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1m Approval 2005 Strategic Plan CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone 952.227.1100 Fax: 952.227.1110 Building Inspections Phone 952.227.1180 Fax 952.227.1190 Engineering Phone 952.227.1160 Fax 952.227.1170 Finance Phone 952.227.1140 Fax 952.227.1110 Park & Recreation Phone 952.227.1120 Fax 952.227.1110 Recreation Center 2310 Coulter Boulevard Phone 952.227.1400 Fax 952.227.1404 Planning & Natural Resources Phone 952.227.1130 Fax 952.227.1110 Public Works 1591 Park Road Phone 952.227.1300 Fax 952.227.1310 Senior Center Phone 952.227.1125 Fax 952.227.1110 Web Site www.ci.chanhassen.mn.us î./YV\; MEMORANDUM TO: Todd Gerhardt, City Manager .,¿ J~ Justin Miller, Assistant City Manager '0 µ- FROM: DATE: February 22, 2005 RE: Adoption of 2005 Strategic Plan/Key Financial Strategies BACKGROUND Beginning in January 2005, the City Council and staff began meeting to develop the 2005 Key Financial Strategies and Strategic Plan. Through a series of work sessions, topics were prioritized into a final draft. Attached to this report is the proposed final draft of the 2005 Key Financial Strategies/Strategic Plan. Items previously identified during the Key Financial Strategies process, as well as topics identified by the City Council as a high priority, have been included in this draft. Task sheets that outline action steps and timelines are included for the major items identified by councilor scheduled to occur in the 2005 KFS plan. Topics which are ongoing or occur annually do not have task sheets included. RECOMMENDA TION Staff recommends that the City Council formally adopt the attached Strategic Plan/Key Financial Strategies report and direct staff to schedule the topics on work sessions/city council meetings as denoted in the timeline. The City of Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks A great place to live. work, and play. 2005 Strategic Plan Priorities Shaded Topics Denote Areas of Focus for the City Council KFS Topic Furlong Labat! Peterson Tjombom Lundquist Average Public Safety CTfOlt plan to deal with public safety Î$SlltS .~. growth coOlÚlueS..ollgl/ing 1.6 2004 2 1 1 2 1 1.40 EvalUllte new Dolice contrQ£t 1.7 2905 2 2 1 3 1 1.80 Traffic Management (Pleasantview, Lake Lucy, Powers, 2121312) 2005 1 2 3 3 2 2.20 Public safety entity - establish and define 2003 4 3 0 2 4 2.60 More council interaction in crime prevention/neighborhood watch -ongoing 2003 2 2 4 2 3 2.60 Update Hunting Map I 2005 3 3 3 4 3 3.20 Economic Development Hwy 21~ -update øn design and land /lSit, vision ølcørridor - (lngøing 1.8 2003 1 1 1 1 1 1.00 Support the marketplace driven development of industrial land - ongoing 2003 3 3 1 2 1 2.00 Begin review of 2010/2015 MUS A and Comp Plan Updates 2005 2 3 2 1 3 2.20 Leverage City property as much as possible - Marketing of land - ongoing 2003 3 2 2 2 3 2.40 Develop town center into a more full-service/inviting central business district I 2003 3 2 3 3 2 2.60 Budgetffaxation Review decÎ$lansbased.on costslbenefits; validate e~gc(/ntracts - øngoing 3.7 2003 1 2 2 1 1 1.40 Improve pWnthly ./iIIancialrfJ¡JOtts 3.9 2005 1 1 1 2 2 1.40 BetJer touncildirectionin ·butJget Drocess 3.6 2003 1 2 ,.2 2 1 1.60 Evøluale KFS Drojeêtions 5.4 2005 1 2 2 2 1 1.60 Inco17Jorale sftt1tegieÞlannmg into budllet Dr'OCe6S - ongomll 3.8 2003 2 2 2 .2 1 1.80 Review ente(JJrlsefunds 7.2 2()05 1 2 2 3 2 2.00 Leverage current services - ongoing 2003 2 2 1 3 3 2.20 Monitor state and county financial situations - ongoing 2004 3 3 1 3 2 2.40 Evaluate outside consultant use/contract model for other services 2003 2 3 3 3 3 2.80 City Or2anization Develop re1øtionships with outsÎdluJgencies (stOle, cOUOO,ek.) . ongoing 1.97 2003 2 2. 1 2. 2. 1.80 Public Works facility expansion (CIP 2007-08) 2004 2 2 3 3 2 2.40 Evaluate potential satellite fire station (CIP 2008) 2005 2 2 3 3 3 2.60 Evaluate park needs based on comp plan service areas 2005 2 3 3 4 3 3.00 Community-Wide Issues Coortlinalion oftJpcodes cjty-wùle!intprovedmailâelivery 1.94 2005 1 2 3 3 4 2.60 Re-evcrmate treepreservalion ordin41tce 1.95 2005 1 1.00 Revise city co.de fe wine in Darks. 1.96 2005 1 1.00 ntdiscusSion, 'imD~1JIenta(ion - 014llo.ing 7.4 2003 1 1 1 2 1 1.20 liiJlhw~ 1011lW Þri)ject - ongðing 4.3 2004 2 2. 1 1 1 1.40 Locating a license serviCe centeTtnthecity , 1.91 2005 T 2 2 1 1 1.40 Downtown Pork and RideexotmsÎØiI 1.92 2005 2 2 1 1 2 1.60 UtiliZation of cilv fesources fo.rcommunÎi"l-wùlèevênts 1.93 2005 2 2 2 2 2 2.00 101 South Tllrn1)ack (south o.f LYrn(l1l Blvd.) 4.4 2004 2 2 2 2 3 2.20 District 112 secondary school site partnership 2005 3 2 2 2 2 2.20 Monitor school district enrollment numbers 2004 3 2 3 2 2 2.40 Highway 5 upgrade (west of Highway 41) 2004 2 3 2 4 2 2.60 Marketing/collaboration with Lifetime Fitness 2005 2 3 4 1 3 2.60 Wireless Internet access 2005 2 3 3 1 4 2.60 Monitor Highway 41 river crossing study 2004 3 2 2 3 3 2.60 Seminary Fen 2004 3 2 3 3 3 2.80 Allocation of athletic field space 2004 4 .3 3 3 4 3.40 Amphitheater/gathering place 2003 4 4 2 4 4 3.60 Housing Review o.fcurrent housing trends 2.4 Explore creative multifamily housing projects in the downtown area 2005 2 2 1 3 2 2.00 Zoning issues related with higher densities 2003 3 3 2 2 2 2.40 Analyze costs imposed by Citv to developers 2004 2 3 2 3 2 2.40 Serve as convener of private and non-profit sectors to develop housing strategies 2003 3 3 2 4 3 3.00 Explore tax credits/other financial support programs that support this issue 2003 2 3 2 4 4 3.00 Ehlers & Associates o EHLERS & ASSOCIATES INC KEY FINANCIAL STRATEGIES OVERVIEW Ehlers & Associates was engaged by the City of Chanhassen, Minnesota (the "City") to assist in the preparation of the City's Key Financial Strategies. The need to create a comprehensive financial management plan was identified by the City Mayor, Council, Manager and Staff due to growing demands for financial resources. This strategic financial plan is the result of four workshops with the Council and many hours of staff consultation. One of the workshops (November 7, 2002) focused on identifying potential financial needs of the City. The results from that session have been incorporated into this plan document. This plan was updated in January/February 2005 during a series of workshops with the City Council. OBJECTIVES FOR THE FINANCIAL