HomeMy WebLinkAbout01(A) - Work Session Strategic Planning and Ten-Year Finance Plan Development
City of Prior Lake | 4646 Dakota Street SE | Prior Lake MN 55372
CITY COUNCIL AGENDA REPORT
ITEM: 1A
MEETING DATE: October 16, 2023
PREPARED BY: Cathy Erickson, Finance Director
PRESENTED BY: Cathy Erickson
AGENDA ITEM: Work Session Strategic Planning and Ten-Year Finance Plan
Development
RECOMMENDED ACTION:
As part of its strategic planning process, the City Council and staff identified initiatives to help the
city maintain financial stability including develop infrastructure funding scenarios and establish a
financial plan that reflects infrastructure needs. The city engaged Northland to assist the city with
a study for development of the scenarios for funding future planned capital improvements,
including related debt service on planned bond issuance to support the planned capital
improvements. The analysis and scenario development also included the city’s plans for funding
general operations. Tammy Omdal, of Northland Public Finance, will present the study results.
Staff is looking for City Council feedback and direction on the city finance plan scenarios detailed
in the study.
Attachments
1. Prior Lake Long Term Financial Plan Scenario Report
2. Long Range Financial Planning Study PowerPoint Presentation
150 South Fifth Street, Suite 3300, Minneapolis, MN 55402
Main: (612) 851-5900 / Direct: (612) 851-4964 / Email: tomdal@northlandsecurities.com
Member FINRA and SIPC
City of Prior Lake, MN
Strategic Planning and Finance Plan Development
Scenario Review
September 20, 2023
Prior Lake Finance Plan September 20, 2023
Scenarios Table of Contents
TABLE OF CONTENTS
Page
INTRODUCTION AND SUMMARY 1
STUDY APPROACH 1
SCENARIOS 2
Scenario A 2
Scenario B 2
PRESENTATION AND COMPARISON OF SCENARIOS 3
EXHIBIT A – TABLE AND CHARTS 4
Prior Lake Finance Plan September 20, 2023
Scenarios Page 1
INTRODUCTION AND SUMMARY
As part of its strategic planning process, the City of Prior Lake identified the following three initiatives to
help the city maintain financial stability:
A.Develop infrastructure funding scenarios
B.Establish Financial Plan that reflects infrastructure needs
C.Develop strategy to increase bond rating
The third initiative above was accomplished on June 12, 2023, when S&P Global raised the city’s long-
term rating to ‘AAA’ from ‘AA+’. The rating reflects S&P’s opinion that Prior Lake will continue to maintain
extremely strong finances despite growth pressures and costs associated with expansion of fire services.
S&P noted that Prior Lake's fiscal 2022 results were in line with historically steady financial performance
and robust reserves.
To further the initiatives above, the city engaged Northland to assist the city with a study for development
of the scenarios for funding future planned capital improvements, including related debt service on
planned bond issuance to support the planned capital improvements. The analysis and scenario
development also included the city’s plans for funding general operations. The objectives of the study
were as follows:
Revenue Sufficiency - Develop and populate the city’s forecasting models to determine the level
of revenue needed to fund planned general government operations and services, capital
improvements, and debt service while maintaining adequate reserves for future services and
capital needs of the City.
Levy and Rate Calculations - Model projected future annual City tax levy and tax rate changes, and
utility rate changes, need to provide revenue sufficiency.
The study includes planned future capital improvements for years 2023-2033. Estimates were made by
the city for capital improvement project costs and the timing of projects. While the specific timing and
costs of future improvements is uncertain, awareness of the projects and the funding required for each
project are important when considering tax levy and utility rates and level of reserves.
Future development of property within the city will provide increased revenue from taxes and charges for
services, including for the utility funds. The rate of future development and addition of new taxpayers and
utility customers is a significant variable for the study. Future development will impact the projected
service demands and revenues included in the study.
STUDY APPROACH
The following steps were taken as part of the study:
•City provided historical financial data along with current budget plans and capital improvement
plans.
•City provided the assumptions for future housing units and commercial-industrial development
to be constructed in the city.
