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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2024 <br />The City formally adopted a fund balance policy for the General Fund. The policy establishes an <br />unassigned fund balance range of 40% - 50% of general fund operating expenditures. <br />S. USE OF ESTIMATES <br />The preparation of financial statements in accordance with generally accepted accounting principles <br />(GAAP) requires management to make estimates that affect amounts reported in the financial statements <br />during the reporting period. Actual results could differ from such estimates. <br />Note 2 DEPOSITS AND INVESTMENTS <br />A. DEPOSITS <br />In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by <br />the City Council. All such banks are members of the Federal Reserve System. <br />Minnesota Statutes require that insurance, surety bonds or collateral protect all City deposits. The market <br />value of collateral pledged must equal 110% of deposits not covered by insurance or bonds. Securities <br />pledged as collateral are required to be held in safekeeping by the City or in a financial institution other <br />than that furnishing the collateral. Minnesota Statue 118A.03 identifies allowable forms of collateral. <br />Custodial Credit Risk — the risk that in the event of a bank failure, the City's deposits may not be returned <br />to it. The City has no additional deposit policies addressing custodial credit risk. <br />At December 31, 2024, the bank balance of the City's deposits with financial institutions was $13,380,912 <br />and the carrying amount was $13,289,330. All deposits were covered by federal depository insurance or by <br />collateral pledge and held in the City's name. <br />55 <br />