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MEMORANDUM <br />To: Mayor McMillan and Orono City Council <br />From: Ron Olson, Finance Director <br />Subject: 2017 Budget <br />Date: May 23, 2016 <br />Attachments: <br />A) Tax Levy/Rate Graph <br />B) 2016 Year -to -Date Reports (Unadjusted) <br />C) Council Goals <br />D) Federal Reserve Economic Projections <br />E) LMC Handbook Chapter 21 <br />Budget worksheets for the 2017 General Fund budget will be distributed to departments this <br />week. This marks the beginning of the 2017 budget process which will conclude with the <br />adoption of the 2017 budget and tax levy on December 12, 2016. <br />Prior to preparing a draft budget, staff would like the Council's input in the areas of the tax levy <br />and spending priorities. This input will assist the Administrator and Finance Department in <br />determining which department funding requests to include in the draft budget. Preliminary <br />budget information will be presented to the Council at the June work session. A draft budget <br />will be discussed in July. The Council's input in July will be used to prepare an updated draft <br />budget which will be discussed at the August work session. Input from the August meeting will <br />be incorporated into a preliminary budget which will be televised for the public at the September <br />12th council meeting. The preliminary budget and tax levy will be adopted on September 26tH <br />2017 Budtet Factors <br />Revenue: <br />1) Property values have been increasing for the last few years. Last year's increase was <br />2.6%; the increase for 2016 (taxes collectable 2017) is currently estimated to be 7.8%. <br />While property values themselves do not impact the City's ability to set the tax levy <br />at a level needed to fund operations, the changing values do impact the City's tax <br />rate. More information on the tax rate and levy can be found in attachment A. <br />2) Revenues for development (building permits, variances, subdivisions) have increased <br />significantly over the past couple of years. However, at this point in the year, it is <br />projected that the building revenue budgets will be unchanged from 2016 to 2017. <br />2017 Budget — Page 1 <br />