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MINUTES OF THE
<br />ORONO CITY COUNCIL MEETING
<br />September 26, 2022
<br />6:00 o’clock p.m.
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<br />Page 7 of 13
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<br />6. ADOPT 2023 PRELIMINARY TAX LEVY – RESOLUTION NO.7291
<br />Finance Director Olson noted the City must certify the Preliminary Tax Levy to the County by September
<br />30. He shared the final levy and budget will be approved on December 12, 2022 and public input will be
<br />allowed prior to the final adoption of the levy and budget. He showed a slide on screen regarding tax and
<br />tax levy history, noting the average property in Minnesota pays 30% of the property tax to the City, 30%
<br />to the schools, and 28% to whatever County they are in. Orono’s share of the tax levy is only 16% with
<br />38% going to the County, and 39% goes to the schools. Olson stated the City has always been
<br />conservative on the tax levy, taking a much smaller portion than cities around Orono. This year the total
<br />levy is proposed to be $8,387,000, the General Fund levy is $5,641,000 (13% increase mostly due to
<br />wage increases in the unions), and he spoke about the pavement management levy which will bring them
<br />to the full funding needed to maintain roads in Orono. This City Council has been very dedicated to
<br />improving parks and the park levy is increasing to $150,000; Olson noted that fund was at zero 10 years
<br />ago with nothing spent on parks other than mowing and portable restrooms. He shared about the
<br />community investment fund, bonds, and debt service which is a savings of $416,000. Olson shared it is a
<br />sizable increase overall but he thinks it is justified for where Orono is going. He stated based on the
<br />increase in property values this year the tax capacity is about $50,000,000 which is a 21% increase. Right
<br />now they are estimating the tax capacity rate for Orono will actually decrease slightly by .04. He
<br />explained if one owns a property in Orono that does not change in value they would see a very small
<br />decrease in taxes. If a property increased by 5% in value they would see increases in property taxes, for
<br />example $22-23 on a $250,000 and $210 on a $2,000,000 home in the City share of taxes. Olson showed
<br />a slide on tax capacity since 2016 which is trending downward over time.
<br />Mayor Walsh noted the City has the road budget in there (they do not assess for roads), as well as the
<br />roads and sewer budget, the parks budget, police, and technology. Looking at Long Lake, for example,
<br />who is at 36% to Orono’s 16%, they do not have any of those things in their budget.
<br />Olson shared a chart comparing taxes between cities and the good job Orono has generally done keeping
<br />taxes low. He showed the general fund tax levy noting Orono is around 52%, Medina is over 70%,
<br />Mound is 67%, Spring Park is over 80%. He noted Orono has done a great job finding other ways to
<br />finance the general fund budget through service contracts for police and public works which allows a
<br />bigger, more robust department, and provides services the other cities could not afford on their own. This
<br />keeps Orono’s budget much more stable because they are not completely reliant upon taxes. Many of the
<br />cities on the graph get some sort of State aid and Orono has not received State aid for 20 years.
<br />Gabriel Jabbour, 985 Tonkawa Road, appreciates Mr. Olson’s presentation. As they know, one goes
<br />through a tax bill and noted to do anything at the State level will take a long time, planning, getting the
<br />right legislator to think the right way, and getting something done at Hennepin County is very difficult.
<br />He stated Orono is picking up quite a bit of Hennepin County, Minneapolis, and other areas. The only
<br />other area they could make a difference is in the local, City government. Mr. Jabbour said the City will
<br />receive close to 21% more taxes out of Orono residents than the previous year. With property values
<br />going up they do not need to change the number that they multiply the value to get the taxes. Mr. Jabbour
<br />would say the reason it is going up is supply and demand and the good citizens of Orono investing in their
<br />own property. If the whole City doubled and the City kept the budget the same, the levy number would go
<br />down in half (he does not mean the taxes). He noted Orono is definitely unique with tons of great houses
<br />that require very little service which are a great cash cow for the City. The reason Mr. Jabbour is asking
<br />the City Council to reconsider the amount of money they are making the budget to be, none of the pie
<br />charts really matter to the people, it matters how much more money is coming out of their pocket. Mr.
<br />Jabbour stated his house went from $2 million-something to $3 million-something, in using the same levy
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