CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
As management of the City of Oconto, Wisconsin (City), we offer readers of the City’s basic financial statements
this narrative overview and analysis of the financial activities of the City for the fiscal year ended December 31,
2012.
Financial Highlights





The assets of the City exceeded its liabilities as of December 31, 2012, by $20,271,813 (net position). Of this
amount, $1,697,041 may be used to meet the government’s ongoing obligations to citizens and creditors
(unrestricted net position). The total net assets include all infrastructure of the governmental funds installed
from 1980 to present.
The City’s total net position increased by a net amount of $310,452 with a $2,117,540 decrease in the net
investment in capital assets.
As of December 31, 2012, the City’s governmental funds reported combined ending fund balances of
$2,026,966 an increase of $1,883,346 in comparison with the prior year.
As of December 31, 2012 the unassigned fund balance of the general fund was $489,716.
The City’s total general obligation debt increased by $2,583,611.
Overview of the Basic Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. These
basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to the basic financial statements. This report also contains other supplementary
information in addition to the basic financial statements themselves.
Government-Wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City’s
finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, liabilities, and deferred inflows of
resources with the net difference reported as net position. Over time, increases or decreases in net position may
serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the government’s net position changed during the
most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the
change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this
statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected special
assessments and earned but unused vacation and sick leave).
Both of the government-wide financial statements distinguish functions of the City that are principally supported
by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to
recover all or a significant portion of their costs through user fees and charges (business-type activities). The
governmental activities of the City include general government, public safety, public works, health and human
services, culture and recreation, and development. The business-type activities of the City includes the combined
water and sewer utility.
The government-wide financial statements can be found on pages 12 - 15 of this report.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The City, like other state and local governments, uses fund
accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the
City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as governmental activities in
the government-wide financial statements.
However, unlike the government-wide financial statements,
governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well
as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating the government’s near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is
useful to compare the information presented for governmental funds with similar information presented for
governmental activities in the government-wide financial statements. By doing so, readers may better understand
the long-term impact of the government’s near-term financing decisions. Both the governmental fund balance
sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a
reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains 11 individual governmental funds. Information is presented separately in the governmental
fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund
balances (deficits) for the general fund, the debt service fund, and the 2005 capital project fund, which are
considered to be major funds. Data from the remaining 8 governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the
form of combining statements later in this report.
The basic governmental fund financial statements can be found on pages 16 - 21 of this report.
Proprietary Funds
Proprietary funds are used to report the same functions presented as business-type activities in the governmentwide financial statements. Proprietary funds provide the same type of information as the government-wide
financial statements, only in more detail. The proprietary fund financial statements provide information for the
utility, which is considered to be a major fund of the City.
The basic proprietary fund financial statements can be found on pages 22 - 25 of this report.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Fiduciary Funds (Not included in government-wide statements)
Agency funds are used to account for assets held by the City as an agent for individuals, private organizations
and/or other government units.
Private-Purpose Trust funds are used to account for resources legally held in a trust and used to support the City
Library.
The basic fiduciary fund financial statements can be found on pages 26 and 27 of this report.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the
government-wide and fund financial statements. The notes to the basic financial statements can be found on
pages 28 - 48 of this report.
Required Supplementary Information
The required supplementary information includes the budget to actual comparison for the general fund. This
information can be found on pages 49 - 51.
Other Information
The combining statements referred to earlier in connection with non-major governmental funds and other
information related to the individual funds can be found on pages 52 - 64 of this report.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Government-Wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government’s financial position. For
the City, assets exceeded liabilities by $20,271,813 at the close of 2012.
