00. agenda and packet

Common Council June 17, 2025 Page 1 CITY OF OCONTO FALLS COMMON COUNCIL MEETING Council Chambers – Municipal Building 500 N. Chestnut Avenue - Oconto Falls, WI. 54154 TUESDAY JUNE 17, 2025 – 6:00 pm MINUTES 1. Meeting called to order at 6:00pm by Mayor Clint Braun 2. Pledge of Allegiance 3. Roll Cal l Present: Aldermen: Mathew McDermid , Ashley Bahrke, Tim Holman , Marty Coopman and Devin Wirtz Absent: Jeff McDonald Also Present: Mayor Clint Braun, Administrator Peter Wills, Deputy Clerk Jenny Friedman, Street Superintendent Wally Remic , Fire Chief Tim Magnin, Beth Rank, Jason Valintine , Michelle Tester, Library Director Rachel Pascoe, Joe Robles, Mary Beth Rice, Tracy Merges, Stephanie Holman, Joel Lavarda, Tim Perizzo, Amber Perizzo 4. Approval of Minutes - Common Council 05.13.25 MOTION: Holman/ McDermid Motion to approve the minutes for the Common Council 05.13.25 with amendment. Voice Vote: All present voting aye - MOTION CARRIED 5. Treasurer’s Report-April MOTION: McDermid/ Wirtz Motion to approve the Treasures Report. Voice Vote: All present voting aye - MOTION CARRIED 6. Bills Payable –May MOTION: Wirtz/ Holman Motion to approve the Bills Payable as presented for May and place on file. Voice Vote: All present voting aye - MOTION CARRIED 7. Reports: Written reports submitted ✓ Administrator Report ✓ Police Department Report Officer Blaskowski is official done this month. There will be two new police officers coming on board in July. Both officers have four-years’ experience. ✓ Municipal Court Report ✓ Fire Department Report ✓ Street Department Report Common Council June 17, 2025 Page 2 ✓ Street Superintendent ✓ Building Inspector Report ✓ Library Report MOTION: McDermid/ Coopman Motion to place reports as presented on file. Voice Vote: All present voting aye - MOTION CARRIED 8. OPPORTUNITY FOR CITIZENS TO ADDRESS THE COUNCIL - Citizen in-put will be limited to 3 minutes. DISCUSSION AND POSSIBLE ACTION ON ANY OR ALL OF THE FOLLOWING: 9. Committee Reports Board of Review 06.10.25 Emergency Management Committee Report-N/A Finance Committee N/A Joint Review Board N/A Library Board- N/A Main Street Committee Report 05.21.25 Park & Recreation Committee Report-N/A Personnel Committee Report N/A Planning Commission Report 05.29.25 Ordinance Commission 05.13.25 Utility Commission Report 05.19.25,05.28.25 MOTION: Bahrke/Holman Motion to place reports on file. Voice Vote: All present voting aye - MOTION CARRIED Old Business: 10. KerberRose 2024 Audit Greg Pitel representative for KerberRose was not able to make the rescheduled Common Council meeting. The audit will be reviewed at the July 8,2025 Common Council. NO ACTION TAKEN 11. WI DOA NEIGHBORHOOD INVESTMENT GRANT- FIRE STATION PROJECT UPDATE Fire Chief Tim Magnin has the grant paperwork all submitted and is waiting on the Department of Administration for final action. No Action Taken 12. Columbia Street Reconstruction Project Updates The Columbia Street Reconstruction Project is going to be worked on from March 2025 Common Council June 17, 2025 Page 3 through December 2025. On the Oconto Falls Municipal Utility website at https://www.ofmu.org/ there is a detour map also for people to view before the construction starts. Columbia Street project is on schedule at this time. Storm and sewer are done. Curb and gutter are going in on the week of June 23,2025. The sidewalks are expected to be going in after the curb and gutter. NO ACTION TAKEN 13. Status of Surplus Assets Sale A. 2020 Ford Explorer Police Squad Police Chief Olson had placed 2020 Ford Explorer Police Squad up for surplus. The final sale price is fifteen thousand dollars. NO ACTION TAKEN B. Fire Dept Surplus Items The Fire Department has multiple items that they are not using and have placed up for surplus. The sale ends on Thursday June 19,2025. NO ACTION TAKEN 14. Town of Stiles Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street Town of Stiles presented a Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street. The annexation would be the road itself and the fifteen feet of right away. This annexation would help with getting the speed limit down for the school zone. MOTION: Bahrke/ Wirtz Motion to accept the Town of Stiles Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street as presented refer to Planning Commission and have City Administrator get a certified survey map. Voice Vote: All present voting aye - MOTION CARRIED NEW BUSINESS 15. Oconto County seeking seven acres for new Highway Shop The County did a study on the County Highway Shops to see if new shop is needed. The question of would the City of Oconto Falls be interested in having a County shop in the City. This is just starting to be looked into. NO ACTION TAKEN 16. 2024 Annual (CMAR) Compliance Maintenance Resolution for Wastewater Treatment Plant A. Resolution 25-005 Annual (CMAR) Compliance Maintenance Resolution for Wastewater Treatment Plant Interim Utility Manager Rank/Valentine presented the Annual (CMAR) Compliance Maintenance for Wastewater Treatment Plant. This CMAR Resolution is done annually for the Utility. Common Council June 17, 2025 Page 4 MOTION: Bahrke/Holman Motion to approve Resolution 25-005 Annual (CMAR) Compliance Maintenance Voice Vote: All present voting aye - MOTION CARRIED 17. Mobile Home Park License Application Renewal at 249 Birch Ave Oconto Falls WI. The Mobile Home Park is due for its annual renewal. The Fire Chief Magnin, Mayor Braun and Administrator Wills have done a walk through with the site manager. There were a few violations that needed fixing and they have been fixed. MOTION: Coopman/Holman Motion to approve the Mobile Home Park Annual license renewal. Voice Vote: All present voting aye - MOTION CARRIED 18. Street Department Additional Seasonal Staff The Street Department has taken on extras this year. Would like to add another summer help to maintain the beaches and other small projects. The Oconto Falls Utility has agreed to pay for six hours a week to do their lawn maintenance. MOTION: McDermid/ Wirtz Motion to allow Street Department to hire one additional seasonal staff. Voice Vote: McDermid -yes, Wirtz-yes, Coopman-yes, Holman-no, Bahrke-no Absent: McDonald MOTION CARRIED 19. Fire Department 125th Anniversary Celebration The Fire Department will be celebrating the 125th year anniversary on September 6th ,2025. Friends of the Fire Department will be helping with this. As of right now it will go from 11:00am until 3:00pm with a car show, cook out excepting any donation. NO ACTION TAKEN 20. WI Dept of Administration Innovation Grants A. Fire Dept Comprehensive study of services There was an error the agenda item twenty is supposed to read WI Dept. of Revenue Innovation Grant. The City has applied for two grants one for the library and one for the fire department. The City of Oconto Falls will contract with Innovative Public Advisors (IPA) to conduct the Comprehensive Study of Consolidated Fire Services. This will take about four months to complete. MOTION: Holman/Coopman Motion to accept the Fire Department Comprehensive study of services with the Department of Revenue Innovation Grant. Voice Vote: All present voting aye - MOTION CARRIED B. Library Potential Consolidation Study Common Council June 17, 2025 Page 5 There was an error the agenda item twenty is supposed to read WI Dept. of Revenue Innovation Grant. The City has applied for two grants one for the library and one for the fire department. The City of Oconto Falls will contract with Innovative Public Advisors (IPA) to conduct the Consolidation Study of Establish the Oconto Falls Joint Library System. This will take about four months to complete. The Oconto Falls Library has been approved for Library Consolidation Grant. The Library Board has met on this and at this time are not interested participating in the grant requirements. MOTION: Bahrke/Coopman Motion to decline the WI. Dept of Revenue Innovation Grant for the library. Roll Call: Bahrke-yes, Coopman -yes, Holman-yes, McDermid-no, Wirtz-no Absent: McDonald MOTION CARRIED 21. Alcohol Beverage Renewal/Agent License Applications: Class A Fermented Malt Beverage & Class A Liquor: Iverson Foods LLC - d/b/a Iverson’s Piggly Wiggly - Agent: Bryce Iverson Krist Oil Co. d/b/a Krist Food Mart #82 – Agent: Linda Trudeau Merciers Fastop of Oconto Falls LLC – Agent: Andy Mercier Dollar General #22944 607 E Highland Dive Oconto Falls, WI. – Agent: Kelli Van Bendegom Five Rivers Wis LLC Agent: Aman Singh Class B Fermented Malt Beverage & Class B Liquor: Boogie Knights LLC; d/b/a The Corner Pocket – Agent: Joe Robles S&S Hometown Bar & Restaurant owned by Russell Strom – Agent: Russell Strom Barbara Salscheider - d/b/a Salscheider’s Antique Bar- Agent: Stephanie Kureck Oconto Falls Golf Club Inc; d/b/a River Island Golf Course - Agent: Kevin Williams The Penguin Again LLC – Agent: Jennifer R Sadorf MOTION: McDermid/Wirtz Motion to approve the Class A and Class B Fermented Malt Beverage and Class A and B Liquor license as presented. Voice Vote: All present voting aye - MOTION CARRIED 22. Cigarette – Tobacco License Applications: Iverson Foods LLC - d/b/a Iverson’s Piggly Wiggly Krist Oil Co – d/b/a Krist Food Mart #82 Barbara Salscheider - d/b/a Salscheider’s Antique Bar Merciers Fastop of Oconto Falls LLC Oconto Falls Golf Club Inc; d/b/a River Island Golf Course Five Rivers Wis. LLC Boogie Knights LLC; / Location d/b/a Corner Pocket Dolgencorp, /Location d/b/a Dollar General #22944 MOTION: Holman/Wirtz Common Council June 17, 2025 Page 6 Motion to approve the Cigarette – Tobacco License Applications. Voice Vote: All present voting aye - MOTION CARRIED 23. One-year Operators License for Kim Holmes, Tammy Gallagher, Michael Nompleggi, AmberRae Rennie, Fonda Fischer, Cathryn Joyce, Jody Katers, Cindi Boucher, Rebecca Salscheider, Stephanie Kurek, Taylor Kollman, Randal Brabant, Kyndra Staidl, Linda Trudeau MOTION: McDermid/Wirtz Motion to approve the One-year Operators License for Kim Holmes, Tammy Gallagher, Michael Nompleggi, AmberRae Rennie, Fonda Fischer, Cathryn Joyce, Jody Katers, Cindi Boucher, Rebecca Salscheider, Stephanie Kurek, Taylor Kollman, Randal Brabant, Kyndra Staidl, Linda Trudeau Voice Vote: All present voting aye - MOTION CARRIED 24. Two-year Operators License for Brandi Story, Jennifer Brazzell, Jennifer Sadorf Rogatzki, Nathan Rogatzki, Hattie Strom, Ashley Coopman, Brittany Niehaus, Carla Nielsen, Russell Strom, Catherine Strom, Cynthia Morrissey, Jason Demmith, Suzanne Verhagen, Morgan Blazek, Constance Blazek, Kelly Berkovitz MOTION: Holman/ Bahrke Motion to approve Two-year Operators License for Brandi Story, Jennifer Brazzell, Jennifer Sadorf Rogatzki, Nathan Rogatzki, Hattie Strom, Ashley Coopman, Brittany Niehaus, Carla Nielsen, Russell Strom, Catherine Strom, Cynthia Morrissey, Jason Demmith, Suzanne Verhagen, Morgan Blazek, Constance Blazek, Kelly Berkovitz Voice Vote: All present voting aye - MOTION CARRIED 25. The Committee may go into closed session to discuss matters of employment, promotion, compensation, or performance evaluation data of public employees pursuant to 19.85 (1)(C) Wis. Stats. A. Employee Evaluation MOTION: Holman/ Bahrke Motion to enter into closed session at 7:04pm. Voice Vote: Holman-yes, Bahrke-yes, Wirtz-yes, Coopman-yes, McDermid -no Absent: McDonald MOTION CARRIED Those remaining in closed session Alderman Holman, Bahrke, McDermid, Coopman, Wirtz and Mayor Braun. 26. The Committee will return to open session and may take action on matters discussed in closed session. B. Employee Evaluation MOTION: Holman/McDermid Motion to go into open session at 7:56pm. Voice Vote: All present voting aye - MOTION CARRIED Common Council June 17, 2025 Page 7 MOTION: Bahrke/Holman Motion to develop final draft of approved questions and send out survey after League of Wisconsin Municipalities review. Voice Vote: All present voting aye - MOTION CARRIED 27. Adjournment Mayor Clint Braun asked if there was any further business before the meeting is adjourned. Having no further business, he declared the meeting adjourned at 7:58pm. ____________________________ City Administrator Peter Wills 1 To: Mayor & City Council From: Peter A. Wills, City Administrator Date: July 2025 Re: Administrator’s Report City Hall Boiler Replacement: (ACC) Automated Comfort Controls has begun the installation of two replacement boilers at City hall, waiting on electrical component to finalize the install. Due to a change in Freon, the Air Conditioner replacement will be delayed. 2024 Audit-Kerber Rose Audit of the City and Municipal Utilities is being finalized. The Auditors will present financials at the July 8th Council Meeting. Projects/Grants: Wis Dept of Revenue: Innovation Planning Grant Approved for two Innovation Planning Grants 1. Fire Dept-held kickoff meeting with consultant to analyze how the City of Oconto Falls Fire Dept serves the rural communities and do interviews and provide recommendations. 2. Library-approved for funding. Library board has voted to decline the grant . was voted down at June Council, vetoed by Mayor. If grant is approved, would hire consultant to analyze forming a joint Library with unrepresented communities in Oconto County. Columbia St Reconstruction Project -Dorner Construction is making progress on the Columbia Street Project. The curb and gutter is complete for 90% of the project. Sidewalks are also 90% installed, areas not complete are waiting on the testing and switch over to the new lift station that will be completed in the next two weeks. New Middle School-Mayor, Police Chief, School Resource Officer and Myself met with the outgoing Superintendent, new Superintendent and Nexus, the Middle School Project team to discuss school safety training for the new school and safety measures. Oconto County Farmer’s Market- The Farmers market is doing well at the new location at Memorial Field. There is more room for vendors, multiple areas to park, and more visible on Hwy 22 for those driving by to see the market. CITY OF OCONTO FALLS 500 NORTH CHESTNUT PO BOX 70 OCONTO FALLS, WI 54154-0070 PHONE: 920-846-4505 FAX: 920-846-4516 2 Commercial Development-Discussions continue with developer seeking to build new apartment buildings and steps to build a new subdivision in the City. Reviewing development plans, anticipated project costs, potential bank funding, anticipated rent levels and return on investment. Annexation of a portion of County I from the Town of Stiles. The Town of Stiles approved a petition to have the City of Oconto Falls annex a portion of County I from City border by South Main Street north to Columbia Street. Public hearing on the annexation is set for August 12th 5pm prior to the August Council meeting. CITY OF OCONTO FALLS STREET DEPT. REPORT JUNE 2025 * Parks Removed stumps and planted grass at Memorial Field Removed playset from Memorial Field Park Prepared the area for new equipment to be installed Cut grass at all parks, beaches and city owned properties Installed the remaining dock section and raft at the East Side Beach Loaded 48 tables for Breakfast on the Farm *Streets Continued the Monday chipping route Cleaned storm drains Continued street sweeping to clean all roads at the curblines Northeast Asphalt fix road openings from winter issues, city crew prepped all areas Ground stumps along Washington Street, filled and planted with grass seed Began rough mowing around the city property *Building Maintenance Completed monthly fire extinguisher inspections of the street department buildings and vehicles. *Street Dept Equipment Performed adjustments on the Bandit Woodchipper C44 Performed annual maintenance on both Volvo Loaders C24, C32 Installed new strobe lights on the Kenworth dump truck C28 Serviced K9 squad car and the main squad C1, C3 Replaced rear brakes on Jason’s truck C21 *Personnel MEMU Excavation supervisor training (Brad and Bryce) Completed 0305 FEMA Disaster Management Course (Wally) Completed final MEUW safety training for the season, Workzone Safety and Lockout Tagout. (Wally, Brad, Bryce, David and Jim) Street Superintendent Wally CITY OF OCONTO FALLS STREET DEPT. REPORT JUNE 2025 * Parks Removed stumps and planted grass at Memorial Field Removed playset from Memorial Field Park Prepared the area for new equipment to be installed Cut grass at all parks, beaches and city owned properties Installed the remaining dock section and raft at the East Side Beach Loaded 48 tables for Breakfast on the Farm *Streets Continued the Monday chipping route Cleaned storm drains Continued street sweeping to clean all roads at the curblines Northeast Asphalt fix road openings from winter issues, city crew prepped all areas Ground stumps along Washington Street, filled and planted with grass seed Began rough mowing around the city property *Building Maintenance Completed monthly fire extinguisher inspections of the street department buildings and vehicles. *Street Dept Equipment Performed adjustments on the Bandit Woodchipper C44 Performed annual maintenance on both Volvo Loaders C24, C32 Installed new strobe lights on the Kenworth dump truck C28 Serviced K9 squad car and the main squad C1, C3 Replaced rear brakes on Jason’s truck C21 *Personnel MEMU Excavation supervisor training (Brad and Bryce) Completed 0305 FEMA Disaster Management Course (Wally) Completed final MEUW safety training for the season, Workzone Safety and Lockout Tagout. (Wally, Brad, Bryce, David and Jim) Street Superintendent Wally Monthly Report - July 2025 Update on the Institute of Museum and Library Services (IMLS): • Second half of Wisconsin’s Grants to States funding has been obtained. • Per the American Library Association: “On May 2, President Trump’s FY26 budget request proposed to eliminate IMLS. The President’s budget request has no legal effect, but it proposes funding levels for Congress to consider when it writes annual government funding (“appropriations”) bills. The Trump Administration proposed eliminating IMLS in all four years of his previous term, and Congress rejected those proposals at the time. ALA is calling on Congress to do so again and to protect funding for IMLS. ALA urges library supporters to contact their Congressmembers in support of IMLS funding. o Current postcard campaign at many local libraries, including ours. Patrons can stop by until July 18th to fill out a paid, pre-addressed postcard to their federal representatives/senators. Content will focus on why libraries are important to citizens/communities and what citizens will be going without if funding is cut. Upcoming Programs: • Summer Reading Challenges continue for all ages and activities until Aug. 15 o Kids play reading bingo to earn prizes o Adults can enter $50 Kwik Trip gift card drawing when finished with a book or audiobook. • J & R Aquatic Animal Rescue – Tues. July 15th, 3:00 PM • Stuffed Animal Sleepover – Thursday, July 17th • Youth Survival Skills (age 5-9) - Thursday, July 24th, 1:00 PM • Zoo Shelters with GB Children’s Museum – Th. July 31st, 10:00 AM Oconto Falls Community Library 251 North Main Street Oconto Falls, WI 54154 920-846-2673 Regular Programs: • Playgroup – Monday at 10:30 AM Storytime – Tuesday at 10:30 AM • Craft and book visits to Meadowlands (3rd Tuesday of the month) • Crafternoons for kids 9+ every Wednesday from noon – 5:00 PM through Aug.13 Rachel Pascoe, Library Director BOARD OF REVIEW – June 10, 2025 Page 1 CITY OF OCONTO FALLS BOARD OF REVIEW (BOR) Council Chambers – Municipal Building 500 N. Chestnut Avenue - Oconto Falls, WI 54154 THURSDAY, JUNE 10, 2025 – 5:30 PM MINUTES Meeting called to order at 5:30 PM Mayor Clint Braun. Roll Call Present: Mayor Clint Braun, BOR Clerk Peter Wills, Vice Chairman Tim Holman, Ashley Bahrke and Jeff McDonald via Phone Also present: Deputy Clerk Jenny Friedman Absent: Chairman Devin Wirtz 2. Confirm quorum of Board of Review Members There was a quorum of Board of Review. 3. Notice of Meeting to Adjourn the Board of Review Due to Incomplete Assessment Roll City of Oconto Falls, Oconto County The Board of Review will meet on the 10 day of June, 2025 at 5:30pm at Oconto Falls Municipal Building, Council Chambers, 500 N Chestnut St, Oconto Falls, WI 54154 for the purpose of calling the Board of Review into session during the 45-day period beginning on the 4th Monday of April, pursuant to Wis. Stat. § 70.47(1). Due to the fact the assessment roll is not completed at this time, the Board of Review will be adjourned until the 4th day of September 2025 at 5:00pm. Pursuant to Wis. Stat. § 70.47(2): After the first meeting of the Board of Review and before the board’s final adjournment, no person who is scheduled to appear before the Board of Review may contact, or provide information to, a member of the board about that person’s objection except at a session of the board. No person may appear before the Board of Review, testify to the board by telephone or contest the amount of any assessment unless, at least 48 hours before the first meeting of the board or at least 48 hours before the objection is heard if the objection is allowed under sub. (3)(a), that person provides to the clerk of the board of review notice as to whether the person will ask for removal under sub. (6m)(a) and if so which member will be removed and the person’s reasonable estimate of the length of time that the hearing will take. When appearing before the board, the person shall specify, in writing, the person’s estimate of the value of the land and of the improvements that are the subject of the BOARD OF REVIEW – June 10, 2025 Page 2 person’s objection and specify the information that the person used to arrive at that estimate. No person may appear before the Board of Review, testify to the board by telephone or object to a valuation, if that valuation was made by the assessor or the objector using the income method, unless the person supplies to the assessor all of the information about income and expenses, as specified in the manual under Wis. Stat. § 73.03(2a), that the assessor requests. The municipality or county shall provide by ordinance for the confidentiality of information about income and expenses that is provided to the assessor under this paragraph and shall provide exceptions for persons using the information in the discharge of duties imposed by law or of the duties of their office or by order of a court. The information that is provided under this paragraph, unless a court determines that it is inaccurate, is not subject to the right of inspection and copying under Wis. Stat. § 19.35(1). (If the date that the assessment roll will be available to the public is known and/or the date for the Open Book is known, the following paragraphs may be included to give the additional 15-day notice required.) Pursuant to Wis. Stat. § 70.45, the assessment roll for the Year 2025 assessment will be open for examination starting on the 30th day of July 2025 at 1:00pm until 5:00pm. Roll will be available to view online at accurateassessor.com or at Oconto Falls City Hall, 500 N Chestnut until Board of Review on September 4th, 2025. Additionally, the assessor shall be available on • 30th day of July 2025 at the Oconto Falls Municipal Building, Council Chambers from 1:00pm. to 5:00pm. • 31st day of July at the Oconto Falls Municipal Building, Council Chambers from 3:00pm to 7:00pm. Instructional material will be provided at the Open Book to persons who wish to object to valuations under Wis. Stat. § 70.47. Notice is hereby given this 6th day of June, 2025 by: Peter Wills City Clerk/Administrator MOTION: Holman/ Bahrke Motion to have the Board of Review will be adjourned until the 4th day of September 2025 at 5:00pm. Due to the fact the assessment roll is not completed at this time. Voice Vote: All present voting aye - MOTION CARRIED Having no further business, Mayor Clint Braun declared the meeting adjourned at 5:35pm. ______________________________ City Administrator Peter Wills/JF A quorum of the Common Council was in attendance of this meeting. Planning Commission Public Hearing July 01,2025 1 CITY OF OCONTO FALLS PLANNING COMMISSION MEETING PUBLIC HEARING Council Chambers – Municipal Building 500 N. Chestnut Avenue Oconto Falls, WI 54154 TUESDAY JULY 01, 2025 – 5:00 PM MINUTES Chairman Coopman called the meeting to order at 5:00 PM. Roll Call Present: Marty Coopman, William Zietlow, Chique Tousey-Tabar, Jeff McDonald, Judy Kostreva and Brad Rice Also Present: Mayor Clint Braun, City Administrator Peter Wills, Deputy Clerk Jenny Friedman, Street Department Superintendent Wally Remic, Fire Chief Tim Magnin, Michelle Tester, Dakota Friedman, Adam Adler, Collen Behnke, Paul Shallow ******PUBLIC HEARING**** *** Public Hearing for investigation and determination of the removal Mobil Station 710 County B- Removal of Slum & Blight Condition **** Public Hearing Notice was properly posted and published in the Oconto County Times Herald newspaper for two consecutive weeks. Property owners within a 200 ft. radius were also given proper notification **** DISCUSSION AND POSSIBLE RECOMMENDATION/ACTION ON THE FOLLOWING: 3. Former Mobil Station 710 County B-Investigation Slum & Blight Determination Removal of Slum & Blight Condition A. Public comments for consideration-written/verbal At 5:00pm Chairman Coopman opened the floor for public comments for Mobil Station 710 County B- Removal of Slum & Blight Condition Deputy Clerk Friedman and City Administrator Wills verified there were no written in or called in concerns prior to the Public Hearing. There was one letter returned in the mail. Deputy Clerk Friedman explained that address was double check with the county website but was the same address on file. There were no concerns from the public. Second call for public input was asked at 5:05pm by Chairman Coopman. Chairman Coopman asked if there were any more concerns and comments on Public Hearing for investigation and determination of the removal Mobil Station 710 County B- Removal of Slum & Blight Condition. There were no other citizens concerns. Planning Commission Public Hearing July 01,2025 2 Third call for public input was asked at 5:10 pm by Chairman Coopman. Chairman Coopman asked if there were any more concerns and comments on Public Hearing for investigation and determination of the removal Mobil Station 710 County B- Removal of Slum & Blight Condition. There were no other citizens concerns. B. Close Public Hearing With no other concerns from the public on the Public Hearing for investigation and determination of the removal Mobil Station 710 County B- Removal of Slum & Blight Condition. Chairman Coopman closed the public hearing at 5:10pm. C. Committee recommendation to City Council. MOTION: ZIETLOW / KOSTREVA Motion to approve the removal of Slum & Blight Condition on Mobil Station 710 County B. and send to Common Council on July 08,2025. Voice Vote: All present voting aye - MOTION CARRIED New Business 4. CSM for Collin Behnke to combine two lots tax parcel ID numbers are 266- 0707715220 & 266-0707715238. Collen Behenke explained that he would like to combine his two lots so that he can place a detached garage on the back lot. Concerns and questions that were brought up; • There is the concern of having a lack of lots that can have house built on them now and then to have a lot with shed and no houses because that could hinder future house building on that property if it were to sell. • The size of the lot is smaller. It is 60x112 which was with in the standards when it was first made. Now the lot size for the city is 60x120. • Are the Behnke’s needing drive way access? No there is already a drive through driveway there. This was placed in by the previous owner. • Is the shed going to orient toward Linden Ave? Yes MOTION: McDonald/Zietlow Motion to approve the CSM for Collin Behnke to combine two lots tax parcel ID numbers are 266-0707715220 & 266-0707715238 and send to Common Council. Voice Vote: All present voting aye - MOTION CARRIED 5. Town of Stiles Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street Town of Stiles presented a Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street. The annexation would be the road itself and the fifteen feet of right away. This Planning Commission Public Hearing July 01,2025 3 annexation would help with getting the speed limit down for the school zone. Concerns and questions brought up were; • Do the addresses have to change? The City Administrator does not think so at this time due to the annexation is for the road and right away only. • If the road will have to be redone who would pay for