HomeMy WebLinkAbout1983-08-08 Info PacketCity of Iowa City
MEMORANDUM
DATE: August 5, 1983
TO: City Council
FROM: City Manager
RE: Informal Agendas and Meeting Schedule
August 8, 1983 Hondav
NO INFORMAL COUNCIL MEETING
August 15, 1983 Monday
7:30 - 9:30 P.M. Conference Room
7:30
P.M.
- Review
zoning matters
7:45
P.M.
- Discuss
Foster Road east of Prairie du Chien
8:05
P.M.
- Discuss
Recommendations on downtown parking
a:15
P.M.
- Discuss
commercial use of sidewalks
8:30
P.M.
- Discuss
water billing procedures
8:45
P.M.
- Discuss
Transit Fare Subsidy Program
8:55
P.M.
- Discuss
revisions to peddler's permit requirements
9:10
P.M.
- Council
agenda, Council time, Council committee reports
9:25
P.H.
- Consider
appointments to Riverfront Commission, Committee
on Community Needs, and United Action for Youth Board
August 16, 1983 Tuesday
7:30 P.M. - Regular Council Meeting - Council Chambers
PENDING LIST
Priority A:
Priority B:
Priority C:
Discuss Council Policy Resolutions
Central Junior High, Use of Funds
Discuss City Council Majority Voting Requirements
Housing Inspection Funding Policy (August 22, 1983)
Housing Market Analysis Recommendations
MECCA Funding Request
Lower Ralston Creek Parcels - Use and Configuration
North Dubuque Street Improvements
Meet with Broadband Telecommunications Commission
Discuss Amendments to Non -Discrimination Ordinance
Clear Creek Investment Company Development
Discuss Transit Interchange Report
Discuss rezoning of 624 South Gilbert (August 22, 1983)
Meet with Design Review Committee (October 3, 1983)
Traffic Signals - Flashing Mode
Mandatory Parkland Dedication (Fall 1983)
Shamrock/Arbor Drive Drainage Area (November 1983)
Appointments to Committee on Community Needs - August 30, 1983
Appointment to Board of Electrical Examiners and Appeals -
September 13, 1983
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CITY OF IOWA CITY
CIVIC CENTER 410 E. WASHINGTON ST IOWA CITY, IOWA 52240 (319) 3=.0-5000
Iowa State Commerce Commission ISCC Consumers Comment Hearing
Lucas Office Building Davenport, Iowa
Des Moines, IA 50319 August 4, 1983
File: RPU -83-22
Re: Electricity Rate Increase Proposal by Iowa -Illinois Gas & Electric
Company
Statement by the City of Iowa City, Iowa
David Perret, Mayor Pro Tem
Dear Commissioners:
The Iowa City City Council, as the representative body for Iowa City,
strongly opposes the Iowa -Illinois Gas & Electric Company's electricity
rate increase (RPU -83-22) now being reviewed by the Iowa State Commerce
Commission. Iowa -Illinois has stated that the rate increase - an average
35.5% or 42% if phased in over several years - is necessary to recapture
the cost of constructing the Louisa County generating plant due on line
this fall. We disagree. Our opposition rests on the grounds that:
f (1) the new rate would be excessive and would have a profoundly negative
impact both on Iowa City's municipal budget and on the local economy;
(2) it would be excessive with respect to cost recovery and would unfairly
burden the consumer with the financial responsibility for the excess
generating capacity of the Louisa plant; and (3) no energy conservation
programs are offered to help offset the rate increase.
The economic impact of the proposed rate increase on Iowa City's municipal
budget and on the local area is devastating. The local, municipal
economic impact of this rate proposal would be that the City of Iowa
City's electrical costs would approach $750,000 for Fiscal Year 1984,
$810,000 for FY85, $860,000 for FY86 and $921,000 for FY87. Electrical
costs for Fiscal Year 1983 were $630,000, meaning that by FY1987 an
additional $291,000 would be spent for electricity even if no increase in
consumption occurred. Total additional cost to the City over the four
years would be $821,000, again in the absence of increased consumption.
