HomeMy WebLinkAbout12-01-1992 Budget Hearing MinutesMINUTES OF THE 1993 BUDGET HEARING
CITY OF ORONO
HELD DECEMBER 1, 1992
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The Council met on the above date with the following members
present: Mayor Peterson, Councilmembers Gabriel Jabbour, Edward
Callahan and Mary Butler. J. Diann Goetten was absent. The
following represented the City staff: City Administrator Ron
Moorse, Public Works Director John Gerhardson, Zoning Administrator
Jeanne Mabusth, Finance Director Tom Kuehn, and City Recorder Teri
Naab. Mayor Peterson called the meeting to order at 7:00 P.M.
OPEN PUBLIC HEARING 7:00 - 8:03 P.M.
The Affidavit of Publication was noted.
Newell Weed presented the Council with information concerning
distribution of tax liability and State Aid. He stated Minnesota's
tax laws are based on the theory that all taxes paid are based on
the ability to pay. Due to great inflation in the past years, the
values of land in the suburban cities has escalated but incomes
have not to that degree. The tax system also ends up assessing more
tax liability to people with 'less ability to pay. He reviewed
slides on the Voss theory, which compares social security numbers
to reported income and taxes paid. He stated in 1993 the Homesavers
Circuit Breaker will be trying to cap property tax Ilability and
create a more fair distribution of State Aid.
Jabbour asked if commercial property is taxed in the same manner.
Weed stated commercial, rental and non - homestead property is taxed
in a different manner than residential. He noted the elderly,
disabled and lower income families are those in greatest need of
tax relief.
Mayor Peterson thanked Mr. Weed for his presentation.
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Moorse explained the Truth and Taxation meeting along with the
adoption of the City Budget is the final step in the process. He
stated this meeting is a way for property owners to get Information
on the impact of the tax assessed to their property. He explained
Orono started the budget process last April or May when the
Department Heads submitted budget information from which the
Administrator and Finance Director compiled a budget overview for
the Council to review. The Council then gave direction to staff on
changes. The Council adopted a proposed budget, which has been
distributed for review by property owners during this meeting. He
reported City staff has tried to reflect the economic situation and
the problems the City may encounter with regard to the State -level
MINUTES OF THE 1993 BUDGET HEARING
CITY OF ORONO
HELD DECEMBER 1, 1992
budget. He said they have tried to keep the budget as fiscally
responsible as possible.
Moorse explained the proposed budget includes a 3.2% overall
increase of the General Fund, which includes a contingency amount
of $50,000 for anticipated costs related to the Highway 12 corridor
study and the potential cut in State Aid. He said the revenue loss
experienced by Orono is in part due to the economic conditions and
the uncertainty of the Highway 12 situation. He reviewed slides
showing the impact of the proposed increase and added because of
the loss of-the three tiered taxing system, the burden of the tax
Incredse has been shifted to the homes taxed within the first tier.
The increase in the budget represents a 9.6% increase in the City's
tax for the first tier properties, and a decrease for the remainder
of properties.
Barb Lohmann, 1860 Lakeview Terrace, stated the City's portion of
her tax bill has increased 17 %, not the 9.6% increase as proposed.
Kuehn explained the additional increase is due to the increase in
the valuation of the property, as well as the incrase in the tax
capacity rate.
Doris Merkert, 1840 Lakeview Terrace, expressed a similar complaint
and stated their income has actually been reduced, but their taxes
keep going up along with the value of the home.
Jabbour explained the State tax system formerly used a three tier
system, but the higher tier has been eliminated and the balance
absorbed by the lower tier.
Callahan stated 98% of the problem comes from the Legislature. He
suggested the property owners questioning their valuation appear
at the Board of Review in the spring.
James Steffenson, 4665 West Branch Road, noted when he purchased
his home in 1988 his taxes were $700 and now the taxes are $1,400.
Moorse clarified that the $1,400 is the total tax bill for the
property, not just the City's portion.
Jabbour stated when
In value six times
became fashionable
mandates the City
certain percentage
increase the City -v
he first moved to Orono, his property increased
In four years, in part due to the fact that it
to move to Orono. He added, the State law
to keep the overall City valuation within a
of the appraised value, or the County will
tide value to that level.
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MINUTES OF THE 1993 BUDGET HEARING
CITY OF ORONO
HELD DECEMBER 1, 1992
Dean Greimann, 3779 Casco Avenue, noted it was indicated that
revenue is flat to stagnant, but noted many properties with new,
and more expensive dwellings on them.
Moorse stated that trend has not happened as much in the past
couple years. He added, the overall City valuation has decreased
in the last two years, in part due to the reduction in lakeshore
valuations.
Jabbour clarified that the City does not receive additional tax
money from a newly developed property, but rather the taxes are
spread among all properties.
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Bill Fox, 1095 West Ferndale Road, noted his City portion of tax
has increased 21.6% yet the market, vaIue has remained the same. He
noted the property is non - homestead.
Moorse indicated that they can assume non - homestead property is
also receiving a larger "share of tax burden from the reduction of
the three tier tax system.
Kuehn suggested Fox contact the City office to review the formula
used to calculate his taxes.
Michael Johnson, 1461 Bayridge Road, stated he has also had a
similar experience and noted he too would contact the City staff.
Hurr questioned the amount budgeted for public safety and asked
where the off - setting revenue is reflected.
Kuehn-answered that the public safety includes budgets from fire,
police, animal control, emergency preparedness, and building and
zoning.
Moorse said the revenue is reflected in the service revenue, a
percentage of license fees, and property taxes.
It was moved by Jabbour, seconded by Butler, to adopt Resolution
#3208 adopting the 1993 Budget. Ayes 4, nays 0.
It was moved by Butler, seconded by Callahan, to adopt Resolution
#3209 approving the final 1992 tax levy collectible in 1993. Ayes
4, nays 0.
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MINUTES OF THE 1993 BUDGET HEARING
CITY OF ORONO
HELD DECEMBER 1, 1992
ADJOURNMENT
It was moved by Jabbour, seconded by Mayor Peterson, to adjourn
the 1993 Budget Hearing at 8:03 p.m. Ayes 4, nays 0.
ilin, City Clerk
Barbara A. Peterson, Mayor
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