HomeMy WebLinkAbout07-22-2024 CC Agenda Packet - work sessionAgenda
City Council Work Session
Monday, July 22, 2024, 5:00 PM
City Council Chambers | 2780 Kelley Parkway, Orono, MN 55356
952-249-4600 /https://www.oronomn.gov/
Roll Call
Work Session Item
2025 General Fund Budget and Tax Levy Update
Adjournment
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1
Date: July 22, 2024 Item:
Presenter: Maggie Jin, Finance Director
Section: Work Session Item
Title: 2025 General Fund Budget and Tax Levy Update
1.Purpose:
The purpose of this item is to present an update of the 2025 Preliminary General Fund Budget and
Tax Levy to the City Council.
2.Staff Recommendation:
Provide staff directions on additional suggestions and recommendations to be made to the
preliminary 2025 general fund budget and tax levy. Staff will continue to refine budget and bring
back to the Council for further feedback at the September 9, 2024 Council Work Session.
AGENDA ITEM
COUNCIL ACTION REQUESTED
Provide staff directions on additional suggestions and recommendations to be made to the preliminary
2025 general fund budget and tax levy.
Exhibits
2024.07.22 Budget Memo and Attachments
2
MEMORANDUM
To: Mayor Walsh and Orono City Council
From: Maggie Jin, Finance Director
Subject: 2025 General Fund Budget and Tax Levy
Date: July 22, 2024
Attachments: 2025 General Fund Budget and Tax Levy
Work is continuing on the 2025 budget and tax levy. Individual departments requests have been
received and department heads have discussed their requests with the City Administrator and
Finance Director. The Budget Committee then met to discuss further changes to meet the needs
and goals of the City, with the focus on keeping the tax rate steady.
Tax levy required to fund the General Fund, Capital Funds, and Debt Service Funds has been
calculated and is sufficient to fund all of the needs with a minor increase to the tax rate. The goal
of the City is to maintain a stable tax rate, which is achieved by the tax rate (16.48%) being
lower than the last five-year average tax rate (16.606%). Staff will continue to meet with the
Budget Committee and work with each department heads to further refine the budget prior to the
adoption of the preliminary budget in September. The draft budget and tax levy information is
being provided as an update of the budget process to the rest of the council for further
suggestions and recommendations.
There are a couple of variables that could still impact the budget and the tax base:
•Health Insurance – The budget has been created with an assumption that the city
contribution for employee health insurance will increase by 10%. The City will not
receive the actual amount of any rate increase until the end of September or early
October.
•Property Values – The final property values will not be received from the Hennepin
County Assessor until December. The tax rate calculations are based on the most recent
numbers available and generally do not change significantly in either direction between
now and the final.
With the first initial meeting of the Budget Committee, the committee have met to refine the
budget and tax levy to meet the goals of both funding needs and keeping the tax rate stable, with
the recommendations as follows:
•Enterprise fund payment to the Facilities Fund to assist in covering future facilities
expenditures.
•Change of the City’s general fund reserve policy from 45% to 35%.
•Cell tower antenna lease revenue move from Facilities Fund to Fire Capital Fund.
Page 1 3
• Capital levy changes: reduce Facilities, increase Fire Capital Fund slightly with
additional funding covered by antenna lease and surplus fund and potential grants, keep
Pavement Management and Parks at the same amount; remove Community Investment.
• Increase in other general fund revenue sources, such as building permit and interest
revenue, based on past years’ trend.
Several departments had more significant changes in the General Fund budget that should be
considered:
• Administration and Elections – 2025 is not an election year so expenditures have been
moved around to accommodate for additional staff hours to scan documents into the
City’s document retention software.
• Communications – This is a newly created department within the General Fund in 2024.
This will allow for better tracking of expenditures related to newsletters, social media,
and other communication related costs. For 2025 budget, a Communications personnel is
budgeted for.
• Assessing – Hennepin County will no longer be charging cities under population of
30,000, which includes Orono.
• Central Services and Parks – Reallocation of Parks and Facilities Superintendent due to
the restructuring of the position to include facilities oversight.
