06-09-2014 Council Packet - Laserfiche WebLink

Home Browse Search

MINUTES OF THE ORONO CITY COUNCIL Tuesday, May 27, 2014 7:00 o’clock p.m. _____________________________________________________________________________________ Page 5 of 23 (5. 2013 COMPREHENSIVE ANNUAL FINANCIAL REPORT, Continued) Hoogeveen stated for 2013, Ehlers intends to issue a clean opinion on the City’s financial statements. Because it is a government audit standard report, Ehlers is required to issue a letter every year on the City’s internal controls over financial reporting controls. Ehlers has found the same concern that was raised in previous years regarding segregation of duties, which is related to the small number of people involved in the finance department. Ehlers is also required to issue a legal compliance opinion based on guidance put together by the Office of the State Auditor. Hoogeveen indicated there is a fairly lengthy checklist of state statutes that have to be tested against the City’s adherence and that it is fairly common to have some minor exceptions. Hoogeveen noted one exception related to the prompt payment of bills and generally related to an invoice that was not transmitted to the business office in a timely manner by one of the departments. Hoogeveen noted Michelle Hoffman is the day-to-day manager on the City’s finances and will be presenting her findings to the City Council. Michelle Hoffman, Manager with Clifton, Larson, stated the first graph depicts the City’s General Fund and shows the City’s unassigned fund balance. Hoffman noted starting in 2011, there was a terminology change from unreserved to unassigned, which accounts for the different colors on the graph, but that it basically is comparing the same thing. Hoffman noted for the last five years the City’s General Fund has been pretty consistent in its balance. In 2013, the City ended up at approximately 50 percent of expenditures for the General Fund, which is where it is expected to be. Orono’s fund balance policy does say to strive to have at least five months worth of expenditures on have and that 50 percent is approximately six months of expenditures on hand. Hoffman stated the next graph depicts the General Fund Revenues broken down into the five major categories. The City’s revenues have been very consistent from year to year. The major portion of the City’s revenue is generated from property taxes, which provides the revenue for the general services of the City. Hoffman noted the City’s user fees increased and was related to the new police service agreement with the City of Mound. Hoffman noted the next slide reflects the City’s General Fund expenditures broken out into categories. The spike shown on the expenditures is related to Public Safety and those expenditures will stay a little higher as the agreement continues. Hoffman noted overall the City’s expenditures have been fairly consistent over the past five years and reflects the City’s conservative approach to planning and spending. Hoffman displayed a graph shows the City’s other governmental funds, noting that it does not include the General Fund. The reason for the multiple terminologies is that in 2011 there was the change in terminology from unreserved to unassigned. Hoffman stated the reason for the decrease was due to the fact that no new government bonds were issued in 2013 but that will increase again in 2014 as the 2014 bonds are issued. Item #03 - CC Agenda - 06/09/2014 Approval of Council Minutes 05/27/2014 [Page 5 of 23]