12-18-1990 Council Minutes - Reconvened 1991

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f, -ORONO BUDGET PUBLIC HEARING MEETING HELD DECEMBER 3, 1990 disparity applies to various income levels. Bernhardson stated that property valuation and budget are two items that must be understood when considering the property tax system. He said, "For the 1991 budget, the^ property values that were set to that go back to January 2, 1990. It is the values as of that date that form the basis for the 1991 budget. Last April and May we held a Board of Review regarding the property values. Back in June of 1990, we oegan our budget cycle and by August had established a maximum total levy for taxation. We then set a location and hearing date for these meetings. The levy we established was included in the tax notice that you received. We then received preliminary tax base information from the County. It is necessary lor the City to adopt a budget and levy at either this meeting, or the December 18, 1990 meeting if this meeting reconvenes. Once the budget and levy are adopted, they are certified to the County. At the beginning of 1991, the City starts its fiscal year. The County will begin to determine what the levy will be for each individual property. All levies for each jurisdiction are placed on a property tax notice and sent to property owners in February or March. Taxes are paid in May. The City receives its first half tax payment in July. The City runs six months of its fiscal year before it realizes its major source of revenue. It is for that reason that we must have a certain amount of reserve. The second half taxes are due in October and are received by the City in December. It takes approximately one and a half years from the time the City begins its budgeting cycle to know the results." Bernhardson referred to the information partaining to proposed expenditures from the general fund and a summary of revenue sources. He stated that property taxes comprise approximately 54% of the total budget. He said, "The City of Orono receives 13.4 cents from every property tax dollar. The School District receives just under 50 cents Hennepin County gets 30 cents, and Special Districts, such as Metro Council, Metro Transit, Hennepin Parks and Mosquito Control District, receive about 7 cents. The tax capacity rate is determined by taking the total number of dollars needed, divided by the property tax base. The City of Orono has the lowest tax capacity rate in 1990 of any city over 1,000 population in Hennepin County. •' Bernhardson displayed information showing a comparison of tax capacity rates for various communities. He then presented information comparing the 1990 and 1991 levies. Bernhardson said, "The General Ad Valorum and special Assessments levies are the two items that represent our General Fund. We are proposing an approximate 4% increase in the general fund area. The major portion of the 13.1% increase is due to 1989 bonded debt in the amount of $140,000, which represents 8.5% of the increase. The 1989 bonds were issued for a sewer and water project on Highway - 2 - WilifWltillft li ■!