HomeMy WebLinkAbout2.a. Key Financial StrategiesCITY OF ROSEMOUNT
EXECUTIVE SUMMARY FOR DISCUSSION
CITY COUNCIL WORK SESSION: June 9, 2004
AGENDA ITEM: KEY FINANCIAL STRATEGIES
AGENDA SECTION:
PREPARED BY: Jamie Verbrugge, City Administrator
AGENDA NO. A .-
ATTACHMENTS: KFS Draft Document; Spreadsheets A
(Steady Tax Rate), B (2% Tax Rate Decline), and C (4% Tax
Rate Decline)
APPROVED BY:
NOTES: For discussion and direction.
ISSUE:
The City has engaged Ehlers and Associates to help the City Council and staff develop
Key Financial Strategies for the immediate and long -term fiscal health of the
community. This meeting is the fifth in a series to develop the KFS process.
The purpose of the Key Financial Strategies process is three -fold. First, it is an
opportunity to conduct financial projections beyond the normal one -year budgeting
cycle. Second, the strategies process helps to identify issues of significance to the
community and to frame those issues based on their importance relative to maintaining
services, meeting community goals, and as new initiatives. Finally, the process is
intended to identify time and financial resources necessary for the assessment of need,
the study of impact, and the implementation of programs and services that are desired
by the City Council and staff on behalf of the community.
The objective of this meeting is to have the City Council come to consensus on a
number of issues related to the Key Financial Strategies.
The first staff recommendation is that the City Council consider three principles that will
guide the implementation, study, and assessment of community issues. The three
principles, alluded to in the Executive Summary of the KFS document, are:
• Fiscal Health — Maintaining fiscal health is the very first goal listed in the recently
adopted City Council goals for the coming year. It is a carry-over from last year's
goals document. The basics of maintaining fiscal health for the community focus
on a property tax policy that will level or reduce the property tax rate; maintain a
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City Council Work Session — KFS
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Page 3 of 3
cost of salaries and benefits. Existing contracts average roughly three percent
increases for the various bargaining units.
• Market Value Homestead Credit - The Market Value Homestead Credit is,
according to 2003 legislation, supposed to be restored for 2005. Although staff
is uncertain at this point whether to include the MVHC in the 2005 budget (due to
the possibility that a State shortfall next year may lead to MVHC cuts), the MVHC
has been included in the budgeting forecast.
• Levy Limits — Levy limits,will not be in place for 2005. However, State legislative
action on any number of issues —most prominently, levy limits or property tax
reform - will dramatically affect future forecasting reliability.
• Property Tax Rate Assumptions — There are three sets of forecasting
spreadsheets. One assumes that the tax rate (line 65 on the spreadsheets)
remains level one assumes a 2% annual reduction in tax rate; and the last
assumes a 4% annual reduction in tax rate. (The City taxes paid at that rate is
shown on line 68. It is probably a good reminder that a level tax rate still means
that taxes paid will increase based on the Dakota County Assessor's annual
property valuation adjustment.)
• Available Resources /Gap - Line 54 demonstrates the available funds through
future debt based on the preliminary projection. The adopted 10 -year CIP has
been included in the projection. Future staffing needs have not yet been
included. Also not included are debt service or general fund costs related to
many of the services /amenities included in the strategies. For example, funding
of the Pavement Management System on an annual basis in the CIP has not
been included. Debt service for a new fire station has not been included.
Once the Council is comfortable with the principles, the KFS document, the
prioritization and timing of issues and strategies, and format of the forecasting
spreadsheets, staff and consultants will begin plugging in the various services and
amenities to demonstrate the various impacts to future budgeting considerations.
Staff will also be presenting the first draft of the 2005 City budget at the City Council
Work session in July.
r
EHLERS
& ASSOCIATES INC
DRAFT -- KEY FINANCIAL STRATEGIES
EXECUTIVE SUMMARY
Key Financial Strategies is a process that combines financial planning with strategic
planning. Its primary purpose is to provide a disciplined framework for decision- making
required to identify and implement strategies that will assure long -term community
viability. This is especially important for communities like Rosemount that face the dual
task of preparing for future development for a community with a very large physical size
(nearly 36 square miles) while preserving the foundation of a mature, developed
community. Long -term viability also reflects the fact that value of current assets owned
by residents and other property owners is directly linked to the ability to prepare the
community for future residents and investors.
Rosemount is a well - managed. City that has developed and maintained sound fiscal
policies in the areas of budgeting, fund balances and debt management. The strong Al
credit rating reflects the results of this management and the strength of the local tax base.
The principles guiding the community financially reflect a commitment to maintain the
financial stability, maintain service levels based upon community standards, maintain the
community infrastructure (streets, sidewalks, lighting, utility systems, etc.), and to
provide additional services and investments based on the needs of current and future
residents within the context of community affordability and without sacrificing the ability
to maintain current operations.
The financial projects prepared as part of the KFS plan project that the City will be able
to maintain these principles with careful attention to the financial planning process. This
process requires a specific commitment to reviewing and updating this financial plan on
an annual basis with a focus on the following:
• Review of staff prepared projections for the cost to maintain current level of
services given projected-growth.
• Review of investments (capital costs) required to maintain current facilities.
• Analysis of the impact of adding new services and facilities on tax rate, fees.
• Periodic surveys to determine public assessment of the value and need for the
current level of services.
• Identification of a select number of new goals and initiatives for needs
assessment, study or implementation.
• Development of direction to staff to prepare specific strategies for future
years.
