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MINUTES OF THE
<br /> ORONO CITY COUNCIL MEETING
<br /> Monday,December 9,2019
<br /> 6:30 o'clock p.m.
<br /> Olson noted all the information is available publicly.
<br /> Olson said the preliminary budget in September showed, over the last 5-6 years, if the value of someone's
<br /> house was$700,000 or a million dollars and it were the same value today,the homeowner would be
<br /> paying less dollars. Meanwhile,the City has paid down 5 million dollars in debt, funded roads and
<br /> infrastructure, so the City is managing and properly weighting where dollars should be used correctly.
<br /> Olson stated Orono's tax capacity rate is 16.498%. The surrounding cities are higher and the Hennepin
<br /> County average is about 39%. In the metro area,property tax bases average 79%residential, and
<br /> commercial and industrial account for 18%. Because of Orono's unique nature and decisions on density
<br /> and the type of developments in the City, 89% is residential and 2% is commercial/industrial.
<br /> Crosby asked what the make-up is of the "Other" category.
<br /> Olson said it was tax-exempt properties like churches, schools, et cetera.
<br /> Olson stated the Council is being asked to approve a$6,007,450 tax levy. This is comprised of a general
<br /> operating budget of$4,679,000, with $617,000 for the pavement management levy and three
<br /> improvement bonds. In 2023, $300,000 of levy needs for debt service will drop off By 2029, all bonds
<br /> will be paid and the City will not have any debt-service levy.
<br /> Olson noted the tax capacity is $36,417,000,the total levy of 6 million dollars,and the tax capacity rate of
<br /> 16.498%. Last year the tax capacity rate was 16.406%;this is a .092% increase. For an owner of a
<br /> $250,000 home which did not increase in value,taxes would increase by$2.16 annually. For a 2-million-
<br /> dollar home, it would increase by$21.85 annually. Assuming a home increases in value by 5%, for a
<br /> $250,000 home taxes would increase by$24.60; for a 2-million-dollar home the increase would be $228.
<br /> If a 2-million-dollar home went down in value,taxes would decrease by$250. Generally, almost as many
<br /> houses go up in value as go down, although for 2020 there's a few more on the"increase" side. He
<br /> offered to walk through anyone's tax statements if there were questions.
<br /> Olson reviewed budget information: revenues are increasing 6.5%,which is property taxes of 6.8%and
<br /> intergovernmental revenue,which looks like it's increasing 47% but is a change in accounting procedures
<br /> regarding how grant money is handled. The total public safety service charges of 2.5 million dollars is in
<br /> regards to the police contracts with the Cities of Spring Park, Minnetonka Beach,and Mound. That helps
<br /> the City keep property taxes at 51%of the budget,which is significantly lower than the average city.
<br /> Olson indicated the expenditure budget is increasing by 6.6%. To the street budget, $80,000 was added
<br /> because basic routine repairs such as potholes was coming out of the Pavement Management Plan, and
<br /> Staff wanted to move those types of expenses into the General Fund Budget. There is an increase of 870%
<br /> for the three 2020 elections: presidential primary,regular primary, and general election. Personal Services
<br /> is increasing 5.41%,which consists of negotiated contracts, settlements,and step increases. Insurances are
<br /> going up 30%. Staff moved around some accounting such as creating an IT Services Fund and also moved
<br /> some charges from Supplies to Professional Services. The shift does not change the dollars being
<br /> expended. Personal Services are 63% of the budget, Professional Services are 16%, so 79%of the
<br /> expenses are related to people and providing service to citizens.
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