09-09-2019 Council Packet - Laserfiche WebLink

Home Browse Search

MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, August 26, 2019 7:00 o’clock p.m. _____________________________________________________________________________________ PRESENTATION 12. 2018 AUDIT PRESENTATION Michelle Hoffman and Troy Gabler, Clifton, Larson and Allen, were present. Michelle Hoffman provided an overview of the City’s 2018 audit, and noted that the primary responsibility of the audit is to provide an opinion on the fairness of the presentation of the financial statements. Following that review, Clifton, Larson issued an unmodified (clean) opinion on the financial statements, which is the best opinion that can be received. Two new GASB standards were implemented this year and included No. 75 (OPEB) and No. 89 (capitalized interest). Neither of those two standards impacted the City substantially. There were no legal compliance exceptions noted in 2018. Internal control exceptions noted were preparation of financial statements, segregation of duties, material audit adjustments, and check signing. These exceptions are somewhat typical for a city the size of Orono. As it relates to the General Fund-Unassigned Fund Balance, the final number was consistent with past years and comprised approximately 54 percent of the budget. The primary source of revenue for the General Fund comes from property taxes, followed by licenses and permits, intergovernmental, and user fees. Total revenue was $8,864,000 in 2018. As it relates to expenditures, public safety is the largest expenditure, followed by general government, streets, and recreation and parks. Troy Gabler provided an overview of the City’s Other Governmental Funds. Orono’s fund balance for all its funds is in good shape. Property taxes has been slowly increasing. Licenses and permits are consistent with past years and there were $203,000 park dedication fees paid in 2018. Intergovernmental funds consist of MSA funds and was higher in 2018 than in previous years. Debt service has been reduced quite a bit, which is due to the payoff of a debt issued in 2017. The recycling and cable television funds are also fairly steady. The water, sewer, and storm water funds are in good shape, with no fund having a negative balance. Operating income has remained steady with the exception of the water fund, which has decreased and should be monitored in the coming years. Hoffman noted there are other items included within the enterprise funds and that it is not unusual for some of the operating funds to have a negative balance until those non-operating funds are included in. Gabler reviewed the City’s future debt service and noted it will remain fairly steady for the next four years. Hoffman stated overall the City is in good financial shape. Walsh noted interest payments after 2023 will be reduced significantly since the City has not been taking on any new debt. Rief noted there will be an uptick in the Water Fund revenue late next year due to some new users coming in. The City Council took no formal action on this item. Page 2 of 5