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MINUTES OF THE
<br />ORONO TRUTH -IN -TAXATION MEETING
<br />and the
<br />ORONO CITY COUNCIL MEETING
<br />Monday, December 12, 2016
<br />6:30 o'clock p.m.
<br />1. 2017 BUDGET HEARING —RESOLUTION NOS. 6704, 6705, 6706, 6707 (continued)
<br />Olson stated those numbers reflect that the City's portion of a resident's property tax bill is very low in
<br />comparison to the county and the school district. The City's portion is 15 percent, the school district is
<br />30 percent, the county is 46 percent, and other smaller taxing districts make up 9 percent of a person's
<br />total tax bill.
<br />Olson noted the school district's portion will be slightly higher than 30 percent due to the recently passed
<br />referendum. In regards to the state average, people are paying 27 percent to their city, 28 percent to their
<br />school district, and 30 percent to the county they live in. Olson stated conservative budgeting in Orono
<br />has helped keep Orono's city tax to almost half of what the average Minnesota resident pays. Orono has
<br />the fourth smallest tax capacity in the county and is less than half of the rest of the county.
<br />Olson stated in front of the Council tonight is approval of the final tax levy, with the total being
<br />$5,353,730. The general fund operating levy is increasing by approximately $183,000, which will be
<br />largely used to pay wages and benefits. The pavement management levy was increased by$401,500 to
<br />help offset the costs to improve the roads. Debt service amount has been level for the last four years.
<br />Olson noted starting in 2018 through 2022, the amount of funds needed to pay off the City's debt service
<br />will decrease by $44,000 per year for the next four years, which is a result of refinancing some bonds.
<br />Olson stated in 2023, because some other bonds will be paid off, the City's debt service will drop down to
<br />$416,000, which is quite a decrease from the $755,000.
<br />Olson stated the City's tax capacity is going up 8.58 percent, with approximately half of the increase
<br />being due to the value of people's homes increasing and the other half being due to some new
<br />developments. When compared to last year, taxable market value has increased by 8.28 percent and the
<br />City's tax capacity has increased by 8.06 percent. As a result of the City's increased tax capacity, the
<br />City's tax capacity rate will decrease from 17.325 percent in 2016 to 17.241 percent.
<br />The impact of that decrease means that if someone's home valued at $250,000 did not change in value at
<br />all, they would see a slight decrease of around $2 in taxes. On a $2 million home, the taxes would
<br />decrease by approximately $20 per year. If the value increased by 5 percent on a $250,000 home, that
<br />person would see a tax increase of $21.50, and on a $2 million home, the increase would be
<br />approximately $195.
<br />Olson noted for 2017, overall property taxes were increased by $180,000, which amounts to a 4.5
<br />increase, but that home values were not raised very much over the past four years. The budgeted amount
<br />for licenses decreased by 22 percent, which is related to the elimination of collection for dog licenses at
<br />$4,000. Total government services are going up slightly by $25,000, which has to do with construction
<br />and building permits. Public safety services charges are increasing by $61,550 or 2.7 percent, which has
<br />to do with Orono's contract cities. Olson noted the City receives over $3.2 million as a result of police
<br />contracts and helps with the funding of the police department. Fines and forfeitures are being decreased
<br />slightly due to receiving less money from the state on each ticket written. The City's total investment
<br />income is being increased to $54,500. The miscellaneous revenues category primarily relates to the golf
<br />course and that is expected to generate approximately $279,000, for an increase of 3.6 percent.
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