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Item No. 4 Meeting Date: May 3, 2010 Type of Business: Work Session City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Adopting a Five Year Financial Plan for 2011 thru 2015 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 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 affect. General Fund Multi-year Operating Budget: The multi-year operating budget for the General Fund excludes any consideration of Local Government Aid for 2011 and beyond. The plan reflects a 0% increase in expenditures for 2011 and a 3% increase in expenditures for the remainder of years. A 4% levy increase is reflected for all years. 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 a projection. The levy amount may be adjusted as we develop the 2011 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 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 using bond proceeds in the CIP. 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. The water tower was added this year to smooth out expenses for future maintenance.