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Identifyin� Revenue Losses and Shortfalls For 2007, the City is not expected to realize any significant downturn in revenues dedicated to support current operations. However, funding sources for street and pathway reconstruction, such as Municipal State Aid, can fluctuate from year to year. Typically, the City does i�c�f commit to any capital project until all revenue sources have been confirmed. One potential revenue loss is ice rental fees at the Arena. The Arena's refrigeration system, dasher boards, and flooring are in need of replacement and will require a shutdown of up to 8 weeks. Typically, the Arena only closes for 3 weeks annually for maintenance. It is expected that water and sewer user charges, building permit revenues, and recreation program fees will increase at a level sufficient to maintain these types of programs and services. Overall, non-tax revenues such as interest earnings, wireless antenna lease payments, cable franchise fees, etc. are expected to remain fairly stable, with the potential for small increases. To offset general cost increases, an inflationary-type increase in the property tax levy will be needed to maintain police, fire, streets, and parks & recreation services at their current level. Twin Lakes T�arlc Dedication Fee At this time, there is no final determination on the uses of park dedication fees that are expected to be generated by the Twin Lal{es redevelopment F�rr�a ec.t_ Further discussions will need to be held by the Parks & Recreation Commission and City Staff before recommendations can be made to the Council. Discussion on Personnel-Related Costs As noted above, the City's single largest operating cost are personnel costs. The total citywide personnel costs for 2006 are $12.5 million. This represents 38% of the total City budget of $33,125,190. Preliminary projectio�s show personnel costs rising to $13 million in 2007 — an increase of�?.i�o. The increase is a�tributable to expected cast-of Iiving-adjus�znents, wage step increases for eligible employees, increasing pension obligations, and higher healthcare costs. Deferred Expenditures The following expenditures have been deferred due to recent budget challenges: 1) Bike Patrol Program - $9,000 (annual) 2) Police Cadet Program - $13,500 (annual) 3) Central Park boardwall{ replacements -$500,000 4) Vehicle replacement funding � $145,000 (annual) 5) Parks improvement Plan - $100,000 (annual) Gvmnastics Center The Gymnastics Center was built in a ioint effort between the City and the Roseville School District. Similar to the Agreements governing the community ��itim� at Brinahall and Central Park Elementary, the School District was responsible for the operating costs for the first 10 years, and the City was responsible thereafter. Major repairs and renovations are the joint responsibility of both parties. The Roseville School District owns the land occupied by the Gymnastics Center. The City owns the Center itself.