•City staff offered input and feedback on the assumptions for the study and multiple scenarios
for tax levy, tax rate, and utility rates, among other assumptions. Scenarios reviewed included
the following:
Prior Lake Finance Plan September 20, 2023
Scenarios Page 2
o Scenario for pay-go strategy for street improvements was reviewed. This strategy was
not moved forward because the pay-go strategy would require the city to defer street
improvement projects for the next 4-5 years. The “pause” on projects would be
necessary to allow time for amortization of existing debt while incrementally increasing
the tax levy for street improvements to achieve a pay-go strategy long-term. The pay-go
strategy that was reviewed would require an average annual increase in the city’s tax
rate of approximately 7.0% over the next five years.
•City staff revisited preliminary capital improvement plans and other assumptions with Northland
to narrow the scenarios for the study to two scenarios for presentation to the city council.
SCENARIOS
There are two scenarios presented for review and discussion with the city council, as outlined below.
Scenario A
Scenario A is presented as the “base” scenario. The results and key assumptions and parameters
for this scenario are as follows:
RESULTS
1.Total average annual change in city tax levy for the planning period (10 years) does not
exceed 8.8%. Five-year annual change is 6.8%.
2.Total average annual change in city tax rate for the planning period (10 years) does not
exceed 2.8%. Five-year average annual change is 5.1%.
City policy objective is to maintain or improve property tax rank when compared
to a broader list of metro area cities. The city also has a policy objective to
Maintain a level of property taxes on a per household basis, which is to consider
the cost of inflation and community growth. The goal is to have a tax levy per
household that is at or below the rate of inflation and growth over time.
3.Total average annual change in city utility bill for all users (high volume, medium volume,
and low volume) over the planning period (10 years) does not exceed 3.6%.
4.Ending cash balances for the utility funds (water, sewer, and stormwater) are projected
to be sufficient to cover at a minimum the following: three months of operating expense;
following year planned pay-go capital improvements; and following year debt service.
Cash balance is projected to be available above these minimum amounts for future capital
improvements.
5.All current city fund balance and reserve policy parameters are projected to be met.
City policy is to maintain a 40 to 50 percent General Fund reserve balance. The
policy establishes that the City will strive to maintain an unrestricted General Fund
balance (which includes committed, assigned, and unassigned classifications)
within a range from 40 to 50 percent of projected expenditures for the subsequent
year.
ASSUMPTIONS
1.City will issue debt as needed to spread the financial impact of capital improvements over
multiple years and future taxpayers and utility customers to achieve the parameters for
average annual change in city tax rate and city utility bills, as listed in items 1 and 2 above.
Prior Lake Finance Plan September 20, 2023
Scenarios Page 3
Total approximate bonds issued between years 2024 and 2028 is $41.15 million; and
between 2029-2033 $51.61 million.
2.City will structure amortization of debt to achieve the parameters for average annual
change in city tax rate and city utility bills, as listed in items 1 and 2 above.
City has historically strived to structure debt to be repaid over a term of ten years.
Scenario A assumes this term is extended to 15-25 years for future debt issuance
depending on the project. All debt is assumed to be structured to be repaid within
the useful life of the capital asset.
3.City will implement its plans for personnel increases, including positions and wage
adjustments as planned and salary and wages, not accounting for changes in personnel
(new FTE), are assumed to increase by approximately 4.0% annually.
4.Governmental funds non-property tax sources of revenue are assumed to increase by an
average of approximately 1.5% annually.
5.Governmental funds non-personnel operating expenses, current expenses, are assumed
to increase by an average of approximately 4.0% annually.
Scenario B
Scenario B is based on the same assumptions as Scenario A except Scenario B includes future
issuance of debt for park and recreation improvements based on the following:
Park Referendum providing for issuance of $60 million of bonds, including $20 million in 2026,
$20 million in 2028, and $20 million in 2030, to finance park and recreation improvements.
Results
Because Scenario B includes funding for park and trail improvements, different than Scenario
A, Scenario B does not achieve the same results as Scenario A. The results for Scenario B are
as follows:
1.Total average annual change in city tax levy for the planning period (10 years) does not
exceed 8.2%. Five-year annual change is 9.9%.
