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As a result, the City, through the use of sinking funds developed <br />from special assessments, defeased and called seven separate <br />public improvement bond issues. The total amount of bonded debt <br />removed from the City's liabilities was $6,500,000. <br />Several of the advantages which resulted to the City were: <br />A reduction of the City's debt per capita by $159 <br />A reduction of the City's tax levy for debt thus releasing <br />levy for other projects. <br />Releasing uncommitted funds of $1,900,000 to be <br />utilized in street construction work. <br />Financial Information <br />Accountina System and Budaetarv Control <br />The accounting system provides for a complete, self-balancing set <br />of accounts for each fund of the City. Accounting records are <br />maintained on the modified accrual basis for the governmental <br />type funds and trust and agency fund, and the accrual basis of <br />accounting is utilized for the proprietary type funds, as defined <br />in the notes to the financial statements. <br />In developing and altering the City's accounting system, <br />consideration is given to the adequacy of internal accounting <br />controls. Internal accounting controls are designed to provide <br />reasonable, but not absolute, assurance regarding the <br />safeguarding of assets against loss from unauthorized use or <br />disposition and the reliability of financial records for <br />preparing financial statements and maintaining accountability for <br />assets. The concept of reasonable assurance recognizes the cost <br />of a control should not exceed the benefits likely to be derived, <br />and the evaluation of costs and benefits requires estimates and <br />judgments by management. All internal control evaluations occur <br />within the above framework. We believe that the City's internal <br />accounting controls adequately safeguard assets and provide <br />reasonable assurance of proper recording of financial <br />transactions. <br />A budgetary system of accounts is maintained for the general and <br />special revenue funds. Control is maintained by the use of a <br />purchase order system and the continuing review of actual <br />: expenditures compared to budgeted amounts. Budget revisions are <br />made upon approval of a resolution by the City Council. The <br />financial statements of revenue and expenditures compared with <br />the budget in this report would reflect these revisions. Reserve <br />for encumbrances is reported as part of the fund balance at the <br />end of the fiscal year. <br />5 <br />