08-14-1980 Council Minutes Special Meeting-sewer info

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. � Page 9 The purpose of this report is to establish the effect on the value � properties because of the installation of a sanitary sewer. The added value to the two lots that would become buildable if a sewer project is installed would be considerable. The 1980 estimated market value for these properties is 8500 for Map �33. The 1980 EMV for adjacent building sites ranges from $15,000 to $20,000. The 1980 estimate market value for Map �54 is $2,200, this lot appears to be mostly s�amp and low land as observed from the aerial photos. The nature of properties along West Ferndale is entirely. . different than that of the riinnetonka Bluffs area, and the adjoining building sites have a 1980 EMV of $45,600 and up. There are 34 lots that have major problems severe enough to warrant the immediate use of holding tanks if sanitary sewer is not installed. The value of these properties would drastically be effected if they were forced to install holding tanks. The loss of value, to a prudent buyer, would be through the maintenance, pumping, of the holding tanks. Tanks would most likely have to be pumped twice a month at an average cost of $70 to $80 per pumping. That is an annual cost of approximately $1, 800 plus for the first year. Future costs could be anticipated to increase at a rate of 10 to 20$ per year. That would mean a cost, over 15 year period of $62,900 ranging from $1, 800 the first year to $:7,500 in the fifteenth year. These f igures are assuming $1, 800 the first y_ear with � a 10$ annual inf��tion. - Also, many>banking institutions will not finance a property that does not have adequate on-site systems or that is not hooked up to municipal sewer. The FHA is also withholding approval of mortgage guarantees on properties that do not meet on-site or sanitary sewer requirements. The cost of continually, maintaining holding tanks and the inability to get financing would have a markedly adverse effect on the value of these properties. There are 13 properties where major changes to the existing on-site systems are now neeessary. • In manX cases these repairs would only be delaying the inevitable of requiring holding tanks or some other means of sewage disposal. Again, there would be _a loss of value to a knowledg able buyer because of these problems. It would also be difficult or im- possible to get financing in properties that have major problems as thes do_ The cost of repairs and likelyhood of future problems along with tt difficulty in obtaining financing would have an adverse effect on value these properties. There are 20 properties where minor repairs could be required. The properties are all contiguous to, or located iri, areas where major prob] now exist. The value of these properties could be adversely effected be cause of these adjoining properties_ A knowledgable buyer would not pa� as much for property that could experience problems in the foreseeable future_ Banking institutes familliar with the area could be reluctant to finance such properties which could have an adverse effect on value. Because of the large range in values of the properties in question