PLANNING PROCESS A financial plan is a necessary element of a City strategy to remain competitive in today's demanding environment. Other objectives of the City's Key Financial Strategies are: · Establishing a common understanding among the elected officials and staff of the City's needs and financial capacity. · Developing a comprehensive view of financial resources and options. · Identifying City issues and opportunities. · Creating a framework in which elected officials and staff can make immediate and long-term investment decisions. · Developing a consensus among the elected officials and staff on key actions the City will take to remain competitive. · Meeting the new standard presented in the Governmental Accounting Standards Board Regulation 34 including its capital planning provisions. Through this workshop process we have examined the current and future ability to meet these objectives to answer the question "How do we get there?" The City's Key Financial Strategies will provide a road map into the future and a framework for future decision-making. City of Chanhassen - Key Financial Strategies Ehlers & Associates FINANCIAL ASSESSMENT - FINDINGS The financial assessment conducted of the City was divided into seven areas: 1. Community goals/initiatives 2. Local tax base considerations 3. Financial Position 4. City owned infrastructure 5. Competitiveness 6. Credit position 7. Enterprise funds As part of the financial assessment, a number of findings were presented within the workshops. These findings are outlined in more detail within this report. A summary of these findings is as follows: 1) COMMUNITY GOALS/INITIA TIVES . Establishing a strategic profile including community vision (purpose), goals (means to achieve the purpose), and strategies (directed at accomplishing goals), which are essential to the efficient and effective use of scarce City resources. A) Important Initiatives -- City Officials have identified several initiatives as part of this financial planning process. Key issues include: · Maintaining city infrastructure. This includes: o Pavement Management System o Sewer and Water Infrastructure o Park Pavement Maintenance o Vehicle and Major Equipment Replacement o Water System Improvements o Public Facility Maintenance · Enhance and protect city environment. This includes: o Update SWMP (Storm Water Management Plan) o Watershed Improvements o NPDES Phase II compliance o Lake Monitoring/Improvements o 2007 Environmental Fund Solvency Issues o Bluff Creek Improvements · Managing growth. This includes: o Future staffing issues o 2005 MUSA o City Trails o Comprehensi ve Plan Update o Coordinating the construction of Highway 212/312 o Expansion of Public Works Facility o Improving City Services City of Chanhassen - Key Financial Strategies Page 2 Ehlers & Associates o Quality Assurance for Law Enforcement/Public Safety o City Archives and E-City Hall. . Explore support for new City facilities. This includes, without limitation: o Public Works expansion o Chanhassen School Campus (site selected - type of school to be determined) Implication: The City has identified a significant agenda for future needs. Developing a mechanism to regularly prioritize needs, develop implementation programs (including resource requirements) and evaluate the City's capacity to implement the programs should be a high priority. Financial strategies should also include direction regarding the nature of activities to be undertaken for each issue including: · Assessing need for service or facility. · Studying alternatives, methods and cost and funding sources for implementation. · Implementation. B) Facility Options -- City Officials are looking at options for public facilities including a water treatment system, Public Works facility expansion, and monitoring the decision making process for a new school at the comer of Lyman Blvd. and Audubon Road. Implication: Involving the public with this process will be key to progressing this issue to the implementation phase. Careful consideration should be given to the funding options and impacts (including operating costs). While there are some issues impacting the timing of these decisions, it is essential that public understanding and support be developed. C) Technology -- Ever growing demands for staff services and the need for City departments to work together require ongoing investments in computers and technology. Implication: Further enhancements to the City's information technology systems may require financial support from the City's General Fund. There will be more and better technology products available to cities. Residents, customers and employees will likely create pressure to invest in improved and new technology. This will require the City to develop a disciplined approach to reviewing the requests and needs for technology investments. That approach should address cost and benefits (not limited to financial), productivity, training, support and potential obsolescence. City of Chanhassen - Key Financial Strategies Page 3 Ehlers & Associates 2) LOCAL T AXBASE CONSIDERATIONS - Structure, quality and size of a community's tax base impact its ability to fund services and investments. A) Development -- City land area is approximately 60% developed and has reached 65% of projected population. How the community completes development will impact its future. Implication: The City will add additional residents and businesses to its population and, in addition, will face new and additional requests for future services as demographics and resident interests change as well as the need to address reinvestment in existing facilities. Understanding the dual impact of new service requests of existing residents and the impact of additional new residents will be a key to future planning. B) Market Value - City market value of $2.2 billion has been increasing an average 10% per year for the past 5 years. The City has a high per capita market value of $95,000. Implication: The high per capita market value and strong commercial base provides good opportunity for revenue diversification. The tax rate should be evaluated in terms of what rate creates the outcomes that the City seeks for itself. The tax rate should be set in conjunction with both the budget and the yearly costs identified in the capital plan. C) Tax Increment Districts - Changes in State property