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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 />_____________________________________________________________________________________ <br /> <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 /> <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 /> <br />Seals asked why there is nothing listed under licenses and permits in 2017. <br /> <br />Hoffman stated she will have to check on that but that there was revenue received from licenses and <br />permits. <br /> <br />Johnson asked what revenue from governmental funds is. <br /> <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 /> <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 /> <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 /> <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 /> <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 /> <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 /> <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.