Annual Financial Report 12/31/1988

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Page 18 of 19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1988 NOTE 6 DEFERRED TAX LEVIES - GENERAL DEBT WITH SPECIAL ASSESSMENTS PLEDGED, (Continued) These future scheduled tax levies are not shown as assets in the accompanying financial statements in accordance with generally accepted accounting principles. Revenue from these tax levies is recognized annually as explained under "Property Tax Revenue Recognition ". Scheduled and actual debt service tax levies for the general obligation debt with special assessments pledged were and are scheduled to be as follows: Levy /Collection Scheduled Actual Percent Levied 1987/88 $29,801 0.00% 1988/89 34,838 0.00% 1989 /90 35,639 1990/91 2,508 1991/92 1,689 1992/93 839 NOTE 7 METROPOLITAN WASTE CONTROL COMMISSION The MWCC bills the City annually based upon estimated volume and budgeted costs. These billings are later adjusted when actual volume and actual costs are determined. The adjustment to actual is generally determined in the succeeding calender year and payable, by the City, in the second succeeding calendar year. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed (for estimated billings) and in the year the adjustments are determined (for adjustments from estimated to actual billings). NOTE 8 CONTINGENCIES The City attorney has indicated that existing and pending lawsuits, claims and other actions in which the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgement of the City attorney, remotely recoverable by plaintiffs. NOTE 9 FEDERALLY ASSISTED PROGRAMS - COMPLIANCE AUDITS The City receives financial assistance from federal and state governmental agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in the opinion of management, any such disallowed claims will not have a material effect on any of the financial statements of the individual fund types included herein or on the overall financial position of the City at December 31, 1988.