01-14-2013 Council Packet - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, December 10, 2012 6:30 o’clock p.m. _____________________________________________________________________________________ Page 1 of 15 ROLL CALL The Orono City Council met on the above-mentioned date with the following members present: Mayor Lili Tod McMillan, Council Members Cynthia Bremer, Aaron Printup, and David Rahn. Representing Staff were City Administrator Jessica Loftus, Assistant City Administrator of Long-Term Strategic Planning Michael Gaffron, City Clerk Lin Vee, Finance Director Ron Olson, Planning Coordinator Melanie Curtis, City Engineer/Public Works Director Jesse Struve, City Attorney Soren Mattick, and Recorder Jackie Young. Mayor McMillan called the meeting to order at 6:32 p.m., followed by the Pledge of Allegiance. PUBLIC HEARING 1. 2013 Budget Hearing – 2013 Budget and Tax Levy Olson stated the truth-in-taxation hearing is to allow for public input into the City’s 2013 budget and tax levy. Tonight’s meeting is the culmination of the City’s budget process that began back at the beginning of June. At a work session in June, the Council was provided background information on the budget and an overview of the budget challenges for 2013. Based on the Council’s input, a draft budget was prepared and provided to the Council for their review at the July 20, 2012, work session. The draft budget was refined further and the updated draft was presented to the Council at the August 27, 2012, work session. The preliminary budget was approved at the September 10th Council meeting. An additional work session was held on October 20th to discuss the City’s enterprise fund budgets. As it relates to the City’s tax levy, a person’s taxes are calculated based on a formula determined by the state legislature. According to the Hennepin County Assessor, the City’s taxable market value is $2,364,624,166 with a tax capacity of $26,790,412. When compared to last year, the City’s taxable market value has decreased by 7.39 percent and the tax capacity by 7.92 percent. As a result of the City’s decreased tax capacity, the tax capacity rate will increase from 16.28 percent in 2012 to 17.55 percent in 2013. This increase is solely the result of the decreased tax capacity. The City’s tax levy did not increase. The actual tax impact on any particular property will depend on how the property’s taxable value changed in relation to the rest of the City. Olson stated the estimated market value is multiplied by the class tax rate for an individual property and there are different rates depending on the type of property, such as commercial/industrial or homestead versus non-homestead. The average tax base distribution for a city in Minnesota is 50 percent residential homestead and 14 percent nonresidential, for a total of 64 percent in the average city in Minnesota. Olson noted 95 percent of Orono’s property tax based is based on residential properties, with the other 5 percent consisting of farm land and commercial/industrial properties. After the county assessor sets the value on every property in the city, those numbers are added together and the median number is taken, which gives you the City’s tax capacity. The City Council tonight will pass the property tax levy, which will be divided by the total city tax capacity, which will then result in the tax capacity rate. The City’s tax capacity rate for 2013 is estimated to be 17.55 percent. Item #02 - CC Agenda - 01/14/2013 Approval of Council Minutes 12/10/2012 [Page 1 of 15]