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KEY FINANCIAL STRATEGIES
OVERVIEW
Ehlers & Associates was engaged by the City of Rosemount, Minnesota (the "City ") to
assist in the preparation of the City's Key Financial Strategies. The need to create a
comprehensive financial management plan was identified by the City Mayor, Council,
Administrator and Staff due to growing demands for financial resources. This strategic
financial plan is, the result of five workshops with the Council and many hours of staff
consultation. Workshops focused on identifying potential financial needs of the City,
reviewing financial projections, and discussing priorities for the community. The results
from those sessions have been incorporated into this plan document. In add tion, the City
Council has conducted an annual goal setting session to help frame issues of importance
to the community. The 2004 -2005 Council Goals document is attached as an appendix to
this report.
OBJECTIVES FOR THE FINANCIAL PLANNING PROCESS
A financial plan is a necessary element of a City strategy to remain competitive in
today's demanding environment. Other objectives of the City's Key Financial Strategies
are:
• Establishing a common understanding among the elected officials and staff
of the City's needs and financial capacity.
•_ Developing a comprehensive view of financial resources and o tions.
• Identifying City issues and opportunities.
• Creating a framework in which elected officials and sta can make
immediate and long -term investment decisions.
• Developing a consensus among the elected officials and staff on key actions
the City will take to remain competitive.
• Meeting the new standard presented in the Governmental Accounting
Standards Board Regulation 34 including its capital planning provisions.
Through this workshop process, the City Council has examined the currerit and future
ability to meet these objectives to answer the question "How do we get there ?" The
City's Key Financial Strategies will provide a road map into the future and a framework
for future decision- making.
City of Rosemount — Key Financial Strategies - -DRAFT
Page 2
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FINANCIAL ASSESSMENT — FINDINGS
The financial assessment conducted of the City was divided into seven Strategic Focus
Areas:
I. COMMUNITY GOALS /INITIATIVES
2. LOCAL TAX BASE CONSIDERATIONS
3. FINANCIAL POSITION
4. CITY OWNED INFRASTRUCTURE
5. COMPETITIVENESS
6. CREDIT POSITION
7. ENTERPRISE FUNDS
As part of the financial assessment, a number of findings were presented within the
workshops. These findings are outlined in more detail within this report. A summary of
these findings is as follows:
1) COMMUNITY GOALS/INITIATIVES - Establish a strategic profile including
community vision (purpose), goals (means to achieve the purpose), and strategies
(directed at accomplishing goals), which are essential to the efficient and
effective use of scarce City resources.
A) Important Initiatives -- City Officials have identified several initiatives as
part of this financial planning process. Key issues include:
• Economic and Communily Development
o Downtown Redevelopment
o
Restaurants and other destination uses
o
Community marketing and enhanced communications
• Maintaining City Infrastructure
o
Street and Utility Maintenance
o
Park Maintenance
o
Vehicle and Major Equipment Replacement
o
Water System Improvements
• Enhance and Protect City Environment
•
Address land use planning related to Flint Hills Refinery
and UMORE Park
•
Open space planning and preservation
• Managing
Growth
o
Future staffing issues
o
Comprehensive Plan Update/MUSA Expansion
o
Improving City Services
o
City Hall Expansion
• Explore support
for new City facilities
•
Athletic Complex
•
County Library
City of Rosemount — Key Financial Strategies -- DRAFT Page 3
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o Aquatic Facility
o Second ice sheet
o Arts & Culture Center
o Community Activity Center (Seniors/Teens/Youth)
Implication: The City has identified a significant agenda for future needs.
Developing a mechanism to regularly prioritize needs, develop
implementation programs (including resource requirements) and evaluate
the City's capacity to implement the programs should be a high priority.
Given this aggressive agenda it will be important to manage the time
required for the council to make the required policy decisions needed to
implement the strategies. A disciplined approach to selecting a manageable
number of strategies should be a priority. Financial strategies should also
include direction regarding the nature of activities to be undertaken for each
issue including:
• Assessing need for service or facility.
• Studying alternatives, methods and cost and funding sources for
implementation.
• Implementation.
B) Facility Options -- City Officials are looking at options for public facilities
city hall expansion, public works facility expansion, fire station #2, and a
variety of other needs.
Implication: Involving the public with this process will be key to
progressing this issue to the implementation phase. Careful consideration
should be given to the funding. options and impacts (including operating
costs). While there are some issues impacting the timing of these decisions,
it is essential that public understanding and support be developed.
C) Technology -- Ever growing demands for staff services and the need for
City departments to work together require ongoing investments in
computers and technology.
Implication.- Further enhancements to the City's information technology systems
may require financial support from the City's General Fund. There will be more and
better technology products available to cities. Residents, customers and employees
will likely create pressure to invest in improved and new technology. This will
require the City to develop a disciplined approach to reviewing the requests and
needs for technology investments. That approach should address cost and benefits
(not limited to financial), productivity, training, support and potential obsolescence.
2) LOCAL TAXBASE CONSIDERATIONS Structure, quality and size of a community's
tax base impact its ability to fund services and investments.
City of Rosemount — Key Financial Strategies —DRAFT Page 4
A) Development - Approximately 31 %0 of Rosemount is within the current and future
MUSA line, Of this 31 %, approximately 60 % is developed. The City has reached
roughly 61% of the 2020 Met Council- projected population of 31,370. How the
community completes development will impact its future.
Implication: The City will add additional residents and businesses to its population
and, in addition, will face new and additional requests for future services as
demographics and resident interests change as well as the need to address reinvestment
in existing facilities. Understanding the dual impact of new service requests of existing
residents and the impact of additional new residents will be a key to future planning.