CITY OF OCONTO, WISCONSIN NET POSITION
Governmental Activities
2012
2011
Current and Other
Assets
Capital Assets
Total Assets
$
4,433,167
14,232,549
18,665,716
$
3,044,851
13,866,347
16,911,198
Business-Type Activities
2012
2011
$
3,138,640
18,442,331
21,580,971
$
Totals
2012
2,388,147
18,534,470
20,922,617
$
7,571,807
32,674,880
40,246,687
2011
$
5,432,998
32,400,817
37,833,815
Long-Term Liabilities
Outstanding
Other Liabilities
Total Liabilities
7,366,495
249,639
7,616,134
9,102,708
422,238
9,524,245
10,419,241
244,890
10,664,131
6,345,047
144,211
6,489,258
17,785,736
494,529
17,280,265
15,447,755
566,449
16,014,204
Deferred Inflows
of Resources
1,694,609
1,858,250
-
-
1,694,609
1,858,250
Net Position
Net Investment in
Capital Assets
Restricted
Unrestricted (Deficit)
8,359,051
750,199
245,723
6,254,871
156,851
(883,720)
7,967,703
1,497,819
1,451,318
12,189,423
838,776
1,405,160
16,326,754
2,248,018
1,697,041
18,444,294
995,627
521,440
$
9,354,973
$
5,528,002
$
10,916,840
$
14,433,359
$
20,271,813
$
19,961,361
The largest portion of the City’s net position (approximately 81 percent) reflects its investment in capital assets
(e.g., land, buildings, machinery and equipment, infrastructure); less any related debt used to acquire those
assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the City’s investment in its capital assets is reported
net of related debt, it should be noted that the resources needed to repay this debt must be provided from other
sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City’s net position (approximately 11 percent) represents resources that are subject to
external restrictions on how they may be used. The remaining balance of unrestricted net position may be used
to meet the City’s ongoing obligations to citizens and creditors.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Government-Wide Financial Analysis (Continued)
CITY OF OCONTO, WISCONSIN CHANGES IN NET POSITION
Governmental Activities
2012
2011
Revenues:
Program Revenues
Charges for Services
Operating Grants and
Contributions
Capital Grants and
Contributions
General Revenues
Property Taxes
Intergovernmental
Revenues not Restricted
to Specific Programs
Other
Total Revenues
$
Expenses:
General Government
Public Safety
Public Works
Health and Human
Services
Culture and Recreation
Development
Interest and Fiscal
Charges
Utility
Total Expenses
Transfers
Increase (Decrease) in Net
Position
Net Position - Beginning of
Year - Restated
Net Position - End of Year
$
1,207,700
$
1,006,747
Business-Type Activities
2012
2011
$
1,894,346
$
Totals
2012
1,720,521
$
2011
3,102,046
$
2,727,268
343,404
605,259
-
-
343,404
605,259
267,334
1,728,472
-
318,824
267,334
2,047,296
1,785,983
1,927,256
-
-
1,785,983
1,927,256
1,771,529
103,585
5,479,535
1,810,382
179,689
7,257,805
52,484
1,946,830
46,747
2,086,092
1,771,529
156,069
7,426,365
1,810,382
226,436
9,343,897
621,004
2,063,732
1,541,749
625,075
1,997,545
1,336,432
-
-
621,004
2,063,732
1,541,749
625,075
1,997,545
1,336,432
4,730
576,148
40,154
5,442
609,259
41,368
-
-
4,730
576,148
40,154
5,442
609,259
41,368
524,106
5,371,623
297,541
4,912,662
1,744,290
1,744,290
1,611,195
1,611,195
524,106
1,744,290
7,115,913
297,541
1,611,195
6,523,857
3,719,059
(248,134)
(3,719,059)
248,134
-
-
3,826,971
2,097,009
(3,516,519)
723,031
310,452
2,820,040
5,528,002
3,430,993
14,433,359
13,710,328
19,961,361
17,141,321
9,354,973
$
5,528,002
$
10,916,840
$
14,433,359
$
20,271,813
$
19,961,361
Key elements of this increase are as follows:
Revenues increased by $866,843 due to an increase in operating grants and contributions, for public safety and
recreational grants, an increase in capital grants for state grants for the harbor project and federal grants for the
highway construction and airport projects, an increase in contributions for the fish cleaning station, and
miscellaneous revenues increased for insurance recoveries for storm damage.
Expenses decreased by $66,600 due to decreases in development since no new loans were granted in the
current year as well as the Kelly Pickle property-site cleanup and development were completed in 2010, interest
and fiscal changes decreased due to previous years debt restructuring and utility expenses decreased due to
fewer contracted services needed for fewer line and main breaks due to the mild winter.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Financial Analysis of the Government’s Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal
requirements.
Governmental Funds
As of December 31, 2012, the City’s governmental funds reported combined ending balances of $2,026,966, an
increase of $1,883,346 in comparison with the prior year. Total unassigned fund balance is a negative $99,544. A
portion of the fund balance is nonspendable for delinquent special assessments of $14,350. Another portion of
the fund balance is restricted to indicate that it is not available for new spending because it has already been
restricted for capital projects of $569,616 and for community revolving loans of $180,583. There is a committed
portion of fund balance for TID No.2 of $940,955. The remainder of the fund balance is assigned to indicate that it
is not available for new spending because it has already been assigned for future purchases as indicated on page
45.
The general fund is the chief operating fund of the City. As of December 31, 2012, the total fund balance of the
general fund was $802,664 of which $489,716 was unassigned. The fund balance of the general fund increased
by $81,982 in fiscal year 2012.