This impact virtually eliminates the accomplishments of a municipally-
run, aggressive energy conservation program. In order to save costs, for
example, the City has reduced its BTU consumption of electrical energy per
degree day per square foot by over 55% in its 18 largest municipal
buildings over the past four years.
The financial pressure on the City budget imposed by the proposed rate
increase does not reflect the conscious effort by municipal departments to
conserve electricity. To have to inform Iowa City taxpayers that, despite
significant conservation in electrical usage, electrical bills will be
higher, is grossly wrong.
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The financial impact of the proposed rate increase on customers,
businesses, industries, and the cost of living should be closely
scrutinized by the Commission. We believe that regionally, such an
increase will deter general economic recovery.
The Iowa City community consumed 386.74 megawatts of electricity in 1982,
an increase of only 1.3% from 1981 usage, which, in turn, was only 1.7%
more than 1980 usage. Converted to dollars, the 1982 electrical bill was
$21.5 million. If the full 42% phased rate increase is approved, the
revenues from the same level of electrical consumption will be $25.09
million in 1984, $26.85 II -1985, $28.73 in 1986 and $30.74 in 1987. An
additional $9.24 million will leave the Iowa City economy in payment for
the same amount of electricity used in 1983. Based on an economic
multiplier effect, $1.27 actually leaves the local economy for every $1.00
spent on electricity. The phased -in rate increase of 42% will actually
cost the Iowa City economy $11.5 million by FY88 in investment potential.
The Iowa State Commerce Commission should carefully scrutinize the equity
in cost sharing between Iowa -Illinois and its customers for a level of
service which is not presently needed or even questionably needed for
several years in the future. We would hope that the Commission would
determine the appropriateness of Iowa -Illinois' original decision to
build the Louisa generating facility and would analyze the information
considered in that decision. Recent studies indicate that Iowa -Illinois
presently has the capability to provide in excess of 50% more electricity
than its customers are using during peak demand. If this is the case,
then present rates are far in excess of what is needed for an equitable
return on investment. If and when the Louisa generating plant is on line,
Iowa -Illinois will have nearly 81% excess generating capacity over the
1982 peak demand. Implicit in Iowa State Commerce Commission rules
allowing utilities to charge customers for new power plants is the
assumption that new plants are needed and useful for utility customers.
It does not appear that that assumption is correct for the Louisa plant.
Customers should not be asked to pay a profit to stockholders on
generating capacity which is neither used by them or useful to them.
Further, it appears that Iowa -Illinois intends to retire its debt for the
Louisa plant in an extremely short period of time. If the revenues from
the proposed electric rate increases for Iowa and Illinois residents are
used to retire debts for the Louisa generating plant, then, according to
Iowa -Illinois financial data, the annual payment for debt retirement will
exceed $70.4 million. If Iowa -Illinois retains its 43.7% investment in
the Louisa facility, equalling $260.4 million, its investment will be
retired within 3.7 years! The electrical revenues of Iowa -Illinois have
increased nearly 500% ($41.5 million in 1968 to $207 million in 1982)
while increases in peak demand have averaged only 4.7% annually in the
same time period. As stated earlier, it appears as if present levels of
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revenue are sufficient to capitalize debt, maintain a fair return on
investment, and compensate for inflation.
It is to the detriment of its customers that Iowa -Illinois has not yet
developed or implemented a strong plan for conservation. Such a plan
could have enabled Iowa -Illinois to manage more responsibly the
production and delivery of cost-effective service. Unnecessary new
generating plants could have been avoided. If the Iowa State Commerce
Commission should approve a certain portion of the electrical rate
increase, it should require Iowa -Illinois to provide to its customers a
comprehensive conservation program.
The City of Iowa City is presently negotiating a new electrical franchise
with Iowa -Illinois. It is of paramount concern that the new franchise
guarantee the most efficient and affordable service possible to Iowa
Citians. The proposed rate increase will not promote affordable service.
While Iowa City's new franchise is designed to promote local conservation,
and provides the City and its residents with opportunities to take
advantage of changing utility regulations, court decisions, and new
technologies, a state mandated conservation program would make a much
larger dent in reducing electrical consumption and in mitigating future
rate increases.
