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Use of Cash Reserves The 2014 General Fund Budget relied on the use of $346,000 of cash reserves to achieve a balanced budget. While the use of cash reserves for one-time purposes is generally accepted, the Council- adopted financial policies call for balanced and sustainable budgets. To eliminate the reliance on the use of cash reserves for day-to-day operations, a permanent funding source will need to be identified. Paid-on-Call Firefi�hter Wa�es and Healthcare As of this date, the Paid-on-Call Firefighters union has not settled on a 2015 Contract. It is conceivable that a signif'icant impact on the 2015 Budget and tax levy will result from these discussions. Debt Service Reductions Savin�s The bonds originally issued to finance the renovation and expansion of City Hall and Public Warks Building was refunded in 2013 to take advantage of lower interest rates. The annual savings was $60,000 which takes effect in 2015. In addition, one of the City's street replacement bonds will be fully paid by the end of 2014 which will allow us to eliminate the dedicated tax levy that was said aside for this purpose. Other Le�islative Im�acts City Staff continues to monitor other legislative impacts including the recently passed changes to the State's minimum wage laws. Beginning August 1, 2014, the minimum wage will be $8 per hour for large employers including the City of Roseville and will rise to $9 per hour on August l, 2015. This is not expected to have any significant impact on the budget for 2015 given that most City employees are already making more than these amounts, or are exempted from the new law. � A more serious impact could result if the Legislature forgoes any changes to the current LGA formula. � Based on preliminary LGA projections provided by the MN House Research Department, Roseville � would lose its entire LGA appropriation of $225,000 annually in 2015. Only a handful of cities would lose their entire appropriation under the formula. Ironically, the City is a`victim' of its own success under the LGA formula. With the recent population gains from Applewood II, Sienna Green, and � Josephine Woods development projects, along with an expanding tax base; the LGA formula � recognizes that Roseville has the means to financially support itself without state assistance. �� The LGA monies are currently earmarked for general facility capital replacements. Given the sizeable � budget pressures being faced for 2015, it is suggested that this be addressed further in conjunction with ? a broader discussion on the City's long-term capital facility needs. � Budgetary Impact on Property Taxes �� For 2015 the total projected budget and tax levy impact from the items noted above will be at least �i � $623,000. This will result in an increase of 3.5% over the current tax levy. Based on preliminary ? estimates of our 2015 market values which includes an 11% increase in the value of a median valued � home, this will result in an estimated tax impact on a median single-family home of $6.40 per month. Page 3 of 4