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Home My WebLink About12-03-2007 Truth in Taxation Packet . PUBLIC ATTENDANCE MEETING DATE � �l � I Zv v �� ❑ COUNCIL ❑ PLANNING COMMISSION PLEASEFILLOUTTHEINFORMATIONREQUESTED ❑ PARK COMMISSION BELOW FOR OUR CITY RECORDS. � OTHER �y`°`�-` PRESENT FOR (from agenda) NAME (please print) ADDRESS NAME OR NUMBER 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 1�. 14. 15. \�'.^,administra[ice Suppor[\�funns)\Public:Vicend�ncerrpd � MINUTES OF THE TRUTH IN TAXATION HEARING HELD AT 6:30 P.M. ON MONDAY, DECEMBER 3, 2007 IN THE ORONO COUNCIL CHAMBERS Members Present: Mayor James White, and Council Members McMiilan, and Bremer. Staff Present: Finance Director Ron Olson, and Assistant City Administrator for Long- Term Strategy Mike Gaffron Mayor White called the meeting to order, and noted all members were present with the exception of Council Members Murphy and Rahn. He opened the hearing at 6:45 p.m. Robert Hanning, of 4220 6�h Avenue North stated that his total property taxes increased by 15%. He questioned why the City levy was increasing by 8%; an amount that is higher than inflation. He also questioned why his value was increased during a time of decreasing property values. The Council responded that they work hard at keeping a stable budget over time, pointing out that the tax capacity rate is decreasing. It was also pointed out the need for road projects were impacting this budget. Ron Esau, of 1230 Orono Oaks Drive asked where the Tax Capacity number comes from. Staff provided an explanation for the calculation of Tax Capacity. Gerald Pettis, of 744 Dickey Lake Drive indicated that his valuation increased by $90,000. Council suggested that he contact the assessor's office for information about his valuation and the appeal process. Mr. Esau asked why the budget for professional services was increasing by such a large percentage. Olson answered that the increase in professional services is due to the increased expenditures for legal and engineering consulting. Dave Runkle, of 2684 Casco Point Road, commented that employee wages were the largest share of the budget. He questioned if the IT position was needed, or if it could be outsourced or shared with other cities. Council responded that the city is careful when adding new positions. They discussed cooperative efforts with other cities for UB, inspections and police services. Mr. Hanning, asked how a 15% increase in his taxes could be justified. Council responded that as the Federal and State governments cut back on funding, the burden is falling on local governments. The Council indicated that they are very conservative when deciding to spend money. Mayor White announced that the final budget and levy will be adopted at the Final Budget Adoption hearing, to be held at 7:00 p.m. on Monday, December 10. There being no further public comments, Mayor White closed the hearing at 7:33 p.m. ADJOURNMENT Council Member Bremer moved, Council Member McMillan seconded, that the meeting be adjourned at 7:33 p.m. Vote: 3 Ayes, 0 Nays. ATTEST: L�� ' � �.��s��l�'1,�=.�" Linda S. Vee, City Clerk a es M. White, Mayor Truth-In-Tasation Hearing 6:30 p.m., Monday, December 3, 2007 Orono City Council Chambers AGENDA l. Call to order and roll call 2. Outline of proposed 2008 budget and tax levy 3. Mayor open hearing 4. Receive public questions and comments 5. Mayor close hearing 6. Advise the members of the public that the final budget will be adopted as part of the final budget adoption hearing that will be held at 7:00 p.m. on Monday December 10, 2007. 