Attached to this statement, for your information, are graphs showing the
electrical usages and costs for the City of Iowa City and the Iowa City
area, a copy of the proposed Electrical Franchise and Regulatory Ordinance
between the City of Iowa City and Iowa -Illinois Gas & Electric Company,
and an earlier letter from Iowa City Mayor Mary Neuhauser, opposing the
rate increase.
Thank you for giving us the opportunity to present our views to you today.
1.$-4,7,
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380
370
350
Megawatts '
' 11
10
9
8
1.0
.9
.8
.7
S
(x 100,000)
.6
.5 .
.4 .
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For- Iowa Commerce Commission
Ia.-Ill. Gas & Elec. Rate File #83-22
—IOWA .C3.IY ABED TOTAL ELECTRIC USAGE
Community Use
78
iunicipal Use
80 82 84
IOWA CITY MUNICIPAL ELECTRIC COST
A877,500 �,'"$921,000
1 f.
r �
r �
' (42%)
(35%)i '
�"'-F.Y.84 Budget Level
rr
630,000
82
Fiscal Year Ending -
•ease,'78 to '83 *)
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City of Iowa City
MEMORANDUM
Date: July 22, 1983
To: Neal Berlin, City Manager
From: Larry McGonagle, Transit Manager
Re: Project Hard Times: Transit Fare Subsidy
As requested by the Council, I worked with Pat Gilroy, Crisis Center, and Tom
Bullington, Job Services, to formulate a Transit Fare Subsidy program.
Guidelines were developed that will cover the entire program. Additional
guidelines were developed covering the individual agencies involved.
General Guidelines:
1. Program will operate on a trial basis from August, 1983, through October,
1983.
i
2. Eligible participants will be allowed to use the system between 9:00 a.m.
and 3:00 p.m. (Council needs to determine if eligible participants will be.
allowed to use the system Monday through Friday or if Saturdays will be
included.)
3. Department of Public Transit will provide specially marked tickets to Job `
Services and the Crisis Center. We will use the ticket we have on hand. We
will purchase a stamp to mark the tickets for easy identification. This
will eliminate the cost of printing new tickets. The maximum amount of
tickets provided for this trial period will be $500. This will provide a
maximum of, 1250 trips. Initially each agency will be a
of tickets. This will provide 250 trips. llotted $100 worth
4. Transfers will be issued to complete a trip.
5. Students are not eligible. (Council needs to determine if only full time
students will be ineligible or if both part time and full time students are
ineligible.)
Jobs Services has requested they be allowed to issue tickets to anyone who is
unemployed and requests the tickets. Job Services does not want to be
responsible for determining eligibility or asking individuals if they wish
tickets.They would like us to provide a sign stating the tickets are available
to the unemployed, upon request. Each individual will be allowed up to three
tickets. This would allow for going to and from an interview and return to Job
Services.
Pat Gilroy of the Crisis Center stated that County Social Services and HACAP are
interested in participating in this program. If the Council decides to allow
this, I recommend the tickets be issued to these agencies through the Crisis
Center. Pat Gilroy would be responsible for issuing tickets on an as -needed
basis.' During the trial period Pat will keep records of who used the tickets and
for what purpose. Pat will be responsible for collecting this information from
County Social Services and HACAP, if they should participate.
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City of Iowa City
MEMORANDUM
Date: August 4, 1983
To: City Council
From: Frank Farmer, City Engineer
Re: Foster Road Right-of-way Acquisition
MMS Consultants, Inc., has been retained to provide the necessary surveys,
platting, and street alignment for Foster Road, at Dubuque Street and
Prairie du Chien Road. When this work is completed, it will be turned
over to Planning and Program Development for appraisals and acquisition.
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City of Iowa City
MEMORANDUM
Date: August 5, 1983
To: City Council
From: W.O. "Bill" Terry, BTC ChairpersonY"OK,
Re: The BTC's recommendation regarding Hawkeye CableVision's rate
increase request
BTC RECOMMENDATION TO COUNCIL:
Moved by Terry, seconded by Ehninger, that the BTC recommend to City
Council that Hawkeye CableVision be granted a 95 cent or an 11.9% increase
in the basic service rate, based on an average increase in local
operational, origination and administration costs to Hawkeye from 1981 to
1982. With four Commissioners present, this motion was unanimously
approved.
