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City of Orono, Minnesota <br />Notes to the Financial Statements <br />December 31, 2024 <br /> <br />Note 1: Summary of Significant Accounting Policies (Continued) <br /> <br />The City reports the following major governmental funds: <br /> <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 /> <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 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 /> <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 /> <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 /> <br />The Storm Water Fund <br />system. <br /> <br /> <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 />City for general liability, property, vehicle, <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 /> <br />55 82