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Special City Council Strategic Planning Meeting Saturday, February 7, 2009 Page 21 Discussion included how this decision-making would change the face of the community; impacts to interdepartmental coordination and community events; how to pursue productive opportunities for enhancing or creating intergovernmental cooperation; need for re-engaging as a City Council and staff in a similar setting as today, not just reacting at a formal City Council meeting; additional education outside meeting formats for Councilmembers as they consider this decision-making and budgeting process; whether Council Worksessions are indicated; and additional opportunities for constructive interaction and discussion. Recess Mayor Klausing briefly recessed the meeting at approximately 12:00 p.m. for lunch and reconvened at approximately 12:25 p.m. 7. Long Range Financial Modeling City Manager Malinen briefly reviewed the previously-distributed ten (10) year Capital Improvement Plan; and staffls preparation of a draft 2010-2019 Financial Plan for the City, provided at this meeting for the City Council's first review. City Manager Malinen noted that obviously, adjustments would be needed along the way, but that this provided a more long-term perspective based on known assumptions; identified challenges; recognized changes in expense/revenue cycles; and highlighted or re-emphasized some projected needs. City Manager Malinen summarized enterprise operations and general purpose operations; noting that overall the plan represented expenditures of approximately $100,000 million, with projected revenues of $60 million; creating the reality of an unsustainable operation. Finance Director Miller reviewed in more detail the various components contained in the draft 2010-2019 Financial Plan; areas of focus requiring the most immediate attention; assumptions and variables based on current trends, projected revenue growth (fee-based and tax based); costs for labor, materials, supplies, other labor, and equipment; and historic factors. Mr. Miller noted that, factoring in all the assumptions and historical trends, in order to close the gap in revenue and expenditures, and solely by increasing fees or property taxes, impacts to property taxpayers would see property taxes increase annually by 17% over that ten year period. Mr. Miller noted that increases on a typical single-family home would be $192 annually over that ten year period. Discussion among Councilmembers and staff included other inflationary assumptions; the ten year plan for sustainability, followed by the potential for future inflationary tax and fee increases; need to consider various options or corrections to "business as usual;" comparisons of current budget trends and situations versus the budgeting for outcomes approach and changes to the business model, operating decisions and assumptions; and recognizing that the budgeting approach will initially provide more workload for directors and their departments as they begin the process.