08-05-1991 WS - Laserfiche WebLink

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TO: Mayor & Council lkFROM: Don Brager, Finance Director - Treasurer DATE: August 1, 1991 SUBJECT: 1992 General Fund Budget Preparation Update Attached please find an updated copy of proposed 1992 Budgeted Revenues, 1992 Budgeted Expenditures, and Departmental Budget Detail sheets for each individual department. REVENUES The 1991 State Tax Bill froze each city's 1992 Local Revenue Base( local government aid + property taxes ) at 1991 levels. For the City of Mounds View the Local Revenue Base represents 70. 36% of estimated 1992 General Fund revenues. In other words, 70.36% of the City' s 1992 General Fund revenues will be the same amount as they were in 1991. This is a radical departure from past legislation which permitted increases of the Local Revenue Base for inflation and population/household growth. Local Government Aid(LGA) was reduced for all Minnesota cities by the 1991 Tax Bill. For the City of Mounds View the reduction amounts to $82,932 or 13 .50% when compared to 1991 LGA. Cities may levy additional taxes to compensate for this reduction in LGA. Per previous Council direction the estimated 1992 General Fund property tax levy was increased to compensate for the loss of LGA in 1992 . The estimated 1992 General Fund property tax levy of $1,425, 642 is an increase of 6.21% over the 1991 levy. Since this additional levy is to replace lost LGA and both taxes and LGA are part of the Local Revenue Base the increased tax levy does not provide the City with any additional revenues; it merely allows us to maintain the 1992 Revenue Base at the 1991 level. Other estimated -revenues- are -declining. The-net effect of -a -- constant Local Revenue Base and declines in other General Fund Revenues is estimated 1992 revenues that are 3 .40% less than 1991 revenues. We all know from managing our families's budgets that prices of goods and services are rising. Therefore, it will be a challenge to Staff and the Council to prepare a 1992 budget which maintains current City services in the face of declining revenues. EXPENDITURES Departmental budget requests totaled $3,225, 596. That amount was $444, 353 more than estimated 1992 Revenues. Some of the new items requested will be commented upon briefly below.