The URL can be used to link to this page

Home My WebLink About12-01-2008 Truth in Taxation MinutesD • ROLL • MINUTES OF THE ORONO TRUTH INS TAXATION M EETING Monday, December 1, 2008 6:30 o'clock p.m. The Orono City Council met on the above -menti James White, Council Members Jim Murphy, Li] were City Administrator William Wells, Finance ied date with the following members present: Mayor McMillan, and Cynthia Bremer. Representing Staff )irector Ron Olson, and Recorder Jackie Young. Mayor White called the meeting to order at 6:35 p.m., followed by the Pledge of Allegiance. NEW BUSINESS White stated the purpose of tonight's meeting is 1 2009. The Minnesota Legislature has re- establisl 3.9 percent, which is roughly the rate of inflation would be pension obligations and debt service. I that it has to fund and very minimal debt service. properties have seen a decline in value, which the City will collect. White noted the City adopted a preliminary budg Hennepin County, who then determines what the property owner's property tax if the budget is ad( may go up or down and that the residents will be different time. Tonight's process is to focus on t; budget was arrived at. White noted the school d are based on market value. White noted there is a handout available on the White indicated the City's proposed budget for non -tax revenues being $2,906,420. The differ projected to be $4,564,687. discuss the City's proposed budget for fiscal year -d levy limits that cities may impose to a maximum of Some expenses are exempt from the levy limit, which bite stated the City of Orono has no pension obligations Due to the real estate market conditions, some i results in a decline in the amount of property taxes the earlier this year and sent that information in to 1pact of the city's budget will be on each individual ed by the City. White stated that a person's valuation ven an opportunity to appeal their valuations at a city's portion of the tax bill and to discuss how the rict's levies are not part of the city's tax capacity and s proposed budget and tax levy for 2009. year 2009 is $7,633,318, with the anticipated 2009 will need to be made up by the tax levy, which is Olson reviewed the 2009 preliminary budget and stated the improvement and equipment fund is the city's capital improvement expenditures. The community investment fund is money that is allocated toward community improvements. Olson stated the $130,000 reflected under the community investment fund is a transfer to help with the City's debt service, which is primarily being used to pay for the fire hall. White noted the City has implemented a 15 -year program to improve the streets throughout the City without assessing the costs to the individual residents. The City has spent a lot of time with the city engineers prioritizing the streets and categorizing the improvements that should be made. Olson displayed a breakdown of the general fund revenues that are projected for 2009. Olson noted the majority of the money received by the City comes from property taxes. White stated the City only increased those items department, which is dictated by their contract. with fuel costs and have added expenses associa here they absolutely had to, such as the police addition, the City increased their expenses associated I with the hiring of a new full -time fire chief. White PAGE 1 L3-) What is the Pur ose of the Truth p in Taxation Meeting? 1 . To Discuss the Proposed 2009 Budget and Tax Levy 2 . To invite and allow the public to speak and ask questions concerning the 2009 Budget and Tax Levy. 3 . To Discuss the reasons for the increase in the proposed 2009 Property Tax. City of Orono Preliminary Budget for Fiscal Year 2009 2009 2008 2009 2009 Proposed Reserve Tax Proposed Non-Tax Tax Increase Levy Budget Revenues Levy (Decrease) General Fund 3,705,790 6,212,500 2,306,420 3,857,431 -48,649 Park Fund 5,000 5,000 0 5,000 0 Improvement & Equipment Fund 0 150,000 250,000 0 100,000 Community Investment Fund 0 130,000 100,000 0 -30,000 Debt Service Funds 680,370 1,135,818 250,000 702,256 -183,562 