this? It was not discussed but possibly share cost would happen. • Why would this create a new ward? This will depend on what supervisory district it will fall in. If is a supervisory district we currently do not have then we would need a new ward. • With the road being in the city then would it need to be renamed? City Administrator does not think so. MOTION: McDonald/ Kostreva Motion to set the Public Hearing for the Town of Stiles Petition to Annex portion of County I from City boundary south of South Main Street north to the northside of Columbia Street. Voice Vote: All present voting aye - MOTION CARRIED Public Comment: Adam Adler letting the Planning Commission know that he has just started working with the school to market the Washington Middle School. He had asked if there has been any discussion of what kind of development the city would like to go into there. There are sixteen lots and are size is 60x120 with an alley way. At this time no further discussion or action can be had due to this not being on the agenda. This topic will be placed on the agenda for the next Planning Commission meeting. Adjournment Having no further discussion, Chairman Coopman declared the meeting adjourned at 5:31 PM. ______________________________ City Administrator Peter Wills A quorum of the Common Council was not in attendance of this meeting OCONTO FALLS MUNICIPAL UTILITIES WATER & LIGHT ⚫ SEWAGE DISPOSAL MINUTES OF MONDAY, JUNE 16, 2025 CALL TO ORDER: The meeting of the Oconto Falls Municipal Utilities Commission was called to order in Council Chambers of the Oconto Falls Municipal Building, 500 North Chestnut Avenue, Oconto Falls, Wisconsin, by President Kardoskee at 6:00 p.m. ROLL CALL: Schindel, Anastasopoulos, Coopman, and Kardoskee, present. Pytleski, excused. Also Present: Interim Utility Manager/ Utility Foreman Jason Valentine, Interim Utility Manager/ Customer Service Representative Beth Rank, City Administrator Peter Wills, Mayor Clint Braun, and Michelle Tester. MINUTES: President Kardoskee asked for any additions or corrections to the minute of the Utility regular meeting on Monday, May 19, 2025 and Utility meeting on Wednesday, May 28, 2025 . President Kardoskee declared the minutes of the Utility regular meeting on Monday, May 19, 2025 and Utility meeting on Wednesday, May 28, 2025 accepted as presented. TREASURERS REPORT: April 2025 The Treasurer’s Report for April 2025, as prepared by Deputy Treasurer Eve Wallace, was placed on file for future audit. BILLS: It was moved by Anastasopoulos, seconded by Coopman, that an order be drawn authorizing payment of payroll vouchers 104400-104416, accounts payable vouchers 027501-027532, and wire transfers 001925-001942. Roll call: Anastasopoulos, Coopman, Schindel, and Kardoskee, voting aye. Motion carried. PRESENTATIONS AND OPPORTUNITY TO ADDRESS THE COMMISSION: - None CORRESPONDENCE/INFORMATION – Thank you letters/cards were received from Oconto Falls Betterment Corp for the Utilities donation of the WPPI Economic Development Funds, Oconto Falls Sno Jokers for the donation to the Memorial Day Fireworks, and from scholarship recipients Conner Wilquet and Tanner Arndt. MANAGERS REPORT: Manager’s Report – Valentine and Rank reviewed their written report. Rank added that the lift station start up is currently scheduled for July 9, 2025. Advance Construction will be reviewing the lift station seals next week to verify they are no longer leaking. Rank updated the transformer shipping for the substation; transformers should be shipped June 27, 2025. Valentine added that there was an accident on N Main Street that took out a power pole and a hydrant. The linemen were able to restore power to those affected within 6 hours of the outage. Valentine thanked the Fire Department for their help with blocking intersections. OLD BUSINESS ELECTRIC Electric Rate Case – Rank informed the Commission that the PSC has the public hearing for the Utility’s rate case set for August 12, 2025 at 2:00 pm. The PSC is proposing the Utility’s rate of return to be 6.3%. The average rate increase would be 22%. Rank and WPPI have sent a letter to the PSC to ask for a more equal, across the board rate adjustment. Rank and WPPI have also asked for the increase to be split into two equal adjustments of 11.28%, with the second increase six months after the first increase. Rank will keep the Commission informed on the PSC’s decision. NEW BUSINESS ELECTRIC Focus on Energy 2024 Annual Participation – The Commission was presented with the 2024 Annual Participation Report with Focus on Energy. OFMU paid $14,000 into Focus on Energy in 2024 and 181 customers saw $40,667 in incentives through different programs. Overall, OFMU customers should save 253,875 kWh and 50 kW over the course of 2024 due to the incentives that customers participated in. COMMON The Commission may go into closed session to discuss matters of employment, promotion, compensation, or performance evaluation data of public employees pursuant to 19.85 (1c) Wis. Stats. (re: Utility Manager Position) – Motion by Anastasopoulos, second by Schindel, to enter closed session to discuss matters of employment, promotion, compensation, or performance evaluation data of public employees pursuant to 19.85 (1c) Wis. Stats. (re: Utility Manager Position) to include Commission, Mayor, and City Administrator. Roll call: Anastasopoulos, Schindel, Coopman, and Kardoskee, voting aye. Motion carried. Commission entered closed session at 6:28 p.m. Motion by Schindel, seconded by Anastasopoulos, to return to open session at 6:50 p.m. Motion carried on a voice vote. There being no other business, the meeting was adjourned at 6:51 p.m. Respectfully submitted, Beth Rank, Customer Service Representative CITY OF OCONTO FALLS, WISCONSIN Annual Financial Report December 31, 2024 www.kerberrose.com CITY OF OCONTO FALLS, WISCONSIN Table of Contents December 31, 2024 Page INDEPENDENT AUDITORS’ REPORT 1 – 3 FINANCIAL STATEMENTS Statement of Net Position 4 Statement of Activities 5 Balance Sheet – Governmental Funds 6 Reconciliation of the Balance Sheet – Governmental Funds to the Statement of Net Position 7 Statement of Revenues, Expenditures and Change in Fund Balances – Governmental Funds 8 Reconciliation of the Statement of Revenues, Expenditures and Change in Fund Balances – Governmental Funds to the Statement of Activities 9 Statement of Net Position – Proprietary Funds 10 Statement of Revenues, Expenses and Change in Net Position – Proprietary Funds 1 1 Statement of Cash Flows – Proprietary Funds 12 Statement of Fiduciary Net Position – Fiduciary Fund 1 3 Statement of Change in Fiduciary Net Position – Fiduciary Fund 14 Notes to Financial Statements 15 – 47 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Employer’s Proportionate Share of the Net Pension Liability (Asset) and Employer Contributions – Wisconsin Retirement System 48 Schedules of Employer’s Proportionate Share of the Net OPEB Liability and Employer Contributions – Other Post-Employment Benefits Other Than Pensions – Cost-Sharing Plan 49 Schedule of Changes in Total OPEB Liability and Related Ratios – Single-Employer Plan 50 Schedule of Budgetary Comparison – General Fund 51 Notes to Required Supplementary Information 52 – 53 SUPPLEMENTARY INFORMATION Combining Balance Sheet – Nonmajor Governmental Funds 54 Combining Statement of Revenues, Expenditures and Change in Fund Balances (Deficit) – Nonmajor Governmental Funds 55 OTHER INFORMATION Detailed Budgetary Comparison Schedule – General Fund 56 – 58 CITY OF OCONTO FALLS, WISCONSIN Table of Contents (Continued) December 31, 2024 Page ADDITIONAL REPORTS Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 59 – 60 Independent Auditors’ Report on Compliance for Each Major Federal Program on Internal Control Over Compliance Required by the Uniform Guidance 61 – 63 FEDERAL AWARDS SECTION Schedule of Expenditures of Federal Awards 64 Notes to the Schedules of Expenditures of Federal Awards 65 Schedule of Findings and Questioned Costs 66 – 71 Summary Schedule of Prior Audit Findings 72 Corrective Action Plan 73 INDEPENDENT AUDITORS’ REPORT 1 Independent Auditors’ Report To the City Council City of Oconto Falls Oconto Falls, Wisconsin Report on the Audit of the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oconto Falls, Wisconsin (City) as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise the City of Oconto Falls, Wisconsin’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oconto Falls, Wisconsin as of December 31, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City of Oconto Falls, Wisconsin and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Oconto Falls, Wisconsin’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 2 To the City Council City of Oconto Falls, Wisconsin Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of Oconto Falls, Wisconsin’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City of Oconto Falls, Wisconsin’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the schedules of employer’s proportionate share of the net pension liability (asset) and employer contributions – Wisconsin Retirement System, schedules of employer’s proportionate share of the net OPEB liability and employer contributions – other post- employment benefits other than pensions – cost sharing plan, schedule of changes in total OPEB liability and related ratios – single-employer plan and schedule of budgetary comparison – general fund be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 3 To the City Council City of Oconto Falls, Wisconsin Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial st atements, is required by the Governmental Accounting Standards Board, who considers it to be an essential par t of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise City of Oconto Falls, Wisconsin’s basic financial statements. The combining balance sheet – nonmajor governmental funds, combining statement of revenues, expenditures and change in fund balances (deficit) – nonmajor governmental funds and the schedule of expenditures of federal awards are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic fina ncial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining balance sheet – nonmajor governmental funds, combining statement of revenues, expenditures and change in fund balances (deficit) – nonmajor governmental funds and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in this annual financial report. The other information comprises the detailed budgetary comparison schedule – general fund but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the wo rk performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 22, 2025 on our consideration of City of Oconto Falls, Wisconsin’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City of Oconto Falls, Wisconsin’s internal control over financial reporting or on co mpliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City of Oconto Falls, Wisconsin’s internal control over financial reporting and compliance. KerberRose SC KerberRose S.C. Certified Public Accountants Green Bay, Wisconsin May 22, 2025 FINANCIAL STATEMENTS ASSETS Current Assets Cash and Investments $ 2,744,095 $ 3,769,017 $ 6,513,112 Receivables: Accounts 60,389 505,216 565,605 Taxes Receivable 1,323,935 - 1,323,935 Special Assessments 124,422 - 124,422 Delinquent Property Taxes 24,215 - 24,215 Current Portion of Leases 19,670 - 19,670 Interest Receivable - 22,295 22,295 Other Receivables - 20,855 20,855 Internal Balances 324,769 (324,769) - Inventories 45,774 191,024 236,798 Prepaid Items 66,391 - 66,391 Total Current Assets 4,733,660 4,183,638 8,917,298 Noncurrent Assets Restricted Cash and Investments - 5,992,647 5,992,647 Noncurrent Portion of Lease Receivable 667,317 - 667,317 Investment in American Transmission Company - 1,071,910 1,071,910 Capital Assets - Nondepreciable 384,816 2,103,851 2,488,667 Capital Assets - Depreciable, Net of Accumulated Depreciation 15,857,751 15,814,839 31,672,590 Total Noncurrent Assets 16,909,884 24,983,247 41,893,131 TOTAL ASSETS 21,643,544 29,166,885 50,810,429 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows Related to Pension 1,205,294 380,619 1,585,913 Deferred Outflows Related to Other Post-Employment Benefits - Cost-Sharing Plan 34,178 9,085 43,263 Deferred Outflows Related to Other Post-Employment Benefits - Single Employer Plan 57,605 20,240 77,845 Total Deferred Outflows of Resources 1,297,077 409,944 1,707,021 LIABILITIES Current Liabilities Accounts Payable 97,138 577,068 674,206 Customer Deposits - 2,683 2,683 Public Benefits - 11,374 11,374 Accrued Liabilities 23,800 43,478 67,278 Due to Other Governments 1,643 - 1,643 Accrued Interest Payable 12,484 71,010 83,494 Compensated Absences 109,796 129,596 239,392 Current Portion of Long-Term Obligations 428,453 939,882 1,368,335 Unearned Grant Revenue 50,000 - 50,000 Total Current Liabilities 723,314 1,775,091 2,498,405 Noncurrent Liabilities Net Pension Liability 135,757 42,870 178,627 Net Other Post-Employment Benefits Liability - Cost-Sharing Plan 75,885 20,172 96,057 Total Other Post-Employment Benefits Liability - Single-Employer Plan 129,464 45,487 174,951 Noncurrent Portion of Compensated Absences 164,693 194,395 359,088 Noncurrent Portion of Long-Term Obligations 3,715,732 10,937,477 14,653,209 Total NonCurrent Liabilities 4,221,531 11,240,401 15,461,932 TOTAL LIABILITIES 4,944,845 13,015,492 17,960,337 DEFERRED INFLOWS OF RESOURCES Taxes Levied for Subsequent Period 1,763,450 - 1,763,450 Deferred Inflows of Resources Related to Leases 686,987 - 686,987 Deferred Inflows of Resources Related to Pension 730,113 230,562 960,675 Deferred Inflows Related to Other Post-Employment Benefits - Cost-Sharing Plan 58,960 15,673 74,633 Deferred Inflows Related to Other Post-Employment Benefits - Single-Employer Plan 38,320 13,464 51,784 Total Deferred Inflows of Resources 3,277,830 259,699 3,537,529 NET POSITION Net Investment in Capital Assets 13,873,098 11,092,105 24,965,203 Restricted 505,719 1,049,060 1,554,779 Unrestricted 339,129 4,160,473 4,499,602 TOTAL NET POSITION $ 14,717,946 $ 16,301,638 $ 31,019,584 Statement of Net Position CITY OF OCONTO FALLS, WISCONSIN Type Business - Activities Governmental Activities Total As of December 31, 2024 See Accompanying Notes 4 GOVERNMENTAL ACTIVITIES General Government $ 652,671 $ 27,682 $ - $ - $ (624,989) $ - $ (624,989) Public Safety 1,874,817 224,407 42,773 - (1,607,637) - (1,607,637) Public Works 1,058,350 249,598 274,678 9,588 (524,486) - (524,486) Health and Human Services 6,547 - - - (6,547) - (6,547) Culture and Recreation 334,449 7,075 202,352 - (125,022) - (125,022) Conservation and Development 105,219 - 1,693,926 - 1,588,707 - 1,588,707 Interest and Fiscal Charges 151,911 - - - (151,911) - (151,911) Total Governmental Activities 4,183,964 508,762 2,213,729 9,588 (1,451,885) - (1,451,885) BUSINESS-TYPE ACTIVITIES Electric and Water Utility 3,995,897 4,147,333 - - - 151,436 151,436 Sewer Utility 973,433 1,215,646 - - - 242,213 242,213 Total Business-Type Activities 4,969,330 5,362,979 - - - 393,649 393,649 TOTAL CITY OF OCONTO FALLS $ 9,153,294 $ 5,871,741 $ 2,213,729 $ 9,588 (1,451,885) 393,649 (1,058,236) GENERAL REVENUES: Taxes: General Property Taxes 1,539,325 - 1,539,325 Other Taxes 23,356 - 23,356 State and Federal Aids not Restricted to Specific Functions 633,953 - 633,953 Interest and Investment Earnings 30,746 449,789 480,535 Gain on Property Sales 21,850 - 21,850 Miscellaneous 132,667 - 132,667 Total General Revenues 2,381,897 449,789 2,831,686 TRANSFERS 213,159 (213,159) - CHANGE IN NET POSITION 1,143,171 630,279 1,773,450 NET POSITION - BEGINNING OF YEAR 13,574,775 15,671,359 29,246,134 NET POSITION - END OF YEAR $ 14,717,946 $ 16,301,638 $ 31,019,584 Operating Capital TotalActivities Activities Governmental Business-Type Net (Expense) Revenue and Changes in Net Position Contributions Grants and Expenses Services Contributions Grants and Charges for Program Revenues For the Year Ended December 31, 2024 Statement of Activities CITY OF OCONTO FALLS, WISCONSIN See Accompanying Notes 5 ASSETS Cash and Investments $ 578,864 $ 1,827,295 $ 337,936 $ 2,744,095 Receivables Accounts Receivable 60,389 - - 60,389 Taxes 930,287 23,663 369,985 1,323,935 Special Assessments 124,422 - - 124,422 Delinquent Property Taxes 24,215 - - 24,215 Leases 686,987 - - 686,987 Due from Other Funds 368,790 - - 368,790 Inventories 45,774 - - 45,774 Prepaid Items 66,391 - - 66,391 TOTAL ASSETS $ 2,886,119 $ 1,850,958 $ 707,921 $ 5,444,998 LIABILITIES Accounts Payable $ 53,635 $ 23,914 $ 19,589 $ 97,138 Accrued Liabilities 21,475 - 2,325 23,800 Due to Other Funds 20,109 - 23,912 44,021 Due to Other Governments 1,643 - - 1,643 Unearned Grant Revenue - 50,000 - 50,000 Total Liabilities 96,862 73,914 45,826 216,602 DEFERRED INFLOWS OF RESOURCES Taxes Levied for Subsequent Period 1,218,147 32,309 512,994 1,763,450 Special Assessments 113,697 - - 113,697 Lease Revenue 686,987 - - 686,987 Total Deferred Inflows of Resources 2,018,831 32,309 512,994 2,564,134 FUND BALANCES (DEFICIT) Nonspendable Prepaid Items 66,391 - - 66,391 Delinquent Taxes 24,215 - - 24,215 Inventories 45,774 - - 45,774 Restricted Debt Service - - 6,718 6,718 Library Activities - - 166,295 166,295 Assigned - 1,744,735 - 1,744,735 Unassigned (Deficit) 634,046 - (23,912) 610,134 Total Fund Balances (DEFICIT) 770,426 1,744,735 149,101 2,664,262 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (DEFICIT) $ 2,886,119 $ 1,850,958 $ 707,921 $ 5,444,998 CITY OF OCONTO FALLS, WISCONSIN Balance Sheet Governmental Funds As of December 31, 2024 FundsGeneral Capital Projects Nonmajor Governmental Funds Total Governmental See Accompanying Notes 6 Total Fund Balances - Governmental Funds 2,664,262$ Total net position reported for governmental activities in the statement of net position is different from the amount reported above as total governmental funds fund balance because: Capital assets used in government activities are not financial resources and therefore are not reported in the fund statements. Amounts reported for governmental activities in the statement of net position: Governmental Capital Assets 22,068,042 $ Governmental Accumulated Depreciation (5,825,475) 16,242,567 Some receivables that are not currently available are reported as deferred inflows of resources in the fund financial statements but are recognized as revenue when earned in the government-wide statements. Special Assessments 113,697 Net pension liability is not payable in the current period therefore not reported in the fund financial statements (135,757) Deferred Outflows Related to Pension 1,205,294 Deferred Outflows Related to Other Post-Employment Benefits - Cost-Sharing 34,178 Deferred Outflows Related to Other Post-Employment Benefits - Single-Employer 57,605 Deferred Inflows Related to Pension (730,113) Deferred Inflows Related to Other Post-Employment Benefits - Cost-Sharing (58,960) Deferred Inflows Related to Other Post-Employment Benefits - Single-Employer (38,320) Noncurrent liabilities, including bonds and notes payable, are not due in the current period and therefore not reported in the fund statements. Noncurrent liabilities reported in the statement of net position that are not reported in the funds balance sheet General Obligation Debt (4,043,443) Debt Premium (100,742) Net OPEB Liability - Cost-Sharing (75,885) Total OPEB Liability - Single-Employer (129,464) Accrued Interest on General Obligation Debt (12,484) Compensated Absences (274,489) Total Net Position - Governmental Activities 14,717,946$ The City's proportionate share of the Wisconsin Retirement System pension plan and Other Post-Employment Benefit Plans are not an available financial resource; therefore, they are not reported in the fund financial statements. As of December 31, 2024 Governmental Funds to the Statement of Net Position Reconciliation of the Balance Sheet CITY OF OCONTO FALLS, WISCONSIN See Accompanying Notes 7 REVENUES Taxes $ 1,003,064 $ - $ 70,475 $ 489,142 $ 1,562,681 Special Assessments 9,588 - - - 9,588 Intergovernmental 1,140,576 1,693,926 5,950 202,327 3,042,779 Licenses and Permits 31,283 - 9,196 - 40,479 Fines, Forfeitures and Penalties 23,626 - - - 23,626 Charges for Services 244,100 - - 5,435 249,535 Interest on Investments - - - 761 761 Donations - - - 21,848 21,848 Miscellaneous 131,690 - - 3,532 135,222 Total Revenues 2,583,927 1,693,926 85,621 723,045 5,086,519 EXPENDITURES Current: General Government 609,040 - - - 609,040 Public Safety 1,416,360 - - 5,400 1,421,760 Public Works 840,768 - - - 840,768 Health and Human Services 6,547 - - - 6,547 Culture and Recreation 98,257 - 10,199 208,789 317,245 Conservation and Development 3,960 2,031,861 597,005 - 2,632,826 Debt Service: Principal Retirement - - - 440,074 440,074 Interest and Fiscal Charges - - - 143,092 143,092 Capital Outlay 42,728 - - 2,883 45,611 Total Expenditures 3,017,660 2,031,861 607,204 800,238 6,456,963 DEFICIENCY OF REVENUES UNDER EXPENDITURES (433,733) (337,935) (521,583) (77,193) (1,370,444) OTHER FINANCING SOURCES (USE) Proceeds of Long-Term Debt - - 2,520,000 - 2,520,000 Debt Premium - - - 100,742 100,742 Sale of Capital Assets 19,225 - 2,625 - 21,850 Insurance Recoveries and Dividends 8,490 - - - 8,490 Transfers In 263,628 372,451 - - 636,079 Transfers Out (33,451) (36,747) (339,000) (13,722) (422,920) Total Other Financing Sources (Use) 257,892 335,704 2,183,625 87,020 2,864,241 NET CHANGE IN FUND BALANCES (175,841) (2,231) 1,662,042 9,827 1,493,797 FUND BALANCES - BEGINNING - AS PREVIOUSLY PRESENTED 946,267 2,231 - 221,967 1,170,465 Change within Financial Reporting Entity (Nonmajor to Major Fund) - - 82,693 (82,693) - FUND BALANCES - BEGINNING - AS ADJUSTED 946,267 2,231 82,693 139,274 1,170,465 FUND BALANCES - ENDING $ 770,426 $ - $ 1,744,735 $ 149,101 $ 2,664,262 Governmental FundsGeneral Nonmajor Governmental Funds Economic Development Capital Projects CITY OF OCONTO FALLS, WISCONSIN Statement of Revenues, Expenditures and Change in Fund Balances Governmental Funds For the Year Ended December 31, 2024 Total See Accompanying Notes 8 Net Change in Fund Balances - Total Governmental Funds 1,493,797$ activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. Capital outlay reported in governmental fund statements 2,617,367 $ Depreciation expense reported in the statement of activities (570,548) Amount by which capital outlays are greater than depreciation in the current period. 2,046,819 The City disposed of assets resulting in a reduction of capital assets and recapture of prior year depreciation expense reported on the statement of activities as a net loss and has no affect on the governmental funds balance sheet. The value of capital assets disposed of during the year (627,970) The amount of depreciation recapture for the year 492,593 Amount by which capital disposals are more than depreciation recapture in the current period (135,377) Amounts related to the pension plan that affect the statement of activities but do not affect the fund financial statements. 38,637 Amounts related to the other post-employment benefit plans that affect the statement of activities but do not affect the fund financial statements: Other Post-Employment Benefits - Cost-Sharing Plan (45,851) Other Post-Employment Benefits - Single-Employer Plan (17,881) Revenues in the statement of activities that are not currently available are not reported as revenue in the funds. Repayments on Special Assessments (19,986) Repayment of principal on long-term debt is reported in the governmental funds as an expenditure, but is reported as a reduction in long-term debt in the statement of net position and does not affect the statement of activities. The amount of long-term debt principal payments in the current year is: 440,074 Debt incurred in governmental funds is reported as an other financing source, but is reported as an increase in outstanding long-term debt in the statement of net position, and does not affect the statement of activities. Debt Issued (2,520,000) Debt Premium (100,742) Vested employee benefits are reported in the government funds when amounts are paid. The statement of activities reports the value of benefits earned during the year. Amounts earned in current year are more than amounts paid by (27,500) In governmental funds interest payments on outstanding debt are reported as an expenditure when paid. In the statement of activities interest is reported as incurred. The amount of interest paid during the current period 143,092 The amount of interest accrued during the current period (151,911) Interest accrued is more than interest paid by (8,819) Change in Net Position - Governmental Activities 1,143,171$ CITY OF OCONTO FALLS, WISCONSIN Amounts reported for governmental activities in the statement of For the Year Ended December 31, 2024 Governmental Funds to the Statement of Activities Reconciliation of the Statement of Revenues, Expenditures and Change in Fund Balances - See Accompanying Notes 9 ASSETS Current Assets: Cash and Investments $ 3,690,285 $ 78,732 $ 3,769,017 Receivables Accounts 392,049 113,167 505,216 Interest Receivable 22,295 - 22,295 Other 20,855 - 20,855 Due from Other Funds - 20,109 20,109 Inventories 191,024 - 191,024 Total Current Assets 4,316,508 212,008 4,528,516 Noncurrent Assets: Restricted Cash 5,050,774 941,873 5,992,647 Capital Assets, Nondepreciable 2,092,099 11,752 2,103,851 Capital Assets, Depreciable - Net of Accumulated Depreciation 7,288,157 8,526,682 15,814,839 Total Noncurrent Assets 15,502,940 9,480,307 24,983,247 TOTAL ASSETS 19,819,448 9,692,315 29,511,763 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows of Resources Related to Pension 269,605 111,014 380,619 Deferred Outflows of Resources Related to Post-Employment Benefits - Cost-Sharing Plan 5,624 3,461 9,085 Deferred Outflows Related to Other Post-Employment Benefits - Single-Employer Plan 16,348 3,892 20,240 Total Deferred Outflows of Resources 291,577 118,367 409,944 CURRENT LIABILITIES Accounts Payable 548,575 28,493 577,068 Customer Deposits 2,683 - 2,683 Public Benefits 11,374 - 11,374 Due to Other Fund 344,878 - 344,878 Accrued and Other Current Liabilities 35,738 7,740 43,478 Accrued Interest 53,982 17,028 71,010 Compensated Absences 106,529 23,067 129,596 Current Portion of Long-Term Obligations 342,676 597,206 939,882 Total Current Liabilities 1,446,435 673,534 2,119,969 NONCURRENT LIABILITIES Net Pension Liability 30,366 12,504 42,870 Net Other Post-Employment Benefits Liability - Cost-Sharing Plan 12,487 7,685 20,172 Total Other Post-Employment Benefits Liability - Single-Employer Plan 36,739 8,748 45,487 Compensated Absences 159,794 34,601 194,395 Noncurrent Portion of Long-Term Obligations 7,080,822 3,856,655 10,937,477 Total Noncurrent Liabilities 7,320,208 3,920,193 11,240,401 TOTAL LIABILITIES 8,766,643 4,593,727 13,360,370 DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources Related to Pension 163,315 67,247 230,562 Deferred Inflows Related to Other Post-Employment Benefits - Cost-Sharing Plan 9,702 5,971 15,673 Deferred Inflows Related to Other Post-Employment Benefits - Single-Employer Plan 10,875 2,589 13,464 Total Deferred Inflows of Resources 183,892 75,807 259,699 NET POSITION Net Investment in Capital Assets 7,007,533 4,084,572 11,092,105 Restricted 75,924 973,136 1,049,060 Unrestricted 4,077,033 83,440 4,160,473 TOTAL NET POSITION $ 11,160,490 $ 5,141,148 $ 16,301,638 As of December 31, 2024 Proprietary Funds Statement of Net Position CITY OF OCONTO FALLS, WISCONSIN Electric and Water Utility Sewer Utility Total See Accompanying Notes 10 OPERATING REVENUES Charges for Services $ 4,072,569 $ 1,193,137 $ 5,265,706 Other Operating Revenues 49,554 22,509 72,063 Total Operating Revenues 4,122,123 1,215,646 5,337,769 OPERATING EXPENSES Operation and Maintenance 3,114,526 470,296 3,584,822 Depreciation 550,145 393,007 943,152 Total Operating Expenses 3,664,671 863,303 4,527,974 OPERATING INCOME 457,452 352,343 809,795 NONOPERATING REVENUES (EXPENSE) Investment Earnings 449,789 - 449,789 Interest Expense (331,226) (110,130) (441,356) Miscellaneous Income 25,210 - 25,210 Total Nonoperating Revenues (Expense) 143,773 (110,130) 33,643 INCOME BEFORE TRANSFERS 601,225 242,213 843,438 TRANSFERS OUT (210,101) (3,058) (213,159) CHANGE IN NET POSITION 391,124 239,155 630,279 NET POSITION - BEGINNING 10,769,366 4,901,993 15,671,359 NET POSITION - ENDING $ 11,160,490 $ 5,141,148 $ 16,301,638 Proprietary Funds Statement of Revenues, Expenses and Change in Net Position CITY OF OCONTO FALLS, WISCONSIN