B) Market Value — City market value of $1.3 billion has been increasing steadily an
average of 14.6% per year over the past five years. The City has a good per capita
market value of $76,000.
Implication: The high per capita market value provides good opportunity for revenue
diversification. The tax rate should be evaluated in terms of what rate creates the
outcomes that the City seeks for itself. The tax rate should be set in conjunction with
both the budget and the yearly costs identified in the capital plan.
C) Diverse tax base -- The City has a tax base with 78% residential and 22%
commercial/industrial/other.
Implication: Tax base diversification is a focus to achieve stability in City services
requirements and property tax production. Continued effort should be made towards a
ratio of residential to commercial /industrial base with a target range of 67% to 75%
residential and 25% to 33% commercial /industrial.
D) Economic Development Policy — The City has provided economic development
incentives in the form of tax increment financing.
Implication: Previously the City used economic development incentives to attract
targeted development. This strategy has contributed to the level of tax base
diversification that exists today. To encourage continued balanced community growth,
the City will consider appropriate strategies such as use of tax increment financing and
tax abatement for financial assistance if necessary.
3) FINANCIAL POSITION - Availability of funds to meet current and future needs,
adequate fund balances for cash flow purposes and to meet emergency needs requires
planning and discipline.
A) Effective past financial management practices has left the City with a solid
undesignated, unreserved fund balance within the General Fund, Water and Sewer
Fund and Storm Sewer Fund. The City Council has recently adopted a Fund Balance
v Policy that aims to maintain General Fund reserves at 55% of annual adopted budget
figures.
City of Rosemount — Key Financial Strategies
Page 5
Implication: The City's General Fund Balance remains strong. Changes in State tax
structure and potential capital project costs indicate the need to continue to carefully
monitor the fund balance.
B) The City faces growing demand and cost to provide services with limited ability to
increase short-term tax base.
Implication: The competitive position of the City tax rate will impact the City's
ability to increase operating expenses without an offsetting increase in non- property
tax revenues.
C) The City has developed effective loss reduction strategies (accident review, safety
committee). Additional risk management efforts including review of risk retention
levels, deductibles, funding of loss reserves may be warranted.
Implication: Additional development of risk management policies will help reduce
exposure to financial risks. Over the long run, an effective risk management policy
will reduce unbudgeted costs for loss reimbursement and increased insurance costs.
4) CITY INFRASTRUCTURE - Communities need to regularly invest and reinvest in their
infrastructure (roads, buildings, parks, etc.). Regular deferral of investment can lead to
fiscal stress and community disinvestments.
A) The City has maintained a street reconstruction program since 2003. The City Council
has recently reviewed a Pavement Management System and is considering increasing
funding levels, in light of its importance to maintaining current levels of service and as
part of the 2005 budgeting process.
Implication: Overall the streets are in acceptable condition, but an increased annual
investment will be needed to maintain streets at an acceptable level. Progress on
maintenance should be carefully monitored.
B) The City is reviewing City Hall and Public Works facility needs. It is intended that
facility needs will be addressed at the same time as a proposed Fire Station #2 is
addressed:
Implication: The City has initiated a plan to review the need for reinvestment in these
facilities.
C) Potential need for reinvestment in public facilities infrastructure needs may increase
the property tax above the normal inflationary increase. The City has major
investments in buildings, utility systems, streets, lighting systems and related
improvements.
Implication: Community involvement will be key to addressing need for major
investments. The City should undertake a public participation process to involve the
community in understanding and then selecting options. Preparing plans and
City of Rosemount - Key Financial Strategies Page 6
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schedules for anticipated required maintenance and replacement will provide
information necessary for financial planning purposes.
D) The City has extensive vehicle replacement requirements for Public Works, Police and
Fire equipment. The City does have a schedule of equipment replacement as part of
the 10 -year CIP that forecasts these needs for the expected life of the equipment.
Implication: Equipment replacement is often deferred as part of budget balancing
efforts. In the long term this may increase maintenance costs, increase downtime of
equipment and staff and lead to a funding problem in future years. Maintaining the
equipment replacement schedule and funding source will help remedy this problem
and provide a more accurate measure of services.
5) COMPETITIVENESS Communities compete for people to live, work and do business.
Understanding and responding to the elements of competition is an important role for
the City.
A)The City's overall tax rate is relatively high compared with other comparable
communities in the metro area.
Implication: Given the tax rate and the high level of services, the City is carefully
monitoring its tax rates. Community growth, combined with the desire to maintain
current service levels, and the need to reinvest in existing infrastructure will continue
to present challenges to the City as it attempts to moderate its tax rate.
B) The City offers a full complement of services to residents and businesses.
Implication: Services offered by the City appear to be consistent and competitive with
surrounding communities.
C) Rosemount is generally well maintained, both in the area of public investments and
private property, with no signs of patterned disinvestment or deterioration.
Implication: Careful attention should be paid to monitoring the condition of public
and private property.
D) Rosemount's open space and trail system appear to be equal to or greater than many
other communities in the metropolitan area. Funding for maintenance of the trails
system is included in the Pedestrian Improvement Plan within the general fund.
Implication: Planning and investments in these areas has provided a sound foundation
for creating a community with amenities that will attract and retain residents, visitors
and businesses. Careful attention should be paid to the operating costs of recreation
and cultural amenities. Community involvement in discussions regarding the cost to
build and maintain new facilities will be a key factor for future considerations.
E) Rosemount has a diversity of housing options that is typical for established
communities experiencing new growth. More established neighborhoods of the
City of Rosemount — Key Financial Strategies Page 7
community are populated with modest residential structures typified by 1960s and
1970s ramblers. Newer development consists of larger higher- valued single family
residential structures, as well as a diverse range of life -cycle attached housing.
