09-25-1989 - Agenda Packet City Council - regular meeting

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. /000� 11-10'1 TO: Mayor and City Council FROM: Mark E. Bernhardson, City Administrator DATE: June 20, 1989 SUBJECT: Budget Guidelines 1990 (Revised) Attachment: A. City of Orono Statistical Chart Updated 5/89 ISSUE - Presentation oC general guidelines for Council review, comment and amendment for the upcoming 1990 budget year. INTRODUCTION - As was done last year preliminary guidelines are againnteJ to Council for review and comment In the early part of the budget process. This is done again to solicit from Council priorities, juldelines and issues that they feel are importa:�t for the upcoming budget. The City will undertake the State mandated Truth in Taxation for the first time during the 1990 budget. Iecause of the complex nature of it in implementing it, the State Legislature has modified some of the features and the timeframes for payable 1990. The Governor chose to veto the bill and the time lines to be followed are presently uncertain. To be safe however, the City should set its mill rate by August 10, 1989 and notices will be sent out to the taxpayers as to the impact of that budget during September - October 1999 with public hearings to be held in the October - November timeframe. (This may be altered as the State provides additional information. It may be subject to whether a special session is held.) Because of the levy limits established by the State and the fact that they have twice in the past eight years limited cities to their previous years actual levies, it would be prudent for Orono together with the other cities in the State to levy their maximum in order to retain flexibility in the future. In addition the levy limit establishment for 1990 will be substantially below the anticipated inflation rate. DISCUSSION ECONOMIC OUTLOOr: The United States economy continues to expand at s ower rates although the expected recession -s still not on the horizon. Positive notes have included the decreasing trade deficit because of expanded exports together with efforts to slow down growth through interest rates. The negative signs however, have been inflation rates for 1988 of 4.4t, and anticipated inflation rate for 1989 above 51 with little decrease anticipated for 1990. Recent leading economic indicators continue showing some strength for the continued growth in the economy. Although efforts to slow inflation have also tended to limit economic growth. While the trade deficit has shown improvement in recent months, a worsening of that because of a stronger dollar together with the Federal deficit not being dealt with could bring the TO: Mayor and City Council FROM: Mark E. Bernhardson, City Administrat4 DATE: September 19, 1989 SUBJECT: Proposed Budget Commentary on Initial Guidelines (Revised) Dated 6/20/89 The City has net the necessary levies as specified in the orlginal law. Based on the information received from the State Department of Revenue, October 9th has been set for thA -equired Public Hearing. The tudget may either be adopted thr4 avanlnq or tabled urtil the October 23, 1989 meeting. It may bo, i,-L-ient to wait pending any special session. The levy needs t•v he otstified to the County by November 9, 1989.