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<br /> The profiles are based on demographic and are the aging of the population,energy costs, (Note:The actual outcome of the 2010 session
<br /> geographical characteristics and are as follows: and falling property values. was a much larger cut to the reimbursement
<br /> • Minnesota average city:profile built for payments for2010 of545 million and then a
<br /> city with average population(exduding Assumptions Used in Projections reiurn to ihe post-ratified unallotmentlevel
<br /> Minneapolis and St Paul) The analysis was performed in January and of roughly S56 million.]
<br /> • Minnesota central city:average of February of 2010.The analysis is static,mean- . The projections assume that cities maintain
<br /> M nneapolis and St.Paul ing that the starting point for the projection is sufficient reserves to comply with the State
<br /> • Greater Minnesota regional cities:cities out- a snapshot in time in terms of input data avail- Auditor's position on fund balances.Those
<br /> side the seven-country metro area that serve able.In order to project out into the future, reserves serve to meet cash flow needs be-
<br /> as regional hubs(e.g.,Albert Lea,Mankato) several assumptions were used. The key as- tween cities'two main influxes of revenue
<br /> • Greater Minnesota cities under 1,000 sumptions were as follows: each year and in case of unexpected expen-
<br /> • Greater Minnesota cities greater than 2,500 • Property tax rates remain flat,meaning any ditures such as dealing with natural disasters.
<br /> (excluding regionol centers)(e.g.,Olivia, growth in property tax revenues comes The assumptions used in assembling the
<br /> Two Harbors) from tax base increases.This assumption projections reflect information available at the
<br /> • Exurban fringe cities:cities essentially part removes policy decisions that cannot be time.For example,the final outcome for city
<br /> of inetropolitan area but lying just outside predicted regarding the size of a city levy LGA and MVHC payments was not yet known
<br /> seven-county boundaries(e.g.,Elk River, from the analysis. during the study period.Thus,the assumption
<br /> Rockford) - Inflation was set at 2 percent as suggested that 2010 LGA would be reduced by$50 mil-
<br /> • Metro slow growth cities:14 cities that in the Minnesota BudgetTrends Study lion following the Governor's unallotment
<br /> have not grown over last 28 years(e.g., Commission final report.That commission reductions represents the best possible guess
<br /> Edina,WestSt.Paul) examined state budget trends in order to at the time.Since the analysis was performed,
<br /> • Metro fast growth cities:73 metro cities that project surpluses or deficits in the future. several key events have occurred that represent
<br /> have seen population growth over 100 percent • LGA was reduced by$50 million for 2010 changes in cities'financial picture.An impor-
<br /> in last 28 years(e.g.,Apple Valley,Lakeville) from the$434 million remaining after the tant one is that the large reduction($50 mil-
<br /> To better understand what these projections $102 million cut the Governor made in the lion)to LGA that is assumed for 2010 did not
<br /> might mean for individual cities in terms of now-ratified unallotments.LGA is then held occur.Instead of a 550 million decrease from
<br /> the kinds of decisions local leaders would face, flat through 2025.fNote:The 550 million the post-ratified unallotment level of$434 mil-
<br /> interviews were conducted with city officials reduction is slighily worse than whatactually lion,$7.8 million was cut.On the other hand,a
<br /> representing each profile city.Cities belonging transpired in the 20101egislaiivesession(an much larger reduction from MVHC reimburse-
<br /> to each profile were randomly selected as in- addiTional cut of$7.8 million).There areseri- ment than was included in the projections did
<br /> terview candidates.Researchers contacted the ous concerns,however,aboutThe future avail- occur.The 2010 legislature reduced the reim-
<br /> chief administrative officer of as many of them abilityofLGAgiven thestate's ongoing budget bursement payments by almost$45 million.
<br /> as possible during the study period.A total of deficit problems.] If those two changes were reflected in a revised
<br /> 36 interviews was conducted.City officials de- • MVHC reimbursements were reduced 1 1.5 projection,the 2010 deficit amount would
<br /> scribed potential cuts to parks,libraries,hous- percent in 2010.This reduction is in addition grow for cities overall and for each of the dif-
<br /> ing,and capital projects.Many stressed that to the 526 million cut to the program made ferent city profiles developed in the analysis.
<br /> service levels would decline.Of top concern by the Governor in the now-ratified unallot- The timing of when different kinds of cities
<br /> among the various pressures on cities budgets ments.MVHC is then held flat through 2025. would fall into deficit remains largely the same.
