Linn County Appraiser Lisa Kellstadt has inherited a situation left by the COVID pandemic where people from out of the area were buying real estate sight unseen and market values leaped 40% or higher. That has meant soaring taxes for those who owned property before the pandemic. (Roger Sims / Linn County Journal)
By Charlene Sims, infor@linncountyjournal.com
MOUND CITY – The Linn County commissioners met with Linn County Appraiser Lisa Kellstadt on Monday, Sept. 23 to listen to a report on conference call from Mike Dallman, property manager from the Kansas Property Value Division in Topeka.
Dallman explained that his meeting with the Linn County Commissioners was required by state statute because the county is out of substantial compliance with the state on real estate valuations for the prior year.
However, recent efforts by the appraisers office to adjust real estate values to current market values, while not popular with taxpaying property owners, has helped bring the county closer into compliance this year.
Dallman said that he would go over the audit or basically the procedural and statistical information for the county along with some appeal information.
He told the commissioners that the scorecard he was talking about was created by statistical compliance and procedural compliance. The statistical compliance is based on the 2023 sales, and the procedural compliance is based on the procedures that were done this past year.
He said with statistical compliance the state looks at two classifications of property – residential and commercial/industrial. He said they do not include agricultural or exempt or vacant lots and stuff like that in the statistical study.
Commissioner Jason Hightower asked if Linn County was in compliance last year and Dallman answered yes.
Dallman told the commissioners that being out of compliance is normal.
“We are seeing a lot of county’s struggling with residential statistics ever since COVID due to the market just going crazy the past three or four years,” said Dallman.
Dallman said that the mid-year results which are based on January through June of 2024 sales data were recently mailed out and were in compliance.
Hightower clarified the information, “Basically you are telling us that we were under-appraised based off of earlier in the year, but now we might be okay for the last part of the year.”
Dallman said as of last year, the county was under-appraised based on the statistical information for residential.
“It varies from county to county,” Dallman said. “You guys are located close to Kansas City, and it’s a hot market. So trying to stay up with the market can be challenging. I tell commissioners that currently state law requires that the appraiser appraise property at fair market value. Right now, fair market values are crazy.”
Dallman told the commissioners that it’s kind of a shock to people who aren’t directly involved in the market.
“Believe me, appraisers don’t want to raise values 30%,” he said. “It’s just unfortunately the nature of the beast right now. Hopefully things are settling down a little bit.”
Dallman said that the state does not require counties to increase the values. He said that they let that be handled at the county level.
“That is between you and your appraiser and how things work themselves out on their own. Sometimes people just don’t want to change values and currently we are not making anybody. I’m not going to tell you that you have to raise values.
Dallman reiterated that the appraisal values compared to sale values are much better in Linn County and are in compliance so far. He said that the values are based on 152 valid residential sales and six valid commercial sales.
Hightower asked if Linn County’s processes are correct.
Dallman answered that Linn County received 50 points out of 50 on procedural, so everything is being done correctly. He said that it’s just a matter of sales getting out of control at times.
“We have 10 counties out of substantial compliance this year and every one of them is due to the residential ratio,” said Dallman.
He told the commissioners that concerns other counties expressed were that out-of-state people were coming in and paying a lot for properties, and they thought that wasn’t fair that they bring up the market and other property owners’ values. But currently the law reads that county appraisals have to be at fair market value.
Commission Chair Danny McCullough asked if there were any ramifications for being out of compliance. He said it sounds like the county is in the wrong.
Dallman said it sounds a lot worse than it is.
Commissioner Jim Johnson said, “There’s no penalties for it, is what he’s asking.”
Dallman said that was correct. Basically when this system first came about, counties would be rewarded from a reimbursement fund if they were in compliance. The state would give each county back some money if the county was in compliance. But they have not used this funding for several years.
“I think they removed it completely out of the statute, so it doesn’t even exist anymore,” said Dallman.
Dallman said, “The only ramification for being out of compliance probably is that my boss the director of the property valuation division could remove the county appraiser from office.”
He continued, “I’ve been here 35 years, and that’s never happened yet. I don’t see it ever happening. Especially with the shortage of county appraisers that there are in the state right now. It would have to be something that we felt was, I mean, that they were purposely violating the law.”
Kellstadt told the commissioners, “We have just seen a crazy market. It’s been really hard to keep up, and as you can see 82%. I know people are yelling at us because their values are raising, but the state says we’re still not high enough as of this year.”
She said that the numbers for 2024 are better because the county did have a land value increase and values did increase.
In a later phone interview with Kellstadt, she did point out that in the previous year the county had been in compliance and that so far this year the county was in compliance.
Kellstadt said that she had been in contact with several counties on the eastern side of the state that were having the same issues with compliance.
She said that she was not seeing values decrease but properties were on the market longer and they did not have multiple offers they were having during COVID.
She explained that her office had to verify every sale by interviewing the seller or the buyer and then the state appraiser would also call them. She also pointed out that outside influences spend more money on property because they were used to higher prices in their areas and that increased the valuations of current Linn County properties.
She explained about how her staff go about doing analytical studies by studying land values, neighborhood valuations, land trends, cost indicators and other factors.
Kellstadt said because training is very important for people on her staff in their analytical work they frequently are taking classes to keep up. She said that she hopes to have the next generation in her office well educated in the appraisal process.
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