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CITY', ,; -:QF IN KES WS -6b WORK SESSION MEMORANDUM To: Mayor and City Council From: Al Rolek Date: May 1, 2006 Re: Council Retreat Issues Update — Financial Analysis Progress Report cc: During the Council retreat held February 20, 2006, staff provided a thumbnail of the city's financial future. In light of this information, the City Council directed staff to prepare an analysis of future financial impacts of financing policies and decisions made by the Council. You also asked staff to propose possible remedies to mitigate any negative impacts. Staff is in the process of working with the City's financial advisors, Springsted, Inc., and the City's independent auditor to formulate the financial analysis and to develop necessary financing policy recommendations. Under review at this time is financing of past projects, use of special assessments and special assessment/project cost deferrals, debt service needs, impacts on fund balances, financial/tax impacts of future projects, including street projects as outlined in the Pavement Management Plan, and potential impacts of special allocations. Also being considered is the financial impacts of certain development options, i.e. conservation developments. The outcome of this process should lead to the preparation of a meaningful long -term financial plan for the city. We anticipate asking Council on May 22 to set a special work session within the first two weeks of June to review the results of this analysis. This time frame with dovetail into the preparation of the 2007 Annual Budget and the 2007 — 2011 Five Year Financial Plan. Page 1