09-22-2025 - Agenda Packet City Council - Regular Meeting

Home Browse Search

City of Orono Introduction and Summary THE BUDGET PROCESS The city began the budget process at the end of May with the various city departments completing their budget request forms. Departments then met with the City Administrator and the Finance Director to review their budget requests. Upon completion of the reviews, the draft preliminary General Fund budget was discussed with City Council during work sessions in July and September. The Preliminary General Fund Budget and Tax Levy is set to be adopted by the City Council at the September 22, 2025 City Council meeting. Prior to the final adoption of the 2026 budget and tax levy, the City is required to hold a public hearing to allow public input on the budget and tax levy. By law, this hearing must occur between November 24th and December 28th. The public hearing will be set for December 8, 2025 at 6:00 pm at Orono Council Chambers. The final budget and tax levy will be adopted at the December 8th City Council meeting. In addition to the work on the actual budget, staff is working on updating the Capital Improvement Plan (CIP). The CIP identifies the long-term infrastructure needs and is a valuable tool in the budgeting process. The CIP will be approved as part of the December 8th meeting. In conjunction with the budget process, staff will review the fee schedule. The 2026 fee schedule will also be adopted at the December 81h meeting. TAX LEVY The tax levy is used to fund the general operations of the City (General Fund), to pay the debt service on the City's outstanding bonds, and to fund the Pavement Management (PMP), Building, Facilities, Fire Capital and Park Funds. The total tax levy required to fund the 2026 preliminary budget is $10,278,500. This is an increase of $647,500 or 6.72% over the 2025 levy of $9,631,000. The increase of $503,900 in the General Fund represents the largest increase in the levy. The increase is primarily for the need to cover wage increase per bargaining agreement with staff unions long with non -union staff following suit. Other levy increases include $160,000 increase for the Fire Capital Fund to fund capital purchases for the new fire department. Decreasing levy includes Parks levy and debt services levy for 2014A and 2021A bonds. The Parks levy is decreasing to accommodate for an increase in work hours of seasonal parks employees. The debt service levy is decreasing to match the levy schedule of each accordingly. Pavement Management and Facilities Capital levy are remaining stable to adequately plan for facilities improvements needed and streets projects respectively. TAX CAPACITY RATE AND THE IMPACT OF THE TAX LEVY ON PROPERTY OWNERS The County Assessor provides an annual calculation of the City's tax capacity based on the annual Page 1 of 96 156