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<br />CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2007 <br /> <br />Note 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY - CONTINUED <br /> <br />B. Excess of Expenditures Over Appropriations <br /> <br />For the year ended December 31, 2007, expenditures exceeded appropriations in the following departments (the <br />legal level of budgetary control). <br /> <br />Amount <br /> <br />General government <br />Assessing <br />Legal <br />Public safety <br />Police protection <br />Fire protection <br />Public works <br />Recycling <br />Culture and recreation <br />City festival <br />Economic development <br /> <br />$ 165 <br />42,688 <br /> <br />1,668 <br />42,050 <br /> <br />15,208 <br />162,773 <br />4,885 <br />11,057 <br /> <br />These over expenditures were funded by lower than expected expenditures in other departments and greater than <br />anticipated revenues. <br /> <br />C. Deficit Fund Equity <br /> <br />The following funds had a deficit fund balance as of December 31, 2007: <br /> <br />Fund <br /> <br />Amount <br /> <br />Major Funds <br />Park <br />Debt Service Funds <br />G.O. Improvement Bonds of2004A <br />Nonmajor Funds <br />2006 Municipal Improvements <br />2009 Street & Utility Improvements <br /> <br />$ 199,618 <br /> <br />37,034 <br /> <br />235,630 <br />97,665 <br /> <br />Note 3: DETAILED NOTES ON ALL FUNDS <br /> <br />A. Deposits and Investments <br /> <br />Custodial credit risk for deposits and investments is the risk that in the event of a bank failure, the City's deposits <br />and investments may not be returned or the City will not be able to recover collateral securities in the possession of <br />an outside party. In accordance with Minnesota statutes and as authorized by the Council, the City maintains <br />deposits at those depository banks, all of which are members of the Federal Reserve System. <br /> <br />Minnesota statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market <br />value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds (140 percent in <br />the case of mortgage notes pledged). <br /> <br />Authorized collateral includes the legal investments described below, as well as certain first mortgage notes, and <br />certain other State or local government obligations. Minnesota statutes require that securities pledged as collateral <br />be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. <br /> <br />-29- <br />