A Financial Strategies OutlineCITYOF
CHANHASSEN
7720 Market Bou!evard
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C??"assen. MN 55317
Administration
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Building Inspections
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Engineering
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Finance
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Park & Recreation
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Planning &
Natural Resources
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Public Works
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Senior Center
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TO:
FROM:
DATE:
Mayor & City Council
SUB J:
Todd Gerhardt, City Manager
July 17, 2002
Taxation--Key Financial Strategies Outline
Attached please find the Process Outline for developing our "Key Financial
Strate=~es. Staff is still in the process of developing some of the exhibits for
Monday night's meeting. More information will be delivered to you on Friday,
July 19.
· , a.,ving bU~h,e...ca. ;;~r~u,.~: . ·
The City of Chanhassen A grov,,ing community ,,vitn clean Takes. Quality schools, a charmir,9 ':o',vntown. t,--~ - : ,,'n ..... ; ~ ~: trails, and beautiful parks. A great place to hive. work. and piav.
JU~. 10.2002 ]'05PM £HLERS & ASSOCIATES
OEHLERS
Key Financial Strategies
Process Outline
'0ne, i'~':', 1. Explain KFS process.
· -:',:; :?..:.',, ,,
..... · ' 2. Review KFS objectives.
: ','~ .. ~.,, ·., · '.,
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".' '""" 3. Identify and discuss financial
:"' ":"" foundation items.
..... · .,' 4. Provide financial status · .. -,. overview.
-.
.': . ; 5. Compare and contrast with other
~ cities.
.o
".,.-,:. : 6. Review financing/revenue
,i ~.'..,: options.
· .'..:.:..:.:. 7, Opportunity to d~scuss
"' ':':" ' community infrastructure and
Two....
...
·
.
· .
·
·
·
·
,. o
;
..
· .
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/populati on/socio-
economic mix/housing type
age)
6. Budget comparison for last
5-10 years.
7. Bond rating agency criteria.
8. Debt ratios.
9. Comparable cities- tTpical
residential tax bill/mix of
tax capacity.
1. Foundation items cost.
2. Schedule of capital
improvements.
3. Gap financing options.
4. List of revenue options.
5. Community strengths and
weaknesses.
l. Review prelirninary plan
including expenditures, schedule
and revenues.
Review funding alternative
impacts.
Provide financial revenue
forecast model.
Review preliminary gap analysis.
Review final plan. 1. Final plan,
Review poi/c/es and schedule 2. Schedule.
required to implement final plan. 3. Policies.
1 Preliminary plan.
2 Alternative impact analysis.
3. Revenue forecast model
4. Sources and uses summary.
0941
1. Document areas of cone
as identified by council
and staff.
2. Identify foundation areas
wh/ch requ/red
development or updating.
1. Agreement on foundation
costs.
2. Agreement on capital
improvements and
schedule,
3. Direction regarding gap
financing options.
4. Identify any remaining
potential funding needs or
revenues.
1 Agreement on financing
options, schedule and
costs.
1. Final action plan.
2. Schedule.
3. Policies.
.
5.
6.
7.
8.
Key Financial Strategies
Staff Outline
2. Develop draft KFS objectives.
3. 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.
Re,dew financial foundation
mazefials.
Reach consensus on presentation
format.
Review budget funds and structure.
Review agenda for session two.
Review strengths and weaknesses.
Review outcomes of session two.
Review revenue forecast model·
3. Review gap analysis.
1. Review draft plan.
2. Review agenda for session three.
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1. Review results from session three.
2. Review draft recommendations and
implementation plan.
3. Review agenda for session four.
N:'~GENEI~L~Kcy l"bancJal Stralct~ies~J~S$[affoutlh~e.wpd
· ,
1. Plan and schedule for filling gaps
in foundations'
2. Copies ofpoli¢!es..
3. Copies of finarjeials.
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.
1. Agreement on revenue forecast
model.
2. Agreement on gap analysis.
l. Agreement on draf~ plan.
1. A~eement on draft
recommendations and.
implementation Plato-.-
_..
.. .
-_
JIJ~. 10. 2002 I'06PM
EHLERS & ASSOCIATES
O / EHLERS
0941 P. 4
:.
Key Financial Strategies
Financial Foundation Descriptions
' .'~..,~ ....
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"", "7 :"::' tern, ' .... ,',,', ,,';'. . .,. ,. , : .
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· ~P~a~,lmproverfieMj'Plafi",';" ,::',.,,',' A five to ~cn "ca .... :---; ' ~~":'"' ~:-~ :: ""-"'"' :"
· ., -pzujcc[lon or anticipated capi penditures The lan
· ( ' ' ' ' ' " ': ' ' ;;";' ' -.~ ~,,~ o,,umu uc upaa[ed at least orlce every two
should cover all funds of thc ci~ o-~ .~,^,.f~ L_ __j~l ,ex., . . P
years. PI~ should include revenue sources.
