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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 />The City participates in various pension plans, total pension expense for the year ended December 31, 2024 is as follows: <br /> <br />Deferred Inflows of Resources <br />In addition to liabilities, the statement of net position and fund financial statements will sometimes report a separate <br />section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, <br />represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of <br />resources (revenue) until that time. The City has four types of items, which arise only under a modified accrual basis of <br />accounting that qualifies as needing to be reported in this category. Accordingly, the item, unavailable revenue, is <br />reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from three <br />sources: delinquent property taxes, special assessments and intergovernmental revenue. These amounts are deferred <br />and recognized as an inflow of resources in the period that the amounts become available. The City also recognizes a <br />deferred lease resources, which is reported under both the modified accrual and full accrual basis <br />Furthermore, the City has one additional item which qualifies for reporting in this category on the statement of net <br />position. The item, deferred pension resources, is reported only in the statement of net position and results from actuarial <br />calculations involving net differences between projected and actual earnings on plan investments and changes in <br />proportions. <br />Net Position <br />Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred <br />inflows of resources. Net position is displayed in three components: <br /> <br />a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any <br />outstanding debt attributable to acquire capital assets. <br /> <br />a. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their <br />use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. <br /> <br />b. Unrestricted net position - <br /> <br /> <br />first, then unrestricted resources as they are needed. <br /> <br />60 87