2.Total average annual change in city tax rate for the planning period (10 years) does not
exceed 4.3%. Five-year average annual change is 6.3%.
3.Total average annual change in city utility bill for all users (high volume, medium volume,
and low volume) over the planning period (10 years) does not exceed 3.6%.
4.Ending cash balances for the utility funds (water, sewer, and stormwater) are projected
to be sufficient to cover at a minimum the following: three months of operating expense;
following year planned pay-go capital improvements; and following year debt service.
Cash balance is projected to be available above these minimum amounts for future capital
improvements.
5.All current city fund balance and reserve policy parameters are projected to be met.
ASSUMPTIONS
Same assumptions as Scenario A, except Scenario B includes project costs and bonding for
park and recreation improvements, as noted above.
Prior Lake Finance Plan September 20, 2023
Scenarios Page 4
1.Park referendum bonds are structured with relatively level annual debt service over term
of 25 years. First debt payment date is estimated to be February 1, 2027.
2.Total approximate bonds issued between years 2024 and 2028 is $81.15 million; and
between 2029-2033 $71.61 million.
PRESENTATION AND COMPARISON OF SCENARIOS
Exhibit A includes charts to graphically present the results for each of the two scenarios based on the
assumptions outlined above. The tables and charts include the following information that is intended to
summarize the data in the more detailed information included in the other exhibits that follow:
Table 1: City Tax Levy – Tax Year 2023 and Estimated Tax Years 2024-2033 – Scenario A and Scenario B
Chart 2: City Tax Levy – Annual Percent Change for Scenario A and Scenario B
Chart 3: City Tax Levy – Average Annual Percent Increase – Five-Year and Ten-Year Averages for Scenario
A and Scenario B
Chart 4: City Tax Rate for Scenario A and Scenario B and 7-County Metro Area Average Tax Capacity Rate
Chart 5: City Tax Rate – Annual Percent Change
Chart 6: City Tax Rate – Average Annual Percent Increase – Five-Year and Ten-Year Averages for Scenario
A and Scenario B
Chart 7: Example City Tax Payable – From Residential Homestead Property (Average Value) for Years
2023, Estimated 2028, and Estimated 2033
Chart 8: Example City Bi-Monthly Utility Bill for Residential Customer
Chart 9: Planned Capital Project Spending by Source of Funds (2023-2033)
Chart 10: Issuance of Bonds to Finance Capital Improvements – Principal (Par) Amount of Bond Issuance
Chart 11: Total Principal (Par) Amount of Bonds Outstanding by Year for Scenario A and Scenario B
Chart 12: Total Annual Debt Service for Years 2023-2033 for Scenario A and Scenario B
Chart 13: Amortization of Bonds – Percent of Principal Repaid Over a Period of Time
Chart 14A: Prior Lake G.O. Debt Per Capita - Tax Supported and Revenue Debt
Chart 14B: G.O. Debt Per Capita - Tax Supported and Revenue Debt Compared to Other Cities
Chart 15: General Fund Ending Fund Balance
Chart 16: City Tax Levy – Scenario A – Ten Year Average Annual Levy by Funds
Chart 17: City Tax Levy – Scenario B – Ten Year Average Annual Levy by Funds
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 1
Chart 2
Table 1
City Property Tax Levy 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
SCENARIO A
Tax Levies - City 16,863,956 18,857,710 20,437,985 22,296,963 24,086,202 25,719,669 27,011,704 28,449,774 29,895,517 31,100,072 32,500,176
Total % Change in Tax Levies 13.2%11.8%8.4%9.1%8.0%6.8%5.0%5.3%5.1%4.0%4.5%
SCENARIO B
Tax Levies - City 16,863,956 18,857,710 20,437,985 22,296,963 25,308,869 27,032,169 29,921,720 31,488,474 34,147,644 35,530,652 37,104,846
Total % Change in Tax Levies 13.2%11.8%8.4%9.1%13.5%6.8%10.7%5.2%8.4%4.1%4.4%
Ten Year Planning Period
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
City Tax Levy
Annual Percent Change
Scenario A Scenario B
Scenario B assumes $60 million in Park and Recreation
Bonds, issued between 2026-2030. With $20 million
issued in years 2026, 2028, and 2030. The increase in
tax levy for debt service on the bonds issued occurs in
the year following the issuance of the bonds.
