New formula is approved by commission
CHARLESTON - After approving yet another change in the formula for assessing riverfront property with mooring leases, Mississippi County Commissioner Homer Oliver recalled his father telling him that while a wise man will change his mind, a fool won't.
"Everything we did last week was rescinded today," Presiding Commissioner Jim Blumenberg said during Thursday's regular county commission meeting.
Commissioners approved a revised formula from Roger Arnzen, certified appraiser, having determined the formula they approved during their meeting last week cut taxes on riverfront property with mooring leases too much, dropping them by about 90 percent. "All we want to do is treat everybody fair," Blumenberg said.
Arnzen met with commissioners and County Assessor W.R. "Bill" Thompson during the meeting to explain his formula.
"He's considered our chief appraiser," Thompson said, with Arnzen being under contract with Mississippi County.
"In Missouri, you can assess a lease," Arnzen confirmed.
As the formula is dealing with unimproved land, the reversion figure included in Arnzen's formula as first presented to Thompson was dropped as well as a 5-percent deduction for vacancy.
Arnzen's adjusted formula takes the gross income of the lease and subtracts 10 percent for expenses to arrive at a net operating income figure. The net operating income is then multiplied by a factor from the compound interest table to come up with a present worth of the lease. The present worth of the lease is multiplied by the commercial rate of 32 percent to come up with the assessed value of the lease.
The assessed value of the lease in then added to the assessed land value of the parcel, which is assessed at the agricultural production rate, to derive the total assessed value of the parcel.
The multiplication using the factor from the compound interest table is to account for the increased value of the land during the life of the lease should someone wish to purchase the parcel.
Under the formula established by a former assessor, however, this factor was not decreased each year as it should have been.
County Clerk Junior DeLay said by using straight capitalization which remained constant every year instead of using the compound interest table to lower the figure annually, riverfront landowners with mooring leases were essentially getting taxed on about double of the lease value.
Arnzen said the parcels with mooring leases should be reviewed and adjusted at least every two years as part of the regular, mandated assessment cycle.
A land owner with mooring contracts on his land expressed concerns of breaching the confidentiality of the lease agreement when asked to provide the contract for verification of the contract's value.
Blumenberg said county officials will need to see the documentation of the dollar amount and linear feet involved in the lease, but have no interest in or need to see any other part of the lease.
Arnzen said the formula is based on a level stream of income so leases with variations in price over the length of the lease will need to be dealt with a bit differently to determine present value of the lease.
Assessor's office staff reported there are 14 parcels with riverfront mooring contracts owned by six landowners.
In other Mississippi County business:
* Commissioners awarded the three-year lease of the county's 65 acres of farmland to the highest bidder, John Bledsoe, who bid $5,000.
Also bidding were Lindsey Goodin who offered $4,940; Alan Collins who had the lease for the last three years and offered $4,900; and Thurmon Sutton who bid $4,875.
* Funds for Thompson to attend a course on the fundamentals of mass appraisal and the annual state assessor's conference were approved by commissioners.
Also approved was the mandatory purchase of the personal property valuation guide for $420. Officials noted previously this manual was offered at the conference at no additional charge.