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CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />1. Summary of Significant Accounting Policies (Continued) <br />D. Assets, Liabilities, Deferred Inflows of Resources, and Net Position or Equity <br />Cash and investments (including cash equivalents) <br />Cash balances from all funds (including cash equivalents) are pooled and invested to the <br />extent available in various securities as authorized by Minnesota statutes. Earnings from <br />the pooled investments are allocated to the respective funds on the basis of applicable <br />cash balance participation by each fund. <br />Investments are stated at fair value, based upon quoted market prices at the reporting <br />date. <br />Cash and cash equivalents for purposes of the basic financial statements includes <br />amounts in demand deposits as well as all investments held by the City. <br />2. Receivables and payables <br />Activity between funds that are representative of lending/borrowing arrangements <br />outstanding at the end of the fiscal year are referred to as either "due to/from other funds" <br />(i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the non- <br />current portion of interfund loans). All other outstanding balances between funds are <br />reported as "due to/from other funds." Any residual balances outstanding between the <br />governmental activities and business -type activities are reported in the government -wide <br />financial statements as "internal balances." <br />Advances between funds, if any, are offset by a fund balance reserve account in <br />applicable governmental funds to indicate that they are not available for appropriation and <br />are not expendable available financial resources. <br />Property tax levies are set by the City Council in December of each year and are certified <br />to Washington County for collection in the following year. In Minnesota, counties act as <br />collection agents for all property taxes. The County spreads all levies over taxable <br />property. Such taxes become a lien on January 1, of the following year, and are recorded <br />as receivables by the City at that date. Revenues from property taxes are accrued and <br />recognized in the year collectible, net of delinquencies. <br />34 <br />