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• • AGENDA ITEM 2Ai STAFF ORIGINATOR Al Rolek MEETING DATE December 18, 2006 TOPIC Consideration of Resolution 06 -207 Adopting Five -Year Financial Plan for 2007 — 2011 Simple Majority VOTE REQUIRED 1 The Lino Lakes City Charter Section 7.05 requires the annual preparation of a five -year financial plan. The elements to be included in the plan are a Public Service Program, Revenue Program, Capital Improvement Program and a Capital Budget. The Charter requires that a public hearing be held on the plan and that a summary of the approved plan be published. Staff has prepared a draft Five -Year Financial Plan for the years 2007 -2011. The plan includes all of the required elements. The Plan first addresses the Public Service Program and lists anticipated personnel and other resources needed to meet these needs over the five -year term. Projections of the City's tax capacity and tax levy authority are presented next, followed by projected revenues (Revenue Program) for the next five years. A detailed projection of anticipated program expenditures follows. Finally, the Capital Improvement Plan (CIP) is presented which addresses future needs in the areas of infrastructure extension and replacement, equipment replacement and park improvements. Project descriptions, cost estimates, financial resources and cash flow analyses are included within the CIP, and constitute projected budgets for future capital needs. The assumptions used in the plan are based upon both historical data and projections of future growth and needs. The plan includes two tax base growth scenarios based on assumptions leaning from a conservative to a less conservative approach. These, in turn, lead to tax rates resulting from those assumptions. In general, an inflation rate of three percent (3 %) was used in projecting future expenditures. This percentage varies somewhat based upon what is known about inflation of particular factors, industries, etc. Existing statutes were used to calculate available taxing capacity and taxing authority. More detailed assumptions and factors are listed throughout the document. The plan has been reviewed by the City Council at several work sessions, and a public hearing was held on December 18, 2006. Staff recommendation is to approve Resolution 06 -207 adopting the Five -year Financial Plan for 2007 -2011. 1. Adopt Resolution 06 -207 adopting the Five -year Financial Plan for 2007 - 2011. 2. Refer to Staff for further review. 3. Deny Resolution 06 -207. 10EctiMMtNoArioN, Option 1