Analysis of $38 statement:
City's Assumptions in Ad:
The city's calculation of a $37.95 annual cost is based on a 25 year loan, with a 5% interest rate and annual lease revenue of $618,775 and the average property assessment of $289,509. (Land $138,937, Improvements $150,572). Their total actual annual nut to crack is $1,480,239 of which $1,000,000 is interest and $480,239 is principal pay down yearly.
Don Quixote's observations about City's calculations:
The multiplex and the theatre are financed over 20 years on an improvements only basis and this average house would have paid $62.72 towards the $14,750,000 multiplex with $14,25 million set to expire in 2020 AND $34.06 towards the $9,020,000 Theatre with $7.050 million set to expire in 2020 with balance by 2022. (The majority of these monies were financed at 6.36%. (and remember that there is a wider tax based as Areas B and C and Coldstream contribute to these functions through GVSC.)
(These annual charges also include the cost for the ongoing operations.) (67.3% of multipex costs are for debt servicing while 75.5% of Theatre costs are for servicing debt- balance appears to be for operating costs and reserves) This would make the Debt costs for the Multipex $42.21 and the Theatre would be $25.72. Operating subsidy would be $20.51 for Multiplex and $8.34 for Theatre.)
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- If the city's annual lease revenue figures of $618,775 are excluded because either they are optimistic, NOT new revenues, or will not it fact be directed exclusively against the sinking fund of this $20,000,000 loan the average house would have an annual charge of $65.22
- If the City actually financed over normally used 20 year period the annual nut to crack would rise to $1,671,635 and the average house would have an annual charge of $8.43 more raising the cost to $73.65.
Other Data:Breakdown of Anticipated lease revenue $618,775
- 3rd floor rental $108,908,
- RCMP add. space $40,499,
- Parking revenue, $95,040,
- Old library Building Rental $150,771,
- Art Gallery $223,820.
(Old Library Rental 13071 sq ft @ $11/sq ft = 150,711,Art Gallery 18635 Sq.Ft @ $12/Sq ft = $223,620, RCMP 6000 sq ft @ $6.65/sq.ft =$40,499, 3rd floor rental 18635 sq.ft @ $5.84 sq.ft. = $108,908 and Parkade 144 spots (96 L1 + 48 L2) @$660/year or $55/month =$95,040
- Contingency built in $900,835
- City to Library Subsidy: $1,031,085
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Most of these numbers come directly From a June 18 report from the Manager of Finance. There is also an alternative proposal for a 4 year financing that would cost the average house $159.56 ($160 in ad) and also uses the same revenue recovery each year of $618,775. Naturally the average house tax would go up an additional $27.27 (65.22-37.95 ) making a total of $186.83 each year for 4 years if revenue is excluded. (In point of fact the rate in their June 18 calculation is .7452/1000 and the average house assessed at $289,509 would pay $215.74.) (This revised figure of $215.74 would be increased to $243.01 if the revenue was excluded.)
City continues to "inform" us using the taxpayers own money. (excerpts below)July 20 Posting:
Actually the City's taxation for the 4 year plan using their own residential levy rate of .7452 per thousand on the average house valued at $259,509 is $215.74 not $159.56.($160)This correction would help the City to persuade you that is better to pay $38 per year for 25 years rather than $215 per year for 4 years. Naturally this ignores the fact that the $618,775 of rental income( if amount is correct) would continue to flow in and would amount to a reduction in taxes for the average house over the next 21 years.
-------------------------Look at your 2007 Tax Information sheet. This same $289,509 property paid General Municipal taxes of $672.78.
- A $38 per year increase over 25 years is 5.64% increase
- A $65.22 per year increase over 25 years is 9.69% INCREASE. (new)
- A $73.65 per year increase over 20 years is 10.94% INCREASE. (new)
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