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 2
Chart 3
Chart 4
0.281
0.304
0.315
0.334
0.350
0.361
0.365
0.367
0.369
0.372
0.370
0.281
0.304
0.315
0.334 0.368
0.380
0.406
0.408
0.424
0.427
0.424
0.000
0.050
0.100
0.150
0.200
0.250
0.300
0.350
0.400
0.450
0.500
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Tax Rate
City Tax Rate
Scenario A
Scenario B
Seven County Metro Area Average Tax Capacity Rate Pay 2022 is 0.41190
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 3
Chart 5
Chart 6
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
City Tax Rate
Annual Percent Change
Scenario A Scenario B
Scenario B assumes $60 million in Park and Recreation
Bonds, issued between 2026-2030. With $20 million
issued in years 2026, 2028, and 2030. The increase in
tax rate for debt service on the bonds issued occurs in
the year following the issuance of the bonds.
5.1%
2.8%
6.3%
4.3%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Five year average annual increase (2024 to 2028)Ten year average annual increase (2024 to 2033)
City Tax Rate
Average Annual Percent Increase
Scenario A Scenario B
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 4
Chart 7
Chart 8
$1,428 $1,428
$1,826 $1,923$1,873
$2,143
$0
$500
$1,000
$1,500
$2,000
$2,500
Scenario A Scenario B
City Tax Payable
From Residential Homestead Property Value with Current Value of $500,000
Pay 2023 City Taxes Pay 2028 City Taxes Pay 2033 City Taxes
Note: Value of residential home held constant to isolate and compare between scenarios the impact
of the increase in city levy. Increase in taxable market value of property may also result in an increase
in taxes payable due to higher valuation of property.
$197
$238
$281
$0
$50
$100
$150
$200
$250
$300
City Bi-Monthly Utility Bill
For Scenario A and Scenario B
Water, Sewer, and Stormwater Services for example residential customer with 18,000 gallons
of water usage, 12,000 gallons of sewer billed, and 1 stormwater unit billed
Year 2023 Year 2028 Year 2033
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 5
Chart 9
Chart 10
$0
$10
$20
$30
$40
$50
$60
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Millions
Total Planned Capital Improvement Spending by Source of Funds
Paid from Reserves / Current Revenues
Paid from Bonding (not including Parks)
Paid from Bonding for Parks
Highlights for major projects: Year 2025 includes $4.0 million for equipment, including fire truck. Year 2028, 2031,
and 2033 include bonding for major sanitary sewer improvements; Year 2032 includes bonding for maintenance
center project.
$41
$52
$81
$72
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
Between years 2024 to 2028 Between years 2029 to 2033
Millions
Issuance of Bonds to Finance Capital Improvements
Principal (Par) Amount of Bond Issuance
Scenario A Scenario B
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 6
Chart 11
Chart 12
$0.0
$20.0
$40.0
$60.0
$80.0
$100.0
$120.0
$140.0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Millions
Total Principal (Par) Amount of Bonds Outstanding
Estimated Based on Planned Capital Improvements and Bonding
Scenario A - Bonds Outstanding Scenario B - Bonds Outstanding for Park Bonds
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Millions
Total Debt Service (Principal and Interest Paid)
Estimated Based on Planned Capital Improvements and Bonding
Scenario A - Bonds Outstanding Scenario B - Bonds Outstanding for Park Bonds
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 7
Chart 13
Chart 14A
52.6%
70.1%
69.1%
86.4%
0.0%20.0%40.0%60.0%80.0%100.0%
Percent of debt amortized
within five years
Percent of debt amortized
within ten years
Amortization of Bonds
Percent of Principal Repaid Over a Period of Time
Scenario A Scenario B
Note: As of year-end 2023, it is estimated that 65.6% of the City's debt will be amortized in five
years and 99.3% in ten years, which is considered by S&P Global (rating report dated June 12,
2023) to be rapid amortizaton of debt.