4,391,160 7,633,318 2,906,420 4,564,687 City of Orono General rund Revenues Por 2009 Dollar Percenta�c 2Q07 YTD 2008 2009 Increase Increase Reve�iue So�uce �ctu��l thru G/30/08 Lil�d�?et }3uci�et l�ecrease I)ecrease "I'lxes 3,335,892 1,783,540 3,705,790 3,857,430 I S l,640 4.1% Business Liccnses 14,513 7,396 13,750 13,750 0 �-0% YCI'lllltS 361,860 163,677 327,750 329,750 2,000 0.G% Intergovernmacnta] }Zevenue 3U0,3_55 �0,666 235,620 229,820 -5,800 -2.5% General Govt Servicc Chargcs 777,826 32(�,097 551,070 563,900 12,830 2.3% Public Safcty Ch�rges 987,880 491,125 987,470 974,800 -12,G70 -1.3% I�ines and Foreits 127,742 51,267 122,000 102,000 -20,000 -16.4% Investmcnt Revcnue 144,183 0 70,800 71,000 200 0 Miscetlancous Revenue 221,139 19,131 20,400 21,400 1,000 49% `I'otal Rcvenues and"1'ransTers In G,271,390 2,922,899 6,034,C50 6,1G3,b50 129,200 2.1% Prcliminary I;xpenditures -E,212,500 Projcctcd Dcficit -48,650 2009 General Fund Revenues Taxes 62% :F ., � �, ._ _ , . � � ; � �. . _ �� ,�. : �> �', Fines and Forfeits ��'�` � � x �4 `i ; , . � 2% ` �. �� . � �,�� , . � �. Public Safety Charges , �� 16% �� ' � - ��- ° General Govt. Service Charges ��`� 9`'/0 �:y ;Y��: Permits 5% Other Revenue 20�0 �Intergovernmental Revenue 4% City of Orono 2009 General Fund Budget Departmental Budgets 2009 2009 2009 2009 DOLLAR % 2007 2008 BASE DEPT MGR ADOPTED INCREASE INCREASE ACTUAL BUDGET BUDGET REQUEST RECOMMD BUDGET (DECREASE) (DECREASE) CITY COUNCIL 83,686 80,83D 90,810 90,930 90,930 0 10,100 12.50°/a ADMINISTRATION 311,280 327,270 327,132 330,850 330,850 0 3,580 1.09°/a ELECTIONS 2,939 15,670 1,711 1,530 1,530 0 (14,140} -90_24% ASSESSING 122,086 124,400 '135,000 134,000 134,000 0 9,600 7.72% FINANCE 196,767 264,050 287,347 288,470 288,470 0 24,420 9.25% LEGAL 99,306 97,D00 101,120 101,000 101,000 0 4,000 4.12% CENTRAL SERVICE5 277,362 263,510 269,987 271,620 271,620 0 8,110 3.08% IUMAN SERVICES 19,900 21,630 22,400 21,200 21,200 0 (430) -1.99% POLICE 2,391,400 2,601,670 2,703,193 2,677,530 2,677,530 0 75,860 2.92% FIRE 311,576 321,200 332,500 392,650 392,65Q 0 71,450 22.24% PLANNING&ZONING 573,256 678,230 712,592 632,060 632,060 0 (46,170) -6.81% ENGINEERING 77,642 56,300 58,300 58,300 58,300 0 2,00� 3.55% STREET MAINTENANCE 514,420 562,830 586,841 572,910 572,990 0 10,�80 1.79% PARKS 50,722 51,770 53,401 47,720 47,720 0 (4,050) -7 82°/a R�CYCLING 83,594 94,500 95,500 102,000 102,000 0 7,500 7.94% SPECIAL SERVICES 379,283 139,790 149,380 147,230 147,230 0 7,440 5.32% SPECIAL PROJECTS 8�CONTINGENCIES 52,434 94,000 51,750 52,500 82,500 0 (11,500) -12.23°/a TRANSFERS TO OTIER FUNDS 1�9,966 240,000 250,000 260,000 260,000 0 20,000 8.33% TOTAL GENEftAL FUND EXPEI�IDITURES 5,657,619 6,034,650 6,228,962 6,212,500 6,212,500 0 177,850 2.95% � 2009 General Fund Budget Departmental Budgets � �l �.S't Y 1 '. I , � .� F$�A � Central Services � �� "�'�3�' - � ' :�- � ,. �. � 4% .. N �� : � :�., �� Finance "' , Police & Fire ,�°,�- 5% 49% �dministration �, , � �' 0 1 c�ty 5 ro i; council °� } �'� 2% Professional Svcs. :�µ : �p/� ��,� .��,ys�� i� 4� # ��;,n '�"�'�.�'�`��`e�;� � �a��;�"�*��`� '. �*��"��'�c � ''.�" �3 ' ��"yT�'� �1%-.��"L �'��,�'p �TM.-� e�.'�4�e,,�, tr �. F Y „'� :1 w" *d1 �� £h8�� k�} ;f�;�. x� .. g y;,* .r� � � �. t y"�y�`�,u�P��. ;�x-��Zpx��`�C'��'�»��-��,f. \ . . . � .. , . ly+ �� '� ��.<':gt �' :'"�.l. , f . . It''"'L. " �. '.a'-¢ . . f �<. - �. a�, -i � �>��; � Planning & Zoning ��r � Other� �-� �� ; 2% ��. 11%� � w � � ��; ;� �� ,�"� �� `� Street Maintenance ��` - 9% ;;�;: , 'i<�: Transfers to Other Funds Special _Recycling (' 40�o Services 2% 2% 2009 General Fund Budget Major Expenditure Categories ... , . .... .. ,. Personai Services 61% ,. �;1:��. `+ . .. .. • . �`-'_ . � . h, +�nr � ..y � �� . '{. � "��`� �. �;4q �s 's'°"h4 �� "3,� �� f - . . .. �� ... 1 ,,�,��,�:.,�,e�F� ��s��+z.��r,�� st��c4:{,�z#�fa�}',� . � � ait�i'� 1;�Y� � Fy ,$} �` Fj^' . p ,�. 'K'% � k` .,�,�-`�. � •��:�rR5u3,.,ar �+�.'.^'� 9�"�`: �.4�''-•�� x ��"^ ��;�` C pitalOutlay �� . Uther Expenses x �,r:;.� �..