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Long Term Financial Plan 2012-2016CITY OF NEW HOPE NEW HOPE, MINNESOTA FIVE YEAR PLAN 2012 to 2016 CITY OF NEW HOPE NEW HOPE, MINNESOTA FIVE YEAR PLAN 2012 to 2016 CITY OF NEW HOPE, MINNESOTA FIVE YEAR PLAN 2009 - 2011 ACTUAL 2012 - 2016 PROJECTED TABLE OF CONTENTS Page No. Executive Summary 2 Summary of Cash Position 4 Summary of Tax Levies and Tax Rates 5 Outstanding Debt Schedule 6 Schedule of Planned Capital Improvement 7 Selected Graphical Data From Projections Tax Rate 8 - Tax Rate comparison Peer Cities 8 Fund Balance Compared to Expenditures and 40% Reserve Target 9 General Fund Revenue by Source 10 General Fund Expenditures by Function 10 Outstanding Debt by Type 11 Debt Per Capita 11 Planned Capital Projects by Fund 12 Mayor and City Council City of New Hope, Minnesota 2012 - 2016 Financial Plan Executive Summary Honorable Mayor and City Council, As discussed in prior communications to the City Council, we have been preparing a long term plan for the City that is intended to give a big picture view of the status now and five years from now. We have measured and projected operations, capital and debt for the City based on assumptions made by management. Our assumptions made are as follows: Assumptions Normal operating expenses will increase by a three percent inflation rate. There will be minimal housing growth over the next five years. New projects have been identified in the capital plan and are to be expended in the street or park infrastructure. The capital plan identifies the source of funds, either bonding or reserves. R The general fund tax levy increase is limited to three percent. In addition council had requested a scenario where tax levy ummarized below: City of New Hope - Comparison Assuming 3% General Fund Levy increase versus 0% 2013201420152016 General fund Levy With 3% increase$ 7,842,983$ 8,078,272$ 8,320,621$ 8,570,239 With no increase 7,452,622 7,452,622 7,452,622 7,452,622 Fund Balance change With 3% increase - (0) 0 0 With no increase (31,973) (291,971) (487,785) (762,522) Fund balance as a percent of expenditures With 3% increase46%45%43%42% With no increase47%43%37%30% The only planned debt is for a portion of the arena improvements in 2012. Other projects are assumed to be paid with current resources or interfund borrowing. The TIF districts are assumed to end as scheduled in the TIF plans Key highlights The General fund maintains an adequate reserve throughout the life of the projections with the assumptions of a three percent tax increase and three percent increase for all other line items. The Street infrastructure is able to finance all planned projects with existing reserves or planned levy. The Park Infrastructure fund does not have adequate reserves to meet the five year CIP costs. The fund is projected to be in deficit beginning in 2015. The average annual CIP costs for 2013 to 2016 are approximately $600 thousand while the annual levy is at $296 thousand. The CIP will continue to be reviewed and adjusted as funding permits. The Water fund is showing a deficit due to financing future projects on a pay as you go basis. In addition the cash flow from operations is weak which indicates larger rate adjustments will be needed to meet increasing operation costs. -term debt is low compared with the peer cities. The past practice of reducing the capital component of the central garage is highlighted in the decrease in cash balance over the life of the projection. In 2008, the balance was $7.5 million and at the end of 2016 it is projected to be $3.1 million. The $3.1 million is improved over last