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Commissioner Schroeder inquired if each property is reviewed and if the amenities of each property arel: tthken into consideration. Mr. Keefeir~plied that each property is assessed every four years and if there are any improvemefif~ offadditions to a property, it would be reflected in the next assessment. Upon inquiW as to why valuations have increased; Mr. Keefe replied sales ratio studies show that before the ~9.91 teassessment, values and sales were widely dispersed and not within the State's minimum ahd maximum deviations from the actual market value. The State and County currently hold assess0rS aO~:ountable to defend the values they place upon properties. If a City is found to be in violation~ then.:the County or State may step in and raise values appropriately and bill all charges back to the ~2ity. ~The ratio of assessed value to sale value is to be at 95%. In 1989, the coefficient of dispersiOn~wai~ over 25% for Ramsey's commercial properties. This required the City Assessor to reassess ~[ commercial property and bring the valuation up to the proper level as required by the State and C~finty~ This presented some problems because the City did not have the physical data and all site~ !had to be reinspected. Some properties go up and some will go down with the reassessme~ti The primary reason for the increase was that the land values were too low and did not reflect ~al value of the property. Commissiohcr Oorecki asked when assessing and doing inspection, if the value of the property is taken into cb~sideration. Mr. Keefe replied that the value is based mainly upon the size of the property. Commissioner Nelson suggested that if someone is marketing a property and it is not sold, then perhaps it is Yalued too high. Mr. Keefe ox.,p, lmtted that ~s the very reason that the assessor wall use an actual sale price rather than "asking pri~', bi, cause many people ask for a higher price that the actual value and the property will not sel~m, a timely fashion. Commissio~hCr V~evea stated that taxes are the basis of all of the economy Ramsey has. There is enough undeyel0~ped, industrially zoned property to last for the next 20 years. If the City raises taxes on thi~ property, people will stop paying the taxes and it will become tax forfeit and become property oftlie City; therefore, no tax revenue will be collected. Small businesses want to move to a location ~i~h lOwer taxes. He also stated that on his business alone, he previously paid $3,500 in taxes an~ t, hey have now been raised to $7,000. Commissioner Vevea suggested the City use Tax Increment Financing to build a business incubator program. Chairpersort Wagner stated that a subcommittee for developing and industrial development plan for the City is Workit!g on a large scope plan to be used to develop the commercially zoned area of the City. CommissiogCr Vevea stated that as taxes are increased, they are causing the City and the Country to erode an~ !hat the City cannot be so intent upon extending municipal services to the industrial areas. Mr. Keefe Stated. that taxes on industrial property have risen more than on residential properties and that a resid~r!tia[property valued at $150,000 would pay approximately $1,050 in taxes whereas the same $1~0,000 commercial property would pay between $3,000 to $3,500 in taxes. In the Economic Development Commission / April 8, 1992 Page 3 of 4