04/04/2011 Council Packet - Laserfiche WebLink

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S -{'t Lk. WI( � SS i Uti 1 WS -4 WORK SESSION MEMORANDUM To: Mayor and Council Members From: Al Rolek Date: April 4, 2011 Re: 2011 -2015 5 -year Financial Plan — 1st Draft CC: Attached is the 1st draft of the 2011 -2015 5 -year Financial Plan for discussion at the work session meeting on April 4. The plan was developed following the process approved by the City Council, with the underlying values of meeting our obligations to the citizens of Lino Lakes and maintaining service levels. The draft plan is a compilation of projected needs over the coming five -year period submitted by the department directors for their respective areas of responsibility. It anticipates an overall increase in expenditures of 19.71% for the five -year period. In light of the weakness in the real estate market, anticipated change in the tax base was revised downward from the previous plan, ranging from a 5.0% decrease in 2012 to a 2.0% increase in 2015, reflecting an anticipated market stabilization. The forecast includes both market adjustments and new construction. The net result is a tax base contraction of 1.2% over the five -year period. Given this rate of contraction in the tax base, the city tax rate in the plan is projected to go from 42.003% in 2011 to 53.027% in 2015. The primary reason for the increasing tax rate is the reduction in the tax base forecast. Following the year 2011, a factor of 0 - 2 % per year was used throughout the plan for most expenditure projections. A number of areas, such as energy, fuels, health insurance, etc., were increased at a greater rate in accordance with anticipated market adjustments. Staffing levels were assumed to remain constant over the plan term. The primary drivers q