01-11-2021 Council Packet - Laserfiche WebLink

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