�.a 2% �.. , . . .7. w=, . , .. �,� 7% ,x Supplies & _ ��'-„ Professional Svcs M�i�tenance ` `:` �� 17% Qo � � : � ' ca �Q . � :�;,.,, Y^ � S;` " � � Transfers to Other , � �� ,�� Insurances �� ' �:, � ��;�� Funds 1 % .�� #.; � � � 4% Last modified: 04-11-08 Glossary of Assessment Terms Estimated Market Value (EMV): This value is what the assessor estimates your property would likely sell for on the open, competitive market. State law requires assessors to value property at 100 percent of market value. Minnesota Statute 272.03 defines "market value" as "the usual selling price...at the time of assessment." It is "the price that could be obtained at a private sale or an auction sale, if the assessor determines that the price from an auction sale represents an arm's length transaction. The price obtained at a forced sale shall not be considered." State law requires that the EMV and classification of real estate be established as of )anuary 2 each year. Limited Market Value (LMV): Limits how much the taxable value cf certain properties can increase, with the exception of new improvements. Limited Market Value is the difference between this year's estimated market value and last year's limited market value, whichever is greater. This only applies to agricultural, residential, timberland, or noncommercial seasonal recreational residential (cabins) property. (M.S. 273.11, Subd. la) • 2003 assessment payable 2004 - 12% or 20% of the difference . 2004 assessment payable 2005 - 15% or 25% of the difference • 2005 assessment payable 2006 - 15% or 25% of the difference • 2006 assessment payable 2007 - 15% or 25% of the difference • 2007 assessment payable 2008 - 15% or 33% of the difference • 2008 assessment payable 2009 - 15% or 50% of the difference • 2009 assessment payable 2010 - sunset of the program Property Ctassification: The statutory classification that has been assigned to your property based upon your use of the property. A change in classification of your property can have a significant impact on the real estate tax payable. (M.S. 273.13 - classification of property) Sales Ratio Analysis: This term refers to the process the assessor uses to measure market conditions by comparing the assessor's estimated market value with the sales prices. The Department of Revenue also uses the sales ratio analysis to measure assessor's performance. Last modified: Oa-11-08 Tax Capacity (TC): " Tax Capacity is determined by multiplying the taxable market value of each property by the statutory class rates for the specific use(s) on the property. There are corresponding class rates for the different property classifications. Tax Capacity Rate: The rate is used to collect the amount of dollars required to operate city/county governments and schools. The tax rate is usually expressed as a percentage of tax capacity, used to determine the property tax due on a property. Taxable Market Value (TMV): This is the value that your property taxes are actually based on, after all reductions, limitations, exemptions and deferrals. Your 2008 value, along with the class rate and the budgets of your local government, will determine how much you will pay in taxes in 2009. This Old House Exclusion (TOH): This is a value exclusion for certain improvements. This is the amount of the new improvement value excluded from taxation on homestead property 45 years of age or older (M.S. 273.11, Subd. 16). Improvements that increase the estimated market value by $5,000 or more may have some of the value excluded from taxation. Only improvements made before January 2, 2003, and assessed for the 2003 assessment will qualify for this exclusion. Value that has been deferred for 10 years began phasing in with the 2004 assessment. Please contact your assessor's office for more information. Value of New Improvements: This is the assessor's estimate of the value of new or previously un-assessed improvements you have made to your property. These improvements are not eligible for limited market value. City of Orono - TNT Meeting Minnesota Property Tax Formula Taxable Market Value X Tax Class Rate Net Tax Capacity X Tax Ca pacity Rate Net Tax City of Orono - TNT Meeting Net Tax Capacity Calculation Residentiai Homestead 1 .00% of the f i rst $500,000 of TMV 1 . 