09-28-1988 - Agenda Packet City Council - regular meeting

Home Browse Search

CITY OF ORONO ORONO, MINNESOTA Summary of Significant Forecast Assumptions and Policies (See Accountants' Compilation Report) This financial forecast presents each Debt Service Fund of the City of Orono which are finan•c�d primarily through Special Assesoment Levies. The City typically prepares its Debt Service Funds' financial statements oil tea modified accrual basis of accounting; however. the purpose of this forecast is to present sources, uses, and availability c_ cash and, accordingly, it is pre- pared on the cash basis of accounting. The assumptions disclosed herein are those that the City believes are signifi- cant to the forecast. The forecast reflects the City's judgement of expected conditions and their expected course of action based on information available as of August 24, 1988. Readers should note that there will usually be differences between the forecasted and actual results because events and circumstances fre- quently do not occur as expected and those differences may be material. For additional information, readers should refer to audited financial statements and footnotes for December 31, 1987, and prior years. SUMMARY OF MAJOR ASSUMPTIONS Iucerest earned on investments is computed based on an average annual cash and investment balance at an average annual rate of 6.5%. Accrued interest and due from other governmental units as of December 31, 1987, are assumed to be collected in the subsequent year unless indicated o'herwise. Provisions for prepayment of Deferred Special Assessments are not included since eventually these will be levied during the term of the assessment fund and the interest earned on the assessment approximates the irterest earned on the resulting cash provided by the prepayment. The forecasts of cash flow are extended through a 25-year period; however, each fund is closed soon after the completion of Special Assessment Levies and the final maturities of bonds issue+ Cash provided by ad valorem tax levies (even if sc-eduled) is not incluu,-d in this forecast other than those certified in 1987 f r collectior_ in 1988. The following S_hedule of Future Ad Valorem Property TaAes are available for certification: