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1 r Mr. %a, Reinhardt 5. August 7, 1952 VI• Overhead - Percentages. Mr. Campbell states that the District feels the item of Overhead should be eliminated: (1) Engineering. Mr. Campbell states that engineering was required for part of water system, but other parts required little or no engineer­ing, and that the forfeited portions of advances in aid of construction would offset engineering costs. The amount included in Appraisal for Engineering represents an estimate of cost of engineering which would be required to reproduce the property as of a specified date under a reproduc­tion program and has no relationship to the amount actually spent or which was charged into the accounts for this item. The idea that engineering costs should be paid for out of amounts for­feited under contracts with subdivid­ers or that these two items should be considered as offsetting seems to me to be getting away from the idea that we are appraising a property at a fig­ure which would fairly represent its present value for sale purposes. . (2} General Expenditures. The amounts included In Appraisal under this heading are properly chargeable to a reproduction estimate. Mr. Camp­bell takes the position that this item could well be eliminated from the ap­praisal for the reason that costs for this item were not charged into the accounts prior to 1951» which does not seem to me to have any bearing on the appraisal. ft V