Property values reportedly rose by as much as 50 percent

By Robert Williams

Editor

The Otter Tail County Assessor’s office announced back in March that county residents will likely see big increases in property values to the tune of 15-30 percent. Actually seeing those increases has a group of Rose Lake business owners and residents perplexed, and seeking more transparency, in how those numbers are factored.

Gina Kitchenmaster, owner of Rose Ridge Resort, contacted friends around the lake to discuss if they were seeing such large increases in values.

“I was just trying to gauge the area,” she said. 

Rose Ridge Resort saw one of the biggest increases of the group of five women who gathered to discuss the topic Friday.

“Our value went up 50 percent and our proposed taxes went up 35 percent,” she said. “Normally, our taxes kind of jive with the local area. I’ve never seen an increase of 35 percent.”

The hike is at least double the biggest increase the resort has ever seen in two decades of operation.

Kitchenmaster spoke with her county commissioner and the county assessor. The commissioner pointed her in the direction of the assessor, who explained that the property value is not necessarily related to the tax amount.

“For me, this has kind of been an education,” she said. “I think most people are probably in the same boat as me. You get the bill; you write the check. It was informational to figure out how the system worked.”

Another piece of advice Kitchemaster got was to attend the next county board of commissioners when the budget is discussed. Part of the assessor’s explanation on the tax amounts was the reason residents are seeing taxes go up is that the budget is increasing.

“If you want to know where your tax dollars are going, go to those meetings,” said Kitchenmaster. “My personal thing is why are they raising the budget so much at a time like this? We’re all trying to live within our means. They can certainly work within the budget that they currently have. Living within my means is shrinking. I think everyone needs to tighten it up until things sort themselves out.”

Chief deputy assessor Kevin Scheidecker spoke publicly in March about the coming increases stating a major factor was that properties were selling for higher prices than in 2021. 

“I don’t know that I necessarily disagree with the value of our properties going up because they typically do every year and that’s just how it works,” said Kitchenmaster.

The group has also noticed more properties selling around Rose Lake over the past year.

“We all have seen it’s been a bit of a land grab out here and of course that’s going to drive our values up, but the amount that I saw go up seems unreal,” she said.

Shannon Charpentier produced a decade of her records of the valuations of her property and aside from one year where she added construction to the property and saw a distinct rise in value, her evaluations had been relatively consistent. This year, the change was nearly double of her construction year and she has done nothing to the property.

“There doesn’t seem to be a lot of rhyme or reason,” said Charpentier.

Doreen Schwarzrock and her family have an extensive history on the lake dating back to when her grandfather purchased the entire east shore drive. Her 90-year-old mother has lived there all her life.   

Her grandfather built the road with a team of oxen that he drove across the ice from his parents’ farm and eventually divided the property into 23 50-foot lots and had a resort until his death in 1960. He built or helped build a lot of the original cottages.  

Doreen and her husband Ken lived on this property in a trailer house during the late 70’s and early 80’s and recall paying only $60 per year in property taxes. That amount has increased exponentially since.

“I know that there are many improvements that we made but, it is a lot for us to pay,” she said.

The value of her property this year jumped 75 percent and the Schwarzrocks made no improvements. 

The tax increase is less of a concern compared to the proposed value in most of these cases.

Her proposed taxes are up 11.3 percent. 

“I think I’m okay with that,” she said.

The group believes the hyperinflation from the housing market induced by COVID and other factors is creating a bubble that’s being used to create numbers that are not realistic in the medium to long term.

“Is that really true value, what we’re seeing with our increases, the way they are?” said Kitchenmaster. “I feel like it’s almost an artificial inflation because you’ve got a few things going on: the pandemic, how building supplies and everything went way up. Well, it’s not always going to be that way. Apparently, because of the pandemic, people were buying property outside of the cities.”

“So everything became more desirable?” said Maria Shomento.

“Without doing any improvements, why is my value 50 percent more?” said Kitchenmaster.

“It’s like a bell curve,” said Shomento. “You can’t take it right at the very top of that one moment in time and then do that for the next five years.”

“The bubble is bursting as we speak,” said Lori Botzet.

Lori Botzet raised her concerns and went looking for explanations in speaking to county appraiser Joel Dulski.

“I went through everything with him and it’s a very complicated process and the state directs it,” Botzet said. “After everything I’ve looked at, we need to go higher. We need to talk to our local representatives. They’re the only ones who can change this system.”

Botzet commented further on the difficulties in understanding the system, along with the topic being one that not everyone involved in the process can properly define or discuss.

“He gave me a lot of information that was so complicated and I think that’s our biggest problem,” Botzet said. “We need to inform people on how to understand our property taxes. It’s always been baffling. His hands are tied. He is obligated by the state and this is what makes it so unfair—this is about an inflated market beyond our control.”

The group’s concerns spread well past their own properties. After comparing all the different values together from homes to businesses, agriculture and empty land lots, they noticed a trend in their sample size.

“Basically, they’re hammering land lots, agriculture and small businesses,” said Shomento. “It’s land lots and small business owners.”

“I think one of our biggest concerns are our small businesses,” said Botzet.

Others are worried about being taxed right off their properties.

“That’s exactly what it is,” said Schwarzrock. “Rose Lake is family-owned. I’m the third generation, my granddaughters are the fifth generation. There are only three houses that have been sold out of the family since 1930.”

While some of the numbers match what the county predicted earlier this year, it still does not sit right with residents looking into the future.

Shomento saw a 37 percent increase in her property value and a 13.9 percent tax increase and she wants details from the county and state. There needs to be more transparency other than saying prices are going up, the budget is up, and here is your bill.

“Educate us, number one; tell us how you get this number?” said Shomento. “Explain it to us and send that out to us. Spell it out.”

Otter Tail County will hold its annual Truth in Taxation meeting on Tuesday, Dec. 13 at 6 p.m., at the Government Services Center, 500 West Fir Avenue, in Fergus Falls.

According to the county’s announcement, this meeting is a time for the public to hear a general review of the county’s budget and levy, and an opportunity for the public to comment on the proposed budget and levy, as well as to ask questions.

The Board of Commissioners has set a proposed levy increase of 6.61 percent that cannot be raised, but may be lowered before final approval on Dec. 20. The final levy is used to calculate payable taxes in 2023.

Cities and counties do have a tendency to set levy numbers high as once set they cannot be increased, but can be lowered if needed. It takes public input to affect that number.

The Dec. 13 meeting will not allow residents to appeal property valuation and classification. Those meetings are typically held in April. The Truth-in-Taxation meeting is held to discuss the proposed budget and tax levy only.

Even those who were surprised by their tax bill, in a good way, are questioning the process.

“I thought my taxes were going to double and they’re not, they’re barely anything. How does that work?” said Charpentier. “I think it’s just inconsistency that we’re seeing.”

By getting together to discuss the issue, one point the group wanted to get across was to encourage residents to make their voices heard.

“If we are paying more attention to it and start showing up at the meetings we draw more attention to it,” said Kitchenmaster.