Laserfiche WebLink
Now <br />Inimw <br />ammo <br />CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1998 <br />Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />6. Legal debt obligation indentures determine the appropriation level and debt service tax levies <br />for the Debt Service Funds. Supplementary budgets are adopted for the Proprietary Funds to <br />determine and calculate user charges. These debt service and budget amounts represent <br />general obligation bond indenture provisions and net income for operation and capital <br />maintenance and are not reflected in the financial statements. <br />7. A capital improvement program is reviewed periodically by the City Council for the Capital <br />Project Funds. However, appropriations for major projects are not adopted until the actual <br />bid award of the improvement. The appropriations are not reflected in the financial <br />statements. <br />8. Expenditures may not legally exceed budgeted appropriations at the total fund level. <br />Monitoring of budgets is maintained at the expenditure category level (i.e., personal services, <br />supplies; other services and charges; capital outlay) within each activity. <br />9. The City Council may authorize transfer of budgeted amounts between City funds. <br />F. CASH AND INVESTMENTS <br />Cash and investment balances from all funds are pooled and invested to the extent available in <br />investments authorized by Minnesota Statutes. Earnings from investments are allocated to individual <br />funds on the basis of the fund's equity in the cash and investment pool. <br />The City provides temporary advances to funds that have insufficient cash balances by means of an <br />advance from another fund shown as interfund receivables in the advancing fund, and an interfund <br />payable in the fund with the deficit, until adequate resources are received. <br />Investments are stated at fair value as of the balance sheet date. Interest earnings are accrued at the <br />balance sheet date. <br />For purposes of the statement of cash flows the Proprietary Fund considers all highly liquid <br />investments with a maturity of three months or less when purchased to be cash equivalents. All of the <br />cash and investments allocated to the proprietary fund types have original maturities of 90 days or <br />less. Therefore, the entire balance in such fund types is considered cash equivalents. <br />G. HOMESTEAD CREDIT AND AGRICULTURAL CREDIT AID (HACA) <br />Property taxes on homestead property (as defined by State Statutes) are partially reduced by HACA. <br />This credit is paid to the City by the State in lieu of taxes levied against homestead property. The <br />State remits this credit through installments each year. The credit is recognized as revenue by the <br />City at the time of collection. <br />H. LOCAL GOVERNMENT AID REVENUE RECOGNITION <br />Local government aid is provided to the City by the State as a shared tax based upon a statutory <br />formula and without restrictions. Payment from the State is generally received during each calendar <br />year for that calendar year. The City recognizes local government aid revenue when it becomes both <br />measurable and available to finance current operations. In practice, local government aid is <br />recognized as revenue as it is received in cash. <br />37 <br />