12-10-2018 Council Packet - Laserfiche WebLink

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AGENDA ITEM Item No.: Item Description: 2019 Budget Hearing Date: December 10, 2018 Presenter: Ron Olson Agenda Truth In Taxation Finance Director Section: Public Hearing 1. Purpose. The purpose of this action item is to approve the 2019 General Fund Budget, Tax Levy, and the 2019 Special Revenue Fund Budgets. 2. Background. Prior to the adoption of the 2019 budget and tax levy, the City is required to hold a public hearing to allow public input on the budget and tax levy. By law, this hearing must occur between November 24th and December 28th. When the preliminary tax levy and budget was approved in September, the public hearing was set for December 10, 2018 at 6:30. This public hearing is the final step prior to adoption of the budget and tax levy. The budget process was begun by staff at the beginning of June. At a work session held on June 25th the Council was provided background information on the budget and an overview of the budget challenges for 2018. Over the summer, a draft budget was prepared and reviewed by the Council at work sessions in July and August. In September the preliminary budget and tax levy was publically presented at the meeting of August 27' and adopted at the September 24' council meeting. In addition to the work on the actual budget, staff has been working on updating the Capital Improvement Plan (CIP). The CIP identifies the long-term infrastructure needs and is a valuable tool in the budgeting process. The CIP will also be approve as part of tonight's meeting. In conjunction with the budget process, staff has also been reviewing the fee schedule. Review of a majority of the fee schedule has been completed. At this time staff is still working on the water and sewer rates. The 2019 fee schedule, as currently amended, will be adopted at tonight's meeting with an amendment made in January for the 2019 water rates. Tax Lew The total tax levy required to fund the 2019 budget is $5,635,450. This is an increase of $195,499 or 3.59% over the 2018 levy. A portion of the increase to the levy, $161,450, is designated for funding the City's Pavement Management Plan to address the City's aging road infrastructure. The remaining increase of $34,049 is an increase to the General Fund operating levy. Even with the increase in the levy, the City's tax rate decreased from 16.555% to 16.378%. Orono continues to have one of the lowest tax rates in both Hennepin County (ranking 42 of 45 cities), and the State of Minnesota. The tax levy is used to fund the general operations of the City (General Fund), pay the debt service on the City's outstanding bonds, and to fund the Pavement Management Fund. A levy amount of $544,450 was approved in the preliminary tax levy. This has not changed in the final tax levy. The breakdown of the 2019 levy is $711,000 for debt service, $544,450 for roads, and the remaining $4,380,000 is used in the General Fund. Prepared By: J*JU Reviewed By: 51V Approved By: -TV