01-14-2019 Council Packet - Laserfiche WebLink

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MINUTES OF THE ORONO TRUTH-IN-TAXATION/CITY COUNCIL MEETING Monday, December 10, 2018 6:30 o’clock p.m. _____________________________________________________________________________________ Page 1 of 19 ROLL CALL The Orono City Council met on the above-mentioned date with the following members present: Mayor Dennis Walsh, City Council Members Richard Crosby, III, Wendy Dankey, and Victoria Seals. Representing Staff were City Administrator Dustin Rief, Finance Director Ron Olson, Community Development Director Jeremy Barnhart, City Planners Melanie Curtis and Laura Oakden, Public Works Director/City Engineer Adam Edwards, City Attorney Soren Mattick, and Recorder Jackie Young. Mayor Walsh called the meeting to order at 6:30 p.m., followed by the Pledge of Allegiance. TRUTH-IN-TAXATION PUBLIC HEARING – 6:30 P.M. 1. 2019 BUDGET HEARING a. 2019 BUDGET INFORMATION b. ADOPT FINAL 2018 LEVY COLLECTIBLE IN 2019 c. ADOPT FINAL 2019 GENERAL FUND BUDGET d. ADOPT THE 2019 SPECIAL REVENUE FUNDS BUDGETS Ron Olson, Finance Director, stated tonight is the conclusion of the budget process undertaken by the City approximately six months ago. Olson noted tonight’s discussion will be centered on the 2019 budget and levy and that property values will be discussed in the spring. Over the summer a draft budget was prepared and reviewed by the Council. In September, the preliminary budget and tax levy was publicly presented at the August 27 meeting and adopted at the September 24 Council meeting. Tonight’s public hearing is the final step prior to adoption of the budget and tax levy for 2019. Each year the Hennepin County assessor provides an annual calculation of the City’s tax capacity based on the annual property evaluation for commercial, industrial, and residential properties. The tax rate for residential properties is 1 percent of the first $500,000 of value and 1.25 percent of anything greater than $500,000 of value. The assessor then takes those numbers to arrive at the tax capacity of an individual property. Once the tax capacity of each property is calculated, the assessor adds all those numbers together, when then becomes the City’s tax capacity. The levy is then divided by the City’s tax capacity to arrive at the City’s tax capacity rate. Olson noted the only piece of the property taxes that the Council has any influence on is the property tax levy. If the levy goes up, overall taxes in the city will go up and vice versa. The property tax levy that is being reviewed tonight to fund the 2019 budget is $5,635,450. The City’s total tax capacity is $34,407,568, for a tax capacity rate of 16.378 percent, which is a slight decrease from last year. Last year the City’s tax capacity rate was 16.55 percent. Property taxes are calculated by taking the property’s net tax capacity times the City’s tax capacity rate, which will determine the net city tax on someone’s property. If a property is valued at $963,000, one percent of the first $500,000 gives you $10,787.50, which is that property’s tax capacity. That number is then multiplied by the 16.378 percent to arrive at $1,766.78 for the City’s tax. Olson noted Hennepin County’s property tax is proposed at $4,688.35 for that same property, the total tax for the school is $4,754.24, and of the average property tax bill, a very small portion is the actual city tax. Olson noted