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#02 Long Range Financial Management Plan
STAFF REPORT DATE: November 9, 2022 DISCUSSION AGENDA ITEM: Long Range Financial Management Plan TO: Mayor and City Council SUBMITTED BY: Kristina Handt, City Administrator BACKGROUND: Earlier this summer when council approved a proposal from Ehlers for financial services it included creating a long range financial plan for items related to the tax levy. ISSUE BEFORE COUNCIL: Does the Council have any questions or direction on the financial management plan? PROPOSAL DETAILS/ANALYSIS: Jason Aarsvold, senior municipal advisor with Ehlers, will be at the workshop to present the latest draft of the financial management plan. In his presentation, copy attached, he will cover what’s in the plan and the assumptions made in developing it. It’s important to note, this is a projection at this point in time based upon the assumptions related to growth, staffing, capital improvements and operations as noted. FISCAL IMPACT: TBD OPTIONS: Provide direction to staff on how to proceed. ATTACHMENT: • Ehlers Presentation • Financial Management Plan Financial Management PlanCity of Lake Elmo, Minnesota 2• A multi-year fiscal plan for tax-supported fundsBest estimate as of today• Integrates:Existing debtCapital improvement plansFuture debtTax base growthFuture operating expensesStaff additionWhat is a Financial Management Plan? 3• Helps to manage expectationsNew spending proposals evaluated against other identified prioritiesWeigh proposals vs. predefined affordability parameters• Used to refine tax impacts• Guides spending and capital planning• Helps maintain assets and appropriate fund balances• Reduces stress during budget process• Rating agencies like multi-year planningWhy is it Important? 4• Council can focus on big picture and policy issuesLong-term financial health of the CityPrioritize good roads, facilities, services, etc.• Identify financial issues that will require multi-year solutionsTools help staff monitor performance• Create a vehicle to inform residences on City goals and prioritiesEnhance transparencyProvide framework for perspective on projects/issuesWhy is it Important? - Continued 5• Ehlers and Staff reviewed historical financial reports• Identified future budget and project needs• Developed model to forecast expenditure levels and revenue needs• Sought Staff input on key assumptions and funding goals• Tonight: Review findings to generate feedback • Next: Refine model for preferred strategies and policies• Future: Incorporate FMP within City processesProcess of Developing Plan 6• Maintain current city services• New Public Works position – 50% funding from General Fund• Capital planStreet improvements - $71.9M from 2023-33Vehicle & Equipment replacement - $6.5M from 2023-33City’s plan used for 2023-2027 projections5-year inflated average used for placeholders from 2028-2033What is Funded? 7• City’s existing tax base grows 2% annually• New growth250 new single-family homes built annually from 2022-25 and 200 built annually from 2026-31 – housing doesn’t slow until 2026Permit revenue decreased 20% in 2026 to reflect reduced growthNew homes built in 2022 estimated to have a value of $440,000 with value increasing 2% annually • Expenses inflated 4% annually – Capital and Non-Capital• Non-property tax revenues increase 2% annuallyKey Assumptions 8• Average value home for 2022 is $553,500• Continue transfer out from General Fund to Vehicle Acquisition FundAverage of $566,000 annually from 2023-2033Minimum of $200,000/yearAmount set with goal of keeping tax rate increase at 2% or less annually• Bonds will be issued to pay for street improvements$71.9M