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City of Roseville — 2004 Budget Letter of Transmittal December 22, 2003 To the Mayor and City Council, Enclosed is the 2004 City Budget as prepared by City Staff, in accordance with City Council actions. The 2004 Budget culminates several months' worth of planning, evaluation, and input from the City Council and citizens. Great effort has been taken to ensure that the City's core services are funded in a manner that preserves the greatest value to the community. In addition, steps have been taken to account for the changing trends and impacts that will affect both next year's and future year's budgets. This year's budget process was one of the most challenging and difficult in recent memory. In response to their own budget crisis, the State of Minnesota rescinded Roseville's general - purpose state -aid apportionment of $700,000 for both 2003 and 2004. This loss in state -aid comes at a time when the City also faces increased challenges in maintaining police and fire protection and providing high - quality streets and park services for a diverse population. The result is that the City is faced with difficult choices, and more than ever must evaluate the City's core mission. Similar to many local governments, the City is faced with a number of events that will have a significant impact on the 2004 budget. They include: a) A cost -of- living increase of 2.3 %. In order to attract and retain highly qualified employees, the City must remain competitive with the marketplace. Based on a review of the 2003 metro area salaries, it has been determined a 2.3% increase is needed to remain at the metro -area average. The cost -of- living increase amounts to $250,000 citywide, three - fourths of which is accounted for in the tax - supported funds. b) The City is facing a 6% increase in health and dental costs. The healthcare cost increases amount to $50,000 citywide, three - fourths of which is accounted for in the tax - supported funds. c) The City will lose $700,000 in general - purpose state -aid for fiscal 2004. d) To continue meeting the City's prior debt service obligations, the existing debt levy will need to remain at the $750,000 level. e) A new debt levy of $875,000 will be needed to meet the City's debt service obligation for the public safety and public works expansion project. The additional debt will result in an averaged valued home of $175,000 paying an additional $13 (3%) annually as a result of the new levy. These impacts will affect multiple programs and services citywide. 1