Sewer Utility Total Electric and Water Utility For the Year Ended December 31, 2024 See Accompanying Notes 11 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from User Charges $ 4,109,899 $ 1,213,952 $ 5,323,851 Cash Paid to Municipality (114,336) (19,509) (133,845) Paid to Suppliers for Goods and Services (2,262,341) (280,320) (2,542,661) Paid to Employees for Operating Payroll (494,160) (200,082) (694,242) Other Receipts 9,878 - 9,878 Net Cash Flows From Operating Activities 1,248,940 714,041 1,962,981 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfer to Other Funds (210,101) (3,058) (213,159) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (1,179,114) (24,326) (1,203,440) Capital Assets Salvaged 2,075 - 2,075 Principal Payments on Long-Term Debt (291,444) (583,989) (875,433) Interest and Fiscal Charges (346,715) (112,706) (459,421) Net Cash Flows From Capital and Related Financing Activities (1,815,198) (721,021) (2,536,219) CASH FLOWS FROM INVESTING ACTIVITIES Long-Term Investments Redeemed 3,393,488 - 3,393,488 Investment Income 446,788 - 446,788 Net Cash Flows From Investing Activities 3,840,276 - 3,840,276 3,063,917 (10,038) 3,053,879 4,571,123 1,030,643 5,601,766 $ 7,635,040 $ 1,020,605 $ 8,655,645 RECONCILIATION OF CASH ACCOUNTS Cash and Investments $ 3,690,285 $ 78,732 $ 3,769,017 Restricted Cash and Investments 5,050,774 941,873 5,992,647 Less: Long-term Investments (1,106,019) - (1,106,019) Total Reconciliation of Cash Accounts $ 7,635,040 $ 1,020,605 $ 8,655,645 RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Operating Income $ 457,452 $ 352,343 $ 809,795 Adjustments to Reconcile Operating Income to Net Cash Flows from Operating Activities: Depreciation 550,145 393,007 943,152 Meter Depreciation Charged to Sewer 14,995 (14,995) - Changes in Assets and Liabilities: Customer Accounts Receivable (12,336) (1,694) (14,030) Other Receivables 9,878 - 9,878 Materials and Supplies (14,897) - (14,897) Deferred Outflows Related to Pension 207,702 32,178 239,880 Deferred Outflows Related to OPEB - Cost-Sharing 8,788 9,957 18,745 Deferred Outflows Related to OPEB - Single-Employer (4,869) (897) (5,766) Accounts Payable 320,847 26,668 347,515 Customer Deposits 112 - 112 Public Benefits 4,767 - 4,767 Other Current Liabilities 29,570 4,304 33,874 Accrued Compensated Absences 15,568 4,587 20,155 Due from (to) Municipality (114,336) (19,508) (133,844) Net Pension Liability (97,111) (25,739) (122,850) Net OPEB Liability - Cost-Sharing (14,128) (17,094) (31,222) Net OPEB Liability - Single Employer 8,586 1,403 9,989 Deferred Inflows Related to Pension (105,222) (13,314) (118,536) Deferred Inflows Related to OPEB - Cost-Sharing (14,223) (16,304) (30,527) Deferred Inflows Related to OPEB - Single-Employer (2,348) (861) (3,209) Net Cash Flows From Operating Activities $ 1,248,940 $ 714,041 $ 1,962,981 CITY OF OCONTO FALLS, WISCONSIN CASH AND INVESTMENTS - BEGINNING CASH AND INVESTMENTS - ENDING CHANGE IN CASH AND INVESTMENTS Electric and Water Utility For the Year Ended December 31, 2024 Proprietary Funds Statement of Cash Flows Sewer Utility Total See Accompanying Notes 12 ASSETS Cash and Investments $ 790,602 Taxes Receivable 2,032,529 Total Assets 2,823,131 LIABILITIES Due to Other Taxing Entities 2,823,131 NET POSITION $ - CITY OF OCONTO FALLS, WISCONSIN As of December 31, 2024 Fiduciary Fund Statement of Fiduciary Net Position Fund Tax Collection Custodial See Accompanying Notes 13 ADDITIONS Taxes Collected on Behalf of Other Taxing Entities $ 1,514,709 DEDUCTIONS Taxes Remitted to Other Taxing Entities 1,514,709 CHANGE IN NET POSITION - NET POSITION - BEGINNING - NET POSITION - ENDING $ - Tax Collection Fund Statement of Change in Fiduciary Net Position CITY OF OCONTO FALLS, WISCONSIN For the Year Ended December 31, 2024 Fiduciary Fund Custodial See Accompanying Notes 14 15 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies This summary of significant accounting policies of the City of Oconto Falls, Wisconsin (City) is presented to assist in understanding the City’s financial statements. The financial statements and notes are representations of the City’s management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles (GAAP) and have been consistently applied in the preparation of the financial statements. The Governmental Accounting Standards Board (GASB) is the accepted standards setting body for establishing governmental accounting and financial reporting principles. Reporting Entity The City is a municipal corporation governed by an elected six member council and an elected mayor. In accordance with generally accepted accounting principles (GAAP), the financial statements are required to include the City (the primary government) and any separate component units that have a significant operational or financial relationship with the City. All significant activities and organizations with which the City exercises oversight responsibility have been considered for inclusion in the basic financial statements. The City has no component units, and it is not included in any other governmental reporting entity. Government-Wide and Fund Financial Statements Government-Wide Financial Statements The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the activities of the City, except those that are fiduciary. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for services. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, 2) grants and contributions that are restricted to meeting the operational requirements of a particular function, and 3) capital grants and contributions. Taxes and other items not properly included among program revenues are reported instead as general revenues. As a general rule the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are other charges between the City’s enterprise funds and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 16 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Government-Wide and Fund Financial Statements (Continued) Fund Financial Statements Separate financial statements are provided for governmental funds, proprietary funds and the fiduciary fund. Governmental funds include general, special revenue, capital projects and debt service funds. Proprietary funds include enterprise funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements. Fund financial statements of the reporting entity are organized into individual funds each of which are considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts which constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures/ expenses. Funds are organized as major funds or non-major funds within the governmental and proprietary statements. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operating fund of the City or meets the following criteria: a. Total assets plus deferred outflows of resources, liabilities plus deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or proprietary fund are at least 10 percent of the corresponding total for all funds of that category or type and b. The same element that met the 10 percent criterion in (a) is at least 5 percent of the corresponding element total for all governmental and proprietary funds combined. c. In addition, any other governmental fund that the City believes is particularly important to financial statement users may be reported as a major fund. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for services. Operating expenses for enterprise funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Governmental Funds Governmental funds are identified as either general, debt service, special revenue or capital projects based upon the following guidelines: General Fund The general fund is the primary operating fund of the City and is always classified as a major fund. It is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds Special revenue funds are used to account for the specific revenue sources (other than major capital projects) that are legally restricted to expenditures for specific purposes. 17 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Government-Wide and Fund Financial Statements (Continued) Governmental Funds (Continued) Debt Service Funds Debt service funds are used to account for the accumulation of resources for, and the payment of, general long- term principal, interest, and related costs. Capital Projects Funds Capital projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds). The City reports the following major governmental funds: General Fund This is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Economic Development Fund This fund accounts for the City’s activities related to the American Rescue Plan Act and economic development grants received from the state of Wisconsin. Capital Projects Fund This fund is used to account for property taxes, bond proceeds, and other financial resources available to implement the City’s capital improvements plan. Proprietary Funds The City reports the following major proprietary funds: Electric and Water Utility This is the City’s fund to account for the operations of the City-owned electric and water facilities. Sewer Utility This is the City’s fund to account for the operations of the City-owned sewage facilities. 18 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Government-Wide and Fund Financial Statements (Continued) Fiduciary Funds Custodial Fund Custodial Fund - Custodial funds are used to account for assets held by the City as a custodian for individuals, private organizations, and/or other governmental entities. The City reports the following custodial fund: Tax Collection Fund This fund accounts for taxes and deposits collected by the City, acting in the capacity of a custodian, for distribution to other governmental units or designated beneficiaries. Non-Major Funds The City reports the following non-major funds: Special Revenue Funds: Crime Prevention Library TID No. 3 Debt Service Fund Measurement Focus and Basis Accounting The government-wide financial statements and fiduciary fund statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenues as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. 19 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Fund Balance Cash and Investments Cash and investments are combined. Cash deposits consist of demand and time deposits with financial institutions and are carried at cost. Investments are stated at fair value. Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. For purposes of the statement of cash flows, all cash deposits and highly liquid investments (including restricted assets) with a maturity of three months or less from date of acquisition are considered to be cash. Restricted Cash Enterprise Funds – Amounts have been set aside to provide for debt retirement, unspent bond proceeds, and replacement of certain plant equipment. Accounts Receivable Accounts receivable are recorded at their gross amount with uncollectible amounts being recognized under the direct write-off method. No allowance for uncollectible accounts has been provided since it is believed that the amount of such allowance would not be material to the financial statements. No provision for uncollectible accounts receivable has been made in the Oconto Falls electric utility, water utility, or sewer utility financial statements because the utilities have the right by law to place delinquent bills on the tax roll. Delinquent personal property taxes remain the collection responsibility of the City. The City is able to recover a portion of these delinquent personal property taxes from other taxing jurisdictions. Inventories Inventories are recorded at cost, which approximates market, using the first-in, first-out method of valuation. The cost is recorded as an expenditure/expense at the time individual inventory items are consumed rather than when purchased. Inventories of governmental fund types are offset by a nonspendable fund balance to indicate they do not represent spendable available financial resources. Prepaid Items Payments made to vendors that will benefit periods beyond the end of the current fiscal year are recorded as prepaid items. Prepaid items of governmental fund types in the fund financial statements are offset by a nonspendable fund balance to indicate that they do not represent spendable available financial resources. 20 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Fund Balance (Continued) Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated acquisition value at the date of donation. In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide statements. Prior to January 1, 2004, infrastructure assets were not capitalized. The City has elected to capitalize infrastructure assets after January 1, 2004 and has not retroactively reported infrastructure assets prior to January 1, 2004, as allowed by generally accepted accounting principles. The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend asset lives are not capitalized. Property, plant and equipment of the City is depreciated using the straight-line method over the following estimated useful lives: Years Governmental Business-Type Assets Activities Activities Land Improvements 7 - 50 - Buildings and Improvements 25 - 45 15 - 45 Machinery and Equipment 3 - 25 4 - 32 Infrastructure 20 - 50 20 - 108 Leases Receivable The government as a lessor recognizes lease receivables and deferred inflows of resources at the commencement of the lease term, with certain exceptions for leases of assets held as investments, certain regulated leases; unless the lease is short term, or ownership is transferred of the underlying asset, in accordance with GASB 87, Leases. As the lessor, the government continues to recognize assets underlying leases to others. The lease receivables are measured at the present value of lease payments expected to be received during the lease term. The deferred inflow of resources is measured at the value of the lease receivable plus any payments received at or before the commencement of the lease term that relate to future periods. Subscription-Based Information Technology Agreements The City follows GASB Statement No. 96, which requires recognition in the financial statements of certain subscription-based information technology agreements (SBITAS). A SBITA is any contract conveying control of the right to use another party’s information technology software. This statement requires the City to report a right- to-use subscription asset and corresponding subscription liability for any SBITAs. 21 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Fund Balance (Continued) Compensated Absences The City adopted GASB Statement No. 101 for the year ended December 31, 2024, which requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. It is the City’s policy to permit employees to accumulate earned but unused vacation, sick leave, and other benefits at various rates depending on classification and length of service. Terminated employees are paid their unused balances based on their current salary rates. All vacation and sick leave is accrued when incurred in the government-wide and proprietary fund financial statements. In the governmental funds, accrued vacation and sick pay are recognized as expenditures when liquidated with expendable available financial resources. Pension and Other Post-Employment Benefits Pension. The fiduciary net position of the Wisconsin Retirement System (WRS) has been determined using the flow of economic resources measurement focus and accrual basis of accounting. This includes for purposes of measuring the following:  Net Pension Liability (Asset)  Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions  Pension Expense Information about the fiduciary net position of the WRS and additions to/deductions from WRS’ fiduciary net position have been determined on the same basis as they are reported by the WRS. For the purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Post-Employment Benefits – Cost Sharing (OPEB). The fiduciary net position of the Local Retiree Life Insurance Fund (LRLIF) has been determined using the flow of economic resources measurement focus and the accrual basis of accounting. This includes for purposes of measuring following:  Net OPEB Liability  Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB  OPEB Expense (Revenue) Information about the fiduciary net position of the LRLIF and additions to/deductions from LRLIF’s fiduciary net position have been determined on the same basis as they are reported by LRLIF. For the purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Other Post-Employment Benefits – Single-Employer (OPEB). For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the City’s Other Post-Employment Benefit Plan have been determined on the same basis as they are reported by the Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance with benefit terms. The Plan has no assets accumulated to pay this liability. 22 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Fund Balance (Continued) Deferred Outflows of Resources and Deferred Inflows of Resources (Continued) In addition to assets, the statements of net position report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The City reports three categories of deferred outflows of resources related to the pension plan, cost-sharing OPEB plan and single-employer OPEB plan on the statements of net position. The deferred outflows related to the pension plan, cost-sharing OPEB plan and single-employer OPEB plan are explained in more detail in Notes 10, 11 and 12, respectively. In addition to liabilities, the statements of net position and balance sheet report a separate section for deferred inflows of resources. The separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government-wide financial statement has five items that qualify for reporting in this category. Accordingly, taxes levied for subsequent period, leases, pension plan, cost-sharing OPEB plan and single-employer OPEB plan are deferred inflows. The deferred inflows related to the pension plan, cost-sharing OPEB plan, single-employer OPEB plan, and leases are explained in more detail in Notes 10, 11, 12 and 13, respectively. The governmental funds report taxes levied for subsequent period, special assessments and lease revenue as deferred inflows of resources on the balance sheet. Long-Term Obligations In the government-wide financial statements and proprietary fund types fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. In the fund financial statements, governmental fund types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources, and payments of principal and interest as expenditures. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Advances To and From Other Funds Noncurrent portions of long-term interfund loans receivable (reported in “Advance To” asset accounts) are offset by a nonspendable fund balance. Current portions of long-term interfund loans receivable (reported in “Due From” asset accounts) are considered available spendable resources. Unearned Revenue Revenue received that has not been earned, is recorded as a liability until a period of time or expenditures occur. Once the funds are considered earned, they are recognized as revenue. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” and “due to other funds” on the balance sheet. 23 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Equity (Continued) Interfund Transactions During the course of normal operations, the City has various transactions between funds, including expenditures and transfers of resources to provide services, construct assets and service debt. The governmental funds generally record such transactions as operating transfers within governmental funds. Transactions between governmental and proprietary funds are usually recorded as revenues and either expenditures or expenses of the respective funds. Equity Classifications Government-Wide Statements Equity is classified as net position and displayed in three components:  Net investment in capital assets – Amount of capital assets, net of accumulated depreciation, less outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvements of those assets.  Restricted net position – Amount of net position that is subject to restrictions that are imposed by 1) external groups, such as creditors, contributors or laws or regulations of other governments or 2) law through constitutional provisions or enabling legislation.  Unrestricted net position – Net position that is neither classified as restricted nor as net investment in capital assets. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. Fund Financial Statements Fund balance is classified as either 1) nonspendable, 2) restricted, 3) committed, 4) assigned, or 5) unassigned. Nonspendable fund balance represents amounts that cannot be spent due to form (such as inventories and prepaid amounts), or amounts that must be maintained intact legally or contractually (such as the principal of a permanent fund). Restricted fund balance represents amounts constrained for a specific purpose by external parties, constitutional provision or enabling legislation. Committed fund balance represents amounts constrained for a specific purpose by a government using its highest level of decision-making authority. It would require action by the same group to remove or change the constraints placed on the resources. The action to constrain resources must occur prior to year-end; however, the amount can be determined in the subsequent period. The City Council is the decision-making authority that can, by adoption of a resolution prior to the end of the fiscal year, commit fund balance. Assigned fund balance, in the general fund, represents amounts constrained by the City Council for a specific intended purpose. The City has not delegated that authority to others. Assigned fund balance in all other governmental funds represents any positive remaining amount after classifying nonspendable, restricted or committed fund balance. Unassigned fund balance, represents amounts not classified as nonspendable, restricted, committed or assigned. 24 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Assets, Deferred Outflows/Inflows of Resources, Liabilities and Net Position or Equity (Continued) Equity Classifications (Continued) Fund Financial Statements (Continued) The general fund is the only fund that would report a positive amount in the unassigned fund balance. The City, unless otherwise required by law or agreements, spends funds in the following order: restricted first, then committed, then assigned, and lastly unassigned. The City has not adopted a minimum fund balance policy. Claims and Judgments Claims and judgments are recorded as liabilities if all the conditions of Governmental Accounting Standards Board pronouncements are met. Claims and judgments expected to be liquidated with expendable available financial resources are recorded during the year as expenditures in the governmental funds. If they are not expected to be liquidated with expendable available financial resources, no liability is recognized in the governmental fund financial statements. Claims and judgments in the government-wide financial statements and proprietary funds are recorded as expenses when the related liabilities are incurred. There were no significant claims or judgments at the end of the year. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results may differ from these estimates and such differences may be material. Note 2 - Cash and Investments The City is required to invest its funds in accordance with Wisconsin Statutes. Allowable investments are as follows:  Time deposits in any credit union, bank, savings bank or trust company maturing in three year or less.  Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, local professional baseball park district, or the University of Wisconsin Hospitals and Clinics Authority.  Bonds or securities issued or guaranteed by the federal government.  The Wisconsin Local Government Investment Pool.  Any security maturing in seven year or less and having the highest or second highest rating category of a nationally recognized rating agency.  Securities of an open-end management investment company or investment trust subject to various conditions and investment options.  Repurchase agreements with public depositories, with certain conditions. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. Wisconsin statutes require repurchase agreements to be fully collateralized by bonds or securities issued or guaranteed by the federal government or its instrumentalities. The City does not have an additional custodial credit policy. 25 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 2 - Cash and Investments (Continued) Custodial Credit Risk (Continued) At December 31, 2024, the City’s deposits had a bank balance of $4,244,742. The City maintains its cash accounts at several financial institutions. Deposits in each bank are insured by the FDIC up to $250,000 for the combined amounts of all time and savings accounts (including NOW accounts); and up to $250,000 for the combined amount of all interest and noninterest bearing demand deposit accounts. Deposits in each credit union are insured by the NCUA in the amount of $250,000 per credit union member. The following represents a summary of deposits as of December 31, 2024: Fully Insured Deposits 636,197 $ Collateralized 3,608,545 Total 4,244,742 $ The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit at December 31, 2024. The Local Government Investment Pool (LGIP) is not registered with the U.S. Securities and Exchange Commission and does not publish credit quality ratings. An investment in the LGIP is not a deposit with any bank and is neither insured nor guaranteed by the Federal Deposit Insurance Corporation, the United States Government or any state governmental agency of the LGIP. Upon demand, cash can be withdrawn with interest from the Local Government Investment Pool. Investments in the Local Government Investment Pool are valued at amortized cost. The balance in the local government investment pool at December 31, 2024 was $4,486. Investments in the local government investment pool are not insured against losses arising from principal defaults on securities acquired by the pool. Interest Rate Risk – Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Investments Fair Value Money Market Funds $ 5,680,875 $ 5,680,875 $ - $ - $ - $ - Certificates of Deposit 1,328,681 1,033,372 295,309 - - - U.S. Treasuries 1,610,529 1,610,529 - - - - Mutual Funds 713,454 713,454 - - - - $ 9,333,539 $ 9,038,230 $ 295,309 $ - $ - $ - Three to Five Years More than Five Years Less than a Year One to Two Years Two to Three Years Credit Risk – State law limits investments in commercial paper, corporate bonds, and mutual bond funds to the top two ratings issued by nationally recognized statistical rating organizations. The City’s investment policy does not further limit its investment choices. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Investments Not Rated Money Market Funds $ 5,680,875 $ 5,680,875 $ - $ - $ - $ - $ - Certificates of Deposit 1,328,681 - - - - - 1,328,681 U.S. Treasuries 1,610,529 1,610,529 - - - - - Mutual Funds 713,454 713,454 - - - - - $ 9,333,539 $ 8,004,858 $ - $ - $ - $ - $ 1,328,681 Fair Value AAA AA+ A+ BBB AA 26 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 2 - Cash and Investments (Continued) Investments are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value. No investments are reported at amortized costs. Adjustments necessary to record investments at fair value are recorded as increases or decreases in investment income.  Level 1 - Valuation for assets are from quoted prices in active markets. These valuations are obtained from readily available pricing sources from market transactions involving identical assets.  Level 2 - Valuation for assets are from less active markets. These valuations are obtained from third party pricing services for identical or similar assets.  