BACKGROUND OF THE RATE INCREASE REQUEST AND THE BTC'S RECOMMENDATION
Following is a synopsis and comments of the BTC to Council regarding the
recommendation. Further details will be available from the minutes of the
meetings. The BTC would like to meet with Council to discuss this
recommendation. In this discussion other BTC recommendations, including
the required extension policy and suggested ordinance amendments may also
be covered.
As an advisory commission to City Council, the BTC is charged with the
responsibility of making a recommendation to the Council on the matter of
Hawkeye CableVision's request for an increase in basic service rates of
$2.00. The BTC has 60 days in which to make this recommendation from the
time of the request filing, which was June 7, 1983. As per ordinance 78-
2917, section 14-76, Hawkeye has filed their rate increase request and
justified their request for arguing their goal, as stated in their
original proposal to Iowa City, of reaching an average of 13% to 17%
return on investment (ROI) over the first ten years of the franchise will
not be reached if an increase of $2.00 is not granted. Hawkeye and ATC
project an 11% average RDI for the 15 year franchise without an increase
in rates.
From the financial information supplied the City, and that requested by
the BTC, the BTC finds that the evidence presented by Hawkeye to justify
their rate increase request to be inconclusive. This is primarily due to
the facts that Hawkeye has: 1) only been in operation for three years,
and 100% operational for only 15 months, therefore it was difficult for
the BTC to determine a 15 year projection could be made based on the
current track record; 2) Hawkeye has continued to -grow in terms of
fubscribers and rate of return every year at a rate of 3% to 4%, although
this rate of growth has slowed somewhat.
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It is still unclear and difficult to attempt to project a leveling off or
plateau effect in subscriber levels and thus gross income for the company.
Such a plateau effect normally does occur in cable systems, and Hawkeye
has argued that effect is starting to occur now; 3) it became clear that
Hawkeye's financial status and growth as a company is interwoven with ATC
and Time, Inc. Is finances, through the interest payments, management fees
and pay channel costs returned to ATC and Time, Inc. The BTC was unable to
determine exactly the extent to which this relationship does or should
affect Hawkeye's ROI.
Therefore, the STC recommends there is not enough of a basis or
accumulated information upon which to decide a projected rate of return
calculation using traditional ROI procedures. However, it is recognized
that: 1) Hawkeye has had to build considerably more cable plant than
originally anticipated (at least 60 miles more plant); 2) that
construction costs have been higher than anticipated; and, 3) that there
have been increased costs on the local level categorized as operational,
origination and administration costs. It is upon an average of these
local increased costs in C. above from 1981 to 1982, which the Finance
Department pointed out to the BTC, that an increase is recommended. This
increase would amount to 95 cents per month more in .the basic service
rate, or an 11.9% increase.
This is not to say more traditional ROI procedures should not be used in
the future, or that this method of computing an increase should be used
heretofore. This next year should give the City an indication of how
close Hawkeye's projections are, so that any futrue rate increase
considerations will have more history and a company projection on which to
be based. It was noted that if at any point Hawkeye appears to be making
more money than the average 13% to 17% ROI, the Comm_ tomn can recommend,
and the Ut Council can reduce balic service rates accordin�v.
There were several concerns expressed by the BTC during their considera-
tions. In the financial area, ATC and Hawkeye's original proposal
projected a basic service rate of $8.95 through year ten of the franchise.
The requested increase at this time would mean a $9.95 rate at year four
of the franchise. Also, that the interest payments to ATC and Time, Inc.
will continue to be substantial throughout the life of the franchise, when
the original proposal projected a repayment of loans at year eight of the
franchise. There was also mention by the BTC of the potential growth in
revenue in other areas Hawkeye may become involved in, such as
advertising, data services, security services and increases in the pay
channel costs.
While considering a rate increase request, the City does not have to
confine itself to financial analyses only. The City may include in its
review, but is not limited to, overall franchise compliance, management
efficiency, services provided, and upgrading of the system. In that vein,
some Commissioners expressed concerns about the specific amount and uses
of the management fees to ATC, and management cooperation of ATC in
conjunction with the BTC in the form of a lack of responsiveness on the
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part of ATC in providing letters back to the BTC involving the extension
Policy, financial information and the provision of requested programming
services, such as a foreign language channel and a better weather channel.
