CITY OF

ROLLBACK PROVISIONS

2004 Assessment Year for 2004-2005
Fiscal Year

__Headlee Rollback__ (Constitution, Art 9, Sec
31 and 211.34d M.C.L.)

If the taxable valuation (TV)
of property excluding the value of new construction and improvements, increases
by a larger percentage than the increase in the General Price Level (as
measured by the annual average of the United States Consumer Price Index for
all urban consumers) from the previous year, the maximum authorized rate
(operating millage rate) applied shall be reduced to yield the same gross
revenue from existing property, adjusted for changes in the General Price
Level.

The 2004 Millage Reduction
Formula (MRF) is calculated as:

2004 MRF = __(Total 2003 TV - 2003 Losses TV) x Inflation
Rate Multiplier__

Total
2004 Taxable - 2004 Additions TV

2004 MRF = __2,393,841,600 - 31,535,967 x 1.023__

2,425,188,600
- 52,349,527

2004 MRF = __2,362,305,633 x 1.023__

2,372,839,073

2004 MRF = __2,416,638,663__

2,372,839,073

2004 MRF = 1.0185

The current year Millage
Reduction Fraction cannot exceed 1.0000 in the computation of the maximum
allowable millage. The 2004 millage rate
permanently reduced multiplied by 1.000 results in a maximum allowable millage
rate for 2004 of 17.87 mills.

Page 2

__Truth in Taxation Rollback__ (1982 P.A. 5, Sec 211.24e
M.C.L.)

Since the City of

Required
information:

1. 2003 Total Taxable Value (TV) 2,393,841,600

2. 2004 Total Taxable Value 2,425,188,600

3. 2003 Losses TV, without transfers 31,535,967

to
another classification

4. 2004 Additions TV, without 52,349,527

transfers
to another classification

5. 2004 CPI = 1.023

The Base Tax Rate Fraction
(BTRF) is calculated as:

2004 BTRF = 2003 __Total Taxable - 2003 Losses TV__

2004
Total Taxable - 2004 Additions TV

2004 BTRF = __2,393,841,600 - 31,535,967 __

2,425,188,600
- 52,349,527

2004 BTRF = __2,362,305,633__

2,372,839,073

2004 BTRF = .9956

The Base Tax Rate (BTR) is
calculated by multiplying the Base Tax Rate Fraction (BTRF) by the operating
tax rate levied in the immediately preceding year.

BTR = 2003 Operating Tax
Rate x BTRF

BTR = 12.26 x .9956

BTR = 12.2061

The Base Tax Rate of 12.2061
multiplied by the 2004 estimated Taxable Value of 2,425,188,600 equals $29,602,094.57
or the Base Operating Levy in dollars that can be derived from the Base Tax
Rate for city operations for the Fiscal Year 2004-2005.

Page 3

__Truth in Assessing__ (1981 P.A. 213, Sec 211.34,
M.C.L.)

Under Public Act 213 of 1981
as amended, the City is restricted to an operating levy based on the local
taxable value based on the assessed valuation total rather than a full levy
based on the taxable value based on the State Equalized Valuation.

The Truth in Assessing
rollback fraction is calculated as:

2004 Sec 34 rollback
fraction = Total Taxable Value Based

__on Assessed Value__

Total Taxable Value Based

on
SEV

= __2,425,188,600__

2,425,188,600

= 1.0000

Allowable Rate = __Max Authorized Operating Rate x Total AV __

= __17.87*
mills x 2,425,188,600__

2,425,188,600

=
17.87 mills, allowable tax rate

*The maximum authorized
millage rate of 17.87 as computed under Headlee Rollback.

Respectfully submitted,

Roger J. Elbers

Deputy City Assessor

R:/MISC/ROLLBACK.PRO