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Orono reports stronger‑than‑expected 2025 revenues; general fund near 40% reserve target
Summary
Finance staff told the council that unaudited 2025 results show general fund revenue at 104.9% of budget and expenditures at 98.8%, with interest allocation pending and an estimated portfolio interest allocation of about $562,000; staff said, pending audit, the city expects to meet its 40% reserve target.
Finance staff (Miss Yin) presented the city’s unaudited 2025 fourth‑quarter financial update, summarizing revenue and expenditure performance and key budget variances.
Miss Yin said general fund revenue stood at 104.9% of the budget and that the largest revenue source, the property‑tax levy, was 99% collected. She noted fines were underperforming at about 71.7% and that interest had not yet been allocated but, once allocated during the audit process, would increase reported revenue (Miss Yin estimated interest allocation of roughly $562,000 for 2025). She explained that other revenues and transfers were higher than budget because of a 2024 Long Lake Fire Department operating surplus that posted to 2025.
On expenditures, Miss Yin highlighted department variances: elections (115.4%), law/legal services (138.5% driven by elections, labor negotiations and waste‑hauler matters), fire protection (108.6% due to staffing transitions) and public works (111.2% largely due to tree‑removal overages approved in July). Overall general fund expenditures were at 98.8% of budget, leaving the fund on track to meet the city's 40% reserve policy after audit, she said.
In enterprise funds, water revenue showed 137.5% of budget largely because of a $1,000,000 transfer back from the facilities fund; excluding that transfer, water revenues were below budget due to lower consumption. Stormwater expenditures exceeded budget due to repairs and a capital purchase tied to a local trail project. Miss Yin said staff will provide more detailed tracking of internal service fund pass‑through revenues in 2026.
Council members asked follow‑up questions about fleet and intergovernmental revenue and requested that Miss Yin return with breakdowns of revenues earned from other governmental entities. Miss Yin said she would provide those figures at a later date.
The presentation was accepted and staff will return with audit‑adjusted figures when the 2025 audit is complete.