• Fire – Orono Fire Department’s first full year of operational service to the Navarre
service area.
Additional items to be noted that staff is still reviewing with the budget process includes the
following:
• Long Lake Fire Department service contract amount has been received and is being
reviewed by Orono staff.
• Compensation for non-union employees is being reviewed.
As staff continues to refine the budget and receive additional budget numbers, the Budget
Committee will be informed and an updated draft budget and tax levy will be presented at the
next General Fund Budget work session in September.
A copy of the June 24th work session memo is attached along with draft preliminary budget and
tax levy information.
Attachments
1) 2025 Draft Tax Levy
2) 2025 Draft Tax Rate Calculation
3) 2025 Draft GF Revenue Summary
4) 2025 Draft Expenditure by Category
5) 2025 Draft Expenditure by Department
6) 2025 Draft Department Expenditure
7) June 24th Work Session Memo
Page 2 4
2024 2025 Amount Percent
TAX LEVIES
General Fund - Total $6,545,100 $6,930,350 $385,250 5.89%
Facilities Fund 375,000 225,000 -150,000 -40.00%
Fire Capital Fund 275,000 300,000 25,000 N/A
Pavement Management 1,000,000 1,000,000 0 0.00%
Parks 200,000 200,000 0 0.00%
Community Investment 200,000 0 -200,000 -100.00%
GO Improvement 2014 60,000 242,000 182,000 303.33%
GO Improvement 2021 760,000 760,000 0 0.00%
Total Local Tax Levy $9,415,100 $9,657,350 $242,250 2.57%
LEVY DETAIL
Page 3 5
City of Orono
PRELIMINARY BUDGET
Tax Rate
2025 Over / Under 2024
Actual Estimated
TAX CAPACITY 2024 2025 Amount Percent
Net Tax Capacity (Adj Net Tax Capacity) $57,584,888 $58,597,796 $1,012,908 1.76%
LOCAL LEVY
Total levy all funds $9,415,100 $9,657,350 $242,250 2.57%
TAX CAPACITY RATES
16.35% 16.48% 0.13
Page 4 6
Revenue Source
2023
Actual
Y-T-D
Jun 30,2024
2024
Budget
2025
Budget
Increase
(Decrease)
Percentage
Increase
(Decrease)
Property Taxes 5,569,282 2,840,769 6,568,600 6,997,350 428,750 6.5%
Total Licenses 23,425 6,600 18,700 16,500 -2,200 -11.8%
Total Permits 777,371 354,574 566,500 636,500 70,000 12.4%
Total Intergovernmental 686,539 32,028 305,000 310,150 5,150 1.7%
Total Gen Govt Service Charges 1,049,551 473,816 859,900 903,000 43,100 5.0%
Total Public Safety Service Charg 2,806,978 2,415,710 2,865,680 2,904,500 38,820 1.4%
Total Fines and Forfeits 57,760 25,830 85,000 65,000 -20,000 -23.5%
Total Investment Revenue 100,732 307 200,660 100,650 -100,010 -49.8%
Total Miscellaneous Revenue 78,179 43,576 66,590 36,400 -30,190 -45.3%
Total Revenue 11,149,819 6,193,210 11,536,630 11,970,050 433,420 3.8%
City of Orono
2025 Revenue Budget Summary
Page 5 7
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 6,259,654 7,073,913 7,539,000 8,098,950 559,950 7.43%
Supplies & Maintenance 631,833 734,038 870,700 835,900 (34,800) -4.00%
Insurances 133,995 214,300 210,600 221,100 10,500 4.99%
Professional Services 1,447,671 1,758,498 1,990,760 1,802,950 (187,810) -9.43%
Other Expenses 573,661 838,703 474,070 524,650 50,580 10.67%
Capital Outlay 191,140 179,339 221,500 221,500 - 0.00%
Transfers to Other Funds 304,250 1,580,000 200,000 250,000 50,000 25.00%
Contingencies 14,256 4,775 30,000 15,000 (15,000) -50.00%
Purchases for Resale 22,019 - - - - N/A
Total 9,578,479 12,383,565 11,536,630 11,970,050 433,420 3.76%
City of Orono
2025 General Fund Budget
Major Expenditure Categories
Page 6 8
2022
Actual
2023
Actual
Y-T-D
Jun 30,2024
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Mayor & Council 34,010 43,660 26,291 60,400 50,000 (10,400) -17.22%
