07-08-1996 Council Minutes - Laserfiche WebLink

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9- k. MINUTES OF THE REGULAR ORONO CITY COUNCIL MEETING HELD ON JULY 8, 1996 ( #2 - 1995 Comprehensive Annual Financial Report - Continued) • The City's reliance on property taxes, reflected on page 7, is due to little assistance from the state. Hoogeveen reported that the City has shown responsibility in maintaining low tax rates. Regarding the enterprise funds, the small net loss shown in the water operating fund, on page 10, was offset by the depreciation on the contributed assets, with the net effect on the retained earnings being a small increase. Kelley related a direct correlation between the loss and improvements to the Navarre water plant, and the City is not recouping the total depreciation. Hoogeveen said the sewer operating fund had a larger operating loss than the water operating fund, due in part to increasing charges from the Metro Council Wastewater Services, but that the City is addressing the situation by taking steps to limit the inflow and infiltration of outside water into the sewer system. He noted that the golf course reflected a net profit of approximately $40,000. Hoogeveen said the Finance Director and Administrator write a comprehensive and detailed transmittal letter in the front of the annual report which is very informative and useful. Callahan asked if the delay in timing of the report was due to the switch over of computer systems during the year and if that switch over was performed competently. Hoogeveen said the switch over was done competently but held up the report somewhat. It is expected that this will not slow the report next year as the entire year will be on the same system. • Jabbour asked if corrections were done adequately in relation to the deficit in the water fund. Hoogeveen said he was not aware of the history, and a rate increase is usually the recommendation made if a net loss is shown. Kelley said he believes the expense should be fully covered by revenue and asked if other cities have deficits. Hoogeveen said he sees cities with and without deficits, but that in his opinion, Orono is correctly accounting for the depreciation. Kelley asked when an audit is expected to be completed. Hoogeveen said the timing is up to the individual councils, but that the audit is typically conducted between about April 15th and 30th and is reported by most cities by the end of June. Hoogeveen said Orono's audit did begin two weeks late this year. Appreciation was extended to the auditor and the City Staff on a job well done. APPROVAL OF MINUTES ( * #4) REGULAR MEETING OF JUNE 24, 1996 Jabbour moved, Goetten seconded, to approve the Minutes of the Regular City Council Meeting of June 24, 1996. Vote: Ayes 4, Nays 0. 40