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-2- <br />Basically, the formula for computing the current value of <br />' <br />facilities is as follows. The total cost for construction <br />Of the facilities, .including engineering, legal, and adminis- <br />trative costs, less any part of it paid from Federal or State <br />funds, and less the principle amount of any then outstanding <br />bonds which were issued to finance this construction, is <br />multiplied by a factor equal to a current cost index divided <br />by the same cost index at the time of construction to determine <br />the replacement costs for these facilities. This replacement <br />cost is then depreciated by 1.25% per annum to determine the <br />current value for the facility. Attached is a sheet outlining <br />those computations and the annual current value credit over a <br />30 year period. The current value credit proposed to be given <br />to the City of New Brighton on an annual basis is $120,663.69 <br />which appears to be a 15 year schedule rather than the 30 year <br />schedule listed on the attached sheet. <br />Unfortunately, the time that we chose to say STOP came when the <br />City of New Brighton proposal was presented but if not New Brighton <br />it would have been some other city that ultimately would be the <br />one to be the catalyst for this change. <br />It would be foolish for us not to recognize that we, along with <br />a great many other cities, have benefited from this formula in <br />the past but that does not justify the continuing use of the r' <br />formula, which was either poorly structured from the very <br />beginning or has become inequitable over the years. The question <br />staff now places before the Mounds View City Council is, "Have <br />we chosen the right or the best battleground for this issue?". <br />If it is the right and best battleground, then we should continue <br />our fight and carry it beyond the present level to the State <br />Legislature. If it is not, then we should drop our opposition <br />to the New Brighton acquisition and determine when and where we <br />wish to again raise this issue for discussion. <br />Your direction in this matter would be appreciated. <br />DPP/pf <br />Attachments <br />Id <br />