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property revaluation. As of August, the City's taxable market value is $5,324,277,671 with an adjusted
<br />net tax capacity of $62,653,121. When compared to last year, taxable market value has increased by
<br />6.22% and the adjusted net tax capacity increased by 6.43%. For 2026, it is anticipated that the tax rate
<br />will remain stable with a 0.05% increase from 16.361% to 16.405%; remaining one of the lowest rates in
<br />both Hennepin County, and the State of Minnesota.
<br />Using this tax rate and assuming no change in a property's value, the City's share of the property tax bill
<br />would remain the same compared to 2025. The actual tax impact on any particular property will depend
<br />on how the property's taxable value changed in relation to the rest of the City. The table supplement
<br />suggest a median City increase in market value of 5.06%. For an average home in Orono, worth
<br />1,110,400 in 2025, with the average increase in market value, can expect an increase of $120.85 (5.85%)
<br />in their City portion of their property tax bill.
<br />GENERAL FUND
<br />General Fund Revenues. The 2026 General Fund Revenue Budget totals $112,490,550 an increase of
<br />$555,550 (4.7%). Property taxes makes up approximately 60% of the budget, with an increase of
<br />$510,900 (4.7%). The remainder of the General Fund revenue is made of non -tax sources with the next
<br />largest revenue source coming from public safety charge at 24%. Public safety charge comes from
<br />service contracts with neighboring cities for police and fire protection. By working cooperatively with
<br />neighboring cities, the police department is able to provide enhanced service at a lower cost by
<br />eliminating overhead and duplication of service. The fire department is anticipated to transition to a
<br />joint power agreement (JPA) on January 1, 2026. The remaining 16% of revenue is made of: license,
<br />permits, intergovernmental revenue, general government service charges, fine and forfeit, interest, and
<br />miscellaneous charges.
<br />Detailed revenue information is included with this document.
<br />General Fund Expenditures. The 2026 expenditure budget is $12,490,550 which is an increase of
<br />$555,550 (4.65%) over the 2025 budget.
<br />By category, the largest increase is in Professional Services in the amount of $741,950 (41.28%). IT
<br />services charge, facilities services charge and contracted fire service makes up the majority of this
<br />increase. IT service charge is increasing by $124,050 due to reallocating IT personal wage and benefits,
<br />subscription costs, telephone cost and other IT supplies and equipment. For 2026 budget, each
<br />department will be charged facilities service charge, totaling an increase of $267,750 increase in the
<br />General Fund. Contracted fire service is also increasing $389,400 with the transition to a joint powers
<br />agreement (JPA).
<br />Offsetting the large increase is Personal Services, which is decreasing by $262,150 (-3.22%). Within the
<br />Central Service department, wages and benefits is decreasing by $145,700 due to transition cost to the
<br />Facilities Services Fund. Fire department wages and benefits are decreasing by $667,800 with the
<br />transition to a JPA fire department. The remaining offset is an increase in overall General Fund wages
<br />and benefits of remaining City staff of $541,350.
<br />By Department, the significant changes are as follows. Administration is increasing by $40,050 or 6.98%,
<br />with a minimal increase of $5,200 of it dedicated to revising the employee recognition policy in the
<br />Employee Handbook to incorporate additional items. Election is increasing $42,150 (113.46%) since
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