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:'":i" :"~':;' ;. "7. .." "'.:;'..,, : '..'..'.;. ',: ....: :..:,.:...:.. operation and capital needs W';', ~---,-- P: ..scenarios on ,he City's
· ,,, ~,c uone m conjunction Mth the City's
capital improvement plan and other facets of this study,
Pavarna'n:ti/M~iage~eni'i~/st'errr :,, ;~',', :.'
: . '.. :..:.,.....,:,. '...'."" A long term maintenance and capital improvement plan detailing the
-.. - '" . .. 7 ..... : . . annual cost for maintaining and replacing roadway systems (pavement, curb,
.-- , . ' .'..' '. ..... .. ,, .., .,. gutter and impacted utilities as required), Ideally this plan is incorporated into
· "~ ':., " ": .... " theCIP,
storm s~WeffManaj~m~nt. Plan,-,. · A five to ten 5'ear projection of storm sewer related expenditures, the plan
: ...... , ..... ii;i}:Z~:,!i..~ ..... :. ':'. ' "'"':' '..::. :... :..,: ;.:'.': should include revenue sources and expenditures by project area and should be
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· :'":,~' '"' updated periodically.
~On.../~. n~a.I Recurr.mg ,M~i. ht}t~i.~nce,., The periodic cost to maintain physical facilities such as FIVAC, roof systems
and parking lots,
The cost to upgrade or replace major facilities such as city hall, public work
fac illdes, public safety, fire stations, water plants, wastewater treatment plantk,
recreation buildings
The cost to purchase, suppor~ and maintain computers, telephones, radios etc.
"~:~.:: .'.: ...... '" '" 4"': "":"' '" ..... '." City/HRA/EDA cost to retain and attract residential and commercial tax base
,, .'. , ~. ('.,::' . ; ,
..... ; :,..' ',:, to community.
OU,mng. De. veloptnen,.t. ';":i!.;: :' ,,:; ,, ;., The cost to replace or upgrade substandard housing and to develop new types
· : .-. ---~--' :. ,:i.':of housing.
,;e'i;t '
Debt' anage .':'"'.:': .... ' · ,' "':"
..... ' .:,. A summary of existing debt service commitments and impact of future debt·
Bu~Iget OP~ion' .~."alYsig '"",
· -- .. · .......... ..." An analysis of the impact of'potential budget reductions at specified levels and
'; " ' "'' '';
· ' ",' ":',:'"..' future staffing needs,
Cab~.cil Goql~'ahd.0bj~.ti~tei. ". i"
·. , ..."." · ..... ., . . .,.: , The cost and schedule assigned to council goals and objectives,
veh~,Cl~EquiP?ant'.Rep[h'~'~e .j. An inventory of vehicles and equipment for all departments and proposed
'"' ' · ": '~ ':'~:~, "J" ' '~",q" ;,:,Lk(": ' ' ' ' ;'
...... · .'.'." - ' '- , i'. ': .... .:,,,.: .,~,.,:, ' replacement schedule including net cost to replace. An option to this plan is
.'. . :-,.',.: .... · ,.. .' ...:.. ",,":
'.fi-?:;-'. :~. :'::--".:~,'. '"'
· . · ..., ,. :L,., ". · '"" '~ "': "'" a vehicle enterprise fund which "/eases" vehicles to departments. Lease cost
.... ' ........ '::T::'"' may include maintenance costs·
::~e2r B/~dget iP.)".o.~cfi~r~,' ,
· '" · , ... A projection of revenues and expenditures for major funds including new or
..... ' '" '"':':;: .... ;' "':' "' previously deferred programs and services.
..
Rating 'Report "": :, . Credit rating reports may provide a basis for changes in financial operations
"' ' ..... " that will improve the city' ability to fund_,.___,~capital improvements.
JUN. 10. 2002 I'06PM
EHLERS & ASSOCIATES
NO.
P. 5
Policy
Debt Management
Risk Management
Special Assessment
User Charges
Utility Charges
Investment Policy
Annexation Policy
Business Subsidies
Fund Balance Policy
Budget and Financial Control
Ehlers & Associates
Key Financial Strategies
Financial Policies
Description
Establishes appropriate debt levels and debt instruments.
Defines how debt will be paid.
Describes use of insurance versus risk retention.
Establishes policy regarding funding of reserves.
Provides for allocation of risk management charges.
Establishes policy regarding public benefit versus assessed
share.
Describes when special assessment financing will be used.
Establishes policy regarding financing cost.
Establishes standards regarding recovery of actual costs to
provide service or product.
Establishes standards regarding recovery' of actual costs to
provide service or product.
Establishes standards regarding allocation of fixed and
var/able 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 and expenditure variances will be
managed.