09-08-2014 Council Minutes - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, September 8, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 5 of 25 (5. 2015 PRELIMINARY BUDGET INFORMATION, Continued) Olson noted the City’s tax capacity increased in 2014 by 2.28 percent and the tax levy went up 1.5 percent. Olson indicated the City’s tax capacity rate is 17.674 percent for 2015 compared to 17.81 percent in 2014. Olson stated the City’s tax capacity goes towards calculating someone’s property taxes. On a $250,000 house, if the house did not change in value, the decrease in the tax capacity rate would save that house .76 percent or $3.18. On a $2 million home, the taxes would decrease by $32. Olson stated if residential property values go up 2 percent, it is likely a property owner would experience a slight increase in their taxes and a $250,000 home would see an increase in their taxes of $1.60 for the year. A $2 million home would see their taxes increase by $56 per year. Olson noted that portion is just the City portion of the taxes and does not include the school district and the state. Olson noted as it relates to the General Fund, revenues are currently budgeted at $7.5 million, which is an increase of $246,000 and consists of $70,000 in taxes. The majority of the revenue increase is in non-tax revenues and result from an increase in construction activity. Olson noted government service charges are going up 11 percent and government service charges are going up three percent. Olson pointed out the majority of the increases do not come from increased taxes. The engineering and legal fees are pass- through bills but also reflect an increase in activity. As it relates to expenditures, the preliminary budget reflects an increase of 2.7 percent or $195,000. Personnel services accounts for 66 percent of the City’s budget and professional services are another 13 percent of the budget. Olson noted there are not a lot of discretionary non-people items that can be cut. The police union contracts require a 2.5 percent increase, which amounts to almost $50,000. Nonunion wages would also receive a 2.5 percent increase in 2015, but the temporary 1.5% 2014 increase will not be continued. The increase in nonunion insurance would be with about another $8,300. Olson indicated a staffing change was made this year, with the City Council approving a change in the position of customer service assistant to full-time, which adds $24,000 to the overall budget. In order to offset some of this increase, $10,500 of the IT technician’s wages and benefits are now being allowed to the Cable Fund. In addition, the City hired a community development director. With benefits, this position adds $99,000 to the General Fund budget. The costs associated with this position are partially offset by the elimination of the building inspector position and a decrease in professional services. Olson indicated those staffing changes were made in an effort to improve customer service. Olson noted in addition, fuel costs are projected to increase by approximately $17,000. Liability insurance on the police department is increasing by $10,000. Other changes include an addition of $30,000 to the Public Works budget for street maintenance materials and supplies. In addition, the Park Department was increased by $11,000 for repairs and maintenance, $10,000 for tree trimming, and $10,000 for seasonal help. Olson indicated a staffing change at the golf course eliminates $10,980 in health insurance and the City will save $21,000 with 2015 not being an election year. Olson stated the City is required to certify its preliminary tax levy to the County by September 30. After adoption of the preliminary levy, the levy cannot be increased but it can be decreased prior to adoption of the final levy at the December 8 Council meeting.