Implication: A healthy and diverse housing stock increases community marketability
for commercial and industrial developments. Currently, the City should evaluate the
condition and diversity of its existing housing stock. Development of housing
reinvestment and rehabilitation programs, either independently or in cooperation with
the Dakota County Community Development Agency (CDA). A review of zoning and
the Comprehensive Plan to provide more options for diverse housing options is
important to maintaining a healthy, balanced residential and business atmosphere.
6) CREDIT POSITION Maintaining a strong credit rating helps reduce the cost of
borrowing required to develop and maintain the community.
A) The City is rated "Al" by Moody's Investors Service. This is an above average rating
reflecting the City's strong property value growth and maintenance of a strong financial
position while supporting debt required for future growth and reinvestment in
infrastructure.
Implication: This strong credit rating has helped the City successfully issue debt at very
competitive interest rates in the commercial marketplace.
B) The City's debt burden is moderate (1.9% direct and 3.5% total), but reflects community
growth needs and overlapping debt of other governmental units. Eighty -two percent
(82 %) of the City's debt will be paid off in ten years. Additionally, none of the currently
issued debt is General Fund debt.
Implication: Careful attention should be paid to "mapping" out future debt issues for the
next five to ten years. An aggressive debt repayment schedule will enable the City to
continue to invest as needed. The City should additionally evaluate the extent that
General Fund debt service of projects presents a strategic alternative to cash fronting or
internally financing services and amenities.
C) The City currently has a prudent undesignated fund balance.
Implication.: This strong fund reserve helps the City to maintain its current rating. The
City should be careful to maintain this strong fund balance.
7) ENTERPRISE- Operating enterprise funds as .a business is key to avoiding a transfer of
the burden of operational cost to general taxpayers. In addition some enterprise
operations can help reduce the cost of general government.
Implication: The city currently updates their utility rates on a regular basis and charges
general fund service costs to the enterprise funds. Both are examples of best practices
for enterprise management. These practices should be continued as part of on -going
financial strategies.
City of Rosemount — Key Financial Strategies
Page 8
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RECOMMENDATIONS
Based on the findings and analysis conducted in the workshops, Ehlers developed a list of
recommendations for the City -- their Key Financial Strategies -- listed in the seven categories below.
1.0 COMMUNITY GOALSANITIATIVES
1.1 GOAL SETTING:
The Mayor and City Council should continue annual goal setting sessions, prior to budget
preparation. The goal setting session should prioritize needs. This information should be
used by staff to develop programs, service options and resource requirements, for
consideration within the budget process. The goals should specifically address the major
issue categories.
Comment: Staff recommends that the City Council consider conducting future goal setting
sessions in May of each year as departments are beginning the budget preparation process.
Financial strategies should be incorporated into the annual goal setting program.
1.2 FACILITY NEEDS:
The City should continue the deliberate and careful approach to addressing facility needs for
future growth, reinvestment and quality of life services and capital investments.
Comment.: As part of the 2005 budget preparation, staff will be presenting recommendations
that are likely to include construction of Fire Station #2 and expansion of the Public Works
garage and City Hall. Additionally, a Facilities Task Force is nearing completion of its
work to recommend desired investment in future recreational and cultural facilities. Council
should prioritize elements within the Task Force report and regularly revisit the issue to
continue planning for the future.
1.3 COMMUNICATION PLAN`.
A communications plan should be developed in order to inform and seek community
feedback on important financial issues including future needs and. financial constraints. The
plan should also forecast the process that will be used to seek community participation for
significant community investment decisions.
Conducting a community survey will help identify the types of services vital to attract and
retain residents. Consideration should be given to expanding the survey to collect
information regarding improving the City's competitive position, economic development,
quality of life, school funding inequity and possible intergovernmental / tax sharing
solutions.
Comment: City Council has directed staff to develop a Communications Plan for the City to
accomplish many of the objectives detailed above. Funding for a resident survey will be
included in budget recommendations for 2005. Additionally, staff will incorporate the
"Funding Public Facilities Public Participation Process" model in City facilities planning.
1.4 TECHNOLOGY PLAN:
City of Rosemount — Key Financial Strategies Page 9
The City should consider developing a technology plan with projected needs at some time
within the next five years. The plan should also include a basis for evaluating the requests
for technology investments that address cost and benefits (not limited to financial),
productivity, training, support and potential obsolescence and funding source.
1.5 IMPLEMENTATION PLAN:
Annual budgets should be prepared with budget options of at least 10% of total budget
expenditures. Budget presentations should be supported with a balance of input and
resources and outcome materials.
2.0 LOCAL TAX BASE ,
2.1 Growth planning should address continued attention to balancing commercial and residential
development. Special attention should be paid to increasing the amount of commercial -
industrial (C -I) development and to assessing housing types that reflect life cycle, financial
ranges and life style choices.
Comment: City Council has directed staff to begin looking at the CR42 corridor and MUSA
expansion opportunities to adequately plan for future commercial and residential growth
potential.
2.2 The use of public subsidies to assist with encouraging the type of development needed to
maintain community competitiveness and balanced tax base should be continued where it
meets the goals and objectives of the community. The public assistance policy should be
reviewed to assure flexibility to meet broad based community needs.
Comment: The Port Authority recently updated the Business Subsidies Policy. Additional
attention should be paid to targeted investment by the City.
