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Item No. 7.D Meeting Date: May 11, 2015 Type of Business: Council Business City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 8405 Adopting a Five Year Financial Plan for 2016 thru 2020 Introduction: The City Charter, Chapter 7.05, requires that a five year financial plan be prepared annually. It must be presented at a public hearing and adopted by motion or resolution. Notice was published in the Sun Focus and 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. Staff also included a summary of the financing plan for the Street and Utility Improvement Program and annual vehicle replacement costs. 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 2015 and beyond. The Council made a transfer to the Special Projects Fund in 2014 to begin to replenish the fund and budgeted for a small transfer in 2015. The City is projected to receive $655,531 in LGA for 2015 and current law projects approximately $666,795 for 2016 The plan reflects a 2.50% increase in expenditures for 2016/17 and 3% for the remaining years. A 2% levy increase is reflected for 2016 and 3.5% for all years after 2016. When possible staff used known amounts instead of projections. The 2014 and 2015 levies were increased by 2%, 2016 reflects a 2% increase but may be adjusted as we develop the 2016 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.