Annual Financial Report 12/31/1987

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Page 4 of 19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1987 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) BUDGETARY DATA (CONTINUED) License and pernuts exceeded budget because of increased development within the City in 1987. Fines and forfeits exceeded budget because of increased enforcement efforts. Engineering exceeded budget because of increased services requested by the City. Independent accountants and auditors exceeded budget because of increased services requested by the City including gas utility franchise negotiations and accounting services. Planning and zoning exceeded budget because of the City's comprehensive planning efforts and the hiring of a staff planner. Legal exceeded budget because of increased services requested by the City. General government buildings was under budget partially because of decreased energy charges. Civil defense - capital outlay was under budget because the City did not purchase the Civil Defense siren in 1987. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is not employed by the City because it is at present not considered necessary to assure effective budgetary control or to facilitate effective cash planning and control. Any appropriations that need to be carried forward to the next year have to be reappropriated by the City Council from the fund balance of the fund involved. NOTE 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS CASH AND INVESTMENTS Cash balances from all funds are pooled and invested to the extent available in authorized investments. Earnings from investments are allocated to individual funds on the basis of the fund's available cash balance. Investments are stated at cost (plus interest added, if any) which approximates market value. Material purchase discounts and premiums are amortized over the term of the investment. Investment earnings are accrued at the balance sheet date. Interest is allocated to funds based on the average cash balance during the year. Cash and investment balances were as follows at December 31, 1987 and 1986: December 31. 1987 1986 Cash - checking $13,450 $(55,091) Investments 2,282,490 1,470,937 Petty Cash and Change 150 150 Totals popdta $2,296 090 $1 526 996 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 all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged).