3.0. SR 01-29-2001Item #:~.
City of
River
M£MORANDUM
TO:
Mayor and City Council
FROM: Pat Klaers, City Administrator
DATE:
January 29, 2001
SUBJECT: Finance Management Plan
Staff is excited to begin work with the City Council and our new financial
consulting firm, Ehlers and Associates, Inc., on the development of a financial
management plan for the city. This is a long overdue management tool that
will help guide the city in making decisions as it endeavors to provide
appropriate municipal facilities and services.
Rusty Fifield, from Ehlers and Associates, Inc., will be at the January 29,
2001, Special Council Meeting to discuss the attached key financial strategies
planning process outline. The process is still influx and still being shaped and
City Council responses to the worksheet (your homework assignment) will
help us more clearly understand some of the issues Councilmembers believe
to be high priorities.
It is expected that this and future worksessions will last between 60 and 90
minutes each. Accordingly, a small amount of"regular" business can also
take place on the evenings when the financial worksessions are scheduled. In
terms of funding, it is recommended that the Council Contingency Fund be
the source of revenues for this project.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone (763) 441-7420 · Fax (763) 441-7425
To:
From:
Date:
Subject:
City of Elk River
Rusty Fifield
January 25, 2001
Key Financial Strategies Planning Process
EHLERS
& ASSOCIATES INC
Introduction
The financial challenges facing the City of Elk River have never been greater. The service
demands of a growing community must balance with the need to make government
affordable. Actions by the State Legislature (levy limits, tax capacity rates) change the rules
of the game.
Planning often focuses on the pieces of the financial puzzle - budgets, capital improvements,
annual financial reports. Rather than look at individual pieces, Ehlers' Key Financial
Strategies process looks at the entire puzzle. This document outlines the proposed scope of
work for financial planning process for the City of Elk River.
Steps in the Process
The Key Financial Strategies process employs a combination of analysis and City Council
workshops to:
· Identify financial issues that will influence the future of the community.
· Evaluate options to address the issues.
· Create a long-term financial management plan for the City.
The process described here represents the basic framework for Elk River. A series of five
City Council workshops are proposed. These workshops would occur on the last Monday of
each month through May. While ending the process in May is not essential, it is very
desirable. This timing allows the results of this planning process to match the preparation of
the 2002 operating budget. The detailed work performed in this process will be influenced
by City Council input at the first workshop and by the issues identified by the planning
process.
The proposed steps in the planning process are as follows:
1) Kick Off Workshop (January 29)
a) Review scope of work and planning process
b) Discuss goals and issues
2) Trends and Projections
a) Identify formal and informal financial policies of the City.
LEADERS IN PUBLIC FINANCE
3060 Centre Pointe Drive 651.697.8506 fax 651,697.8555
Roseville, MN 55113-1105 rusty@ehlers~inc, corn
Key Financial Strategies
January 25, 2001
Page 2
b) Analyze trends for the key financial factors for the period 1990 to 2000.
studies include:
i) Property valuation
ii) Population and households
iii) Building permits
iv) Overall City financial condition
v) General Fund expenditures, revenues and fired balance
vi) Debt and bond rating
c) Make projections for 10-year period of following factors:
i) Overall property valuation (estimated market value and tax capacity)
ii) Value in TIF districts
iii) Population
3) Council Workshop #2 (February 26)
a) Review policy summary
b) Review and discuss results of trend analysis and projections.
c) Identify issues and questions for further study.
Factors to be
4) Capital Improvements
a) Work with City Staffto identify necessary future capital improvements.
b) Analyze options for funding the proposed projects.
c) Create recommendations for on-going capital improvements planning.
5) Council Workshop #3 (March 26)
a) Review and discuss capital improvements analysis.
b) Reach consensus on plan for capital improvements and funding.
c) Identify policy considerations resulting from capital improvements plan.
6)
a)
Issues Analysis
Study key financial issues identified in previous steps. Potential issue areas include:
i) Projected revenues, expenditures and fund balances for General Fund.
ii) Property tax rates.
iii) Debt ratios
iv) New financial policies
b) Prepare information for Council consideration.
7) Council Workshop #4 (April 30)
a) Review and discuss results of issue analysis.
b) Reach consensus on plans and policies related to these issues.
8) Plan Development
a) Summarize results of planning process.
b) Compile and record planning information developed in process.
c) Present current and new financial policies.
d) Create action plan for addressing issues.
9) Council Workshop #5 (May 29*)
a) Present plan report to City Council.
Key Financial Strategies
January 25, 2001
Page 3
b) Receive comments and make adjustments.
c) Discuss next steps.
* May 28 is Memorial Day
Budget for Project
Elders will complete the tasks described above for a total cost not to exceed $13,500.
will bill monthly for worked performed. The budget may be increased if additional
workshops are needed to complete the planning process.
Elders
Key Financial Strategies
Financial Planning Process
City of Elk River
City Council Worksheet
Please take a few minutes to complete this worksheet before the workshop on January 29. This
information will help to shape the final scope of work for the planning process.
Understanding
The Key Financial Strategies process increases your understanding of financing City services and capital
improvements. The effectiveness of the educational process will be improved with your guidance. Please
list five (5) aspects of financing city government that you would like to learn more about.
Issues
The Key Financial Strategies process provides a tool for identifying, studying and finding solutions for
the financial issues facing the City. For the purposes of Cthis exercise, consider issues to be matters that
need to be resolved and objectives to be fulfilled. Please list the five (5) most important issues to be
addressed in the planning process.