of capital is financed through bonding of $74M (includes $2.2M of estimated issuance costs)Key Assumptions - Continued ProposedGENERAL FUND 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033REVENUETotal Revenue 7,733,443 8,070,192 8,588,258 8,521,620 9,021,471 9,650,664 10,110,691 10,735,119 11,024,523 11,329,504 11,650,684 EXPENSESTotal Expenses 7,273,443 7,715,192 8,388,258 8,321,620 8,771,471 9,000,664 9,360,691 9,735,119 10,124,523 10,529,504 10,950,684 Revenues Over / (Under) Expenses 460,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000 800,000 700,000 OTHER FINANCING SOURCES / (USES)Total Other Sources / (Uses) (460,000) (355,000) (200,000) (200,000) (250,000) (650,000) (750,000) (1,000,000) (900,000) (800,000) (700,000) Ending General Fund Balance (FB) 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 Restricted - - - - - - - - - Unassigned 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 Fund Balance as a % of Next Year's Expenditures 86% 79% 80% 75% 74% 71% 68% 65% 63% 60%Projected9• Reserve meets City Fund Balance policy of 50-60% of subsequent fiscal year budgeted expendituresReserves consistentExpenses inflated at a higher rate than revenues, contingency could be consideredGeneral Fund 10• Transfer out will continue to Vehicle Acquisition FundFunds expected vehicle and equipment replacement while maintaining a sufficient fund balanceMinimum of $200,000 per year with amount set based on keeping tax rate increase at 2% or less annuallyGeneral Fund - Continued$566,000 averageProposedGENERAL FUND 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Transfer Out to Vehicle Acquisition (425,000) (355,000) (200,000) (200,000) (250,000) (650,000) (750,000) (1,000,000) (900,000) (800,000) (700,000) ProjectedProposedGENERAL FUND 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Tax Rate % Change -21.30% 1.80% 2.13% 2.92% 1.94% 1.68% 1.71% 1.56% 1.82% 1.86% 1.73%Projected 11• Funded by General Fund transferHealthy fund balance maintained• Average of $595,000 in expenses annuallyAnnual placeholder of $600,000-$740,000 from 2028-33Vehicle Acquisition Fund2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Vehicle Acquisition FundREVENUETotal Revenue 19,488 19,421 16,441 16,654 18,385 4,512 5,205 7,043 12,279 15,699 17,260EXPENSESTotal Expenses 449,000 573,040 202,259 101,238 1,193,256 608,326 632,660 657,966 684,285 711,656 740,122Revenue Over / (Under) Expenses(429,512) (553,619) (185,818) (84,584) (1,174,871) (603,814) (627,455) (650,923) (672,006) (695,957) (722,862)OTHER FINANCING SOURCES / (USES)Transfers In-General Fund 425,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000 800,000 700,000Total Other Sources / (Uses) 425,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000 800,000 700,000Ending Fund Balance 1,294,703 1,096,084 1,110,266 1,225,682 300,812 346,998 469,543 818,620 1,046,614 1,150,657 1,127,795Projected Street Improvements and Debt 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033REVENUETotal Revenue - 403,245 811,368 1,619,254 2,261,975 2,793,495 3,483,012 4,201,052 4,947,481 5,724,448 6,532,950 EXPENSESTotal Expenses 4,328,300 4,618,294 8,865,851 7,980,558 7,465,297 9,555,512 10,486,431 11,454,668 12,461,253 13,508,231 14,597,017 Revenues Over / (Under) Expenses (4,328,300) (4,215,049) (8,054,484) (6,361,304) (5,203,321) (6,762,017) (7,003,418) (7,253,616) (7,513,772) (7,783,783) (8,064,066) OTHER FINANCING SOURCES / (USES)Bond Proceeds 4,330,000 4,230,000 8,090,000 6,430,000 5,310,000 6,890,000 7,170,000 7,450,000 7,750,000 8,060,000 8,380,000 Total Other Sources / (Uses) 4,330,000 4,230,000 8,090,000 6,430,000 5,310,000 6,890,000 7,170,000 7,450,000 7,750,000 8,060,000 