Agenda - Council Work Session - 04/29/2003

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Hoisington Koegler Group Inc. To** From: Subject: Date: City of Ramsey Rusty Fifield Status Report - Fiscal Planning Analysis April 22, 2003 Hoisington Koegler Group has been working with Northland Securities and City Staff to develop a computer model that will assist the City of Ramsey in understanding the financial implications of alternative forms of growth. At the outset, it must be noted that this exercise is not intended to produce accurate forecasts of revenues and expenditures. Local government finance depends on too many unpredictable variables (i.e. - legislative changes and local policy decisions) to create meaningful forecasts. Instead, the focus of this exercise is to prepare a model that allows the City to compare the financial implications of changes in the form and pace of development. This information will enable the City to do a better job of combining physical and fiscal planning for the future. There are tl-n'ee basic elements of this financial analysis: · Forecasts of future growth · Linkages between growth and municipal revenues and expenditures · Projections of the General Fund and tax rates. Within each of these elements are a series of other components that provide sufficient detail to produce useful information. The following table explains each component of the model and the current status of development. i ' Projected housing This component projects the annual number Under review by staffto development and type of new housing units by area or determine if assumptions are subdivision. Housing growth produces reasonable and any uncounted property valuation. This growth also creates source of housing growth. population and the basis for changes in : expenditures and revenues. .... -~"'""-~ ...... '~'o-~i;~- ......... The anfilysis uses housing't~it prc~j'ect~ons Under revieTM by staff to projections and assumptions o£average household size determine if assumptions are to project population. Population projected reasonable. on assumption of persons per household: · SF - 3.33 persons per household · MF - 3.15 persons per household · HD - 2.49 persons per household 3 Job projectit~ns'' Job growth based on'assumptions of new Under review'by staffto ...... jobs created by new commercial and determine if assumptions are industrial growth. These projections serve reasonable, in particular, as the means of accounting for the financial focusing on: implications of non-residential growth. 123 North Third Street, Suite 100, Minneapolis, MN 55401-1659 Ph (612) 338-0800 Fx (612) 338-6838 www.hkgi.com Direct (612) 252-7133 Emailrusty@hkgi.com -21-