07-22-2019 Council Work Session Packet

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MEMORANDUM To: Mayor Walsh and Orono City Council From: Ron Olson, Finance Director Subject: 2019 Budget Date: June 24, 2019 Attachments: 2020 Budget Information At the May 27th work session, the Council provided staff with guidance on the budget. The information being provided tonight has incorporated that input. 2020 Budget Factors Revenues 1) According to the most recent numbers from Hennepin County (3/21/19), The City's Taxable Market Value (TMB) has increased from $3,003,119,796 to $3,165,276,316. This is an increase of 5.4%. As a result of the increased in valuation, the City's tax capacity is estimated to increase from $34,672,468 to $36,356,331; an increase of 4.87%. This means that the City's tax levy can increase by 4.87% ($272,000) without increasing the City's tax rate. At the work session, the Council indicated that they would be comfortable with an additional $100,000 levy increase for road funding. 2) The property tax levy for the General Fund is increasing by $299,000. $80,000 of the increase is to cover street maintenance costs that are being moved from the Pavement Management Fund back to the General Fund. These costs had been moved into the Pavement Management Fund a number of years ago. From an accounting and operating perspective, having the maintenance cost in an operating budget versus a construction fund the preferred way to track operating expenditures. 3) The Council also indicated at the May work session that budgets for building related revenues could be increased by $40,000. This increase has been incorporated into the revenue budget. The increase are: $25,000 for building permits, $3,000 for plumbing permits, $10,000 for plan check fees, and $2,000 for variances. 4) Administrative charges are increasing by $38,310. This revenue is charged to the Water, Sewer, and Storm Water funds and is based on the Administration and Finance budgets. 2019 Budget — Page 1