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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2010 <br />NOTE-4 CITY INDEBTEDNESS (CONTINUED) <br />NOTE 5 <br />NOTE S <br />NOTE 7 <br />Description and Restrictions of Long -Term Debt <br />General Obligation Bonds — The: bonds were :issued for improvements or projects which <br />benefited the City as a whole and are, therefore, repaid from ad valorem levies. <br />STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY <br />Deficit`.Fund Balances <br />The City has deficit fund balances at December 31,.201 a as follows: <br />Scheunernan Road Fund <br />Fund Balance <br />Deficit <br />$ (71,025) <br />The City intends to fund these .deficits through future tax levies, transfers frorn other funds, <br />and various other sources. <br />INTERFUN❑ RECEIVABLE AND PAYABLE <br />Individual fund. receivable and payable balances at ❑ecember 31, 2010 are as follows: <br />Governmental Activity: <br />General Fund <br />Capital Projects Fund - Scheuneman Road <br />Interfund <br />Receivable <br />$ 71,025 <br />$ 71,025 <br />Interfund <br />Payable <br />71,025 <br />$ 71,025. <br />Interfund receivable and payable balances represent the elimination of negative cash <br />between funds. <br />RISK MANAGEMENT <br />The City is: :exposed to various risks of loss related to torts; theft of, damage to and <br />destruction. of assets; errors and omissions; injuries to employees; and natural disasters. <br />The City carries commercial insurance for all .risks of loss, including disability and employee <br />health insurance. <br />There were no significant .reductions in insurance from the previous year or settlements in <br />excess of insurance coverage for any of the past three. fiscal years.. <br />