25% of the TMV over $500,000 Rates a re set by State Statute City of Orono - TNT Meeting Tax Calculation �., "9rt�> � �'"`"�y'� �'��nemwr ��z `+£�u�"� ,a,.�`m� ++�,,�i� N*1 s .. � j ,� �. �-.s��t i �" '"�°"' ' r �,�k�s�"'�M., `.=�`r � �:7; ,� '�h �� t -, ��:�. � ,�. 4 tu^� S�' o�k�` i � �` �' r�~�"� r.:,,r ti��r i� ��1�14��< � -,� � ��te� 1��^» 3�,� �r � s ��;:�3 }1 FK} ,g 4�. IL� ew.� � '�� .y;w �� 2 r �ar1A .:.��t�.� � tr '4+('��i'�a �.,` ^3�K t `-7 3 �S�-, {� q��.� x �� > z ;n � �-� "�; j4 +,�. � w' � �z � ��v -�': `'aty.- .r��ad,�k�d r'i�-x'P �JS�}7 �-~ � t-�' �1 k r 3 � -,Shc .T ��Lr, M O � � � � �p {�� ,�,; �J'-: C° ., : •,_• . . `� h'^ s kty -xGd.a}..) y_n..,r�...aaw�'.�hx>. a0��e>.,. ..��13- i e -•. ��. �� ^. �5 -..t ..m..A % _.rr r �:, 'y�� ti-.7. y { i 1 � � ��..{� ^`.-�� .C'+.� ,.�.:F?n.a��.n .'n.�u've,.�.,.��.i;.ti-. :��.. y.._ . � ._ :. �.. .. „�� E4�� i.Lte 6��,J. n..._ . .._.cv_ni w {.,,�j_ki�r ...r._...e . ....._ _ � 500,000 � X 1% X 1 . 25% 5 000 $0 $5,000 Tax Capacity $ � 5,000 Tax Capacity X 13 . 382% Orono Tax Rate $669 $669 City Taxes City of Orono - TNT Meeting Tax Calculation ��:- r a � s ; ; �a . -�� : � �:.y � �j �n� u��.� '� ,. Lrj }�i��''��'t�S •�I+x�'�5'S�-'�`F"n'T"nI�y� Z '�, `$ :�r�i'�,: 1' 'i a .� ` i � t �' " ��w F � � r 4' � �,�� i�' r I � ,: �. v '� x 4 x!X+y„}, {��, � �,�„s, ` ,3 c�• -9 e4�:;, �3x�� i2�r�i ��3y� "4r�u�t��:}�•F4r �+�' x H.� _....M � . �i � � I �� 'i�, r � R y � +'it,'� t4 r` t4.x�.:�� .�C� �� :� y''��A,w� � '�!".�YSi'�� .� ��.�,��`�,.�.��:,� _,�n�.-..�':. � . _ .,,_.�., �z�, ._ ixr,v�.�.K .n,�t.� � �'�.�c_.>>„a.:e�v ..._3;��M a�"_w� _...,�.,+,W.�.�.., _.._�.. .��._..__.,u,.... ..,3 :'�£1;�5., ��s>.,.,.W�a 500,000 604,000 X 1% X 1 . 25% $5,000 $7,550 $ 12,550 Tax Capacity 12,550 Tax Capacity X 13 . 382% Orono Tax Rate 1,679 1, 679 City Taxes � • �our �rc�posed Praperty Tax for 2009 � g � . [uul IAXABLE MARKET VALUE FOR 2�08 TAXES: 1 ,104,D00 NOMESTEAD 2008 TAXABLE MARKET VALUE FOR 2009 TAXES: 1 ,104,000 HOMESTEAD The taxable rnarket values for property tax payable in 2009 was sent to you in the spring of 2008. The period to discuss possibie changes has passed and changes can nc icnger be made fo your property valuation It is included here for your information only. �� (z) Actua{2008 Proposed 2008 Percent of Change Propeity Tax Property Tax 510,588. 64 S11,493.9i 8•5% TO7AL exclud+ng specia!assessments Budget Hearing Dates Addresses for Correspondence Tlmes and Locations Hennepin County 84,963,52 55,115.12 Dec 4, 200B 5:30 PM Commissioner Board Room A240D Go�ernment Center A2400 Governmant Center Minneapolis MN 55487 Minnea[+olis MN 55487 612-348-3011 City of ORONO 51.704.28 51,679.44 Dec 1� 2008 6:30 PM Drono Council Chambers Orono City Hall 278� Kellev Parkaay PO Box 66 Crystal Bay MN 55323 HNy12�Old Crvstal Say Rd Orono MN 55356 952-249-4600 No meeting required STATE 6ENERAL TAX Dec 2. 2608 7:30 PM School District 278 Voter Approved Levy: 51,944.29 62,587.24 Drono District Office Other Local Levies: S819.99 ___�•60 685 Old Crystal Bav Rd N School District Total 52,764.28 S3.540.64 Long Lal;e MN 55356 Neal Lawson PO Sox 46 685 Old Crystal Bay Rd N Lon9 Lake MN 55356 952-449-8300 Metro Special Taxing Dist. Metro�olitan Council 5321.53 6324.91 No meeting required 39D Rohert Street North St Paul M4 55101 651-602-1374 Other Spec. Taxing Dist: 5660.16 5712.61 No meeting required No meeting required Flscal DisParity Tax: No meeting required Tax Increment Tax: Solitl Waste Mgnt Fee: 5174.87 5120.99 Not aaPlicable e e convenlen Paymen op lons aval a e o pay s Proper Y axes http://www,hennePin.us or call 612 348-3011 � This is Not a Bill • Do Not Pay � City of Orono - TNT Meeting Tax Breakdown by Entity - $ 1, 104,000 Home Henne in County $5, 115 44. 50% p Orono Schools $3, 541 30.81% Cit of Orono $ 1,679 14. 61% v Other Districts $ 1, 159 10.08% 11,494 100.00°fo � • Y�ur Pr�posed Property Tax for 2009 � . eo . 