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
Current Scenario A: Estimated Year
2033
Scenario B: Estimated Year
2033
Debt Per Capita
Prior Lake G.O. Debt Per Capita
Includes Tax Supported and Revenue Debt
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 8
Chart 14B
Chart 15
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Rosemount
Champlin
Farmington
Woodbury
Lino Lakes
Cottage Grove
Chanhassen
White Bear Lake
Prior Lake
Savage
Andover
Shoreview
Forest Lake
Lakeville
Victoria
Chaska
Lake Elmo
PL Scenario A Year 2033
PL Scenario B Year 2033
Debt Per Capita
G.O. Debt Per Capita as of Year-End 2022 Continuing Disclosure Reporting
Includes Tax Supported and Revenue Debt
G.O. Debt Including Revenue Supported Debt Per Capita
Average of Comparative Cities Current Data
Note: Comparison of the Prior Lake (PL) Scenario A and
Scenario B to other cities, shown at the right, doesn't
account for changes that other cities may experience in debt
per capita over the next decade. PL Scenarios take into
account projected population growth.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
2022 2023 2024 2025 2026 2027 2028 2029
Total Ending Fund Balance as % of Expense
Ending General Fund Balance
Millions
General fund
Ending Fund Balance
*Scenario A and B have same results for the General Fund - Ending Fund Balance as shown in this
chart
Ending Fund Balance Ending Fund Balance as % of Expense Fund Balance Target
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 9
Chart 16
Chart 17
General Fund
19,535,338
74.4%
Debt Service Fund
4,012,760
15.3%
All Other Funds
2,709,057
10.3%
Scenario A
City Tax Levy
Ten Year Average Annual Levy by Fund (2024-2033)
General Fund
20,173,690
69.4%
Debt Service Fund
6,189,886
21.3%
All Other Funds
2,709,057
9.3%
Scenario B
City Tax Levy
Ten Year Average Annual Levy by Fund (2024-2033)
EXHIBIT A
Prior Lake Finance Plan, Scenarios Exhibit A Page 10
10-Year Financial Plan Study
October 16, 2023
PriorLakeMN.gov
Agenda
2
Introduction – City Manager
Plan Assumptions – Finance Director
Finance Plan Scenarios – Tammy Omdal, Northland Public Finance
Executive Summary – Study Results
Future Challenges
Next Steps
PriorLakeMN.gov
Strategic Plan Initiatives
3
Strategic Priorities:
Financial Sustainability
Stable & Sustainable Infrastructure
High Quality Parks & Trails
Three initiatives to help the city maintain financial stability:
1.Develop infrastructure funding scenarios
2.Establish Financial Plan that reflects infrastructure needs
3.Develop strategy to increase bond rating
PriorLakeMN.gov
Study Assumptions
Ten -Year Planning Period
4
•Financial plan assumes an average annual growth in tax capacity for 2024-2033 of approximately
4.3% per year.
•City provided assumptions for future housing units and commercial/industrial growth.
- Building permits of 80/year for 2024 & 2025. Ramps up to 125/year between 2026- 2033.
- Apartment units annual average of 35 units
- New commercial square footage annual average of 50,000
•City will implement its personnel plans for new staff (FTEs). Salary and wages are assumed to
increase by approximately 4.0% annually.
•Governmental funds current expenses are assumed to increase by an average of approximately
4.1% annually
PriorLakeMN.gov
•City provided current budget plans
and capital improvement plans.
5
Study Assumptions
Ten -Year Planning Period
Capital Projects
10-YEAR
AVERAGE
2024-2033
Capital Park Fund F225 (280,000)
Pavement Management F450/F501 (7,502,500)
Facilities Mgmt Fund F440 (2,833,380)
Revolving Equip Fund F410 (1,726,940)
Revolving Park Equip Fund F430 (286,550)
Trunk Fund F502 (599,050)
Capital Projects Grand Total (13,228,420)
PriorLakeMN.gov
Property Tax Rate History
6
PriorLakeMN.gov
Study Parameters:
Scenario A is presented as the “base” scenario.
•Achieve average annual change in city tax rate of 3% and average annual change in city utility bill of 3.5%.
