08-13-2001 Council Minutes - Laserfiche WebLink

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ORONO CITY COUNCIL MEETING MONDAY, AUGUST 13, 2001 • Z Use of Funds from the Community Investment Fund — Continued Mayor Peterson moved, and Sansevere seconded, to table Item 2. Vote: Ayes 4, Nays 0. Item 2 is continued after Item 14. 3. Presentation of the.City's 2000 Comprehensive Annual Financial Report Ken Malloy, Auditor for the City, presented the 2000 Comprehensive Annual Financial Report. Tom Kuehn, City Finance Director, was present to help answer questions. Malloy stated that he had been an audit partner in the City's independent audit firm for the last 10 years. His job was to review the City's financial records and statements and give an opinion as to whether the financial statements were accurately stated. They also function as a watchdog for the state to make sure the City was in compliance with state statutes. The City's financial statements were accurate, with only a few findings. One finding concerned contracts. Previously a number of requirements had to be met for contracts over $25,000. The state recently changed that to over $50,000 for a city the size of Orono. The City had a contract they thought was in compliance, but was actually awarded before the new law went into effect. Malloy did write up the finding, but felt there would be no consequence. IS Another finding involved a broker the City dealt with, who did not return the broker certificate form to the City for filing. 0 Malloy indicated that the state will be taking over the General Education Levy portion of property taxes. They will pay that for the school, but will also cut aids to municipalities. The change is supposed to be neutral in terms of how it will affect the City. What the City loses in state aid should be generated by additional taxes and more local government aid. Property tax payers should receive the benefit. Malloy discussed how Orono City revenues compare to other cities. The General Operations levy generated a little less revenue than state wide averages through 1998, which means Orono needs to generate less per capita than other cities, or that Orono spends less, or that Orono finds other revenue sources. The tax rate is used as a benchmark to see how heavy a burden the city places on its residents. Orono's tax rate is 14.8, while other cities averaged 29.6 in 2000. The General Fund balance and cash balance dropped in 2000, but it was a planned drop for the purchase of land. The cash and fund balances were both at $1.7 million, which Malloy characterized as a good, healthy balance. The City has healthy water and sewer funds. Traditionally, Orono receives very little funding from the state, and all of it is in homestead credit. Other sources of revenue are taxes and charges for services that are specifically attributed to the person using the service. The municipal golf course provides a small source of revenue. The new 2