08-23-2004 Council Minutes - Laserfiche WebLink

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. r ' MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, August 23, 2004 7:00 o'clock p.m. • Council member Sansevere arrived at 7:25 P.M. With regard to the management report, Malloy pointed out that the City has relied little on State paid Local Government Aid, or property tax credits, which is good, since the State is struggling with huge deficits, resulting in levy limits at the City level and cutbacks in Local Government Aid. Malloy indicated that Orono's tax as applied to tax capacity is less than half of the state average tax rate as compared to other cities, but pointed out that Orono has a higher tax capacity. In addition, Malloy noted that Orono's general fund revenue including property taxes is more than the state average. The City's overall expenditures per capita appear to be less than the state average. Malloy pointed out that although safety expenditures are greater than the average; this is due to providing service to other cities. These expenditures are off set by revenues from the shared services. He commented that the General Fund appeared to be in good condition. On the other hand, Malloy urged the city to keep an eye on the golf course operations, since they had been operating at a loss for the past few years, not unlike other municipalities. With regard to the audit itself, Malloy stated that the City's financial records are well kept and in need of few adjustments. He added that the compliance testing has been positive and noted that the only recommendation he might suggest would be that the audit process begin earlier in the year to allow for implementation of recommendations the current year. so Sansevere asked when this should be performed and whether it would be a hardship for Financial Director Kuehn to begin the process earlier. Malloy suggested the audit process be performed in April for presentation in May. Kuehn pointed out that additional hours would be necessary to implement the new `GASB 34 reporting model' for the next year and indicated that the City strives to begin the audit in April but is short handed. Murphy asked how the expiration of levy limits in 2005 would impact cities, and what other cities are doing. He commented that some residents suggest a tax increase in the current low tax rate Malloy stated that he had not seen an increase in taxes to offset the State Aid cuts in most cities; however, certain services and expenditures have been cut back. He pointed out that cities must find more effective and efficient ways of sharing costs and services and cautioned the Council not to rely on the State to turn things around. Murphy asked Malloy or Kuehn to explain the `under run' on the City's expenses and questioned whether this was a good idea. Kuehn explained that the under run was due in part to public safety positions that were unfilled for a portion of the year. In addition, the paving budget was cut in half and the superintendent of public works retired which left an opening there as well. • PAGE 4 of 9