2D07 TAXABLE MARKET VALUE F�R 2008 TAXES: 373,000 HOMESTEAD 2008 TAXASLE MARKET VALUE FOR 2009 TAXES: 357,000 HOMESTEAD The taxable market values for property tax payable in 2009 was sent to you in the spring ef 2008. The period to discuss possible changes has passed and changes can no longer be made to your property valuation. It is included here for your information only. Actua,f'2008 Proposed 2009 Percent of Change Property Taz Property Tax 53,166. 10 S3,275.65 3.4% TO7AL excluding specia!assessments 6adgcl Hearing Dates Times and Locatlans Addrosseslor Correspondence Hennepin CountY b1.455.16 61,429.04 Dec 4, 2008 5:3D PM Comnissioner Board Room A2400 Government Center A2400 Government Center Minneapolis MN 55487 Minneapolis MN 55487 612-348-3011 City of ORONO 5499.64 5469.19 Dec 1� 2008 6:30 PM Orono Council Chambers Orono Citv Na12 27g0 Kelley Parkwav PD Box 66 Hwyl2aDld Crystal Bay Rd CrYstal Hay MN 55323 0 rono MN 55356 952-249-460U No meoting required STATE GENERAL TAX Dec 2, 2008 7:30 PM School District 278 s��g.s� Orono Disirict �ffice Voter Approved Levy: 5622.39 Other Loca1 Levies: _ 6244.� �69.BG 685 Old Crystal "ay Rd N School District Total ^.866.41 b1,048.43 Long Lake MN 55356 Neal Lawson PO 0ox 46 685 Old Crystal Bay Rd N Long Lake HN 55356 952-449-8300 Metro Special Taxin9 Dist. Metropolitan Council 594.26 690.77 No meeting reCuired 390 Robert Street Narth St Paul NN 551�1 651-602-1374 Other SPec. Taxing Dist: s193.55 5199.10 No meeting required No meeting required Fiscal DisparitY Tax: No meeting reauired Tax Increment Tax: Solid Waste Mgnt Fee: :59.�8 539.12 Not applicable eC ou e COnVe�l2fl paym0� Op lo�s avel dbZe�O p2Y t 5 p�OP2f Y taxBS http://www.hennepin.us or call 612 348-3011 � ThisisNotaBill • DoNotPay � City of Orono — TNT Meeting Sample Tax Rates Mapie Plain 49 .440% Long Lake 36. 571% M i n netrista 27 .477% Shorewood 26 . 166% Minnetonka Beach 21 . 200% Wayzata 20.896% Medina 20.474% Tonka Bay 14. 514% Orono 13 . 382% Cit of Orono Y , Tax Capacity Rates Zoo2 - zo� o 25% - -- - ------- ---- ---- - -- --- -- -� --___ - I 20% --------------------------- - - -_ -- i � - ---- ---- --- 15% - - - - - - - i � 10% - - -- - - - - __ _ i I 50�0 _ _ _ _ _ _ - - i �}; � �_ �� : I � _ � :. � � - ----�-:KK�_ �_. ___ I �% 2002 2003 2004 20�5 2006 2007 2008 20�9 2010 � _-___ _ i �-- -- -------- -- -- -__ - - MINUTES OF THE ORONO TRUTH IN TAXATION M EETING Monday, December 1, 2008 6:30 o'clock p.m. noted the City of Orono is responsible for approximately 80 percent of those costs. The City has elected not to hire a full -time person in the inspections department as well as the administrative staff. Ken Carlson, Orono resident, asked what the difference is between the $7,633,318 listed in the 2009 proposed budget and the $6,163,850 listed on the next page under 2009 budget. Olson stated the $7.6 million is the number for the entire budget and the $6.16 million is just the number for the general fund revenues. Olson stated the revenues do not balance to the expenditures and that the difference will be made up with fund balances. White noted the budget is not balanced at the present time and that it may become necessary to withdraw approximately $48,000 from their reserve. Wells noted the budget will be balanced at the time the Council approves it at their December 8h meeting. Murphy commented the City will need to keep a very watchful eye on the budget during 2009 given the state of the economy. White stated the City has been fairly consistent in maintaining the level of Staff over the years, which, compared to other cities, is considered low. White noted Orono is also the lowest in Hennepin County for municipal taxes, which is due to the low debt service that the City has and their efforts at minimizing expenses wherever possible. Olson displayed a pie chart depicting the allocation of the 2009 general fund revenues. Bremer noted the amount of fees received by the City in building permits has been relatively flat over the past few years. Olson noted that the fire and police departments make up 49 percent of the general budget, with street maintenance being