7. Adjournment Pronosed 2008 Bud�et The proposed 2008 budget reflects additional funding for street improvements and public safety. The budget includes funding to enable a multi-year street improvement program to move forward at an accelerated pace, as well as funding for an expanded Police Department garage. The budget also reflects Orono's share of the cost of a new full-time Fire Chief position to lead the Long Lake Fire Department, which serves the majority of the City. Tax Capacitv Rate and Propertv Tax Impact on Property Owners Based on the proposed budget and tax levy, and the increase in the City's tax capacity (tax base), the City's tax capacity rate will be reduced. Applying the proposed tax levy to the estimated tax capacity results in a tax rate of 13.52% which is a reduction from the 2007 level of 14.27 %. Using this tax rate, the City's share of the property tax bill on a home valued at $500,000, assuming the home has increased in value by 8% over the past year, will increase by $16.63, or 2.3%. For a home valued at $1,000,000, again assuming an 8% value increase, the City's share of the property tax bill will increase by $50.94, or 3.2 %. Tax Levy The total tax levy required to fund the proposed 2008 budget is $4,391,160. This is an increase of$307,930, or 7.5 % over the 2007 levy. The former $200,000 tax levy for street rehabilitation has been eliminated in favor of a new levy to fund the debt service on the planned street improvement bonds. The new levy for the street improvement bonds is $275,370. General Fund Bud�et Expenditures The proposed 2008 General Fund expenditures are $6,034,650. This is an increase of$451,410 or 8.09% over the 2007 budget. The main expenditure items affecting the budget increase are salary and benefits adjustments, the City's share of the cost related to the new Long Lake Fire Chief position, and additional engineering fees related to development, which are reimbursed by the developer. The budget also includes costs related to the update of the City's Community Management Plan, which is required every 10 years. Significant elections expenditures related to the 2008 presidential election are also included in the budget. General Fund Bud�et Revenues The General Fund revenue items are relatively stable for 2008. Construction-related revenues, such as building permit fees, plan review fees, and conditional use permit and variance fees were reduced in 2007, and are budgeted at the same level in 2008. The lower revenue amounts reflect the slowing of residential construction activity. Fundin� for Street Improvements The City has developed a multi-year street improvement plan that is designed to manage the condition of the City's streets in the most cost-effective manner over the long term. The 2008 budget reflects a substantial increase in the levy for debt service related to the street improvements bonds. This levy for these bonds will increase again in 2009, but will remain relatively stable in future years. Cit of Orono Y Tota I Tax Levy 1999 - 2010 $5.5 __ __ - - - __ _ _ __ ----- $5.0 --- ----- -----____ -- - - $4.5 - __---- -- ---- __ _ $4.0 - _ _ -- -- - - - � $3.5 __-- __ -__ - --- __ _ --- ------- - - - � $3.0 - _ _--- - -- - _ - - - = $2.5 -- - - - - - � $2.0 - - - - - - - $1 .5 - - - - - - $1 .0 - - - - - - , $0.5 - - - - - - - - $0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Page 2 Cit of Orono y � Tax Capacity Rates ' 1999 - 2008 25% __- _-- - 20% -- - - ---- -- _ __ --- I 15% - - - - 10% - - - - - - - - 5% - - - - - - - - - 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Page 3 City of Orono Tax Capacity, Local Levy, &Tax Capacity Rates 2008 Over(Under)2007 Actual Estimated TAX CAPACITY 2007 2008 Amount Percent Net Tax Capacity(To calculate rate) $28 383,366 $32,070,037 $3 686,671 �2•99% LOCAL LEVY Total levy all funds $4 083,230 $4,391,160 $307,930 7.54°�a TAX CAPACITY RATES Tax Levv General Revenue 11.757% 11.438% -0.319% -2.71% 3,705,790 PIR Infrastucture-Storm Sewer/Ro; 0.699% 0.000% -0.699% -100.00°/a 0 Parks-Land Acquisition&Development 0.018% 0.016% -0.002°/a -13.38% 5,000 Debt Service 0.189°/a 0.921% 0.732°/a 387.31% 295,370 HRA Building Bonds 0.874% 0.000% -0.874% -100.00% � Fire Facility&Equipment Bonds Debt 0.469% 0.655% 0.186% 39.62% 210,000 Big Island Vets Camp Bonds Debt 0.263% 0.546% 0.283% 107.48% 175.000 Total Local Tax Capacity Rate 14.269% 13.575% -0.694% -4•86% 4.391.160 Page 4 Cit of Orono y Ex enditure b Cate o p Y g rY Total Budget $7,971,490 Capital & Equipment Construction 0 3.6 /o � 5.0% Transfers � 4.6% � Debt Service 15.7% Personnel u" � _- - �'��'� 46.6% £�.� �_� ��. \ � � _�: ��'� . ��,� � � �� t��', � ,., 1 _,�, �. ,. Non- ersonnel � . µ p _�______------ 24.4% Page 5 2008 2008 DOLLAR % 2006 2007 Y-T-D DEPT MGR 2008 INCREASE INCREASE ACTUAL BUDGET 2007 REQUEST RECOMMD ADOPTED (DECREASE) (DECREASE) GENERAL FUND 5,930,366 5,583,240 2,534,828 6,034,650 6,034,650 0 451,410 8.09% PARK FUND 1,376 5,000 0 5,000 5,000 5,000 0 0.00% IMPROVEMENT & EQUIP OUTLAY FUND 69,010 371,000 257,990 150,000 150,000 150,000 (221,000) -59.57% COMMUNITY INVESTMENT FUND 120,000 130,000 0 130,000 130,000 130,000 0 0.00% 1991 HRA PUBLIC FACILITIES BONDS 398,870 403,470 386,595 400,430 400,430 400,430 (3,040) -0.75% 1997 G.O. IMPROVEMENT BONDS 1,230,080 0 2,316 0 0 0 0 NA 1999 G.O. IMPROVEMENT BONDS 117,428 114,190 93,811 112,340 112,340 112,340 (1,850) -1.62% 2000 G.O. IMPROVEMENT BONDS 90,558 92,850 75,560 93,540 93,540 93,540 690 0.74% 2003 FIRE HALL & EQUIPMENT BONDS 71,755 71,260 36,880 328,830 328,830 328,830 0 0.00% 2003 SEWER REFUNDING BONDS 192,710 194,950 189,960 183,500 183,500 183,500 (11,450) -5.87% 2004 REFUNDING BONDS 16,590 158,420 114,340 133,200 133,200 133,200 4,520 2.85% MSA FUND 0 400,000 0 400,000 400,000 400,000 0 0.00% PIR FUND 0 200,000 0 0 0 0 (200,000) -100.00% TOTAL GOVERNMENTAL FUNDS 8,238,743 7,724,380 3,692,280 7,971,490 7,971,490 1,936,840 19,280 0.25% Page 6 City of Orono Generai Fund Levy 1998 - 2007 $4.0 - _ ____ __- _ _ $3.0 ----- -- - - � � •� $2.0 - - - _ _ _ � $1.0 - - - - - - - $0.0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Page 7 Cit of Orono v General Fund Revenues Total: $6,034,650 Fines & Forfeitures Other 2.0% 1, � 1 .5% ; Public Safety Charges _ , 16.4% �� , i � \ L � � . _ � F I Charges for Service ° , -- .* =��:��.=�a.��;;�a�s�a° �irs� 9.1% _ . � ,�: '�� Property Taxes Intergovernmental -��;��,a ,' ��- 3.9% "�°�`� 61 .4% r .