Administration 376,607 485,705 234,529 500,250 553,600 53,350 10.66%
Elections 61,200 35,816 31,146 98,200 37,100 (61,100) -62.22%
Communications - - 8,669 39,000 149,200 110,200 282.56%
Assessing 234,000 254,000 - 270,000 - (270,000) -100.00%
Finance 338,825 334,416 142,142 339,600 341,700 2,100 0.62%
Law/Legal Services 117,972 144,782 50,699 128,000 121,000 (7,000) -5.47%
Central Services 244,263 415,441 199,294 429,400 518,700 89,300 20.80%
Human Services - 9,500 - 12,000 12,000 - 0.00%
Police 5,079,607 5,626,334 2,631,756 5,719,910 6,029,000 309,090 5.40%
Fire Protection Services - LL 471,462 589,974 332,469 664,940 600,000 (64,940) -9.77%
Fire Protection Services - OR - 203,462 361,912 772,510 1,026,800 254,290 32.92%
Building & Zoning 735,903 841,949 406,225 862,900 921,600 58,700 6.80%
Engineering 31,649 35,189 5,844 25,000 26,000 1,000 4.00%
Street Maintenance 667,528 768,804 359,564 690,050 731,650 41,600 6.03%
Public Works - Spring Park 79,218 111,366 53,613 100,400 103,000 2,600 2.59%
Brush Site 40,068 32,748 16,349 50,920 46,750 (4,170) -8.19%
Parks 313,442 444,117 168,554 431,750 340,500 (91,250) -21.13%
Golf Course 348,795 (2,540) - - - - N/A
Special Services 85,292 424,069 59,055 111,400 96,450 (14,950) -13.42%
Other Expenditure 4,383 - - - - - N/A
Special Projects-Contingencies 14,256 4,775 - 30,000 15,000 (15,000) -50.00%
Transfers to Other Funds 300,000 1,580,000 100,000 200,000 250,000 50,000 25.00%
Total General Fund Expenditures 9,578,479 12,383,565 5,188,111 11,536,630 11,970,050 433,420 3.76%
City of Orono
2025 General Fund Budget
Departmental Budgets
Page 7 9
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 20,310 19,717 19,700 19,700 - 0.00%
City Wide Memberships 3,904 13,610 14,000 15,400 1,400 10.00%
Other Expenses 9,797 10,333 26,700 14,900 (11,800) 218.18%
City Council Total 34,010 43,660 60,400 50,000 (10,400) -17.22%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for City Council Representatives (Mayor and 4 Council Members).
* City-wide Memberships are as follows:
Suburban Rate Authority
League of Minnesota Cities
Metro Cities
* Other Expenses includes training and meeting expenses.
2025 General Fund Operating Budget
Departmental Summary
Mayor & Council
41110
The City Council oversees the policies and procedures that govern the city in promoting the health, safety, and general welfare of the citizens of Orono.
Page 8 10
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 363,853 461,223 478,000 535,700 57,700 12.07%
Supplies & Maintenance - - - - - N/A
Professional Serivces 9,448 13,295 13,000 10,000 (3,000) 0.00%
Other Expenses 3,307 11,188 9,250 7,900 (1,350) -14.59%
Administration Total 376,607 485,705 500,250 553,600 53,350 10.66%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Administration DepartmentCity Administrator and Administration Staff.
Staff Includes: City Administrator, City Clerk, Management Assistant, and Municipal Services Support Representative.
* Professional Services includes the city recorder for city council meetings.
* Other Expenses includes training and development, memberships in professional organizations for the Administrative Staff.
Departmental Summary
Administration
41300
The Administration Department includes the City Administrator who is responsible for meeting satatutory and legal obligations, implementing policy
established by the City Council and ensuring the successful management of all city operations. In addition, the City Administrator is responsible for overseeing
the human resource function.