another major item in the City's budget. Olson noted that even though the police department received a 3.5 percent increase, the City's overall budget increase came in under 3.0 percent. Olson stated some of the items in the general fund budget have been decreased, such as a decrease in planning and zoning because of a decision not to hire a full -time inspector. Murphy stated one of the benefits of having a full -time fire chief is that they will no longer need to hire the fire chief from Wayzata to perform inspections. • Murphy stated the City has also been paying a portion of the costs for a part-time administrative person for the fire department, which will also become the responsibility of the fire chief. Olson noted personal services make up 61 percent of the city's expenditures. Tim Traff, 1640 Bohns Point Road, asked if the City is saving for future capital expenditures under the item street maintenance or whether that amount is being spent every year. Olson stated this is the amount that would be spent from the annual fund on your typical street maintenance, such as snow plowing and normal patching. PAGE 2 1 • P ORONO TRUTH I Monday, 6:30 White stated the City has put aside monies in a offset some of those anticipated improvement c McMillan commented that the amount reflected u is routinely done on the streets and not major imp grant for the recycling, which helps to offset thos Traff asked if the current provider has raised Olson stated Waste Management has a three -year contract. Traff asked if it would be eight percent a year. 'ES OF THE TAXATION M EETING ecember 1, 2008 'clock p.m. fund every year for the past few years to help der street improvement is the annual maintenance that wements. McMillan noted the City does receive a costs. pnces. and that there is a built -in price increase in that Olson stated it would not be eight percent. O1son1noted the organics program is included in the expenditures even though the City receives a grant for the program. Traff asked whether the City Council has Olson stated the Council will not be receiving an memberships that are included under the categor • Conservation District, which increased their budl addition, there was a shortfall from 2008, which Murphy commented he would prefer to have a sef items, such as personal services, should perhaps h Olson reviewed some sample calculations done of capacity is determined. White noted state law requires assessors to value 1 rates are set by state statute. Olson displayed the calculations for a $500,000 hi no increase in value, the property owner's city tax Bremer noted that even though there was an 8.5 pi home, the city's tax rate actually decreased for tha Carlson asked why there would be a reduction. Olson stated the city's tax capacity has decreased. Bremer pointed out the city's tax rate is dependen an increase in their pay. ;rease in their pay but that there are some ty council, such as the Lake Minnetonka and resulted in an increase in the City's cost. In I be made up in the 2009 budget. .e line item for the LMCD and that some of these a different label. different house valuations and how the City's tax at 100 percent of market value and that the .e and a $1.1 million home. Olson stated if there was would decrease. 'cent increase in property tax for the $1.1 million property. on the valuation of the home. Murphy stated one of the least understood issues is how the taxation process works. The City attempts to • explain the items that taxpayers are subjected to be taxes on and that property taxes in the state of 'I PAGE 3 MINUTES OF THE ORONO TRUTH IN TAXATION M EETING Monday, December 1, 2008 6:30 o'clock p.m. • Minnesota are based on comparative sales data and not what the property is worth on an ongoing basis. Murphy stated another impact to a person's overall tax bill that is being felt is the Orono school referendum. White stated in his view the City of Orono provides very good city services at a very reasonable cost. Olson noted Hennepin County taxes make up the biggest share of the taxes. Olson displayed a list of sample