12-11-2023 City Council Agenda Packet

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MINUTES OF THE ORONO CITY COUNCIL MEETING November 27, 2023 6:00 o’clock p.m. _____________________________________________________________________________________ Page 2 of 10 Finance Director Olson explained how property taxes are calculated, beginning with the Hennepin County Assessor’s Estimated Market Value. The preliminary budget and tax levy was approved by the Council on September 11. The final budget and levy will be adopted December 11. He noted the City of Orono’s tax Capacity is the second lowest in the area. He also showed the City’s proposed general fund revenue and expenditure budgets for 2024. Total estimated revenues and expenditures are $11,536,630, an increase of 4.9 percent from 2023. The total proposed levy is $9,415,100. Compared to 2023, the levy is increasing by $1,028,100 or 12.3%. Mayor Walsh opened the public hearing at 6:35 p.m. Denise Reilley, 3405 High Lane, spoke to object to the budget and the resulting 26 percent increase in her personal Orono property taxes. Since Walsh has been mayor, she said, the City’s levy has increased from $5.2 million in 2017 to a proposed $9.4 million for 2024, which is an increase of more than 80 percent. She said part of the increase is to fund a new Fire Department including the hiring of a Chief and firefighters and the purchase of trucks. However, the contract with Long Lake runs through 2025. This past summer, Long Lake requested and was granted an injunction to keep Orono from breaking that contract, she said. This past week a judge found that Orono had violated the injunction and ordered Orono to pay Long Lake’s attorney fees and other charges, including $2,000 per violation. She said she objects to her taxes being used to pay attorney’s fees and other costs due to the City’s actions and pointed out those costs are probably not yet reflected in the budget. She asked that there be a moratorium on the new Fire Department until after a referendum, which would be the election that occurs before the end of the contract. Kim Carswell, 261 Cygnet Place, said the Council keeps talking about tax rates remaining stable but the funds the City pulls in has increased more than 80 percent since 2017 so it is spending what it has rather than prioritizing needs. Continuing to talk about the tax rate remaining steady is not clear communications to the citizens as to how much money the City keeps bringing in and spending, she said. James Elder, 195 South Brown Road, said the examples are based on property values remaining static. No one’s property values have remained the same. He said the presentation slides didn’t show that so that is not Truth in Taxation, which he referred to as an oxymoron. He noted the inflation of property values and the increase of the City’s tax capacity as a result. That doesn’t mean the City needs to keep spending all that money, he said. The more property values go up the more money the City has to spend, and it’s not well accounted for. He also pointed to enterprise funds as actually being costs to taxpayers such as water and sewer. He said those are taxes described as fees. Enterprise funds carry balances and create a slush fund that can be transferred to other accounts, which is not as clear to the taxpayers. Kelly Prchal, 4705 Watertown Road, also said she objects to incredible spending on an unnecessary Fire Department and she objects to tax dollars going to fines being caused by this spending and recruitment of firefighters. The budget has a line item for fire services from Long Lake for more than $600,000 in 2024 and a line item for Orono Fire that is higher than that, at more than $700,000 without yet providing any services, she said. She asked why the City is moving forward with duplicating fire services when neighboring communities are joining together. Luann Tolliver said she was there because she is very concerned about the 12.2 percent levy increase notice she received from Hennepin County. She said if some areas of the budget increase it is necessary to decrease other areas, adding that’s how she has to run her budget. She said she can’t spend more money 5