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HomeMy WebLinkAbout2.a. Key Financial StrategiesCITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR DISCUSSION COMMITTEE OF THE WHOLE MEETING DATE: NOVEMBER 12, 2003 AGENDA: KEY FINANCIAL STRATEGIES AGENDA SECTION: DISCUSSION PREPARED BY: JAMIE VERBRUGGE, CITY ADMINISTRATOR AGENDA NO: A, A. ATTACHMENTS: NONE APPROVED BY: 4�� The City Council previously authorized staff to retain Ehlers & Associates for the purpose of conducting a Key Financial Strategies (KFS) program to look at current and future fiscal and budgetary processes and impacts for the City of Rosemount. The KFS program includes at least four meetings with the City Council to work through the process. The November 12 meeting is Session #1 in the KFS process. Information was previously distributed for with an agenda packet for the October 14 meeting that was rescheduled. Please contact staff if you no longer have this information. The Ehlers team of Jim Prosser and Rebecca Kurtz will be present at the meeting and will provide additional detailed information for the purposes of conducting Session #1. RECOMMENDED ACTION: DISCUSSION OF KEY FINANCIAL STRATEGIES. NO ACTION IS REQUESTED. COUNCIL ACTION: CITY OF ROSEMOUNT AGENDA SPECIAL MEETING October 14, 2003 Jaycee Park Shelter 6:00 P.M. City Council and City Staff 1. Call to Order 2. Key Financial Strategies 3. Adjournment CITY OF ROSEMOUNT EXECUTIVE SUMMARY FOR ACTION SPECIAL CITY COUNCIL MEETING DATE: OCTOBER 14, 2003 AGENDA: KEY FINANCIAL STRATEGIES AGENDA SECTION: DISCUSSION PREPARED BY: JAMIE VERBRUGGE, CITY ADMINISTRATOR AGENDA NO: ATTACHMENTS: KFS PROCESS INFORMATION APPROVED BY: The City Council previously authorized staff to retain Ehlers & Associates for the purpose of conducting a Key Financial Strategies (KFS) program to look at current and future fiscal and budgetary processes and impacts for the City of Rosemount. The KFS program includes at least four meetings with the City Council to work through the process. The special meeting of October 14 is Session #1 in the KFS process. Attached for Council review is information previously provided by Ehlers & Associates regarding the process outline for Council and staff, as well as a description of the Financial Foundation to the KFS approach. The Ehlers team of Jim Prosser and Rebecca Kurtz will be present at the meeting and will provide additional detailed information for the purposes of conducting Session #1. RECOMMENDED ACTION DISCUSSION OF KEY FINANCIAL STRATEGIES. NO ACTION IS REQUESTED. COUNCIL ACTION: FREERS 8 ASSOCIATES INC Key Financial Strategies Process Outline 1. Explain KFS process. 2. Review KFS objectives. 3. Identify and discuss financial foundation items. 4. Provide financial status overview. 5. Compare and contrast with other cities. 6. Review financing /revenue options. 7. Opportunity to discuss community infrastructure and financial strengths and weaknesses. 1. Review costing of foundation items. 2. Review scheduling of investment /capital improvement items. 3. Discuss gap financing options. 1. KFS process guide. 2. KFS objectives. 3. Financial checklist. 4. Overview. 5. Comparison. (Tax base mix /growth/ allocation/growth factors/population/socio- economic mix /housing type age) 6:Budget comparison for last " 3-10 years. 7. Bond rating agency criteria. 8. Debt ratios. 9. Comparable cities- typical residential tax bill /mix of tax capacity.' "o 1. Document areas of concern as identified by council and staff. 2. Identify foundation areas which required development or updating. 1. Review preliminary plan including expenditures, schedule and revenues. 2. Review funding alternative impacts. 3. Provide financial revenue forecast model. 4. Review preliminary gap analysis. 1. Foundation items cost. I 1 2. Schedule of capital improvements. 3. Gap financing options. 4. List of revenue options. 5. Community strengths and weaknesses. 1. Preliminary plan. 2. Alternative impact analysis 3. Revenue forecast model 4. Sources and uses summary. rd Agreement on foundation costs. Agreement on capital improvements and schedule. Direction regarding gap financing options. Identify any remaining potential funding needs or revenues. 2 3 1. Agreement on financing options, schedule and costs. 1. Review final plan. 1. Final plan. 1. Final action plan. 2. Review policies and schedule 2. Schedule. 2. Schedule. required to implement final plan. 3. Policies. 3. Policies. N: \GENERALTey Financial Strategies\KFS.outline . wpd If EHLERS 8 ASSOCIATE 5 I N C Key Financial Strategies Staff Outline 1. 2. 3. 4. 5. 6. 7. 8. 1. 2. 3. 4. 5. 6. 7. Explain KFS process. Develop draft US objectives. Identify and discuss financial foundation items including need for new materials. Review financial status. Identify comparison cities. Review financing /revenue options. Develop master schedule. Review financial policies. Review outcomes of session one. Review objectives established by council. Review financial foundation materials. Reach consensus on presentation format. Review budget funds and structure Review agenda for session two. Review strengths and weaknesses. 