Agenda Packets - 1985/05/28 - Laserfiche WebLink

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/3 TO: Mayor b City Council FROM: Finance Director -Treasurer Brager DATE: May 24, 1985 RE: 1986 BUDGETS - POLICY GUIDELINES To assist staff in preparing the 1986 Budget your consideration and direction on several policy issues would be appreciated. This approach has been followed the past several years and has been a great aid in preparing the annual budgets. As in past years these guidelines are subject to modification at any time during the budget process. The implicit price deflator is an index of the costs of goods and services that governments actually purchase. It is used by the Minnesota Department of Revenue in the calculation of the levy limits of Minnesota cities. At the present time the Department estimates that the implicit price deflator will be 5.5% as of June 30, 1985. That figure will then be used in the levy limit calculation. In addition the levy limit for the City may be increased by any increase in the number of households and/or population. Data as to the number of households and the population of the City is provided by the Metropolitan Council and will not be available until the end of July. Staff feels that the percent increase of the implicit price deflator and any population increase should be a goal as far as an increase in the general property tax levy is concerned. Therefore, staff suggests a goal of limiting the overall 1986 property tax levy to no more than 5.5% increase overall. Due to the fact that the comparable worth study has not yet been completed staff is unable to make a recommendation as to the amount that 1986 salaries should be budgeted at. The comparable worth study is not scheduled to be completed until after October 1, 1985. Receipt of the study by that date would allow sufficient time to make salary recommendations for City employees which could be put into effect on January 1, 1986. However, that date does not allow sufficient time to include recommended salaries in the 1986 Budget. Therefore, staff recommends that 1986 salaries be budgeted at 1985 levels and a lump sum for salary increases be budgeted and placed in a contingency account. Energy costs are a major item in our budget. Staff has talked with our suppliers about future energy costs and also has reviewed estimates of future energy prices developed by the Minnesota State Energy Agency. Based upon information from those sources staff feels that an increase of 58 be budgeted for electricity and an increase of 78 be budgeted for natural gas.