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MINUTES OF THE
<br /> ORONO CITY COUNCIL MEETING
<br /> Monday,December 7,2020
<br /> 6:00 o'clock p.m.
<br /> TRUTH IN TAXATION PUBLIC HEARING—Continued
<br /> the City's tax capacity rate to get the net City tax on the property. Onscreen,she showed an actual
<br /> example of a home in Orono of which the value is$1,026,000 for 2021; using the 2021 value assigned to
<br /> this property, 1%of the$500,000 of the estimated market value and then 1.25%of the remaining
<br /> $526,000 of the home value is $11,575. She said they multiply that number by the City's tax capacity
<br /> rate of 16.765%and that comes out to$1,940.54,which is the City's portion of the property tax. She
<br /> showed a property tax statement onscreen and noted the City's portion,the County's portion,and the
<br /> School's portion, as well as other taxing districts. She stated this reflects the conservative nature that the
<br /> Orono City Council has,which is to try and keep the property taxes as low as possible while still being
<br /> able to fund and improve needed infrastructures and services. She showed a graphic comparing Orono's
<br /> tax capacity rate compared to neighboring and connecting cities,of which Orono was the lowest. In
<br /> Hennepin County,the average tax capacity rate for cities is 38.4%. Metro-wide there is an average of
<br /> 79%residential and 18%commercial; in Orono the majority is 98%residential with only 2%making up
<br /> commercial. Ms. Ung moved on to the budget information and showed the tax levy they are asking the
<br /> Council to approve tonight. The majority of the$6.6 million will go towards the General Fund of
<br /> $4,921,140. There are two new levies to share,the building fund and parks levy;the building fund levy
<br /> of$310,000 will go towards development and improvement of buildings, and the parks levy of$50,000
<br /> will go towards parks improvements and expenses. The pavement management levy is designated
<br /> towards the improvement of road infrastructures. The last two levies are for outstanding bonds that they
<br /> sold in the past and are now trying to pay those off. This year one bond was paid off, and they expect to
<br /> see the other two drop off by 2029. Ms.Ung showed another way to look at the tax levy; as previously
<br /> stated,the tax capacity is$39,431,077 and the City's total levy is$6,610,620 and that brings them to a
<br /> total tax capacity rate of 16.765%for 2021 which is .25%above last year's rate of 16.512%. For the
<br /> average homeowner, if one has a home that has a$250,000 market value and market value did not change
<br /> for 2021,their City's tax portion would be increased by $5.95. On a$2,000,000 dollar home with no
<br /> change in value,their City's tax portion would be increased by$60.09. Some homes have increases and
<br /> decreases in values so looking at a 5%increase in the value of a home, a home with a value in 2020 of
<br /> $250,000 now increases$28.79 for 2021;a home with a decrease in value of 5%(a$250,000 home is
<br /> now valued at$237,500)the City tax portion would decrease by $16.89. Ms. Ung moved on to the
<br /> budget and provided summary information. She noted the detailed budget would be made available on
<br /> the website later in the week. Revenue is increasing 1.3%overall,the biggest decrease is in the
<br /> intergovernmental due to the way they handle the grant money for accounting purposes. Because Orono
<br /> is not the grant distributor,they will also see this decrease in the expenditure side. Taxes make up over
<br /> half of the revenue,and public safety charges make up about 1/4 of the revenue budget, due to police
<br /> contract with neighboring cities (Mound, Spring Park,Minnetonka Beach). This helps Orono keep
<br /> property taxes down to 53%;typically,they would see the other cities' budgets depend on the property
<br /> taxes about 65-76%. She showed a graph that breaks down the revenues. She gave a year-to-date update
<br /> on permit revenues, and said overall through November they are at 85.7%of the budget for 2020;
<br /> building permit is about 80%;planned check site exam is at 76.4%;mechanical permit is at 163%;
<br /> plumbing is at 89%. Expenditures are increasing by 1.28%, so the percentage increase on the Mayor and
<br /> Council is 25.5%;this is due to the meeting minute price increase and noted that is a small amount
<br /> compared to the overall budget. There is also a 54%decrease in election due to 2020 having been
<br /> budgeted for the presidential election(they will see another spike in the budget line item in 2024 for this
<br /> reason). She noted another way to look at the budget by use:the personal service line item has increased
<br /> for Staff increases and costs of living;this is offset by eliminating the building official position. They
<br /> will see an increase in professional service for the outsourcing of those duties which is the 10.5%increase
<br /> in professional service. As for the decrease of other expenses, it is to offset the way they account for
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