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<br />. CITY OF 1lRDEN HILI8 <br /> ~ <br /> Dl\TE: August 18, 1992 <br /> TO: Hayor, City council Members and Staff <br /> FRaI@) Terry Post, city 1\coOUI1tant <br /> SllBJECT: 1993 Budqet ~eee Overview <br /> As the 1993 Budget process begins, the following factors should be kept in <br /> mind: <br /> 1- Sicmificant Capital Item <br /> Previous direction from Council to staff was to limit the General <br /> Fund 1993 proposed budget experditures to a less than 5% increase <br /> over the 1992 approved budget. '!he proposed 1993 bJdget <br /> distributed for this meeting does not a<=tplish this objective. <br /> '!he projected 8.6% increase includes a $100,000 Capital Budget <br /> item for a new street SWeeper. If this Capital item were treated <br /> as a discretionary "overlay" item and excluded from the 1993 <br />. Baseline Proposed Budget, the rate of increase would be <br /> approxilnately 3.5% - well within Council guidelines. <br /> 2. External Factors Affectincr the Process <br /> a. Beginning 6/1/92, the City is liable for Minnesota Sales Tax <br /> at the rate of 6.5% on JOOSt non-labor, non-construction <br /> project, purchases. 'Ihe impact is JOOSt severe on the Capital <br /> Budget items. <br /> b. 12vv Lilnitations have been renpved by 1992 legislative action. <br /> c. It is anticipated that no dramatic changes will = in the <br /> Consumer Price Index (CPIl from 1992 to 1993. A 3.0% range <br /> movement in the 1993 Pay Plan appears reasonable. <br /> d. As the legislature has continued to "b.ly down" the Tax <br /> Capacity Percentages (Le. the maximum residential tax <br /> capacity moving fran 3% to 2 1/2% to 2% in 1993) the City's <br /> General FUnd is much llKlre depen:lent upon collection of HACA <br /> aid. <br /> TRP:rk <br />. <br />