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Other factors also exist that may further inhibit this funding shift. Both State-imposed tax levy <br />limits, and the City's own budget policies restrict the amount of levy that can be imposed. Bond <br />financing presents an alternative given the fact that tax levies to support debt service on bonds <br />are outside of State levy limits. However, bond financing ultimately increases the cost of the <br />project (primarily due to interest costs), and would still be subject to the City's budget policy <br />restrictions. In addition, sustained reliance on bond financing for infrastructure projects, coupled <br />with planned bond financing for other facilities, may negatively impact the City's bond rating. <br />Reductions or Elimination of Special Assessments on <br />Particular Property Types <br />Reducing or eliminating special assessments on specific property types could potentially: <br />• Shift the cost burden from one segment to another. <br />. Increase taxes for homeowners. <br />. Affect fixed-income and low-income residents disproportionately. <br />Reducing or eliminating special assessments on one or more property types will likely shift the <br />cost burden from one segment to another. For example, reducing assessments on non-residential <br />properties will require other funding sources. If the burden is shifted to citywide taxes, <br />ultimately residential homeowners will bear some of the increase. This may affect certain <br />housing segments more than others. <br />Other Issues <br />. Shifting the cost burden to homeowners is in sharp contrast to other housing policy <br />� initiatives, such as initiatives seeking to encourage construction of affordable housing. <br />Other Financing Sources <br />As was noted above, the City has a variety of funding sources that are somewhat discretionary in <br />nature. However, all of these sources are currently funding other programs and services. <br />MSA Funds <br />With regard to MSA monies, the city currently receives $262,000 annually to support minor <br />street repairs such as; cracksealing, sealcoating, and fixing potholes. These activities are <br />accounted for in the General Fund. In addition, the City also receives an `apportionment' of <br />$787,000 annually for the purposes of financing the non-assessed nortion of reconstruction costs <br />on local MSA designated roadways, and other permitted uses such as semaphores. The <br />apportionment is held at the State, until the City submits for reimbursement of costs. These <br />activities are accounted for in the Special Assessment Construction Fund. All of the monies are <br />expended in the current year in which they are received. Transferring MSA dollars to other <br />activities would reduce the amount available for the above-mentioned purposes. <br />Attachment B <br />-2- <br />