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City Manager's 2004 Budget Recommendations I note here at the beginning of this Report, and will reiterate at the end, that Department Heads recognize the need to balance our budget but would deeply regret cutting programs and services* They also differ on some spending priorities. B. our Buil ng Prgj ect and an HRA Lgn Will Create New Tax - Rayer Costs. Also as a part of this Introduction, we all need to reflect on two new in- creases in local tax costs at the same time the City is losing a significant t amount of state funding to help us operate. These new costs relate to our building project and our Housing and Redevelopment Authority (HRA). In November, 2002, the Voters approved the bonds for our police and Public works Building Project. The city estimated and publicized before that bond election the property tax impact of approving those bonds. Our estimate was a bond interest cost equal to 10% a of the average Roseville property owner's 2002 local taxes. Now that we have sold these Toter- approved bonds we know our estimate was accurate. Roseville has an excellent credit rating, earning us a low interest rate on these bonds. But the annual debt service for our $9.7 million in bonds for our Building Project, even at favorable interest rates, is an additional $875,000 in City costs per year. We also estimate our costs of operating the new Police and Public Works facilities (mostly utility costs) will be about $100,000 per year. In addition, I expect that our H RA will recommend to you that the City Council authorize a $400,000 H1RA levy for 2004. This would be another new cost for Roseville taxpayer's to handle. C, §UMMaK79 To summarize this Introduction, the city will lose another $700,000 in state funds next year, 2004, to support City services at the same time taxpayers in Roseville will be facing $1,375,000 in new local tax costs -- 875,000 in new debt costs, $100,000 in new utility and building opera- tion costs, and $400,000 in a new HFAA levy. This is not an easy budget to balance. The following assumptions don't help either. r