 273.072 and Minnesota Statutes, Section 471.59 permit the County Assessor
to provide for the assessment of property; and
WHEREAS, said CITY desires the COUNTY to perform certain assessments
on behalf of said CITY; and
WHEREAS, the COUNTY is willing to cooperate with said CITY by completing
the assessment in a proper manner;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, it is agreed as follows:
1. The COUNTY shall perform the 2004, 2005, 2006, 2007, 2008 and 2009
property assessment for the CITY OF HOPKINS in accordance with property
assessment procedures and practices established and observed by the COUNTY, the
validity and reasonableness of which are hereby acknowledged and approved by the
CITY. Any such practices and procedures may be changed from time to time, by the
COUNTY in its sole judgment, when good and efficient assessment procedures so
require. The property assessment by the COUNTY shall be composed of those
assessment services which are set forth in Exhibit A, attached hereto and made a part
hereof by this reference, provided that the time frames set forth therein shall be
considered to be approximate only.
2. All information, records, data, reports, etc. necessary to allow the
COUNTY to carry out its herein responsibilities shall be furnished to the COUNTY
without charge by the CITY, and the CITY agrees to cooperate in good faith with the
COUNTY in carrying out the work under this Agreement.
3. The CITY agrees to furnish, without charge, office space needed by the
COUNTY at appropriate places in the CITY's offices. The keys thereto shall be
provided to the COUNTY. The CITY assures that such areas shall not be unattended,
during or after work of any kind by or on behalf of the CITY, in any area occupied by the
COUNTY as provided herein, or if unattended, the CITY shall make certain that such
areas are locked and secured. Such office space shall be sufficient in size to
accommodate reasonably two (2) appraisers and any furniture placed therein. The
office space shall be available for the COUNTY's use at any and all times during the
CITY's business hours, and during all such hours the COUNTY shall be provided with
levels of heat, air conditioning and ventilation as are appropriate for the seasons.
4. The CITY also agrees to provide appropriate desk and office furniture as
necessary, clerical and secretarial support necessary and reasonable for the carrying
out of the work herein, necessary office supplies and equipment, copying machines and
fax machines and their respective supplies, and telephone service to the COUNTY, all
without charge to the COUNTY.
(2)
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5. It shall be the responsibility of the CITY to have available at the CITY's
offices each CITY working day a person who has the knowledge and skill to be able to
answer routine questions pertaining to homesteads and property assessment matters
and to receive, evaluate and organize homestead applications. It shall also be the
responsibility of the CITY to promptly refer any homestead application which needs
investigation to the COUNTY.
6. In accordance with Hennepin County Affirmative Action Policy and the
County Commissioners' policies against discrimination, no person shall be excluded
from full employment rights or participation in or the benefits of any program, service or
activity on the grounds of race, color, creed, religion, age, sex, disability, marital status,
sexual orientation, public assistance status, ex-offender status or national origin; and no
person who is protected by applicable Federal or State laws, rules and regulations
against discrimination shall be otherwise subjected to discrimination.
7. It is agreed that nothing herein contained is intended or should be
construed in any manner as creating or establishing the relationship of joint venturers or
co-partners between the parties hereto or as constituting the CITY as the agent,
representative or employee of the COUNTY for any purpose or in any manner
whatsoever. Any and all personnel of CITY or other persons, while engaged in the
performance of any activity under this Agreement, shall have no contractual relationship
with the COUNTY and shall not be considered employees of the COUNTY and any and
all claims that mayor might arise under the Workers' Compensation Act of the State of
Minnesota on behalf of said personnel or other persons while so engaged, and any and
all claims whatsoever on behalf of any such person or personnel arising out of
(3)
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employment or alleged employment including, without limitation, claims of
discrimination against the CITY, its officers, agents, CITY or employees shall in no way
be the responsibility of the COUNTY, and CITY shall defend, indemnify and hold the
COUNTY, its officials, officers, agents, employees and duly authorized volunteers
harmless from any and all such claims regardless of any determination of any pertinent
tribunal, agency, board, commission or court. Such personnel or other persons shall
not require nor be entitled to any compensation, rights or benefits of any kind
whatsoever from the COUNTY, including, without limitation, tenure rights, medical and
hospital care, sick and vacation leave, Workers' Compensation, Re-employment
Compensation, disability, severance pay and retirement benefits.
8. CITY agrees that it will defend, indemnify and hold the COUNTY, its
elected officials, officers, agents, employees and duly authorized volunteers harmless
from any and all liability (statutory or otherwise) claims, suits, damages, judgments,
interest, costs or expenses (including reasonable attorney's fees, witness fees and
disbursements incurred in the defense thereof) resulting form or caused by any act or
omission of the CITY, its officers, agents, contractors, employees or duly authorized
volunteers in the performance of the responsibilities provided by this Agreement.
