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Equity or Fairness Finally, the issue of equity or fairness comes into play. Equity is often described as the relative relationship between things. Generally, equity is measured in two ways, horizontal equity and vertical equity. Vertical equity is when you compare one type of property against another type. For instance, under Roseville's current assessment policy for MSA roads, homeowners pay zero percent and businesses pay 1000. A business owner might suggest that there is not vertical equity (fairness) in that policy. By the same token, if you had two homes that were perfectly identical except that one is on an MSA road paying a zero percent assessment and one on a non-MSA road and paying a 100o assessment. This might be perceived as not being horizontally equitable to the owner paying 1000. Please note that equity does not require that all things must be even but it is only a measure or description of a relationship. I would submit that a public perception of both vertical and horizontal equity is required for acceptance of a policy. The Roseville Assessment Policy I am not going to do an analysis of Roseville's current assessment policies because I suggest that the City Council should create a new policy. That policy should be based and considered on some of the criteria mentioned in this memo: 1. The gas tax distribution is to the city and the formula for that distribution is only a proxy for how to divide the money among cities with populations of greater than 5000. The money is not distributed for a specific road or property. 2. Roads are a public good. All residents have a vested interest in the quality of our city's infrastructure. 3. A road's function is different depending on what the need of the property is but the value to the property is similar. 4. The value added to the property. 5. Equity, both vertical and horizontal, must be positively perceived by the citizen for a policy to be accepted. In many ways equity is the most important of these issues. I suggest that the city council consider two options for a new special assessment policy. For the first option, I would recommend that on a yearly basis, the city council, as part of the budgeting process set a uniform price per foot assessment for property type. For example, if the city engineer does an analysis that determines that on average, it costs $1000 per foot to do the next years projects, you could use'that as your baseline and adjust from there using the criteria mentioned previously. You might end up with a rate schedule where CI pays $1000 per foot, residential $750 per foot, churches $200 per foot, etc. no matter which street you live on. Once the policy is set, the council could grant exceptions for particular parcels as appropriate. A second option might be to base assessments on percentages as is done today. With a starting point for this option being that all properties would pay at 1000 of the special assessment cost. From this starting pointing and using some of the issues I've discussed, special provisions could be made. For instance, you might consider the following: a. Recognizing that there may be a small overburden for homeowners who live on MSA roads, set their assessment rate at 800. b. Recognizing the functionality of roads for churches, set church assessments at 70o for those churches without schools and 85o for those churches with schools. c. Provide for a due process appeal system for special circumstances. While there are certainly many more types of properties that can make a case for their special circumstance, it should be noted that each exception reduces total project/city revenue, shifts higher costs to other properties or have fewer road projects. I realize that there are countless options for a new policy and is directly connected to the revenues and budget of the city. If revenues are plentiful, assessment may not be needed, if they are not, assessments would 3