The debt service fund has a negative fund balance of $346,605. The fund balance decreased by $99,886.
The 2005 capital projects fund has a fund balance of $569,616. The fund balance increased by $1,657,871.
Proprietary Fund
The City’s proprietary fund provides the same type of information found in the government-wide financial
statements, but in more detail.
Unrestricted net position of the utility fund at the end of the year amounted to $1,451,318. The total decrease in
net position was $3,516,519, which was result of transfer to debt service fund.
General Fund Budgetary Highlights
During the year, actual revenues and other financing sources exceeded budgeted revenues by $45,738 primarily
in intergovernmental revenues due to an increase in state and federal grants in public safety. Actual expenditures
were more than budgeted expenditures by $49,138 primarily in public safety for unexpected increases in
overtime, health and retirement expenses and capital outlay for the highway project costs reimbursed by the
State, and the fish cleaning station project paid for partially with private donations.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Capital Asset and Debt Administration
Capital Assets
The City’s net investment in capital assets for its governmental and business-type activities as of December 31,
2012, amounts to $32,674,880 (net of accumulated depreciation). This investment in capital assets includes land,
land improvements, buildings, machinery and equipment, vehicles, public domain infrastructure (highways and
bridges) and utility plant.
CITY OF OCONTO, WISCONSIN’S CAPITAL ASSETS
Governmental Activities
2012
2011
Land
Construction in
Progress
Buildings and
Improvement
Machinery and
Equipment
Infrastructure
Total Capital
Assets
Less Accumulated
Depreciation
Capital Assets Net of
Depreciation
$
659,603
$
Business-Type Activities
2012
2011
659,603
$
45,854
$
Totals
2012
45,854
$
2011
705,457
$
705,457
8,616
52,500
-
-
8,616
52,500
6,832,534
6,794,829
18,102,677
18,011,032
24,935,211
24,805,861
4,110,642
8,412,019
3,842,028
8,045,318
6,637,956
-
6,572,410
-
10,748,598
8,412,019
10,414,438
8,045,318
20,023,414
19,394,278
24,786,487
24,629,296
44,809,901
44,023,574
5,790,865
5,527,931
6,399,543
6,094,826
12,190,408
11,622,757
$ 14,232,549
$ 13,866,347
$ 18,386,944
$
18,534,470
$
32,674,880
$
32,400,817
For further details on capital asset activity, refer to Note 7 of the Notes to Financial Statements.
Long-Term Debt
At the end of the current fiscal year, the City has total bonded debt outstanding of $16,930,947; of this amount
$7,290,003 comprises debt backed by the full faith and credit of the government. The remainder of the City’s debt
represents bonds secured solely by specific revenue sources.
CITY OF OCONTO, WISCONSIN LONG-TERM DEBT
Governmental Activities
2012
2011
General Obligation Debt:
Notes
Revenue Bonds
Special Assessment
Bonds
Clean Water Fund Loan
Total
$
6,754,353
-
$
$
6,754,353
$
Business-Type Activities
2012
2011
4,063,522
4,547,954
$
535,650
9,550,000
-
90,944
-
8,611,476
$ 10,176,594
$
642,870
4,952,319
Totals
2012
$
95,274
654,584
$
6,345,047
7,290,003
9,550,000
2011
$
90,944
$
16,930,947
4,706,392
9,500,273
95,274
654,584
$
14,956,523
The City maintains an “A-” and the Utility maintains an “A+” rating from Standards and Poor’s for general
obligation debt.
State statutes limit the amount of general obligation debt a governmental entity may issue to 5 percent of its total
equalized valuation. The current debt limitation for the City is $9,445,170, which exceeds the City’s current
outstanding general obligation debt.
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CITY OF OCONTO, WISCONSIN
Management’s Discussion and Analysis
For the Year Ended December 31, 2012
Economic Factors and Next Year’s Budgets and Rates

The unemployment rate for the City is currently 10.4%. This compares to the State of Wisconsin’s average
unemployment rate of 8.1%.

The economic condition and outlook of the City has remained fairly stable based on a relatively healthy mix of
manufacturing, tourism, service industry, retail and technology based activities, which support our tax base.

The City is currently working with their bond counsel to refinance their 2001 and 2009 Revenue Bonds as well
as borrowing new money to finance the 2012 Utility Projects. The estimated amount of the borrowing will be
$5,091,000
These factors were considered in preparing the City’s budget for the 2013 fiscal year.
Requests for Information
This financial report is designed to provide a general overview of the City’s finances for all those with an interest
in the government’s finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to Sara J. Perrizo, Administrator/Clerk/Treasurer, 1210 Main
Street, Oconto, WI 54153.
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