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<br /> <br />City of Little Canada, Minnesota <br />Notes to the Financial Statements <br />December 31, 2023 <br /> <br />Note 1: Summary of Significant Accounting Policies (Continued) <br /> <br />Net Position <br /> <br />Net position represents the difference between assets and deferred outflows of resources and liabilities and deferred <br />inflows of resources. Net position is displayed in three components: <br /> <br />a. Net investment in capital assets - Consists of capital assets, net of accumulated depreciation reduced by any <br />outstanding debt attributable to acquire capital assets. <br /> <br />b. Restricted net position - Consists of net position balances restricted when there are limitations imposed on their <br />use through external restrictions imposed by creditors, grantors, laws or regulations of other governments. <br /> <br />c. Unrestricted net position - All other net position that do not meet the definition of “restricted” or “net investment in <br />capital assets”. <br /> <br />When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources <br />first, then unrestricted resources as they are needed. <br /> <br />Use of Estimates <br /> <br />The preparation of financial statements in conformity with accounting principles generally accepted in the United States <br />of America requires management to make estimates and assumptions that affect the reported amounts of assets and <br />liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect <br />the reported amounts of revenue and expenditures/expense during the reporting period. Actual results could differ from <br />those estimates. <br /> <br />Note 2: Stewardship, Compliance and Accountability <br /> <br />A. Budgetary Information <br /> <br />The budget for each fund is prepared on the same basis of accounting as the fund financial statements. Legal budgetary <br />control is at the fund level. The City adopts an annual budget for the General and Special Revenue funds. Budget amounts <br />are presented as originally adopted or amended. The City has established budgetary control at the department level in the <br />General fund. Management many amend the line items within the departments in the General fund without seeking <br />approval of the City Council. Budgeted expenditure appropriations lapse at year -end. <br /> <br />B. Deficit Fund Balance <br /> <br />As of December 31, 2023, the following funds reported deficit fund balance: <br /> <br />Amount <br />Primary Government <br />Nonmajor funds <br />TIF #6-1 273,663$ <br />TIF #7-3 Owasso Warehouse 19,695 <br />Fund <br /> <br />The fund deficits are expected to be eliminated with future tax increment revenues or transfers from other funds. <br /> <br />68