8,380,000 Projected12• Funded by special assessments and bonding• Average of $6.5M in streets annuallyAnnual placeholder of $6.7M-$8.1M from 2028-33• Will require annual bonding in order to finance improvementsStreet Improvements and Debt 13SummaryAverage annual increase from 2024-33 is $74/year for average value homeand average annual tax rate increase is 1.91%ProposedGENERAL FUND 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Ending General Fund Balance (FB) 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 General Fund Operating Tax Levy 5,134,187 5,419,126 5,884,348 6,051,409 6,502,038 7,081,029 7,489,851 8,062,054 8,298,191 8,548,843 8,814,610 Annual Increase 2.4% 5.5% 8.6% 2.8% 7.4% 8.9% 5.8% 7.6% 2.9% 3.0% 3.1%Total Other Special Levies 2,677,138 2,852,434 3,004,745 3,564,983 3,799,402 3,850,193 4,106,011 4,216,259 4,728,767 5,274,826 5,830,711 Total Tax Levy 7,811,325 8,271,560 8,889,093 9,616,392 10,301,440 10,931,222 11,595,863 12,278,313 13,026,958 13,823,669 14,645,321Increase/(Decrease) in Total Tax Levy 4.59% 5.89% 7.47% 8.18% 7.12% 6.11% 6.08% 5.89% 6.10% 6.12% 5.94%Total Net Tax Capacity 30,692,153 32,405,996 34,176,116 36,004,078 37,891,489 39,601,859 41,365,487 43,183,820 45,061,050 47,001,096 49,005,720Tax Rate on Tax Capacity 24.040% 24.473% 24.995% 25.725% 26.224% 26.664% 27.119% 27.542% 28.043% 28.566% 29.059%Tax Rate % Change -21.30% 1.80% 2.13% 2.92% 1.94% 1.68% 1.71% 1.56% 1.82% 1.86% 1.73%City Taxes on $553,500 Residential Homestead 1,396 1,456 1,523 1,605 1,675 1,744 1,816 1,888 1,968 2,052 2,137$ Tax Increase/(Decrease) (335)$ 60$ 67$ 82$ 70$ 69$ 72$ 72$ 80$ 84$ 85$ % Tax Increase / (Decrease) -19.37% 4.27% 4.60% 5.39% 4.39% 4.10% 4.15% 3.96% 4.24% 4.26% 4.12%Projected 14• Lake Elmo is on a sustainable track to finance City needs• General Fund reserve meets City Fund Balance policy of 50-60% of subsequent fiscal year budgeted expenditures• Long-term capital expenses are uncertain Placeholders for future years included• Housing growth is uncertainAssuming housing doesn’t slow until 2026If it slows sooner, it may have a negative impact on estimated tax rateSummary - Continued 15AQ& 11/1/2022CITY OF LAKE ELMOFinancial Management PlanLong Range Budget ProjectionsInflation Assumptions1,901,616 2,032,729 2,361,063 2,545,705 2,700,317 2,935,890 2,912,567 3,070,015 3,150,233 3,276,242 1 Revenue (Non-property tax) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%2 Interest Earnings 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%3 Expenses 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%4 CIP Inflation Factor 0.00% 0.00% 0.00% 0.00% 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%Projected ProposedGENERAL FUND 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033REVENUE4 General Property Tax 2,771,055 3,288,076 3,595,695 4,719,073 4,701,041 5,078,219 5,537,296 5,696,965 6,137,238 6,709,151 7,111,739 7,677,492 7,907,626 8,151,180 8,409,540 5 Fiscal Disparities 194,300 245,389 269,390 294,401 433,046 340,807 346,952 354,344 364,700 371,778 378,013 384,462 390,466 397,563 404,970 6 Penalties and Interest on Taxes 1,038 1,162 79 100 100 100 100 100 100 100 100 100 100 100 100 7 Special Assessments - - 930 - - - - - - - - - - - - 8 Intergovernmental 269,907 273,194 267,180 302,383 311,574 317,805 324,162 330,645 337,258 344,003 350,883 357,901 365,059 372,360 379,807 9 Licenses and Permits 1,055,038 1,425,695 1,485,658 1,442,920 1,256,495 1,281,625 1,307,257 1,045,806 1,066,722 1,088,056 1,109,818 1,132,014 1,154,654 1,177,747 1,201,302 10 Charges for Services 884,885 1,022,028 1,064,375 825,351 754,625 769,718 785,112 800,814 816,830 833,167 849,830 866,827 884,163 901,847 919,884 11 Fines & Forfeits 36,696 33,584 45,749 30,000 30,000 30,600 31,212 31,836 32,473 33,122 33,785 34,461 35,150 35,853 36,570 12 Investment Income 118,298 164,236 (13,605) 35,000 35,000 35,525 36,058 36,599 37,148 37,705 38,271 38,845 39,427 40,019 40,619 13 Miscellaneous Revenues 192,494 183,711 177,000 226,598 211,562 215,793 220,109 224,511 229,002 233,582 238,253 243,018 247,879 252,836 257,893 14 Total Revenue 5,523,711 6,637,075 6,892,451 7,875,826 7,733,443 8,070,192 8,588,258 8,521,620 9,021,471 9,650,664 10,110,691 10,735,119 11,024,523 11,329,504 11,650,684 EXPENSES15 Current16 General Government 1,136,908 1,005,254 1,056,983 1,332,914 1,546,217 1,794,061 1,865,823 1,940,456 2,018,074 2,098,797 2,182,749 2,270,059 2,360,862 2,455,296 2,553,508 17 Public Safety 1,948,269 2,641,770 3,003,677 2,942,018 3,444,559 3,713,558 3,862,100 4,016,584 4,177,247 4,344,337 4,518,111 4,698,835 4,886,789 5,082,260 5,285,551 18 Public Works 1,869,082 1,476,099 1,488,448 2,171,404 1,668,003 1,734,723 1,804,112 1,876,277 1,951,328 2,029,381 2,110,556 2,194,978 2,282,777 2,374,088 2,469,052 19 Culture and Recreation 263,979 310,066 258,690 299,559 384,664 400,051 416,053 432,695 450,002 468,003 486,723 506,192 526,439 547,497 569,397 20 NEW Public Works Position - 50% General Fund25,910 26,946 28,024 29,145 30,311 31,523 32,784 34,096 35,460 21 NEW Operating Costs27,560 28,662 29,809 31,001 32,241 33,531 34,872 36,267 37,718 22 NEW Operating Costs - One Time4,500 23 Capital Outlay24 General Government25 Public Safety 24,000 205,000 72,800 26 Public Works25,000 382,200 116,986 27 Culture and Recreation28 Total Expenses 5,242,238 5,433,189 5,807,798 6,745,895 7,273,443 7,715,192 8,388,258 8,321,620 8,771,471 9,000,664 9,360,691 9,735,119 10,124,523 10,529,504 10,950,684 29 Revenues Over / (Under) Expenses 281,473 1,203,886 1,084,653 1,129,931 460,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000 800,000 700,000 OTHER FINANCING SOURCES / (USES)30 Transfers In 765,079 31 Contingency(35,000) 32 Sale of Fixed Assets33 Bond Proceeds34 Transfer Out to Vehicle Acquisition (645,076) (1,003,847) (260,746) (150,000) (425,000) (355,000) (200,000) (200,000) (250,000) (650,000) (750,000) (1,000,000) (900,000) (800,000) (700,000) 35 Transfer Out to 2017A Improvement Bonds (47,766) - 36 Transfer Out to 2018A Equipment Cert. (20,093) - - 37 Transfer Out to EDA (30,000) (30,000) (30,000) 38 Transfer Out to Infrastructure Reserve - (15,661) - 39 Transfer Out to Inwood and 79th Street Stoplight - - (30,000) 40 Transfer Out to Village Fund - - (378,736) 41 Transfer Out to Project Fund(17,254) 42 Transfer Out43 Total Other Sources / (Uses) (742,935) (284,429) (699,482) (167,254) (460,000) (355,000) (200,000) (200,000) (250,000) (650,000) (750,000) (1,000,000) (900,000) (800,000) (700,000) 44 Prior Period Adjustments45 Ending General Fund Balance (FB) 4,314,184 5,233,641 5,618,812 6,581,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 46 Restricted - - - - - - - - - - - - - 47 Unassigned 4,314,184 5,233,641 5,618,812 6,581,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 6,616,489 48 Fund Balance as a % of Next Year's Expenditures 79% 90% 83% 90% 86% 79% 80% 75% 74% 71% 68% 65% 63% 60%GENERAL FUND BUDGETActualProjected 11/1/2022CITY OF LAKE ELMOFinancial Management PlanLong Range Budget ProjectionsInflation Assumptions1,901,616 2,032,729 2,361,063 2,545,705 2,700,317 2,935,890 2,912,567 3,070,015 3,150,233 3,276,242 1 Revenue (Non-property tax) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%2 Interest Earnings 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%3 Expenses 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%4 CIP Inflation Factor 0.00% 