�� j``�� r'``'" 'sz� ' Permits �,. ��;`T � 5.4% -- `%'� Licenses � � 0.2% Page 8 City of Orono General Fund Revenues For 2008 Dollar Percentage 2006 YTD 2007 2008 Increase Increase Revenue Source Actual thru 6/30/07 Budqet Budqet (Decrease) (Decrease) Property Taxes 3,240,249 1,757,135 3,365,520 3,705,790 340,270 10.1% MVHC Offset 0 0 3,240,249 1,757,135 3,365,520 3,705,790 340,270 10.1% Beer&Liquor Licenses 6,900 400 6,500 6,500 0 0.0% Cigarette Licenses 1,283 900 1,100 1,100 0 0.0% Commercial Dock Licenses 0 0 0 0 0 -- Septic Licenses 0 15 0 0 0 -- Garbage Hauler Licenses 750 0 650 650 0 0.0% Dog Licenses 740 5,420 4,000 4,000 0 0.0% Other Business Licenses 1,588 530 1,500 1,500 0 0.0% Total Businees Licenses 11,261 7,265 13,750 13,750 0 0.0% Building Permits 272,802 132,891 257,750 257,750 0 0.0% General Permits 58,715 20,437 45,000 45,000 0 0.0% Other Permits 27,070 10,768 25,000 25,000 0 0.0% Total Permits 358,587 164,096 327,750 327,750 0 0.0% Federal Grant-Emerg. Prep. 1,095 0 0 0 0 -- HACA Aid(MVC 555 0 0 0 0 -- Police Training Reimbursement 7,597 0 6,800 6,800 0 0.0% Police State Aid 121,845 0 121,000 121,000 0 0.0% PERA State Aid 7,219 0 7,220 7,220 0 0.0% State Grants/Aids-Other 11,282 0 0 D 0 -- MSA-Streets 77,347 0 96,000 96,000 0 0.0% County Grant-Recycling 14,531 25,000 4,600 4,600 0 0.0% Aids/Grants from Other Govts. 0 0 0 0 0 -- Total Intergovernmental Reveni 241,471 25,000 235,620 235,620 0 0.0% Plan Check&Site Exam Fees 160,977 66,905 150,000 150,000 0 0.0% Conditional Use,Variance,8 Subdiv 63,669 31,031 70,000 70,000 0 0.0% Engineering/Legal Fees 0 0 55,000 120,000 65,000 118.2% On-Site Septic Program Fees 52,050 780 52,000 52,000 0 0.0% Recycling Program Fees 68,634 0 68,000 68,000 0 0.0% Contracted Public Works Services 0 900 1,200 1,200 0 0.0% Interdepartmental Services-Public W 0 0 5,000 5,000 0 0.0% Administrative Charges for Services 79,000 31,083 79,000 81,370 2,370 3.0% General Taxable Sales 3,898 3,757 3,000 3,000 0 0.0% Assessment Searches 100 140 150 150 0 0.0% Building Permit Mail-in Fees 635 215 350 350 0 0.0% Total Gen Govt Service Chrgs F 428,963 134,811 483,700 551,070 67,370 13.9% Contracted Police Services 910,937 435,872 860,000 902,900 42,900 5.0% Contracted Animal Control Services 35,210 13,869 33,700 28,570 -5,130 -15.2% Police Special Services 29,885 1,080 20,000 25,000 5,000 25.0% Contracted Inspection Services 30,227 6,573 25,000 25,000 0 0.0°/a False Alarm Fees 7,555 925 5,000 5,000 0 0.0% Police Reports 675 469 1,000 1,000 0 0.0% Police Reserve/DARE Program RecE 0 0 0 0 0 -- Total Public Safety Serv Chrg F 1,014,489 458,788 944,700 987,470 42,770 4.5% Court Fines 150,581 0 120,000 120,000 0 0.0% City Share 30%Fo�etures 4,907 3,713 1,000 1,000 0 0.0% Dog Impound Fees 875 575 1,000 1,000 0 0.0% Total Fines and Forfeits Reveni 156,363 4,288 122,000 122,000 0 0.0% Interest on Investments 105,506 0 70,000 70,000 0 0.0% NOW Interest 1,655 0 800 800 0 0.0% Total Investment Revenue 107,161 0 70,800 70,800 0 0.0% Payments In Lieu of Taxes 0 0 0 0 0 -- Miscellaneous Revenue 10,861 2,999 4,000 4,000 0 0.0% Rent Income 5,850 2,700 5,400 5,400 0 0.0% Contributions&Donations 0 0 0 0 0 -- Sale of Equipment&Land 147,742 25,280 11,000 11,000 0 0.0% Transfer In 0 0 0 0 0 -- Total Misceilaneous Revenue 164,453 30,979 20,400 20,400 0 0.0% Total Revenues and Transfers In 5,722,997 2,582,362 5,584,240 6,034,650 790,680 14.2% Page 9 �— - - --------— --- -- — Cit of Orono v 2008 General Fund Expenditures by Category Total: $ 6,034,650 Capital Outlay 2 30�o Transfers Other Expenses _ � 4.0%0 � __. 