11/22/2005 Council Packet - Laserfiche WebLink

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WS -3 WORK SESSION MEMORANDUM To: Mayor and Council Members From: Al Rolek Date: November 18. 2005 Re: 2006 -10 5 -year Financial Plan - Draft CC: Gordon Heitke Attached is a first draft of the 2006 -10 5 -year Financial Plan for discussion at the work session meeting on November 22. The plan was developed with the underlying values of meeting our obligations to the citizens of Lino Lakes, maintaining service levels, and holding the line on costs and taxes in a growth environment. The draft plan anticipates an overall increase in expenditures of 53.42% for the 5 year period. Anticipated growth in the tax base was estimated at 10% per year. This includes both inflationary growth and new construction, but does not include any unapproved developments, i.e. Hardwood Creek. This was a conservative estimate as actual growth has been averaging about 12 -17% over the last several years. The net result is an overall growth in tax base of 66 %. Given this rate of growth in the tax base, the city tax rate in the plan is scheduled to be reduced from 42.223% in 2005 to 41.393% in 2010. A general inflation factor of 3% per year was used throughout the plan. A number of areas, such as energy, fuels, insurance, etc., were increased at a greater rate due to market conditions. The primary drivers for increases within the draft plan are staff additions, pavement management, capital equipment replacement planning, and energy costs. Anticipated staffing needs of 22 employees, related benefits and other personnel costs, were included from 2006 — 2010. The Fire Protection budget anticipated increases of 5% per year in response to city growth. The completion of the transition from certificate of indebtedness financing to current financing of equipment replacement, eliminating future interest expense, is an integral part of the plan. Planning for long -term capital outlay was