However,notd that there have beennew proramming services
offered onitheaIowa City system such as CNN, SNC and MTV; that cooperation
on the local level regarding the resolution of the extension of cable to
new areas has been good and that company Support of access related
activities has been far above average.. There has been no weighting system
devised to evaluate such points in regard to a rate increase request, yet
such points can figure in such a determination and were included in the
considerations of the BTC.
Because of the magnitude of the task of rate regulation, -the bulk of
material to be processed, the need to determine precisely the right
questions to ask in such a process, the number of ways rate regulation can
be approached and the relatively short timeframe within which the BTC must
come to a recommendation (60 days), it is suggested that for this process
it would have been extremely helpful if: 1) the 87C would have had the
assistance of a third party consultant to make such determinations as fair
and efficient as possible; 2) the BTC could have had more than the
allotted 60 days to make a recommendation, which could be accompl
an ordinance amendment; and 3) the Finance ished by
staff
latitude to make a definite recommendation to thcould have had the
e BTC. ,
If the Council decides to grant Hawkeye CableVision a rate increase, the
BTC Chairperson is expressing an interest, which was endorsed by the BTC
members, that any more revenues generated to the City be used to give the
BTS position and/or office the compensation and/or funds that are more
commensurate with the pay scale similar positions receive across the
country and with the work that yet needs to be done with cable TV in Iowa
City so that: 1) high quality personnel are attracted to and can be kept
ain Iowa City; 2) Iowa City continues to progress as a model system and
ccesserelated, civic related, re benefits to its �institut institutional uses e interactfuture ive'servi�cas
es
and potential City funds, savings and/or revenue producing endeavors can
be realized. It is recognized that the majority if
incurred involving cable will be paid for not all expenses
by the franchise fee.
The BTC is very grateful for all of the assistance provided by the Finance
Department, the City Manager's office, the legal staff and the BTS in this
process.
bdw/sp
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CITY OF IOWA CITY
CIVIC CENTER 410 E. WASHINGTON ST. IOWA CITY, IOWA 52240 (319) 356-5000
Date: July 26, 1983
To: Council
From: BTC Chairman
Re: Hawkeye CableVision 1983 construction projects
Attached please find the letter from Bill Blough of
Hawkeye CableVision in regard to 1'5 areas of construction to
be completed in 1983. I received this letter from him in a
meeting on July 26, 1983 in which we discussed the concerns of
the residents of these areas. Installation of service was the
prime concern of these residents and certain residents felt
that they had received misinformation from Hawkeye staff. In
order to resolve this matter Bill Slough assured me that future
questions in relation to construction deadlines will be routed to
him. Hopefully this will provide information of greater accuracy
to the residents of Iowa City.
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Hawkeye
Cabl¢1TSio
July 25, 1983
Bill Terry ( Chairman )
Broadband Telecommunications Commission
Iowa City, Iowa 52240
Dear Mr. Terry;
I
Within the past few weeks, it appears that some concern has surfaced relative
' to the status of Hawkeye CableVision 1983 Construction. Because this is of
utmost importance to the company as well as the City of Iowa City,
appropriate to address this very issue. I felt it
' As you know, Iowa City is undergoing a tremendous amount of construction
throughout the community all in varying degrees of completion. It should
be noted that Hawkeye fully intends to provide service to all areas where
the status is either completed or under construction at this time. We will
complete all such projects during 1983.
i
Some projects have not been started as yet and are only in the planning stages.
In otherwords, no dwellings have been built as yet. These projects stand a
good chance of missing our '83 construction schedules. They will be picked
up in the Spring of '84. These areas include.a developement on the end of
First Avenue and one South of Abor drive, West of Morman Trek.
The rest of the projects include the following:
1. Orchard Ct. 60 block
2. Amhurst, Oberlin, Washington 6 Friendship add ons
3. Page (800 block)
4. Spencer Drive ( Completed 7-18-83 )
5. Mt. Prospect. This area is built but only being activated as demand
dictates.