tax law adversely impacted the City's ability to cover debt service related to development. A plan was been prepared and implemented to cover potential shortfalls, and as of December 31, 2004 the Downtown and Eden Trace TIP districts were de-certified. Implication: The City should continue to monitor existing TIP districts to ensure their viability and to avoid any impacts to the City's general fund. D) Diverse tax base -- The City has a diverse tax base with 69% residential and 28% commerciallindustrial. The balance includes a variety of open space and institutional uses. Implication: Tax base diversification is a positive trend for stability in City services requirements and property tax production. Continued effort should be made to maintain a ratio of residential to commercial/industrial base with a target range of 67% to 75% residential and 25% to 33% commerciallindustrial. E) Economic Development Policy - The City has provided economic development incentives in the form of tax increment financing. Implication: Previously the City used economic development incentives to attract targeted development. This strategy is clearly responsible for the level of tax base diversification that exists today. To encourage continued balanced community growth the City will consider appropriate strategies. City of Chanhassen - Key Financial Strategies Page 4 Ehlers & Associates 3) FINANCIAL POSITION - Availability of funds to meet current and future needs, adequate fund balances for cash flow purposes and to meet emergency needs requires planning and discipline. A) Effective past financial management practices has left the City with a moderate undesignated, unreserved fund balance within the General Fund, Water and Sewer Fund and Storm Sewer Fund. Implication: The City's General Fund Balance remains adequate. Changes in State tax structure and potential capital projects costs indicate the need to continue to carefully monitor the fund balance. B) The City faces growing demand and cost to provide services with limited ability to increase short-term tax base. Implication: While State levy limits were not in place for the 2005 budget, future State actions may impact the City's ability to increase operating expenses without an offsetting increase in non-property tax revenues. C) The City has developed effective loss reduction strategies (accident review, safety committee). Additional risk management efforts including review of risk retention levels, deductibles, funding of loss reserves may be warranted. Implication: Additional development of risk management policies will help reduce exposure to financial risks. 4.) CITY INFRASTRUCTURE - Communities need to regularly invest and reinvest in their infrastructure (roads, buildings, parks, etc.). Regular deferral of investment can lead to fiscal stress and community disinvestments. A) The City has maintained a street reconstruction program since 2002. Implication: Overall the streets are in acceptable condition, but continued annual investment will be needed. Progress on maintenance should be carefully monitored. B) The City is reviewing Public Works facility needs. It is intended that facility needs will be addressed with the adoption of the 2007-08 Capital Improvements Plan. Implication: The City has not initiated a plan to review the need for reinvestment in this facility. City of Chanhassen - Key Financial Strategies Page 5 Ehlers & Associates C) Potential needs for reinvestment in public facilities infrastructure continue to be seen. The City has major investments in buildings, utility systems, streets, trails, lighting systems and related improvements. Implication: Community involvement will be key to addressing need for major investments. The City should undertake a public participation process to involve the community in understanding and then selecting options. Preparing plans and schedules for anticipated required maintenance and replacement will provide information need for financial planning purposes. D) The City has extensive vehicle replacement requirements for Public Works and Fire equipment. The City has a schedule of equipment replacement that forecasts these needs for the expected life of the equipment. Implication: Equipment replacement is often deferred as part of budget balancing efforts. In the long term this may increase maintenance costs, increase downtime of equipment and staff and lead to a funding problem in future years. Maintaining an equipment replacement schedule and funding source will help remedy this problem and provide a more accurate measure of services. E) The City faces potential major expenditures in its Water Fund for infrastructure improvements in order to improve water quality standards and distribution system needs. Implication: Enterprise funds are generally expected to support system needs. The City , should continue to identify future major enterprise expenditures within the next five to ten years. This will permit the development of a utility rate plan to facilitate the required improvements. A water and sewer rate study was implemented in 2004 and reinforced in 2005. The City should continue to monitor the balance in the enterprise funds and re- evaluate each year. 5) COMPETITIVENESS - Communities compete for people to live, work and do business. Understanding and responding to the elements of competition is an important role for the City. A) The City's overall City tax rate remains competitive with other comparable communities in the metro area. (42nd out of 108 metro communities in 2004) Implication: Given the competitive tax rate and the high level of services, the City would be in position to increase tax rates when conditions permit. However, this increase should come only upon completion of a comprehensive analysis of competing demands and priorities with community involvement in setting and funding these priorities. B) The City offers a full complement of services to residents and businesses. Implication: Services offered by the City appear to be consistent or superior to surrounding communities. City of Chanhassen - Key Financial Strategies Page 6 Ehlers & Associates C) Chanhassen appears to be well maintained with no typical signs of disinvestments or deterioration. Implication: Careful attention should be paid to monitoring the condition of public and private property. D) Chanhassen's open space and trail system appear to be equal or greater than many other communities in the metropolitan area. A new state of art library was opened in 2003. The City does not have some amenities typical for comparable communities including a community center but the construction of a new Lifetime Fitness facility may meet this need. Trail maintenance was included in the 2005 pavement management program. Implication: Planning and investments in these areas has provided a sound foundation for creating a community with amenities that will attract and retain residents, visitors and businesses. Careful attention should be paid to the operating costs of recreation and cultural amenities. Community involvement in discussions regarding the cost to build and maintain new facilities will be a key factor for future considerations. 