3.0 FINANCIAL POSITION
3.1 The City Council should consider a Fund Balance Policy for the Special Revenue' Funds,
Debt Service Funds, Capital Project Funds, Enterprise Funds, and Internal Service Funds
3.2 City staff should prepare an alternative revenue source report for the City Council. These
options should be reviewed annually as part of the Key Financial Strategies update.
3.3 The City should continue to adjust all user fees and utility rates on an annual basis to reflect
changes in the cost of services.
3.4 The City should review assessment practices to include pavement management cost recovery
through special assessments to benefiting property owners (i.e. increasing assessments to
property owners and including street maintenance such as crack sealing) and to address
increased cost of pavement management projects.
3.5 The City should continue annual evaluation of development fees to reflect the City's cost of
services.
City of Rosemount — Key Financial Strategies Page 10
3.6 The City should use this report as part of its annual goal- setting framework.
4.0 CITY OWNED INFRASTRUCTURE / CAPITAL EQUIPMENT
4.1 The Administrator and Finance Director should review the final list of items which were
recommended as part of the vehicle /equipment replacement program and develop a funding
program to provide a more level annual replacement contribution. The City should evaluate
an internally funded equipment rental program that could potentially level out annual
replacement costs.
4.2 The City staff should enact each annual capital improvement program based on review of the
multi -year capital improvement needs. The City staff should continue to coordinate
development of the capital improvement budget with the development of the operating
budget. Future operating costs associated with new capital improvements should be
projected and included in operating budget forecasts.
4.3 The City should prepare a non - annual recurring maintenance schedule for City facilities.
5.0 COMPETITIVENESS
5.1 The City's tax rate is higher than some comparable communities. In managing property
taxes, the City will seek a balance between providing an appropriate level of service,
maintaining infrastructure, and affordability for residents. Having the lowest property taxes
is not always the final measure of this balance.
5.2 The City should review and implement a revenue enhancement study for additional revenue
options including utility franchise fees, utility bill preparation fees and similar alternatives.
The information should be prepared to identify options prior to their need.
5.3 Staff should annually prepare three -year projections of tax levies. The City Council may
consider community involvement in the long range planning process to build support for the
development of resources to achieve goals the public has supported.
5.4 The City should continue to meet and confer with overlapping local government units
(county, schools, etc.) to discuss operating and capital funding issues that will impact
residents overall taxes.
5.5 In order to provide direction to staff, the Mayor and City Council should review and select
the appropriate items from the Budget Option Impact Worksheets that would be included in
next year's budget: This budget should then be constructed by balancing resources with
current and future needs.
5.6 The Financial Strategies should be reviewed and updated annually as part of the City's
budget process. The City Council should annually agree that the three priorities for budget
adoption are (1) maintaining fiscal health, (2) maintaining City services at existing levels or
higher, and (3) providing community amenities where possible and when they do not
adversely impact items (1) and (2).
5.7 Annual budgets should include budget option analysis for 5% to 10% of total projected
City of Rosemount — Key Financial Strategies, Page 11
expenditures. Budget presentations and discussions should be supported with a balance of
input/resources and outcome options.
5.8 The City should evaluate its risk management program and make improvements where
necessary. Additional effort to reduce risk exposure including review of retention levels,
deductible levels, funding of reserves for retained risks should be undertaken.
6.0 CREDIT POSITION
6.1 The approval of Key Financial Strategies by the Mayor and City Council will help document
the future City plan to Moody's Investors Service.
6.2 The City should endeavor to keep the total maturity length of general obligation bonds below
20 years and at least 50% of the principal shall be retired within ten years. In all cases, the
maturity shall be shorter than the life of the related assets.
6.3 The City should work to minimize the amount of debt supported by property taxes and will
seek additional use of special assessments, utility revenues and other non -tax sources to
support debt.
6.4 City staff, working with the City's independent financial advisor, shall monitor outstanding
debt and advise the City Council on ways to reduce the debt burden through refinancing at
lower interest rates and the early retirement of bonds.
7.0 ENTERPRISE FUNDS
7.1 Annually, the Administrator and Finance Director should continue to review and recommend
necessary adjustments to water and sewer rates sufficient to recover cost of operations and
provide for capital needs for consideration by the Mayor and City Council.
7.2 City staff should continue to annually review the cost of general fund services provided to
enterprise activities including insurance, financial and accounting services, management,
legal and related expenses. These costs should be evaluated by the City Council for
inclusion in the rates for enterprise services.
7.3 City staff should annually review the utility rate policy that addresses the need for fees to
recover operating costs and provide for operating cash, reserves, non -annual recurring
maintenance, and debt service.
7.4 City staff should identify the costs to meet mandated water quality standards and the impact
on water rates.
City of Rosemount — Key Financial Strategies Page 12
ACTION PLAN
This section describes the actions needed to implement the City's Key Financial Strategies. Actions
fall into two categories: Tasks for immediate action, and tasks that reflect on -going financial
management actions. The following is a recommendation on the tasks that require attention over the
next five -year period. Implementation of these Key Financial Strategies requires annual review and
updating of the Plan, and revision of the schedule prior to initiating the budget process. Careful
attention should be paid to developing realistic time frames and work plans.
