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MINUTES OF THE ORONO CITY COUNCIL Tuesday, May 27, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 6 of 23 (5. 2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT, Continued) Hoffman noted for the most part the other governmental funds have also been very consistent from year to year in both expenditures and revenues. Hoffman noted the fees received from the Metropolitan Council for various road projects were less than in prior years and there was a spike in expenditures related to the 2003 HRA bonds being paid off in 2011. As it relates to the Enterprise Funds, the graph includes two new funds that have a small balance in them due to the fact that they were only created this year. The main funds are water, sewer, and stormwater, which have been fairly consistent over the years. Hoffman noted there was a decrease in the water fund this year due to a transfer and a small loss on investments, which was pretty typical for the majority of cities due to the economy. Hoffman noted the City’s operating income for its enterprise funds appears to be more erratic but it is due to the scale being calculated at $150,000. The other three funds consisting of the sewer fund, stormwater fund, and the recycling fund did remain fairly consistent. Hoffman displayed a graph depicting the City’s debt service schedule and its projections for the next five years. Hoffman noted the City’s debt service is expected to decrease in future years from $1.4 million in 2013 down to $800,000 by the year 2018. Hoffman noted the City’s tax rate per the League of Minnesota Cities reflects that Orono has the lowest tax rate as compared to the neighboring cities of Long Lake, Medina, Wayzata, and Spring Park. In addition, Orono is well below the statewide city average as well as the Region 11 average. Hoogeveen stated other items of note include the implementation of GASB No. 68 in the year 2015. GASB No. 68 requires that government entities report a net pension liability for their allocation of the state-administered pension plans. Hoogeveen noted the state’s pension plans are funded at a higher rate than a number of other states but the new regulation requires that Orono reflect their share of that liability on their balance sheet. Hoogeveen congratulated the City for being the recipient of the GFOA Certificate of Achievement for Excellence in Financial Reporting for 2012. Mayor McMillan thanked Hoogeveen and Hoffman for their presentation and excellent work on the City’s audit. The City Council took no formal action on this item. 6. LONG LAKE FIRE DEPARTMENT Fire Chief James Van Eyll reported Station No. 2 experienced a power surge that largely affected the fire alarm panel. Replacement of the panel is expected to cost approximately $1,200. Van Eyll indicated the other systems were checked and everything else appears to be working. Van Eyll stated he spoke with the City’s finance director and was told the City’s deductible was $2,500 so the City will not be able to recoup its costs associated with the repair. Van Eyll noted this is the second time Station No. 2 has experienced a power surge, with the previous one affecting the HVAC system. Van Eyll indicated they are looking at installing a power surge protection system but that he does not have any cost estimates at this point in time. Item #03 - CC Agenda - 06/09/2014 Approval of Council Minutes 05/27/2014 [Page 6 of 23]