years projection of $2.8 million because the City reinstated the $300 thousand of capital charges. Based on the energy savings guarantee and consistent ice time sales, the Ice Arena fund appears to have stable positive cash flows. This results in a cash balance that is sufficient to provide for operations. The golf course also reports relatively stable operations. The effect of the consolidation of the management positions allows for positive cash flows for 2013 and on. Overall this exercise has supported the assertion that the overall financial health of the City is strong and this should help assemble a budget that uses a forward look. ABDO, EICK & MEYERS, LLP Certified Public Accountants & Consultants CITY OF NEW HOPE, MINNESOTA SUMMARY OF CASH POSITION 2009 TO 2011 ACTUAL AND 2012 TO 2016 PROJECTED Ending Cash BalancesEnding Cash Balances - Continued Status 20092010201120122013201420152016Indicator The Governmental Fund consists of the following funds 9001General$ 3,910,596$ 4,355,041$ 4,823,007$ 4,935,212$ 4,935,212$ 4,935,212$ 4,935,212$ 4,935,212 $ 3 9015/9501Economic Development Authority 1,787,895 1,905,624 2,261,409 2,359,245 2,296,767 2,356,905 2,411,496 2,460,136 $ 3 9005Firemen's Relief 95,319 - - - - - - - $ 3 9008Community Development 229,024 230,690 - - - - - - $ 3 9011HRA Administration - - - - - - - -N/A 9024Safety Camp 11,914 11,171 - - - - - - $ 3 9013Bassett Creek Watershed 16,780 16,769 16,462 - - - - - $ 3 9014Shingle Creek Watershed 355 400 400 - - - - - $ 3 9021Police Forfeiture 138,487 152,926 85,883 108,078 131,073 154,758 179,154 204,281 $ 3 9016Solid Waste Management 166,569 129,697 136,307 172,194 174,418 176,708 179,067 181,497 $ 3 9010Pool Capital Outlay 666,767 649,709 341,991 348,831 355,807 362,924 370,182 377,586 $ 3 9213-9219HRA Construction 2,711,385 4,385,210 5,301,264 1,128,440 1,257,399 1,240,857 1,378,978 1,521,937 $ 3 9203Street Infrastructure 2,810,925 3,621,609 2,000,484 3,034,475 3,096,980 3,761,910 2,164,402 3,014,593 $ 3 9241Temporary Financing 749,218 2,139,289 2,660,198 2,601,796 2,804,946 3,014,294 3,224,926 3,441,881 $ 3 9233Park Infrastructure 1,435,021 1,501,768 1,492,844 765,472 540,087 108,773 (445,406) (329,566) $ 3 91252001A Lease Revenue Bonds 206,176 418,538 637,271 862,565 1,094,619 $ 3 9143/9146Improvement Bond Redemption 3,793,985 3,913,374 - - - - - -N/A 9140General Obligation Taxable 32,439 33,122 35,252 35,252 35,252 35,252 35,252 35,252 3 9147Refunding Bonds 1,400,932 - - - - - - -N/A 91452010 Fire Truck Certs 137,070 152,636 168,739 180,140 197,000 209,175 $ 3 9110-9119HRA Bonds 1,216,800 365,320 290,693 239,912 187,541 136,264 81,735 24,661 $ 3 Subtotal 21,174,411 23,411,719 19,583,264 16,087,719 16,402,760 17,101,269 15,574,563 17,171,262 The Proprietary Funds consists of the following funds 9301Water and Sewer (2008 and 2009) -N/AN/AN/AN/AN/AN/AN/A 9300Sewer (2010 and after)N/A 199,922 413,985 723,694 933,366 702,228 920,995 1,181,856 $ 3 9301Water (2010 and after)N/A - 706,617 645,071 (661,294) (1,227,175) (2,642,378) (2,468,298) $ 1 9302Golf Course 57,799 50,375 11,153 3,267 43,443 82,425 125,626 168,246 $ 3 9303Ice Arena 276,341 417,649 347,901 83,238 104,225 129,373 159,917 196,158 $ 3 9017Ice Arena Endowment 3,662 3,678 8,825 14,126 19,587 25,211 31,004 36,971 $ 3 9304Storm Water 327,287 1,572,607 1,668,076 2,077,721 2,081,044 2,537,828 2,853,326 3,250,537 $ 3 9305Street Lighting 145,818 161,105 175,212 190,102 205,728 222,120 239,310 257,332 $ 3 Subtotal 810,907 2,205,414 2,211,167 2,368,455 2,454,027 2,996,957 3,409,184 3,909,244 The Internal Service Funds consists of the following funds 9402Central Garage 