CR 42/Hwy 52 Study
2004
1 /S
Arts and culture center
Evaluate MUSA expansion, including capital
2004
Second ice sheet
2005
and operating needs, to accommodate growth
Teen center
Update public subsidy policy
Senior center
2004
4/A
2004
Water park/aquatic center
2006
1/I
Skate park expansion/relocation
2005
4/S
2005
Athletic complex
2005
2/A
2006
Downtown redevelopment strategy
2004
1/I
Ongoing
Library land acquisition and funding options
2004
1/I
2004
Prepare financial strategies communication
plan
Develop customer service feedback systems
for key City services
2004
2/A
2005
Conduct community survey to assess
community knowledge of and support for
new initiatives, facilities, services and fees
2005
2/1
2005
Annual CIP
Annual
1/1
Annual
CR 42/Hwy 52 Study
2004
1 /S
2005
Evaluate MUSA expansion, including capital
2004
3/S
2005
and operating needs, to accommodate growth
Update public subsidy policy
2004
4/A
2004
Update Comprehensive Plan
2006
1/I
2008
son
=_
Update Debt Management Plan
2004
2/A
2004
Update Investment Policy
2004
2/A
City of Rosemount — Key Financial Strategies
Page 13
Projected Start Projected Completion
ACTIVITY Date Level/Status Date
Explore franchise fee in context of financing 2004 2/S 2005
needs
Review assessment practice to address Annual l/S Annual
rovcamnrt moro nnm or4
Identify options for funding Pavement
2004
1/I
2005
Management System
Prepare non - annual recurring maintenance
2005
1 /S
2006
schedule
Prepare funding options for major equipment
2006
1/S
2007
sources_
Radio communications infrastructure
2004
2/S
2005
Prepare fire equipment replacement plan
Facility needs assessment
Property tax review
Annual
1/S
Annual
Prepare three year budget forecasts including
Annual
2/S
Annual
revenue forecasts
Prepare alternate revenue analysis
2005
1/S
2005
Identify and fund future staffing requirement
Annual
1/S
Annual
to match growth
Identify a limited number (1 -3) of selected
Annual
2/S
Annual
services for potential competitive pricing on
annual basis
Review budget option analysis as part of
Annual
2/S
Annual
budget process
Prepare annexation policy
2004
3/A
2005
Develop plans for future land conversions
2005
2/A
2006
Establish/Update Risk Management Policy
2004
2/S
2005
Accept Key Financial Strategies
2004
2/I
2004
Adopt debt policies as outlined in Credit
2004
2/I
2005
section of report..
.. .F.
IN
NON=
.,
,. ..
Adjust user fees on annual basis to reflect
Annual
1/S
Annual
changes in cost of services.
7.2 Evaluate Water Treatment Improvements
2004
1 /A
2005
City of Rosemount Key Financial Strategies Page 14
ACTIVITY
Projected Start
Date
Level/Status
Projected Completion
Date
7.3 Pedestrian facility maintenance and
improvement plan
2004
2/A
2004
F
- T
PR IO R I T Y D E FI NI T IO NS
LEVEL l Critical to continued operation of city baseline services at present levels. This includes
restoration of services identified as baseline.
LEVEL 2 Provides opportunity for increased efficiency in baseline level of services. This
includes ability to continue to serve existing level of services without staff increases.
LEVEL 3 Provides opportunity for expansion of services to meet existing demand as evidenced
by Council direction or staff analysis.
LEVEL 4 Provides opportunity to increase services that improve quality of life within City.
I Implementation
S Study Need
A Assess Need
City of Rosemount Key Financial Strategies Page 15
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431998A
City of Rosemount
_
253,644.
267,500
255,384;.
258,957" !
251,389
248,908
231,344
259,437 -
254,217
295,491.
FINANCIAL MANAGEMENT PLAN
205,058
44
19996 Improvement
17,274
16,434.
19,059
0!_
tl :
- 4
0 'I
2% TAX RATE DECLINE LINE 65
0 :
0
0
0
45
20006 Port Authority
473,880
236,266:.
239,442
1
2
3
Inflation Assumptions lRevenue
Expenses
'011,
2.50%
2.50%
3.00%
0
2.50% 2.50%
3.00% 3.00%
2.50%
3.00%
2.50%
3.00%
2.50%
3.00%
2.50%
3.00%
2.50%
3.00
2.50%
3.00%
4
32
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1 9nn7
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-A
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0
3.00% 3.25%
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3.50%
......a
3.75%
...,....
4.00%
.,....
4.25%
.....
4.50%
.---
4.50%
....._
431998A
let Arena
_
253,644.
267,500
255,384;.
258,957" !
251,389
248,908
231,344
259,437 -
254,217
295,491.
'. 207,742
205,058
44
19996 Improvement
17,274
16,434.
19,059
0!_
tl :
- 4
0 'I
0
0 :
0
0
0
45
20006 Port Authority
473,880
236,266:.
239,442
236,896
".
'011,
0
6 S.
0
0 -
0
0 :
0
46 2001A Improvement
0
0
116,066
OSSS
0 !:
0
0
0
0
0
0..
0
47 2001C Public Facility -
169,664
170,604.
172,914
169,764'.
171,864 `
168,504
! 170,394
172,074
: 773,402 '.
168,914
169,675
170,200
46 2001E Community Center Refunding
93,447
96,744
99,879
91,946
84,705
96,941 -'
83,713.
95,537
91,883
93,311
0
49 2002C Port Authority
0'
272,942
267,023!
265,816
258,650
177,432 L.
