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To summarize, the recommended property tax levy increase is a grand total of 4.5%. This will generate $501,945 in added funding. Based on my recommendations, this funding would be allocated as follows: Eliminate use of reserves �.c, install'permanent' funding) Estimated 3.0% COLA for City Employees Estimated healthcare increases for City Employees Additional fuel and energy related expenses Additional Set-Aside for Asset Replacement (Police, PW, PR) Addition to Parlc Improvement Program (PIP) Total $ 128,000 230,000 10,000 22,945 86,000 �� $ 501,945 Taxpayer Impact and Comparison to Peer Cities For an average valued home in Roseville of $200,000, the 2007 Recommended Budget and Tax Levy increase will result in an increase of approximately $58 per year or $4.83 per month. This increase factors in the additional tax levy described above ,�rl assumes that the home experiences a valuation increase of 15%. Some homes in Roseville will experience a lesser increase, and therefore will see a smaller overall increase in their City taxes. In total, for 2007, this same home will pay $522 per year in City property taxes, or $43.50 per month. This monthly charge is comparable to what a typical homeowner pays independently for gas, electric, telephone, cable �v, or broadband internet. In comparing the tax burden in other cities in the metro area that have similar populations and size and scope of City services, Roseville would still compare very favorably. Even with a$58 increase, Roseville will remain the lo+��est taxed city in the Twin Cities Metro among the twelve (12) cities that serve a population between 25,000 and 45,000. If an expanded comparison were made to include all cities in the metro area that serve a population in excess of 10,000, Roseville would ranlc ��.'� �o��cs� out of 56 cities. Over the last 10 years, Roseville's tax burden has remained approximately 30% ��€� than the average for this peer group. Alternative Budget Spending Plans As noted above, the City Manager Recommended Budget calls for a levy increase of 4.5%. Pages 1-4 of your Budget Boolc describe what a 4.5% levy increase will provide for — and what it won't provide for. As is shown in the Budget Boolc, and as you've witnessed during previous budget presentations, the City will have a number of unmet needs despite a 4.5% levy increase. In short, the City's cost inputs are outpacing inflation, and they are expected to continue outpacing inflation for the foreseeable future. This leaves us with very few options if we want to maintain existing programs and expected service levels. Moving forward, we hope to find new efficiencies in our service delivery process. And we may decide to place greater emphasis on a ranlcing or prioritization process to help focus our resources on those programs that matter the most. Finally, while it's lilcely the least attractive option to most, we can revisit whether the existing tax burden to property owners is appropriate or not.