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MEMORANDUM <br />To: Mayor Walsh and Orono City Council <br />From: Maggie Jin, Finance Director <br />Subject: 2025 Preliminary General Fund Budget and Tax Levy <br />Date: September 9, 2024 <br />Attachments: 2025 Preliminary General Fund Budget and Tax Levy <br />Work has been progressing on the on the 2025 budget. The draft preliminary General Fund <br />budget was reviewed by the Budget Committee and was presented at the July 22, 2024 council <br />work session. Since then, staff have been refining the budget as updated numbers are received. <br />Tonight’s information is being presented in advance of the adoption of the preliminary budget <br />and tax levy that will occur on September 23, 2024. By statute, the city must certify the <br />preliminary tax levy to Hennepin County by September 30. <br />There are a couple of variables that could still impact the budget and the tax base. <br />Health Insurance – The budget has been created with an assumption that the city <br />contribution for employee health insurance will increase by 10%. Rate change will not be <br />known until October. <br />Property Values – The final property values will not be received from the Hennepin <br />County Assessor until December. The tax rate calculations are based on the county’s <br />proposed net tax capacity released on August 14th and generally do not change <br />significantly between now and the final. <br />Directions from the Council was to maintain a stable tax rate. The tax information provided with <br />this memo is based on a levy increase of $215,900 (2.29%) and the same tax rate of 16.35%. <br />From the previous draft presented to Council at the July 22 work session, the significant changes <br />are as follows: <br />Administrative service charge revenue was increased in the General Fund. This is an <br />expenditure in the Enterprise funds for staff wages and benefit for the following <br />departments (Administration, Communication, Finance, Central Services). <br />Long Lake Fire operating budget was received and included as an attachment with this <br />memo. <br />The City of Long Lake has provided the draft budget for the LLFD. This budget <br />forms part of the Orono general fund budget and is funded by the Levy. As <br />currently drafted, the Orono portion is $577,849. This is a $42,545 decrease from <br />the 2024 budget. The majority of the decrease comes from wages and benefits <br />Page 1 of 58 3