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CITY OF CENTERVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 Note 1: SUMMARY OF SIGNlFICANT ACCOUNTING POLICIES - CONTINUED Comparative DataIRec:lasslfications Comparative total data for the prior year have been presented in the selected sections of the accompanying financial statements in order to provide an understanding of changes in the City's financial position and operations. Also. certain amounts presented in the prior year data bave been reclassified in order to be consistent with the cWTent year's presentation. Note 2: STEWARDSIDP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Iuformation Annual budgets are adopted on a basis consistent with aCcOlUlting principles generally accepted in the United States of America for the general fund. All annual appropriations lapse at fiscal year end. The City does Dot use encwnbrance accounting. In August of each year, all departments ofthe City submit requests for appropriations to the City Administrator so thst a budget may be prepared_ Before September 15, the proposed budget is presented to the Council for review. The Council holds public hearings and a [mal budget is prepared and adopted in early December. The appropriated budget is prepared by fund, function and department_ The City's department heads, with the approval of the City Administrator, may make transfers of appropriations within a department_ Transfers of appropriations between departments require the approval ofthe Council. The legal level of budgetary control is the department level. Budgeted amounts are as originally adopted, or as amended by the Council. There were no budget amendments made during the year. B. Deficit Fund Equity The following funds have a deficit fund balance as of December 31, 2002: Capital projects T1F District 14 21 SI Avenue Improvements Downtown Revitalization $ 4,420 11,021 8,560 The deficits in these funds will be eli.rninated by future revenue sources and transfers. Note 3: DETAILED NOTES ON ALL FUNDS AND ACCOUNT GROUPS A. Deposits and Investments Cash balances of the City's funds are combined (pooled) and invested to the extent available in various investments authorized by Minnesota statute. Each fund's portion of this pool (or pools) is displayed on the financial statements as "cash and temporary investments." For purposes of identifying the risk of investing public funds, the balances are categorized as follows: