01-22-2024 CC Agenda Packet - Laserfiche WebLink

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2022 Note 2: Stewardship, Compliance and Accountability (Continued) B.Deficit Fund Equity The following fund had a fund equity deficit at December 31, 2022: Amount Major Municipal State Aid Street 1,507,050$ Pavement Management Plan 1,117,246 Nonmajor Governmental 2010 General Obligation Bond 234,924 2021 Improvement Bonds 372,404 Park 402,933 Senior Housing TIF 454,098 Internal Services Fleet Management 125,994 IT Services 246,763 Fund The fund deficits are expected to be eliminated with future fund revenues or transfers from other funds. Note 3: Detailed Notes on All Funds A.Deposits and Investments Deposits Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City’s deposits and investments may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the City Council, the City maintains deposits at depository banks, all of which are members of the Federal Reserve System. Minnesota statutes require that all City deposits be protected by insurance, surety bond or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, with the exception of irrevocable standby letters of credit issued by Federal Home Loan Banks as this type of collateral only requires collateral pledged equal to 100 percent of the deposits not covered by insurance or bonds. Authorized collateral in lieu of a corporate surety bond includes: •United States government Treasury bills, Treasury notes, Treasury bonds; •Issues of United States government agencies and instrumentalities as quoted by a recognized industry quotation service available to the government entity; •General obligation securities of any state or local government with taxing powers which is rated “A” or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated “AA” or better by a national bond rating service; •General obligation securities of a local government with taxing powers may be pledged as collateral against funds deposited by that same local government entity; •Irrevocable standby letters of credit issued by Federal Home Loan Banks to a municipality accompanied by written evidence that the bank’s public debt is rated “AA” or better by Moody’s Investors Service, Inc., or Standard & Poor’s Corporation; and •Time deposits that are fully insured by any federal agency.64 110