The City Clerk and Administrative Staff are also included in the Administration Department and perform various function such as customer service, general
administrative duties, permits and licensing, elections, data practices, and record management.
2025 General Fund Operating Budget
Page 9 11
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 51,625 30,746 83,700 33,400 (50,300) -60.10%
Supplies & Maintenance 7,148 1,919 8,500 2,000 (6,500) -76.47%
Professional Services -1,000 1,100 1,400 300 27.27%
Other Expenses 2,427 2,151 4,900 300 (4,600) -93.88%
Elections Total 61,200 35,816 98,200 37,100 (61,100) -62.22%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services are the wages for the temporary election judges and a portion of Administration Staff (10%). 2023 is not an election year.
* Professional Services includes IT service.
* Other expenses include postage, travel expenses, advertising, building/equipment rental, training, meeting expenses and other miscellaneous expenses.
Elections
41410
The Elections Department administers all federal, state, county, and municipal elections held in the city. Temporary election judges are hired to provide the
necessary staffing at polling locations, and for the operation of voting machines. The Administrative Staff provides supervision to the election judges as
needed and maintains election records.
2025 General Fund Operating Budget
Departmental Summary
Page 10 12
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services - - 6,700 126,700 120,000 1791.04%
Professional Services - - 9,300 2,500 (6,800) -73.12%
Other Expenses - - 23,000 20,000 (3,000) -13.04%
Elections Total - - 39,000 149,200 110,200 282.56%
PROGRAM DESCRIPTION & OBJECTIVES:
The Communications Department is responsible for public comminications including, Social Media, Websites Administration, and Newsletters.
OPERATING COST ACTIVITIES:
* Personal Services are the wages represent 10% of the Management Assistant and 5% of the City clerks wages and benefits.
* Professional services includes IT service and website hosting fees.
* Other expenses printing, postage, and software.
41430
2025 General Fund Operating Budget
Departmental Summary
Communications
Page 11 13
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Assessing Contract 234,000 254,000 270,000 - (270,000) -100.00%
Assessing Total 234,000 254,000 270,000 - (270,000) -100.00%
PROGRAM DESCRIPTION & OBJECTIVES:
The City contract with Hennepin County to provide Assessing services. Starting in 2025, Hennepin County will no longer charge the City directly.
2025 General Fund Operating Budget
Departmental Summary
Assessing
41550
Page 12 14
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 288,968 321,362 323,800 320,800 (3,000) -0.93%
Supplies & Maintenance - 65 - - - 0.00%
Professional Services 42,725 7,875 10,000 15,000 5,000 0.00%
Other Expenses 7,132 5,114 5,800 5,900 100 1.72%
Finance Total 338,825 334,416 339,600 341,700 2,100 0.62%
PROGRAM DESCRIPTION & OBJECTIVES
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Finance Department Staff.
Staff includes: Finance Director, Accountant and Resource Management Technician.
* Other Expenses includes training and development, and memberships in professional organizations for the Finance Staff.
2025 General Fund Operating Budget
The Finance Department oversees the City's financial operations, insurances, and employee benefits. It is responsible for preparing the budget document and
annual report in accordance with generally accepted accounting principles. Finance department supports the City Administrator with human resources
function.
Departmental Summary
Finance
41500
Page 13 15
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Professional Services 117,972 144,782 128,000 121,000 (7,000) -5.47%
Law/Legal Services Total 117,972 144,782 128,000 121,000 (7,000) -5.47%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Professional Services includes the costs associated with the contract with legal staff, prosecution costs, code enforcement, and jail charges.
2025 General Fund Operating Budget
Departmental Summary
Law & Legal Services
41600
The City maintains a renewable contract agreement with two local legal firms to provide legal services. The Legal Department provides professional
representation and opinion on city services and operations.
Page 14 16
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 19,953 24,736 100,200 144,650 44,450 44.36%
Supplies & Maintenance 51,781 70,621 64,500 81,500 17,000 26.36%
Professional Services 66,461 99,548 110,200 135,750 25,550 23.19%
Insurances 36,900 63,300 61,000 64,000 3,000 4.92%
Other Expenses 69,167 157,236 93,500 92,800 (700) -0.75%
Capital Outlay & Transfers - - - - - 0.00%
Central Services Total 244,263 415,441 429,400 518,700 89,300 20.80%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Facilities Department Staff.
