08-09-2021 Council Work Session Packet

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2022 Budget – Page 1 MEMORANDUM To: Mayor Walsh and Orono City Council From: Ron Olson, Finance Director Subject: 2022 Revenue Budget Date: August 9, 2021 Attachments: a) General Fund Revenue Budget At the last work session, the council requested more detailed information on the revenue side of the General Fund Budget. Some increases were included the discussion in July. These include: $191,000 in new revenue connected to the new Spring Park Public Works Agreement, $115,000 of additional grant proceeds that will be received and distributed back to other cities that participate in the Toward Zero Deaths grant program, and $99,740 in the contracted increases in the police service contracts. This memo will focus on the historical trends of the major General Fund revenue sources. Taxes: The property tax levy is the major revenue source for the General Fund. As presented it represents 51.5% of the revenue budget. 51% is a relatively low dependence on taxes. It is made possible revenue received from service contracts with neighboring cities. Orono has always had a high rate of tax collections which generally range from 98% to 100% of the levy. The General Fund tax levy is currently increasing by $250,890 (5.1%). This is the amount needed to balance the draft expenditure budget. As discussed in July, current estimates will allow the overall levy to be increased by approximately 8% without increasing the property tax rate. The following table compares the draft 2022 levy to the actual 2021 levy. Tax Levy Comparison 2021/2022 2021 2022 (E) General Fund $4,921,140 $5,172,030 Building Fund 310,000 390,000 Pavement Management 750,000 900,000 Parks 50,000 100,000 2014 Debt Service 166,700 161,000 2016 Debt Service 412,780 416,680 Total: $6,610,620 $7,139,710