Level 3 - Measurements that are least observable are estimated from related market data, determined from sources with little or no market activity for comparable contracts, or are positions with longer durations. These valuations incorporate certain assumptions and projections in determining fair value assigned to such assets. As of December 31, 2024 the City had the following investments at fair value: Investment Level 1 Level 2 Level 3 Money Market Funds 5,680,875 $ - $ - $ Certificates of Deposit - 1,328,681 - U.S. Treasuries - 1,610,529 - Mutual Funds 713,454 - - 6,394,329$ 2,939,210 $ - $ Note 3 - Restricted Assets Restricted assets on December 31, 2024 totaled $5,992,647 and consisted of cash and investments held for the following purposes: Enterprise Funds: Electric and Water Utility 5,050,774 Sewer Utility 941,873 Total Enterprise Funds 5,992,647$ Note 4 - Property Taxes Property taxes consist of taxes on real estate and personal property. They are levied during December and become an enforceable lien on property the following January 1. Property taxes are payable in various options depending on the type and amount. Personal property taxes are payable on or before January 31 in full. Real estate taxes are payable in full by January 31, or in two equal installments on or before January 31 and July 31. Real estate taxes not paid by January 31 are assumed by the County as part of the February tax settlement. Delinquent personal property taxes remain the collection responsibility of the City. The City bills and collects its own property taxes and also levies and collects taxes for the School District of Oconto Falls, Oconto County, and Northeast Wisconsin Technical College. Collections and remittances of taxes for other entities are accounted for in the property tax custodial fund. Under 2011 Wisconsin Act 32, a municipality is allowed to increase its levy over the amount it levied in the prior year by the percentage increase in equalized value from net new construction or zero percent. Changes in debt service from one year to the next are generally exempt from this limit. 27 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 5 - American Transmission Company (ATC) The Oconto Falls Utility is a member of the American Transmission Company (ATC). ATC is a company formed by electric utilities to own and construct electric transmission facilities in Wisconsin. Operations of ATC began January 1, 2001. The Oconto Falls Electric Utility owns less than .5% of ATC. The investment earns dividends, 80% of which are paid quarterly and 20% of which are reinvested in ATC. From time to time, the Oconto Falls Electric Utility has the option to contribute additional funds to maintain their proportionate share of ownership. The investment in ATC is reported at original cost plus additional contributions and reinvested dividends. Note 6 - Capital Assets Capital asset activity for governmental activities for the year ended December 31, 2024 was as follows: Governmental Activities Capital Assets not Being Depreciated Land $ 275,189 $ - $ - $ 275,189 Construction in Progress 5,384,698 109,627 5,384,698 109,627 Total Capital Assets Not Being Depreciated 5,659,887 109,627 5,384,698 384,816 Capital Assets Being Depreciated Land Improvements 560,990 106,825 - 667,815 Buildings and Improvements 4,433,657 7,425,888 540,645 11,318,900 Machinery and Equipment 3,139,559 359,725 87,325 3,411,959 Infrastructure 6,284,552 - - 6,284,552 Total Capital Assets Being Depreciated 14,418,758 7,892,438 627,970 21,683,226 Less Accumulated Depreciation Land Improvements (359,063) (21,350) - (380,413) Buildings and Improvements (2,083,627) (204,904) (414,645) (1,873,886) Machinery and Equipment (1,946,809) (169,632) (77,948) (2,038,493) Infrastructure (1,358,021) (174,662) - (1,532,683) Total Accumulated Depreciation (5,747,520) (570,548) (492,593) (5,825,475) Total Capital Assets Being Depreciated, Net of Depreciation 8,671,238 7,321,890 135,377 15,857,751 Governmental Activities Capital Assets, Net of Accumulated Depreciation $ 14,331,125 $ 7,431,517 $ 5,520,075 $ 16,242,567 Balances Increases Decreases Beginning Ending Balances 28 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 6 - Capital Assets (Continued) Depreciation expense was charged to functions of the City as follows: Governmental Activities: General Government $ 44,180 Public Safety 149,094 Public Works 253,605 Culture and Recreation 34,457 Conservation and Development 89,212 Total Depreciation Expense - Governmental Activities $ 570,548 Capital asset activity for business-type activities for the year ended December 31, 2024 was as follows: Business-Type Activities Capital Assets not Being Depreciated Land and Land Rights $ 72,289 $ - $ - $ 72,289 Construction in Progress 1,420,973 610,589 - 2,031,562 Total Capital Assets Not Being 1,493,262 610,589 - 2,103,851 Depreciated Capital Assets Being Depreciated Buildings 6,089,183 - - 6,089,183 Machinery and Equipment 6,985,103 391,649 44,865 7,331,887 Infrastructure 17,182,843 201,202 5,342 17,378,703 Subtotal 30,257,129 592,851 50,207 30,799,773 Less Accumulated Depreciation (14,089,905) (945,236) (50,207) (14,984,934) Total Capital Assets Being Depreciated, Net of Depreciation 16,167,224 (352,385) - 15,814,839 Business-Type Activities Capital Assets, Net of Accumulated Depreciation $ 17,660,486 $ 258,204 $ - $ 17,918,690 Beginning Ending Balances Increases Decreases Balances Depreciation expense was charged to functions of the Utilities as follows: Business-Type Activities: Electric and Water Utility $ 567,224 Salvage Charged to Depreciation (2,084) Less: Share of Meter Depreciation (14,995) Electric and Water Utility Depreciation Expense 550,145 Sewer Utility 378,012 Plus: Share of Meter Depreciation 14,995 Sewer Utility Depreciation Expense 393,007 Total Depreciation Expense - Business-Type Activities $ 943,152 29 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 7 - Interfund Receivables, Payables and Transfers The following is a schedule of interfund receivables and payables: Receivable Fund Payable Fund Amount Purpose General Fund 23,912 $ Year End Cash Flow Timing General Fund 344,878 Year End Cash Flow Timing Sewer Utility TID No. 3 Electric & Water Utility General Fund 20,109 Year End Cash Flow Timing 388,899$ Interfund transfers for the year ended December 31, 2024 were as follows: Economic General Development Fund Fund Purpose Transfer From: General Fund - $ 33,451 $ To assist in Closeout of Economic Development Capital Project - 339,000 Allocation of Debt Proceeds Economic Development 36,747 - Closeout of Economic Development Crime Prevention 13,722 - Future Capital Projects Electric and Water Utility 210,101 - Property Tax Equivalent Sewer Utility 3,058 - Property Tax Equivalent Total Transfers 263,628 $ 372,451 $ Note 8 - Long-Term Obligations The following is a summary of changes in long-term obligations of the City for the year ended December 31, 2024: Governmental Activities General Obligation Debt: G.O. Promissory Notes $ 1,590,000 $ 2,020,000 $ 275,000 $ 3,335,000 $ 295,000 Direct Borrow ings and Placements: State Trust Fund Loan 58,820 500,000 136,029 422,791 103,678 Bank Notes 314,697 - 29,045 285,652 29,775 Total General Obligation Debt 1,963,517 2,520,000 440,074 4,043,443 428,453 Premium on Debt Issued - 100,742 - 100,742 - Compensated Absences 246,989 27,500 - 274,489 109,796 Total Governmental Activity Long-Term Liabilities $ 2,210,506 $ 2,648,242 $ 440,074 $ 4,418,674 $ 538,249 Due Within One YearBalances Beginning Increases Decreases Ending Balances Total interest paid during the year for Governmental Activities was $143,092. The compensated absences are denoted by a net change in the liability. 30 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 8 - Long-Term Obligations (Continued) The following is a summary of changes in long-term obligations of the City for the year ended December 31, 2024: Business-Type Activities G.O. Promissory Notes $ 650,000 $ - $ 90,000 $ 560,000 $ 90,000 Revenue Bond 6,530,000 - 155,000 6,375,000 205,000 Direct Borrow ings and Placements: Clean Water Fund Loans 4,737,851 - 543,989 4,193,862 557,206 Safe Drinking Water Loans 724,509 - 86,444 638,065 87,676 Total General Obligation Debt 12,642,360 - 875,433 11,766,927 939,882 Premium on Debt Issued 116,243 - 5,811 110,432 - Compensated Absences 303,835 20,156 - 323,991 129,596 Total Business Activity Long-Term Liabilities $ 13,062,438 $ 20,156 $ 881,244 $ 12,201,350 $ 1,069,478 Beginning Ending Due Within Balances Increases Decreases Balances One Year Total interest paid in 2024 on business type activities was $459,421. The compensated absences are denoted by a net change in the liability. Additional information on the above outstanding long-term debt obligation follows: Governmental Activities Long-Term Obligations Promissory Note 07/27/18 06/01/25 3.50% $ 550,000 $ 43,330 State Trust Fund Loan 07/20/20 03/15/25 2.50% 143,000 29,775 G.O. Promissory Notes 08/05/20 06/01/30 0.6-1.4% 1,420,000 1,315,000 Promissory Note 09/13/22 10/27/27 3.85% 170,000 97,714 Promissory Note 06/13/23 06/22/28 5.25% 60,968 44,350 G.O. Promissory Notes 05/06/24 05/06/44 5.00% 500,000 493,274 Promissory Note 12/05/24 06/01/44 4.00-5.00% 2,020,000 2,020,000 Total Governmental Activities Long-Term Obligations $ 4,043,443 Business Type Activities Long-Term Obligations Clean Water Fund Loan 01/25/06 05/01/25 2.365% $ 787,821 $ 46,061 Safe Drinking Water Loan 01/13/10 05/01/29 1.601% 543,619 274,490 Clean Water Fund Loan 02/22/12 05/01/31 2.400% 7,340,219 3,239,842 Clean Water Fund Loan 07/23/14 05/01/34 2.625% 1,608,597 907,958 Safe Drinking Water Loan 09/24/14 05/01/34 1.155% 627,085 363,576 G.O. Promissory Notes 08/05/20 06/01/30 0.60-1.4% 910,000 560,000 Revenue Bond 09/14/23 05/01/43 4.00-5.00% 6,530,000 6,375,000 Total Business Type Activities Long-Term Obligations $ 11,766,927 Issuance Date of Final Maturity Interest Rate Original Indebtedness Balances 12/31/24 Balances 12/31/24 Original Indebtedness Date of Issuance Final Maturity Interest Rate 31 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 8 - Long-Term Obligations (Continued) The annual principal and interest maturities are as follows: 2025 $ 428,453 $ 134,948 $ 939,882 $ 390,497 $ 1,368,335 $ 525,445 2026 383,184 126,244 917,519 364,895 1,300,703 491,139 2027 392,070 116,419 951,540 338,728 1,343,610 455,147 2028 268,682 108,158 975,889 311,462 1,244,571 419,620 2029 272,895 102,533 1,000,576 283,236 1,273,471 385,769 2030-2034 796,265 418,765 3,221,521 1,037,328 4,017,786 1,456,093 2035-2039 725,954 251,946 1,880,000 625,178 2,605,954 877,124 2040-2044 775,940 84,281 1,880,000 174,103 2,655,940 258,384 $ 4,043,443 $ 1,343,294 $ 11,766,927 $ 3,525,427 $ 15,810,370 $ 4,868,721 Business-Type Activities Totals Principal Interest Principal Interest Principal Interest Governmental Activities Legal Margin For Debt The 2024 equalized valuation of the City as certified by the Wisconsin Department of Revenue is $263,112,700. The legal debt limit and margin of indebtedness as of December 31, 2024, in accordance with Section 67.03 of the Wisconsin Statutes follows: Equalized valuation of the City 263,112,700 $ Statutory limitation percentage 5% General obligation debt limitation, per Section 67.03 of the Wisconsin Statutes 13,155,635 Total outstanding general obligation debt applicable to debt limitation 4,603,443 Legal margin for new general obligation debt 8,552,192 $ Other Debt Information The City’s outstanding debt from direct borrowings and direct placements related to governmental and business-type activities contain event of default and/or termination provisions with possible finance-related consequences. City management has evaluated the event of default and/or termination provisions with possible finance-related consequences and in the opinion of City management, the likelihood is remote that these provisions will have a significant effect on the City’s financial position or results of operations. 32 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 8 - Long-Term Obligations (Continued) Utility Revenues Pledged The City has pledged future revenue derived from the Water and Sewer Utilities, net of specified operating expenses, to repay the Clean Water Fund and Safe Drinking Water Loans. Proceeds from the debt provided financing for the construction or acquisition of capital assets used within the utilities. The Clean Water Fund Loans are payable from Sewerage System net revenues and payable through 2025, 2031 and 2034. The total principal and interest remaining to be paid on the loans is $4,598,183. Principal and interest paid for the current year and total Sewerage System net revenues were $654,119 and $745,350 , respectively. The Sewerage System did meet the Clean Water Fund Loan revenue requirements in 2024. The Safe Drinking Water Loans are payable from Water System net revenues and are payable through 2029 and 2034. The total principal and interest remaining to be paid on the loans is $670,586. Principal and interest paid for the current year and total water system net revenues were $98,650 and $527,546, respectively. The Water System did meet the Safe Drinking Water Loan revenue requirements in 2024. The Electric Revenue Bonds are payable from Electric System net revenues and are payable through 2043. The total principle and interest remaining to be paid on the loans is $9,443,431. Principle and interest paid for the current year and total electric system net revenues were $474,019 and $480,474, respectively. The Electric System did meet the Electric Revenue Bond revenue requirements in 2024. Note 9 - Net Position Government- Wide Statements Net position of the government-wide statement of net position at December 31, 2024 includes the following: Net Investment in Capital Assets Net Capital Assets $ 16,242,567 $ 17,918,690 $ 34,161,257 Less: Related Long-Term Debt (4,043,443) (11,766,927) (15,810,370) Less: Related Premium on Debt Issued (100,742) (110,432) (211,174) Add: Unspent Bond Proceeds 1,774,716 5,050,774 6,825,490 Total Net Investment in Capital Assets 13,873,098 11,092,105 24,965,203 Restricted Library 166,295 - 166,295 Plant Replacement - 941,873 941,873 Pension Benefits 339,424 107,187 446,611 Total Restricted 505,719 1,049,060 1,554,779 Unrestricted 339,129 4,160,473 4,499,602 Total Government-Wide Activities Net Position $ 14,717,946 $ 16,301,638 $ 31,019,584 Governmental Business-Type Activities Activities Total 33 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan General Information About the Pension Plan Plan Description. The WRS is a cost-sharing multiple-employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government, and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, expected to work at least 1,200 hours a year (880 hours for teachers and school district educational support employees) and expected to be employed for at least one year from employee’s date of hire are eligible to participate in the WRS. ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at https:// etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements. Additionally, ETF issued a standalone Wisconsin Retirement System Financial Report, which can also be found using the link above. Vesting. For employees beginning participation on or after January 1, 1990, and no longer actively employed on or after April 24, 1998, creditable service in each of five years is required for eligibility for a retirement annuity. Participants employed prior to 1990 and on or after April 24, 1998, and prior to July 1, 2011, are immediately vested. Participants who initially became WRS eligible on or after July 1, 2011, must have five years of creditable service to be vested. Benefits Provided. Employees who retire at or after age 65 (54 for protective occupations and 62 for elected officials and executive service retirement plan participants, if hired on or before December 31, 2016) are entitled to a retirement benefit based on a formula factor, their final average earnings, and creditable service. Final average earnings is the average of the participant's three highest annual earnings periods. Creditable service includes current service and prior service for which a participant received earnings and made contributions as required. Creditable service also includes creditable military service. The retirement benefit will be calculated as a money purchase benefit based on the employee’s contributions plus matching employer's contributions, with interest, if that benefit is higher than the formula benefit. Vested participants may retire at or after age 55 (50 for protective occupations) and receive an actuarially reduced benefit. Participants terminating covered employment prior to eligibility for an annuity may either receive employee- required contributions plus interest as a separation benefit or leave contributions on deposit and defer application until eligible to receive a retirement benefit. The WRS also provides death and disability benefits for employees. 34 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan (Continued) Post-Retirement Adjustments. The Employee Trust Funds Board may periodically adjust annuity payments from the retirement system based on annual investment performance in accordance with s. 40.27, Wis. Stat. An increase (or decrease) in annuity payments may result when investment gains (losses), together with other actuarial experience factors, create a surplus (shortfall) in the reserves, as determined by the system’s consulting actuary. Annuity increases are not based on cost of living or other similar factors. For Core annuities, decreases may be applied only to previously granted increases. By law, Core annuities cannot be reduced to an amount below the original, guaranteed amount (the “floor”) set at retirement. The Core and Variable annuity adjustments granted during recent years are as follows: Year Core Fund Adjustment Variable Fund Adjustment 2014 4.7% 25.0% 2015 2.9 2.0 2016 0.5 (5.0) 2017 2.0 4.0 2018 2.4 17.0 2019 0.0 (10.0) 2020 1.7 21.0 2021 5.1 13.0 2022 7.4 15.0 2023 1.6 (21.0) Contributions. Required contributions are determined by an annual actuarial valuation in accordance with Chapter 40 of the Wisconsin Statutes. The employee required contribution is one-half of the actuarially determined contribution rate for General category employees, including Teachers, Executives and Elected Officials. Starting on January 1, 2016, the Executives and Elected Officials category was merged into the General Employee Category. Required contributions for protective employees are the same rate as general employees. Employers are required to contribute the remainder of the actuarially determined contribution rate. The employer may not pay the employee required contribution unless provided for by an existing collective bargaining agreement. During the reporting period, the WRS recognized $164,412 in contributions from the City. Contribution rates as of December 31, 2024 are: Employee Category Employee Employer General (including executives and elected officials) 6.90% 6.90% Protective with Social Security 6.90% 14.30% Protective without Social Security 6.90% 19.10% 35 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan (Continued) Pension Liabilities (Assets), Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At December 31, 2024, the City reported a liability of $178,627 for its proportionate share of the net pension liability. The net pension liability was measured as of December 31, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2022, rolled forward to December 31, 2023. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The City’s proportion of the net pension liability was based on the City’s share of contributions to the pension plan relative to the contributions of all participating employers. At December 31, 2023, the City’s proportion was 0.01201420%, which was a decrease of 0.00001716% from its proportion measured as of December 31, 2022. For the year ended December 31, 2024, the City recognized pension expense of $122,035. At December 31, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Differences between expected and actual experiences $ 720,225 $ 953,943 Changes in actuarial assumptions 77,858 - Net differences between projected and actual earnings on plan investments 622,489 - Changes in proportion and differences between employer contributions and proportionate share of contributions 929 6,732 Employer contributions subsequent to the measurement date 164,412 - Total $ 1,585,913 $ 960,675 Deferred Outflows of Resources Deferred Inflows of Resources The $164,412 reported as deferred outflows related to pension resulting from the WRS Employer’s contributions subsequent to the measurement date will be recognized as an adjustment of the net pension liability (asset) in the year ending December 31, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized in pension expense as follows: 36 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan (Continued) Year Ending December 31, Net Deferred Outflows (Inflows) of Resources 2025 93,600 $ 2026 97,688 2027 389,492 2028 (119,954) 460,826$ Actuarial Assumptions. The total pension liability in the December 31, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: December 31, 2022 Measurement Date of Net Pension Liability (Asset): December 31, 2023 Experience Study: January 1, 2018 – December 31, 2020 Published November 19, 2021 Actuarial Cost Method: Entry Age Normal Asset Valuation Method: Fair Value Long-Term Expected Rate of Return: 6.8% Discount Rate: 6.8% Salary Increases: Inflation Seniority/Merit 3.0% 0.1% - 5.6% Mortality: 2020 WRS Experience Mortality Table Post-retirement Adjustments* 1.7% *No post-retirement adjustment is guaranteed. Actual adjustments are based on recognized investment return, actuarial experience, and other factors. 1.7% is the assumed annual adjustment based on the investment return assumption and the postretirement discount rate. Actuarial assumptions are based upon an experience study conducted in 2021 that covered a three-year period from January 1, 2018 to December 31, 2020. The total pension liability for December 31, 2023 is based upon a roll-forward of the liability calculated from the December 31, 2022 actuarial valuation. Long-term Expected Return on Plan Assets. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of geometric real rates of return for each major asset class are summarized in the following table: 37 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan (Continued) Asset Allocation Targets and Expected Returns1 As of December 31, 2023 Core Fund Asset Class Asset Allocation % Long-Term Expected Nominal Rate of Return % Long-Term Expected Real Rate of Return %2 Public Equity 40% 7.3% 4.5% Public Fixed Income 27 5.8 3.0 Inflation Sensitive 19 4.4 1.7 Real Estate 8 5.8 3.0 Private Equity/Debt 18 9.6 6.7 Leverage3 (12) 3.7 1.0 Total Core Fund 112% * 7.4% 4.6% Variable Fund Asset Class U.S. Equities 70% 6.8% 4.0% International Equities 30 7.6 4.8 Total Variable Fund 100% 7.3% 4.5% 1Asset Allocations are managed within established ranges; target percentages may differ from actual monthly allocations 2New England Pension Consultants Long Term US CPI (Inflation) Forecast: 2.5%. 3The investment policy used for the Core Fund involves reducing equity exposure by leveraging lower-volatility assets, such as fixed income securities. This results in an asset allocation beyond 100%. Currently, an asset allocation target of 12% policy leverage is used, subject to an allowable range of up to 20%. Single Discount Rate. A single discount rate of 6.8% was used to measure the total pension liability for the current and prior year. The discount rate is based on the expected rate of return on pension plan investments of 6.8% and a municipal bond rate of 3.77% (Source: Fixed-income municipal bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as reported in Fidelity Index’s “20-year Municipal GO AA Index” as of December 31, 2023. In describing this index, Fidelity notes that the municipal curves are constructed using option- adjusted analytics of a diverse population of over 10,000 tax-exempt securities.). Because of the unique structure of WRS, the 6.8% expected rate of return implies that a dividend of approximately 1.7% will always be paid. For purposes of the single discount rate, it was assumed that the dividend would always be paid. The projection of cash flows used to determine this single discount rate assumed that plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the difference between actuarially determined contribution rates and the member rate. Based on these assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments (including expected dividends) of current plan members. Therefore, the municipal bond rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the City’s Proportionate Share of the Net Pension Liability (Asset) to Changes in the Discount Rate. The following presents the City’s proportionate share of the net pension liability (asset) calculated using the discount rate of 6.80 percent, as well as what the City’s proportionate share of the net pension liability (asset) would be if it were calculated using a discount rate that is 1-percentage-point lower (5.80 percent) or 1-percentage-point higher (7.80 percent) than the current rate: 1% Decrease to Discount Rate (5.80%) Current Discount Rate (6.80%) 1% Increase to Discount Rate (7.80%) City's proportionate share of the net pension liability (asset) 1,726,524 $ 178,627 $ (904,500) $ 38 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 10 - Defined Benefit Pension Plan (Continued) Pension Plan Fiduciary Net Position. Detailed information about the pension plan’s fiduciary net position is available in separately issued financial statements available at https://etf.wi.gov/about-etf/reports-and- studies/financial-reports-and-statements. Payables to the Pension Plan. The City is required to remit the monthly required contribution for both the employee and City portions by the last day of the following month. The amount due to WRS as of December 31, 2024 is $21,792 for December payroll. Note 11 - Post-Employment Benefits Other Than Pension Benefits – Cost-Sharing Plan General Information About the Other Post-Employment Benefits Plan Plan Description. The LRLIF is a multiple-employer, defined-benefit OPEB plan. LRLIF benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. The Wisconsin Department of Employee Trust Funds (ETF) and the Group Insurance Board have statutory authority for program administration and oversight. The plan provides post-employment life insurance benefits for all eligible members. OPEB Plan Fiduciary Net Position. ETF issues a standalone Annual Comprehensive Financial Report (ACFR), which can be found at https://etf.wi.gov/about-etf/reports-and-studies/financial-reports-and-statements. Additionally, ETF issued a standalone Retiree Life Insurance Financial Report, which can also be found using the link above. Benefits Provided. The LRLIF plan provides fully paid up life insurance benefits for post-age 64 retired members and pre-65 retirees who pay for their coverage. Contributions. The Group Insurance Board approves contribution rates annually, based on recommendations from the insurance carrier. Recommended rates are based on an annual valuation, taking into consideration an estimate of the present value of future benefits and the present value of future contributions. A portion of employer contributions made during a member’s working lifetime funds a post-retirement benefit. Employers are required to pay the following contributions based on member contributions for active members to provide them with Basic Coverage after age 65. There are no employer contributions required for pre-age 65 annuitant coverage. If a member retires prior to age 65, they must continue paying the member premiums until age 65 in order to be eligible for the benefit after age 65. Contribution rates as of December 31, 2024 are: Coverage Type Employee 50% Post Retirement Coverage 40% of Member Contribution 25% Post Retirement Coverage 20% of Member Contribution 39 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 11 - Post-Employment Benefits Other Than Pension Benefits – Cost-Sharing Plan (Continued) Member contributions are based upon nine age bands through age 69 and an additional eight age bands for those age 70 and over. Participating members must pay monthly contribution rates per $1,000 of coverage until the age of 65 (age 70 if active). The member contribution rates in effect for the year ended December 31, 2022 are as listed below: Life Insurance Member Contribution Rates * For the Year Ended December 31, 2023 Attained Age Basic/Supplemental Under 30 $ 0.05 30-34 0.06 35-39 0.07 40-44 0.08 45-49 0.12 50-54 0.22 55-59 0.39 60-64 0.49 65-69 0.57 * Disabled members under age 70 receive a waiver-of-premium benefit. During the reporting period, the LRLIF recognized $427 in contributions from the employer. OPEB Liabilities, OPEB Expense (Revenue), and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEBs At December 31, 2024, the City reported a liability of $96,057 for its proportionate share of the net OPEB liability. The net OPEB liability was measured as of December 31, 2023, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of January 1, 2023 rolled forward to December 31, 2023. No material changes in assumptions or benefit terms occurred between the actuarial valuation date and the measurement date. The City’s proportion of the net OPEB liability was based on the City’s share of contributions to the OPEB plan relative to the contributions of all participating employers. At December 31, 2023, the City’s proportion was 0.02087900%, which was a decrease of 0.00321000% from its proportion measured as of December 31, 2022. For the year ended December 31, 2024, the City recognized OPEB expense of $3,274. 