Staff includes: Parks & Facilities Superintendent (33%), Janitor
* Supplies & Maintenance include the operating supplies and maintenance expenses on city equipment and facilities.
* Other Expenses includes utilities, publishing costs, copier leases, and other miscellaneous charges related to city operations.
* Professional Services includes annual audit expenses and fees associated with administering city benefit plans.
The Central Services Department provides for those operating expenses that encompass all city departments. By consolidating these expenditures, the City
can more accurately determine the effectiveness of the costs and benefits provided. The City maintains a renewable contract agreement with an outside
janitorial service for general cleaning and upkeep of city facilities. The Central Services Department also pays for a portion of the costs associated with the
annual audit.
Central Services
41900
2025 General Fund Operating Budget
Departmental Summary
Page 15 17
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Contributions 0 9,500 12,000 12,000 0 0.00%
Human Services Total 0 9,500 12,000 12,000 0 0.00%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Contributions are the contributions made to Human Service Organizations in the Orono area. Organizations include:
The Gillespie Center
Orono Community Education
2025 General Fund Operating Budget
The Human Services Department is comprised of area organizations that provide equal opportunity in employment, housing, public services, and education.
The City maintains an affiliation with these organizations to ensure a strong relationship with area communities and their citizens.
Departmental Summary
Human Services
41800
Page 16 18
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 4,041,450 4,584,141 4,600,000 4,806,400 206,400 4.49%
Supplies & Maintenance 235,520 227,307 283,000 263,500 (19,500) -6.89%
Professional Services 215,348 295,270 341,310 440,800 99,490 29.15%
Insurances 86,025 150,975 140,000 147,000 7,000 5.00%
Other Expenses 310,125 189,301 134,100 149,800 15,700 11.71%
Capital Outlay 191,140 179,339 221,500 221,500 - 0.00%
Police Total 5,079,607 5,626,334 5,719,910 6,029,000 309,090 5.40%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Police Department.
* Supplies & Maintenance include the operating supplies and maintenance expenses on police equipment and facilities.
* Professional Services includes the police records system, internet, animal care, and medical and psychological evaluations for new officers.
* Insurance Expenses includes a portion of the City's general, liability, and auto insurance costs.
* Other Expenses includes utilities, fuel, publishing costs, copier leases, and other miscellaneous charges related to police operations.
Staff includes: Police Chief, Deputy Chief, Sergeant (5), Investigators (5), Patrol Officers (19), Part Time Officers (2), CSO Cadets (3), Office Manager,
Administrative Assistant (2)
Departmental Summary
Police
42110
The Police Department provides for the public safety within Orono and the surrounding communities of Minnetonka Beach, Spring Park, and Mound. This is
accomplished through preventive patrol, traffic enforcement, education, criminal investigation and prosecution.
2025 General Fund Operating Budget
Page 17 19
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services - 156,725 434,900 661,900 227,000 52.20%
Supplies and Maintenance - 12,381 152,700 114,600 (38,100) -24.95%
Professional Services - 17,910 92,310 116,700 (2,000) -2.17%
Long Lake Fire 471,462 589,974 664,940 600,000 (64,940) -9.77%
Insurances - - 9,500 10,000 500 5.26%
Other Expenses - 16,446 83,100 123,600 40,500 48.74%
Fire Protection Services Total 471,462 793,436 1,437,450 1,626,800 162,960 11.34%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Orono Fire Department.
Staff includes: Fire Chief, Training Chief, Part-Time Firefighters, and Paid-On-Call Firefighters.
* Supplies & Maintenance include the operating supplies and maintenance expenses on fire equipment and facilities.
* Professional Services includes medicals, legal consultation, turn out gear washing and maintenance, IT and fleet service.
* Insurance Expenses includes a portion of the City's general, liability, and auto insurance costs.
