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Home My WebLink About09-07-1977 Council Minutes - Public Hearing � � � CITY OF ORONO' t Public Hearing of the Orono Council, 7 : 00 P.M. �eptember 7, 1977 . . . � The Orono Council met on the above date with the following members present: Mayor Van Nest, ! Councilmembers Butler, Paurus , and Pesek. Absent: Councilmember Massengale. Also present: � City Administrator Benson and Finance Director , Kuehn. • Mayor Van Nest announced that this was the time PUBLIC HEARING � and place for a public hearing concerning a Levy Limit resolution to increase the 1977/1978 levy limit �' by ten percent. City Administrator Benson • presented the Notice of Public Hearing and Affidavit of Publication. No comments were � made from the public. The Mayor closed the public hearing at 7: 10 P.M. • Discussion followed concerning: • l. Should the City of Orono take advantage � of expanding the tax base authorizing a reverse • referendum? � 2. How much of the revenue referendum should �e levied if authorized? • Dick Benson, City Administrator, entered into � the record the following memo, dated September 6 , � 1977. See pages 2-� � Paurus moved, Butler seconded, to adopt Resolution RESOLUTION #819 � #819 , A Resolution To Amend Resolution #817 , Levy Limit Regarding .The Increase In The 1977-78 Levy � Limitation By Ten Percent. Motion, Ayes (4) - Nays (0) . � RESOLUTION #819 � ' � WFiEREAS, the City of Orono deems it necessary to increase its levy limit by ten percent, according ` to Minnesota State Laws, 1977, Chapter 423, Article 5 , Section 6, and • WHEREAS, the 19_77-78 limit base is $696 , 364 , � including Local Government Aid, a ten percent • increase would net a permanent 1977-78 levy limit base of $766 ,000. • NOW, THEREFORE, BE IT RESOLVED that the City of �Orono' s permanent 1977-78 levy limit base i� $766, 000. � Motion, Ayes (4) - Nays (0) . � � � . PUBLI� HEARING MINUTES OF SEPTEMBER 7, 1977 Page 2 � y � � In 1971 the Minnesota State Legislature imposed a six percent � levy limitation on all municipalities for taxes due and payable i in 1972. At that time Orono did not have a realistic dollar � � amount budgeted for the 1971 budget which established the base e for the levy limitation. � � The year 1972 found Orono exceeding the levy limitation for � the 1973 Budget by $11, 998. 73. _ Which meant that we would be penalized $. 33 on the dollar. Therefore, in 1973 when the �' 1974 budget was established Orono included the monies from � the Federal Revenue Sharing Program to support the General Fund and were able to under levy $9, 289. 92, reducing the excess � levy to $2, 708. 81. The 1975 Budget also reflected an under � levy of $4, 311. 79 which forgave the penalty incurred by the 1973 budget. This was made possible by including the Federal � Revenue Sharing monies again. � � The following Budgets of the years 1976 and 1977 have included � the Federal Revenue Sharing monies as means of financing the ' General Fund. If Orono had nc,t used these Federal Revenue • monies to support the GenEral �d we would be exceeding the levy limitation each year and would be penalized . 3� on the � dollar of each dollar exceeding the levy limitation. • � � a � � � � • (Continued) � � � � � � � � � . , . �PUBLIC HEARING MINUTES OF SEPTEMBER 7 , 1977 Page 3 � � Since the initial proposed budget for 1978 was tabulated there � have been several changes. The following is a comparison of the • original proposed budget verses the proposed budget after the � changes. � General Fund Ori�g`inal Revised Decrease • City Council $ 27, 507 $ 26, 222 $ 1 , 285 � Elections 6, 797 6, 797 -- Administration 56, 757 55, 425 1, 332 � Finance 39, 505 38, 533 972 � Legal 27, 100 27, 100 -- Assessing 32, 863 32, 863 -- � Government