7,208,467 6,498,261 6,033,520 5,544,900 4,886,668 4,249,664 3,558,499 3,065,250 $ 2 9407Insurance Reserve 470,365 451,219 461,352 472,837 484,596 496,635 508,960 521,577 $ 3 9408Employee Leave 541,058 507,077 491,713 477,623 462,246 445,516 427,366 407,726 $ 3 9410Information Technology 299,566 213,316 175,565 186,042 196,989 208,426 220,371 232,846 $ 3 Subtotal 8,519,456 7,669,873 7,162,150 6,681,402 6,030,499 5,400,240 4,715,195 4,227,399 Total$ 30,504,774$ 33,287,006$ 28,956,581$ 25,137,576$ 24,887,286$ 25,498,466$ 23,698,943$ 25,307,905 Trend indicator Adequate for reserve levels Adequate as of 2010 but decreasing balances. Need to watch Below targeted reserve levels and should have a plan to address The fund has events in the future that need addressing now. CITY OF NEW HOPE, MINNESOTA SUMMARY OF TAX LEVIES AND TAX RATES 2009 TO 2011 ACTUAL AND 2012 TO 2016 PROJECTED Taxes Levied Tax type2009 Actual2010 Actual2011 Budgeted201220132014201520162017 The Governmental Fund consists of the following funds 9001GeneralGeneral$ 6,524,813$ 7,044,686$ 6,960,834$ 7,452,622$ 7,842,983$ 8,078,272$ 8,320,621$ 8,570,239$ 8,827,346 9015/9501Economic Development AuthorityGeneral 85,000 85,000 85,000 85,000 85,000 85,850 86,709 87,576 88,451 9005Firemen's Relief - - - - - - - - - 9008Community Development - - - - - - - - - 9011HRA Administration - - - - - - - - - 9024Safety Camp - - - - - - - - - 9013Bassett Creek WatershedWatershed 24,517 22,605 23,440 25,533 - - - - - 9014Shingle Creek WatershedWatershed 24,050 24,186 28,080 25,273 - - - - - 9021Police Forfeiture - - - - - - - - - 9016Solid Waste Management - - - - - - - - - 9010Pool Capital Outlay - - - - - - - - - 9213-9219HRA ConstructionTIF 682,811 843,985 1,078,910 1,106,326 1,109,007 150,178 150,178 150,178 150,178 9203Street InfrastructureGeneral 1,182,500 1,182,500 1,182,500 1,182,500 1,182,500 1,194,325 1,206,268 1,218,331 1,230,514 9241Temporary Financing - - - - - - - - - 9233Park InfrastructureGeneral 296,000 296,000 296,000 296,000 296,000 298,960 301,950 304,969 - 91252001A Lease Revenue BondsGeneral 9143/9146Improvement Bond RedemptionGeneral 9140General Obligation TaxableGeneral 40,960 39,268 38,005 - - - - - - 9147Refunding BondsGeneral 171,115 - - - - - - - - 2010 Fire Truck CertsGeneral 154,100 161,802 164,322 161,487 163,902 160,962 160,962 9110-9119HRA BondsTIF 706,027 329,346 293,837 290,899 287,990 285,110 282,259 279,436 276,642 Total$ 9,737,793$ 9,867,576$ 10,140,706$ 10,625,955$ 10,967,802$ 10,254,182$ 10,511,886$ 10,771,691$ 10,734,094 Taxes by General City Levy$ 8,300,388$ 8,647,454$ 8,716,439$ 9,177,924$ 9,570,805$ 9,818,894$ 10,079,449$ 10,342,077$ 10,307,274 Watershed 48,567 46,791 51,520 50,806 - - - - - TIF 1,388,838 1,173,331 1,372,747 1,397,225 1,396,997 435,288 432,437 429,614 426,820 Total$ 9,737,793$ 9,867,576$ 10,140,706$ 10,625,955$ 10,967,802$ 10,254,182$ 10,511,886$ 10,771,691$ 10,734,094 9017Ice Arena Endowment Total TOTAL TAX RATE (Tax Capacity Based - no TIF)45.74%48.94%54.81%58.07%57.84%57.64%57.42%55.56% Net Tax Capacity for Local Rate$ 19,864,103$ 18,479,396$ 16,686,170$ 16,482,241$ 16,976,708$ 17,486,009$ 18,010,590$ 18,550,907 CITY OF NEW HOPE, MINNESOTA OUTSTANDING DEBT SCHEDULE FOR THE YEARS ENDED DECEMBER 31, 2009 TO 2011 ACTUAL AND 2012 TO 2016 PROJECTED Estimated Actual BalanceBalanceBalanceBalanceBalanceBalanceBalanceBalanceBalance FundIssue12/31/0912/31/1012/31/1112/31/1212/31/1312/31/1412/31/1512/31/1612/31/17 GOVERNMENT-TYPE General Obligation Tax Increment Bonds 9110G.O. Tax Increment Bonds, Series 2005C$ -$ -$ -$ -$ -$ -$ -$ -$ - 9117G.O. Tax Increment Bonds, Series 2004 3,114,000 