177,464
177,b04
176,190
'' 180,180
0
50 Armory Anticipatory levy
201,686
207,552'
" 210,338
232,021
'.. 242,752
254,214
266,452
279,516
'= 293,456 ==
306,332
54 Equipment certificates
475,100-
969,300 S
906,400
778,400 -
857,400
997,900
716,400
' 450,000
52
53
54 FUTURE DEBT /SPECIAL LEVY ALLOWED WITHIN OX
465.000
655.000
1 , 2 40.00
1,790.60
2,070
2.295.000
92. 85.000
: 3.700.000
4.585.000
55 TOTAL SPECIAL' LEVY
769,395
1,376,353
2,176,598
- 2,652,221:
3,151,669
3,504,827
3,876,209
4,263,732:
4,672,i20
;5,094,366
5,268,590
56
57
TOTAL TAX LEVY
5,452.000
7,062,806
8,121,252
8,731,031
9,370,515
10,037,921
10,563,235
11,111,076
11,679,471
12,273,253
12,885,527
13,254,531
58
ADJUSTMENTS
2
59
NET LEVY TO TAXPAYERS
5,452,000
7,062,806
8,121,252
8,731,031
9,370,515
10,037,921
10,563,235
11,111,076
11,679,471
12,273,253
12,885,527
13,254,531
60
1
-s=
751 New tax
78
Existing $200,000 home Market Value
200,000
210,000
1 220,500
231,525
243,101
255,256
- 268,019
281,420
295,491.
310,266
0
Debt as a % of Total General Fund Expenditures
35 %.
40%
43%
46%
49%
52%
55%
55%
Market Value Based Refemdum
1996A Fire Station
Market value
Referendum rate
154182
156130
152,193
1336,920,700
0.0001138385.
153,426
1,410,420700
0.0001087803
154,308
1,558116,735
0.0000990349
154,828
1,717056,322
0.0000901706
154,975
1,851,529,386
0.0000837011
154,739
1995,157,120
0.0000775573
154,109
2,148518,801
0.0000717280
153,076
2,312228,758
"
0.0000662024
151,683
2,486,938,414
0.0000609919
149,930
2,673,338,483
SIMO04
0.0000560834
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ROSEMOUNT CITY COUNCIL
GOALS FOR 2004
GOAL: FISCALLY HEALTHY CITY
DESCRIPTION: The City of Rosemount will work diligently to maintain a fiscally
healthy city. Elements to preserve a fiscally healthy city (which
have been targeted by the City Council) include:
■ Broadening the tax base
Moderating the tax rate
■ Maintaining high quality service levels
■ Researching alternative revenue streams
■ Maintain Al bond rating
Process:
■ City Council and staff will utilize the Key Financial Strategies
framework to implement budget and service priorities
IMPORTANCE: Fiscal health guarantees that the City can provide services desired
by residents. Financial discipline keeps the City responsive to the
community's priorities and provides for strategic long -term planning.
KFS ANALYSIS: This goal primarily fits within Strategic Area Focus (SAF) #2 —
Financial Position, with crossover into SAF #5 (Competitiveness)
and # (Credit).
GOAL: DOWNTOWN REVITALIZATION
DESCRIPTION: The historic heart of Rosemount risks continued disinvestment and
being overlooked by the development market in favor of other,
"newer" areas of the City. The City is committed to revitalizing the
downtown area to create a mix of retail, entertainment, business,
and housing options. This in turn will maintain Downtown's
vibrancy and vitality as the community continues to grow.
Process:
■ Developing an action plan for 2004 and beyond
■ Implementing the Downtown development framework
■ Through work with the Port Authority, continually educating
and involving citizens and businesses
2004 City Council Goals
Page 2 of 7
IMPORTANCE: Revitalization of the Downtown area is intended to provide more
housing and retail options to residents in the short term, while
stabilizing the tax base and enhancing the image of the City in the
long term.
KFS ANALYSIS: Downtown Revitalization has been identified as a top goal of the
community and therefore resides in SAF #1— Community
Goals /Initiatives. There is KFS impact to SAF #2 (Local Tax Base)
and #5 (Competitiveness).
GOAL:
DESCRIPTION:
ATHLETIC COMPLEX
The City of Rosemount will continue to identify potential sites and
explore various options to purchase land for an athletic complex.
Process:
Discussing land options
■ Working with current land owners
■ Exploring options for purchase (i.e. referendum, donation,
community trust fund, etc.)
IMPORTANCE: Adequate athletic facilities need to be added to meet the needs of
our current and future residents. To that extent, this initiative is
important in continuing current service levels. Additionally,
investment in the City's park system increases the overall quality of
life in the community.
KFS ANALYSIS: An athletic complex has been identified as a top goal of the
community and therefore resides in SAF #1- Community
Goals/lnitiatives. There is KFS impact to SAF #5 ,
(Competitiveness) as the Parks & Recreation Department seeks to
meet the demands for outdoor recreation facilities. Beyond
meeting residents' needs, an athletic complex will draw
tournaments and leagues to the community, which both promotes
the success of the department and brings people into the
community where it is expected they will also use discretionary
spending dollars at restaurants and retail locations.
2004 City Council Goals
Page 3 of 7
GOAL: LIBRARY
DESCRIPTION: The City is committed to.providing a library site in a location that's
convenient for patrons and strengthens the sense of community.
Process:
■ Completing land acquisition by the end of 2004
■ Approving a Joint Powers Agreement with Dakota County
IMPORTANCE: A Dakota County branch library would serve as a multimedia
information resource and a gathering place for Rosemount
residents. Nearby businesses could draw on the activity generated
by the library to maintain and expand successful enterprises.
KFS ANALYSIS: Acquisition of land for a library has been identified as a top goal of
the community and therefore resides in SAF #1— Community
Goals /Initiatives. There is also KFS impact to SAF #5
(Competitiveness) in ,that most users of the library are expected to
be current residents that take their business to the Galaxie branch
library in Apple Valley.
GOAL: AIR CARGO FACILITY
DESCRIPTION: To remain competitive with other regions and to achieve better
homeland security, Minnesota needs a large campus for facilities to
handle international air cargo shipments. The City is committed to
locating the facility in Rosemount.
