12-09-2013 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ` ORONO CITY COUNCIL MEETING � Monday,December 9,2013 6:30 o'clock p.m. (PRESENTATION, Continued) Olson stated the county assessor provides the City with an annual calculation of the City's tax capacity based on the annual property revaluation. Once the City's tax capacity is determined,the City decides what its tax levy will be. Olson noted 2014's s tax levy will be the same as it was in 2012 and 2013. The City's total tax capacity in 2014 is $26,]80,986, with a tax capacity rate of 17.81 percent. On a$500,000 home,the City's taxes would amount to $890.50. The city taY in Orono is between 15 and 16 percent of a property owner's tax bill, with the largest amount going to Hennepin County followed by the school district. Olson stated the City Council over the years has done a good job at keeping the city taxes low compared to other cities. The state average increase for cities in Minnesota is scheduled to increase by 2.1 percent. Olson noted Orono will not be experiencing an increase in their tax levy for 2014. The primary revenue source for the City's General Fund is the property tax levy. The 2014 General Fund tax levy is $3,946,260. Total General Fund revenues are budgeted to decrease by$15,000 in 2014. The largest reduction is in engineering and legal fees,which are pass-through charges related to the development. Other savings came from elimination of the deputy clerk position,a reduction in the use of a consulting engineer, staffing changes at the golf course, and the restoration of the sales tax exemption for cities. The other major decrease is in the on-site septic program fees, which are being reduced from $60 annually to $45. The major increase comes from police service charges, which are increasing by $43,000. The savings were offset by increases in areas that were beyond the City's control. Major expenditure increases are due to expenses associated with the 2014 elections,the Hennepin County assessing contract increasing by $15,000,a rate increase from PERA for police officers, and a change in the premium rating from the League of Minnesota Cities for officers. Olson stated even though expenses are going up, the City is not increasing their budget for 2014. Olson stated as it relates to the City's outstanding debt, outstanding at the end of the year will be $8.5 million, which is projected to be decreased to $7.4 million in 2014. The current outstanding debt will be fully paid off in 2016 and the levy needed for debt service on the City's existing debt will begin to decrease. Mayor McMillan opened the public hearing. There were no questions regarding the 2014 budget and tax levy. Mayor McMiilan closed the public hearing. Bremer commended Ron Olson for his good work on the City's budget and tax levy. Bremer encouraged the citizens to attend the meeting in the spring on property valuations. An unidentified citizen asked whether the assessed value of all homes in Minnesota is a figure that is adjusted based on the state's projected budget. Page 2 of 35