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CITY OF ORONO, MINNESOTA
<br />MANAGEMENT’S DISCUSSION AND ANALYSIS
<br />YEAR ENDED DECEMBER 31, 2015
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<br />The City has completed the development of a Capital Improvement Plan (CIP) that was formally
<br />adopted by the City Council. This plan will be reviewed annually as part of the budget process. The
<br />approved purchase of an asset management program will improve the City’s ability to track useful and
<br />identify maintenance concerns involving the City’s infrastructure and assets.
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<br />Additional details of capital asset activity for the year can be found in Note 4 of the notes to basic
<br />financial statements.
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<br />Long-Term Liabilities
<br />The debt service funds account for the accumulation of resources to finance all of the City’s general
<br />obligation bonds. The revenue sources for these funds include annual tax levies, special assessments,
<br />and transfers from other funds. At year-end, the total fund balance of these funds was $2,209,951. The
<br />following table summarized the City’s long-term liabilities
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<br />2015 2014 2015 2014 2015 2014
<br />General Obligation Bonds 9,610,000$ 10,620,000$ 1,195,000$ -$ 10,805,000$ 10,620,000$
<br />Compensated Absences 444,350 427,923 32,824 25,270 477,174 453,193
<br />Other Postemployment Benefits 273,616 229,446 27,361 24,088 300,977 253,534
<br />Net Pension Liability 3,701,933 3,723,015 296,134 307,923 3,998,067 4,030,938
<br />Capital Lease Payable 11,812 17,374 - - 11,812 17,374
<br />Bond Premium (Discount), Net 141,699 155,933 20,041 - 161,740 175,974
<br />Total Outstanding Debt 14,183,410$ 15,173,691$ 1,571,360$ 357,281$ 15,754,770$ 15,551,013$
<br />Governmental Activities Business-Type Activities Total
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<br />Additional details of long-term debt activity for the year can be found in Note 5 of the notes to basic
<br />financial statements.
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<br />General Fund Budgetary Highlights
<br />Detail of the General Fund original budget, final budget and actual revenues and expenditures can be
<br />found on page 55 of this report. While a few departments required budget adjustments, the City
<br />compensated for these increases with reductions in other departments. The Departments that needed
<br />budget adjustments were Assessing, Golf, and Special Services. The City contracts with Hennepin
<br />County for assessing services. One variable component of the contract rate is charges associated with
<br />assessing new construction. The City experienced a dramatic increase in building activity during the
<br />year and one result was a higher than budgeted assessing bill. Special Services is also related to
<br />building activity and as a result was over budget. Both of these departments have revenue lines
<br />associated with the services that they provide. These revenues were also well over budget. The Golf
<br />Course had its highest annual revenue in years. The expenditure overage was the result of purchasing
<br />more items for resale than budgeted. The overage was offset by the revenue associated with the sale
<br />of the merchandise. The overall General Fund net budget amount did not change and ended the year
<br />with a favorable budget variance of $727,907 before other financing sources and uses.
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<br />REQUESTS FOR INFORMATION
<br />Questions concerning any of the information provided in this report or requests for additional
<br />information should be addressed by writing to the City of Orono, 2750 Kelley Parkway, P.O. Box 66,
<br />Crystal Bay, Minnesota 55323 or by calling (952) 249-4600.
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