6) CREDIT POSITION Maintaining a strong credit rating helps reduce the cost of borrowing required to develop and maintain the community. A) The City was upgraded to "AA-" by Standard & Poor's Investors Service in 2004. This is an above average rating reflecting the City's strong property value growth and maintenance of a strong financial position while making progress in mitigating the impact of a tax increment district negatively impacted by tax rate changes. Implication: This strong credit rating has helped the City successfully issue debt at very competiti ve interest rates in the commercial marketplace. B) The City's debt burden has been reduced to $1,200 per capita, due mainly to paying off tax increment debt. About 2/3 of this debt is supported by tax increment, assessment and enterprise revenues. Forty-four per cent (44%) of the City's debt will be paid off in ten years. Implication: The City has successfully implemented a plan to address tax increment debt issues. Careful attention should be paid to "mapping" out future debt issues for the next five to ten years. The aggressive debt repayment schedule will enable the City to continue to invest as needed. C) The City currently has a moderate undesignated fund balance. Implication: This strong fund reserve helps the City to maintain its current rating. The City should be careful to maintain this strong fund balance. City ofChanhassen - Key Financial Strategies Page 7 Ehlers & Associates 7) ENTERPRISE- Operating enterprise funds as businesses is key to avoiding transferring the burden of operations to general taxpayers. In addition some enterprise operations can help reduce the cost of general government. A) The City has improved cost recovery for water and sewer services over the past few years. A new rate study was conducted and increases for water and sewer rates have been implemented for both 2004 and 2005. Implication: Fluctuations in water demand due to weather has provided challenges in establishing water and sewer rates. However, rates should be established to assure recovery of operating costs and adjusted annually. City of Chanhassen - Key Financial Strategies Page 8 Ehlers & Associates RECOMMENDA TIONS Based on the findings and analysis conducted in the workshops, Ehlers developed a list of recommendations for the City -- their Key Financial Strategies -- listed in the seven categories below. 1.0 COMMUNITY GOALS/INITIA TIVES 1.1 GOAL SETTING: The Mayor and City Council should continue annual goal setting sessions, prior to budget preparation. The goal setting session should prioritize needs. This information should be used by staff to develop programs, service options and resource requirements, for consideration within the budget process. The goals should specifically address the major issue categories. Financial strategies should be incorporated into the annual goal setting program. 1.2 FACILITY NEEDS: The City should continue the deliberate and careful approach to addressing facility needs for future growth, reinvestment and quality of life services and capital investments. The Mayor and City Council should consider authorizing a study to address future facility needs. 1.3 COMMUNICATION PLAN: A communications plan should be developed in order to inform and seek community feedback on important financial issues including future needs and financial constraints. The plan should also forecast the process that will be used to seek community participation for significant community investment decisions. A community survey scheduled for 2005 will help identify the types of services vital to attract and retain residents. Consideration should be given to expanding the survey to collect information regarding improving the City's competitive position, economic development, quality of life, school funding inequity and possible intergovernmental/tax sharing solutions. Consideration should be given to continuing the use of the "Funding Public Facilities Public Participation Process" model in City facilities planning. 1.4 TECHNOLOGY PLAN: A technology plan has been prepared with projected needs for the next five-year period. The plan should also include a basis for evaluating the requests for technology investments that address cost and benefits (not limited to financial), productivity, training, support and potential obsolescence and funding source. 1.5 IMPLEMENTATION PLAN: Annual budgets should be prepared with budget options of at least 10% of total budget expenditures. Budget presentations should be supported with a balance of input and resources and outcome materials. City of Chanhassen - Key Financial Strategies Page 9 Ehlers & Associates 2.0 LOCAL TAX BASE 2.1 Growth planning should address continued attention to balancing commercial and residential development. Special attention should be paid to assessing housing types to reflect life cycle, financial ranges and life style choices. 2.2 The use of city assistance to encourage the type of development needed to maintain community competitiveness and balanced tax base should be continued. The public assistance policy should be reviewed to assure flexibility to meet broad based community needs. 3.0 FINANCIAL POSITION 3.1 FINANCIAL POLICIES: The Mayor and City Council should consider a Fund Balance Policy for the Special Revenue Funds, Debt Service Funds, Capital Project Funds, Enterprise Funds, and Internal Service Funds. 3.2 City staff should prepare an alternative revenue source report for the City Council. These options should be reviewed annually as part of the Key Financial Strategies update. 