Agenda - 06-03-1991 - Laserfiche WebLink

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T By way of comparison, and to give some idea of what a combined pay -as- you -go /bond financing program would cost, Table 9 assumes that the two cent tax increase needed to meet debt service payment in the first year would be held constant throughout the 20 -year period. In subsequent years, funds remaining after the debt service payment was made would be used to purchase development rights. If such a combined program were implemented, the total cost of the program would be slightly more than $29.3 million, result in the acquisition of development rights on 5,630 acres of farmland, and cost the owner of a $100,000 home approximately $820 (average of $41 per year). Regardless of which funding method is chosen, the acquisition of development rights is expensive. The advantage of the program over purchase in fee simple is the land remains in the hands of the owner and is taxable. In contrast, even with expenditures on the order of $29.0 million, development rights could only be acquired on six percent of the 90,373 acres under agricultural use. This assumes an average cost of $2,400 per acre and a seven percent appreciation rate. If, however, the program focused on the acquisition of development rights in the northern and southwestern portions of the county with costs of $1,500 per acre, development rights could be acquired on approximately 14 percent of the acreage under agricultural use (See Table 10). 5. Where will the purchase of development rights most likely occur? Table 2 shows the distribution, by township, of parcels and acreage under the Preferential Assessment /Deferred Taxation Program in Orange County. In terms of acreage and number of parcels, participation is greatest in Cedar Grove, Bingham, and Little River Townships. In terms of the total amount of land area in each township, at least 50 percent or more is assessed on the basis of its agricultural or forestry use value. The purchase of development rights would most likely occur in these areas, because of the presence of active farms and good soils. The presence of a number of farms in close proximity to each other is also beneficial from an economic and management perspective. Farm equipment and products can be moved easier and less expensively than in areas where farm lots are scattered. There is also less opportunity for residential development and associated nuisances to occur. Another advantage is that development rights may cost less in these areas than close to urban centers. Based on the values presented in Table 1, the average market value per acre would be lower - $1,980 versus $2,826. With an average use value of $422 in these townships, development rights might be expected to cost $1,558 or close to the national average. This would mean more benefit derived for the expenditures made. Page - 10