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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1993 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) M. Totals Memorandum Only Columns Total columns on the combined statements are captioned "Memorandum Only" to indicate that they are presented only to facilitate financial analysis. Data in these columns does not present financial position, results of operations, or cash flows in conformity with generally accepted accounting principles. Interfund eliminations have not been made in the aggregation of this data. N. Statement of Cash Flows For purposes of the Statement of Cash Flows, the City considers all highly liquid debt instruments with an original maturity from the time of purchase by the City of three months or less to be cash equivalents. The Proprietary Funds' equity in the City -wide cash and investment management pool is considered to be cash equivalents. Note 2. DEPOSITS AND INVESTMENTS A Deposits In accordance with applicable Minnesota Statutes, the City maintains deposits at depository banks authorized by the City Council. Minnesota Statutes require that all deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage- backed collateral). Authorized collateral includes the legal investments described below, as well as certain first mortgage notes and certain other State or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City or in a financial institution other than that furnishing the collateral. Deposit balances at December 31, 1993, are as follows: Bank Carrying Balance Amount Bank Deposits (checking and savings accounts) $ 194,726 $ 116,938 At December 31, 1993, all deposits were insured or collateralized by securities held by the City's agent in the City's name. -18-