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5 <br />OWASA ORANGE WATER & SEWER AUTHORITY <br />Quality Service Since 1977 <br />MEMORANDUM <br />TO: Ed Kerwin <br />FROM: Ed Holland <br />DATE: November 30, 1998 <br />SUBJECT: Optional Methods for Calculating Payments to the Orange Grove <br />Volunteer Fire Department <br />Background <br />OWASA has expressed its willingness to consider possible payments to the Orange <br />Grove Volunteer Fire Department ( OGVFD) to help offset losses in fire district tax <br />revenues that might otherwise have been levied on land owned by OWASA within the <br />fire district. <br />A November 3, 1998 letter from Dr. Ed Johnson of the OGVFD proposed that OWASA <br />Provide annual compensation based on (1) total acreage of OWASA watershed land in <br />the fire district, (2) estimated tax valuation of that land, and (3) the OGVFD tax rate. <br />Based on Dr. Johnson's estimates for these parameters, payments would amount to <br />$4,725 per year. <br />Additional information, including the amount of land taxed at its use value, rather than <br />market value, was obtained from the Orange County Tax Assessor's Office to help refine <br />those calculations. This information is presented in Table 1. <br />Amount of OWASA Land <br />Orange County Tax records indicate that OWASA owns 2,927 acres of land within the <br />OGVFD tax district. Approximately 2,100 acres are within the Cane Creek watershed, <br />including some 540 acres purchased for the reservoir itself. The remainder of OWASA <br />property in the fire district is outside of the watershed, either adjacent to the dam and <br />recreation area, or reserved for biosolids application. <br />Calculations in Table 1 are based on all 2,927 acres of OWASA property in the tax <br />district. Alternatively, this can be scaled back to the approximately 2,100 acres within <br />the watershed. <br />Tax Valuation <br />Orange County applies standard methods for assigning value to property for tax <br />assessment purposes. Land may be taxed at its market value or its use value. That is, a <br />piece of property currently in agricultural production coul-d be taxed on the basis of what <br />it might sell for on the open market, or on the basis of its agricultural use. <br />400 Jones Ferry Road Eqw /Opportunity E-p/oyrr Voice (919) 968 -442 U <br />PO Box 366 Princed on Reerded Paler FAX (919) 968 -4464 17.2 <br />Can6oro, NC 27510 -0366 <br />