07-11-1988 - Agenda Packet City Council - regular meeting

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INTER -GOVERNMENTAL - Despite the 2% increase in the inter -governmental revenues it is not anticipated that there will be any significant change for 1989. UNDESIGNATED CITY RESERVE - It is recommended that as an effort to build up a cushion under the levy limits that a significant amount from the City's undesignated reserve be placed in a catagory for possible expenditure in order to develop a cushion. This does not mean that it will necessarily be spent, but the City can then in 1990 request the reserve used in 1989 be put in as an increase to its base for 1990. EXPENDITURES - Based on anticipated inflation rate of 4 1/28 for 1989 general wages are recommended to increase at 38 plus other adjustments for people moving through the steps and the ongoing adjustments in comparable worth. It is expected that there will be selected increases above a 4% particularly for items such as oil and health insurance. Early indications are that health insurance will be increasing in the range of 25-30% for '89 followed by increases of as much of 100% over the 188 <ates by the year 1991. Specific expenditure objectives are: - Having City work to develol. the necessary levy limit cushion for the future. - Undertake appropriate expenditures that will result longterm in a more effective delivery system. - Initiate the improvement of city facilities. SUMP"Y Financially 1989 will be an interestinq year with a slight tapering of the activity from '88. This should not however translate at this time to any decreased demand for personal services. 189 should also be a year that the Counci 1 will have a broader framework of financial and other information within which to make its necessary policy decisions. It will probably be even more challanging in 1990 when the City will be faced with a 3% levy limit restriction for finan-ing. 5