3.3 The City should adjust all user fees and utility rates on an annual basis to reflect changes in the cost of services. 3.4 The City should review assessment practices to include pavement management cost recovery through special assessments to benefiting property owners (i.e. increasing assessments to property owners and including street maintenance such as crack sealing) and to address increased cost of pavement management projects. 3.5 The City should establish a schedule for increasing developer fees that is determined annually. The current method of tying fees to increases in construction cost index does not accurately reflect the City's cost of services. 3.6 The City should use this report as part of its annual goal-setting framework. 4.0 CITY OWNED INFRASTRUCTURE / CAPITAL EQUIPMENT 4.1 CAPITAL EQUIPMENT: The Manager and Finance Director should review the final list of items which were recommended as part of the vehicle/equipment replacement program and develop a funding program to provide a more level annual replacement contribution. The City could establish an internally funded equipment rental program to level out annual replacement costs. 4.2 INFRASTRUCTURE: The City staff should enact each annual capital improvement program based on review of the multi-year capital improvement needs. The City staff should coordinate development of the capital improvement budget with the City of Chanhassen - Key Financial Strategies Page 10 Ehlers & Associates development of the operating budget. Future operating costs associated with new capital improvements will be projected and included in operating budget forecasts. The City should prepare a non-annual recurring maintenance schedule for City facilities. 5.0 COMPETITIVENESS 5.1 PROPERTY TAXES: The City's tax rate is currently significantly below the state limit. In managing property taxes, the City will seek a balance between providing an appropriate level of service, maintaining infrastructure, and affordability for residents. Having the lowest property taxes is not always the final measure of this balance. Given these limits and demands on property taxes, the City should review and implement a revenue enhancement study for additional revenue options including utility franchise fees, utility bill preparation fees and similar alternatives. The information should be prepared to identify options prior to their need. Continued long range financial planning creates the opportunity for managing property taxes and providing the greatest stability in tax rates. Staff should annually prepare three-year projections of tax levies. Community involvement in the long range planning process will allow build support for the development of resources to achieve goals the public has supported. The City should continue to meet and confer with overlapping local government units (county, schools, etc.) to discuss operating and capital funding issues that will impact residents overall taxes. 5.2 BUDGET: The current five year projections show only an inflationary increase in the following year's operating budget. In order to provide direction to staff, the Mayor and City Council should review and select the appropriate items from the Budget Option Impact Worksheets that would be included in next year's budget. This budget should then be constructed by balancing resources with current and future needs. The Financial Strategies should be reviewed and updated annually as part of the City's budget process. Annual budgets should include budget option analysis for 5% to 10% of total projected expenditures. Budget presentations and discussions should be supported with a balance of input/resources and outcome options. 5.3 Risk Management The City has initiated development of a risk management program. Additional effort to reduce risk exposure including review of retentions levels, deductible levels, funding of reserves for retained risks should be undertaken. City of Chanhassen - Key Financial Strategies Page 11 Ehlers & Associates 6.0 CREDIT POSITION 6.1 The approval of Key Financial Strategies by the Mayor and City Council will help document the future City plan to bonding agencies. 6.2 The City should endeavor to keep the total maturity length of general obligation bonds below 20 years and at least 50% of the principal shall be retired within ten years. In all cases, the maturity shall be shorter than the life of the related assets. 6.3 The City should work to minimize the amount of debt supported by property taxes and will seek maximum use of special assessments, utility revenues and other non- tax sources to support debt. 6.4 City staff, working with the City's independent financial advisor, shall monitor outstanding debt and advise the City Council on ways to reduce the debt burden through refinancing at lower interest rates and the early retirement of bonds. 7.0 ENTERPRISE FUNDS 7.1 Annually, the Manager and Finance Director should review and recommend necessary adjustments to water and sewer rates sufficient to recover cost of operations and provide for capital needs for consideration by the Mayor and City Council. 7.2 City staff should annually review the cost of general fund services provided to enterprise activities including insurance, financial and accounting services, management, legal and related expenses. These costs should be evaluated by the City Council for inclusion in the rates for enterprise services. 7.3 City staff should prepare a utility rate policy that addresses the need for fees to recover operating costs and provide for operating cash, reserves, non-annual recurring maintenance, and debt service. - completed in 2004. 7.4 City staff should identify the costs to meet mandated water quality standards and the impact on water rates. 