09-13-2004 Council Packet - Laserfiche WebLink

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Tax Capacity Rate Reduction Results in Minimal Property Tax Impact on Property Owners Based on the proposed budget and tax levy, and the substantial increase in the City’s tax capacity (tax base), the City’s share of the property tax bill for Orono property owners will increase by 1,1%. Tlie City's lax capacity has increased by approximately 17.9%. Applying the proposed tax levy to the estimated tax capacity results in a tax rate of 16.22%, which is a substantial reduction from the 2004 level of 17.641 %. Using this tax rate, the City’s share of the property lax bill on a home valued at $300,000, assuming a 10% value increase, will increase by $6.03, or 1.1%. For a home valued at $800,000, the City’s share of the property tax bill will increase by $16.08, or 1.1%. Tax Levy The total tax levy required to fund the proposed 2005 budget is $3,461,670. This is an increase of $263,740, or 8.25 % over the 2004 levy. The breakout of the use of tax levy revenues by fund is shown on the attached chart titled Tax Levies. The General Fund expenditures have the greatest impact on the proposed tax levy. In addition, the Infrastructure lev'y in the PIR Fund (for street rehabilitation) has been increased from $35,450 to $69,950. The tax levy required to fund the proposed 2005 General Fund budget is $3,005,470. This is an increase of $354,240, or 13.36% over the 2004 levy amount. Of this amount, $80,000 is not a levy increase, but rather is a shifting of tax levy from the Improvement and Equipment Outlay Fund to the General Fund. Excluding the $80,000 of expenditures shifted to the General Fund, the levy increase is $274,240, or 10.3%. General Fund Budget Expenditures Tlie proposed expenditures in the General Fund are having the greatest impact on the tax levy. The proposed 2005 General Fund expenditures are $5,132,950. This is an increase of $431,460, or 9.18% over the 2004 budget. The main items causing the General Fund expenditure increase include the addition of a police investigator and a narcotics investigator, the addition of a part- time Finance Clerk, annual compensation adjustments, Navarre Fire Station operating costs, funding for consultant assistance related to the turnback of current Highway 12 from the State to the County, and the transfer of vehicle replacement funding from the Improvement and Equipment Outlay Fund to the General Fund. Police Staffing The proposed 2005 budget reflects the addition of a police investigator position, and a narcotics investigator position. The Department’s current investigative caseload is too large for one officer. Other Departments of Orono’s size (and smaller) have two investigators. The Department’s greatest criticism from citizens during the past three years has been about poor follow-up on case reports. The investigator is much more effective when he has a partner who can back him up on some