9. The COUNTY shall endeavor to perform all services called for herein in
an efficient manner. The sole and exclusive remedy for any breach of this Agreement
by the COUNTY and for COUNTY's liability of any kind whatsoever, including but.not
limited to liability arising out of, resulting from or in any manner related to contract, tort,
warranty, statute or otherwise, shall be limited to correcting diligently any deficiency in
said services as is reasonably possible under the pertinent circumstances.
(4)
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10. Neither party hereto shall be deemed to be in default of any provision of
this Agreement, or for delay or failure in performance, resulting from causes beyond the
reasonable control of such party, which causes shall include, but are not limited to, acts
of God, labor disputes, acts of civil or military authority, fire, civil disturbance, changes
in laws, ordinances or regulations which materially affect the provisions hereof, or any
other causes beyond the parties' reasonable control.
11. This Agreement shall commence on August 1, 2003, and shall terminate
on July 31 ,2009. Either party may initiate an extension of this Agreement for a term of
four (4) years by giving the other written notice of its intent to so extend no less
than 150 days prior to the termination of this Agreement. If the party who receives said
notice of intent to extend gives written notice to the other party of its desire not to
extend within 110 days prior to termination of this Agreement, this Agreement shall
terminate on July 31,2009.
Nothing herein shall preclude the parties, prior to the end of this Agreement, from
agreeing to extend this contract for a term of four (4) years. Any extended term hereof shall
be on the same terms and conditions set forth herein and shall commence on August 1, 2009.
Either party may terminate this Agreement for "just cause" as determined by the
Commissioner of Revenue after hearing for such a determination is held by the Commissioner
of Revenue and which has been attended by representatives of COUNTY and CITY or which
said representatives had a reasonable opportunity to attend, provided that after such
determination, any party desiring to cancel this Agreement may do so by giving the other party
no less than 120 days' written notice. If the CITY should cancel this Agreement, as above
provided, before the completion of the then currentproperty assessment by the COUNTY, the
(5)
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CITY agrees to defend and hold the COUNTY, its officials, officers, agents, employees and
duly authorized volunteers harmless from any liability that might ensue as a result of the non-
completion of a property tax assessment.
For the purpose of this Agreement, the term "just cause" shall mean the failure of
any party hereto reasonably to perform a material responsibility arising hereunder.
12.A. In consideration of said assessment services, the CITY agrees to pay the
COUNTY the sum of Eighty-five Thousand Dollars ($85,000) for each assessment,
provided that any payment for the current year's assessment may be increased or
decreased by that amount which exceeds or is less than the COUNTY's estimated.cost
of appraising new construction and new parcels for the current year's assessment. The
amount of any increase or decrease shall be specified in the billing for the current
year's assessment. For the 2004 assessment year only, the COUNTY agrees to adjust
the charge for assessment services to reflect the work of the CITY's Residential
Appraiser; such 2004 adjustment shall be agreed upon in writing by the parties, and
shall not exceed $42,500.
12.B. Regarding each assessment, in addition to being subject to adjustment
in the above manner, said assessment cost of $85,000.00 may also be increased by
the COUNTY if:
(1) The COUNTY determines that any cost to the COUNTY in carrying
out any aspect of this Agreement has increased, including but not
limited to the following types of costs: new construction and new
parcel appraisals, gasoline, postage, supplies, labor (including
fringe benefits) and other types of costs, whether similar or
dissimilar; and/or
2) The COUNTY reasonably determines that other costs should be
included in the costs of assessment work.
If the COUNTY desires to increase the assessment cost pursuant to this
(6)
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paragraph 12(8), it shall give written notice thereof by June 15 of any year and such
increase shall apply to the assessment for the calendar year next following the current
calendar year. Any such notification shall specifically set forth the amount of any new
construction and new parcel appraisal charges. Notwithstanding any provisions herein to the
contrary, if any such increase, exclusive of any charge for the estimated costs of new
construction and new parcel appraisals, exceeds ten (10%) percent of the amount charged
for the assessment for the then current calendar year, exclusive of any charge for the
estimated costs of new construction and new parcel appraisals, the CITY may cancel this
Agreement by giving to the COUNTY written notice thereof, provided that said cancellation
notice must be received by the COUNTY not later than July 24 of the then current calendar
year and said cancellation shall be effective no earlier than five (5) days after the receipt of
said notice by the COUNTY and not later than July 31 of said current calendar year.
Supportive records of the. cost increase will be open to inspection by the CITY at such times
as are mutually agreed upon by the COUNTY and CITY.
Failure of the COUNTY to give the CITY a price-change notice by June 15
shall not preclude the COUNTY from giving CITY such notice after said date but prior to
September 1 of any year, provided that if such price increase exceeds said ten (10%)-
all as above set forth - the CITY may cancel this Agreement if the COUNTY receives
notice thereof not later than thirty-nine (39) days from the date of receipt by the CITY of
any said late price-change notice, provided further that any such cancellation shall be
effective not earlier than five (5) days after COUNTY's receipt of said cancellation
notice and not later than forty-six (46) days after the CITY's receipt of any said price-
increase notice.