7.5 City staff should continue to monitor storm water management program (SWMP) to ensure compliance with state and federal regulations. City ofChanhassen - Key Financial Strategies Page 12 Ehlers & Associates ACTION PLAN This section describes the actions needed to implement the City's Key Financial Strategies. Actions fall into two categories: Tasks for immediate action, and tasks that reflect on-going financial management actions. The following is a recommendation on the tasks that require attention over the next five-year period. Implementation of these Key Financial Strategies requires annual review and updating the Plan and revision of the schedule prior to initiating the budget process. Careful attention should be paid to developing realistic time frames and work plans. Projected Start Projected Activity Date Level/Status Completion Date 1.0 Community Goals/Initiatives 1.1 Goal setting Annual 1/1 N/A 1.2 Facility needs study 2006 2/S 2007 1.22 Monitor School District 112 new school 2003 3/A 2008 planning 1.23 Community Center / Ice Arena 2005 3/A Completed 1.3 Prepare financial strategies communication 2004 4/1 2005 plan 1.32 Conduct community survey to assess 2005 1/1 2005 community knowledge of and support for new initiatives, facilities services and fees. 1.4 Expand e-city hall services -phase 1 2004 1/1 2005 1.41 Develop digitized document archives 2003 3/1 Ongoing 1.5 Annual CIP Annual 1/1 Annual 1.51 Identify options for replacing 2007 2004 l/S 2005 Environmental Fund 1.6 Create plan to deal with public safety issues 2004 2/1 2005 as growth continues 1.7 Monitor implementation of sheriff's 2004 1/1 2005 Maximus studyÆvaluate new police contract 1.8 Hwy 212/312 - update on design, land use 2004 2/1 2005 and vision of corridor 1.9 Communicate what City Council does 2004 4/1 Ongoing 1.91 Locate a license center in City 2005 3/S 2006 1.92 Downtown Park and Ride expansion 2005 3/S 2007 1.93 Utilization of city resources for community- 2005 2/S 2005 wide events 1.94 Coordination of zip codes/mail delivery 2005 4/S 2005 1.95 Re-evaluate tree preservation ordinance 2005 2/S 2005 1.96 Evaluate policy regarding wine in parks 2005 4/S 2005 City ofChanhassen - Key Financial Strategies Page 13 Projected Start Projected Activity Date LeveVStatus Completion Date 1.97 Develop relationships with other agencies Ongoing 4/1 Ongoing 2.0 Local Tax Base 2.1 Prepare plan for 2005 MUSA expansion 2003 1/S 2005 including capital and operating needs to accommodate growth. 2.12 Review land uses in 2005, 2010 and 2015 2004 2/S 2006 MUSA areas 2.13 Update Comprehensive Plan 2008 2/S 2009 2.2 Update public subsidy policy 2003 4/A Completed 2.3 Analyze methods to leverage/market City 2004 4/S Ongoing owned land 2.4 Review of current housing trends 2005 4/S 2005 3.0 Financial Position 3.1 EstablishlUpdate Budget Control and 2004 2/S Completed Financial Control Policy 3.11 Update fund balance policies 2004 2/S 2005 3.12 Update debt management plan 2005 liS 2006 3.13 EstablishlUpdate Investment Policy 2004 2/S 2005 3.2 Explore franchise fee in context of financing 2003 liS 2006 needs 3.4 Review assessment practice to address Annual 1/S Annual pavement management and consider increasing assessed portions and interest rate. 3.41 Identify funding sources for Park Pavement 2004 liS Completed Maintenance 3.5 Create plan for TIP districts returning to tax 2004 2/1 Completed rolls 3.6 Better council direction in the budget process Ongoing 2/1 Ongoing 3.7 Review decisions based on costs/benefits Ongoing 2/1 Ongoing 3.8 Incorporate strategic planning into budget Ongoing 2/1 Ongoing process 3.9 Improve monthly financial reports 2005 2/1 Ongoing 4.0 Infrastructure/Capital Equipment 4.2 Identify options for funding Pavement 2004 1/1 2005 Management System 4.21 Develop estimates for public facilities 2006 2/S 2007 maintenance 4.22 Prepare non-annual recurring maintenance 2006 liS 2006 schedule City of Chanhassen - Key Financial Strategies Page 14 Projected Start Projected Activity Date Level/Status Completion Date 4.23 Prepare funding options for major equipment 2004 l/S Ongoing sources 4.24 Construct trail additions Ongoing 1/1 Ongoing 4.25 Expand Public Works Facility 2007 2/A 2008 4.3 Highway 10 1 gap project 2004 1/S 2006 4.4 Highway 101 South Turnback (south of 2005 2/S 2006 Lyman) 5.0 Competitiveness 5.1 Property tax review Annual 1/S Annual 5.11 Prepare five year budget, CIP and debt Annual 2/S Annual forecasts including revenue forecasts 5.12 Prepare alternate revenue analysis 2004 1/S Ongoing 5.13 Identify and fund future staffing requirement Annual 1/S Annual to match growth 5.2 Identify a limited number (1-3) of selected Annual 2/S Annual services for potential competitive pricing on annual basis 5.21 Review budget option analysis as part of Annual 2/S Annual budget process 5.3 EstablishlUpdate Risk Management Policy 2005 2/S 2005 5.4 Evaluate KFS Projections Annual 2/S Annual 6.0 Credit 6.1 Accept/Evaluate Key Financial Strategies Annual 2/1 Annual 6.2 Review professional services contracts As scheduled 2/1 As scheduled 7.0 Enterprise 7.1 Adjust user fees on annual basis to reflect Annual 1/S Annual changes in cost of services. 7.2 Review enterprise funds for cost 2004 2/S Ongoing savings/efficiencies 7.3 Develop utility rate policy 2003 1/1 Completed 7.4 Evaluate/initiate Water Treatment 2003 1/S 2006 Improvements 7.41 Identify funding source for sewer and water 2003 1/1 2005 infrastructure replacement 7.5 Update Storm Water Management Plan Underway 1/1 Ongoing 1. Watershed improvement impacts 2. Bluff Creek improvements 3. Lake Monitoring/Improvement 7.51 NPDES Phase II Compliance Underway 1/A 2007 City of Chanhassen - Key Financial Strategies Page 15 PRIORITY DEFINITIONS: LEVEL 1 Critical to continued operation of city baseline services at present levels. This includes restoration of services identified as baseline. LEVEL 2 Provides opportunity for increased efficiency in baseline level of services. This includes ability to continue to serve existing level of services without staff increases. LEVEL 3 Provides opportunity for expansion of services to meet existing demand as evidenced by Council direction or staff analysis. LEVEL 4 Provides opportunity to increase services that improve quality of life within City. I S A Implementation Study Need Assess Need City of Chanhassen - Key Financial Strategies Page 16 GOAL #1 Community GoalslInitiatives Tar2et Completion Date 2005 STRA TEGY #1.94 Coordination of zip codes/mail postal customers delivery DEFINE GOAL ACCOMPLISHMENT Work with the post office to better serve business and residential ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Meet with postmaster to share JM TG 3/05 concerns 2. Meet with legislators to discuss JM TG,CC 5/05 possible legislation 3. Work with Chamber of Commerce to JM TG, Linda 5/05 discuss business community concerns Walton 4. 5. 6. 7. 8. 9. 