Buildings 23, 825 23, 825 -- � Police 327, 217 278, 901 48, 316 Fire 47, 710 47, 710 -- � Building & Zoning 76, 614 76, 614 -- � Civil Defense 6, 679 2, 079 4, 600 Animal C�ntrol 4, 414 4, 414 -- � Engineering 6, 500 6, 500 -- � Streets 237, 890 237, 705 185 Health & Sanitation 24, 556 24, 556 -- � Pensions 20, 140 20, 140 -- � Parks 23, 095 23, 095 -- Insurance 32, 809 32, 809 -- � Contingency 20, 000 20, 000 -- � Human Rights � 250 250 -- � - TOTALS $1, 042, 228 $ 985, 538 $ 56, 690 � Due to the changes above in the Police Budget there will be an � effect on Police Contract Income as a Revenue Souree. There are also changes in the Property Taxes and in the Reverse � Referendum because of calculation errors in the preceding memos. • The changes in the Revenue Sources to finance the General � Fund Budget for 1978 are indicated as follows: � a � � � � � (Continued) � � a PUBLIC HEARING MIPIUTES OF SEPTEMBER 7, 1977 Page 4 • Revenue Source Original Revised Chan�e y General Property Taxes $ 553, 759 $ 538, 045 $(15, 714) � Licenses & Permits 30, 000 30, 000 -- Federal Revenue 56, 000 56, 000 -- � Fines & Forfietures 12, 000 12, 000 -- � Shared Taxes 142, 605 158, 319 15, 714 Highway Users 12, 200 12, 200 -- � Contract Income (Police) 94, 059 79, 550 (14, 509) � Contract Income (Inspection) 1, 000 1, 000 -- . Town Aid 14, 000 14, 000 -- � � Transfer Liquor 35, 000 35, 000 -- � I}utch Elm Program 10, 500 10, 500 -- • Sub-Total $ 961, 123 $ 946, 614 $ (14, 509) Reverse Referendum 55, 376 69, 636 14, 260 � TOTAL Sl� 016, 499 1 016, 250 S �4� • - -- � The effect of these various changes on the budget deficit is as follows: � - ` Original Revised Chan�e . Proposed Budget $ 1, 042, 228 $ 985, 538 $ (56, 690) Revenue Source without � Reverse Referendurn 961 , 123 946, 614 (14, 509) . � Surplus/(Deficit) S (81 , 105) $ (38, 924) $ 42. 181 • • Proposed Budget $ 1, 042, 228 $ 985, 538 $ (56, 690) Revenues Source with � Reverse Referendum 1, 016, 499 1 , 016, 250 (249) � Surplus/(Deficit) ,��5, 729) � 30, 712 �56, 441 • � Mill Rate: � The total mill rate for 1977 was 12. 418 including all levies. � Based on the assessed values available at this time, the new • mill rates for 1978 total 11 . 578 without the reverse referendum and 13. 017 with the reverse referendum. Please note that for � taxes payable in 1978 the County will be determining the total • assessed valuation of the City using a new formula. The mill rates I have noted in this memo are based on the new assessed � valuation but under the old formula because the conversion has � not been made as of this date. � � (Continued) � s � PUBLIC HEARING MINUTES OF SEPTEMBER 7, 1977 Page 5 • In 1977 a home with a taxable value of $50, 000 had a tax levy of approximately $224. The taxes payable in 1978 for a home � � with a taxable value of $50, 000 will be approximately $235 with • the reverse referendum and approximately $209 without L-he � reverse referendum. The net estimated increase from the reverse referendum is $11 because of the re�3uction in the debt levy and special 1 r Following are tabulations showing the tax levies and mill rates , for 1977 compared to the estimated tax levies and mill rates for 1978. Please keep in mind that the mill rates for 1978 will � be changing due to the new formula. � ' 1977 1978 � Tax Mill Rate Tax Mill Rat � General $S14, 861 11. 842 $538, 045 11. 117 � General Rev. Ref. --� -- 69, 636 1 . 439 General Total $514, 861 11 . 842 $607, 681 12. 556 � Bonds & Interest 22, 825 . 525 22, 300 . 461 � Special Levy 2, 217 . 051 -0- -0- � Total Levies 539, 903 12 . 418 =S629�_981 13. 017 � Total Levies without Reverse Referendum �539, 903 12 . 418 S560, 345 11 . 578 � Followin is a tabulation h � g s owing the taxes payabie in 1977 and the • estimated taxes payable in 1978 for a house with a $50, 000 taxable value. � � 1977 1978 Tax Mill Rate Tax Mill Rat� � General ' $ 214 11 . 