06-14-2021 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2020 or unassigned resources are available for use, it is the City’s policy to use resources in the following order: 1) committed 2) assigned and 3) unassigned. The City formally adopted a fund balances policy for the general fund. The policy establishes an unassigned fund balance range of 40% - 50% of general fund operating expenditures. R. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles (GAAP) requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. Note 2 DEPOSITS AND INVESTMENTS A. DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that insurance, surety bonds or collateral protect all City deposits. The market value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. Securities pledged as collateral are required to be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. Minnesota Statue 118A.03 identifies allowable forms of collateral. Custodial Credit Risk – the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City has no additional deposit policies addressing custodial credit risk. At December 31, 2020, the bank balance of the City’s deposits with financial institutions was $5,357,631 and the carrying amount was $4,978,958. All deposits were covered by federal depository insurance or by collateral pledge and held in the City’s name. 53