0.00% 0.00% 0.00% 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%Projected ProposedGENERAL FUND 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033ActualProjected49 General Fund Operating Tax Levy2,973,905 3,537,317 3,824,879 5,013,574 5,134,187 5,419,126 5,884,348 6,051,409 6,502,038 7,081,029 7,489,851 8,062,054 8,298,191 8,548,843 8,814,610 50 Annual Increase 18.9% 8.1% 31.1% 2.4% 5.5% 8.6% 2.8% 7.4% 8.9% 5.8% 7.6% 2.9% 3.0% 3.1%OTHER SPECIAL/DEBT TAX LEVIES62 2009B Improvement Bonds 43,580 - - - - - - - - - - - - - - 63 2010A Improvement Bonds 59,356 57,151 - - - - - - - - - - - - - 64 2010B CIP Bonds 205,989 206,908 207,338 207,076 206,656 202,692 - - - - - - - - - 65 2011A Improvement Bonds 76,719 74,828 - - - - - - - - - - - - - 66 2012B Improvement Bonds 65,275 63,669 67,313 65,417 - - - - - - - - - - - 67 2014A Improvement Bonds 203,885 199,370 205,117 200,394 200,091 103,597 183,304 183,829 178,946 179,314 179,314 - - - - 68 2015A Improvement Bonds 25,113 21,543 12,722 14,508 - - - - - - - - - - - 69 2016A Improvement Bonds 189,419 194,564 188,999 193,934 193,409 187,529 186,899 186,164 - - - - - - - 70 2017A Improvement/Equipment Bonds 346,598 340,691 339,904 344,104 342,660 340,954 338,985 342,004 307,879 - - - - - - 71 2018A Equipment Certificate - 128,996 123,848 126,404 123,569 125,984 128,258 125,139 127,270 124,010 - - - - - 72 2019A Improvement/Equipment Bonds - 124,786 293,148 295,301 297,138 298,661 294,618 290,419 296,560 296,981 200,801 - - - - 73 2021A City Hall/Fire Bonds - - - 733,323 744,758 751,111 746,333 746,491 751,426 745,231 743,971 747,488 747,423 747,173 746,740 74 2021A Improvement Bonds - - - 274,713 281,172 274,399 276,551 273,139 274,819 276,184 271,984 272,876 272,338 276,958 276,144 75 2022A Improvement/Abatement Bonds - - - - 287,685 283,998 279,523 279,509 272,948 266,111 263,984 255,047 245,323 243,065 234,492 76 Street Debt Levy - NEW Projects - - - - - 283,509 570,274 1,138,289 1,589,554 1,962,362 2,445,957 2,940,848 3,463,683 4,007,630 4,573,335 777879 Total Other Special Levies 1,215,934 1,412,506 1,438,389 2,455,174 2,677,138 2,852,434 3,004,745 3,564,983 3,799,402 3,850,193 4,106,011 4,216,259 4,728,767 5,274,826 5,830,711 80 Total Tax Levy4,189,839 4,949,823 5,263,268 7,468,748 7,811,325 8,271,560 8,889,093 9,616,392 10,301,440 10,931,222 11,595,863 12,278,313 13,026,958 13,823,669 14,645,32181 Increase/(Decrease) in Total Tax Levy18.14% 6.33% 41.90% 4.59% 5.89% 7.47% 8.18% 7.12% 6.11% 6.08% 5.89% 6.10% 6.12% 5.94%82 Fiscal Disparity Distribution(199,047) (249,326) (271,597) (294,401) (433,046) (340,807) (346,952) (354,344) (364,700) (371,778) (378,013) (384,462) (390,466) (397,563) (404,970)83Net Levy to Taxpayers 3,990,792 4,700,497 4,991,671 7,174,347 7,378,279 7,930,753 8,542,140 9,262,047 9,936,740 10,559,445 11,217,850 11,893,852 12,636,493 13,426,106 14,240,3518485 Existing Tax Base 17,361,919 20,021,726 21,116,953 23,487,099 30,692,153 31,305,996 33,054,116 34,859,638 36,724,160 38,649,319 40,393,896 42,192,797 44,047,496 45,962,271 47,941,11886878889 New Net Tax Capacity000001,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,60290 Total Net Tax Capacity 17,361,919 20,021,726 21,116,953 23,487,099 30,692,153 32,405,996 34,176,116 36,004,078 37,891,489 39,601,859 41,365,487 43,183,820 45,061,050 47,001,096 49,005,72091Tax Rate on Tax Capacity 22.986% 23.477% 23.638% 30.546% 24.040% 24.473% 24.995% 25.725% 26.224% 26.664% 27.119% 27.542% 28.043% 28.566% 29.059%92 Tax Rate % Change 2.14% 0.69% 29.22% -21.30% 1.80% 2.13% 2.92% 1.94% 1.68% 1.71% 1.56% 1.82% 1.86% 1.73%93 City Taxes on $553,500 Residential Homestead 1,303 1,331 1,340 1,732 1,396 1,456 1,523 1,605 1,675 