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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2011 <br />NOTE 4 CITY INDEBTEDNESS (CONTINUED) <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 />NOTE 5 STEWARDSHIP COMPLIANCE AND ACCOUNTABILITY <br />Deficit Fund Balances <br />The City has deficit fund balances at December 31, 2011 as follows <br />Scheuneman Road Fund <br />Fund Balance <br />npfirit <br />-1) k04,300) <br />The City intends to fund these deficits through future tax levies, transfers from other funds, <br />and various other sources. <br />NOTE 6 INTERFUND RECEIVABLE AND PAYABLE <br />Individual fund receivable and payable balances at December 31, 2011 are as follows <br />Governmental Activity: <br />General Fund <br />Capital Projects Fund - Scheuneman Road <br />Interfund Interfund <br />Receivable Payable <br />$ 54,385 $ <br />$ 54,385 <br />54 385 <br />S 54,385 <br />Interfund receivable and payable balances represent the elimination of negative cash <br />between funds. <br />NOTE 7 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 />(27) <br />