To: Victory Heights Property Owners

From: xxx

Victory Heights Residents

Date: February 28, 2006

Subject: Victory Heights County Road Maintenance District Survey Results

The purpose of this memo is to update the Victory Heights property owners on the final results of the survey that we initiated on December 12. We accepted survey inputs until February 15.

Final Survey Results

Three of the survey responses indicated that they were included in the proposed Maintenance District (MD) in error, in that they have access to Highway 260 without using the Victory Heights roads. They have been removed from the proposed MD. Also, one 10-acre parcel has been split into four parcels which have all been sold since the beginning of the survey. Therefore, we now have 72 owners within the proposed MD

Of these 72 property owners, we have received responses from 60 of them (83%). Of these 60 responses, 40 indicated an interest in pursuing the formation of the MD. Therefore, of those owners who responded to the survey, 67% were in favor of the MD. This is a 2:1 margin. Note that the 40 favorable responses also represent 56% of all 72 owners in the MD, including those that did not respond to the survey.

Given this very positive response, we will proceed with the next steps in the MD formation process.

Next Steps

The next major step in the MD formation process is the development of the formal petition to form the MD, and to present it to the property owners for signature.

In order to develop this petition, we will need to provide a formal, legal definition of the MD boundaries which is signed by a Professional Engineer. We are in the process of retaining an engineer to perform this task, and expect that it will be completed within the next several weeks. Shortly after that, Navajo County officials will provide us with the above petition ready for signature by the property owners.

At that time we will schedule an informational meeting for all Victory Heights property owners, at which we and appropriate Navajo County officials will be available to answer any questions you may have. This meeting will be held locally, near Victory Heights, to make attendance as convenient as possible for everyone. At this time, there will be an opportunity for property owners who are in favor of the MD to sign the petition.

If you are unable to attend this meeting, a copy of the petition will be mailed to you for your signature.

Assuming we receive the signatures of a majority of the property owners, Navajo County will then take over the remaining steps of forming the MD. If everything proceeds smoothly, we would expect funds to become available to the MD so that it can begin maintaining our roads in late 2007.

Finally

As an appendix to this memo, we are providing an additional “Frequently Asked Question” to address a concern which has been brought to our attention.

If any of you have any questions or concerns, please contact xxx or xxx). You can also send email to Jim at xxx

We would like to thank everyone who has responded to the survey, and we look forward to your continued support as we proceed with the formation of the MD.

Sincerely,

xxx xxx

Additional Frequently Asked Question

1. We have recently received a notice of property valuation from Navajo County, which indicated a significant increase in the assessed valuation of our property. Does this mean that our property tax estimate for the MD will also go up?
No. The estimate for the annual cost of the MD has not changed. Therefore, the same cost would be spread over a larger total assessed valuation of all properties in the MD, resulting in a smaller levy rate for the MD, so your property tax estimate should remain the same (assuming you haven’t made any improvements to your property to cause an additional increase to its assessed valuation). For example, let’s assume that the Assessed Full Cash Value for your property is currently $10,000, the total of Assessed Full Cash Values for all properties in the MD is $850,000 and the annual costs of the MD are $16,000, resulting in an MD levy of $1.88 for every $100 of Assessed Full Cash Value. Therefore, the portion of your property tax required to support the MD is 100 x $1.88 = $188. If everyone’s property assessed value has increased by 10%, then your new Assessed Full Cash Value would be $11,000, and the new total Assessed Full Cash Value for all properties in the MD would now be $935,000. However, the MD annual cost is still $16,000, so the new MD levy would be reduced to $1.71 per $100 of Assessed Full Cash Value. Therefore, your new property tax required to support the MD would be 110 x $1.71 = $188, i.e. it is unchanged.