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MINUTES OF THE
<br />ORONO TRUTH -IN -TAXATION MEETING
<br />and the
<br />ORONO CITY COUNCIL MEETING
<br />Monday, December 12, 2016
<br />6:30 o'clock p.m.
<br />ROLL CALL
<br />The Orono City Council met on the above-mentioned date with the following members present: Mayor
<br />Lili Tod McMillan, Council Members James Cornick, Jr., Lizz Levang, Aaron Printup, and Dennis
<br />Walsh. Representing Staff were City Administrator Jessica Loftus, Finance Director Ron Olson,
<br />Community Development Director Jeremy Barnhart, Public Works Director/City Engineer Adam
<br />Edwards, City Attorney Soren Mattick, Consulting City Engineer David Martini, Senior Planner Michael
<br />Gaffron, City Planner Melanie Curtis, and Recorder Jackie Young.
<br />Mayor McMillan called the meeting to order at 6:30 p.m., followed by the Pledge of Allegiance.
<br />TRUTH -IN -TAXATION PUBLIC HEARING — 6:30 p.m.
<br />1. 2017 BUDGET HEARING — RESOLUTION NOS. 6704, 6705, 6706, 6707
<br />Finance Director Olson stated tonight is the end of a long process that started in May. The purpose of the
<br />public hearing tonight is to discuss the 2017 budget and tax levy and it is not to discuss property values,
<br />which is the open book hearing held in the spring.
<br />Olson stated residents' taxes are calculated the following way: The Hennepin County Assessor
<br />determines a market value on people's homes through sales and site visits. Once the assessor has come
<br />up with an estimated market value, those properties are then classified with a class tax rate. Olson
<br />indicated he will be using the residential tax rate this evening since that affects 85 percent of the
<br />properties in Orono. For a residential property, one percent of the first $500,000 of that property's value
<br />is calculated into its tax capacity, with 1.25 percent being added for all value over $500,000. If a property
<br />is worth $500,000, its tax capacity would be $5,000. Those two numbers are then taken together, which
<br />results in the net tax capacity for a property.
<br />To determine the City's tax capacity, all properties are added together. Olson stated the property tax levy
<br />is what the Council will be passing tonight. The property tax levy is divided by the City's tax capacity,
<br />which results in the City's tax capacity rate. For Orono, the proposed tax levy is $5,353,730, the City's
<br />total tax capacity is $31,052,317, which calculates to a tax capacity rate of 17.421 percent. Olson noted
<br />that is lower than last year's, which was approximately three-quarters of a percent higher.
<br />Olson stated to determine someone's individual property tax, they would take the City's tax capacity
<br />number times 17.41 percent, which results in the net property tax. Olson noted he is only talking about
<br />city tax and that he is not talking about county or school taxes. On a residential homestead worth
<br />$886,000, it would be one percent on the first $500,000 and 1.25 percent on the additional $386,000, for a
<br />tax capacity of $9,825. That number would then be multiplied by the city's tax capacity rate for a net city
<br />tax on the property of $1,693.92. Hennepin County's tax on that same property would be $4,611.64 and
<br />the school district tax would be $3,893, which is before the recently passed levy.
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