Agenda Packets - 1987/04/13 - Laserfiche WebLink

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TELEPHONE 681-2681 '. O "'! IT.i{ll'!�a7� �'E�IiT Mr. Donald Pauley City Manager City of Moundsview 2401 Highway 10 Moundsview, MN 55112 Mary nderson BETE EB Ipw6 fGR BETTER ❑ NG MARMN GRR,XMWCd IRKTM CMeN, EfJE e,wME RYTNVF eRUEN .mrBuaB Mr,rrtwu eseEo April 9, 1987 'a 3d'h Annr��rrriry Dear Mr. Pauley: This letter is in reference to our telephone discussion pertaining to the SWM charges pertaining to Silver Lake Woods condominiums. From previous discussions on this subject, we had been very hopeful that the adjustment in the charge would be made as requested in my letter of October 15, 1986. At the beginning of each year, we calculate what our developed lot costs are in each of our subdivisions along with all other costs to determine what, if any, cost increase and therefore price in- crease must occur at the beginning of each year. Unfortunately even during a period where inflation is quite low, our industry still experiences a certain amount of cost increases. This year a large increase is the 15% import tariff being added to Canadian lumber. Land and finished lot costs always increase due to the additional holding period and the cost of borrowed money to purchase the property, real estate taxes, and special assessments. When we calculated our land cost for Silver Lake Woods, we cal- culated it with the assumption that the adjustment on the SWM would occur. Even with that adjustment our total costs increased which necessitated increasing the sale prices which was effective March 1, 1987. Fled we not assumed that the adjustment would occur, the increased prices would have been considerably greater than what actually occurred. To answer your question as to whether or not we would be able to reduce the price of the housing units, passing on the savings to our buyers, the following would occur. Without the increased cost from what we calculated we would not need to increase the sales prices, however, if the adjustment does not occur, we will then need to recalcuate our costs and increase the price once again. Therefore in effect the adjustment will save the buyers of the units, not only the amount of the reduction of the SMW charge, but also the other necessary mark up expenses such as real estate commissions, financing costs and so forth.