8.1. SR 06-04-2012 - Laserfiche WebLink

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Long -term financial planning As part of a yearly budget process the City Council reviews the updated Financial Management Plan. The Financial Management Plan provides a long -range forecast that brings together future expenditures, revenues, and development of the City. The Council has been diligent in maintaining a level tax rate. This plan provides the information needed to develop in a manner that will sustain or expand City services while keeping the property taxes stable. Department heads take part in this process to estimate staff additions, service levels, and capital needs for the next ten years. In addition, the City Council continually reviews cash flow analysis and long -term planning as part of the comprehensive Capital Improvement Plan (CIP) process. The CIP is a 5 -year planning tool that forecasts the City's capital needs based on the City's long -range plans, goals, and policies. Relevant Financial Policies The City Council has adopted several financial management policies and continually monitors and updates the policies. The financial management policies include: revenues, property taxes, investments, purchasing, financial reporting, reserves, fund balance, capital investment, and debt policies. The City's policy on fund balance states that the City will maintain an unassigned fund balance of not less than 40% of budgeted general fund operating expenditures. The percentage of unassigned fund balance at December 31, 2011 is 41.5 %. Since property tax payments are received by the City in two installments in July and December, the City needs adequate cash reserves for cash flow in order to avoid short-term borrowing to finance operations. Changes in state law over the past several years have resulted in funding changes for both schools and local governments. Replacement of Market Value Homestead Credits (MVHC) with the Market Value Exclusion (MVE) program and Local Government Aids (LGA) programs have resulted in revenue losses to the City. Due to the uncertainty in receiving the aid from the state, the LGA and MVHC revenues are not included in the 2012 budget. The City does not expect in the short-term to see LGA and MVHC amounts restored to previously years levels. Major Initiatives In 2011, the City completed an Alternative Urban Area Review (AUAR) over the 171" Avenue Area. This AUAR, coupled with the preliminary engineering report of Phase 1 development, have set the groundwork for the final design and construction of the Natures Edge Business Center. The project, which is scheduled for construction in 2012, will involve extending municipal streets and utilities to serve a new 28 -acre business park. In addition, Elk River's Northstar Station continues to have the largest ridership numbers along the rail line that runs from Minneapolis to Big Lake. Awards and Acknowledgements The Government Finance Officers Association of the United Stated and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Elk River for its comprehensive annual financial report for the fiscal year ended December 31, 2010. This was the 22nd consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.