* Other Expenses includes utilities, fuel, radio cost, copier leases, and other miscellaneous charges related to fire operations.
The Fire Department is comprised of a contract agreement with the community of Long Lake for fire suppression services for the north section of City. The
Orono Fire Department provides fire suppression service for the remainder of the City and supports Police with public safety within Orono.
2025 General Fund Operating Budget
Departmental Summary
Fire
42260
Page 18 20
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 662,199 745,958 763,900 824,300 60,400 7.91%
Supplies & Maintenance 2,175 1,701 2,050 3,650 1,600 78.05%
Professional Services 60,063 77,605 79,500 79,150 (350) -0.44%
Other Expenses 11,465 16,685 17,450 14,500 (2,950) -16.91%
Building & Zoning Total 735,903 841,949 862,900 921,600 58,700 6.80%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for Planning and Zoning Staff.
Staff includes: Director of Community Development, Planners (2), Planning Assistant, Building Official and Building Inspector.
* Professional Services include engineering, legal consulting services and contracted building inspections.
* Other Expenses includes training and development, and memberships in professional organizations for the Planning & Zoning Staff.
The Planning & Zoning Department oversees the development and redevelopment within the City in accordance with established policies and guidelines. The
policies and guidelines have been created and are enforced to maintain the health, safety, and welfare of the public, as well as the aesthetics of the
community.
2025 General Fund Operating Budget
Departmental Summary
Building & Zoning
42400
Page 19 21
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Professional Services 31,649 35,189 25,000 26,000 1,000 4.00%
Engineering Total 31,649 35,189 25,000 26,000 1,000 4.00%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Professional Services are the costs associated with the contract agreement with the engineering firm.
Departmental Summary
2025 General Fund Operating Budget
Engineering
43170
The City maintains a renewable contract with a local firm to provide all engineering services. The Engineering Department provides professional
representation and opinion on city services and operations.
Page 20 22
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 362,833 262,493 295,900 305,250 9,350 3.16%
Supplies & Maintenance 172,140 292,142 202,500 221,500 19,000 9.38%
Professional Services 79,535 137,899 132,000 148,100 16,100 12.20%
Other Expenses 53,020 76,271 59,650 56,800 (2,850) -4.78%
Public Works Total 667,528 768,804 690,050 731,650 41,600 6.03%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Public Works Department.
* Supplies & Maintenance include general operating supplies for street repair/maintenance, and vehicle and equipment maintenance.
* Professional Services includes IT and Fleet Services.
* Other Expenses include electricity costs for street lighting and employee development.
2025 General Fund Operating Budget
Departmental Summary
Public Works
43000
The Street Department provides for the maintainance of all city streets to ensure a safe and driveable condition. Standard maintenance includes seal-coating,
patching, snow plowing, and sweeping. Due to its excess storage capacity, the City maintains cooperative agreements with surrounding communities for
storage and sale of salt/sand supplies.
Staff includes the following FTES: Public Works Superintendent (.25), Street/Stormwater Supervisor (.50) Maintenance Workers (1.25), Public
Works Admin Support (.20)
Page 21 23
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 63,706 99,863 98,400 100,700 2,300 2.34%
Professional Services 9,789 3,923 2,000 2,300 300 15.00%
Other Expenses 5,723 7,580 - - - N/A
PW - Spring Park Total 79,218 111,366 100,400 103,000 2,600 2.59%
PROGRAM DESCRIPTION & OBJECTIVES:
As of 9/1/2021 Orono began providing public works service to the City of Spring Park.
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Public Works Department.
Wages and benefits are based 1 FTE and use the average wage of all maintenance workers.
* Professional Services includes IT Services, Fleet Services and Other professional Services.
* Other Expenses includes reimburseable expenses.
PW - Spring Park
City of Orono
Departmental Summary
43100
Page 22 24
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 171,372 267,956 279,300 164,550 (114,750) -41.08%
Supplies & Maintenance 95,844 120,756 116,200 118,900 2,700 2.32%
Professional Services 28,923 41,845 20,500 41,700 21,200 43.33%
Other Expenses 17,302 13,559 15,750 15,350 (400) 0.00%
Parks Total 313,442 444,117 431,750 340,500 (91,250) -21.13%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Personal Services includes the wages and employment taxes for the Parks Department.
