Agenda - Council - 06/23/1981 - Laserfiche WebLink

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urbanizing population demands. For the high projections, the same rate of increase from 1978-81 for each budget category was continued for 1982-86, since the inflation rate and population growth rate, and expansion of services would also continue. For the medium an low projections, the growth rate for each category was reduced proportionately, after ~lowing for an 8% inflation rats. C. Pro~eeted Surplus or Deficit Revenue A comparison of the projected revenues and expenditures, as shown in Figures 4 and 5 indicates that levy limits will have significant impact on the City of Ramsey. Since the levy limit is permitted to increase only 8% per year, after the homestead growth adjustment there is no allowance for the improvement or expansion of services that and urbanizing community such as Ramsey may find necessary. What this will mean is that the city will have to do one of the following to balance future revenues and expenditures: o mainitain city services at the current level rather than expanding or improving them. If inflation exceeds 8%, the levels of service would have to be cut back to maintain a balance. o obtain authorization by whatever means provided by law to exceed the levy limit, such as a referendum. Under the high projections, the gap between revenues and expenditures is the greatest. This may be due to the assumption that the expansion of such services as public safety and parks operation and maintenance will continue at the same rate as in the past. The revenue shortfall under the medium and low projections is not as great, because the need to expand and improve services under the slower growth rate would not be as great. Ail of the foregoing discussion assumes that the future inflation rate will be 8%. If this rate is actually greater than 8%, and the levy limit percentage is not increased, then the city may have to actually reduce levels of service in order to balance revenues and expenditures. As far as the impact of this analysis on capital improvement programming is concerned, it appears that the city will not be likely to have surplus revenues available to finance capital improvements on a "pay as you go" basis. III. Capital Improvements Financin6 Method{ A. Previous Methods and Policies The city has used several means of financing capital improvemehts in the past that would seem to establish certain precedents or policies for its capital improvement program up to 1986. Revenue sharing funds have been used -6-