<br /> APPENDIX-City Profiles:Revenue and Expenditures through 2025
<br /> I007 2009 ]009 2010 2015 2070 2025
<br /> Minr:esota Average City Sivplus,'jDeficitl in 5's
<br /> Total Revenues 5,847,369 6,011,870 6,054,109 6,120,786 7,401,401 8,871,288 10,820,948
<br /> Total Ezpendi[ures 5,453,187 5,566,812 5,792,211 5,974,612 7,509,269 9,655563 12,655,607
<br /> Total Surplus/(Deficit) 394,182 445,058 261,897 146,174 (707,868) (784,275) (1,834,659)
<br /> Minnemta Metro Central City Surpiusii0eficiY;in 5's
<br /> Total Revenues 766,163,027 795,302,404 605,963,653 806,655,535 965,673,616 1,152,822,869 1,397,05J,453
<br /> TotalExpenditures 722,437,01� 738,666,147 777,566,709 817,552,784 1,093,404,406 1,494,453,286 2,056,802,151
<br /> Total Surplus/IDeficit) 43,726,016 56,636,257 78,396,943 (10,897,749) (127,730,790) (341,630,417) (659,744,698)
<br /> Greater Minnesota Regional Surplusi{Oeboti in 5's
<br /> Total Revenues 27,463,Sfi4 27,887,156 28,025,214 1/,894,954 33,885,355 40,901,083 50,487,761
<br /> Total Expenditures 25,621,547 27,875,680 29,153,107 30,28�,67� 39,206,578 51,652,601 68,667,175
<br /> TotalSurplus/(Deficit) 1,647,017 11,476 (1,127,892) (2,387,718) (5,321,222) (10,751,578) (18,179,413)
<br /> Greater Mmneso[a Crties LesstY�an 1,060 peopfe Surpl�s/�Defiut)in$'z
<br /> Total Revenues 486,647 423,680 428,387 421,029 503,541 601,405 733,535
<br /> Total Expenditures 478,678 418,202 436,421 452,504 578,248 753,254 990,600
<br /> TotalSurplus/(Deficit) 7,969 5,477 (8,040) (31,474) (74,708) (151,849) (257,065)
<br /> Greater Minnesota ClTles Greater Yben 2,5(10 people Surplus!(Deficit)in 5's
<br /> Total Revenues 11,962,616 12,907,75A 12,938,0�5 13,009,920 15,876,189 19,297,776 23,919,937
<br /> Total Expenditures 11,865,787 11,915,562 12,449,301 12,910,728 16,606,221 21,728,376 28,696,700
<br /> Total Surplusl(Deficit) 96,831 987,196 488,724 99,193 (730,032) (2,430,600) (4,776,763)
<br /> Exurban Fringe Surplus/(Defidtj in 5's � �
<br /> Total Revenuez 1,759,918 1,889,6ffi 1,918,779 1,918,186 2,269,259 2,724,372 3,334,294 �O� �
<br /> Total Expenditu�es 1,594,963 1,7&3,802 1,857,523 1,923,490 2,451,022 3,175,956 4,151,465
<br /> TotalSurplus/(Deficit) 764,955 105,880 61,256 (5,304) (181,763) (451,584) (817,177) LEAGUEoF
<br /> ntec,o siow�rowti,s��pi�,�{o�r,�����„s�� MI N N FSOTA
<br /> TotalRevenues 21,979,742 20,287,852 20,146,489 20,805,475 25,702,162 30,390,176 36,319,204 C�T�FS
<br /> Total Expenditures ll,972,510 16,844,717 19,694,106 20,499,383 26,730,122 35,769,335 48,296,977
<br /> Tota�Surplusl(Deficit) 4,007,232 1,443,134 452,382 306,092 (1,0]7,960) (5,379,159) (11,977,774) 145 UNIVEItSITY AVE.WEST
<br /> Metro Fazt Grawth SurplusryDeficiU in 5's ST.PAUL.MN 55103-2044
<br /> TotalRevenues 25,891,001 23p52,399 23,616,203 24,559,953 30,353,892 36,643,352 44,824,�43 PIIONE(651)281-120U
<br /> TotalExpenditwez 24,404,452 25,413,887 24,018,015 24,921,095 32,057,793 41,899,270 55,261,954 1500)925-1122
<br /> TotalSurplus/(Deficit) 1,186,549 (1,961,487) (401,812) (361,141) (1,703,901) (5,255,918) (10,437,711) WWW.IMC.(lRG
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