6. Dover ( next to the Moose Lodge)
7. Shamrock Ct- Hud Housing
8. Benton Manor ( We are building as we go )
9. Waldonwood ( Trunk line extended- one subscriber )
10. Waldenridge - Cable being laid at this time.
11. Westwind Drive
12. Abor West of Dane's Dairy Southside
13. Melrose 6 Morman Trek ( no street yet
14. Carver arena.
15. Highway 6 d Newton Road
P.O. Box 4500
546 Southgate Avenue
Iowa City, Iowa 52240
319-351-3984
A subsidiary of American Television & Communications Corp.
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Also, there are many smaller projects ( perhaps two dozen seperate apart-
ment buildings ) under construction and nearing completion. These are being
built behind existing plant and pose no problem.
It is my intention to have service available to the following areas by
October let by project numbers given above: Numbers 1,2,5,7,9,10,12 and 14.
The remaining projects will be completed by November 1st and they are projects
�
3,6 8,11,13,15.
Of course rain will slow construction considerably but I will do my best to
stay as close to these schedules as possible. All of these new projects are
?; underground and are very time consuming. They represent a tremendous amount
of planning and engineering on the part of Hawkeye staff and we are looking
forward to serving them.
i Hawkeye has committed over $200,000 worth of capitol to these projects and has
' allocated an additional 360,000 for 1984. That's over a half million dollars
toward the continuing committment to serve our potential subscriber base
within the community.
Mr. Terry, if some of these new areas represent sensitive problems to you,
the commission, or council, please advise all parties interested to contact
me personally. I can keep all those concerned briefed as to specifics on each
project as well as more defined timetables of completion.
Respectfully submitted, �
U I
r William L. Slough
General Manager
i
WLB/ah
P.O. Box 4500
546 Southgate Avenue
Iowa City, Iowa 52240
319.351-3984
A subsidiary of American Television & Communications Corp.
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THE NEW YORK 77MB.% SUNDAY, JULY SI,tiM
MICROFILMED BY
JORM MICROLAB
CEDAR RAPIDS -DES MOINES
/c5G6
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WILL J. HAYEK (18964062)
JOHN W. HAYEK
C. PLTEn HAYEK
C.JOOEPH HOLLAND
WILLIAM O. WERGER
HAYEK, HAYEK, HAYEK & HOLLAND
ATTORNEYS AT LAW
110 EAST WASHINGTON STREET
IOWA CITY. IOWA 62240.3078
July 27, 1983
City Council of the City of Iowa City
Iowa City Civic Center
410 East Washington Street
Iowa City, Iowa 52240
Re: Oaknoll Tax Litigation
Dear Mayor and Council Members:
AREA CODE 319
337.9606
�IR�M
AUG 1'1983
MARIAN K. KARR
CITY CLERK (3)
Pursuant to Section 441.44 of the Code of Iowa I
am giving notice on behalf of the Board of Review of
the City of Iowa City of a voluntary Court settlement
of the assessment appeal in connection with the above
case. If you will recall, I previously wrote to you
on March 17, 1983, indicating that settlement negotiations
had been under way. The parties to this litigation have
now reached tentative agreement as to settlement terms.
Summarized generally, the settlement terms involve
the following. The residential portions of the Oaknoll
Retirement Home will be subject to payment• of property
taxes. The infirmary portion will be exempt from the
requirement of payment of property taxes. The parties
have negotiated a percentage allocation of values between
the residential and infirmary portions of the facility
to ease the allocation of assets between exempt and non-
exempt categories. Additionally, the parties have reached
agreement as to the valuations to be placed upon these
facilities for the years in dispute as well as for January
1, 1983.
If you have any questions concerning the proposed
settlement or its terms and conditions, please feel free
to contact me or Assistant City Attorney David Brown.
In addition, City Assessor Dan Hudson pa)a provide you
with additional information if needed.' Please provide
us with any comments you may have concerning this matter
on or before August 15, 1983.
Very trul yours,
ohn W. Iiuyek
JWH:vb
l{ j MICROFILMED BY k
tai' JORM MICROLAB y
CEDAR RAPIDSEDES MOINES' r
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