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Regular City Council Meeting Monday,November 17, 2014 Page 17 and sewer rates were still on the high side, that had not always been the case, with the gap widening after 2011, and when the CIP needs were cycled into the rate structure to address long-deferred infrastructure needs. Mr. Miller opined that he anticipated that gap to narrow in 2015, and continue to do so over the next five years as rates stabilize for the CIP, with no large increases foreseen in the near fu- ture. Mr. Miller opined that this may not be a realistic picture for those peer cities depending on if and how they address their infrastructure needs. Finance Director Miller briefly reviewed supplemental historical information pro- vided by staff after distribution of the agenda packet, and provided as bench handouts, and incorporated in the final staff report. At the request of Coun- cilmember McGehee, Mr. Miller noted the inclusion of staff's analysis for other CIP funding options via the tax levy versus water/sewer rates, and financial im- pacts for a typical single-family home under both scenarios. If using Option B, by financing capital replacement needs by using tax levy bonds as proposed by Councilmember McGehee, Councilmember Willmus asked Fi- nance Director Miller how he proposed capturing costs from non-profits or those with tax-exempt properties in Roseville. Finance Director Miller stated that he had no immediate answer to that dilemma, but recommended that if using that methodology, all non-profits or tax exempt properties be required in some way to pay their fair share unless waived by the City Council for some reason. At the request of Mayor Roe in identifying $3,398,000 as the amount needed an- nually for a tax levy, Finance Director Miller advised that the interest on those bonds over a term of fifteen years, if bonding were used, would be additional to the average annual need projected under Option B. Councilmember Etten observed that if moving to a partial tax based system, busi- nesses would also be charged, and with current median home value fluctuations, business owners of commercial properties would need to pick up that differential. Finance Director Miller concurred, noting that commercial properties pay higher tax rates than most residential properties; and if using this option, some of the burden would shift to them, generally representing a potential shift of 10%to 15% as part of the inherent design of the current property tax system. Councilmember McGehee provided her rationale in asking for this comparison, opining that it seemed unfair to her to tie the CIP needs to the base fee, especially for residents using under 10,000 gallons of water per quarter ($7.56), with those using over 50,000 gallons receiving a much smaller increase ($3.39), with many of those lower water consumptions in lower valued homes and lower water users, creating an unequal burden on them. If a uniform cost was applied across the board for taxpayers as part of bond issue and subsequent tax levy, Councilmem- ber McGehee opined that her thought had been that this would be a fairer plan for