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City Manager's 2004 Budget Recommendations <br />I also stated at the beginning of this Report nay assumption that the <br />Council would not create significant new revenue sources to help with <br />our budget, such as a utility franchise fee like New Brighton's or Little <br />Canada's. But maybe I'm mistaken and the Council will want to create <br />such a fee or some other new revenue source to help us make up for the <br />loss of $700,000 in state funding and to help us pay for our new bond <br />and operating costs. <br />Or maybe the Council would authorize the use of some of the $1.3 mil - <br />lion in proceeds from the sale of the Arona property to help with our <br />budget. "Those sale proceeds, $1.3 million, are very close to the total <br />amount of state funding that Roseville is to sing in 2003 and 2004, which <br />is $1.4 million. <br />Those sale proceeds, $1.3 million, are also very close in amount to the <br />new tax costs that Roseville property owners will experience in 2004 - <br />that is, the interest and operating cost for our new Building Project in <br />2004 plus the amount of a new TIFAA tax levy proposed in 2004 ($975,000 <br />+ 4 0 0, o 0 0= $1.375 million) . <br />Thus, if you don't want to cut City services you could use the $1.3 in <br />Arona sale proceeds either to help plug the funding gap created by the <br />loss of state funds or to offset the new tax costs that are associated with <br />our building project and the HA. <br />The Aroma development will also generate for the City about $200,000 in <br />TIF increment each year for the next eight or nine yew's. Because this <br />particular TI F district is one of the older districts, this increment can be <br />used for many purposes: to name just two, this +TIF increment could be <br />used for recreation improvements or affordable housing. <br />Pursuant to your direction, staff is preparing a comprehensive memo de- <br />scribing the potential uses for the 'TIF increment and the sale proceeds <br />arising from the Arona project. There will be marry worthwhile uses for <br />this money, not all of which can be satisfied. <br />All I want to get across Mere is that, in addition to the difficult budget is- <br />sues created by the loss of state funding, the cost of the bonds for our <br />building project, and the cost of an LIRA levy, the Council will also have <br />challenging decisions to make respecting the use of the new revenues <br />from the Aroma sale proceeds and TIFr increment. <br />-11 <br />