02-04-1991 WS - Laserfiche WebLink

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MEMORANDUM Memo To :Mayor and Council Members From :Ric Minetor, Acting Clerk-Administrator Date :January 28 , 1991 A9-00(42 ; Subject :Estimated Amount of Local Government Aid Cuts and Possible Impacts to the City's 1991 Budget I have been discussing the proposed (possibly now adopted) Local Government Aid cuts and the impact on the 1991 budget. From information distributed by the League of Minnesota Cities, an estimate of $50,000 was determined as the possible cut to Mounds View's revenues. As you recall, a revenue shortfall reserve was established in the amount of $130 , 000 . While this scenario appears to be manageable, I wish to caution Council that our figures are very preliminary and have not been verified. I will submit updated figures as they become available. The major concern of staff is the possible impacts of future cuts on the 1992 budget. It has been suggested that cities may not be allowed to increase pay '92 property taxes to make up for LGA reductions . This could pose a serious problem for our 1992 III budget . Of particular concern is the impact of hiring an additional police officer this year. As Council directed, Police Chief Ramacher is ready to begin the testing and review process for hiring an officer for the 2nd half of 1991. We will continue monitoring the LGA situation to determine if this position may be beyond our funding abilities for 1992 . In discussions I have had with various people, the question of budget adjustments for 1991 continues to be a major concern. As noted above, the reserve for revenue shortfall appears to be adequate for this years possible cuts. If Council feels that some ' o - - 0-Is-In-order-as well as utilization of the rcvcnuo reserve , there are some operational adjustments that may beneficially impact the budget; a reduction of rink flooding, a shortened season for skating rink attendants, reduced maintenance levels in streets and parks, and a general attempt at reduction of routine costs such as number of copies, etc. It should be noted that due to the nature of capital funds being dedicated for capital , reduction of capital expenditures will not improve the revenue shortfall picture. Likewise, spending from funds other that the general fund ( i . e . sewer fund , water fund, park dedication fund, etc. ) does not improve the situation either. It can be argued that spending from these sources can have beneficial impacts where improved productivity results for areas 0 funded by the general fund.