6.9% \ - , insurances 1 .2% .�.�.�� . ��,_,�>�,� , �.q+. �;$ `\ � � � � Professional Services ';, o �. I 15.8 /0 � � � '' �; ,, � �� F�,� �� i �i�� ; , ,� yV�,i ,;9I I i ��uli i , 'i I,� I I ;' Personal Services � \ 61 .6% Supplies & Maint _�� ' ' I 8.3% `�� Page 10 2008 General Fund Budget Major Expenditure Categories Increase % 2005 2006 2007 2008 (Decrease) Increase % Actual Actual Budqet Budqet 2006 to 2007 Decrease of Budqet Personal Services 3,125,452 3,221,880 3,459,880 3,714,740 254,860 7.3�% 61.56% Supplies & Maintenance 506,843 470,361 483,380 500,070 16,690 3.45% 8.29% Professional Services (including Assessing) 871,831 1,085,626 793,750 950,950 157,200 19.80% 15.76°/a � 1.19% Insurances 80,480 80,480 80,480 71,950 (8,530) -10.60/o OtherExpenses 470,929 418,967 391,850 416,940 25,090 6.40% 6�91% CapitalOutlay 98,704 113,052 133,900 140,000 6,100 4.56% 2.32% Transfers to Other Funds 125,000 540,000 240,000 240,000 0 0.00% 3�98% Total 5,279,239 5,930,366 5,583,240 6,034,650 451,410 8.09% 100.00% Page 11 Cit of Orono v 2008 General Fund Expenditures by Department $5,946,650 Finance Administration 4.4% 5.4% Fire Transfers , ; 5.3% 4.0% � r �� Central Services '` �/ 4.4% Other � , ' o -� � 12.9 /0 �� Planning & Zoning �� ' 11 .2% , �� _�_�. r/ � . ___.. ..._ __.._� I. ., __. \__. ._.... �i �� I � Streets �`` 9.3% \ ,` � `�, , � �---- __—� Police _�� 43.1 % Page 12 City of Orono 2008 General Fund Budget Departmental Budgets 2008 DOLLAR % 2006 2007 Dept INCREASE INCREASE ACTUAL BUDGET Request (DECREASE) (DECREASE) CITY COUNCIL 79,296 78,430 80,830 2,400 2.97% ADMINISTRATION 297,056 314,590 327,270 12,680 3.87% ELECTIONS 14,054 1,680 15,670 13,990 89.28% ASSESSING 115,450 118,000 124,400 6,400 5.14% FINANCE 180,574 244,540 264,050 19,510 7.39% LEGAL 101,025 83,070 97,000 13,930 14.36% CENTRAL SERVICES 253,223 259,130 263,510 4,380 1.66% HUMAN SERVICES 19,200 21,000 21,630 630 2.91% POLICE 2,363,586 2,490,430 2,601,670 111,240 4.28% FIRE 438,554 273,000 321,200 48,200 15.01% PLANNING &ZONING 537,159 581,640 678,230 96,590 14.24% ENGINEERING 77,323 51,300 56,300 5,000 8.88% STREET MAINTENANCE 461,178 556,590 562,830 6,240 1.11% PARKS 58,803 50,400 51,770 1,370 2.65% RECYCLING 90,408 86,650 94,500 7,850 8.31% SPECIAL SERVICES 206,956 82,790 139,790 57,000 40.78% SPECIAL PROJECTS & CONTINGENCIES 96,522 50,000 94,000 44,000 46.81% TRANSFERS TO OTHER FUNDS 540,000 240,000 240,000 0 0.00% TOTAL GENERAL FUND EXPENDITURES 5,930,366 5,583,240 6,034,650 451,410 8.09% Page 13 General Fund Budget Comparison 3,714,�4o Major Expenditure Categories 3,459,88 ❑ 2007 ■ 2008 950,950 793,750 483,380 500,070 391,850 416,940 240,000 240,000 133,900 140,000 80,480 71,950 �-- — __, . _ �__—� Personal Services Professional Supplies & Other Expenses Transfers to Other Capital Outlay Insurances Services (including Maintenance Funds Assessing) Page 14 3,'°5,'9° General Fund Budget Comparison 3,365,52o M a'o r Reve n u e C ate o ri es J J ❑ 2007 ■ 2008 987,470 944,700 551,070 483,700 ';�'�� 750 327,750 � 235,620 235,620 91,200 91,200 122,000 122,000 13,750 13,750 , _ ---� - ---� —_ �----- —�__ �--�-__�—-, --�--r - -�___ , e�y�a�e5 e�\Ge G`�95 e�\Ge Grgs Qe`��5 �a\�e�e��e a�a�o�e��s ��a�a��s�' ees�\GerSes Q�oQ �a�e��S Go�t S Je��e� F��es \��es�t�`e ��s�r Qub�� Ge�� \�tiec9° Page 15