1,744 1,816 1,888 1,968 2,052 2,13794 $ Tax Increase/(Decrease) 28$ 9$ 392$ (335)$ 60$ 67$ 82$ 70$ 69$ 72$ 72$ 80$ 84$ 85$ 95 % Tax Increase / (Decrease) 2.14% 0.69% 29.22% -19.37% 4.27% 4.60% 5.39% 4.39% 4.10% 4.15% 3.96% 4.24% 4.26% 4.12%96 Existing Tax Base Inflation / (Deflation) 0.0% 0.0% 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%97 Total Tax Base Increase 15% 5% 11% 31% 6% 5% 5% 5% 5% 4% 4% 4% 4% 4%PROPERTY TAX LEVY AND TAX IMPACT CITY OF LAKE ELMOFinancial Management PlanVehicle Acquisition Fund 410Inflation Assumptions1 Revenue (Non-property tax) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%2 Interest Earnings 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%3 Expenses 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%4 CIP Inflation Factor 0.00% 0.00% 0.00% 0.00% 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Vehicle Acquisition Fund BudgetedREVENUE5 Property taxes6 Investment Income 33,976 33,576(6,335)19,488 19,421 16,441 16,654 18,385 4,512 5,205 7,043 12,279 15,699 17259.86029 Total Revenue 33,976 33,576(6,335)0 19,488 19,421 16,441 16,654 18,385 4,512 5,205 7,043 12,279 15,699 17,260EXPENSES10 Total Current11 Debt service 12,32812 Capital Outlay13 Public Safety 856,832 297,090 319,89514 Public Works 188,403 299,319 109,884 409,00015 Total Capital Projects449,000 573,040 202,259 101,238 1,193,256 608,326 632,660 657,966 684,285 711,656 740,12216 Total Expenses 1,057,563 596,409 429,779 409,000 449,000 573,040 202,259 101,238 1,193,256 608,326 632,660 657,966 684,285 711,656 740,12217 Revenue Over / (Under) Expenses(1,023,587) (562,833) (436,114) (409,000) (429,512) (553,619) (185,818) (84,584) (1,174,871) (603,814) (627,455) (650,923) (672,006) (695,957) (722,862)OTHER FINANCING SOURCES / (USES)18 Bond Proceeds 698,98419 Proceeds From Sale of Capital Assets 44,927 13,805 17,30020 Transfers In-General Fund 645,076 1,003,847 260,746 150,000 425,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000 800,000 700,00021 Transfers Out22 Total Other Sources / (Uses) 1,388,987 1,017,652 278,046 150,000 425,000 355,000 200,000 200,000 250,000 650,000 750,000 1,000,000 900,000800,000 700,00023Ending Fund Balance 1,261,464 1,716,283 1,558,215 1,299,215 1,294,703 1,096,084 1,110,266 1,225,682 300,812 346,998 469,543 818,620 1,046,614 1,150,657 1,127,795Tax Rate Increase/(Decrease)1.80% 2.13% 2.92% 1.94% 1.68% 1.71% 1.56% 1.82% 1.86% 1.73%Multiple 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033Capital Project Name CIP # Year First Year Last Year Cost24 Inspection Vehicle - 2015 Jeep B-002 2023 30,000 - - - - - - - - - - 25 Inspection Vehicle - 2017 Equinox B-003 2023 30,000 - - - - - - - - - - 26 Inspection Vehicle - 2019 Equinox B-004 2024 30,000 31,200 - - - - - - - - - 27 Inspection Vehicle - 2022 Equinox B-005 2027 30,000 - - - 35,096 - - - - - - 28 Brush Truck 2 F-012 2024 66,000 68,640 - - - - - - - - - 29 T2 Tender/Engine F-013 2027 650,000 - - - 760,408 - - - - - - 30 Rescue Boat & Trailer Replacement F-014 2023 35,000 - - - - - - - - - - 31 Rescue/Brush Fire UTV F-015 2026 55,000 - - 61,868 - - - - - - - 32 Command Vehicle 2 (2016 Tahoe) F-019 2025 67,000 - 72,467 - - - - - - - - 33 Command Vehicle 3 (2015 Tahoe) F-020 2023 72,000 - - - - - - - - - - 34 Utility Vehicle/Trail Groomer PR-020 2024 37,000 38,480 - - - - - - - - - 35 Loader PW-004 2023 235,000 - - - - - - - - - - 36 Tractor PW-006 2024 195,000 202,800 - - - - - - - - - 37 Back Hoe PW-044 2024 52,000 54,080 - - - - - - - - - 38 Mini Loader PW-048 2025 120,000 - 129,792 - - - - - - - - 39 Skidloader PW-054 2024 70,000 72,800 - - - - - - - - - 40 Pickup w/ Plow PW-060 2024 41,000 42,640 - - - - - - - - - 41 Pickup PW-061 2026 