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City of Orono, Minnesota <br />Notes to the Financial Statements <br />December 31, 2023 <br />Note 1: Summary of Significant Accounting Policies (Continued) <br />The City reports the following major governmental funds: <br />The General fund is the govern It accounts for all financial resources of the general <br />government, except those required to be accounted for in another fund. <br />The Municipal State Aid Street fund is used to collect and spend resources on the various projects related to state aid <br />streets and highways. <br />The Pavement Management Plan fund collects and allocates resources related to the repair and maintenance of roads <br />within the city. <br />The Project Construction fund is used to collect and spend resources related to various construction projects within <br />the city. <br />The City reports the following major proprietary funds: <br />The Water fund and the Sewer fund account for activities related to the operation of a water distribution system and a <br />sanitary sewer distribution system, respectively. <br />The Sewer Fund is used to account for the provision of water services to the residents of the City who have sanitary <br />sewer service available. <br />The Storm Water Fund <br />system. <br />Internal service funds account for insurance, compensated absences, fleet management, and IT services provided to <br />other departments or agencies of the City. These funds are used to account for the insurance costs incurred by the <br />cles, <br />and IT services provided to various City functions. These funds are reimbursed through charges to the various <br />participating departments of the City. <br />As a general rule the effect of interfund activity has been eliminated from government-wide financial statements. <br />Exceptions to this general rule are payments in-lieu of taxes, payments where the amounts are reasonably equivalent in <br />value to the interfund services provided and <br />functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the <br />various functions concerned. <br />Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and <br />expenses generally result from providing services and producing and delivering goods in connection with a proprietary <br />service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal <br />service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All <br />revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. <br />53 <br />Sewer FundSewer Fund is used to account for the provision of water services to the residents of the City who have sanitary is used to account for the provision of water services to the residents of the City who have sanitary <br />sewer service available.sewer service available. <br />Storm Water FundStorm Water Fund <br />system.system. <br />Internal service fundsInternal service funds account for account for insurance, compensated absences, fleet management, and ITinsurance, compensated absences, fleet management, and IT services provided to services provided to <br />88