tax rates for the surrounding cities and noted that Orono's tax rate has declined on a steady basis since 2002. Bremer noted that Maple Plain's tax rate is 49.44 percent and that Orono's tax rate is 13.382 percent. White pointed out that one of the ways Orono saves money is that Orono does not have an active, full - time parks department. The City of Orono recently surveyed 400 Orono residents, who have indicated they are satisfied with not having a very active park department given the many natural parks and trails that are available in this area to the residents. McMillan noted there are also some private organizations, such as the Freshwater Institute and the art center, that offer some great services to the residents, which also allows the City to keep its costs down. Murphy stated the budget comes down to a long -term vision and philosophy for the City, with the general feeling being that some of these services should be privately funded. Bremer noted two of the conclusions from the survey state that the residents are very satisfied with the interaction they have had with staff as well as their quality of life they enjoy. Bremer stated the City of Orono ranks among one of the top four communities in the metropolitan area. White commented that every department is also reviewing its costs to determine where expenses can be decreased. Ken Carlson suggested the City conduct a heat loss survey of the city -owned facilities and look at whether jobs could be handled on a part-time basis rather than a full -time basis. Carlson suggested the City also look at long -term cost savings such as adding insulation or utilizing natural gas in certain vehicles. McMillan stated the City has just started discussing energy audits and that it is on the schedule for 2009. Murphy commented they have looked at using natural gas in police vehicles and possibly utilizing hybrids. Murphy noted hybrids are not feasible for the police department given the horse power that is required at times but that the City should look at utilizing natural gas wherever possible. Murphy noted the City Administrator has been asked to research whether fuel could be purchased in bulk, but at this time they have not been successful in finding someone who would be willing to sell it at a reduced bulk price. Carlson suggested the City also look at their heating and cooling systems and whether improvements could be made. • PAGE 4 ORONO TRUTH l Monday, • 6:30 Murphy stated the City needs to consider the White commented the City is open to sugge: would formally adopt the budget next week. ES OF THE TAXATION M EETING ;cember 1, 2008 clock p.m. capital costs of making those improvements. how to reduce costs. White noted the City Council Tim Traff commended the City Council on their efforts at reducing their costs. Traff noted his valuation has increased 25 percent this year and that in his view the housing prices have reached a peak and the tax assessor will need to decrease his valuations in the coming years, which will decrease the City's revenue. Traff asked whether the City has a representative at the state to lobby for their interests. Traff stated the higher taxes and fees go, the more impact it has irito all elements of society, which could potentially change the character of the city. 11 White stated the various smaller cities will pro effort to reduce costs. Carlson stated Orono has a fixed amount of acres result in fewer taxes being collected. need to look at combining certain services in an that they are approaching its capacity, which will Murphy stated there will be 100 percent turnover in their representation at the Minnesota Legislature in the next couple of years and that they have been lobbying for representatives that the City feels will support their interests. Murphy concurred the City should take a stronger approach at the state legislature. White closed the public hearing at 7:38. ADJOURNMENT Bremer moved, McMillan moved to adjourn Ayes 4, Nays 0. ATTEST: - 'z- 1� Vee, City Clerk • Truth in Taxation meeting at 7:38 p.m. VOTE: J es White, Mayor PAGE 5