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GENERAL FIXED ASSETS ACCOUNT GROUP <br />General fixed assets are those assets used for general governmental functions only. This does <br />not include 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 <br />amounts to be provided through future tax levies, assessments and tax increments. <br />CASH MANAGEMENT <br />Cash temporarily idle during the year was invested in certificates of deposit, commercial paper, <br />and obligations of the U.S. Treasury. The City's investment policy's primary objective is safety <br />of principal. Therefore, deposits were insured by Federal depository insurance or were <br />collateralized. The City Council amended the investment policy in 1998. <br />DEBT ADMINISTRATION <br />At year -end, the City had a number of debt issues outstanding. These issues included $6,862,734 <br />of general obligation bonds and equipment certificates, $13,21.5,000 of general improvement <br />bonds with special assessments pledged and $4,075,000 of revenue bonds and contracts for deed <br />in the amount of $946,020. During 1998, the City issued $287,734 of equipment certificates <br />internally; the proceeds of which were used to purchase equipment. Also, during the year the <br />City issued $5,350,000 in lease revenue bonds to finance the construction of the Civic Center <br />Complex and the issuance of $6,310,000 of general obligation improvement bonds to finance <br />infrastructure improvement. <br />RISK MANAGEMENT <br />The City's general property and liability coverage is provided through the League of Minnesota <br />Cities Trust (LMCIT) and worker's compensation is provided through State Fund Mutual. <br />At the beginning of the insurance year, the city deposits with State Fund a premium determined <br />by calculating estimated payroll and applying experience modification ratios. An audit is <br />performed at the end of the insurance year, which may produce a refund or an adjustment due. <br />State Funds reserves and rates are reviewed annually by an actuary to assure that the program <br />remains financially strong. <br />INDEPENDENT AUDIT <br />Minnesota State law requires that cities over 2,500 population submit annual financial statements <br />attested by a certified public accountant or the State Auditor to the State Auditor. The firm <br />Larson, Allen, Weishair and Co., LLP was selected by the City Council to perform the audit. In <br />14 <br />