12-08-2008 Council Packet - Laserfiche WebLink

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MINUTES OF THE ORONO TRUTH IN TAXATION M EETING Monday, December 1, 2008 6:30 o’clock p.m. ______________________________________________________________________________ PAGE 1 ROLL The Orono City Council met on the above-mentioned date with the following members present: Mayor James White, Council Members Jim Murphy, Lili McMillan, and Cynthia Bremer. Representing Staff were City Administrator William Wells, Finance Director Ron Olson, and Recorder Jackie Young. Mayor White called the meeting to order at 6:35 p.m., followed by the Pledge of Allegiance. NEW BUSINESS White stated the purpose of tonight’s meeting is to discuss the City’s proposed budget for fiscal year 2009. The Minnesota Legislature has re-established levy limits that cities may impose to a maximum of 3.9 percent, which is roughly the rate of inflation. Some expenses are exempt from the levy limit, which would be pension obligations and debt service. White stated the City of Orono has no pension obligations that it has to fund and very minimal debt service. Due to the real estate market conditions, some properties have seen a decline in value, which then results in a decline in the amount of property taxes the City will collect. White noted the City adopted a preliminary budget earlier this year and sent that information in to Hennepin County, who then determines what the impact of the city’s budget will be on each individual property owner’s property tax if the budget is adopted by the City. White stated that a person’s valuation may go up or down and that the residents will be given an opportunity to appeal their valuations at a different time. Tonight’s process is to focus on the city’s portion of the tax bill and to discuss how the budget was arrived at. White noted the school district’s levies are not part of the city’s tax capacity and are based on market value. White noted there is a handout available on the city’s proposed budget and tax levy for 2009. White indicated the City’s proposed budget for the year 2009 is $7,633,318, with the anticipated 2009 non-tax revenues being $2,906,420. The difference will need to be made up by the tax levy, which is projected to be $4,564,687. Olson reviewed the 2009 preliminary budget and stated the improvement and equipment fund is the city’s capital improvement expenditures. The community investment fund is money that is allocated toward community improvements. Olson stated the $130,000 reflected under the community investment fund is a transfer to help with the City’s debt service, which is primarily being used to pay for the fire hall. White noted the City has implemented a 15-year program to improve the streets throughout the City without assessing the costs to the individual residents. The City has spent a lot of time with the city engineers prioritizing the streets and categorizing the improvements that should be made. Olson displayed a breakdown of the general fund revenues that are projected for 2009. Olson noted the majority of the money received by the City comes from property taxes. White stated the City only increased those items where they absolutely had to, such as the police department, which is dictated by their contract. In addition, the City increased their expenses associated with fuel costs and have added expenses associated with the hiring of a new full-time fire chief. White Item #03 - CC Agenda - 12/08/08 Approval of Truth in Taxation Minutes [Page 1 of 5]