12-12-2016 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO TRUTH -IN -TAXATION MEETING and the ORONO CITY COUNCIL MEETING Monday, December 12, 2016 6:30 o'clock p.m. 1. 2017 BUDGET HEARING — RESOLUTION NOS. 6704, 6705, 6706, 6707 (continued) Olson displayed a graph displaying the percentage for each revenue category. Property taxes represent 52 percent of the General Fund budget, which is a very low number compared to other cities. Olson noted many cities are up in the 70 to 80 percent range. Olson pointed out Orono receives zero dollars in Local Government Aid from the State of Minnesota and that the City does a very good job of balancing the budget without being overly dependent on property taxes. Olson stated in 2017, Orono's expenditures are going up 3.6 percent or $280,000. The biggest reason for the increase is due to union employees receiving a 2.5 percent increase in wages, which was just slightly under $60,000. Olson stated the police department also had a couple of significant workers compensation claims which increased the City's experience rating to 1.0 and amounted to $36,000. Another $8,000 has been budgeted for the police department for maintaining of records. Another portion of the increase in expenditures is a result of software vendors now requiring the City to pay for their licenses per year. Also being budgeted is $20,000 for work on upgrading the City's Comprehensive Plan. Olson stated the majority of the budget consists of police and fire, which amounts to 58 percent of the budget, professional services at 4 percent, street maintenance at 7 percent, finance at 4 percent, administration at 4 percent, building and zoning at 9 percent, and the golf course at 2 percent. Approximately 77 percent of the overall budget consists of wages and benefits for personnel in the various departments. Olson noted other budgets being adopted tonight are the special revenue funds. Included in that category are the Park Fund, the Drug Forfeiture Fund, and the TIF Fund. Special revenue funds have a primary source of revenue that is dedicated for a specific purpose. The water, sewer, stormwater and recycling funds are designed to account for the business type activities of the City. These funds do not receive any property tax revenue. As part of the 2017 fee schedule, the following rate increases were approved: water at 11 percent, sewer at 4 percent, stormwater at 10 percent, and recycling by 10 percent. The increases in the fee schedule were approved at the November 28 Council meeting. Even after the increases, the water fund will have a small operating loss of $4,628. The stormwater fund will show a profit. The purpose of the stormwater fund is to collect money to help pay for expenditures in the future. There should also be a small profit in the sewer fund and the recycling fund. In 2012, the City adopted a Capital Improvement Plan (CIP). In order to keep the CIP useful, it is updated on a yearly basis. The CIP outlines anticipated large budget expenses and provides long-term planning for future expenses. OIson noted approving the CIP does not authorize any specific expenditure and is merely a working document. Council approval would still be required for any expenditure. Olson stated Staff is looking for motions to adopt the resolutions that are before the City Council tonight. Mayor McMillan opened the public hearing at 6:58 p.m. No public comments were received. Page 3 of 33