35,000 - - 39,370 - - - - - - - 42 Dump Truck w/ Plow, Sander & Underbody PW-062 2027 250,000 - - - 292,465 - - - - - - 43 Pickup w/ Lift Gate & Plow PW-063 2027 45,000 - - - 52,644 - - - - - - 44 Pickup w/ Lift Gate & Plow PW-064 2027 45,000 - - - 52,644 - - - - - - 45 Pickup Truck Addition w/ V-Plow PW-072 2023 47,000 - - - - - - - - - - 46 Chopper PW-078 2024 60,000 62,400 - - - - - - - - - 47 Placeholder Yes 2028 2033 500,000 - - - - 608,326 632,660 657,966 684,285 711,656 740,122 65 Total Capital Projects2,797,000 573,040 202,259 101,238 1,193,256 608,326 632,660 657,966 684,285 711,656 740,122 CASH FLOW ANALYSISCAPITAL PROJECTS & DEBT LEVYActualProjectedProjectProjected CITY OF LAKE ELMOFinancial Management PlanStreet DebtInflation Assumptions1 Revenue (Non-property tax)2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%2 Interest Earnings1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50%3 Expenses4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%4 CIP Inflation Factor0.00% 0.00% 0.00% 0.00% 0.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%PreliminaryStreet Improvements Fund2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033REVENUE5 General Property Tax - New Projected- 283,509 570,274 1,138,289 1,589,554 1,962,362 2,445,957 2,940,848 3,463,683 4,007,630 4,573,335 6 Special assessments - New Projected- 119,710 240,844 480,182 670,609 827,719 1,031,722 1,252,372 1,473,021 1,702,497 1,941,151 7 Interest Earnings- 26 250 783 1,813 3,413 5,333 7,832 10,777 14,321 18,464 10 Total Revenue- - - - - 403,245 811,368 1,619,254 2,261,975 2,793,495 3,483,012 4,201,052 4,947,481 5,724,448 6,532,950 EXPENSES11 Total Current - Issuance costs129,900 126,900 242,700 192,900 159,300 206,700 215,100 223,500 232,500 241,800 251,400 12 Total Capital Projects4,198,400 4,107,376 7,850,658 6,246,257 5,153,461 6,691,591 6,959,255 7,237,625 7,527,130 7,828,215 8,141,344 13 Debt service - New (Projected)- - - 384,018 772,493 1,541,401 2,152,536 2,657,221 3,312,076 3,993,543 4,701,623 5,438,216 6,204,273 14 Total Expenses- - - - 4,328,300 4,618,294 8,865,851 7,980,558 7,465,297 9,555,512 10,486,431 11,454,668 12,461,253 13,508,231 14,597,017 15 Revenues Over / (Under) Expenses- - - - (4,328,300) (4,215,049) (8,054,484) (6,361,304) (5,203,321) (6,762,017) (7,003,418) (7,253,616) (7,513,772) (7,783,783) (8,064,066) OTHER FINANCING SOURCES / (USES)16 Bond Proceeds4,330,000 4,230,000 8,090,000 6,430,000 5,310,000 6,890,000 7,170,000 7,450,000 7,750,000 8,060,000 8,380,000 17 Transfers In18 Transfers Out19 Total Other Sources / (Uses)- - - - 4,330,000 4,230,000 8,090,000 6,430,000 5,310,000 6,890,000 7,170,000 7,450,000 7,750,000 8,060,000 8,380,000 20 Ending Fund Balance- - - - 1,700 16,651 52,167 120,863 227,542 355,525 522,107 718,491 954,719 1,230,936 1,546,869 Project Multiple Project CostCapital Project Name CIP # Road Section DescriptionAssessment %Year? Year Last Year 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 203321 2023 Street Improvements PW-039 30% 2023 3,688,400 - - - - - - - - - - 22 2024 Street Improvements PW-040 30% 2024 2,389,400 2,484,976 - - - - - - - - - 23 2025 Street Improvements PW-041 30% 2025 2,278,375 - 2,464,290 - - - - - - - - 24 2026 Street Improvements PW-042 30% 2026 2,252,900 - - 2,534,206 - - - - - - - 25 Ideal Ave (CSAH 13))-Phase 3-CSAH 14 to CSPW-053 30% 2026 800,000 - - 899,891 - - - - - - - 26 2027 Street Improvements PW-055 30% 2027 2,605,200 - - - 3,047,716 - - - - - - 27 Manning Ave Phase 3 PW-057 30% 2027 1,800,000 - - - 2,105,745 - - - - - - 28 TH36-Lake Elmo Ave (CSAH 17) Imp PW-074 30% 2025 4,500,000 - 4,867,200 - - - - - - - - 29 South Frontage Road (Keats to Lake Elmo AvePW-076 