TOWN OF ORONO FINANCIAL OVERVIEW Presented by: Casey Leonard and Josh Kochis RUNYON KERSTEEN OUELLETTE Recently, the Town of Orono completed the financial audit process. We are pleased to report that the Town received an unmodified opinion, which means the financial statements are fairly stated in all material respects. Further, the Town reported no significant deficiencies or material weaknesses related to its internal controls. The remainder of this publication is dedicated to providing you with the financial results for fiscal year We hope you find this information useful and understandable. Finally, we wish to express our appreciation to all those who were so helpful to us during the audit process. It truly is a pleasure working with your staff. INSIDE 2.General Fund – Assets 3.General Fund – Liabilities and Deferred Inflows of Resources 4.General Fund – Fund Balance 5.General Fund – Revenues 6.General Fund – Expenditures 7.Property Tax Collection Rates 8.General Fund – Revenues Pie Chart 9.General Fund – Expenditures Pie Chart 10.Unassigned Fund Balance as a Percentage of Budget, FY About this presentation This presentation is intended as a tool to assist the Town Council and management in understanding its financial operating results. The information contained in this publication should be read in conjunction with the audited financial statements and related disclosures and should not be used for any other purposes without the expressed consent of RUNYON KERSTEEN OUELLETTE. Please contact us at or Long Creek Drive, South Portland, ME 04106

TOWN OF ORONO GENERAL FUND - ASSETS 2 Observations: The 2014 cash balance (which is net of the interfund loan activity) decreased by approximately $69k. Accounts and rescue receivables are net of allowances and change as a result of the timing of receipts at year end. Outstanding taxes and liens increased by approximately $231k and is consistent with the increase in unavailable revenue – property taxes. The increase is primarily due to a lower collection rate on tax liens than in the prior year. The note receivable is due from OEDC and the decrease is related to scheduled payments on the loan.

TOWN OF ORONO GENERAL FUND – LIABILITIES AND DEFERRED INFLOWS OF RESOURCES 3 Observations: Changes in accounts payable and accrued payroll are a result of the timing of payments at year end. Accrued payroll represents wages earned prior to June 30, but paid in July. Unavailable revenue – property taxes represents taxes still unpaid 60 days after the end of the year. These amounts are not recognized as revenues in the current year per Generally Accepted Accounting Principles (GAAP).

TOWN OF ORONO GENERAL FUND – FUND BALANCE 4 Definitions and Observations: Nonspendable fund balance represents resources which cannot be spent because they are not in a spendable form. Restricted fund balance comprises resources with constraints placed on their use externally imposed by creditors, grantors, contributors or laws or regulations of other governments. Committed and assigned fund balance represents resources that are constrained by the Town’s intent to be used for specific purposes and changes annually based on the status of projects and appropriations. Unassigned fund balance is what remains after amounts are recognized in other categories and decreased by approximately $307K from 2013 to 2014.

TOWN OF ORONO GENERAL FUND - REVENUES BudgetActualVariance Taxes$ 10,919,179$ 10,788,040$ (131,139) Intergovernmental 1,806,3001,878,34572,045 Licenses and permits92,075136,13544,060 Interest Income6,0006, Charges for services462,891498,79135,900 Other revenue339,550371,70832,158 Total revenues13,625,99513,679,39253,397 Issuance of bonds545,000-(545,000) Transfers in193,500120,000(73,500) Utilization of assigned balance412,237-(412,237) Utilization of unassigned balance300,000-(300,000) Total revenues and other sources$ 15,076,732$ 13,799,392$ (1,277,340) 5 Observations: Taxes were under budget primarily due to the change in unavailable revenue – property taxes, however, this was partially offset by greater-than-expected excise taxes. Intergovernmental revenues exceeded budget due to higher- than-expected State grants and reimbursements. Licenses and permits were over budget primarily due to higher- than-expected demand for building permits and land use fees. Charges for services exceeded budget primarily due to higher- than-expected police special details.

TOWN OF ORONO GENERAL FUND - EXPENDITURES BudgetActualVariance General government$ 1,460,214$1,366,871$ 93,343 Public services751,327690,47360,854 Public safety2,901,4062,895,8445,562 Public works1,409,5981,416,348(6,750) Education5,714,080 - County tax477,242 - Debt service415,463 - Capital expenditures1,422,614405,2361,017,378 Total expenditures14,551,94413,381,5571,170,387 Transfers out524,788450,12774,661 Total expenditures and other financing sources $ 15,076,732$ 13,831,684$ 1,245,048 6 Observations: General government expenditures were under budget primarily due to lower-than-expected costs related to contracted services. Public services were under budget primarily due to lower-than-expected library and recreation expenditures, as well as general assistance. Capital expenditures were under budget due to the budgeting of multi- year projects which were not completed in the current year. Unspent amounts have been carried forwards to the next year.

TOWN OF ORONO PROPERTY TAX COLLECTION RATES 7 Observations: The collection of current-year taxes remained consistent with the prior year, after a 1.82% decrease from 2012 to 2013.

8 TOWN OF ORONO GENERAL FUND – REVENUES PIE CHART

9 TOWN OF ORONO GENERAL FUND – EXPENDITURES PIE CHART

TOWN OF ORONO UNASSIGNED FUND BALANCE AS A PERCENTAGE OF BUDGET, FY Observations: Fund balance provides working capital for the Town and enhances its credit worthiness. We generally recommend one to two months of expenditures, which equals 8.3% to 16.7%.