Minutes 04/26/1988 - Laserfiche WebLink

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57 April 26, 1988 Fund Balance In order to balance the budget, I propose using $2.5 million of the available fund balance in the General Fund. Our total fund balance ~stimated to be available at the end of June 30, 1988, will be approximately S10.5 million. This will leave $8 million available as an emergency budget contingency, or about 4.2% of the total Operating budget. The use of funding sources which are not recurring revenues obviously is a temporary measure. I feel that the use of a portion of the available fund balance is a preferable alternative: t~ a tax increase. However, in the interest of sound financial management, I would strongly recommend~ that we use no more of the fund balance for recurring operating expenditures than the amount propose'd. In an effort to keep the~ fund balance at approximately $%, as recommended by %he Municipal Finance Commission, I have included in this proposal an increase on the sale of a stand~rd pack-of~ cigarettes from 15 cents to 20 cents. Such an increase keeps me from proposing a .2 cents increase in the real estate_ tax ~ate. School Budge% The School Board adopted a budget of $75,509,049, which represents ~an increase of 19% over its curren~ budget. To fully fund the School Board's request ~ould require an increase in City funding of 43% or $9,210,824. This amount ~is equivalent to 41 cents of the real estate tax rate! Obviously, I could not in good conscience~ recommend such a tax ~ncrease and deny all othe~ services to the people of this City. 1 have recommended in this budget an increase of 7.3% in the local ~funding for schools, or $1,553,094. Taken together with State and other sources of funding, this provides for an overall increase in school operations of 7.3% above the current year's School Budget. Although this level of funding will not be sufficient to satisfy all of the request of the School Board, it will allow for the required increase in teachers_' salaries as mandated by the'General Assembly. Teachers' salaries, must increase by an average of 7.3% for each of.the two years of the State'-s 1988-90 biennium in order for the the School division to qualify for the Teacher Salary Incentive Payment from the State. Much. has been said and written abou~ Stm~e funding for education' fn the new biennium. Confusion abounds and there seems to be no~'cIear explanation of the funding formula chan~es. However, there is a very clear "bottom line." The increase in State funding for Portsmouth is smaller for~l~88-89 than it was in the previous year; or the year before; or the year before that. When I say "smaller", I do not mean proportionally less or smaller in percentage.~ In actual dollars, the increase is the smallest since 1984-85 ~ccording to the March 12~ 1~988 report of the Secretary of Education, Donald J. Finley. The City of Portsmouth does not have the fi-~cal capacity to compensate for the inadequacy of State funding for edueation. Nonetheless, I have held the growth in fundin9 for general government operations to 5.8% in order to provide 7.3% more local funds to t~e Schoo~ Board. Despite major cuts of requests made by department heads, there are some areas where I am~recommending enhancements in delivery of service and therefore deserve special mention.