30% 2026 2,500,000 - - 2,812,160 - - - - - - - 30 Hudson Blvd Improvements (Gap Segments) PW-079 30% 2023 510,000 - - - - - - - - - - 31 Hudson Blvd Improvements (Gap Segments) PW-079 30% 2024 1,560,000 1,622,400 - - - - - - - - - 32 Hudson Blvd Improvements (Gap Segments) PW-079 30% 2025 480,000 - 519,168 - - - - - - - - 33 Placeholder30% Yes 2028 2033 5,500,000 - - - - 6,691,591 6,959,255 7,237,625 7,527,130 7,828,215 8,141,344 109 Total Capital Projects30,864,275 4,107,376 7,850,658 6,246,257 5,153,461 6,691,591 6,959,255 7,237,625 7,527,130 7,828,215 8,141,344 PROJECTED NEW DEBT TERMSPer MA:JAAs of Date:9/9/20222023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033110 Par Amount (Line 16)4,330,000 4,230,000 8,090,000 6,430,000 5,310,000 6,890,000 7,170,000 7,450,000 7,750,000 8,060,000 8,380,000 111 Number of Years15 15 15 15 15 15 15 15 15 15 15 112 Interest Rate3.80% 4.30% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80%113 105% Debt Levy0 0 0 0 403,219 811,118 1,618,471 2,260,162 2,790,082 3,477,679 4,193,220 4,936,704 5,710,127 6,514,486CASH FLOW ANALYSISCAPITAL PROJECTS & DEBT LEVYActualProjectedProjected 11/1/20221CITY OF LAKE ELMO2FIN MGMT PLAN (FMP)Inflation Assumptions 0% 2% 2% 2% 2% 2% 2% 2% 2% 2%3 Inflated Value 440,000 448,800 457,776 466,932 476,270 485,796 495,511 505,422 515,530 525,8414Built in 2022 Built in 2023 Built in 2024 Built in 2025 Built in 2026 Built in 2027 Built in 2028 Built in 2029 Built in 2030 Built in 20315Residential GrowthUnit Value Total Units 2024 2025 2026 2027 2028 2029 2030 2031 2032 20336 Single Family Homes 440,000 2,200 250 250 250 250 200 200 200 200 200 2007 Multi-Family Homes 0 000000000008 Apartments 0 000000000009 Total Residential Units 2,200 250 250 250 250 200 200 200 200 200 20010 Total Homestead Market Value 110,000,000 112,200,000 114,444,000 116,732,880 95,254,030 97,159,111 99,102,293 101,084,339 103,106,026 105,168,14611 Total Multi Family Market Value00000012 Total Apartment Market Value00000013 Total Residential Market Value 110,000,000 112,200,000 114,444,000 116,732,880 95,254,030 97,159,111 99,102,293 101,084,339 103,106,026 105,168,14614 Single Family Tax Capacity 1,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,60215 Multi Family Tax Capacity00000016 Rental Apartment Tax Capacity00000015Total Residential Tax Capacity 1,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,6021617Built in 2022 Built in 2023 Built in 2024 Built in 2025 Built in 2026 Built in 2027 Built in 2028 Built in 2029 Built in 2030 Built in 203118Commercial GrowthUnit Value Total Units 2024 2025 2026 2027 2028 2029 2030 2031 2032 203319 Commercial 0 000000 000020 Industrial 0 0000000000021 Total Commercial Units 0000000000022 Total Commercial Market Value 000000000023Total Commercial Tax Capacity 00000000002425 TOTAL NEW MARKET VALUE 110,000,000 112,200,000 114,444,000 116,732,880 95,254,030 97,159,111 99,102,293 101,084,339 103,106,026 105,168,14626 TOTAL NEW TAX CAPACITY 1,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,60227 Less TOTAL NEW FISCAL DISP. CONT. TAX CAPACITY28 TOTAL NEW LOCAL TAX CAPACITY 1,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,60229 Decert Date30 313233 TOTAL NEW TAX CAPACITY includes expired TIF Districts 1,100,000 1,122,000 1,144,440 1,167,329 952,540 971,591 991,023 1,013,554 1,038,825 1,064,60234## TIF Captured Tax Capacities are net of fiscal disparities, where applicable.## Market Values of all new residential and commercial construction units are increased 2% annually after 2025## Growth Projections are for Financial Management Plan only. They are not coordinated with Met Council and Comp Plans at this time.Page 5 - Growth Projections