(7)
Payment for each assessment shall be made in the following manner:
Approximately one-half (1/2) of the cost of an assessment (the amount payable being
set forth in a bill sent by the COUNTY to the CITY) shall be paid by the CITY no later
than the fifteenth (15th) day of the December which precedes the pertinent assessment
year; and the remaining portion of said cost (the amount payable being set forth in a bill
sent by the COUNTY to the CITY) shall be paid by the CITY no later than July 15 of the
pertinent year.
The COUNTY may bill the CITY after the aforesaid dates and in each such case,
the CITY shall pay such bill within fifteen (15) days after receipt thereof. In the event
the CITY receives a bill less than fifteen (15) days before said December 15 or said July
15, such bill shall be paid not more than fifteen (15) days after its receipt.
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13. Any notice or demand, which mayor must be given or made by a party
hereto, under the terms of this Agreement or any statute or ordinance, shall be in
writing and shall be sent registered or certified mail to the other party addressed as
follows:
TO CITY:
Mayor, City of Hopkins
1010 First Street So.
Hopkins, MN 55343
TO COUNTY:
Hennepin County Administrator
2300A Government Center
Minneapolis, MN 55487
(8)
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copies to:
County Assessor
Hennepin County
2103A Government Center
Minneapolis, MN 55487
Assistant County Assessor
Hennepin County
2103A Government Center
Minneapolis, MN 554?7
Any party may designate a different addressee or address at any time by giving
written notice thereof as above provided. Any notice, if mailed, properly addressed,
postage prepaid, registered or certified mail, shall be deemed dispatched on the
registered date or that stamped on the certified mail receipt and shall be deemed
received within the second business day thereafter or when it is actually received,
whichever is sooner. Any notice delivered by hand shall be deemed received upon
actual delivery.
14. It is expressly understood that the obligations of the CITY under
Paragraphs 7, 8, 11, and 12 hereof and the obligations of the CITY which, by their
sense and context, are intended to survive the performance thereof by the CITY, shall
so survive the completion of performance, termination or cancellation of this
Agreement.
[Remainder of page intentionally left blank.]
(9)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
day of
executed by its duly authorized officers and delivered on its behalf, this
,2003.
Approved as to form:
Assistant County Attorney
Date:
Approved as to execution:
Assistant County Attorney
Date:
City organized under:
Statutory
COUNTY OF HENNEPIN
STATE OF MINNESOTA
By:
Chair of the County Board
And:
Assistant/Deputy/County Administrator
ATTEST:
Deputy/Clerk of the County Board
CITY OF HOPKINS
By:
Its
And:
Its
Option A
Option B
Charter
(10)
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Contract No. A031167
EXHIBIT A
CITY OF HOPKINS
During the contract term, the County shall:
Physically inspect and revalue 20% of the real property, as required by
law.
Physically inspect and value all new construction, additions and
renovation.
1.
2.
3.
4.
5.
. 6.
7.
8.
9.
10.
11.
12.
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Conduct valuation reviews prior to Board of Review - approximate dates:
March through May 15.
Attend Board of Review. Per Board request, make all necessary review
appraisals. Approximate dates: April 1. - May 31 .
Keep updated field card file - current values, homestead and classification
data.
Print, mail and post valuation notices and homestead cards.
Respond to taxpayers regarding assessment or appraisal problems or
inquiries periodically.
Make divisions and combinations periodically.
Administer the abatement process pursuant to Minn. Stat. 9 375.192 (2000).
Make appraisals, defend and/or negotiate all Tax Court cases.
Post values from appraisal cards to assessment rolls.
Adjust estimated market values on those properties not physically
inspected as needed as per sales analysis.
(11 )
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OCT-01-2003 15:20
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HENNEPIN CTY ASSESSOR
612 348 8751 P.02/02
Contraet No.. A031167
EXHIBIT B
2004 Assessment Fee Adjustment
Hennepin County and the City of Hopkins
Section 12.A. ofthis Agreement provides that, for the 2004 assessment only,
Hennepin County shall adjust its charge for assessment services to reflect the work ofthe
City of Hopkins' residential appraiser, in an amount not to exceed $42,500.
1. A fee reduction of $42,500 will be made for the 2004 assessment if the
City of Hopkins' residential appraiser continues to provide assessment
services until April 30, 2004, and completes the 2004 residential
assessment work.
2.
In the event that the City's residential appraiser either leaves city
employment prior to April 30, 2004 or otherwise do~ not complete the
2004 residential assessment, and the County completes the 2004
residential assessment, the $42,500 amomt will be reduced by $1,375 for
each week or portion of a week that the County provides assessment
services on the 2004 residential assessment
TOTAL P. 02