10-10-2016 Council Packet - Laserfiche WebLink

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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, September 26, 2016 7:00 o'clock p.m. 4. 2017 BUDGET AND PRELIMINARY LEVY — RESOLUTION NOS. 6675 and 6676 (continued) Olson indicated that is correct. Olson stated what will happen is before the City can actually refund, the City has to go out to the market and there has to be a certain percentage of savings prior to any refund. Mayor McMillan asked if there are any public comments regarding this item. Rich Anderson, 3205 Crystal Bay Road, stated what Ron Olson just showed should be included in the City's newsletter where it talks about the City of Orono's share of taxes and where it comes from. Anderson stated if those parameters are laid out as to how Orono gets paid, that would be very helpful to the residents and that he would suggest it be included in the City's newsletter. There were no further public comments. Council Member Printup thanked Ron Olson for pointing out that 100 percent or close to it was dedicated to the streets over two years. Walsh stated the City Council has an obligation to make sure the City has a road funding mechanism going forward and that the City got a good start on it last year by putting $188,000 in the pavement management fund. Walsh commented it would be prudent to keep doing that. Walsh stated one of the City's biggest obligations is to make sure there are police and fire protection as well as adequate infrastructure. Walsh indicated he would support the $5,353,000 levy. Council Member Cornick stated he is in agreement with Council Member Walsh and the numbers outlined in the presentation. Levang stated she is more interested in the 5.19 percent levy and that the City Council should be entertaining a $1 million bond to make sure the roads are addressed. Levang noted if the City goes with a 5.19 levy, the tax rate would decrease. Levang stated the opportunity to benefit from a tax rate increase does not come along very often and that the City has a way to fund a considerable number of road projects as well as lower the tax rate. Levang indicated she is not interested in the 8.06 percent levy. McMillan stated the City will be going out to the bond market to refund for $2.8 million and that adding $1 million to it would be timely to capture the low rates. McMillan stated having a little bit bigger bonding issue makes the City more attractive to investors in terms of the bond rate and it will give the City a chance in the next year or two to complete a number of mill and overlay projects. McMillan stated if the City was not going out to the bond market, she would be hesitant to do that, but that they would be able to get more roads done with the additional bonding. McMillan stated in her view it is prudent investing and that she is in favor of the 5.19 percent. McMillan stated if the Council is not comfortable with the 5 percent, they could reduce it lower depending on the interest rate the City receives. McMillan stated in her view an 8 percent increase is a lot and that the City has not been above 5 or 6 percent in a long time and it also sets a new rate. Walsh commented this is a stark contrast between him and the Mayor and that bonding is for exceptional projects rather than for items that should be included in the budget. Page 6 of 26