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<br />CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2004 <br /> <br />Note 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY <br /> <br />A. Budgetary Information <br /> <br />Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States <br />of America for the General fund. All annual appropriations lapse at fiscal year end. The City does not use <br />encumbrance accounting. <br /> <br />In August of each year, all departments of the City submit requests for appropriations to the City Administrator so <br />that a budget may be prepared. Before September 15, the proposed budget is presented to the Council for review. <br />The Council holds public hearings and a final budget is prepared and adopted in early December. <br /> <br />The appropriated budget is prepared by fund, function and department. The City's department heads, with the <br />approval of the City Administrator, may make transfers of appropriations within a department. Transfers of <br />appropriations between departments require the approval of the Council. The legal level of budgetary control is the <br />department level. Budgeted amounts are as originally adopted, or as amended by the Council. The budget was <br />amended in 2004. <br /> <br />B. Excess of Expenditures Over Appropriations <br /> <br />For the year ended December 31,2004, expenditures exceeded appropriations in the following departments (the <br />legallevel of budgetary control). <br /> <br />General government <br />Administration <br />Assessing <br />Legal and accounting <br />General government building <br />Public safety <br />Police protection <br />Fire protection <br />Civil defense <br />Animal control <br />Public works <br />Engineering services <br />Culture and recreation <br /> <br />$ 12,443 <br /> 203 <br /> 1,022 <br /> 5,446 <br /> 4,697 <br /> 110,106 <br /> 727 <br /> 426 <br /> 5,022 <br /> 1,366 <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, 2004: <br /> <br />Fund <br /> <br />Amount <br /> <br />Debt service <br />Elementary School Water Extension <br />Capital projects <br />TIFDistrict 14 <br /> <br />$ <br /> <br />38,778 <br /> <br />6,985 <br /> <br />The City plans to fund these deficits with future revenues from tax increment, special assessments and transfer from <br />other funds. <br /> <br />-23- <br />