40 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 11 - Post-Employment Benefits Other Than Pension Benefits – Cost-Sharing Plan (Continued) At December 31, 2024 the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Differences between expected and actual experiences $ - $ 8,501 Changes in actuarial assumptions 30,048 37,826 Net differences between projected and actual earnings on plan investments 1,298 - Changes in proportion and differences between employer contributions and proportionate share of contributions 11,490 28,306 Employer contributions subsequent to the measurement date 427 - Total $ 43,263 $ 74,633 Deferred Outflows of Resources Deferred Inflows of Resources The $427 reported as deferred outflows related to OPEB resulting from the City’s contributions subsequent to the measurement date will be recognized as an adjustment of the net OPEB liability in the year ending December 31, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ending December 31, Net Deferred Outflows (Inflows) of Resources 2025 (4,651) $ 2026 (1,810) 2027 (5,100) 2028 (8,850) 2029 (10,481) Thereafter (905) (31,797)$ 41 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 11 - Post-Employment Benefits Other Than Pension Benefits – Cost-Sharing Plan (Continued) Actuarial Assumptions. The total OPEB liability in the January 1, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Actuarial Valuation Date: January 1, 2023 Measurement Date of Net OPEB Liability: December 31, 2023 Experience Study: January 1, 2018 - December 31, 2020, Published November 19, 2021 Actuarial Cost Method: Entry Age Normal 20 Year Tax-Exempt Municipal Bond Yield*: 3.26% Long-Term Expected Rate of Return: 4.25% Discount Rate: 3.32% Salary Increases: Wage Inflation Seniority/Merit 3.00% 0.1% - 5.6% Mortality: 2020 WRS Experience Mortality Table *Based on the Bond Buyers GO index. Actuarial assumptions are based upon an experience study conducted in 2021 that covered a three-year period from January 1, 2018 to December 31, 2020. The total OPEB liability for December 31, 2023 is based upon a roll-forward of the liability calculated from the January 1, 2023 actuarial valuation. Long-term Expected Return on Plan Assets. The long-term expected rate of return is determined by adding expected inflation to expected long-term real returns and reflecting expected volatility and correlation. Investments for the LRLIF are held with Securian, the insurance carrier. Interest is calculated and credited to the LRLIF based on the rate of return for a segment of the insurance carriers’ general fund, specifically 10-year A- Bonds (as a proxy, and not tied to any specific investments). The overall aggregate interest rate is calculated using a tiered approach based on the year the funds were originally invested and the rate of return for that year. Investment interest is credited based on the aggregate rate of return and assets are not adjusted to fair market value. Furthermore, the insurance carrier guarantees the principal amounts of the reserves, including all interest previously credited thereto. Local OPEB Life Insurance Asset Allocation Targets and Expected Returns As of December 31, 2023 Asset Class Index Target Allocation Long-Term Expected Geometric Real Rate of Return % U.S. Intermediate Credit Bonds Bloomberg U.S. Interm Credit 40% 2.32% U.S. Mortgages Blookberg U.S. MBS 60 2.52 Inflation 2.30 Long-Term Expected Rate of Return 4.25 42 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 11 - Post-Employment Benefits Other Than Pension Benefits – Cost-Sharing Plan (Continued) Single Discount Rate. A single discount rate of 3.32% was used to measure the total OPEB liability for the current year, as opposed to a discount rate of 3.76% for the prior year. The change in the discount rate was primarily caused by the decrease in the municipal bond rate from 3.72% as of December 31, 2022 to 3.26% as of December 31, 2023. The Plan’s fiduciary net position was projected to be insufficient to make all projected future benefit payments of current active and inactive members. Therefore, the discount rate for calculating the Total OPEB Liability is equal to the single equivalent rate that results in the same actuarial present value as the long-term expected rate of return applied to benefit payments, to the extent that the plan’s fiduciary net position is projected to be sufficient to make projected benefit payments, and the municipal bond rate applied to benefit payment to the extent that the plan’s fiduciary net position is projected to be insufficient. The plan’s fiduciary net position was projected to be available to make projected future benefit payments of current plan members through December 31, 2036. The projection of cash flows used to determine the single discount rate assumed that employer contributions will be made according to the current employer contribution schedule and that contributions are made by plan members retiring prior to age 65. Sensitivity of the City’s Proportionate Share of the Net OPEB Liability to Changes in the Discount Rate. The following presents the City’s proportionate share of the net OPEB liability calculated using the discount rate of 3.32 percent, as well as what the City’s proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.32 percent) or 1-percentage-point higher (4.32 percent) than the current rate: 1% Decrease (2.32%) Discount Rate (3.32%) 1% Increase (4.32%) City's proportionate share of net OPEB liability 129,066 $ 96,057 $ 70,861 $ Payables to the OPEB Plan. As of December 31, 2024, the City had no outstanding payables to the OPEB plan. 43 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 12 - Post-Employment Benefits Other Than Pension Benefits – Single-Employer Plan General Information About the Plan Plan Description. The City of Oconto Falls allows eligible employees and their spouses to remain on the health insurance plan through the State Health Trust (EFT) until Medicare eligibility provided they pay the full monthly premium. However, they are receiving a benefit from being in the City’s pool which includes active employees. This benefit is the implicit rate subsidy that results in the City’s liability. Benefits and eligibility for City employees and Police Chief and Supervisory, and Professional Police Association are established and amended through collective bargaining with the recognized bargaining agent for each group; and include post-employment health coverage. Benefits and eligibility for administrators, secretaries and general support staff are established and amended by the governing body. Eligible Employees. The City allows employees who are WRS eligible or disabled to stay on the health insurance plan through the State Health Trust (ETF) provided they pay the full premium. Benefits Provided. The Plan provides post-employment health benefits to eligible employees as described in the Plan Description section. There are no assets accumulated to pay this liability. Employees Covered by the Benefit Terms . At December 31, 2023, the City’s membership consisted of the following: Inactive employees or beneficiaries currently receiving benefit payments 3 Active Employees 96 99 OPEB Liability. The City’s OPEB liability was measured as of December 31, 2023, and the total OPEB liability used to calculate the OPEB liability was determined by an actuarial valuation as of December 31, 2023. Actuarial Assumptions. The total OPEB liability in the December 31, 2023 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Actuarial Assumptions Inflation 2.50% Discount Rate 4.00% Health Care Cost Trend Rates Mortality Wisconsin 2020 Mortality Table 6.50% decreasing to 4.50% Actuarial assumptions are based on an experience study conducted in 2021 using Wisconsin Retirement System (WRS) experience from 2018-2020. 44 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 12 - Post-Employment Benefits Other Than Pension Benefits – Single-Employer Plan (Continued) Changes in the Total OPEB Liability Increase (Decrease) Total OPEB Liability Balances at 12/31/2022 122,411$ Changes for the year: Service cost 9,463 Interest 5,404 Changes of benefit terms - Differences between expected and actual experience 34,447 Changes of assumptions or other input 3,226 Benefit payments - Net Changes 52,540 Balances at 12/31/2023 174,951$ Sensitivity of the Total OPEB Liability to Changes in the Discount Rate. The following presents the City’s total OPEB liability calculated using the discount rate of 4.00 percent, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (3.00 percent) or 1-percentage-point higher (5.00 percent) than the current rate: 1% Decrease (3.00%) Current Discount Rate (4.00%) 1% Increase (5.00%) Total OPEB Liability 192,821$ 174,951 $ 158,682 $ Sensitivity of the Total OPEB Liability to Changes in the Healthcare Cost Trend Rates. The following presents the City’s total OPEB liability calculated using the current healthcare cost trend rate of 6.5 percent decreasing to 4.5 percent, as well as what the total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.5 percent decreasing to 3.5 percent) or 1-percentage-point higher (7.5 percent decreasing to 5.5 percent) than the current rate: 1% Decrease (Actual - 1.0%, then 5.5% decreasing to 3.5%) Health Care Cost Trend Rates (Actual, then 6.5% decreasing to 4.5%) 1% Increase (Actual + 1.0%, then 7.5% decreasing to 5.5%) Total OPEB Liability 152,970$ 174,951 $ 201,544 $ 45 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 12 - Post-Employment Benefits Other Than Pension Benefits – Single-Employer Plan (Continued) OPEB Expense and Deferred Outflows of Resources Related to OPEB For the year ended December 31, 2024, the City recognized OPEB expense of $18,895 related to the single- employer plan. At December 31, 2024, the City reported deferred outflows and inflows of resources related to OPEB from the following source: Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experiences 65,638 $ 244 $ Changes of assumptions or other input 12,207 51,540 Total 77,845$ 51,784 $ The amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ending December 31, Deferred Inflows of Resources 2025 4,028 $ 2026 4,028 2027 4,028 2028 4,029 2029 4,433 Thereafter 5,515 26,061$ Note 13 - Leases The City leases a portion of the library to Oconto Falls Public Schools. The lease has a term of 5 years with annual payments of $1,800. The City leases a plot of land and the premises on a tower for the purpose of transmission and reception of communication signals. The lease has a term of 20 years with monthly payments of $2,647. The City recognized $19,290 in lease revenue and $14,278 in interest revenue related to these agreements. At December 31, 2024, the City recorded $686,987 in lease receivables and deferred inflows of resources for these agreements. Lease Agreement Cellcom $ 702,731 $ - $ 17,526 $ 685,205 Cook Library 3,546 - 1,764 1,782 $ 706,277 $ - $ 19,290 $ 686,987 12/31/2024DecreasesIncreases1/2/2024 Balances Balances 46 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 13 - Leases (Continued) Remaining amounts to be received associated with these leases at December 31, 2024 are as follows: Year Ending December 31, 2025 $ 19,670 2026 19,587 2027 21,871 2028 22,323 2029 22785 2030-2034 133,553 2035-2039 167,574 2040-2044 207,225 2045-2046 72,399 $ 686,987 Note 14 - Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, or destruction of assets; errors and omissions; injuries to employees; employee health claims; unemployment compensation claims; and environmental damage for which the City purchases commercial insurance. There has been no reduction in insurance coverage from the prior year. Insurance settlements for claims resulting from the risks covered by commercial insurance have not exceeded the insurance coverage in past three years. Note 15 - Commitments Long-Term Contracts – WPPI The Oconto Falls Electric Utility purchases its electric requirements from WPPI Energy. WPPI Energy is a municipal electric company and political subdivision of the State of Wisconsin created by contract by its members on September 5, 1980 pursuant to the Municipal Electric Company Act, Sec. 66.073 of the Wisconsin Statutes (the Act). WPPI Energy’s purposes include providing an adequate, economical and reliable supply of electric energy to its members. The Oconto Falls Electric Utility is one of 51 members of WPPI Energy located throughout the States of Wisconsin, Iowa, and Michigan. On December 1, 1989, each initial WPPI Energy member commenced purchasing electric service from WPPI Energy under a new Long-term Power Supply Contract for Participating Members (long-term contract) under which WPPI Energy has agreed to sell and deliver to each member, and each member has agreed to take and pay for, the electric power and energy requirements of the members for an initial thirty-five (35) year term. The contract has been amended to extend the term of the contract through 2037. Under the long-term contract, the Oconto Falls Electric Utility and other members of WPPI Energy are required to pay for all power and energy requirements supplied or made available by WPPI Energy at rates sufficient to cover all of WPPI Energy’s revenue requirement which includes power supply costs, administrative expenses and debt service on outstanding bonds. WPPI Energy’s subsequent year’s rates and operating budget are approved annually by its Board of Directors, consisting of representatives from each member municipality. The members have agreed to charge rates to retail ratepayers of their electric system sufficient to meet their WPPI Energy obligations. The Long- term Contract provides that all payments to WPPI Energy under the Contract constitute operating expenses of the Oconto Falls electric system payable from any operating and maintenance fund established by the Oconto Falls Electric Utility. 47 CITY OF OCONTO FALLS, WISCONSIN Notes to Financial Statements December 31, 2024 Note 15 - Commitments (Continued) Long-Term Contracts – WPPI (Continued) The long-term contract may be terminated by either party upon five years prior written notice effective at the end of the initial thirty-five year term, or at any other time thereafter, provided that no WPPI Energy bonds are outstanding at the time of the proposed termination and certain other contract provisions are met. Electric power purchases by the Oconto Falls Electric Utility from the WPPI Energy for distribution to its customers under the above arrangement amounted to approximately $2.2 million. Other The City has a five year contract for joint ambulance services with Oconto Falls Area Ambulance beginning in 2022 and ending in 2026. The annual cost for 2024 was $79,501 and increases by 2% annually. The City has entered into a contract with Forster Electrical Engineering to purchase transformers and breakers in the amount of $2,527,748 and $274,891 respectively. Note 16 - Basis For Utility Existing Rates Electric and Water The Public Service Commission of Wisconsin approved the electric rates on January 13, 2017, and are designed to provide 5% return on rate base. The Public Service Commission of Wisconsin approved the water rates on February 1, 2023, and are designed to provide a 4.9% return on rate base. Sewer Current sewer rates were approved by the Utility commission on May 17, 2018. Note 17 - Environmental Matters The City was contacted by the Department of Natural Resources (DNR) concerning its closed two non-combustible landfill sites that were used by the City where underground water contamination was detected. In 1992, as part of an Administrative Order issued by the DNR, the City has installed and is currently monitoring two groundwater wells in the area. The City will continue the long-term groundwater monitoring plan. The estimated annual monitoring cost for natural attenuation is $30,000. This estimate is subject to changes from deflation, inflation, technology, or changes in laws and regulations. Note 18 - Deficit Fund Balance The following fund had deficit balances as of December 31, 2024: TID No. 3 $ 23,912 The deficit balance will be corrected with subsequent years revenues. REQUIRED SUPPLEMENTARY INFORMATION City's Proportionate City's City's Share of the Plan Fiduciary WRS Fiscal Proportion Proportionate Net Pension Net Position as Year End Date of the Net Share of the City's (Asset)/Liability a Percentage of (Measurement Pension Net Pension Covered as a Percentage of the Total Pension Date) (Asset)/Liability (Asset)/Liability Payroll Covered Payroll Liability 12/31/2023 0.01201420% 178,627 $ 1,762,432 $ 10.14% 98.85% 12/31/2022 0.01203136% 637,385 1,707,550 37.33% 95.72% 12/31/2021 0.01170353% (943,326) 1,640,194 57.51% 106.02% 12/31/2020 0.01140464% (712,007) 1,640,973 43.39% 105.26% 12/31/2019 0.01113908% (359,174) 1,527,192 23.52% 102.96% 12/31/2018 0.01106869% 393,789 1,451,761 27.12% 96.45% 12/31/2017 0.01102181% (327,250) 1,483,133 22.06% 102.93% 12/31/2016 0.01091326% 89,951 1,449,115 6.21% 99.12% 12/31/2015 0.01098691% 178,535 1,394,905 12.80% 98.20% 12/31/2014 0.01110918% (272,872) 1,387,526 19.67% 102.74% Contributions in Relation to the Contributions Contractually Contractually Contribution as a Percentage City Required Required Deficiency Covered of Covered Year End Date Contributions Contributions (Excess) Payroll Payroll 12/31/2024 164,412$ 164,412 $ - $ 1,792,626 $ 9.17% 12/31/2023 160,746 160,746 - 1,762,432 9.12% 12/31/2022 124,690 124,690 - 1,707,550 7.30% 12/31/2021 125,516 125,516 - 1,640,194 7.65% 12/31/2020 115,167 115,167 - 1,640,973 7.02% 12/31/2019 120,648 120,648 - 1,527,192 7.90% 12/31/2018 113,098 113,098 - 1,451,761 7.79% 12/31/2017 114,606 114,606 - 1,483,133 7.73% 12/31/2016 105,070 105,070 - 1,449,115 7.25% 12/31/2015 103,949 103,949 - 1,394,905 7.45% Last 10 Fiscal Years CITY OF OCONTO FALLS, WISCONSIN Schedule of Employer's Proportionate Share of the Net Pension Liability (Asset) Wisconsin Retirement System (WRS) Schedule of Employer Contributions Wisconsin Retirement System (WRS) Last 10 Fiscal Years See Accompanying Notes to Required Supplementary Information 48 City's Proportionate City's City's Share of the Plan Fiduciary WRS Fiscal Proportion Proportionate Net OPEB Net Position Year End Date of the Net Share of the City's Liability as a Percentage (Measurement OPEB Net OPEB Covered as a Percentage of of the Total Date) Liability Liability Payroll Covered Payroll OPEB Liability 12/31/2023 0.02087900% 96,057 $ 1,579,000 $ 6.08% 33.90% 12/31/2022 0.02408900% 91,775 1,647,000 5.57% 38.81% 12/31/2021 0.02770600% 163,753 1,622,000 10.10% 29.57% 12/31/2020 0.02364300% 130,054 1,608,000 8.09% 31.36% 12/31/2019 0.02192500% 93,361 1,466,000 6.37% 37.58% 12/31/2018 0.02277200% 58,759 1,463,000 4.02% 48.69% 12/31/2017 0.02669600% 80,317 1,122,643 7.15% 44.81% Contributions in Relation to the Contributions Contractually Contractually Contribution as a Percentage City Required Required Deficiency Covered of Covered Year End Date Contributions Contributions (Excess) Payroll Payroll 12/31/2024 427 $ 427 $ - $ 1,484,144 $ 0.03% 12/31/2023 426 426 - 1,579,000 0.03% 12/31/2022 476 476 - 1,647,000 0.03% 12/31/2021 605 605 - 1,622,000 0.04% 12/31/2020 486 486 - 1,608,000 0.03% 12/31/2019 438 438 - 1,466,000 0.03% 12/31/2018 506 506 - 1,463,000 0.03% * The amounts presented for each year were determined as of the calendar year-end from the prior calendar year. Ten years of data will be accumulated beginning with 2018. Last 10 Fiscal Years* Last 10 Fiscal Years* CITY OF OCONTO FALLS, WISCONSIN Schedule of Employer's Proportionate Share of the Net OPEB Liability Other Post-Employment Benefits Other Than Pensions - Cost-Sharing Plan Schedule of Employer Contributions Other Post-Employment Benefits Other Than Pensions - Cost-Sharing Plan See Accompanying Notes to Required Supplementary Information 49 Total OPEB Liability Service Cost $ 9,463 $ 12,752 $ 12,237 $ 11,042 $ 8,017 $ 8,265 $ 8,265 Interest 5,404 3,196 3,259 3,573 3,147 2,885 3,145 Changes in Benefit Terms - - - - - - - Differences Between Expected and Actual Experience 34,447 (294) 20,363 - 34,926 - - Changes in Assumptions 3,226 (28,910) (34,439) 6,950 8,892 (4,049) - Benefit Payments - - (8,959) (5,552) (4,897) (16,576) (21,108) Net Change in Total OPEB Liability 52,540 (13,256) (7,539) 16,013 50,085 (9,475) (9,698) Total OPEB Liability - Beginning 122,411 135,667 143,206 127,193 77,108 86,583 96,281 Total OPEB Liablity - Ending $ 174,951 $ 122,411 $ 135,667 $ 143,206 $ 127,193 $ 77,108 $ 86,583 Covered Employee Payroll $ 1,727,743 $ 1,605,416 $ 1,605,416 $ 1,430,714 $ 1,430,714 $ 1,416,080 $ 1,416,080 City's Total OPEB Liability as a Percentage of the Total Covered Employee Payroll 10.13% 7.62% 8.45% 10.01% 8.89% 5.45% 6.11% Notes to Schedule: *Ten years of data will be accumulated beginning with 2017. CITY OF OCONTO FALLS, WISCONSIN Other Post-Employment Benefits - Single-Employer Plan Last 10 Fiscal Years* 2019 2018 20172020 Schedule of Changes in Total OPEB Liability and Related Ratios 202120222023 See Accompanying Notes to Requireed Supplementary Information 50 REVENUES Taxes $ 1,003,308 $ 1,003,064 $ (244) Special Assessments 7,500 9,588 2,088 Intergovernmental 1,131,005 1,140,576 9,571 Licenses and Permits 32,250 31,283 (967) Fines, Forfeitures and Penalties 22,200 23,626 1,426 Public Charges for Services 238,995 244,100 5,105 Miscellaneous 112,325 131,690 19,365 Total Revenues 2,547,583 2,583,927 36,344 EXPENDITURES Current: General Government 529,625 609,040 (79,415) Public Safety 1,315,776 1,416,360 (100,584) Public Works 822,720 840,768 (18,048) Health and Human Services 24,433 6,547 17,886 Culture and Recreation 87,429 98,257 (10,828) Conservation and Development 3,300 3,960 (660) Capital Outlay - 42,728 (42,728) Total Expenditures 2,783,283 3,017,660 (234,377) DEFICIENCY OF REVENUES UNDER EXPENDITURES (235,700) (433,733) (198,033) OTHER FINANCING SOURCES (USE) Sale of Capital Assets - 19,225 19,225 Insurance Recoveries and Dividends 1,700 8,490 6,790 Transfers In 248,000 263,628 15,628 Transfers Out (14,000) (33,451) (19,451) Total Other Financing Sources (Use) 235,700 257,892 22,192 NET CHANGE IN FUND BALANCE - (175,841) (175,841) FUND BALANCE - BEGINNING 946,267 946,267 - FUND BALANCE - ENDING $ 946,267 $ 770,426 $ (175,841) Original Budget and Actual Schedule of Budgetary Comparison CITY OF OCONTO FALLS, WISCONSIN (Negative) Variance with Positive Final Budget For the Year Ended December 31, 2024 General Fund Amounts Actual and Final Budgeted Amounts See Accompanying Notes to Required Supplementary Infortmation 51 52 CITY OF OCONTO FALLS, WISCONSIN Notes to Required Supplementary Information For the Year Ended December 31, 2024 Defined Benefit Pension Plan Changes of benefit terms. There were no changes of benefit terms for any participating employer in WRS. Changes of assumptions. Based on a three-year experience study conducted in 2021 covering January 1, 2018 through December 31, 2020, the ETF Board adopted assumption changes that were used to measure the total pension liability beginning with the year-end December 31, 2021, including the following: • Lowering the long-term expected rate of return from 7.0% to 6.8% • Lowering the discount rate from 7.0% to 6.8% • Lowering the price inflation rate from 2.5% to 2.4% • Lowering the post-retirement adjustments from 1.9% to 1.7% • Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2018 Mortality Table to the 2020 WRS Experience Mortality Table. Other Post-Employment Benefits Other Than Pension Benefits – Multi-Employer Plan Changes of benefit terms. There were no recent changes in benefit terms. Changes of assumptions . In addition to the rate changes detailed in the tables above, the State of Wisconsin Employee Trust Fund Board adopted economic and demographic assumption changes based on a three year experience study performed for the Wisconsin Retirement System. These assumptions are used in the actuarial valuations of OPEB liabilities (assets) for the retiree life insurance programs and are summarized below. The assumption changes that were used to measure the December 31, 2021 total OPEB liabilities, including the following: • Lowering the price inflation rate from 2.5% to 2.4% • Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2018 Mortality Table to the 2020 WRS Experience Mortality Table. Post-Employment Benefits Other Than Pension Benefits – Single-Employer Plan Changes of benefit terms. There were no changes of benefit terms during the current year. Changes of assumptions. Inflation rate increased from 2.00% to 2.50%. Discount rate decreased from 4.25% to 4.00%. Healthcare cost trend rates decreased from 7.00% to 6.50%. Mortality assumptions were changed to reflect updated trends by transitioning from the Wisconsin 2018 Mortality Table to the 2020 WRS Experience Mortality Table. 53 CITY OF OCONTO FALLS, WISCONSIN Notes to Required Supplementary Information For the Year Ended December 31, 2024 Budgetary Process The City follows these procedures in establishing the budgetary data reflected in the budgetary comparison schedule:  During October, City management submits to the City Council a proposed operating budget for the calendar year commencing the following January 1. The operating budget includes proposed expenditures and the means of financing them. After submission to the governing body, public hearings are held to obtain taxpayer comments. Following the public hearings, the proposed budget, including authorized additions and deletions, is legally enacted by City Council action.  Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the general fund. Budget is defined as the originally approved budget plus or minus approved amendments. Budget appropriations not expended during the year are closed to fund balance unless authorized by the governing body to be forwarded into the succeeding year’s budget.  The City does not adopt a budget for the Economic Development Fund; therefore, no schedule is presented.  During the year, formal budgetary integration is employed as a management control device for the general fund and debt service funds. Management control for the capital projects funds is achieved through project authorizations included in debt issue resolutions.  