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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 />Mayor McMillan closed the public hearing at 6:58 p.m. <br />Walsh moved, Printup seconded, to adopt RESOLUTION NO. 6704, a Resolution Adopting the <br />Final 2016 Tax Levy Collectible in 2017. <br />McMillan noted in September she voiced her opposition to the 8 percent levy increase and that her <br />position is still the same today. McMillan stated in her view the 8 percent increase is too high and that <br />increasing the Pavement Management Fund by $401,000 should be done incrementally rather than all at <br />one time. McMillan noted the City Council had the ability to bond at 1 percent interest but that they <br />chose not to do so back in September. McMillan stated in her view increasing the levy to pay for road <br />improvements should be done incrementally since they have a number of citizens in Orono who live on <br />private roads and have to pay for their own road repairs and snow plowing. McMillan stated if the City is <br />going to increase the levy for pavement management, the City should increase it in smaller amounts. <br />McMillan indicated she is in favor of everything else for the different funds. <br />Council Member Walsh stated the City Council has had their disagreement about that and that his <br />position is that the City should not go out and borrow money for road improvements. Walsh stated in <br />order for the City to be financially solvent, they should have the money in the Pavement Management <br />Fund rather than bonding for road improvements. Walsh stated they are incrementally increasing that <br />fund, which they started doing in 2015, and that they should not need to borrow money to do road <br />improvements. <br />Council Member Levang indicated she is in agreement with Mayor McMillan and that she is not <br />interested in approving a levy at 8.1 percent. The City had an opportunity to have a levy at 5.37 percent <br />and then bond for $1 million, which would have been at 1 percent. Levang stated the City could have <br />gotten a lot of roads done for that amount and that it would have been more fiscally responsible. Levang <br />noted in the last six years the levy has increased by approximately 6 percent, and to have a levy increase <br />of 8.1 percent in one year is not fiscally responsible. <br />Walsh stated the 6 percent increase, along with the 8 percent increase, averages out to approximately a <br />2.5 percent increase over the past six years. Walsh stated being fiscally responsible is actually getting the <br />roads done and that having a Pavement Management Fund with no money is a bridge to nowhere. Walsh <br />stated it is fiscally responsible to put money into that fund rather than taking on new debt, which ties the <br />hands of future Councils down the road. Walsh stated the 8.1 percent is a small increase overall and that <br />the City will be able to get a whole bunch of roads done without additional debt service. Walsh stated the <br />Council voted back in September to go in that direction and that he would hope they are able to pass the <br />resolution so they can move forward with the plans in place for the roads in 2017. <br />McMillan stated if the price of oil increases dramatically, the City will not be able to do as many roads as <br />they had hoped. McMillan stated bonding is another way of funding the Pavement Management Plan and <br />that she was looking at a different opportunity the City could have taken advantage of to get the roads <br />done. McMillan stated time will tell whether borrowing money at 1 percent interest might have been the <br />better way to go. <br />Page 4 of 33 <br />