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MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
ISSUES:
4646 Dakota Street S.E.
Prior Lake. MN 55372-1714
CITY COUNCIL AGENDA REPORT
AUGUST 6, 2007 ~
10A
Frank Boyles, City Manage
CONSIDER APPROVAL OF THE FINAL FORMAT FOR THE 2006 PRIOR
LAKE REPORT ON FINANCIAL GOLD STANDARDS
Introduction
The purpose of this agenda item is to receive final Council approval for the
format of the 2006 Financial Gold Standard report prior to publication and
distribution.
History
Earlier this year, the 2030 Vision and Strategic Plan was updated. Several of the
Vision elements were improved. The "Strong Financial Management" Vision
element was changed by adding a five-year goal and eight two-year objectives
establishing Financial Gold Standards for the City.
Specifically the five-year goal stated:
Five-Year Goal: "Establish 'Financial Performance Gold Standards' to
ensure the financial health of the City. Such criteria support several
purposes: a) to serve as best practice measures to strengthen the City's
financial position and maximize the return of the taxpayer dollars; b) to
communicate the fiscal performance and condition of the City to residents
in a consistent manner; c) to facilitate the setting of policy and financial
direction by the Council with resident input."
Seven of the eight two-year objectives identify each specific standard. The
eighth objective calls for the preparation and publication of a fiscal accountability
scorecard to be communicated to all residents.
Current Circumstances
The Communications Advisory Committee has been meeting to review the
format and content of the scorecard. Attached is a draft of the document which
is recommended for City Council approval. This document would be published
and distributed in the Prior Lake American in August. Copies would be available
on the Website and distributed to 15 locations in Prior Lake.
The issues related to the scorecard relate primarily to its format and method of
distribution:
· The intent is to distribute the document through the Prior Lake American
since that publication is most used by the public to receive City information
and it is a considerably less expensive method of distribution than by mail.
· No one single standard is intended to be most important, but they are
organized in a fashion that the Committee felt to be most logical.
WV./W. cityofpriorlake. com
Phone 952.447.9800 / Fax 952.447.4245
· For each standard the goal is identified whether we have achieved it or not.
· Quotations from our audit are included to underscore the Standards.
· A report card is provided for those who want only a cursory understanding of
the results.
· Readers are referred specifically to Ralph Teschner and Mike Peterson for
additional information.
FINANCIAL
IMPACT:
The cost of printing the report is approximately $1,200 for 10,000 copies.
Distribution is $600. The costs are included in and charged to the
Communication budget. Distribution is slated for the end of August.
ALTERNATIVES:
1. Approve the document as submitted or with amendments.
2. Take no action.
RECOMMENDED Alternative #1.
MOTION:
The 2006 Tax Rate By City
A favorable tax rate provides a stimulus for growth of
dential and commercial property tax base while assuring
property taxpayers that Prior Lake is being frugal.
Shakopee
30.97%
31.30%
New Market
37.51%
Savage
46.49%
New Prague
49.99%
50.68%
Jordan
50.79%
Belle Plalne
20%
30%
40%
50%
54.98%
60%
About Our Grade: In 2006, Prior Lake's tax rank was second to last of the seven Scott County cities. Only
Shakopee had a lower tax rank. Our objective is to be the lowest.
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2. Yearly Bond Rating
Each year the City must borrow money on the
open market for various imporvement projects.
The better the city's bond rating, the lower the
interest costs we pay as taxpayers.
About Our Grade: The City's present Aa3 grade
is in the top three percent of all Minnesota cities.
The city's credit rating last improved in 2005.
Our objective is to further improve to Aa2 to
receive even greater interest savings.
3. General Fund Balance
60%
55%
The City does not
receive over 60% of its
operating income until
June and December. The
General Fund balance pro-
vides adequate funds for
cash flow and offsets rev-
enue shortfalls and unfore-
seen catastrophic events.
50%
45%
40%
35%
30%
25%
2003
2004
2005
2006
About Our Grade: The office of the State Auditor and the City Auditor recommend a 45%
reserve. The City achieved a 43.8% balance.
4. Investment Level
During the course of the year, the City carries cash
balances which are not yet in use. Investing such
funds is good financial stewardship and reduces
reliance upon other sources.
100%
99%
98%
97%
96%
95%
94%
93%
2002
2003
2004
2005
2006
About Our Grade: Every month the Auditor checks to see what proportion of Prior Lake's funds are
invested and found the total to be 98%.
5 P rt T R t. Aggressive but judicious user and develop-
. rope y ax a 10 ment fees minimize City dependence upon
property tax money.
The 40 members of the
Volunteer Fire Department
may receive a lump sum
pension of $118,000
after 20 years of service.
The City is responsible
for paying these retire-
ment benefits. Full
(100%) funding means
the City will not have to
rely upon property taxes
to pay these obligations.
41%
40%
39%
38%
37%
36%
35%
34%
2002
Non Property Tax Revenues
2003
2004
2005
2006
6. Fire Relief Ass'n Pension
125%
120%
Fire Relief Funding
115%
110%
105%
100%
95%
90%
2002
2003
2004
2005
2006
About Our Grade: For
2006, Prior Lake's ratio
was 36% non-tax to tax
revenue. Over the last
four years, the non-tax
portion has varied from
36% to 40%.
About Our Grade: Prior Lake is over 100% funded for the present pension amounts for the firefighters
presently employed.
State law provides that budget expenditures must
be balanced with revenues. Prudent budgeting
means spending only what
is essential to get the job
done.
7. Budget Outcome
104%
102%
100%
98%
96%
94%
92%
90%
2002
2003
2004
2005
2006
About Our Grade: In
2004 through 2006, Prior
Lake's expenditure level
has been between 95%
and 98%.
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OVERALL REPORT CARD
STANDARD
OBJECTIVE
GRADE
2. Bond Rating
3. General Fund Balance
4. Inn~stment Level
5. Property Tax Ratio
6. Fire Relief Ass'n Pension
7. Budget Outcome
Attain Aa2
Build Savings Account
Keep 97'1() Invested
Keep at 60/40
100% Funded
Attain 98%
A-
B+
A
B
A
A
Taxes Per Capita
How does the City of Prior lake stack up against other communities regarding its
Taxes Per Capita?
In 2006, the average Prior Lake tax per capita was $870. Our property taxes ranked
45th of 113 metropolitan communities. This is a very good showing for a growth commu-
nity such as Prior Lake because of the higher cost of new infrastructure that typically
challenge growing cities.
For more information about the City of Prior Lake's Financial
Gold Standards Report Card, contact Financial Director
Ralph Teschner, City Of Prior Lake, 4646 Dakota St. SE,
(952) 447-9841, or rteschner@cityofpriorlake.com.
This Report Card was produced by the City of Prior Lake
and is also available at www.cityofpriorlake.com.
For information about the City of Prior Lake, contact
communications coordinator Mike Peterson at (952) 447-
9804, mtpeterson@cityofpriorlake.com.
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