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H n V Date : 8/22/11 Item: 10.a Attachment D Roseville City Council Colleagues and City Manager: As a new Councilmember I have tried to understand where we stand with respect to what I would call a "balanced" budget—a budget where our operating expenses are covered by our revenues. I have reviewed the figures with Chris. I don't necessarily advocate any particular position; I just believe that all the residents should have a clear overview of where we stand as a City before they ask for or we provide additional expenses. I would like to also like to provide some information to the public and my colleagues of my view and understanding of the budget and the challenges we face. Where we are: Here is my understanding of where we are. Due to drops in the values of both commercial and residential properties in the past couple of years, loss of Local Government Aid,and other things,the City is and has been spending approximately 1.5 million dollars more for operations than it takes in. Because of this shortfall in revenues,we are facing delayed maintenance issues on some of our infrastructure(storm water,water,and sanitary sewer systems)as well as some of our public buildings, including those of the fire department and parks and recreation. Dan and Jeff,together with City staff have spend much time and hard work to formulate a plan to replenish our CIP(Capital Improvement Program)funding, but the operating budget is still is not sufficiently funded from revenues nor consistently able to supply adequate annual CIP funding. In short, we do not have a balanced budget policy and we do not have a balanced budget. We have a list of proposed cuts, many of which,as some council members and members of the community feel,attack the"soul"of the community. In addition we have two very large spending proposals coming before us. I strongly believe that before we begin to consider any projects requiring additional spending,either through bonding or referendum, residents must be fully aware of the cost of simply maintaining the programs and services they have at the present time. In order to simply continue as we are and put aside the funds needed to begin to replenish our reserves,we need approximately$5.00 per month,or a levy of 8.5%. These are figures generated by Chris Miller and confirmed by Bill Malinen, not figures that I generated. (Please see the attached e-mail from Chris Miller.) This figure provides covering the staff and programs we have at the present time. Theoretically,going forward from such an increase, residents would only be asked for cost of living increases, barring Council or resident action to add programs or expenditures. Increase,Review,Cut: I don't feel we have sufficient information regarding all programs available for review or the time to adequately or carefully review each of them. I am not sure,either that it is the role of the Council to review some 160 or so programs for, in most cases, relatively small savings. We do not appear to be overstaffed if the level of activities and programs we currently have are those that our residents feel are essential. In fact, in some cases we are substantially understaffed. I see no justification to cut funding for programs that are provided for maintenance for our streets, paths,and trails,and buildings. We have not fully explored some of the ongoing expenses in our CIP budget for either reductions or to evaluate possible changes to our replacement policies as has been done in other communities. Page 1 of 5