12/10/2012 Council Minutes - Laserfiche WebLink

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r MINUTES OF THE ORONO CITY COUNCIL MEETING Monday,December 10,2012 6:30 o'clock p.m. (l. 2013 Budget Hearing-20I3 Budget and Tax Levy, Continued) To determine someone's ta�ces,the county assessor will take an individual property's net tax capacity times the City's ta.x capacity rate,which is the 17.55 percent,to arrive at the net tax on an individual property. If a residential property is worth$500,000,the tax capacity would be$5,000 times 17.55 percent. Olson noted it is possible for a person's properly value to increase while their city tax decreases. It is also possible that a person's property value will decrease while their city tax increases. Olson indicated it all depends on how your property valuation changes in comparison to the other properties in the city. Olson noted the City's ta�t levy will remain at the same level as 2012 and 2011. The cities of Shorewood and Spring Park are also proposing a zero percent increase in their tax levy. The cities of Long Lake and Minnetonka Beach are proposing increases. Olson stated in 2012,Hennepin County received almost 44 percent of the ta�ces collected, school districts received 31.82 percent,and the City's share was 15.25 percent. The remaining portion goes to the Metropolitan Council,the Hennepin County Railroad Authority, and some other small entities. In addition,the average property tax distributions in Minnesota for 2012 were at 28 percent,which means that in an average city in Minnesota,28 cents out of every dollar went to the city. In Orono, only 15 percent went to the City. Olson stated the Orono City Council has done a good job at holding City taxes in line over the years,which has allowed Orono to remain towards the bottom for city taxes collected. Olson stated a person's city tax dollars pays for a number of things. The General Fund receives $3.9 million,which pays for plowing the streets,police and fire protection,and general city functions. Another$755,000 goes to pay down the city's debt service. The total tax levy required to fund the 2013 budget is$4,701,760. This is the same amount that was levied in 2011 and 2012. The budget does include a 1 percent increase in wages, a$50 per month contribution for each employee's family health insurance,which results in approximately a $51,000 increase. Olson noted the City was able to keep the budget and the tax levy at the same level as 2012 even though inflation increased at 2.2 percent. The addition of Mound to the City's police service area has had a major impact on the General Fund budget. The proposed 2013 General Fund expenditures are$7,348,630,which is an increase of 27 percent from the 2011 budget. This increase is fully funded by an increase in police service contract revenues and no tax dollars will be used to fund the services provided to Mound. The total levy for debt service has decreased by$14,000 for 2013. This levy is used to pay the debt service on the City's outstanding bonds. Based on the existing debt,the levy needed for debt service will decrease in future years and the City's total debt service will be paid off by 2026. The Water, Sewer, Stormwater,and Recycling Funds are designed to account for the business type activities of the City. These funds do not receive any property tax revenue. 2013 is the second year that the City will adopt formal budgets for the enterprise funds. As part of the 2013 fee schedule,the following rates increases are proposed: Water by 6.5 percent; sewer by 2 percent, stormwater by 5 percent, and recycling by 5 percent. ------------------------ - --------- ----- Page 2 of 15 ----- ---- ------ - - - ---- --