Laserfiche WebLink
January 18, 1984 <br />Page 2 <br />factor equal to the difference between assessment interest and an <br />equitable present value factor such as 12% should be used. In <br />other words, charges attributable to the lateral charges should <br />be discounted to present value at a rate of 7.25% for the <br />sanitary sewer system and 6.25% for the water system (12% - 4.75% <br />= 7.25% and 12% - 5.75% = 6.25 %). The remaining term of the bond <br />issuance should be used for purposes of a discount period, <br />presumably, the remaining term set forth in the connection letter <br />on page 6, i.e., 14 years. <br />Tax Levy Fee <br />Assessed Value of Facility. The connection charge letter <br />estimated the fair market value of the completed facility at <br />$200,000 for purposes of computing assessed value of the <br />completed facility. Dr. Taylor asserts that the true fair value <br />of the property is no more than $104,200. He bases his valuation <br />upon the 1983 assessed fair market value as calculated by the <br />Ramsey County Assessor's Office. Both Maplewood and Little <br />Canada contract with Ramsey County for assessment valuations. <br />The St. Paul City Assessor appraised Dr. Taylor's property on its <br />Rice Street location in 1983 at $97,400 ($28,200 of this sum was <br />attributable to land). Since the facility on County Road B is in <br />all respects identical to the facility on Rice Street, Dr. Taylor <br />asserts the fair market value of the facility should be the fair <br />market value as calculated by the Ramsey County Assessor, that <br />being $69,200 ($97,400 total fair market value minus $28,200 land <br />= $69,200). Dr. Taylor purchased the land upon which the <br />facility now sits for the sum of $35,000 in an arms - length <br />purchase in September, 1983. Therefore, total fair market value <br />of the facility and land should equal not more than $104,200 <br />($69,200 facility appraisal plus $35,000 fair market value /cost <br />of land). A copy of the Assessor's statement is attached. <br />Present Value Factor of Tax Levy Fee <br />In the computations in the proposed formula, equivalent <br />1982/1983 mills were multiplied by total tax years in the bond <br />issues and then adjusted by a present value factor adjustment <br />based upon bond interest rate. Because the city will have the <br />benefit of Dr. Taylor's connection charges currently and for the <br />remaining term of the bond issues, Dr. Taylor asserts that the <br />equivalent 1982/1983 mills should be determined over the <br />remaining issue period and adjusted by an equitable present value <br />factor such as 12 %. If the formula is not calculated in this <br />