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Item No. 7G Meeting Date: May 27, 2008 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: First Reading and Introduction of Ordinance 806, Adopting a Five Year Financial Plan for 2009 thru 2013 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 ordinance. The components of the Five Year Financial Plan are attached for introduction and first reading of ordinance number 806. There are several components to the Five Year Financial Plan. These are the General Fund Multi-year Operating Budget, the Capital Improvement Program, the Vehicle & Equipment Replacement Plan, 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 affect. General Fund Multi-year Operating Budget: The multi-year operating budget for the General Fund includes an increase in Local Government Aid for 2009 of $521,000. The 2008 Legislature restricted levy increases to a 3.9% increase over the previous year’s levy with some exceptions. When possible staff used known amounts instead of a projection. The 2009 levy reflects a 3% increase over the previous year’s levy. The levy amount may be adjusted as we develop the 2009 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. Capital Improvement Program (CIP): The Capital Improvement Program was presented to the City Council at the March 3, 2008 work session. The plan 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. Vehicle and Equipment Replacement Plan The schedule has been updated to reflect retirements and new acquisitions. The current amounts transferred to the Vehicle and Equipment Fund from the participating funds is sufficient to maintain replacement levels.