@Chad - Well, to clarify, we did get our homestead tax rate reinstated after a couple months. It was a lot of time and effort, and I had to take off of work quite a bit, undergo multiple inspections of our home, have conference calls, fill out forms, the whole 9 yards. I guess I am not that into pursuing a litigation route since that issue was eventually resolved, but I am just bitter as hell about it. You are right though, the city was the most unreasonable in this case, I am sure these bogus claims come in all the time, they should know better.
Most people don't realize that there were 384,000 house fires last year (2010). 27,500 of those were intentionally set.
Just saying.
Is that an idea, or something I should watch out for?

At this rate, I am a bit worried about my house. Before we moved into our house, our neighbor was digging without permit in their front yard. They ruptured a gas main and the whole block had to be evacuated while the city repaired the line.

Vigo,
After reading your above posts.......I'm shocked you aren't in jail for shooting those wankers yet. 
The trick is to enjoy the small victories of their idiocy. Last year they had a bunch of scrap metal in their yard that they needed to get rid of. They spend over $500 renting a dumpster and getting a permit to have the dumpster on the street. After they finished filling the dumpster, it was no more than 10 minutes that a scrapper drove by, saw the metal, and took it all so he could recycle it for profit. When the dumpster company came to pick it back up, the amount of stuff in the dumpster could have easily fit in the neighbor's trash can.