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Mr. Joseph Chlebeck January 24, 1984 Page 3 Accordingly, the Ramsey County Assessor's value is not the best source to be used in determining a proper fair market value. Most new facilities are financed through some type of lending company. In conjunction therewith, the lender will normally require a current appraisal. The City should require a copy of such appraisal or other alternative indicators of proper fair market value. TAX LEVY FEE - PRESENT VALUE FACTOR Mr. Echtenkamp's objections to our method of computing the tax levy fee was also discussed by you, myself, the City Engineer and the City Attorney. Additionally, I discussed these points with Mr. Echtenkamp several weeks ago and explained why we used the years and interest rates that we did. His computations are in error because he is using my Equivalent 1982/1983 which were based upon 29 and 19 years of tax levies and he is applying these mills for 14 years rather than the appropriate 29 and 19 years. If Mr. Echtenkamp wishes to use 14 years as his multiplier, he should use the same number of years as his divider to compute the average annual tax levy. A comparison of his computation and mine (before the present value factor adjustment is made) for the Sanitary Sewer System is as follows: November Objection Description Calculations Calculations 1. Total Scheduled Tax Levies $ 2,868,100 $ 2,868,100 2. Total Years c 29 yrs. _ 29 yrs. 3. Average Annual Levy $ 98,900 $ 98,900 4. 1981/1983 Amount Equivalent to 1 mill r 50,241 - 50,241 5. Equivalent 1982/1983 Mills 1.969 1.969 6. Total Tax Years 7. Total Mills @ 29 yrs. @ 14 yrs. 57.101 27.566 As shown above, Mr. Echtenkamp was inconsistent in his calculations. Had he divided the total scheduled tax levies by the same 14 years as his multiplier, he would have ended up with 57.092 total mills instead of 27.566 total mills (i.e., $2,868,100 4 14 = $204,864 _ $50,241 = 4.078 x 14 = 57.092). The .009 mills difference is due to rounding. Mr. Echtenkamp made the same error in his computations for the Water System.