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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2003 <br />Note 9 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY (CONTINUED) <br />Expenditures in Excess of Budget <br />Actual expenditures exceeded 2003 budgets in the following fund: <br />Budget Actual <br />Program Recreation <br />Note 10 CONTINGENCIES <br />225,341 $ 244,555 <br />Litigation - The City attorney has indicated that existing and pending lawsuits, claims and other actions in which <br />the City is a defendant are either covered by insurance; of an immaterial amount; or, in the judgment of the City <br />attorney, remotely recoverable by plaintiffs. <br />Federal and State Funds - The City receives financial assistance from federal and state governmental agencies in <br />the form of grants. The disbursement of funds received under these programs generally requires compliance <br />with the terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. <br />Any disallowed claims resulting from such audits could become a liability of the applicable fund. However, in <br />the opinion of management, any such disallowed claims will not have a material effect on any of the financial <br />statements of the individual fund types included herein or on the overall financial position of the City at <br />December 31, 2003. <br />Note 11 DEFERRED AD VALOREM TAX LEVIES - BONDED DEBT <br />General Obligation bond issues sold by the City are financed by ad valorem tax levies and special assessment <br />bond issues sold by the City are partially financed by ad valorem tax levies in addition to special assessments <br />levied against the benefiting properties. When a bond issue to be financed partially or completely by ad valorem <br />tax levies is sold, specific annual amounts of such tax levies are stated in the bond resolution and the County <br />Auditor is notified and instructed to levy these taxes over the appropriate years. The future tax levies are subject <br />to cancellation when and if the City has provided alternative sources of financing. The City Council is required <br />to levy any additional taxes found necessary for full payment of principal and interest. <br />These future scheduled tax levies are not shown as assets in the accompanying financial statements at <br />December 31, 2003 and 2002. <br />Future scheduled tax levies for all bonds outstanding at December 31, 2003 totaled $10,201,740. <br />49 <br />