08-14-2017 Council Work Session Packet

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CITY OF ORONO MEMORANDUM DATE: August 14, 2017 TO: Orono City Council FROM: Danielle Amira, Interim Finance Director RE: 2018 Budget The draft 2018 budget reflects an effort to address current operating needs while keeping any tax levy increases to a minimum. As presented, the draft 2018 budget reflects a 3.86% increase in expenditures. Tax Lew The property tax levy, representing 53.5% of the revenue budget, is the main revenue source for the General Fund. The current General Fund revenue budget is currently presented with 6.05% increase to the levy. In addition to funding the General Fund, the tax levy is also needed for debt service and road funding. The current tax levy is broken down as follows: • General Fund $4,451,200 • Pavement Mgmt 500,000 • Debt Service 711,000 $5,662,200 The City's debt service needs will remain constant at $711,000 through 2022. It will decrease substantially to $416,530 in 2023. If no new debt is issued, the debt levy will be reduced to $0 in 2029. The Pavement Management Levy was added to the budget in 2016 to begin funding ongoing road maintenance needs, the 2017 Levy was $253,000. The planned 2018 levy is $500,000. To fully fund the City's road program of $1,050,000, an additional $750,000 of funding is needed in 2019. Other Revenues The General Fund revenue budget as presented is a 1% ($54,987) increase from the 2017 budget. Most revenue lines are remaining flat when compared to the 2017 budget. The General Government Service Charges category is decreasing by $20,000. This is the result of anticipated revenue loss due to variances and conditional use fees. This also reflects a new revenue, Lurton Dog Park off Leash Pass of $10,000. Public Safety Service Charges are increasing by $54,387 mainly as the result of an increase in contracted police service charges. The Mound service contract includes a price inflator of 2.3% ($39,224) for 2017. In talking with the Public Works Director and based on 2016 and 2017 year to date results, Golf Course revenue is being increased by $20,000. All other revenue changes are minor.