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MINUTES OF THE
<br />ORONO CITY COUNCIL MEETING
<br />Monday, December 11, 2017
<br />6:30 o'clock p.m.
<br />ROLL CALL
<br />The Orono City Council met on the above-mentioned date with the following members present:
<br />Mayor Dennis Walsh, City Council Members Richard Crosby, III, Wendy Dankey, and Aaron Printup.
<br />Representing Staff were City Administrator Dustin Rief, Community Development Director Jeremy
<br />Barnhart, City Planner Melanie Curtis, City Planner Laura Oakden, Finance Director Ron Olson, City
<br />Engineer/Public Works Director Adam Edwards, City Attorney Soren Mattick, and Recorder Jackie
<br />Young.
<br />Mayor Walsh called the meeting to order at 6:30 p.m., followed by the Pledge of Allegiance.
<br />TRUTH -IN -TAXATION PUBLIC HEARING
<br />1. 2018 BUDGET HEARING
<br />Olson stated the purpose of the public hearing tonight is to discuss the 2018 General Fund budget and tax
<br />levy and it is not to discuss property values of any particular property.
<br />Olson provided an overview of how property taxes are calculated. The first step in the process is the
<br />Hennepin County Assessor will place a value on the property, which is then multiplied by a property tax
<br />rate. The property tax rate is set by the State of Minnesota. Olson explained the tax capacity rate is a
<br />simple mathematical calculation and consists of the property tax levy set by the City Council, which is
<br />then divided by the City's tax capacity. The City's tax capacity is 1 percent of the first $500,000 and 1.25
<br />percent on anything over $500,000, so on a $500,000 home, the tax capacity would be $5,000. The
<br />property tax levy, divided by the tax capacity, equates to the property tax rate. For Orono, the property
<br />tax levy being proposed tonight is $5,439,951, and the City's total tax capacity as calculated by Hennepin
<br />County is $32,863,837. The City's tax capacity rate is calculated at 16.553 percent, which is the number
<br />that is used to determine the City's portion on everybody's taxes in the City.
<br />Olson stated an $861,000 home would have a tax capacity of $9,512.50, which is then multiplied by the
<br />16.553 tax capacity rate resulting in a city tax of $1,574.60. Olson noted the City's portion of a person's
<br />total tax bill amounts to approximately 15 percent, with the biggest tax portion going to Hennepin
<br />County, followed by the school district. In addition, Orono's tax levy is the lowest of the surrounding
<br />cities. Hennepin County averages around 40 percent, followed by Mound at 45 percent, and then Maple
<br />Plain at 66 percent. The metro area average is 29 percent school, 39 percent county, and 29 percent city.
<br />Olson stated Orono has worked hard to keep the City's tax rate down around 15 percent.
<br />The majority of the properties in Orono are residential at 89 percent, with 3 percent being
<br />industrial/commercial, farms at 1 percent, and the other category is at 7 percent, which can be vacant
<br />properties, utilities, and golf courses.
<br />The total tax levy required to fund the 2018 budget is $5,439,951. This is an increase of $234,721 or 4.51
<br />percent over the 2017 levy. A portion of the increase to the levy is designated for funding the City's
<br />Pavement Management Plan to address the City's aging road infrastructure. The remaining increase of
<br />$104,721 is an increase to the General Fund operating levy. Olson stated even with the increase in the
<br />levy, the City's tax rate will decrease from 16.844 percent to 16.529 percent.
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