Minutes - Council Work Session - 11/12/2014

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balance can offset the General and EDA. She stated the effect on the property tax and overall levy are detailed in the staff report. Finance Director Lund described the intended use of CIP equipment certificates and anticipated bonding. She stated in 2015 the tax capacity rate is estimated at 42.2% and in 2019, the tax capacity rate is estimated at a little over 46 %. City Administrator Ulrich thanked Finance Director Lund for preparing this documentation, which will be useful when making presentations to rating agencies. He stated it is an estimate, but he thinks it is conservative and a fairly realistic snapshot of what the next five years will look like. It was noted the priorities were towards basic services, streets, police, and inspections. Councilmember Riley noted that on page 2 of the assumptions, the revenue increases $2.8 million and increases $4 million so over five years with a deficit of $1.2 million, which will be offset by an increase in rates and other assumptions. He stated he knows this is a model but would like to keep debt below the rate of growth. Finance Director Lund stated the impact is the road debt. Councilmember Riley asked staff to break out those numbers so it can be understood that of the $4 million debt, a majority is road reconstruction. He stated with the debt issues and bonds, he would ask whether it makes sense to combine bond issues to save issuance costs. Finance Director Lund stated staff has to bring forward a five -year plan for road reconstruction and at that time, the Council can decide how much they want to bond. She stated she will show that information when bonding is considered. City Administrator Ulrich asked how much of the five -year budget should be presented to the public. Mayor Strommen stated she does not want to confuse that issue with what is required to be covered during Truth in Taxation but thinks it can be indicated that the City prepares a five -year plan as part of the effort to manage the budget and smooth out expenses. Councilmember Kuzma agreed. City Administrator Ulrich noted the five -year plan also contains a lot of assumptions. Finance Director Lund agreed it would create confusion to present the five -year plan because the Truth in Taxation requirement is to address the numbers shown on the notice the resident receives. Councilmember Johns supported mentioning that a five -year plan is created and why. City Council Work Session / November 12, 2014 Page 4 of 9