05-28-13 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2012 39 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. LEGAL COMPLIANCE – BUDGETS (CONTINUED) 7. A capital improvement program is reviewed periodically by the City Council for the Capital Project Funds. However, appropriations fo r major projects are not adopted until the actual bid award of the improvement. The appropriations are not reflected in the financial statements. 8. Expenditures may not legally exceed budgeted appropria tions at the department level unless approved by the City Council. Therefore, the legal level of budgetary control is at the department level (i.e. administration, community development, pub lic safety, public services, and other). 9. The City Council may authorize transfers of budgeted amounts between City funds. F. CASH AND INVESTMENTS Cash and investment balances from all funds are pooled and invested to the extent available in investments authorized by Minnesota Statutes. Earnings from investments are allocated to individual funds on the basis of the fund's equity in the cash and investment pool. The City provides temporary advances to funds that have insufficient cash balances by means of an advance from another fund shown as interfund receivables in the advanc ing fund in the governmental fund financial statements, and an interfund payable in the fund with the deficit, until adequate resources are received. These interfund payables are eliminat ed for statement of Net position presentation. Investments are stated at fair value and interest earnings are accrued at year-end. For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All of the cash and investments allocated to the proprieta ry fund types have original maturitie s of 90 days or less. Therefore, the entire balance in such fund types is considered cash equivalents. Permanently restricted cash and inve stments represents the principal portion of resources received that must be retained in a permanent fund. Only earnings from these funds may be used for purposes that support environmental maintenance and improvements. G. PROPERTY TAX CREDITS Property taxes on homestead property (as defined by St ate Statutes) are partially reduced by property tax credits. These credits are paid to the City by the State in lieu of taxes levied against homestead property. The State remits these credits thr ough installments each year. These cred its are recognized as revenue by the City at the time of collection.