Staff includes: Park Superintendant (34%), Maintenance Workers (1), Seasonals.
* Supplies & Maintenance includes the operating supplies and maintenance for all park facilities.
* Other Expenses includes the utilities and costs associated with equipment rental.
2025 General Fund Operating Budget
Departmental Summary
45200
Parks
The Parks Department provides for the maintainance of the City's parks. In addition, the city participates in a joint recreation program with area organizations
to ensure a community-wide effort in providing adequate recreational facilities.
Page 23 25
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 169,833 (2,540) - - - N/A
Supplies & Maintenance 53,135 - - - - N/A
Insurances 10,995 - - - - N/A
Other Expenses 82,208 - - - - N/A
Purchases for Resale 22,019 - - - - N/A
Golf Course Total 338,190 (2,540) - - - N/A
PROGRAM DESCRIPTION & OBJECTIVES:
The Golf Course has been moved from the General Fund to an Enterprise Fund.
Golf Course
2025 General Fund Operating Budget
Departmental Summary
45210
Page 24 26
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 10,670 12,662 13,100 13,450 350 2.67%
Supplies & Maintenance 70 555 250 250 - 0.00%
Insurances 75 25 100 100 - 0.00%
Other Expenses 29,252 19,505 37,470 32,950 (4,520) -12.06%
Brush Site Total 40,068 32,748 50,920 46,750 (4,170) -8.19%
PROGRAM DESCRIPTION & OBJECTIVES:
The Brush Site provides a place for residents and contractors to drop off tree branches and brush.
OPERATING COST ACTIVITIES:
* Personal Services include the wages and employment taxes for the Brush Site.
Staff includes: Brush Site Attendant
* Supplies & Maintenance include general operating supplies for repair and maintenance of the brush site.
* Insurances include the brush site's share of the City's general insurance polices.
2025 General Fund Operating Budget
Departmental Summary
Brush Site
43100
Page 25 27
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Personal Services 32,882 88,870 41,400 41,450 50 0.12%
Professional Services 51,910 32,490 70,000 55,000 (15,000) -21.43%
Other Expenses 500 302,708 - - - N/A
Special Services-Consulting & Police Total 85,292 424,069 111,400 96,450 (14,950) -13.42%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES (Reimbursed):
* Personal Services include Police Officer overtime wages for security work and/or traffic control.
* Professional Services include legal and engineering review expense for land use applications.
43280
The Special Services Department provides a separate 'cost center' for tracking city-provided consulting and Police special service details. Orono residents who
apply for land use variations are subject to be billed for any additional staff, legal, and engineering time that is spent reviewing their application. These
charges are recorded in this departmental budget, and the applicants are subsequently billed for this additional time. Orono businesses or residents who wish
to contract with the city for Police security or traffic control are billed for the officers’ time. The City's costs are recorded in this departmental budget, and are
offset by the revenues received from the requesting parties.
Departmental Summary
Special Services
2025 General Fund Operating Budget
Page 26 28
2022
Actual
2023
Actual
2024
Budget
2025
Preliminary
Budget
Dollar
Increase
(Decrease)
%
Increase
(Decrease)
Capital & Transfers 304,250 1,580,000 200,000 250,000 50,000 25.00%
Contingency Items 14,256 4,775 30,000 15,000 (15,000) -50.00%
Special Projects-Contingencies Total 318,506 1,584,775 230,000 265,000 35,000 15.22%
PROGRAM DESCRIPTION & OBJECTIVES:
OPERATING COST ACTIVITIES:
* Transfers are as follows:
Improvement and Equipment Outlay Fund
* Contingency Items is an amount for unbudgeted and unforseen items that require action before the next budget cycle.
GENERAL FUND TOTAL 9,567,741 12,383,565 11,536,630 11,970,050 407,030 3.53%
The Special Projects & Contingencies Department includes funds allocated for planned projects or events that benefit the entire city, and for any unforseen
circumstances that produces additional expenses. This department also provides for operating transfers to other funds.
