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MINUTES OF THE <br /> ORONO CITY COUNCIL MEETEING <br /> Monday,April 22,2019 <br /> 7:00 o'clock p.m. <br /> permits, intergovernmental,and user fees. Overall revenues have remained fairly steady over the past <br /> five years,with a slight increase being noted in 2016 and 2017. <br /> Expenditures out of the General Fund are comprised of general government expenses, streets,public <br /> safety, public works,recreation and parks, and other expenditures. The green bar on the chart represents <br /> municipal state aid,which has decreased the past few years. The amount collected in property taxes has <br /> increased slightly in the past few years. By far the two largest expenditures of the City are capital outlay, <br /> such as the new police garage, and debt service. <br /> Seals asked why there is nothing listed under licenses and permits in 2017. <br /> Hoffman stated she will have to check on that but that there was revenue received from licenses and <br /> permits. <br /> Johnson asked what revenue from governmental funds is. <br /> Hoffman indicated most of it would be debt service funds or tax levy dollars. The exact source would <br /> depend on the fund, but other examples would include municipal state aid or park dedication fees. <br /> Hoffman noted the main expenditure of the City is debt service,which has been decreasing over the past <br /> few years,followed by capital outlay for various projects. <br /> The enterprise funds are broken out into unrestricted(spendable) and operating income. In 2017 the <br /> sewer fund had approximately$3 million,the storm water fund had$1.5 million,and the water fund <br /> decreased to just under$800,000. Hoffman recommended the City keep an eye on the enterprise funds to <br /> make sure they can fund potential capital outlays in the future. <br /> Walsh noted back in 2015,the City had no road improvements budgeted and that this Council is now <br /> more focused on budgeting for infrastructure improvements. Starting in 2015,his mandate was not to <br /> bond any more but to budget for various infrastructure improvements. Over the past couple of years <br /> approximately$4.5 million in debt has been paid off. Decreasing the City's debt service will help the <br /> overall budget and has helped the City's cash position on the balance sheet consistently get better with the <br /> reduction in the debt. <br /> Hoffman stated the City should always keep a certain amount in reserves when considering whether to <br /> bond or not. Hoffman noted a couple of the enterprise funds were operating at a loss in 2017, such as the <br /> water fund, and the recycling fund had approximately a$14,000 operating loss. The sewer fund was <br /> approximately$1,000 in the hole. Hoffman stated it is fairly common to see operating losses in enterprise <br /> funds since that number also includes depreciation and that if the number only reflected operating <br /> expenses,those funds would likely be positive. <br /> As it relates to debt service, in 2017 there was a bond that was paid off,which is why the amount was <br /> larger in 2017. It is projected the City's debt service will decrease in the years going forward from 2018 <br /> through 2022. <br /> Hoffman stated last year she had a graph that compared the tax rates of neighboring cities,but the League <br /> of Minnesota Cities did not have that data available for 2017 on their website. That graph helped provide <br /> a nice idea of where Orono compared with neighboring cities. <br /> Page 3 of 5 <br />