842 $ 201 11 . 117 � General Rev. Ref. -- -- 26 1 . 439 General Total $ 214 11. 842 $ 227 12 . 556 i Bonds & Interest 9 . 525 8 . 461 � Special Levy 1 . 051 -- -- • Total Levies 224 _ . 12. 418 _ 235 13. 017 Total Levies without � Reverse Referendum S 224 12. 418 - S .209 11 . 578 � As noted above, the estimated gross increase for the reverse � referendum is $26. � Reverse Referendum: � � As stated earlier in this memo, there was an error in the original � � � (Continued) ! .,, • PUBLIC HEARING MINUTES OF SEPTEMBER 7, 1977 Page 6 � calculation of the reverse referendum, The resolution states � that a ten percent increase in the levy limit base would raise � the base from $553, 759 to $609, 135 exclusive bf Local Government Aid. The resolution should read that a ten percent increase • in the levy limit base would raise the base from $696, 364 to � $766, OOO, including Loca1 Government Aid. � Based on the budget and revenues changes, there should be about � $30, 000 of surplus generated by the inclusion of the reverse � referendum in the revenue sources . It is recommended that this surplus be budgeted for the express purpose of recodifi- � cation of the City Ordinances in 1978. ! Actually, to call the additional revenue to be generated by � _ the reverse referendum a surpl�us is somewhat misleading. Each � year the City receives certain monies from the Federal Govern- ment as its portion of revenue sharing. In 1977 the Federal � Government changed its fiscal year from June 30 to September � 30. At the same t�me the Department of Revenue Sharing changed the methods and requirements for using revenue sharing monies � effective January 1, 1977, for those budgets enacted after � that date. Due to these changes, the last entitlement period � under the old rules was for the last two quarters of 1976. � The first entitlement period under the new rules was for the first three quarters of 1977 (Jan. -Sept. ) . These monies had � . not been budgeted for use in the 1977 budget because of the . fact that the 1977 budget was enacted prior tQ January 1, 1977. The second entitlement period under the new rules is for a • full year, October l, 1977, to September 30, 1978. Therefore, � the total Federal Revenue Sharing monies available for our budget year 1978 includes seven quarters, January l, 1977 to � SeptemY�r30, 1978. The problem is that for our budget year � 1979 there will only be one year (four quarters) of revenue sharing monies available for use. This will mean a reduction in monies • available of about $24, 000. i - w • , • • . � � � (Continued) � � � � � , • PUBLiC HEARING MINUTES OF SEPTEMBER 7, 1977 Page 7 ` Dick Benson, City Adr,iinistrator, informed the City Council that if within 30 days after �esolution #817 was adopted,August 8, 1977, a � etition signed by voters equal in number to � five percent of the votes cast in the govern- mental subdivision in the last general election � or 2, 000 voters, whichever is less , requesting � a referendum on the proposed resolution is filed with the clerk or recorder of the governmental � subdivision if the governmental subdivision is a city or town, or with the county auditor if � the governmental subdivision is a county, the resolution shall not be effective until it � has been submitted to the voters at a general • or special election and a majority of votes cast on the question of approving the resolution are � in the affirmative. , � Butler moved, Mayor Van Nest seconded, that the ADJOURNMENT � public hearing be adjourned at 8 : 00 P.M. Motion, � Ayes (4) - Nays (0) . � � � GGn"1' William B. Van Nest, Mayor � � � Attest: Y��/�� i � Walter enson, Clerk-Administrator � � � I � � � � � � � � �