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MINUTES OF THE <br /> ORONO CITY COUNCIL MEETING <br /> Monday,December 7,2020 <br /> 6:00 o'clock p.m. <br /> PRESENTATION—Continued <br /> issues there and no compliance areas to report. Ms. Schwieger then went on to the General Fund results <br /> and showed a chart onscreen from the last five years which shows the fund balance at the end of each year <br /> compared to the next year's budget so the City can see how much they have in reserves at the end of the <br /> year to cover the next year's budget. She noted in 2019 Orono had about 47%to cover the 2020 budget; <br /> the City also has a policy of how much they want to cover the current year budget, and had 50%of the <br /> current year budget in their 2019 reserves. In revenues, Orono was significantly over budget due to <br /> building permits, some grants,and charges for services that were over budget. <br /> Mayor Walsh stated that is a positive problem. <br /> Ms. Schwieger answered yes; she said expenditures were very close to budget with only about a$4,000 <br /> variance there. Orono was able to transfer out a significant amount to the pavement management fund at <br /> the end of the year, about$700,000. An overview of revenues;taxes is the largest source,another <br /> category includes grants,charges for services, fines and forfeitures and miscellaneous items. She said <br /> overall, fairly consistent revenues with the past three years. Under General Fund expenditures by type, <br /> public safety is the largest program because of contracted services and there is a slight increase for some <br /> capital needs. Ms. Schwieger mentioned that other category includes culture and recreation,and <br /> economic development. Separate from the General Fund is the Special Revenue Fund(SRF),noting <br /> Orono has several SRF's and they are all very restricted resources;the Park Fund is a significant one that <br /> changed in 2019 as there were some big park projects that took place and they saw a decrease there. <br /> Otherwise,there was fairly consistent activity in the other funds. Ms. Schwieger showed a graph <br /> onscreen that showed the debt service fund shows what the City's principal and interest payments look <br /> like over the next 10 years until the last bond matures. In 2023, Orono will see a drop and another drop in <br /> 2026. <br /> Johnson noted that is another positive problem. <br /> Mayor Walsh said that is about a$400,000 drop. <br /> Ms. Schwieger continued on with the Capital Fund balances; pavement management and municipal state <br /> aid street have some pretty big negative balances but are not something to be too alarmed about; it is just <br /> something to plan for in the future. She believes there are some funds that will come in and clean out <br /> those negative balances along with what Orono currently has planned. She noted the rest of the funds are <br /> assigned for different capital and equipment purchases. Next is the internal service fund;the <br /> governmental funds and enterprise funds chip in for all of these different things and they are using these <br /> to save up different resources. Continuing on with the water fund, she explained the charts onscreen <br /> showing the cash flows coming in and comparing it to how much Orono can cover with their operating <br /> receipts. In 2019, Orono was able to cover both the operating payments and debt payments,which is <br /> great. In looking at the bottom chart,there was a pretty big decrease in cash,but there was about <br /> $350,000 in capital that was paid out of cash reserves and that is where they see the big decrease in cash. <br /> She stated they have a cash reserve goal of 25%of Orono's operating costs and 25%of the capital costs <br /> to be in the cash reserves at the end of the year. Next is the sewer fund; receipts have been more than <br /> enough to cover disbursements over the past four years. Regarding the cash balances, although there was <br /> about$500,000 in the sewer fund,they were also able to meet that cash reserve goal for the fund. She <br /> showed similar charts onscreen from the storm water fund,noting for the operating receipts and <br /> disbursements,there were some one-time items in 2019 and they can see they were sufficient to cover the <br /> cash reserve goals. The recycling fund is smaller and generally not able to cover—over the last three <br /> Page 5 of 15 <br />