•City will issue debt and structure amortization of debt to achieve the parameters for average annual change in city tax rate
and city utility bills, as listed above. This will spread the financial impact of capital improvements over multiple years and
future taxpayers and utility customers.
Scenario B is based on the same assumptions as Scenario A except Scenario B includes future
issuance of debt for park and recreation improvements based on the following:
•Park Referendum providing for issuance of $60 million of bonds, including $20 million in 2026, $20M in 2028 and $20
million in 2030, to finance park and recreation improvements.
7
Study Objectives for Ten-Year Planning
Period
Study
Objectives:
Revenue Sufficiency
Levy and Rate
Calculations
Park Improvements Proposed
2026 2028 2030
Spring Lake Park $20M
Lakefront Park $20M
Neighborhood Parks and Trails $20M
Total $20M $20M $20M
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
8
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
9
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
10
Note: Comparison of the
Prior Lake (PL) Scenario A
and Scenario B to 2022
metro area average tax rate,
shown at the right, doesn't
account for changes that
other cities may experience
in debt per capita over the
next decade. PL Scenarios
take into account projected
population growth.
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
11
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
12
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
13
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
14
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
15
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
16
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
17
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
18
•City will issue debt and structure
amortization of debt to achieve the
parameters for average annual change
in city tax rate and city utility bills.
•For Scenario A, this changes the % of
debt amortized over 10 years to 86%
•For Scenario B, this changes the % of
debt amortized over 10 years to 70%
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
19
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
20
To provide some context, we have
included comp cities data. This data
is as of 2022.
As of 2022, Prior Lake is at a
debt/capita of $1,332.
Other cities information does not
account for changes other cities
may experience in debt per capita
over the next decade.
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
21
PriorLakeMN.gov
Results of Scenario A and Scenario B
Assumptions
22
PriorLakeMN.gov
Executive Summary
UNDER BOTH SCENARIOS:
All fund balance and reserve policy parameters met
Utility Funds ending cash balances projected to meet reserve policy
parameters
The annual average change in the utility rates is 3.6% for both scenarios
Total bond issuance in years 2029-2033 is the same
The first five years of the plan reflect a higher annual average tax rate
change than the 10-year average
23
PriorLakeMN.gov
Executive Summary
SCENARIO A
24
10-year average annual change does not
exceed:
•Tax levy – 8%
•Tax rate – 2.8%
•Utility bill – 3.6%
Total bond issuance:
2024-2028: $41.15M
2029-2033: $51.61M
PriorLakeMN.gov 25
Executive Summary
SCENARIO B includes parks and trails funding
Park referendum bonds: $60M
Total bond issuance:
2024-2028: $101.15M
2029-2033: $51.61M
10-year average annual change does not
exceed:
•Tax levy – 8.2%
•Tax rate – 4.3%
•Utility bill – 3.6%
PriorLakeMN.gov
Future Challenges
26
General Fund:
•Funding for additional staff to maintain city services
•Unfunded mandates (ex. Future budget impacts for earned sick and safe time for
seasonal staff/Fire POC/Council and 2026 financial impact for paid family medical
leave)
•Reduction in the rate of development
•Wages/Healthcare and commodities – Market conditions and inflation impacts
Capital Project Funding:
•Funding for pavement management plan
•Funding for parks plan
•Funding for future facility improvements, including Maintenance Center expansion in
2032
•Exposure for limited ability to assess for street projects
PriorLakeMN.gov
Ten -Year City
Financial Plan
27
October 16, 2023 – Financial Planning Work Session
January 2024 – Request Council Approval of Master Park Plan
April 2024 –Council Meeting: Present Ten-Year Plan to Council for
approval
Summer 2024 – Budget and CIP Work Sessions
Next Steps
Jan/Feb 2024 – Financial Planning Work Session follow-up – Council
direction on implementation of Scenario B (Scenario A plus $60M Park
Referendum)
Council decision – Park Referendum on November 2025 Ballot
PriorLakeMN.gov
Council Discussion
28
Is there any additional information the council needs prior to
the next work session to help inform your decision regarding:
•Scenario B of the 10-year financial plan
•Park Referendum approval