2,965,500 2,812,500 2,655,000 2,493,000 2,326,500 2,155,500 1,975,500 1,791,000 9118G.O. Tax Increment Bonds, Series 2004 346,000 329,500 312,500 295,000 277,000 258,500 239,500 219,500 199,000 9119G.O. Tax Increment Bonds, Series 2005A 1,335,000 1,310,000 1,285,000 1,255,000 1,225,000 1,195,000 1,160,000 1,125,000 1,090,000 Total G.O. Tax Increment Bonds 4,795,000 4,605,000 4,410,000 4,205,000 3,995,000 3,780,000 3,555,000 3,320,000 3,080,000 General Obligation Special Assessment Bonds 9143G.O. Special Assessment Bonds, Series 1999 910,000 775,000 - - - - - - - General Obligation Bonds and Certificates 9140Fire Pension Bond, Series 1996 70,000 35,000 - - - - - - - 91462011A Taxable Lease Revenue Bonds - - 3,505,000 3,505,000 3,505,000 3,505,000 3,505,000 3,505,000 3,505,000 9147G.O. Refunding Bonds, 1998A 155,000 - - - - - - - - 94022011 Fire Truck cert of indebtedness - 1,245,000 1,245,000 1,120,000 990,000 855,000 720,000 580,000 440,000 Total General Obligation Bonds and Certificates 225,000 1,280,000 4,750,000 4,625,000 4,495,000 4,360,000 4,225,000 4,085,000 3,945,000 TOTAL GOVERNMENT-TYPE BONDS 5,930,000 6,660,000 9,160,000 8,830,000 8,490,000 8,140,000 7,780,000 7,405,000 7,025,000 BUSINESS-TYPE Revenue Bonds 9300 Utility Revenue Bonds, Series 1999 - Sewer 355,250 - - - - - - - - 9301 Utility Revenue Bonds, Series 1999 - Water 355,250 - - - - - - - - 9301 MN Public Facilities Authority - - 385,095 366,095 347,095 328,095 308,095 288,095 268,095 9302 Golf Course Revenue Bonds, Series 2000 400,000 - - - - - - - - 9304 Storm Water Revenue Bonds, Series 1995 215,000 110,000 - - - - - - - 9304 Utility Revenue Bonds, Series 1999 - Storm Water 264,500 - - - - - - - - 9304 Storm Water Revenue Bonds, Series 2002/2011 Refunding 675,000 1,240,000 605,000 560,000 510,000 460,000 405,000 350,000 295,000 9301 GO Utility Revenue, Series 2010A - 1,068,309 991,794 848,922 701,050 555,000 480,000 405,000 330,000 9302 GO Utility Revenue, Series 2010A - 293,309 216,794 143,922 71,050 - - - - 9304 GO Utility Revenue, Series 2010A - 218,382 161,413 107,156 52,900 - - - - Total Revenue Bonds 2,265,000 2,930,000 2,360,095 2,026,095 1,682,095 1,343,095 1,193,095 1,043,095 893,095 Capital Lease 9303Ice Arena Energy System 27,161 19,756 11,238 2,931 - - - - - TOTAL BUSINESS-TYPE 2,292,161 2,949,756 2,371,333 2,029,026 1,682,095 1,343,095 1,193,095 1,043,095 893,095 TOTAL ALL FUNDS$ 8,222,161$ 9,609,756$ 11,531,333$ 10,859,026$ 10,172,095$ 9,483,095$ 8,973,095$ 8,448,095$ 7,918,095 CITY OF NEW HOPE SCHEDULE OF PLANNED CAPITAL IMPROVEMENT 2012 TO 2016 PROJECTED Main Funding Sources* ProjectFunding YearMSAStreet InfraWaterSewerStormTIFCenGarWS GrantsOtherPark FundsTotal 2012$ -$ 180$ 150$ 100$ 170$ 5,430$ 91$ -$ 25$ -$ 5,206$ 11,352 2013 1,500 1,140 1,400 225 605 - 156 - - - 434 5,460 2014 1,650 550 650 690 175 150 213 - - - 684 4,762 2015 - 2,825 1,580 320 400 - 140 - - - 811 6,076 2016 - 390 - 300 350 - 5 - - 175 402 1,622 $ 4,220$ 8,772$ 5,226$ 1,895$ 2,003$ 5,580$ 868$ -$ 25$ 175$ 8,376$ 37,140 *cost in thousands Funding Sources Central Garage fund - internal service fund MSAMN/DOT State AidCenGar Tax levy - street infrastructureWatershed commissions Str InfraWS Grant from any source W & SWater and sewer utility fundGrants StormStorm water fundOtherIncludes development funds, County funds, JWC, Federal funds, EDA TIFTax increment financingPark FundsIncludes park infrastructure, park dedication, liquor reserve funds CITY OF NEW HOPE, MINNESOTA SELECTED GRAPHICAL DATA FROM PROJECTION City of New Hope Tax Rate - 2009 to 2011 Actual and 2012 to 2016 Projected 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 