1. Review outcomes of session two. 1. Agreement on revenue forecast 2. Review revenue forecast model. model. 3. Review gap analysis. 2. Agreement on gap analysis. 1. Review draft plan. 1. Agreement on draft plan. 2. Review agenda for session three. 1. Review results from session three. 1. Agreement on draft 2. Review draft recommendations and recommendations and implementation plan. implementation plan. 3. Review agenda for session four. 1. Plan and schedule for filling gaps in foundations. 2. Copies of policies. 3. Copies of financials. 4. Draft master schedule. 5. Agreement on comparison cities. 1. Presentation format. 2. Agreement on financial foundation materials. 3. Agreement on agenda for session three. N: \GENERAL\Key Financial Strategies \KFS.staffoulline.wpd FREERS 8 ASSOCIATES INC Ehlers & Associates Key Financial Strategies Financial Policies Debt Management Establishes appropriate debt levels and debt instruments. Defines how debt will be paid. Risk Management Describes use of insurance versus risk retention. g " n Establishes policy regarding funding of reserves. Provides for allocation of risk management charges. Special Assessment °' Establishes policy regarding public benefit versus assessed share. Describes when special assessment financing will be used. Establishes policy regarding financing cost. , s er Charge �a. I Establishes standards regarding recovery of actual costs to provide or product. Utility:', harges :, Establishes standards regarding recovery of actual costs to provide service or product. Establishes standards regarding allocation of fixed and variable costs. Establishes standards for the type of acceptable investments. Establishes collateralization standards. Establishes liquidity standards. Describes when and how annexation will be considered. Describes when assistance such as tax increment financing, abatement and other assistance will be provided. Provides guidelines for targeted fund balances based upon cash flows, emergency needs, contingencies and management policies. Describes how the budget will be developed, implemented and revised as needed. Describes how revenue a expenditur variances will be managed. N: \GENERALUCey Financial Strategies \KFS.financial.policies.wpd FREERS & ASSOCIATES INC Key Financial Strategies Financial Foundation Descriptions Capital Improvement Plan J A five to ten year projection of anticipated capital expenditures. The plan should cover all funds of the city and should be updated at least once every two �= years. Plan should include revenue sources. Growth lmpacts, On Operations And . A review of different growth and development scenarios on the City's Capital Needs r operation and capital needs. Will be done in conjunction with the City's capital improvement plan and other facets of this study. Pavement.Managernent Sys #ern A long term maintenance and capital improvement plan detailing the ` techniques (sea] coating, crack filling, routing, resurfacing and replacement and ".; annual cost for maintaining and replacing roadway systems (pavement, curb, gutter and impacted utilities as required). Ideally this plan is incorporated into the CIP. Storm Sewer Management Plan -. A five to ten year projection of storm sewer related expenditures. The plan should include revenue sources and expenditures by project area and should be updated periodically. Non- Annuail Recurring Maintenance. The periodic cost to maintain physical facilities such as HVAC, roof systems �.� and parking lots. Facili Replaeemen# u The cost to upgrade or replace major facilities such as city hall, public work facilities, public safety, fire stations, water plants, wastewater treatment plants, recreation buildings Information Technologies, The cost to purchase, support and maintain computers, telephones, radios etc. Econnmic,Development: City /HRA /EDA cost to retain and attract residential and commercial tax base to community. Housing Development :. The cost to replace or upgrade substandard housing and to develop new types of housing. - Deft whaeemen�t A summary of existing debt service commitments and impact of future debt. Budget Optjon Analysis . An analysis of the impact of potential budget reductions at specified levels and fixture staffing needs. Council Goals and ,Objectives. The cost and schedule assigned to council goals and objectives. Vehicle /Equipment Replacement An inventory of vehicles and equipment for all departments and proposed Plan' ,, replacement schedule including net cost to replace. An option to this plan is a vehicle enterprise fund which "leases" vehicles to departments. Lease cost may include maintenance costs. Five Year B: udge tPro jection ` A projection of revenues and expenditures for major funds including new or previously deferred programs and services. Credi# Rating Report, Credit rating reports may provide a basis for changes in financial operations that will improve the city' ability to fund capital improvements.