|
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°/x. 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.
<br />Page 2 of 34
<br />
|