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City of Roseville — 2010 Budget Discussion Items From 2006 -2010, overall funding sources for the City's governmental fund operations have remained fairly stable with a few exceptions. Since 2006, the City has become more reliant on the property tax to fund current operations. This has resulted in large part due to the loss in Homestead Credit State -Aid. This was an intended effect resulting from the State Legislature's decision to remove the homestead credit reimbursement to help finance the State's takeover of the general education (per pupil) funding. In 2004, the tax levy was increased to accommodate new debt service on voter - approved bonds issued the previous year. The growth in the property tax levy is depicted below. For 2010, the increase in the tax levy was used to offset a further reduction in state aid, and to reinstate funding for the City's Vehicle Replacement Program. From 2011 -2015, it is expected that the City's tax levy will need to increase at levels that are above inflation. This will be necessary to offset expected increases in personnel - related costs and to strengthen the City's asset replacement funding mechanisms. Beginning in 2011 or 2012 the City will be able to reduce the portion of the levy that is set aside to pay debt service. Special assessments are expected to remain the same or decline in 2010. Beginning in the mid 80's, the City embarked on a comprehensive street replacement program which resulted in a substantial amount of new assessment activity. These assessments have largely been paid off resulting in lower assessment revenues for 2010 and beyond. The City expects to continue to see fluctuations in investment earnings in the coming years. While cash reserve levels are expected to remain relatively unchanged, price fluctuations on portfolio holdings and required accounting practices have resulted in market or `on- paper' adjustments each year. 100% of the principal investment remains intact. 17