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• • December 18, 2006 Honorable Mayor Members of the City Council City of Lino Lakes The Five -Year Financial Plan for the City of Lino Lakes, 2007 — 2011. This plan is prepared in compliance to and in Charter Section 7.05. The criteria for the preparation of the pl Service Program; the Capital Improvement Program; the Revenue elements have been addressed within this sub �; a ion. sota is here miffed for the years e Lino Lakes City ur elements: the Public and the Capital Budget. All The Plan first addresses the Public Service P needed to meet these needs over the five -year authority are presented next, followed by proje A detailed projection of anticipated program exp Plan (CIP) is presented whic s future ne replacement, equipment r financial resources and, low ana budgets for future c "needs. ticipated p e City' park impr are inclu ows. F 1 and other resources capacity and tax levy am) for the next five years. the Capital Improvement areas of infrastructure extension and ents. Project descriptions, cost estimates, 'thin the CIP, and constitute projected As with any long - Financial Plan for 20 growth, inflation, servic acqui ';, , service r forecasting future needs. The Five -Year prepare • h >rF ,' umber of assumptions including anticipated revenue streams, taxing authority, capital replacement and r factors. These assumptions are based upon both historical data and ds. In general, an annual inflation rate of 3% was used in es. centage vanes somewhat based upon what is known about , etc. ample, medical insurance was estimated at an annual increase energy at 10 %, etc. ting future e icular factors, ind 15 %, oil and fuels at os for forecasting future tax base. Analysis of the historical trend in the Crty ase from 1 the present reveals a range in annual increases of 9.6% to 23.1%, with an average $ _ . e of; der 14 %. Recent weakness in the real estate markets and the construction industry i . continue into the near future. Therefore, considering historical growth rates and present c ns, the first scenario assumes a growth factor of a conservative 7% throughout the term of the Plan. Assuming a rebound in the real estate and construction markets in the next few years, the second scenario estimates seven percent increases in 2008 and 2009 with increases of 8.5% and 10% in 2010 and 2011, respectively. Under both scenarios, it is estimated that the City's tax rate in 1