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MINUTES OF THE <br />ORONO TRUTH IN TAXATION M EETING <br />Monday, December 1, 2008 <br />6:30 o’clock p.m. <br />______________________________________________________________________________ <br /> <br />PAGE 3 <br /> <br />White stated the City has put aside monies in a special fund every year for the past few years to help <br />offset some of those anticipated improvement costs. <br /> <br />McMillan commented that the amount reflected under street improvement is the annual maintenance that <br />is routinely done on the streets and not major improvements. McMillan noted the City does receive a <br />grant for the recycling, which helps to offset those costs. <br /> <br />Traff asked if the current provider has raised their prices. <br /> <br />Olson stated Waste Management has a three-year contract and that there is a built-in price increase in that <br />contract. <br /> <br />Traff asked if it would be eight percent a year. <br /> <br />Olson stated it would not be eight percent. Olson noted the organics program is included in the <br />expenditures even though the City receives a grant for the program. <br /> <br />Traff asked whether the City Council has received an increase in their pay. <br /> <br />Olson stated the Council will not be receiving an increase in their pay but that there are some <br />memberships that are included under the category city council, such as the Lake Minnetonka <br />Conservation District, which increased their budget and resulted in an increase in the City’s cost. In <br />addition, there was a shortfall from 2008, which will be made up in the 2009 budget. <br /> <br />Murphy commented he would prefer to have a separate line item for the LMCD and that some of these <br />items, such as personal services, should perhaps have a different label. <br /> <br />Olson reviewed some sample calculations done on different house valuations and how the City’s tax <br />capacity is determined. <br /> <br />White noted state law requires assessors to value property at 100 percent of market value and that the <br />rates are set by state statute. <br /> <br />Olson displayed the calculations for a $500,000 home and a $1.1 million home. Olson stated if there was <br />no increase in value, the property owner’s city taxes would decrease. <br /> <br />Bremer noted that even though there was an 8.5 percent increase in property tax for the $1.1 million <br />home, the city’s tax rate actually decreased for that property. <br /> <br />Carlson asked why there would be a reduction. <br /> <br />Olson stated the city’s tax capacity has decreased. <br /> <br />Bremer pointed out the city’s tax rate is dependent on the valuation of the home. <br /> <br />Murphy stated one of the least understood issues is how the taxation process works. The City attempts to <br />explain the items that taxpayers are subjected to being taxes on and that property taxes in the state of <br />Item #03 - CC Agenda - 12/08/08 <br />Approval of Truth in Taxation Minutes [Page 3 of 5]