10. GOAL #1 Community Goals/Initiati ves STRATEGY #1.32 Conduct communit satisfaction of city services DEFINE GOAL ACCOMPLISHMENT Conduct community survey to assess general ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Share survey options with Council JM TG 1/05 2. Begin survey generation process JM CC, Commissions 2/05 3. Surveys delivered to residents JM 1M 3/05 4. Report to Council JM CC 5/05 5. 6. 7. 8. 9. 10. GOAL #1 Community Goals/Initiatives STRATEGY #1.92 Downtown Park and Ride Ex ansion DEFINE GOAL ACCOMPLISHMENT Work with SW Metro to expand the downtown park and ride station ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Meet with SWMT, Bloomberg 1M TG, Simich, 12/05 Companies to determine appropriate Clayton Johnson steps 2. Discuss funding option with JM City Council,TG, 12/05 legislators KA, Ortman, Hoppe 3. 4. 5. 6. 7. 8. 9. 10. GOAL #1 Community Goals and Initiatives STRATEGY #1.7 Tare:et Completion Date Monitor implementation of Maximus studyÆvaluate new police 2006 contract DEFINE GOAL ACCOMPLISHMENT Monitor new police contract format with Carver County to ensure desired level of police service is being met. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Quarterly Sheriff's Contracting JM TG Quarterl y Committee meetings 2. Monthly report to Council JO TG,JM Monthly 3. Review new hiring process JO TG,JM 5/05 4. Begin negotiations for 2006 contract TG JM,JO 8/05 5. 6. 7. 8. 9. 10. GOAL #4 Infrastructure/Capital Tar2et Completion Date 2006 Equipment STRA TEGY #4.3 Highway 101 Gap Project ~ Gap between W 86th Street and Lake Drive 101 DEFINE GOAL ACCOMPLISHMENT Investigate methods to accelerate construction of Highway This project will include the upgrade of old 10 1. COMMENTS TARGET COMPLETI ON DATE 3/04 KEY INDIVIDUALS PRIMARY RESPONSI BLE PO ACTION STEPS 3/04 3/04 6/04 6/04 PO,MS,TG PO,MS,TG PO,MS,TG PO,MS,TG PO,TG PO PO PO PO Review gap project with MnDot and county, identify scope of project, costs and potential funding sources Review Status of Project with Council Council Consider adoption of resolution for application of Access Management Funds Identify agency funding participation Council Considers Adoption of Memorandum of Understanding with MnDot 1 2 3 4 5 March-Sept 2004 12/04 2/05 PO,MS,TG PO,MS,TG, TH, LH PO,MS,TG PO PO PO Discuss with other governmental agencies and legislative representatives alternative funding sources Governmental agency responsibilities and cost participation identified Preliminary Design Complete - Old and New 101 6 7 8 9. Call Municipal Consent Hearing PO PO 3/05 10. Hold Municipal Consent Hearing PO PO 3/05 11. Stream Realignment and Fish Barrier Work PO PO, MS, LH 5/05 - Final Design Complete 12. Stream Realignment and Fish Barrier Work PO PO, MS,LH 6/05 - Construction Start 13. Stream Realignment and Fish Barrier Work PO PO, MS,LH 9/05 - Substantial Completion 14. Final Design Complete - Old and New 101 PO PO, MS,LH, TG, TH 9/05 15. Construction Start - Old and New 101 PO PO,MS 5/06 16. Substantial Completion - Old and New 101 PO PO,MS 9/06 GOAL #4 Infrastructure/Capi tal letion Date Equipment STRA TEGY #4.4 Highw 101 South Tumback - Lvman Blvd. to Old TH 212 DEFINE GOAL ACCOMPLISHMENT Review Land use along Corridor, study future traffic projections, identify roadway corridor deficiencies, identify future roadway needs, identify future alignment of corridor, identify right-of-way needs, estimate costs for future upgrades, identify potential project hasin lan, look for funding 0 ortunities (grant). COMMENTS TARGET COMPLETIO NDATE 7/05 KEY INDIVIDUA LS PO.KA PRIMARY RESPONSIBLE ACTION STEPS 8/05 8/05 10&11/05 11/05 2/06 On Going KA, TH, TG PO,KA PO,KA PO,KA PO,KA PO PO KA PO PO PO PO PO Authorize study and joint powers agreement for study cost splits (MnDot, County, City) Review land uses along corridor Begin corridor and traffic study Neighborhood meetings Council study update Complete study Look for funding opportunities 1 2 3 4 5 6 7 8 9 10 11 12 13 14. GOAL #1 Community Goals and Initiatives STRA TEGY #1.8 Tar2et Completion Date Highway 212/312 - review design, land use, and vision of 2007 corridor, construction DEFINE GOAL ACCOMPLISHMENT Monitor design and construction of highway to maximize benefit to community and minimize cost to taxpayers ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSI INDIVIDUALS COMPLETION BLE DATE 1. Hold municipal consent hearing PO MS, KA, TH 1/04 Kimley-Horn 2. Follow-up meetings with MnDOT PO MS, KA, TH 2/04 Kimley-Horn 3. Municipal consent given by Council CC PO, MS, TH, 3/04 Kimley- Horn 4. Review land uses along corridor KA KA, TH, TG 5/04 5. Cooperative Agreement for Improvements PO PO 2/05 6. Start Construction PO PO 5/05 7. Loan Agreement PO PO,TG 4/05 8. Inspection and Coordination of project PO PO, Inspector 5/05-11/07 9. 10. GOAL #3 Financial Position STRA TEGY #3.9 Improve monthly financial reports DEFINE GOAL ACCOMPLISHMENT Provide the City Council with better financial reports to ensure proper management of City funds ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Provide check listings in packets GS TG,JM Monthl v 2. Provide monthly budget and revenue GS TG,JM Monthly reports 3. Mid-year revenue and expenditure GS TG,JM 7/05 review 4. 5. 6. 7. 8. 9. 10. GOAL #1 Community Goals and Initiatives STRA TEGY #1.6 Create ulan to deal with rowth continues DEFINE GOAL ACCOMPLISHMENT Determine public safety needs of the community by completing study of current law enforcement arrangement. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Conduct public safety open house JM TG,JO 2/05 2. Consultant completes report Ehlers TG, JM, JO 4/05 3. Report to City Council Ehlers TG, JM, JO 4/05 4. 5. 6. 7. 8. 9. 10. GOAL #1 Community Goals/Initiatives STRA TEGY #1.91 Locate a license center in Chanhassen DEFINE GOAL ACCOMPLISHMENT Work with Carver County to locate a license service center somewhere within the City of Chanhassen. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Assist Carver County in lobbying TG JM 5/05 Legislation needed efforts 2. Assist Carver County in locating JM TG 8/05 adequate location 3. 4. 5. 6. 7. 8. 9. 10. GOAL #6 Credit STRA TEGY #6.2 Review professional is receiving the best service services contract DEFINE GOAL ACCOMPLISHMENT Each of our contracts for professional services should be periodically reviewed to ensure that the City possible. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Bond Attorney GS TG,JM 7/05 2. Bond Consultant GS TG,JM 7/05 3. Attorney TG JM,KA 7/06 4. Banking Services GS TG,JM 7/06 5. Insurance Agent JM TG,GS 7/06 6. Auditor GS TG,JM 7/07 7. 8. 9. 10. GOAL #7 Enterprise STRA TEGY #7.2 Review Ente rise Funds DEFINE GOAL ACCOMPLISHMENT Conduct a comprehensive review of the City's enterprise funds to establish baseline services and evaluate opportunities for efficiencies. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Present enterprise fund information to GS TG, PO, KA 6/05 council in coordination with annual audit report 2. 3. 4. 5. 6. 7. 8. 9. 10. GOAL #5 Competiti veness STRA TEGY #5.3 Update Risk Management Polic DEFINE GOAL ACCOMPLISHMENT Update risk management policy to minimize exposure to accidents and high insurance premiums. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Convene Safety Committee JM JM,CW 9/05 2. Review current practices JM JM,CW 10/05 3. Consult with St. Paul Companies JM JM,CW 10/05 4. Present revised policy to Council JM JM,TG 11/05 5. 6. 7. 8. 9. 10. GOAL #1 Community GoalslInitiati ves Completion Date 2005 Tar~et STRATEGY #1.95 Re-evaluate tree preservation ordinance DEFINE GOAL ACCOMPLISHMENT Evaluate recent amendments to tree preservation ordinances to determine if desired effect has been met. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Compile impacts to developments KA JS,LH 4/05 under new ordinance 2. Report to council on findings KA JS,LH 5/05 3. Proceed with amendments, if KA Planning 7/05 necessary Commission, JS, LH 4. 5. 6. 7. 8. 9. 10. i GOAL #3 Financial Position STRA TEGY #3.12 Tar2et Completion Dat«:. Update Debt Management Plan 2006 - - DEFINE GOAL ACCOMPLISHMENT Evaluate current debt management programs to determine best approach for current and future debt issues. - - - - ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE - - - 1. Review GFOA literature and GS GS 3/05 guidance from the State Auditor's office - - - 2. Prepare language for debt GS GS 4/05 - management policy - - 3. Review with Ehlers and Auditors GS GS, Tautges 5/05 - - Redpath, Ehlers - 4. Present to City Council GS GS 5/05 - 5 - 6 - 7 - 8 - 9 GOAL #3 Financial Position Tar~et Completion Date 2005 STRATEGY #3.11 Update Fund Balance Policies for All Funds policies of the City. into the financial DEFINE GOAL ACCOMPLISHMENT Determine appropriate fund balance levels and incorporate them COMMENTS TARGET COMPLETION DATE 3/05 KEY INDIVIDUALS PRIMARY RESPONSIBLE ACTION STEPS GS.DW GS Review GFOA literature and guidance from the State Auditor's office 1 4/05 GS.DW GS GS Prepare language for fund balance policy Review with Ehlers and Auditors 2 3 5/05 5/05 GS, Tautges Redpath, Ehlers OS GS Present to City Council 4. 5 6 7 8 9 GOAL #3 Financial Position Tar~et Completion Date 2005 STRATEGY #3.13 Update Investment Policy DEFINE GOAL ACCOMPLISHMENT Review current investment policy and determine what changes, if any, need to be made and incorporate into financial policies of the City. COMMENTS PRIMARY KEY TARGET RESPONSIBLE I INDIVIDUALS I COMPLETION DATE - - GS GS 3/05 - - GS GS 4/05 - - GS GS, Tautges 5/05 - Redpath, Ehlers - GS GS 5/05 ACTION STEPS Review GFOA literature and guidance from the State Auditor's office 1 Prepare language for investment policy Review with Ehlers and Auditors 2 3 Present to City Council 4 5 6 7 8 GOAL #1 Community GoalslInitiati ves ~ Tar2et Completion Date 2005 STRA TEGY #1.93 Utilization of City resources for community-wide events triathlons, etc arades DEFINE GOAL ACCOMPLISHMENT Determine level of su ort the City wishes to use for events such as ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Introduce topic to Council at work TH TG, JM, JO, PO 5/05 seSSlOn 2. Discuss options with Park and Rec TH TG, JM, JO, PO 8/05 commission, interested parties 3. Formalize recommendations TH TG, JM, JO, PO 10/05 4. 5. 6. 7. 8. 9. 10. GOAL #7 Enterprise STRA TEGY #7.4 Initiate Water Treatment rogram DEFINE GOAL ACCOMPLISHMENT Begin implementation of water treatment process ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. A ward contract to design consultant PO PO,MS 12/04 to work on preliminary design 2. Preliminary design with options PO PO,MS,KJ,TG 1/05 submitted to City with updated costs 3. Staff, Council and CAP group review PO PO,MS,KJ,TG 2/05 preliminary design and submit comments 4. Final design complete PO PO,MS,KJ,TG 5/05 5. Bids received PO PO,MS 5/05 6. Construction start PO PO,MS 6/05 7. Substantial completion PO PO,MS,KJ 12/06 8. 9. 10. GOAL #1 Community Goals/Initiatives wine/alcoholic beverages DEFINE GOAL ACCOMPLISHMENT Evaluate policy regarding wine/alcohol in City parks and make appropriate changes as needed. ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Park and Rec Commission to evaluate TH Park Commission 3/05 options 2. Report to council on commission TH Park Commission 4/05 findings 3. Implement changes, if necessary CC TH 5/05 4. 5. 6. 7. 8. 9. 10. Target Completion Date 2005 GOAL #2 Local Tax Base STRATEGY #2.1 t Prepare Plan to Accommodate Growth in 2005 MUSA Area - DEFINE GOAL ACCOMPLISHMENT Prepare plans to ensure timely and efficient development of the 2005 MUSA area ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIB INDIVIDUALS COMPLETION LE DATE 1. Prepare Utility Feasibility Study PO PO,KA 2/04 2. Noise Attenuation Study PO BG . 7/04 3. Coordinate Feasibility Study with PO PO,KA 10/04 County and MnDot 4. Meet with Developers in 2005 MUSA KA PO,KA Ongoing 5. Hold Public Hearing for Improvements PO PO 8/04 6. Order Improvements for TH 212 projects PO PO 2/05 7. Order Improvements for rest of project PO PO,KA 2/05 8. Assessment Hearing for TH 212 projects PO PO,KA 6/05 9. Work on Design of MUSA infrastructure PO PO,KA 3/05-09/05 10 Bid project PO PO,KA 10/05 11. Assessment Hearing for rest of project PO PO,KA 11/05 12. Start Construction PO PO 4/06 13. Substantial Construction Complete PO PO 8/07 GOAL #2 Local Tax Base STRA TEGY #2.4 Review of current housin trends if any, changes need to be made. in the City to determine what, DEFINE GOAL ACCOMPLISHMENT Report on the current status of housing trends ACTION STEPS PRIMARY KEY TARGET COMMENTS RESPONSIBLE INDIVIDUALS COMPLETION DATE 1. Report to Council on current trends KA TG 5/05 2. Implement changes, as needed, in KA TG,CC 2008 comprehensive plan review 3. 4. 5. 6. 7. 8. 9. 10.