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Letter to Susie L. Smith June 23, 2004 Page 6 of items on the Capital Improvement List which are required as a result of more stringent regulations are allocated between existing users and new users in an equitable manner. A careful analysis of the Facilities Plan and Capital Improvement List as well as the Methodology and the underlying data makes it clear that the proposal does not require new users to bear a disproportionate share of the costs associated with more stringent regulatory requirements. D. Timing of Adoption. Mr. Stamp argues that the MWMC Facilities Plan and Capital Improvements List must be adopted 60 days prior to the time that it adopts the SDC methodology. That is a misstatement of the law. There is no such legal requirement. E. Standard of Review. An appeal of a City's decision related to System Development Charges would be to Circuit Court under Oregon's writ of review procedure. That procedure states among other things, that a court may overturn a city's decision regarding System Development Charges if the decision is not supported by "substantial evidence". Mr. Stamp's argument implies that there is no substantial evidence to support the City's decision if it follows Staff's and MWMC's recommendation and approves the System Development Charge Methodology and Facility Plan and Capital Improvements List. That is simply untrue. If the Homebuilders truly believe that its position is correct, Mr. Stamp should point out the specific parts of the recommendation which are not supported by substantial evidence. F. System Valuation. Mr. Stamp asserts that the system valuation must be made as part of the Methodology and that has not been done. Mr. Stamp is incorrect. The system valuation is contained in Table A-1 attached as supporting material to the Methodology when it was released to interested parties and the public. That table clearly demonstrates that the assets were valued at original cost, net of grants, inflated by the ENR index, as recommended by the CAC and as approved by MWMC. While Mr. Stamp is entitled to disagree with the CAC and MWMC decision to endorse that method of system valuation, which is one of several different methods used throughout the State, his disagreement on a matter of policy does not make the method illegal. G. Adjustments. As noted above, Table A-1 explicitly sets forth, by individual asset, the portion funded from federal grants and specifically excludes that amount in calculating the system valuation. H. Assumptions. Mr. Stamp challenges the assumptions regarding future population growth, current population, household size and per capita contribution to the loading on the treatment facility used by MWMC and its consultants in developing the Methodology. Mr. Stamp argues that because he disagrees with those assumptions, they are necessarily wrong and a court would refuse to approve the Methodology using those assumptions. Assumptions by definition cannot be guaranteed for accuracy and it would be foolish to assume that they are totally accurate. Assumptions in any kind of model necessarily require the exercise of professional judgment.