08-05/08-24-1999 Council Work Session Minutes

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Summary of 2000 Budget Work Sessions Page 2 The 2000 budget uses $45,000 of General Fund reserves that are specific to two expenditure items: A. $20,000 of reserves will be used to fund the one-time costs of hiring a new police chief to be on board three months prior to Chief Cheswick's retirement. B. $25,000 of reserves is unused COPS grant funds that will be used to offset a portion of the first year costs of hiring an additional police officer. Tax Levy, Tax Capacity Rate, and Impact on Property Owners The total tax levy required to fund the proposed 2000 budget is $2,363,560. This is an increase of $71,680 or 3.13% over the 1999 levy. The proposed levy amount is at the City's levy limit. The estimated tax capacity for taxes payable in the year 2000 is $15,750,937. This is an increase of $1,035,895(?) or 7.04% over the 1999 tax capacity. Based on the City's tax capacity and the proposed ta}c levy, the tax capacity rate would be 14.637%. This is a 3.55% reduction from the 1999 tax capacity rate. Based on the reduction in the City's tax capacity rate, and assuming no change in property value, the City's share of the property tax bill on a home valued at $100,000 would decrease by $9.19 or 5.1%. For a home valued at $400,000, the City's share of the property tax bill would decrease by $59.09 or 6.1%. Medium and Long-Term Needs Because of the levy limit and the need to address higher priority needs, the 2000 budget does not include increased funding for street overlays, stormwater projects, or parks development. The Council discussed possible funding options for these needs. The Council directed that the funding for street overlays be used for collector roads versus neighborhood streets, and that staff develop a policy regarding assessments for overlays on neighborhood streets. Council also directed staff to provide information regarding the City's overlay bids to the presidents of the homeowners' associations of subdivisions with private roads. It was discussed that an option for funding smaller stormwater improvement projects is a stormwater utility. With a stormwater utility, all properties pay a user fee, similar to a water or sewer fee, based on the amount of stormwater runoff produced by their property. The Council also agreed that the City needs to be proactive in bringing ponding projects to the Minnehaha Creek Watershed District for funding rather than waiting for the Watershed District to bring projects to the City. A specific suggested site for a future pond is upstream of Stubbs Bay. The Council discussed that the 1999 General Fund surplus should be used to fund a priority special project. The Council directed staff to contact Ehlers Associates, the City's bond consultant, to determine if Orono could sell bonds for the new Long Lake Fire Station.