The City will continue to work through the State Legislature and
with the Greater Metropolitan Area Foreign Trade Zone
Commission to locate the air cargo facility within Rosemount.
Should successful legislation ensue, we shall continue to:
■ Develop a communications strategy
Evaluate the service and financial impacts
■ Submit a proposal to secure the location
■ Work with other governmental agencies to pursue federal
homeland activity and transportation funding
IMPORTANCE: A unified air cargo facility, would contribute to the economic
development needs of Rosemount as well as the state.
Construction and hiring would spur business development in the
southeastern part of the city.
2004 City Council Goals
Page 4 of 7
KFS ANALYSIS: The potential of an air cargo facility would have significant long
term benefit in SAF #2 - Local Tax Base. Full build -out of an air
cargo facility is anticipate to approach $150 million of commercial
investment.
GOAL: -
DEFINITION:
IMPORTANCE:
COMMUNITY EVENTS
Attendance at community events continues to be high within
Rosemount. At this time, City Council would like a successful
transition to community ownership of these events.
Process:
■ Recruiting community volunteers to organize and administer
community events
■ Assisting volunteers with development of a volunteer
organizational structure to run events
Putting community events under the supervision of volunteer
groups keeps the focus on community needs. Clarifying the role of
city government frees up staff for other duties that only the City can
provide.
KFS ANALYSIS: Although there is no anticipated financial impact related to this goal,
the success and growth of Community Events fits in SAF #1
(Community Goals/ Initiatives) and SAF #5 (Competitiveness).
Continued growth of Community Events will bring people into the
City.
GOAL: INCREASE DIVERSITY IN RESTAURANT OPTIONS
DESCRIPTION: The City will encourage development of more sit -down, family style
restaurants for a community that has been underserved. Staff will
work to locate one or more restaurants in Rosemount to provide an
even greater variety of dining and leisure options than currently
exist.
Process:
■ Identifying potential sites for restaurants
■ Developing an economic development marketing strategy to
promote Rosemount
2004 City Council Goals
Page 5 of 7
IMPORTANCE:
KFS ANALYSIS:
■ Working with the development community and brokers to
encourage investment in Rosemount's hospitality industry
Rosemount's population requires — and because of its rapid growth,
can support — a variety of dining establishments. Amenities, like
restaurants, keep additional dollars within the community, and
offers opportunities for nearby businesses to gain customers.
Recruitment of restaurants to Rosemount addresses SAF #2 (Local
Tax Base) and KFS #5 (Competitiveness). Commercial investment
will add to the tax base, while the presence of restaurants will
provide options for residents to spend discretionary dollars that
might otherwise leave the community.
GOAL: CITY ORDINANCES REVIEW
DESCRIPTION: The ordinances Rosemount utilizes to govern activities within the
City help to maintain an attractive and welcoming community. City
Council and staff will continue to identify and prioritize ordinances
that require updating and revising.
Process:
■ Identifying ordinances for review
• Prioritizing and scheduling ordinance review
• Educating and seeking public input for changes
• Executing appropriate revisions
IMPORTANCE: Ordinance review allows the City to be sure it is remaining
competitive with neighboring communities. By making sure that the
law reflects Rosemount's priorities, it lessens the risk of uneven or
unfair enforcement.
KFS ANALYSIS: Continued review of City ordinances is important to SAF #5 —
Competitiveness. Prospective residents and businesses investing
in Rosemount will look to our ordinances as a means of assuring a
quality environment.
2004 City Council Goals
Page 6 of 7
GOAL:
COMMUNICATIONS
DESCRIPTION:
The City of Rosemount will actively engage the community and
increase resident and business awareness through a
communications plan. Communications will work in conjunction
with the marketing plan to carry consistent messages of vision in
relation to our community goals.
Process:
• Identifying messages that will build strong connections to
existing and potential business and residents
• Creating a new resident packet of information
• Preserving, protecting and enhancing the image of
Rosemount as a good place to live, work, learn and raise a
family
IMPORTANCE:
Improving the community by making choices with limited resources
requires constant feedback between the City and its citizens. Good
customer service depends on well - informed consumers of City
services.
KFS ANALYSIS:
Improved communications has been identified as a priority of the
City Council, making it an important element of SAF #1—
Community Goals /Initiatives. It also serves a function in SAF #5
(Competitiveness) as a means to attract residents and businesses
to stay or locate in Rosemount.
GOAL:
MARKETING
DESCRIPTION:
The City of Rosemount will develop new messages and visual
communications to attract a broader audience and reconnect with
existing residents and businesses. Through the development of a
marketing plan, future activities will aid in the enhancement of
Rosemount's image and promotion of this community.
Process:
• Developing an informed set of messages and position
• Creating an all- encompassing marketing plan
• Developing a comprehensive visual identity system
• Applying an identity system to all communications materials
IMPORTANCE:
In addition to community /economic development broadening the tax
base, it will offer new places for residents to live, work, and play.
2004 City Council Goals
Page 7 of 7
Rosemount competes with all other cities to attract development. A
sophisticated marketing approach is required to attract
developments that will complement the community.
KFS ANALYSIS: Improved communications has been identified as a priority of the
City Council, making it an important element of SAF #1—
Community Goals /Initiatives. It also serves a function in SAF #2
(Local Tax Base) and SAF #5 (Competitiveness). Development of
an effective economic development marketing plan will help spur
commercial- industrial investment in the community, broadening the
overall tax base. Marketing the community places us in a
competitive advantage, or at least levels the field, as residents and
businesses look to Rosemount as a place to live, work, do
business, learn, and raise a family.
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