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MINUTES OF THE ORONO CITY COUNCIL MEETING Monday, May 29, 2012 7:00 o’clock p.m. _____________________________________________________________________________________ Page 2 of 10 (4. 2011 COMPREHENSIVE ANNUAL FINANCIAL REPORT, Continued) statements and segregation of duties, which are the same two exceptions noted during last year's audit. Hoffman indicated those exceptions are common with cities the size of Orono. As it relates to the Minnesota legal compliance, various areas were tested and there was one exception noted, and that was a disbursement not paid within 35 days. Hoffman stated to her understanding it related to a golf course expense. McMillan asked what is meant by the exception in the preparation of the financial reports. Hoogeveen indicates it has to do with the fact that Orono has a small staff and relies on auditors to draft their financial statements. Under the new GSAB regulations, the auditor is required to inform the City Council that the City is relying on Clifton, Larson, Allen to prepare those financial statements. Hoffman stated as it concerns the General Fund/Unreserved/Unassigned Fund Balance, the unassigned amount of expenditures for the year was $3.5 million, which is approximately 54 percent for the year. As it relates to the General Fund Revenue, all of the revenue streams have remained fairly consistent over the past five years. Total General Fund Revenues for this year is approximately $5.9 million. As it relates to the General Fund expenditures, those also have remained fairly stable over the past five years, with the total expenditures in 2011 being approximately $5.5 million. Hoffman noted as it relates to the Other Governmental Funds-Fund Balance, different categories have been created due to the new accounting standard. The unreserved and assigned categories over the past five years have remained basically the same except for a different title. There was a decrease in 2011 as a result of the bond payment that was paid off in that year. Total revenue in 2011 was approximately $1.6 million compared to $1.4 million in 2010. There was an increase in intergovernmental spending last year and that related to some MSA funding for a bridge project. The All Other Revenues Category was higher in 2007 and 2008 due to investment income received by the City. Hoffman noted the Other Governmental Funds – Expenditures graph shows a higher amount of debt service in 2011 than in the previous four years due to the $1.6 million bond payment that paid off the 2003 public utilities lease bonds. The City’s Enterprise Funds consist of the water fund, sewer fund, and storm water fund. A little over $2 million was spent on the Casco Point project in 2009, which is the reason for the decrease in that year. As it relates to the Enterprise Funds-Operating Income, the water and sewer funds did have operating losses in 2011. Once you factor in non-operating revenue, those funds would have had a positive change in net assets. McMillan asked if non-operating revenue is like connection fees and antenna fees. Hoffman indicated it is. Hoffman stated in 2007, there were a couple of bigger developments that generated more trunk fees, which was the reason for the increase in that year. Item #03 - CC Agenda - 06/11/2012 Approval of Council Minutes 05/29/2012 [Page 2 of 10]