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Item No. 7.E Meeting Date: May 12, 2014 ®T-----Type of Business: Council BusiRgss VJJ"L City Administrator Review: City of Mounds View Staff Report To: From: Item Title/Subject: Honorable Mayor and City Council Mark Beer, Finance Director Resolution 8252 Adopting a Five Year Financial Plan for 2015 thru 2019 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 excludes consideration of Local Government Aid (LGA) for 2013 and beyond. There has been some discussion about using LGA to replenish the Special Projects Fund and the Vehicle and Equipment Fund as both have seen reductions in their respective fund balances. The City is projected to receive $597,024 in LGA for 2014 and current law projects approximately $611,886 for 2015 The plan reflects a 3.00% increase in expenditures for 2015 and for the remaining years. A 3.5% levy increase is reflected for 2015 and 4% for all years after 2015. The General Fund runs deficits for the five years under consideration. When possible staff used known amounts instead of projections. The 2014 levy was increased by 2%, 2015 reflects a 3.5% increase but may be adjusted as we develop the 2015 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.