06-24-2024 CC Agenda Packet - Laserfiche WebLink

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2023 Note 1: Summary of Significant Accounting Policies A. Reporting Entity The City of Orono (the City) operates under the State of Minnesota Statutory Plan A form of government. Under this plan, the City Council, composed of an elected mayor and four elected trustees or council members, exercises legislative authority and determines all matters of policy. The City Administrator, appointed by the City Council, is responsible for the proper administering of all affairs relating to the City. The City has considered all potential units for which it is financially accountable, and other organizations for which the statements to be misleading or incomplete. The City includes all funds, organizations, institutions, agencies, departments, and offices that are not legally separate from such. Component units are legally separate organizations for which the elected officials of the City are financially accountable and are included within the basic financial statements of the City because of their operational or financial relationships with the City. The Governmental Accounting Standards Board (GASB) has set forth criteria to be considered in determining financial accountability. These criteria include appointing a organization or (2) the potential for the organization to provide specific benefits to, or impose specific financial burdens on the primary government. following blended component unit. Blended Component Unit The Orono Housing and Redevelopment Authority (Orono HRA) is a legally separate organization created in accordance with Minnesota Statute § 469.003. Its purpose is to clear and redevelop blighted areas within the City and to provide adequate housing for low- and moderate-income residents. The Orono HRA is fiscally dependent upon the City, and its blended component unit of the City, with its funds reported as though they are funds of the City. The financial activity at this time is limited to debt payments within the Orono HRA debt service funds, namely the public facilities and project revenue bonds. B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. 51 Component UnitComponent Unit The Orono Housing and Redevelopment Authority (Orono HRA) is a legally separate organization created in accordance The Orono Housing and Redevelopment Authority (Orono HRA) is a legally separate organization created in accordance with Minnesota Statute § 469.003. Its purpose is to clear and redevelop blighted areas within the City and to provide with Minnesota Statute § 469.003. Its purpose is to clear and redevelop blighted areas within the City and to provide adequate housing for adequate housing for low--and moderateand moderate--incomeincome residents. The Orono HRA is fiscally dependent upon the City, and its residents. The Orono HRA is fiscally dependent upon the City, and its blended component unit of the City, with its fundblended component unit of the City, with its funds reported as though they are funds of the City. The financial activity at s reported as though they are funds of the City. The financial activity at this time is limited to debt payments within the Orono HRA debt service funds, namely the public facilities and project this time is limited to debt payments within the Orono HRA debt service funds, namely the public facilities and project revenue bonds.revenue bonds. 86