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Regular City Council Meeting Monday,August 08,2011 Page 27 summarizing his memorandum to the City Council distributed today; followed by a Q and A period between the City Council and staff. A Memorandum via e-mail dated August 4, 2011 from City Manager Bill Mali- nen related to Market Value Homestead Credit (MVHC) and proposed 2012 budget reduction adjustments in accordance was provided as a bench handout, at- tached hereto and made a part hereof. City Manager Malinen addressed a new change in state law as a result of the Spe- cial Session of the Legislature and budget-balancing programs, basically through elimination of the Market Value Homestead Credit (MVHC) program as detailed in the memorandum. Mr. Malinen advised that this would provide additional funds to the City and not part of the budget programming to-date; allowing for identification of some options for the City Council to consider for those extra funds, that could potentially reduce the proposed tax increase from the City Man- ager-recommended budget to approximately 1.8%, allowing the City to restore some of the proposed FTE staff reductions and other programs proposed for re- duction or elimination. Councilmember Willmus questioned how this one-time adjustment would impact the City going forward in future budget years; and if future legislative action could put the City in the same situation if it were to become dependent on those budget dollars annually. City Manager Malinen advised that it would become the new baseline going for- ward as part of the City's levy, avoiding the need for the City Council to make the previously-recommended adjustments and providing incremental costs in the fu- ture. Mr. Malinen opined that he didn't think the City would be in a similar si- tuate, as he didn't anticipate levy limits being renewed, and with the most recent formulaic changes in MVHC and dramatic changes in Local Government Aid (LGA), of which the City is not a recipient and therefore not dependent upon, he didn't anticipate future impacts to the City. Mayor Roe noted that one option would be to reduce the levy by that amount going forward and continue with the currently recommended cuts, thereby reduc- ing the levy by approximately $475,000, thus not making the City dependent on those funds going forward. City Manager Malinen noted that the City of Roseville was not subject to any reimbursement any longer, taking that risk out of the equation. City Manager Ma- linen opined that reducing the levy was one option. Councilmember McGehee opined that having just received the memorandum, it provided some good options for the City; however, she wasn't confident that it couldn't be taken away as easily as it was given. Councilmember McGehee opined that the City was in unchartered water federally and state-wide; and when