Expenditures may not exceed appropriations provided in detailed budget accounts maintained for each department of the City. Amendments to the budget during the year require initial approval by management and are subsequently authorized by the Common Council. The City’s Department heads can approve transfers within their departments while transfers between departments and changes in the overall budget require approval by two-thirds of the Common Council. Excess of Actual Expenditures Over Budget The following fund had an excess of actual expenditures over budget for the year ended December 31, 2024: Excess General Fund Expenditures General Government $ 79,415 Public Safety 100,584 Public Works 18,048 Culture and Recreation 10,828 Conservation and Development 660 Capital Outlay 42,728 SUPPLEMENTARY INFORMATION ASSETS Cash and Investments $ - $ 188,209 $ 1,423 $ 148,304 $ 337,936 Receivables: Taxes - - 3,682 366,303 369,985 TOTAL ASSETS $ - $ 188,209 5,105 $ 514,607 $ 707,921 LIABILITIES Accounts Payable $ - $ 19,589 - $ - $ 19,589 Accrued Liabilities - 2,325 - - 2,325 Due to Other Funds - - 23,912 - 23,912 Total Liabilities - 21,914 23,912 - 45,826 DEFERRED INFLOWS OF RESOURCES Taxes Levied for Subsequent Period - - 5,105 507,889 512,994 FUND BALANCES (DEFICIT) Restricted - 166,295 - 6,718 173,013 Unassigned (Deficit) - - (23,912) - (23,912) Total Fund Balances (Deficit) - 166,295 (23,912) 6,718 149,101 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES (DEFICIT) $ - $ 188,209 5,105 $ 514,607 $ 707,921 CITY OF OCONTO FALLS, WISCONSIN As of December 31, 2024 Combining Balance Sheet Special Revenue Funds Crime Prevention Library Debt Service TID No. 3 Capital Projects Total Nonmajor funds 54 REVENUES Taxes $ - $ - $ - $ - $ 489,142 $ 489,142 Intergovernmental - 202,327 - - - 202,327 Charges for Services - 5,435 - - - 5,435 Interest on Investments - 761 - - - 761 Donations 19,410 2,438 - - - 21,848 Miscellaneous - 3,532 - - - 3,532 Total Revenues 19,410 214,493 - - 489,142 723,045 EXPENDITURES Current: Public Safety 5,400 - - - - 5,400 Culture and Education - 208,789 - - - 208,789 Debt Service Principal - - - - 440,074 440,074 Interest - - - - 143,092 143,092 Capital Outlay - - 2,883 - - 2,883 Total Expenditures 5,400 208,789 2,883 - 583,166 800,238 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 14,010 5,704 (2,883) - (94,024) (77,193) OTHER FINANCING SOURCE (USE) Debt Premium - - - - 100,742 100,742 Transfer Out (13,722) - - - - (13,722) Total Other Financing Source (Use) (13,722) - - - 100,742 87,020 NET CHANGE IN FUND BALANCES (DEFICIT) 288 5,704 (2,883) - 6,718 9,827 FUND BALANCES (DEFICIT) - BEGINNING - AS PREVIOUSLY STATED (288) 160,591 (21,029) 82,693 - 221,967 Change within Financial Reporting Entity (Nonmajor to Major Fund) - - - (82,693) - (82,693) FUND BALANCES (DEFICIT) - BEGINNING - AS ADJUSTED (288) 160,591 (21,029) - - 139,274 FUND BALANCES (DEFICIT) - ENDING $ - $ 166,295 (23,912) $ - $ 6,718 $ 149,101 Combining Statement of Revenues, Expenditures and Change in Fund Balances (Deficit) CITY OF OCONTO FALLS, WISCONSIN Special Revenue Funds For the Year Ended December 31, 2024 Crime Prevention Debt Service Library Total Nonmajor funds Nonmajor Governmental Funds Capital Projects TID No. 3 Capital Projects 55 OTHER INFORMATION REVENUES TAXES General Property Taxes $ 979,708 $ 979,708 $ - Mobile Home Taxes 2,600 1,909 (691) Payment in Lieu of Taxes 21,000 21,447 447 Total Taxes 1,003,308 1,003,064 (244) SPECIAL ASSESSMENTS 7,500 9,588 2,088 INTERGOVERNMENTAL Federal Aids Fire Department 3,037 6,186 3,149 State Aids Shared Taxes 604,835 604,835 - Fire Insurance Tax 21,329 25,930 4,601 Law Enforcement Grants 2,016 4,272 2,256 Public Safety - 435 435 General Transportation Aids 265,196 269,678 4,482 Transportation Grants 5,000 5,000 - Municipal Services 1,100 1,418 318 Payment in Lieu of Taxes on State Conservation Lands 27 26 (1) Exempt Computers 27,674 27,674 - Charges for Services Law Enforcement 65,133 65,664 531 Fire Protection 135,658 129,458 (6,200) Total Intergovernmental 1,131,005 1,140,576 9,571 LICENSES AND PERMITS Liquor and Malt Beverage Licenses 8,300 10,840 2,540 Cigarette Licenses 900 1,000 100 Operator Licenses 450 125 (325) Cable Franchise Fees 11,000 5,753 (5,247) Other Business Licenses - 460 460 Bicycle Licenses - 7 7 Dog Licenses 600 469 (131) Other Nonbusiness Licences - 68 68 Building Permits 10,000 12,211 2,211 Zoning Permits 1,000 350 (650) Total Licenses and Permits 32,250 31,283 (967) FINES, FORFEITURES AND PENALTIES Court Penalties and Fees 20,000 21,860 1,860 Ordinance Violations 200 80 (120) Parking Violations 2,000 1,686 (314) Total Fines, Forfeitures and Penalties 22,200 23,626 1,426 For the Year Ended December 31, 2024 General Fund CITY OF OCONTO FALLS, WISCONSIN (Unfavorable) Favorable Variance and Final Amounts Actual Amounts Detailed Budgetary Comparison Schedule Original Budgeted 56 PUBLIC CHARGES FOR SERVICES General Government $ 250 $ 240 $ (10) Law Enforcement 250 307 57 Fire Department 7,000 4,526 (2,474) Highway Maintenance and Construction 30,000 11,700 (18,300) Solid Waste Disposal 178,795 203,783 24,988 Recycling 20,000 21,904 1,904 Weed and Nuisance Control 1,200 - (1,200) Other Culture and Recreation 1,500 1,640 140 Total Public Charges for Services 238,995 244,100 5,105 MISCELLANEOUS Investment Income 2,000 24,623 22,623 Interest on Special Assessments 1,500 5,362 3,862 Rent 87,725 86,687 (1,038) Donations 8,500 25 (8,475) Miscellaneous 12,600 14,993 2,393 Total Miscellaneous 112,325 131,690 19,365 TOTAL REVENUES 2,547,583 2,583,927 36,344 EXPENDITURES GENERAL GOVERNMENT Council 31,700 36,617 (4,917) Municipal Judge 25,268 26,821 (1,553) Attorney 4,500 20,160 (15,660) Mayor 8,436 8,232 204 Human Resources 76,800 77,443 (643) Elections 15,250 11,799 3,451 General Administration 92,627 105,695 (13,068) Accounting 79,776 81,442 (1,666) Treasury 74,368 75,371 (1,003) Assessment of Property 27,000 27,828 (828) Buildings 40,300 79,082 (38,782) Property and Liability Insurance 52,600 57,633 (5,033) Other General Government 1,000 917 83 Total General Government 529,625 609,040 (79,415) PUBLIC SAFETY Police Department 894,774 976,367 (81,593) Fire Department 327,727 344,398 (16,671) Ambulance 80,296 81,091 (795) Building Inspection 12,979 14,504 (1,525) Total Public Safety 1,315,776 1,416,360 (100,584) PUBLIC WORKS Highway and Street Maintenance 416,643 449,345 (32,702) Machinery Operations 76,749 58,965 17,784 Street Lighting 28,000 28,293 (293) Sidewalks 199 - 199 Storm Sewer Maintenance 9,066 35,833 (26,767) Garage and Shed 22,766 15,131 7,635 Garbage and Refuse Collection 107,386 103,857 3,529 Solid Waste Disposal 57,758 54,605 3,153 Recycling 87,963 84,144 3,819 Weed and Nuisance Control 16,190 10,595 5,595 Total Public Works 822,720 840,768 (18,048) Actual Favorable and Final Amounts (Unfavorable) Original CITY OF OCONTO FALLS, WISCONSIN Detailed Budgetary Comparison Schedule (Continued) General Fund For the Year Ended December 31, 2024 Variance Budgeted Amounts 57 HEALTH AND HUMAN SERVICES Senior Center $ 898 $ 578 $ 320 Cemetery 23,185 5,969 17,216 Other Health and Human Services 350 - 350 Total Health 24,433 6,547 17,886 CULTURE AND RECREATION Parks 48,583 66,544 (17,961) Holiday Decorations 4,445 1,714 2,731 Athletic Field 500 165 335 Beach 14,177 19,120 (4,943) Skating Rink 18,780 7,625 11,155 Other Culture and Recreation 944 3,089 (2,145) Total Culture, Recreation and Education 87,429 98,257 (10,828) CONSERVATION AND DEVELOPMENT Urban Development - 562 (562) Economic Development 3,300 3,398 (98) Total Conservation and Development 3,300 3,960 (660) CAPITAL OUTLAY Fire Protection 42,728 (42,728) TOTAL EXPENDITURES 2,783,283 3,017,660 (234,377) DEFICIENCY OF REVENUES UNDER EXPENDITURES (235,700) (433,733) (198,033) OTHER FINANCING SOURCES (USE) Sale of Capital Assets - 19,225 19,225 Insurance Recoveries and Dividends 1,700 8,490 6,790 Transfers In 248,000 263,628 15,628 Transfers Out (14,000) (33,451) (19,451) Total Other Financing Sources (Use) 235,700 257,892 22,192 NET CHANGE IN FUND BALANCE - (175,841) (175,841) FUND BALANCE - BEGINNING 946,267 946,267 - FUND BALANCE - ENDING $ 946,267 $ 770,426 $ (175,841) Amounts Original CITY OF OCONTO FALLS, WISCONSIN Detailed Budgetary Comparison Schedule (Continued) General Fund For the Year Ended December 31, 2024 Variance Budgeted Actual Favorable and Final Amounts (Unfavorable) 58 ADDITIONAL REPORTS 59 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards To the City Council City of Oconto Falls Oconto Falls, Wisconsin We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business- type activities, each major fund and the aggregate remaining fund information of the City of Oconto Falls, Wisconsin (City), as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise City of Oconto Falls, Wisconsin’s basic financial statements, and have issued our report thereon dated May 22, 2025. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered City of Oconto Falls, Wisconsin’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of City of Oconto Falls, Wisconsin’s internal control. Accordingly, we do not express an opinion on the effectiveness of City of Oconto Falls, Wisconsin’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings and questioned costs, we identified certain deficiencies in internal control that we consider to be a material weakness and significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2024-003 to be a material weakness. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiencies described in the accompanying schedule of findings and questioned costs as items 2024-001, 2024- 002 and 2024-004 to be significant deficiencies. 60 To the City Council City of Oconto Falls, Wisconsin Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether City of Oconto Falls, Wisconsin’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. City of Oconto Falls, Wisconsin’s Response to Findings Government Auditing Standards requires the auditor to perform limited procedures on the City of Oconto Falls, Wisconsin’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. City of Oconto Falls, Wisconsin ’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. KerberRose SC KerberRose SC Certified Public Accountants Green Bay, Wisconsin May 22, 2025 61 Independent Auditors’ Report on Compliance for Each Major Federal Program and on Internal Control Over Compliance Required by the Uniform Guidance To the City Council City of Oconto Falls Oconto Falls, Wisconsin Report on Compliance for Each Major Federal Program Opinion on the Major Federal Program We have audited City of Oconto Falls, Wisconsin’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on the City of Oconto Falls, Wisconsin’s major federal program for the year ended December 31, 2024. City of Oconto Falls, Wisconsin’s major federal program is identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs. In our opinion, City of Oconto Falls, Wisconsin complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended December 31, 2024. Basis for Opinion on Each Major Federal Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report. We are required to be independent of City of Oconto Falls, Wisconsin and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal and state program. Our audit does not provide a legal determination of City of Oconto Falls, Wisconsin’s compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City of Oconto Falls, Wisconsin’s federal programs. 62 To the City Council City of Oconto Falls, Wisconsin Auditors’ Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City of Oconto Falls, Wisconsin’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and Uniform Guidance always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City of Oconto Falls, Wisconsin’s compliance with the requirements of the major federal programs as a whole. In performin g an audit i n accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City of Oconto Falls, Wisconsin’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of City of Oconto Falls, Wisconsin’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City of Oconto Falls, Wisconsin’s internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on Internal Control Over Compliance A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 63 To the City Council City of Oconto Falls, Wisconsin Our audit was not designed for t he purpose of expressing an opinion on the effectiveness of interna l control over compliance. Accordingly, no such opinion is expressed. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. KerberRose SC KerberRose SC Certified Public Accountants Green Bay, Wisconsin May 22, 2025 FEDERAL AWARDS SECTION Pass- Pass- Through Through ALN Agency Number U.S. DEPARTMENT OF ADMINISTRATION Neighborhood Investment Fund Program - ARPA 21.027 Wisconsin Department of Administration 10000-14200 $ 944,814 $ 679,700 $ - $ 1,624,514 $ - American Rescue Plan Act 21.027 Wisconsin Department of Revenue 10000-12100 69,412 - - 69,412 - TOTAL FEDERAL AWARDS $ 1,014,226 $ 679,700 $ - $ 1,693,926 $ - 12/31/2024 Expenditures Total Deferred Grantor Agency/Federal Program Title Schedule of Expenditures of Federal Awards CITY OF OCONTO FALLS, WISCONSIN Subrecipient Payments or Value Accrued Revenue (Deferred)Cash (Accrued) Received (Refunded)1/1/2024 Revenue For the Year Ended December 31, 2024 See Notes to the Schedule of Expenditures of Federal Awards 64 65 CITY OF OCONTO FALLS, WISCONSIN Notes to the Schedules of Expenditures of Federal Awards December 31, 2024 Note 1 - Basis Of Presentation The accompanying schedule of expenditures of federal awards include the federal grant activity of the City of Oconto Falls under programs of the federal government for the year ended December 31, 2024. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a select portion of operations of the City, it is not intended to, and do not, present the financial position and change in net position of the City. Note 2 - Significant Accounting Policies Revenues and expenditures in the schedules are presented in accordance with the modified accrual basis of accounting and are generally in agreement with the revenues and expenditures reported in the fund financial statements. Expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited for reimbursement. The City has not elected to charge a de minimis rate of 10% of modified total costs. Note 3 - Oversight Agencies The City’s federal oversight agency is the Department of Administration. 66 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs December 31, 2024 Section I – Summary of Auditors’ Results Financial Statements Type of auditors’ report issued Unmodified Internal control over financial reporting: Material weaknesses identified? Yes Significant deficiencies identified? Yes Noncompliance material to the financial statements? No Federal Awards Internal control over major programs: Material weaknesses identified? No Significant deficiencies identified? None Reported Type of auditors’ report issued on compliance for the major program: Unmodified Any audit findings disclosed that are required to be reported in accordance with the Uniform Guidance? No Identification of major federal program: ALN Name of Federal Program 21.027 Neighborhood Investment Fund Program - ARPA Dollar threshold used to distinguish between Type A and Type B Programs Federal Awards $750,000 Auditee qualified as a low-risk auditee? No State Awards Internal control over major programs: Material weaknesses identified? No Significant deficiencies identified? None Reported Type of auditors’ report issued on compliance for the major program: Unmodified Any audit findings disclosed that are required to be reported in accordance with Wisconsin State Single Audit Guidelines No Identification of major state program: State I.D. Number Name of State Program 307.545 Fire Suppression 67 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs - Continued December 31, 2024 Section II - Financial Statement Findings 2024-001 Lack of Segregation of Duties Prior Year Finding No. 2023-001 Condition: During our audit, we noted that the City has limited staff which does not allow for the proper segregation of duties. Criteria: Management is responsible for establishing and maintaining internal controls and for the fair presentation of the financial information of the City in conformity with GAAP. Cause: Due to limited staff, management is unable to properly segregate duties. Effect: Because of the lack of segregation of duties, unauthorized transactions could occur in the City’s operations. Recommendation: We recommend the duties should be separated as much as possible and compensating controls should be used to compensate for the lack of segregation of duties. This includes the Council having an active role in the City’s operations. Management’s Response: Due to small staff, duties are segregated as much as possible. The Council does review and approve transactions. Management agrees that the Council should have access to review or question any transaction which flows through the City office, and reports detailing cash receipts and disbursements are provided to the Council monthly to assist in that capacity. By employing individuals who are capable of maintaining the integrity of the books and safeguarding City assets, the Council can be confident that the financial affairs of the City are being handled properly. Responsible Officials: Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date: This finding will not completely resolve itself given the cost/benefit basis the City continues to make. 68 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs - Continued December 31, 2024 Section II - Financial Statement Findings (Continued) 2024-002 Financial Reporting Prior Year Finding No. 2023-002 Condition: During our audit, we noted that the internal control system does not include a process for preparing the annual audited financial statements and the related disclosures in accordance with GAAP. Criteria: Management is responsible for establishing and maintaining internal controls and for the fair presentation of the financial position, change in net position, and disclosures in the financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Cause: Management does not have the required experience and expertise to prepare financial statements. Therefore, management requested that KerberRose SC assist in preparing a draft of the audited financial statements, including the related footnote disclosures. The outsourcing is a result of management’s cost/benefit decision to use our accounting expertise rather than incurring this internal resource cost. Effect: Although the auditors are assisting with the preparation of the financial statements and related footnotes, management of the City thoroughly reviews them and accepts responsibility for their completeness and accuracy. Recommendation: We recommend that management continues to make this decision on a cost/benefit basis. Management’s Response: The City will continue to contract with an outside audit firm to complete the statements and related notes to comply with GAAP. Management does review and approve the financial statements and management accepts responsibility for the financial statements. Responsible Officials: Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date: This finding will not completely resolve itself given the cost/benefit basis the City continues to make. 69 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs - Continued December 31, 2024 Section II - Financial Statement Findings (Continued) 2024-003 Material Account Adjustments Prior Year Finding No. 2023-003 Condition: Throughout the course of performing the audit, certain adjustments were identified and proposed. Management has approved and posted these material adjustments to present fair and accurate financial statements. Criteria: Management is responsible for maintaining internal controls and maintaining its accounting records in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Cause: Internal controls did not detect certain adjustments necessary to properly record year-end balances. Effect: The initial trial balances were misstated. Recommendation: We recommend that management take steps to ensure that all year-end adjustments are identified and posted for financial reporting purposes. Management’s Response: The City is aware of the reasons for the material account adjustments and has continued to take action to implement procedures for the preparation of year- end adjustments. Responsible Officials: Peters Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date: The City intends to work towards resolving this finding for the following year. 70 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs - Continued December 31, 2024 Section II - Financial Statement Findings (Continued) 2024-004 Schedule of Expenditures of Federal Awards Prior Year Finding No. 2023-004. Condition: The Uniform Guidance requires the City to prepare appropriate financial statements, including the schedules of expenditures of federal awards. While the current staff of the City maintain records supporting amounts reported in the schedule of federal awards, the City contracts with KerberRose SC to compile the data from these records and assist in the preparation of the single audit report for the City. Criteria: Having staff with expertise in federal financial reporting prepare the City’s single audit report is an internal control intended to prevent, detect and correct a potential misstatement in the schedule of expenditures of federal awards, or accompanying notes to the schedule. Cause: The additional costs associated with hiring staff sufficiently experienced to prepare the City’s single audit report, including the additional training time, outweigh the derived benefits. Effect: Although the auditors are assisting with the preparation of the schedules of federal awards, management of the City thoroughly reviews the schedule and accepts responsibility for the schedule’s completeness and accuracy. Recommendation: We recommend management and the Common Council continue to monitor the transactions and the financial records of the City, including those related to federal awards. We also recommend continuing to review the schedule of federal awards upon their completion. Management’s Response: The City is aware of the requirements and will attempt to compile the information necessary in the future. Responsible Officials: Peters Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date: This finding will not completely resolve itself given the cost/benefit basis the City continues to make. Section III - Federal Award Findings and Questioned Costs There are no findings related to the federal awards for the year ended December 31, 2024. 71 CITY OF OCONTO FALLS, WISCONSIN Schedule of Findings and Questioned Costs - Continued December 31, 2024 Section IV - Other Issues 1. Does the auditor have substantial doubt as to the auditee’s ability to continue as a going concern? No 2. Was a Management Letter or other document conveying audit comments issued as a result of this audit? Yes 72 CITY OF OCONTO FALLS, WISCONSIN Schedule of Prior Year Audit Findings For the Year Ended December 31, 2024 Financial Statement Findings 2023-001 – Lack of Segregation of Duties – See current year finding 2024-001 2023-002 – Financial Reporting – See current year finding 2024-002 2023-003 – Material Account Adjustments – See current year finding 2024-003 2023-004 – Schedule of Expenditures of Federal Awards – See current year finding 2024-004 73 Corrective Action Plan Financial Statement Findings: 2024-001 - Lack of Segregation of Duties - Due to small staff, duties are segregated as much as possible. The Council does review and approve transactions. Management agrees that the Council should have access to review or question any transaction which flows through the City office, and reports detailing cash receipts and disbursements are provided to the Council monthly to assist in that capacity. By employing individuals who are capable of maintaining the integrity of the books and safeguarding City assets, the Council can be confident that the financial affairs of the City are being handled properly. Responsible Officials – Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date - This finding will not completely resolve itself given the cost/benefit basis the City continues to make. 2024-002 - Financial Reporting - The City is aware that their staff does not have training to prepare financial statements and related notes in accordance with GAAP. The City will rely on the assistance of the auditors for preparation of the financial statements and related notes. Responsible Officials – Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date - This finding will not completely resolve itself given the cost/benefits basis the City continues to base this decision on. 2024-003 - Material Account Adjustments - Management will review the adjustments so corrective procedures can be implemented before the 2025 audit. If any new issues arise during the year, we will contact our auditors for guidance. Responsible Officials – Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date - The City intends to work towards resolving this finding for the following year. 2024-004 - Preparation of the Schedule of Expenditures of Federal Awards - The City will continue to ensure that all grant applications, requests and awards are maintained in a central location and available for the auditors. However, assistance from a consultant will be requested to prepare the schedule of federal expenditures. Responsible Officials – Peter Wills, Administrator Eve Wallace, Deputy Treasurer Anticipated Completion Date - This finding will not completely resolve itself given the cost/benefits basis the City continues to base this decision on. THIS PAGE LEFT BLANK INTENTIONALLY To the Mayor and Common Council City of Oconto Falls Oconto Falls, Wisconsin We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oconto Falls (City) as of and for the year ended December 31, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards , Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), as well as certain information related to the planned scope and timing of our audit. We have communicated information in our engagement letter to you as well as verbally during our initial planning meetings. Professional standards also require that we communicate to you the following information related to our audit. Our Responsibility Under Auditing Standards Generally Accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, As stated in our engagement letter dated December 23, 2024, our responsibility as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. We are responsible for planning and performing the audit to obtain reasonable, but not absolute, assurance that the financial statements are free of material misstatement. Our audit of the financial statements does not relieve you or management of your responsibilities. Generally accepted accounting principles provide for certain required supplementary information (RSI) to supplement the basic financial statements. Our responsibility with respect to the schedules of employer’s proportionate share of the net pension liability (asset) and employer contributions – Wisconsin Retirement System, schedules of employer’s proportionate share of the net OPEB liability and employer contributions – other post-employment benefits other than pensions – cost-sharing plan, schedule of changes in total OPEB liability and related ratios – single-employer plan and schedule of budgetary comparison – general fund as indicated in the financial statement’s table of contents, which supplement the basic financial statements, was to apply certain limited procedures in accordance with generally accepted auditing standards. However, the RSI was not audited and, because the limited procedures did not provide us with sufficient evidence to express an opinion or provide any assurance, we did not express an opinion or provide any assurance on the RSI. We have been engaged to report on combining financial statements of the nonmajor governmental funds, and schedule of expenditures of federal awards as indicated in the financial statement’s table of contents, which accompany the financial statements but are not RSI. Our responsibility for this supplementary information as described by professional standards, was to evaluate the presentation of the supplementary information in relation to the financial statements as a whole and to report on whether the supplementary information was fairly stated, in all material respects, in relation to the financial statements as a whole. We did not audit the detailed budgetary comparison schedule – general fund and accordingly, we express no opinion on it. To the Mayor and Common Council City of Oconto Falls Page 2 Audit Scope, Significant Risks and Other Our audit included examining on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involved judgment about the number of transactions to be examined and the areas to be tested. Our audit included obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing and extent of further audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Any internal control related matters that are required to be communicated under professional standards are included later in this letter. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City of Oconto Falls are described in Note 1 to the financial statements. As discussed in Note 1, the City adopted the provisions of Governmental Accounting Standards Board Statement No. 101 – Compensated Absences and Governmental Accounting Standards Board Statement No. 100 – Accounting Changes and Error Corrections – an amendment of GASB Statement No. 62 as of and for the year ended December 31, 2024. