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Item No. 3 Meeting Date: May 7, 2018 MOT T os VIEW Type of Business: Work Session J City Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 89xx Adopting a Five Year Financial Plan for 2019 thru 2023 Introduction: The City Charter, Chapter 7.05, requires that a five year financial plan be prepared annually. It must be presented at a public meeting and adopted by motion or resolution. Notice was published for the Council meeting in the Sun Focus on May 4, 2018. Residents are welcome to comment on the plan at this meeting. The components of the Five Year Financial Plan are attached for Council consideration. There are several components to the Five Year Financial Plan. These are the General Fund Multi-year Operating Budget, the Vehicle & Equipment Replacement Plan, the Capital Improvement Program, the Impact on Capital Projects Funds' Cash Balance, and Utility Rate Studies. This five year plan should be considered a work -in -progress and a guide for Council and Staff to make longer range decisions. As new information becomes available and conditions change we can update the components to determine the longer range effect. General Fund Multi-year Operating Budget: The multi-year operating budget for the General Fund includes Local Government Aid (LGA) at 90% of the anticipated amount for 2019 and beyond. The City is projected to receive $739,462 in LGA under current law for 2019 and certified aid is $736,425 for 2018. The plan reflects a 4% increase in expenditures for 2019, 2020, 2021, and 3.5% for the remaining years. A 4.5% levy increase is reflected for 2019 and all years after. When possible staff used known amounts instead of projections. Past levy increases were 2% for 2014 and 2015, 1% for 2016, 1.71 % for 2017 and 4.3% for 2018. 2019 reflects a 4.5% increase but may be adjusted as we develop the 2019 budget and better information becomes available. This version of the budget assumes that there will be no additions to personnel or other major changes in operating expenditures. City staff has varied by 1 or 2 positions over the last 20 years with an average of 49.675 FTE's over that period. Public Works has added 1 position and Police has added 3 while Community Development and Finance have each lost a position. We have had 9-11 seasonals over that same period. Capital Improvement Program (CIP): The Capital Improvement Program has been updated to reflect changes in the project list and is presented for your consideration. There are a number of projects that have no current funding source and are reflected as unfunded in the CIP.