11/05/2007 Council Packet - Laserfiche WebLink

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• • • WS -3 WORK SESSION MEMORANDUM To: Mayor and Council Members From: Al Rolek Date: November 5, 2007 Re: 2008 -2012 5 -year Financial Plan - Draft CC: Gordon Heitke Attached is a draft of the 2008 -2012 5 -year Financial Plan for discussion at the work session meeting on November 5. The plan was developed following the process approved by the City Council in the resolution adopted last December, 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 45.72% for the five -year period. In light of the weakness in the real estate market, anticipated growth in the tax base was revised downward from the previous plan, ranging from 2% -7% over the plan period, reflecting an anticipated market rebound. The forecast includes both inflationary growth and new construction, but does not include any unapproved developments. In addition, TIF District 1 -9 will decertify during this period and adjustments are included in the analysis. The net result is an overall growth in tax base of 25.29 %. Given this rate of growth in the tax base, the city tax rate in the plan will adjust from 38.994% in 2007 to 44.871% in 2012. The primary reason for the growth in the tax rate is the reduction in the tax base forecast. A general inflation factor of 3% per year was used throughout the plan. A number of areas, such as energy, fuels, medical insurance, etc., were increased at a greater rate due to market conditions. The primary drivers for increases within the draft plan are staff