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the City’s financial statements were: Management’s estimate of the useful lives of the capital assets is based on industry standards. We evaluated the key factors and assumptions used to develop the estimated useful lives in determining that it is reasonable in relation to the financial statements taken as a whole. Management’s estimate of the net pension liability and related deferred outflows/inflows based on an actuarially determined amount. We evaluated the key factors and assumptions used to develop the pension liability and related deferred outflows/inflows in determining that they are reasonable in relation to the financial statements as a whole. Management’s estimate of the other post-employment liabilities and related deferred outflows/inflows are based on an actuarially determined amount. We evaluated the key factors and assumptions used to develop the OPEB liabilities and related deferred outflows/inflows in determining that they are reasonable in relation to the financial statements taken as a whole. Management’s estimate of accrued compensated absences liability is based upon the number of vested employee hours available and is calculated based on the current wages rates. We evaluated the key factors and assumptions used to calculate the liability in determining that they are in relation to the financial statements taken as a whole. To the Mayor and Common Council City of Oconto Falls Page 3 Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was: The disclosure of deposits and investments and the related risks with them in Note 2 to the financial statements. The footnote was prepared based on the requirements of the Governmental Accounting Standards Board and is intended to inform readers as to the risks associated with the City’s cash and investments. The disclosure of the net pension liability and related deferred outflows/inflows and the related risk associated with it is disclosed in Note 10 of notes to the financial statements. The footnote was prepared based on the requirements of the Governmental Accounting Standards Board and is intended to inform readers as to the risk associated with the City’s participation in the Wisconsin Retirement System. The disclosure of the other post-employment benefits liabilities and related deferred outflows/inflows and the related risk associated with them in Notes 11 and 12 to the financial statements. The footnotes were prepared based on the requirements of the Governmental Accounting Standards Board and is intended to inform readers as to the risk associated with the City’s OPEB liabilities and related deferred outflows/inflows. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial and communicate them to the appropriate level of management. We proposed adjustments to the City’s general ledger some of which were material to the financial statements taken as a whole. These misstatements were detected as a result of audit procedures and were corrected by management. A list of corrected misstatements is attached to this management letter. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management dated May 22, 2025 that are included in the management representation letter. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditors’ opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. To the Mayor and Common Council City of Oconto Falls Page 4 Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Oconto Falls as of and for the year ended December 31, 2024, in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards , we considered the City of Oconto Falls’ internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. However, as discussed below, we identified certain deficiencies in internal control that we consider to be a material weakness and others we consider to be significant deficiencies. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. We consider the following deficiency in the City of Oconto Falls’ internal control to be a material weakness: Material Account Adjustments – During our audit, we proposed and management accepted material adjustments to the City’s general ledger. Material misstatement occurred due to management not complying with generally accepted accounting principles. They include adjusting pension and postemployment benefit plan balances, recording depreciation expense and recording capital asset disposals. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the following deficiencies in the City of Oconto Falls’ internal control to be significant deficiencies: Segregation of Duties – The City has a limited number of people who are responsible for and perform substantially all of the bookkeeping and accounting functions. Good internal control requires a complete separation of duties with respect to the handling and recording of transactions. In order to provide for an adequate segregation of duties, additional personnel may have to be involved in the performance of the accounting and bookkeeping functions. We recognize that this may not be practicable based on the size of the City and limited resources. This is not unusual for entities your size, but we are required to inform you that this condition exists. Because some procedural controls do not exist, the board has compensating controls such as approval of invoices and review of receipts and revenues which allow it to rely heavily on its knowledge of the City’s operations in order to safeguard assets. Financial Reporting - One of the components of internal control over financial reporting is that staff of the City be sufficiently knowledgeable to record the entity’s financial transactions in accordance with generally accepted accounting principles (GAAP) and to prepare the entity’s financial statements including the footnotes in accordance with those principles. The City’s staff do not have the training in GAAP to prepare financial statements including the related notes in accordance with GAAP. KerberRose prepares the annual financial report for the City. The City’s management does review the financial statements and footnotes and accepts responsibility for them. This matter is common in most small organizations since they do not have the resources to devote to this area of internal control. To the Mayor and Common Council City of Oconto Falls Page 5 Preparation of Schedule of Expenditures of Federal Awards – The Uniform Guidance requires the City to prepare the schedules of federal expenditures. We have assisted in drafting the preparation of the schedules of federal expenditures of federal awards as part of our services related to preparation of the single audit report in accordance with the Title 2 U.S. Code of Federal Regulations Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Other Matters In addition, we felt the other matters described in the following paragraphs were important to the operation of the City of Oconto Falls. These matters may involve internal controls, general operations, recommendations for the adoption of policies and other such items that we feel will enhance the City of Oconto Falls. Additional Information Governmental Fund Balance Comparison Fund balance for City’s governmental funds are categorized as non-spendable, restricted, committed, assigned or unassigned. The General Fund is the only fund that can have unassigned fund balance unless the fund balance of another fund type is negative. The General fund has $136,380 of non-spendable fund balance which is due to certain assets that are not in spendable form (Inventories/prepaid items and delinquent personal property taxes) and $634,046 of unassigned fund balance that is available for cash flow needs and unanticipated or emergency expenditures. The unassigned general fund balance of $634,046 is 21.01 percent of general fund expenditures. Moody’s bond rating service considers general fund unassigned fund balance over 30 percent of general fund expenditures to be very strong. 2024 2023 136,380$ 147,212 $ 634,046 799,055 166,295 160,591 6,718 - 1,744,735 82,693 (23,912) (21,029) - 2,231 General Fund: Non-spendable Unassigned Library - Restricted Debt Service - Restricted Capital Projects TID No. 3 Unassigned (Deficit) Economic Development Unassigned (Deficit) Crime Prevention Unassigned (Deficit) - (288) 2,664,262$ 1,170,465 $ To the Mayor and Common Council City of Oconto Falls Page 6 Closing We thank you for allowing us to be of service to the City of Oconto Falls. We received complete cooperation and appreciate your consideration of our comments and your implementation of suggestions. This information in intended solely for the use by the Mayor and City Council, management, and others within the City and is not intended to be and should not be used by anyone other than these specified parties. KerberRose SC KerberRose SC Certified Public Accountants Green Bay, Wisconsin May 22, 2025 City of Oconto Falls Year End: December 31, 2024 Adjusting journal entries Date: 1/1/2024 To 12/31/2024 Number Date Name Account No Debit Credit AJE01 12/31/2024 Acc Dp of Util Plt in Svc 6350-111-000-000 WATER -173,104.00 AJE01 12/31/2024 Acc Dp of Util Plt in Svc 6350-111-000-000 WATER AJE01 12/31/2024 Acc Dp of Util Plt in Svc 6350-111-000-000 WATER 401.00 AJE01 12/31/2024 Acc Dp of Util Plt in Svc 6350-111-000-000 WATER 44,865.00 AJE01 12/31/2024 Acc Dp of Util Plt in Svc /1-1 6350-111-000-001 WATER -28,137.00 AJE01 12/31/2024 Acc Dp of Util Plt in Svc /1-1 6350-111-000-001 WATER AJE01 12/31/2024 Acc Dp of Util Plt in Svc /1-1 6350-111-000-001 WATER 99.00 AJE01 12/31/2024 Accessory Elect-Services CIAC 6350-345-050-000 WATER -99.00 AJE01 12/31/2024 Misc Pwr Plt-Meters 6350-346-000-000 WATER -44,865.00 AJE01 12/31/2024 Services- 6350-369-000-000 WATER -401.00 AJE01 12/31/2024 Depr Exp 6350-403-000-000 WATER 173,104.00 AJE01 12/31/2024 Depr Exp CIAC 6350-403-050-000 WATER 28,137.00 AJE01 12/31/2024 Misc General Exp 6350-930-000-000 WATER AJE02 12/31/2024 Acc Dp of Util Plt in Svc 6360-111-000-000 SEWER -378,012.00 AJE02 12/31/2024 Acc Dp of Util Plt in Svc 6360-111-000-000 SEWER AJE02 12/31/2024 /Elec Pmp Eqp/Oth Pwr Eqp 6360-323-000-000 SEWER AJE02 12/31/2024 Struct/Oth Trtmt/Struct 6360-341-000-000 SEWER AJE02 12/31/2024 Depr Exp 6360-403-000-000 SEWER 378,012.00 AJE03 12/31/2024 Interest Accrued 6330-237-000-000 ELECTRIC 9,376.00 AJE03 12/31/2024 Interest on Long-Term Debt 6330-427-000-000 ELECTRIC -9,376.00 AJE03 12/31/2024 Interest Accrued 6350-237-000-000 WATER 303.00 AJE03 12/31/2024 Interest on Long-Term Debt 6350-427-000-000 WATER -303.00 AJE03 12/31/2024 Interest Accrued, default/default 6360-237-000-000 SEWER AJE03 12/31/2024 Interest Accrued Clean Water 6360-237-000-112 SEWER 2,576.00 AJE03 12/31/2024 Interest on Long-Term Debt 6360-427-000-000 SEWER -2,576.00 AJE04 12/31/2024 Misc Deferred Debits Def Outfl 6330-186-000-003 ELECTRIC -159,665.00 AJE04 12/31/2024 Misc Cur and Accrued Liabil re 6330-242-154-300 ELECTRIC 69,585.00 AJE04 12/31/2024 Oth Deferred Credits Def Inflo 6330-253-000-009 ELECTRIC 82,302.00 AJE04 12/31/2024 Employee Pensions and Benefits 6330-926-154-000 ELECTRIC 7,778.00 To record CY water utility depreciation and disposals To record CY sewer depreciation and disposals To adjust accrued interest expense To record CY Electric fund WRS activity AJE05 12/31/2024 Misc Deferred Debits Def Outfl 6350-186-000-003 WATER -48,037.00 AJE05 12/31/2024 Misc Cur and Accrued Liabil re 6350-242-154-300 WATER 27,526.00 AJE05 12/31/2024 Oth Deferred Credits Def Inflo 6350-253-000-009 WATER 22,920.00 AJE05 12/31/2024 Employee Pensions and Benefits 6350-926-154-000 WATER -2,409.00 AJE06 12/31/2024 Misc Deferred Debits Def Outfl 6360-186-000-003 SEWER -32,178.00 AJE06 12/31/2024 Misc Cur and Accrued Liabil re 6360-242-154-300 SEWER 25,739.00 AJE06 12/31/2024 Oth Deferred Credits Def Inflo 6360-253-000-009 SEWER 13,314.00 AJE06 12/31/2024 Employees Pensions & Benefits 6360-854-154-000 SEWER -6,875.00 AJE07 12/31/2024 Misc Deferred Debits Def Out-L 6330-186-000-013 ELECTRIC -1,059.00 AJE07 12/31/2024 Misc Cur and Accrued Liabil li 6330-242-152-301 ELECTRIC 1,793.00 AJE07 12/31/2024 Oth Deferred Credits Def In-Li 6330-253-000-014 ELECTRIC 1,729.00 AJE07 12/31/2024 Employee Pensions and Benefits 6330-926-152-000 ELECTRIC -2,463.00 AJE08 12/31/2024 Misc Deferred Debits Def Out-L 6350-186-000-013 WATER -7,729.00 AJE08 12/31/2024 Misc Cur and Accrued Liabil li 6350-242-152-301 WATER 12,335.00 AJE08 12/31/2024 Oth Deferred Credits Def In-Li 6350-253-000-014 WATER 12,494.00 AJE08 12/31/2024 Employee Pensions and Benefits 6350-926-152-000 WATER -17,100.00 AJE09 12/31/2024 Misc Deferred Debits Def Out-L 6360-186-000-013 SEWER -9,957.00 AJE09 12/31/2024 Misc Cur and Accrued Liabil li 6360-242-152-301 SEWER 17,094.00 AJE09 12/31/2024 Oth Deferred Credits Def In-Li 6360-253-000-014 SEWER 16,304.00 AJE09 12/31/2024 Employees Pensions & Benefits 6360-854-152-000 SEWER -23,441.00 AJE10 12/31/2024 Retained Earnings 62100-33000-00-000-000 GEN 939.00 AJE10 12/31/2024 Misc Expense gen govt/ 62100-51980-10-000-000 GEN -939.00 AJE10 12/31/2024 Retained Earnings 62401-33000-00-000-000 CAPITAL -1.00 AJE10 12/31/2024 Beach-beach admission 62401-55420-00-000-249 CAPITAL 1.00 AJE11 12/31/2024 Oth Deferred Credits /Premium 6330-253-000-027 ELECTRIC 5,812.00 AJE11 12/31/2024 Misc NonOper Income 6330-421-000-000 ELECTRIC -5,812.00 activity To record CY water fund WRS activity. To record CY Sewer WRS activity To record CY Electric OPEB To record CY OPEB water activity To record CY Sewer OPEB cost sharing activity. to adjust fund balance to PY FS To record utility amortization of issuance costs and premium AJE12 12/31/2024 Solid Waste Disposal -Garbage Fees 62100-46430-00-000-471 GEN 6,318.00 AJE12 12/31/2024 Other Misc Revenue police/wages 62100-48900-15-120-000 GEN -6,318.00 AJE13 12/31/2024 Customer Accounts Rec-misc 62100-13100-10-000-000 GEN 12,833.00 AJE13 12/31/2024 Public Safety Charges fire-Town of Stiles 62100-46200-20-000-470 GEN -12,833.00 AJE14 12/31/2024 Unappropriated Earned Surplus 6330-216-000-000 ELECTRIC -295.00 AJE14 12/31/2024 Misc General Exp 6330-930-000-000 ELECTRIC 295.00 AJE14 12/31/2024 Unappropriated Earned Surplus 6360-216-000-000 SEWER 3.00 AJE14 12/31/2024 Misc General Exp /training & e 6360-856-000-450 SEWER -3.00 AJE16 12/31/2024 Misc Deferred Debits Def Out-L 6330-186-000-012 ELECTRIC 3,632.00 AJE16 12/31/2024 Misc Cur and Accrued Liabil he 6330-242-151-301 ELECTRIC -6,831.00 AJE16 12/31/2024 Oth Deferred Credits Def In-Li 6330-253-000-015 ELECTRIC 742.00 AJE16 12/31/2024 Employee Pensions and Benefits 6330-926-151-000 ELECTRIC 2,457.00 AJE16 12/31/2024 Misc Deferred Debits Def Out-L 6350-186-000-012 WATER 1,237.00 AJE16 12/31/2024 Misc Cur and Accrued Liabil he 6350-242-151-301 WATER -1,755.00 AJE16 12/31/2024 Oth Deferred Credits Def In-Li 6350-253-000-015 WATER 1,606.00 AJE16 12/31/2024 Employee Pensions and Benefits 6350-926-151-000 WATER -1,088.00 AJE16 12/31/2024 Misc Deferred Debits Def Out-L 6360-186-000-012 SEWER 897.00 AJE16 12/31/2024 Misc Cur and Accrued Liabil he 6360-242-151-301 SEWER -1,403.00 AJE16 12/31/2024 Oth Deferred Credits Def In-Li 6360-253-000-015 SEWER 861.00 AJE16 12/31/2024 Employees Pensions & Benefits 6360-854-151-000 SEWER -355.00 AJE17 12/31/2024 Misc Cur and Accrued Liabil va 6330-242-123-000 ELECTRIC -2,737.00 AJE17 12/31/2024 Misc General Exp 6330-930-000-000 ELECTRIC 2,737.00 AJE17 12/31/2024 Misc Cur and Accrued Liabil va 6350-242-123-000 WATER -1,295.00 AJE17 12/31/2024 Misc General Exp 6350-930-000-000 WATER 1,295.00 AJE17 12/31/2024 Misc Cur and Accrued Liabil va 6360-242-123-000 SEWER -873.00 AJE17 12/31/2024 Misc General Exp 6360-856-000-000 SEWER 873.00 AJE20 12/31/2024 Cash 6350-131-000-000 WATER 29,318.00 AJE20 12/31/2024 Depr Exp 6350-403-000-000 WATER -14,995.00 AJE20 12/31/2024 Taxes 6350-408-000-000 WATER -3,058.00 AJE20 12/31/2024 Oth Wtr Rev 6350-474-000-000 WATER -11,265.00 AJE20 12/31/2024 Cash 6360-131-000-000 SEWER -29,318.00 AJE20 12/31/2024 Depr Exp 6360-403-000-000 SEWER 14,995.00 AJE20 12/31/2024 Taxes 6360-408.000-000 SEWER 3,058.00 AJE20 12/31/2024 Misc General Exp 6360-856-000-000 SEWER 11,265.00 To record utility OPEB SE activity To reclassify OFSD crossing guard invoice to appropriate account To record AR for Town of Stiles Fire Contracted amount owed yet at year-end To adjust fund balance to PY FS To record BT Comp Absences after GASB 101 and current portion of Comp Abs to record meter allocation AJE21 12/31/2024 Payables to Muni /due to/from 6330-233-000-600 ELECTRIC -108,461.00 AJE21 12/31/2024 Taxes 6330-408-000-000 ELECTRIC 108,461.00 AJE21 12/31/2024 Payables to Muni /due to/from 6350-233-000-600 WATER -101,640.00 AJE21 12/31/2024 Payables to Muni /due to/from 6350-233-000-600 WATER -3,058.00 AJE21 12/31/2024 Taxes 6350-408-000-000 WATER 101,640.00 AJE21 12/31/2024 Taxes 6350-408-000-000 WATER 3,058.00 AJE21 12/31/2024 Due from Enterprise Fund -due to/from Electric 62100-15600-00-000-630 GEN 3,317.00 AJE21 12/31/2024 Due from Enterprise Fund -due to/from Electric 62100-15600-00-000-630 GEN 3,058.00 AJE21 12/31/2024 Due from Enterprise Fund -due to/from Water 62100-15600-00-000-650 GEN 144.00 AJE21 12/31/2024 Taxes from Reg Muni-Owned Util 62100-41310-00-000-000 GEN -3,461.00 AJE21 12/31/2024 Taxes from Reg Muni-Owned Util 62100-41310-00-000-000 GEN -3,058.00 AJE23 12/31/2024 Acc Dp of Util Plt in Svc 6330-111-000-000 ELECTRIC -333,951.00 AJE23 12/31/2024 Acc Dp of Util Plt in Svc /1-1 6330-111-000-001 ELECTRIC -29,948.00 AJE23 12/31/2024 Depr Exp 6330-403-000-000 ELECTRIC 333,951.00 AJE23 12/31/2024 Depr Exp CIAC 6330-403-050-000 ELECTRIC 29,948.00 AJE24 12/31/2024 Due from State of Wisconsin 62401-14200-00-000-000 CAPITAL -12,047.00 AJE24 12/31/2024 Fire Protection fire/Outlay 62401-57220-20-000-000 CAPITAL 12,047.00 AJE25 12/31/2024 Fund Cash 6330-131-100-000 ELECTRIC -17,862.00 AJE25 12/31/2024 Payables to Muni /due to/from 6330-233-000-600 ELECTRIC 17,862.00 AJE25 12/31/2024 Payables to Muni /due to/from 6330-233-000-600 ELECTRIC -4.00 AJE25 12/31/2024 Payables to Muni /due to/from 6330-233-000-600 ELECTRIC 1,508.00 AJE25 12/31/2024 Employee Pensions and Benefits 6330-926-151-000 ELECTRIC -1,508.00 AJE25 12/31/2024 Misc General Exp 6330-930-000-000 ELECTRIC 4.00 AJE25 12/31/2024 Fund Cash 6350-131-100-000 WATER 17,862.00 AJE25 12/31/2024 Payables to Muni /due to/from 6350-233-000-600 WATER -17,862.00 AJE25 12/31/2024 Receivables from Muni /due to/ 6360-145-000-600 SEWER 20,109.00 AJE25 12/31/2024 Payables to Muni /due to/from 6360-233-000-600 SEWER 2.00 AJE25 12/31/2024 Misc Oper Rev 6360-735-000-000 SEWER -20,109.00 AJE25 12/31/2024 Misc General Exp 6360-856-000-000 SEWER -2.00 To adjust PTE To record electric depreciation To adjust due from state To clean up due to/due froms OCONTO FALLS MUNICIPAL UTILITIES Enterprise Funds of the City of Oconto Falls, Wisconsin Financial Statements December 31, 2024 www.kerberrose.com OCONTO FALLS MUNICIPAL UTILITIES Enterprise Funds of the City of Oconto Falls, Wisconsin Table of Contents December 31, 2024 Page INDEPENDENT AUDITORS’ REPORT 1 – 3 FINANCIAL STATEMENTS Electric and Water Utility Statement of Net Position 4 Statement of Revenues, Expenses, and Change in Net Position 5 Statement of Cash Flows 6 Sewer Utility Statement of Net Position 7 Statement of Revenues, Expenses, and Change in Net Position 8 Statement of Cash Flows 9 Notes to Financial Statements 10 – 34 REQUIRED SUPPLEMENTARY INFORMATION Schedules of Employer’s Proportionate Share of the Net Pension Liability (Asset) and Employer Contributions – Wisconsin Retirement Plan 35 Schedules of Employer’s Proportionate Share of the Net OPEB Liability and Employer Contributions – Other Post-Employment Benefits Other Than Pensions – Cost-Sharing Plan 36 Schedule of Changes in Total OPEB Liability and Related Ratios – Single-Employer Plan 37 Notes to Required Supplementary Information 38 OTHER INFORMATION Schedule of Electric Utility Plant 39 Schedule of Water Utility Plant 40 Schedule of Sewer Utility Plant 41 Schedule of Electric Utility Operating Revenues and Expenses 42 Schedule of Water Utility Operating Revenues and Expenses 43 Schedule of Sewer Utility Operating Revenues and Expenses 44 Schedule of Rates of Return 45 INDEPENDENT AUDITORS’ REPORT 1 Independent Auditors’ Report To the Utilities Commission Oconto Falls Municipal Utilities City of Oconto Falls, Wisconsin Opinions We have audited the accompanying financial statements of the Oconto Falls Municipal Utilities (Utilities), enterprise funds of the City of Oconto Falls, Wisconsin, as of and for the year ended December 31, 2024, and the related notes to the financial statements, which collectively comprise the Oconto Falls Municipal Utilities, enterprise funds of the City of Oconto Falls, Wisconsin’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Oconto Falls Municipal Utilities, enterprise funds of the City of Oconto Falls, Wisconsin, as of December 31, 2024, the changes in their financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Oconto Falls Municipal Utilities, enterprise funds of the City of Oconto Falls, Wisconsin and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter - Enterprise Funds of the City of Oconto Falls, Wisconsin As discussed in Note 1, the financial statements present only the enterprise funds and do not purport to, and do not, present fairly the financial position of the City of Oconto Falls, Wisconsin, as of December 31, 2024, and the changes in its financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2 To the Utilities Commission City of Oconto Falls Municipal Utilities Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Oconto Falls Municipal Utilities, enterprise funds of the City of Oconto Falls, Wisconsin internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Required Supplementary Information Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information. Accounting principles generally accepted in the United States of America require that the schedules of employer’s proportionate share of the net pension liability (asset) and employer contributions – Wisconsin Retirement System, schedules of employer’s proportionate share of the net OPEB liability and employer contributions – other post- employment benefits other than pensions – cost sharing plan, and schedule of changes in total OPEB liability and related ratios – single-employer plan be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Management is responsible for the other information included in this annual financial report. The other information comprises the schedule of electric utility plant, schedule of water utility plant, schedule of sewer utility plant, schedule of electric utility operating revenues and expenses, schedule of water utility operating revenues and expenses, schedule of sewer utility operating revenues and expenses and schedule of rates of return but does not include the financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. 3 To the Utilities Commission City of Oconto Falls Municipal Utilities In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Change in Accounting Principle For the year ended December 31, 2024, the Utilities adopted new accounting guidance, GASB Statement No. 101, Compensated Absences. Our opinions are not modified with respect to this matter. KerberRose SC KerberRose S.C. Certified Public Accountants Green Bay, Wisconsin May 22, 2025 FINANCIAL STATEMENTS ELECTRIC AND WATER UTILITY ASSETS Current Assets: Cash and Investments $ 3,690,285 Receivables: Accounts 392,049 Interest 22,295 Other 20,855 Inventories 191,024 Restricted Cash - Bond Proceeds 5,050,774 Total Current Assets 9,367,282 Noncurrent Assets: Investment in American Transmission Company 1,071,910 Capital Assets, Nondepreciable 2,092,099 Capital Assets, Depreciable - Net of Accumulated Depreciation 7,288,157 Total Noncurrent Assets 10,452,166 TOTAL ASSETS 19,819,448 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows of Resources Related to Pension 269,605 Deferred Outflows of Resources Related to Post-Employment Benefits - Cost-Sharing Plan 5,624 Deferred Outflows Related to Other Post-Employment Benefits - Single-Employer Plan 16,348 Total Deferred Outflows of Resources 291,577 CURRENT LIABILITIES Accounts Payable 548,575 Customer Deposits 2,683 Public Benefits 11,374 Due to Other Fund 344,878 Accrued and Other Current Liabilities 35,738 Accrued Interest 53,982 Compensated Absences 106,529 Current Portion of Long-Term Obligations 342,676 Total Current Liabilities 1,446,435 NONCURRENT LIABILITIES Net Pension Liability 30,366 Net Other Post-Employment Benefits Liability - Cost-Sharing Plan 12,487 Total Other Post-Employment Benefits Liability - Single-Employer Plan 36,739 Noncurrent Portion of Compensated Absences 159,794 Noncurrent Portion of Long-Term Obligations 7,080,822 Total Noncurrent Liabilities 7,320,208 TOTAL LIABILITIES 8,766,643 DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources Related to Pension 163,315 Deferred Inflows Related to Other Post-Employment Benefits - Cost-Sharing Plan 9,702 Deferred Inflows Related to Other Post-Employment Benefits - Single-Employer Plan 10,875 Total Deferred Inflows of Resources 183,892 NET POSITION Net Investment in Capital Assets 7,007,533 Restricted 75,924 Unrestricted 4,077,033 TOTAL NET POSITION $ 11,160,490 CITY OF OCONTO FALLS ELECTRIC AND WATER UTILITY CITY OF OCONTO FALLS, WISCONSIN Statement of Net Position As of December 31, 2024 See Notes to the Basic Financial Statements 4 OPERATING REVENUES Electric: Charges for Services $ 3,160,716 Other Operating Revenues 31,943 Total 3,192,659 Water: Charges for Services 911,853 Other Operating Revenues 17,611 Total 929,464 Total Operating Revenues 4,122,123 OPERATING EXPENSES Electric: Operation and Maintenance 2,712,185 Depreciation 363,899 Total 3,076,084 Water: Operation and Maintenance 402,341 Depreciation 186,246 Total 588,587 Total Operating Expenses 3,664,671 OPERATING INCOME 457,452 NONOPERATING REVENUES (EXPENSES) Investment Earnings 449,789 Interest Expense (331,226) Miscellaneous Income 25,210 Total Nonoperating Revenues (Expenses) 143,773 INCOME BEFORE TRANSFERS 601,225 TRANSFERS OUT (210,101) CHANGE IN NET POSITION 391,124 NET POSITION - BEGINNING 10,769,366 NET POSITION - ENDING $ 11,160,490 CITY OF OCONTO FALLS ELECTRIC AND WATER UTILITY Statement of Revenues, Expenses and Change in Net Position For the Year Ended December 31, 2024 CITY OF OCONTO FALLS, WISCONSIN See Notes to the Basic Financial Statements 5 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from User Charges $ 4,109,899 Cash Payments to Municipality (114,336) Paid to Suppliers for Goods and Services (2,262,341) Paid to Employees for Operating Payroll (494,160) Other Receipts 9,878 Net Cash Flows From Operating Activities 1,248,940 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfer to Other Funds (210,101) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (1,179,115) Capital Assets Salvaged 2,076 Principal Payments on Long-Term Debt (291,444) Interest and Fiscal Charges (346,715) Net Cash Flows From Capital and Related Financing Activities (1,815,198) CASH FLOWS FROM INVESTING ACTIVITIES Long-Term Investments Redeemed 3,393,488 Investment Income 446,788 Net Cash Flows From Investing Activities 3,840,276 3,063,917 4,571,123 $ 7,635,040 RECONCILIATION OF CASH ACCOUNTS Cash and Investments $ 3,690,285 Restricted Cash and Investments 5,050,774 Less: Long-term Investments (1,106,019) Total Reconciliation of Cash Accounts $ 7,635,040 RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM Operating Income $ 457,452 Adjustments to Reconcile Operating Income to Net Cash Flows from Operating Activities: Depreciation 550,145 Meter Depreciation Charged to Sewer 14,995 Changes in Assets and Liabilities: Customer Accounts Receivable (12,336) Other Receivables 9,878 Inventories (14,897) Deferred Outflows Related to Pension 207,702 Deferred Outflows Related to OPEB - Cost-Sharing 8,788 Deferred Outflows Related to OPEB - Single-Employer (4,869) Accounts Payable 320,847 Customer Deposits 112 Public Benefits 4,767 Other Current Liabilities 29,570 Accrued Compensated Absences 15,568 Due to Municipality (114,336) Net Pension Liability (97,111) Net OPEB Liability - Cost-Sharing (14,128) Total OPEB Liability - Single Employer 8,586 Deferred Inflows Related to Pension (105,222) Deferred Inflows Related to OPEB - Cost-Sharing (14,223) Deferred Inflows Related to OPEB - Single-Employer (2,348) Net Cash Flows From Operating Activities $ 1,248,940 CITY OF OCONTO FALLS, WISCONSIN CITY OF OCONTO FALLS ELECTRIC AND WATER