Agenda Packets - 1988/06/06 - Laserfiche WebLink

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MEMO TO: MAYOR AND CITY COUNCIL FROM: FINANCE DIRECTOR -TREASURER 1 / DATE: JUNE 2, 1988 SUBJECT: BUDGET POLICIES The department head team met to consider issues for the 1989 Budget. Issues that were identified are presented below. Staff realizes that you may have issues which may not be presented in this memorandum. The purpose of this memorandum is to begin a dialogue on budget issues and policies which will lead to the setting of goals which staff may use to prepare the first draft of the 1989 Budget. Staff proposes to not add any new programs and/or services to the 1989 Budget; but to continue to maintain existing programs and services. Staff believes that present programs and services cannot be maintained with existing personnel. It is, therefore, proposed that serious consideration be given to the hiring of an additional police officer and a maintenance worker. Presently, the vacation time that police officers are entitled to results in the loss of services of approximately one officer. The types of calls received are chose which demand more of the responding officer's time. Staff feels that the Police Depart- ment needs another officer to maintain existing levels of service. The Public Works Department has experienced difficulties in maintaining present services. As a consequence, many maintenance activities have either been postponed or pushed back. Staff recommends seriouc consideration be given to hiring an additional maintenance person in 1989. Recent news reports indicate a concern on the part of economists that our economy may see another round of inflation in the near future. First quarter figures show an annualized rate of inflation of 3.7%. The Federal Reserve reacted by increasing interest rates in hopes of slowing inflation. Release of second quarter data in August will give an indication of whether the first quarter's data was the beginning of an inflationary trend or an event which is confined to the first quarter. Staff recommends budgeting an overall salary increase of 5%. This will allow for a cost of living increase plus merit increases. An adjustment can be made should second quarter data on the economy warrant a change. Costs of health insurance have increased dramatically in 1988. Pr=miums for Group Health Plan increased approximately 15%. Renewal rates for the LMCIT health plan have not been received I yet. Preliminary information received from LMCIT indicate a probably increase of 15% to 211. Staff will prepare an analysis of the costs of health insurance and the City's cnnt-ihution towards the premiums over the past 5-7 years in the near future.