6.4. SR 06-21-2004 - Laserfiche WebLink

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CITY OF ELK RIVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2003 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 7. Fund Equity In the fund financial statements, govermnental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. Note 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles. Annual appropriated budget are legally adopted for the general and some special revenue funds. Project-length financial plans are adopted for all capital projects funds. All annual appropriations lapse at fiscal year end. On or before July 1 of each year, all departments and agencies of the City submit requests for appropriation to the City's administrator so that a budget may be prepared. Before September 15, the proposed budget is presented to the City Council for review and approval. The City Council holds public hearings and may add to, subtract from, or change appropriations. Any changes in the budget must be within the revenue and reserves estimated as available or the revenue estimates must be changed by an affirmative vote by a majority of the City Council.. The budget is prepared by fund, function, and activity and includes information on the past year, current year estimates, and requested appropriations for the next fiscal year. Expenditures may not legally exceed budgeted appropriations at the fund level without Council approval. Spending control is established by the amount of expenditures budgeted for the fund, but management control is exercised at the department level. Reported budget amounts are as originally adopted or as amended by Council approved supplemental appropriations and budget transfers. Supplemental budgetary appropriations decreased $243,200 due to the loss of state-aid funds. B. Excess of Expenditures Over Appropriations For the year ended December 3 I, 2003, expenditures exceeded appropriations in the landfill fund by $70,601 and the EDA fund by $1,838. These over expenditures were funded by greater than anticipated revenues, available fund balances and future revenues. C. Deficit Fund Equity The ice arena fund, improvement projects fund, and tax increment financing districts fund had deficit balances of $18,592, $281,371, and $41,701, respectively. The fund deficits are expected to be covered from future fund revenues or transfers from other funds. Note 3: DETAILED NOTES ON ALL FUNDS A. Deposits and Investments Deposits In accordance with Minnesota statutes, the City maintains deposits at the depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). 41