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Item No. 7L Meeting Date: May 23, 2011 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 7795, Adopting a Five Year Financial Plan for 2012 thru 2016 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. The City Council reviewed the Capital Improvement Program (CIP) at the May 9th Council Meeting. Notice of the public hearing was published in the Sun Focus. 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 the financing plan for the Street and Utility Improvement Program with acceleration of the last three projects. 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 affect. General Fund Multi-year Operating Budget: The multi-year operating budget for the General Fund excludes any consideration of Local Government Aid for 2012 and beyond. The plan reflects a 2.50% increase in expenditures for 2012 and a 3% increase in expenditures for the remaining years. A 4% levy increase is reflected for all years after 2012. The General Fund runs deficits for the five years under consideration. This indicates that there will be some difficult choices ahead. When possible staff used known amounts instead of projections. The levy amount for 2012 reflects no increase but may be adjusted as we develop the 2012 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 and does reflect the reduction of personnel in the Community Development department. 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 were anticipated to be funded with unobligated tax increment, but will have to have another funding source and are reflected as unfunded in the CIP.