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NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) V. Loans payable to Met Council The City entered into a loan agreement with the Metropolitan (Met) Council to acquire property within the proposed right-of-way of highways designated as a part of the metropolitan highway system plan. State Highway 10, within Ramsey, is part of that highway system plan. The loans bear no interest, and are to be repaid upon the acquisition of the property by the State of Minnesota. W. Use of Estimates The preparation of financial statements, in accordance with accounting principles generally accepted in the United States of America, requires management to make estimates that affect amounts reported in the financial statements during the reporting period. Actual results could differ from such estimates. X. Comparative data/reclassifications Comparative data for the prior year has been presented only for management discussion and analysis. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year’s presentation. Y. Future Change in Accounting Standards GASB Statement No. 68 replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers, and Statement No. 50, Pension Disclosures, as they relate to employer governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. GASB Statement No. 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. This statement will be effective for fiscal years beginning after June 15, 2014. The City has not yet determined the financial statement impact of adopting this new standard. NOTE 2 – DEPOSITS AND INVESTMENTS A. Components of Cash and Investments Cash and investments at year-end consist of the following: Deposits$ 4,401,415 Investments 46,204,895 Cash on hand 500 Total$ 50,606,810 Cash and investments are presented in the financial statements as follows: Cash and temporary investments - Statement of Net Position$ 49,663,519 Restricted cash and investments for debt service - Statement of Net Position 502,638 Cash and temporary investments - Statement of Fiduciary Net Position 440,653 Total50,606,810$ Page 71