UTILITY CASH AND INVESTMENTS - BEGINNING CASH AND INVESTMENTS - ENDING CHANGE IN CASH AND INVESTMENTS For the Year Ended December 31, 2024 Statement of Cash Flows See Notes to the Basic Financial Statements 6 SEWER UTILITY ASSETS Current Assets: Cash and Investments $ 78,732 Receivables Accounts 113,167 Due from Other Fund 20,109 Total Current Assets 212,008 Noncurrent Assets: Restricted Cash 941,873 Capital Assets, Nondepreciable 11,752 Capital Assets, Depreciable - Net of Accumulated Depreciation 8,526,682 Total Noncurrent Assets 9,480,307 TOTAL ASSETS 9,692,315 DEFERRED OUTFLOWS OF RESOURCES Deferred Outflows of Resources Related to Pension 111,014 Deferred Outflows of Resources Related to Post-Employment Benefits - Cost-Sharing Plan 3,461 Deferred Outflows Related to Other Post-Employment Benefits - Single-Employer Plan 3,892 Total Deferred Outflows of Resources 118,367 CURRENT LIABILITIES Accounts Payable 28,493 Accrued and Other Current Liabilities 7,740 Accrued Interest 17,028 Compensated Absences 23,067 Current Portion of Long-Term Obligations 597,206 Total Current Liabilities 673,534 NONCURRENT LIABILITIES Net Pension Liability 12,504 Net Other Post-Employment Benefits Liability - Cost-Sharing Plan 7,685 Total Other Post-Employment Benefits Liability - Single-Employer Plan 8,748 Compensated Absences 34,601 Noncurrent Portion of Long-Term Obligations 3,856,655 Total Noncurrent Liabilities 3,920,193 TOTAL LIABILITIES 4,593,727 DEFERRED INFLOWS OF RESOURCES Deferred Inflows of Resources Related to Pension 67,247 Deferred Inflows Related to Other Post-Employment Benefits - Cost-Sharing Plan 5,971 Deferred Inflows Related to Other Post-Employment Benefits - Single-Employer Plan 2,589 Total Deferred Inflows of Resources 75,807 NET POSITION Net Investment in Capital Assets 4,084,572 Restricted 973,136 Unrestricted (Deficit) 83,440 TOTAL NET POSITION $ 5,141,148 CITY OF OCONTO FALLS SEWER UTILITY CITY OF OCONTO FALLS, WISCONSIN Statement of Net Position As of December 31, 2024 See Notes to the Basic Financial Statements 7 OPERATING REVENUES Charges for Services $ 1,193,137 Other Operating Revenues 22,509 Total Operating Revenues 1,215,646 OPERATING EXPENSES Operation and Maintenance 470,296 Depreciation 393,007 Total Operating Expenses 863,303 OPERATING INCOME 352,343 NONOPERATING EXPENSE Interest Expense (110,130) INCOME BEFORE TRANSFERS 242,213 TRANSFERS OUT (3,058) CHANGE IN NET POSITION 239,155 NET POSITION - BEGINNING 4,901,993 NET POSITION - ENDING $ 5,141,148 CITY OF OCONTO FALLS SEWER UTILITY CITY OF OCONTO FALLS, WISCONSIN Statement of Revenues, Expenses and Change in Net Position For the Year Ended December 31, 2024 See Notes to the Basic Financial Statements 8 CASH FLOWS FROM OPERATING ACTIVITIES Cash Received from User Charges $ 1,213,952 Cash Payments from from Municipality (19,509) Paid to Suppliers for Goods and Services (279,059) Paid to Employees for Operating Payroll (201,343) Net Cash Flows From Operating Activities 714,041 CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Transfer to Other Funds (3,058) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of Capital Assets (24,326) Principal Payments on Long-Term Debt (583,989) Interest and Fiscal Charges (112,706) Net Cash Flows From Capital and Related Financing Activities (721,021) (10,038) 1,030,643 $ 1,020,605 RECONCILIATION OF CASH ACCOUNTS Cash and Investments $ 78,732 Restricted Cash and Investments 941,873 Total Reconciliation of Cash Accounts $ 1,020,605 RECONCILIATION OF OPERATING INCOME TO NET CASH FLOWS FROM Operating Income $ 352,343 Adjustments to Reconcile Operating Income to Net Cash Flows from Operating Activities: Depreciation 393,007 Allocation of Water Meter Depreciation (14,995) Changes in Assets and Liabilities: Customer Accounts Receivable (1,694) Deferred Outflows Related to Pension 32,178 Deferred Outflows Related to OPEB - Cost-Sharing 9,957 Deferred Outflows Related to OPEB - Single-Employer (897) Accounts Payable 26,668 Receivable from Municipality (19,508) Other Current Liabilities 4,304 Accrued Compensated Absences 4,587 Net Pension Liability (25,739) Net OPEB Liability - Cost-Sharing (17,094) Net OPEB Liability - Single Employer 1,403 Deferred Inflows Related to Pension (13,314) Deferred Inflows Related to OPEB - Cost-Sharing (16,304) Deferred Inflows Related to OPEB - Single-Employer (861) Net Cash Flows From Operating Activities $ 714,041 CASH AND INVESTMENTS - ENDING CITY OF OCONTO FALLS SEWER UTILITY CITY OF OCONTO FALLS, WISCONSIN Statement of Cash Flows For the Year Ended December 31, 2024 CHANGE IN CASH AND INVESTMENTS CASH AND INVESTMENTS - BEGINNING See Notes to the Basic Financial Statements 9 10 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies Introduction This summary of significant accounting policies of the Oconto Falls Municipal Utilities (Utilities) is presented to assist in understanding the Utilities’ financial statements. The financial statements and notes are representations of the Utilities’ management who is responsible for the integrity and objectivity of the financial statements. These accounting policies conform to generally accepted accounting principles (GAAP) and have been consistently applied in the preparation of the financial statements. The Governmental Accounting Standards Board (GASB) is the accepted standards setting body for establishing governmental accounting and financial reporting principles. Nature of Business The Oconto Falls Municipal Utilities are separate enterprise funds of the City of Oconto Falls. The Utilities are managed by the Utilities commission. The Utilities provide electric, water and sewer services to properties within the city. The Electric and Water Utilities operate under service rules and rates established by the Public Service Commission of Wisconsin (PSCW). The Sewer Utility operates under rules and rates established by the utilities commission. Measurement Focus and Basis Accounting The financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Investments For purposes of the statements of cash flows, cash deposits and highly liquid investments having original maturities of three months or less at the time of purchase are considered to be cash equivalents. Accounts Receivable Accounts receivable are recorded at their gross amount with uncollectible amounts being recognized under the direct write-off method. The Utilities have the right under Wisconsin statutes to place delinquent electric, water and sewer bills on the tax roll for collection. No allowance for uncollectible accounts has been provided since it is believed that the amount of such allowance would not be material to the financial statements. Inventories Inventories are recorded at lower of cost or market utilizing the average cost method and charged to construction or expense when used. 11 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Capital Assets Capital assets are defined by the Utilities as assets with an initial, individual cost of $5,000 or more and an estimated useful life in excess of one year. Capital assets of the Utilities are recorded at cost or estimated acquisition value at the time of contribution to the Utilities. Major outlays for Utility plants are capitalized as projects are constructed. Capital assets in service are depreciated using the straight-line method over the following useful lives: Compensated Absences The Utilities adopted GASB Statement No. 101 for the year ended December 31, 2024, which requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Under terms of employment, employees are grant sick leave and vacation in varying amounts. Only benefits considered to be vested are disclosed in these statements. All vested vacation and sick leave is accrued when incurred in the proprietary fund financial statements. Pension and Other Post-Employment Benefits Pension. The fiduciary net position of the Wisconsin Retirement System (WRS) has been determined using the flow of economic resources measurement focus and accrual basis of accounting. This includes for purposes of measuring the following:  Net Pension Liability (Asset)  Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions  Pension Expense Years Electric Plant: Transmission 33 Distribution 18 – 40 General 4 – 40 Water Plant: Sources of Supply 34 – 56 Pumping 23 – 41 Water Treatment 17 Transmission and Distribution 20 – 108 General 4 – 44 Sewer Plant: Collecting System 100 Collecting System Pumping 20 – 40 Treatment and Disposal 15 – 40 General 4 – 20 12 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Other Post-Employment Benefits - Cost-Sharing (OPEB) . The fiduciary net position of the Local Retiree Life Insurance Fund (LRLIF) has been determined using the flow of economic resources measurement focus and accrual basis of accounting. This includes for purposes of measuring the following:  Net OPEB Liability (Asset)  Deferred Outflows of Resources and Deferred Inflows of Resources Related to Other Post-Employment Benefits  OPEB Expense (Revenue) Other Post-Employment Benefits - Single-Employer (OPEB). For purposes of measuring the total OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the City’s Other Postemployment Benefit Plan have been determined on the same basis as they are reported by the Plan. For this purposes, the Plan recognizes benefit payments when due and payable in accordance with benefit terms. The Plan has no assets accumulated to pay this liability. Deferred Outflows/Inflows of Resources In addition to assets, the statements of net position report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The Utilities reports three categories of deferred outflows of resources related to the pension plan, cost-sharing OPEB plan and single-employer OPEB plan. The deferred outflows related the pension plan, cost-sharing OPEB plan and single- employer OPEB plan are explained in more detail in Notes 9, 10 and 11, respectively. In addition to liabilities, the statements of net position report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Utilities report three categories of deferred inflows of resources related to the pension plan, cost-sharing OPEB plan and single-employer OPEB plan. The deferred inflows related to the pension plan, cost-sharing OPEB plan and single-employer OPEB plan are explained in more detail in Notes 9, 10 and 11, respectively. Public Benefits The Electric Utility charges public benefit fees to all customers as required by the 1999 Energy Reliability Act. Revenues generated from the fees are used to fund energy conservation and low-income energy assistance programs. The Utility is acting as an agent administering the program so receipts and disbursements associated with the program are recorded as a current liability on the statement of net position. Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” and “due to other funds” on the statement of net position. Interfund Transactions Interfund transactions include transfers to the municipality for payment in lieu of taxes. 13 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 1 - Summary of Significant Accounting Policies (Continued) Revenues and Expenses The Utilities distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the Utilities’ principal ongoing operations. The principal operating revenues of the Utilities’ funds are charges to customers for services. The principal operating expenses are operation and maintenance expense, depreciation on capital assets and purchase of electricity. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. Leases The Utilities follow GASB Statement No. 87 which requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. This statement establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. The Utilities did not have any material leases to record. Subscription-Based Information Technology Agreements The Utilities follow GASB Statement No. 96, which requires recognition in the financial statements of certain subscription-based information technology agreements (SBITAS). A SBITA is any contract conveying control of the right to use another party’s information technology software. This statement requires the Utilities to report a right-to- use subscription asset and corresponding subscription liability for any SBITAs. There were no material SBITAs that were required to be recorded for the year ended December 31, 2024. Note 2 - Cash and Investments The Utilities are authorized to invest their funds in accordance with Wisconsin Statutes. Allowable investments are as follows:  Time deposits in any credit union, bank, savings bank or trust company maturing in three years or less.  Bonds or securities of any county, city, drainage district, technical college district, village, town, or school district of the state. Also, bonds issued by a local exposition district, local professional baseball park district, local professional football stadium district, local cultural arts district or by the University of Wisconsin Hospitals and Clinics.  Bonds or securities issued or guaranteed by the federal government.  The local government investment pool.  Any security maturing in seven years or less and having the highest or second highest rating category of a nationally recognized rating agency.  Securities of an open end management investment company or investment trust, subject to various conditions and investment options.  Repurchase agreements with public depositories, with certain conditions. At December 31, 2024, the Utilities’ deposits had a bank balance of $2,356,155. The Utilities’ maintain their cash accounts at one institution. Deposits in each bank are insured by the FDIC up to $250,000 for the combined amounts of all time and savings accounts (including NOW accounts); and up to $250,000 for the combined amount of all interest and noninterest bearing demand deposit accounts. 14 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 2 - Cash and Investments (Continued) The following represents a summary of deposits as of December 31, 2024: Fully Insured Deposits 250,000 $ Collateralized 2,106,155 2,356,155$ The difference between the bank balance and carrying value is due to outstanding checks and/or deposits in transit at December 31, 2024. Investments Interest Rate Risk – The Utilities do not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. At December 31, 2024, the Utilities investments in the table below as follows: Investments Money Market Funds $ 5,420,399 $ 5,420,399 $ - $ - $ - $ - Mutual Funds 713,454 713,454 - - - - Certificates of Deposit 1,106,019 860,262 245,757 - - - $ 7,239,872 $ 6,994,115 $ 245,757 $ - $ - $ - One to Two Years Less than a YearFair Value Three to Five Years Two to Three Years More than Five Years Credit Risk – State law limits investments in commercial paper, corporate bonds, and mutual funds to the top two ratings issued by nationally recognized statistical rating organizations. The Utilities investment policy does not further limit its investment choices. Investments Money Market Funds $ 5,420,399 $ 5,420,399 $ - - $ - $ - $ - Mutual Funds 713,454 - - - - - 713,454 Certificates of Deposit 1,106,019 - - - - - 1,106,019 $ 7,239,872 $ 5,420,399 $ - $ - $ - $ - $ 1,819,473 A+Fair Value AAA AA+ AA Not Rated BBB Concentration of Credit Risk – The Utility does not have an additional custodial credit policy. Investments are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require in the statement of net position at the end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset’s fair value. No investments are reported at amortized costs. Adjustments necessary to record investments at fair value are recorded as increases or decreases in investment income. Level 1 – Valuation for assets are from quoted prices in active markets. These valuations are obtained from readily available pricing sources from market transactions involving identical assets. Level 2 – Valuation for assets are from less active markets. These valuations are obtained from third party pricing services for identical or similar assets. Level 3 – Measurements that are least observable are estimated from related market data, determined from sources with little or no market activity for comparable contracts, or are positions with longer durations. These valuations incorporate certain assumptions and projections in determining fair value assigned to such assets. 15 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 2 - Cash and Investments (Continued) As of December 31, 2024, the Utilities had the following investments: Investments Money Market Funds $ 5,420,399 $ - $ - Mutual Funds 713,454 - - Certificates of Deposit - 1,106,019 - $ 6,133,853 $ 1,106,019 $ - Level 1 Level 2 Level 3 Note 3 - Restricted Assets Replacement Account The replacement accounts are to be used to provide funds for equipment to maintain the plant at intended capacity. The balances as of December 31, 2024 are as follows: Electric and Water Utility Enterprise Fund Unspent Bond Proceeds 5,050,774 $ Sewer Utility Enterprise Fund Plant Replacement 941,873 $ Note 4 - American Transmission Company (ATC) The electric utility is a member of ATC. ATC is a company formed by electric utilities to own and construct electric transmission facilities in Wisconsin. Operations of ATC began January 1, 2001. The electric utility owns less than .5% of ATC. The investment earns dividends, 80% of which are paid to the electric utility quarterly and 20% of which are reinvested in ATC. From time to time, the electric utility has the option to contribute additional funds to maintain their proportionate share of ownership. The investment in ATC is reported at original cost plus additional contributions and reinvested dividends. 16 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 5 - Changes in Capital Assets Electric Utility A summary of changes in electric capital assets for 2024 follows: Capital Assets not being Depreciated: Land and Land Rights $ 40,307 $ - $ - $ 40,307 Construction in Progress 1,420,972 532,639 - 1,953,611 Total Capital Assets Not Being 1,461,279 532,639 - 1,993,918 Depreciated Capital Assets Being Depreciated: Transmission 10,580 - - 10,580 Distribution 6,183,421 204,510 4,842 6,383,089 General 1,067,529 219,902 - 1,287,431 Total Capital Assets Being Depreciated 7,261,530 424,412 4,842 7,681,100 Total Capital Assets 8,722,809 957,051 4,842 9,675,018 Less Accumulated Depreciation (6,377,875) (365,983) (4,842) (6,739,016) NET CAPITAL ASSETS $ 2,344,934 $ 591,068 $ - $ 2,936,002 Balances Balances 1/1/24 Increases Decreases 12/31/24 Water Utility A summary of changes in water capital assets for 2024 follows: Capital Assets not being Depreciated: Land and Land Rights $ 25,982 $ - $ - $ 25,982 Construction in Progress - 72,199 - 72,199 Total Capital Assets Not Being 25,982 72,199 - 98,181 Depreciated Capital Assets Being Depreciated: Sources of Supply 188,748 - - 188,748 Pumping 910,292 - - 910,292 Water Treatment 165,860 - - 165,860 Transmission and Distribution 7,030,089 139,687 45,365 7,124,411 General 228,631 10,178 - 238,809 Total Capital Assets Being Depreciated 8,523,620 149,865 45,365 8,628,120 Total Capital Assets 8,549,602 222,064 45,365 8,726,301 Less Accumulated Depreciation (2,126,171) (201,241) (45,365) (2,282,047) NET CAPITAL ASSETS $ 6,423,431 $ 20,823 $ - $ 6,444,254 Balances Balances 1/1/24 Increases Decreases 12/31/24 17 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 5 - Changes in Capital Assets (Continued) Sewer Utility A summary of changes in sewer capital assets for 2024 follows: Capital Assets not being Depreciated: Land $ 6,000 $ - $ - $ 6,000 Construction in Progress - 5,752 - 5,752 Total Capital Assets Not Being 6,000 5,752 - 11,752 Depreciated Capital Assets Being Depreciated: Collection System 4,200,089 2,638 - 4,202,727 Collection System Pumping 432,916 - - 432,916 Treatment and Disposal 9,377,734 8,369 - 9,386,103 General 461,240 7,567 - 468,807 Total Capital Assets Being Depreciated 14,471,979 18,574 - 14,490,553 Total Capital Assets 14,477,979 24,326 - 14,502,305 Less Accumulated Depreciation (5,585,859) (378,012) - (5,963,871) NET CAPITAL ASSETS $ 8,892,120 $ (353,686) $ - $ 8,538,434 Balances Balances 1/1/24 Increases Decreases 12/31/24 Depreciation expense was charged to functions of the Utilities as follows: Electric Utility 365,983 $ Salvage Charged to Accumulated Depreciation (2,084) Electric Utility Depreciation Expense 363,899 Water Utility 201,241 Less: Share of Meter Depreciation (14,995) Water Utility Depreciation Expense 186,246 Sewer Utility 378,012 Plus: Share of Meter Depreciation 14,995 Sewer Utility Depreciation Expense 393,007 Total Depreciation Expense 943,152 $ Note 6 - Interfund Receivables, Payables and Transfers The following is a schedule of interfund receivables and payables: Receivable Fund Payable Fund Amount Purpose Municipality Electric and Water 344,878 $ Year End Cash Flow Timing Sewer Utility Municipality 20,109 Year End Cash Flow Timing 364,987$ 18 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 6 - Interfund Receivables, Payables and Transfers (Continued) Interfund transfers for the year ended December 31, 2024 were as follows: Municipality Purpose Transfer From: Electric and Water Utility 210,101 $ Property Tax Equivalent Sewer Utility 3,058 Property Tax Equivalent 213,159$ Note 7 - Long-Term Debt The following is a summary of changes in long-term obligations for the year ended December 31, 2024: Water and Electric Utilities District Borrowings: Safe Drinking Water Loan $ 326,821 $ - $ 52,332 $ 274,489 $ 53,168 Safe Drinking Water Loan 397,688 - 34,112 363,576 34,508 G.O. Promissory Notes 350,000 - 50,000 300,000 50,000 Revenue Bond 6,530,000 - 155,000 6,375,000 205,000 Premium on Debt Issued 116,243 - 5,811 110,432 - Compensated Absences 250,755 15,569 - 266,324 106,529 Total $ 7,971,507 $ 15,569 $ 297,255 $ 7,689,821 $ 449,205 Sewer Utility District Borrowings: Clean Water Fund Loan $ 91,059 $ - $ 44,998 $ 46,061 $ 46,061 Clean Water Fund Loan 3,660,318 - 420,476 3,239,842 430,569 Clean Water Fund Loan 986,474 - 78,515 907,959 80,576 G.O. Promissory Notes 300,000 - 40,000 260,000 40,000 Compensated Absences 53,080 4,587 - 57,667 23,067 Total $ 5,090,931 $ 4,587 $ 583,989 $ 4,511,529 $ 620,273 12/31/24 One Year Balances Balances Due Within 1/1/24 Increases Decreases Water and Electric Utilities Safe Drinking Water Loan 01/13/10 05/01/29 1.601% $ 921,255 $ 274,489 Safe Drinking Water Loan 09/24/14 05/01/34 1.155% 627,085 363,576 G.O. Promissory Notes 08/05/20 06/01/30 .6 - 1.4% 490,000 300,000 Revenue Bond 09/14/23 05/01/43 4.00-5.00% 6,530,000 6,375,000 $ 7,313,065 Sewer Utility Clean Water Fund Loan 12/23/09 05/01/25 2.668% $ 11,107,582 $ 46,061 Clean Water Fund Loan 02/13/03 05/01/31 2.75% 4,226,755 3,239,842 Clean Water Fund Loan 07/23/14 05/01/34 2.63% 1,608,597 907,959 G.O. Promissory Notes 08/05/20 06/01/30 .6 - 1.4% 2,830,000 260,000 $ 4,453,862 Issuance Maturity Rate Indebtedness 12/31/24 Date of Final Interest Original Balances The interest paid during the year was $459,422. The compensated absences are denoted by a net change in the liability. 19 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 7 - Long-Term Debt (Continued) The annual principal and interest maturities are as follows: Electric and Water Utilities 2025 $ 342,676 $ 291,969 $ 634,645 2026 353,925 279,823 633,748 2027 370,194 266,958 637,152 2028 381,480 253,387 634,867 2029 392,785 239,235 632,020 2030-2034 1,712,005 980,949 2,692,954 2035-2039 1,880,000 625,178 2,505,178 2040-2043 1,880,000 174,103 2,054,103 $ 7,313,065 $ 3,111,602 $ 10,424,667 Principal Interest Total Sewer Utility 2025 $ 597,206 $ 98,528 $ 695,734 2026 563,594 85,073 648,667 2027 581,346 71,770 653,116 2028 594,409 58,075 652,484 2029 607,791 44,001 651,792 2030-2034 1,509,516 56,378 1,565,894 . $ 4,453,862 $ 413,825 $ 4,867,687 Principal Interest Total Utility Revenues Pledged The City has pledged future revenue derived from the Water and Sewer Utilities, net of specified operating expenses, to repay the Clean Water Fund and Safe Drinking Water Loans. Proceeds from the debt provided financing for the construction or acquisition of capital assets used within the Utilities. The Clean Water Fund Loans are payable from Sewerage System net revenues and payable through 2025, 2031 and 2034. The total principal and interest remaining to be paid on the loans is $4,598,183. Principal and interest paid for the current year and total Sewerage System net revenues were $654,119 and $744,927, respectively. The Sewerage System did meet the Clean Water Fund Loan revenue requirements in 2024. The Safe Drinking Water Loans are payable from Water System net revenues and are payable through 2029 and 2034. The total principal and interest remaining to be paid on the loans is $670,586. Principal and interest paid for the current year and total water system net revenues were $98,650 and $527,546, respectively. The Water System did meet the Safe Drinking Water Loan revenue requirements in 2024. The Electric Revenue Bonds are payable from Electric System net revenues and are payable through 2043. The total principal and interest remaining to be paid on the loans is $9,443,431. Principal and interest paid for the current year and total electric system net revenues were $474,019 and $480,474, respectively. The Electric System did meet the Electric Revenue Bond revenue requirements in 2024. 20 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 7 - Long-Term Debt (Continued) Other Debt Information The Utilities outstanding debt from direct borrowings and direct placements related to governmental and business- type activities contain event of default and/or termination provisions with possible finance-related consequences. City management has evaluated the event of default and/or termination provisions with possible finance-related consequences and in the opinion of City management, the likelihood is remote that these provisions will have a significant effect on the Utilities financial position or results of operations. Note 8 - Net Position Net position is classified into three components – net investment in capital assets; restricted; and unrestricted. These classifications are defined as follows: Net investment in capital assets - This component of net position consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvements of those assets. Restricted - This component of net position consists of constraints placed on assets use through external constraints imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or constraints imposed by law through constitutional provision or enabling legislation. Unrestricted net position - This component of net position consists of net position that does not meet the definition of “restricted”, or “net investment in capital assets”. When both restricted and unrestricted resources are available for use, it is the Utilities’ policy to use restricted resources first, then unrestricted resources as they are needed. Net position of the Utilities at December 31, 2024 include the following: Net Investment in Capital Assets Net Capital Assets $ 9,380,256 $ 8,538,434 $ 17,918,690 Less: Related Long-Term Debt Outstanding (7,313,065) (4,453,862) (11,766,927) Less: Related Premium on Debt Issued (110,432) - (110,432) Add: Unspent Bond Proceeds 5,050,774 - 5,050,774 Net Investment in Capital Assets 7,007,533 4,084,572 11,092,105 Restricted Plant Replacement - 941,873 941,873 Pension Benefits 75,924 31,263 107,187 Total Restricted 75,924 973,136 1,049,060 Unrestricted (Deficit) 4,077,033 83,440 4,160,473 Total Net Position $ 11,160,490 $ 5,141,148 $ 16,301,638 Water Utilities Utility Total Electric and Sewer 21 OCONTO FALLS MUNICIPAL UTILITIES Notes to Financial Statements December 31, 2024 Note 9 - Defined Benefit Pension Plan General Information about the Pension Plan Plan Description. The WRS is a cost-sharing multiple-employer defined benefit pension plan. WRS benefits and other plan provisions are established by Chapter 40 of the Wisconsin Statutes. Benefit terms may only be modified by the legislature. The retirement system is administered by the Wisconsin Department of Employee Trust Funds (ETF). The system provides coverage to all eligible State of Wisconsin, local government, and other public employees. All employees, initially employed by a participating WRS employer on or after July 1, 2011, expected to work at least 1,200 hours a year (880 hours for teachers and school district educational support employees) and expected to be employed for at least one year from employee’s date of hire are e