20092010201120122013201420152016 Tax Rate Comparison - Peer Cities 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% New HopeCrystalGolden ValleyChamplinHopkinsBrooklyn Center 2009 41.06%38.29%45.91%34.18%47.32%47.52% 2010 45.74%42.87%48.20%35.02%49.00%51.10% 2011 48.94%47.35%53.06%39.21%55.74%57.22% 2012 54.81%51.34%55.80%41.20%58.68%64.36% Tax Rates Tax rates are a function of the levy and total tax base. The city tax rate is computed by dividing the city levy by the taxable tax capacity. The City has a goal of maintaining a consistent tax levy. Comparable Hennepin County communities are provided for reference. CITY OF NEW HOPE, MINNESOTA SELECTED GRAPHICAL DATA FROM PROJECTION Fund Balance Compared to Expenditures and 40% Reserve Target $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 2010201120122013201420152016 ExpendituresFund BalanceTarget General fund balance as a percent of revenue The General fund balance should be maintained at a level to provide for adequate working capital reserves. Typically a 40% reserve is a sufficient target and New Hope has a 42% target based on revenue and expenditure patterns. CITY OF NEW HOPE, MINNESOTA SELECTED GRAPHICAL DATA FROM PROJECTION General Fund Revenue by Source - 2009 to 2011 Actual and 2012 to 2016 Projected $10,000,000 $9,000,000 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $- 200920102011201220132014201520162017 Property taxesIntergovernmentalCharges for ServiceOther General Fund Revenue By Source Based on assumptions of a 3 percent tax revenue increase and a 3% increase for other revenue sources. Taxes are projected to comprise 74% of the total general fund revenue sources during the life of the projection General Fund Expenditures by Function - 2009 to 2011 Actual and 2012 to 2016 Projected 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 20092010201120122013201420152016 General governmentPublic safetyPublic worksCulture and recreation General Fund Expenditures By Function During the life of the projection, expenditures increase at a 3 percent inflation rate. Public safety comprises the largest percent of total expenditures or 59% in 2016. CITY OF NEW HOPE, MINNESOTA SELECTED GRAPHICAL DATA FROM PROJECTION Outstanding Debt by Type - 2009 to 2011 Actual and 2012 to 2016 Projected $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 20092010201120122013201420152016 G.O. TIFGeneral ObligationEnterprise - GO Revenue Debt Per Capita - Comparison Cities for 2009 through 2011 and New Hope 2009 to 2011 Actual and 2012 to 2016 Projected $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 20092010201120122013201420152016 CrystalGolden ValleyChamplinHopkinsBrooklyn CenterNew Hope Debt balances Currently the City plans to issue debt in 2012 for the Ice Arena project . There are no other anticipated debt issues in the projection but due to cash deficits in the Water fund, debt may be considered. The majority of the City's debt is in TIF districts and enterprise funds and as result the only property tax supported debt is the issue done in 2010 for new fire trucks. Overall the City's debt level is low compared to similar cities. CITY OF NEW HOPE, MINNESOTA SELECTED GRAPHICAL DATA FROM PROJECTION Planned Capital Projects by Fund 2012-2016 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- 20122013201420152016 StreetWaterStormParkOther Planned capital projects The City has completed a 5 year capital plan for the Street and Park Infrastructure Funds. The projects will ultimately be funded by revenue from the fund. Bonding may be needed for the arena improvement and a portion of the Water fund projects.