12-07-2020 Council Packet - Laserfiche WebLink

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AGENDA ITEM Prepared By: MLU Reviewed By: MLU Approved By: DJR 1. Purpose. The purpose of this action item is to approve the 2021 General Fund Budget, Tax Levy, and the 2021 Special Revenue Fund Budgets. 2. Background. Prior to the adoption of the 2021 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 25th and December 28th. When the preliminary tax levy and budget was approved in September, the public hearing was set for December 7, 2020 at 6:00 pm. 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 July 22nd, the Council was provided background information on the budget and an overview of the budget challenges for 2021. Over the summer, a draft budget was prepared and reviewed by the Council at work sessions in August. In September, the preliminary budget and tax levy was publically presented and adopted at the council meeting of September 28th. 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. The 2021 fee schedule, as currently amended, will be adopted at tonight’s meeting. Tax Levy The total tax levy required to fund the 2021 budget is $6,610,620. This is an increase of $603,170 or 10% over the 2020 levy. The increase includes an additional $132,550 for road maintenance and reconstruction; reflecting the Council’s desire to establish a long term funding solution for the City’s road infrastructure. Added to the tax levy this year includes funding towards the Building Fund and Parks Fund, of $310,000 for development, improvements and repairs for buildings and $50,000 for parks, respectively. There is a slight increase of $1,400 for the 2014 bond and a slight decrease of $195 for the 2016 bond. The remaining increase of $242,140 is an increase to the General Fund operating levy. Overall, the tax rate is slightly increasing from 16.512% to 16.765%. Orono continues to have one of the lowest tax rates in both Hennepin County (ranking 41 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 fund the Pavement Management Fund, Building Fund and Parks Fund. A levy amount of $6,610,620 was approved in the preliminary tax levy. This has not changed in the final tax levy. The breakdown of the 2019 levy is $579,480 for debt service, $750,000 for roads, $310,000 for buildings, $50,000 for parks and the remaining $4,921,140 is used in the General Fund. Item No.: 1 Date: December 7, 2020 Item Description: 2021 Budget Hearing Presenter: Maggie Ung Accountant Agenda Section: Truth In Taxation Public Hearing