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awn <br />AGENCY FUNDS <br />Agency Funds account for assets held as an agent for individuals, organizations, other governmental units or <br />other funds. The City currently maintains three agency funds. <br />The Contractors Deposits Fund accounts for the pass - through costs of developer financed projects within the <br />City. <br />The Pending Assessments Fund accounts for the receipt of assessment prepayments prior to certification. This <br />fund is closed annually at certification time. The balance in this fund is the result of assessments being collected <br />that will not be certified to Anoka County until 2002. <br />The Investment Fund accounts for the pooling of all the City's money that is invested throughout the year. <br />Interest on investments is recorded in this fund before allocating to all funds. Interest earned in 2002 was <br />$487,505 compared to $611,806 in 2001. The decrease in interest income resulted from changing market <br />conditions in 2001 and 2002. Interest rates dropped substantially in response to a weakened economy leading to <br />reduced returns on investment. <br />GENERAL FIXED ASSETS ACCOUNT GROUP <br />General fixed assets are those assets used for general governmental functions only. This does not include <br />enterprise funds. Depreciation is not recorded on the general fixed assets. <br />GENERAL LONG -TERM DEBT ACCOUNT GROUP <br />This group reports the current assets available in the Debt Service Funds and recognizes the amounts to be <br />provided through future tax levies, assessments and tax increments. <br />CASH MANAGEMENT <br />The City's policy is to invest all available moneys at competitive rates in accordance with Minnesota law. <br />Investments are made by minimizing credit and market risks while maintaining a competitive yield. Funds are <br />invested in certificates of deposit, commercial paper and U.S. government agencies. Cash is pooled in one <br />'— account to provide maximum return. <br />WNW <br />Cash temporarily idle during the year was invested in certificates of deposit, commercial paper, and obligations <br />of the U.S. Treasury. The City's investment policy's primary objective is safety of principal. Therefore, all <br />deposits were either insured by Federal depository insurance or were collateralized as required by State Statute. <br />The City Council reviews the investment policy annually and last amended it in 1998. <br />DEBT ADMINISTRATION <br />At year -end, the City had a number of debt issues outstanding. These issues included $6,244,450 of general <br />obligation bonds and equipment certificates, $11,640,000 of general obligation improvement bonds with special <br />assessments pledged and $3,220,000 of revenue bonds. During 2002, the City issued general obligation <br />improvement bond issues of $645,000 and $2,110,000. Both issues are to be repaid from special assessments. <br />Additionally, the City issued $140,000 of equipment certificates internally, the proceeds of which were used to <br />purchase capital equipment. <br />9 <br />