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It's worth noting, that the strengths noted above resulted in the City earning a bond rating (also known as a credit rating) that places the City in the top 5% of all cities nationally. Weaknesses Despite the City's excellent overall financial strength, it is faced with a structural budget deficit in its core functions. This deficit was triggered by a reduction in the general purpose state-aid the City receives from the State. In response to its own budget crisis, the State rescinded the City's state aid of $700,000 for 2003 and 2004. Although the City has enacted some budget cuts, a structural deficit of approximately $400,000 remains, and will continue unless the City makes further spending reductions or establishes new funding sources. The City also has two other financial weaknesses that are inherent to most local units of government. The first is that cities are generally risk-averse. Because much of the services the City provides are funded with involuntary payments, the City is generally asked to use the monies only in the direct provision of services. There is minimal support by the general public to spend monies on areas that would be considered `research and development' . There is little tolerance in pursuing initiatives that have a wide ranging risk-reward relationship. `Speculative' spending is typically frowned upon at the local level. In addition, local units of government, including Roseville are generally focused on short-term goals and objectives. This is partly due to our state-mandated fiscal cycle, and our organizational structure. It's also due to the acknowledgementthat the general public oftentimes expects current resources to provide for current services at the local level. This is in contrast to federal or state government where there is a greater acceptance for setting aside monies for long-term objectives such as education, pensions, Medicare, etc. This is not to suggest that the City doesn't engage in long-term planning — we do. Nor does it suggest that we have not been setting aside resources for future use — we do that also. Rather it indicates that the City's overall efforts are focused on the near-term and on generally accepted and highly-visible services. Opportunities The City of Roseville has numerous cooperative agreements with other local units of government. Some of these cooperative efforts have been in place for many years, which suggests that the partnerships have been successful. These cooperative agreements include; recreation facilities, information technology, street maintenance, and others. Recognizing past successes, the City should consider expanding these kinds of efforts. Given the challenging budget times and in recognizing economies of scale and similar missions held by local governments, opportunities for cooperative agreements should continue to be explored. For the past decade, the City has emphasized investments in new technologies. In recent years, the City has successfully leveraged its investment in the Institutional Network (I-net) by sharing IT support services across the I-Net to other communities. The City also recently installed a new internet-based telephone system that substantially increased our functionality while reducing on- going telephone service costs by 50%. Increasingly popular wireless technologies and `virtual office' capabilities could have an even more dramatic and positive effect on our service delivery process. With continued emphasis on technology spending, a 24x7x365 government will continue to materialize. 3