2025 General Fund Operating Budget
Departmental Summary
Special Projects - Contingencies
43290
Page 27 29
MEMORANDUM
To: Mayor Walsh and Orono City Council
From: Maggie Jin, Finance Director
Subject: 2025 Budget
Date: June 24, 2024
Attachments: 2025 Budget
Work on the 2025 budget has begun. Individual departments are currently preparing their budget
requests. The City Administrator and Finance Director will begin to meet within the week with
each department to discuss and refine the department budget requests.
This will be the third year of utilizing the budget committee in the budget process. A chart
illustrating the budget process is attached to this memo. In brief, department heads provide their
budget requests to the Finance Department. These requests are reviewed and adjusted during
meetings between the Department Heads, the City Administrator, and the Finance Director. As
each process is completed by staff, the budget committee follows up with a meeting to review
and provide guidance to the development of the Preliminary Budget and Tax Levy. The full
Council will be updated at the work sessions. Adoption of the Preliminary Budget and Tax Levy
will be at the second meeting in September.
Major factors that impact the budget are as follows:
Inflation has slowed from the previous year but continues to be a factor in building the
2024 budget. The current annual (May to May) CPI-U is 2.6%. The CPI includes a wide
variety of items in its calculation so it does not mean all budget lines are equally
impacted.
Wages and benefits. The city has four labor unions that cover most of the city’s
employees. These contract all have a 3% increase for 2025. Wages and Benefits make
up approximately 65% of General Fund expenditures; it is expected that this expenditure
category will have the greatest impact on the budget. It is anticipated that health
insurance premiums will increase by approximately 10% for next year. As part of the
budget process, staff will review non-union compensation in response to concerns
regarding competitiveness with neighboring cities.
Tax Levy/Tax Capacity Rate. The City’s property tax base continued to increase during
the 2024 assessment period. While the County numbers are not final, the current
estimated taxable market value has increased to $4,997,539,503, which is an increase of
$86,145,185 (1.75%). The current estimated tax capacity is $58,985,547. Taking
additional factors in, the estimated adjusted net tax capacity for taxes payable in 2025 is
$58,597,796, an increase of 1.76%.
Page 28 30
In 2024, the Orono Fire Department was in operation beginning July 1. For 2025 budget,
the Orono Fire Department will be operational for a full year. The increase in expenditure
for this department will follow the increase in operation. At the end of the Long Lake
Fire Department contract on December 31, 2025, the amount budgeted for Long Lake
Fire will be eliminated. It is possible that in the future, the City will have some contracts
with neighboring cities that will offset the costs. In the meantime, the cost is absorbed
into the General Fund operating budget.
Cost for assessment services provided by the Hennepin County Assessor’s Office will be
absorbed in the county’s budget and will no longer be included with the city’s budget. In
2024, the amount was $270,000 in the general fund budget.
In the near future, the city will see some relief in the pressure on the levy as two required levy
amounts will be eliminated. The need for the levy portion paying for LL Fire will be eliminated
from the 2026 levy. The 2014 GO Improvement Bonds will be eliminated from the levy in 2029.
The 2025 budget process has some challenges, with phasing in the levy increases needed to
properly fund the capital and operating needs of the fire department while balancing the
remainder of the city’s needs. The City’s strong financial reserves and long-term funding
identified for the city’s capital plan has the City in a good position to navigate the current
situation to maintain a stable tax rate.
Over the past several years, the Council’s budget guidance has been to deliver a general fund
budget that keeps the tax rate steady. If the Council determines that there is a different objective,
staff will work to prepare a budget based on keeping the tax rate level. As part of the budget
process, staff will bring additional suggestions in order to meet the guidance provided.
Included with this memo are two different scenarios for the property tax levy and rates. The first
scenario is an estimated calculation of the levy amount to maintain the same tax rate as in 2024.
The second scenario would keep the levy stable for the majority of funds (Facilities, Pavement
Management, Parks, Community Investment) and takes into account the most minimal needs in
the General Fund. Also included is a chart detailing the annual budget process and the budget
timeline.
Page 29 31