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CITY OF RAMSEY Notes to Financial Statements (continued) December 31, .1999 NOTE 1 -SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 2. Public hearings are conducted to obtain public comments. 3. The budgets are legally enacted through passage of a resolution. 4. After the budget resolution has been adopted, the Council may, by a resolution approved by a 4/5 vote of its members, reduce the sums appropriated for any purpose by the budget resolution, or authorize the transfer of sums from unencumbered balances of appropriations in the budget resolution to other purposes. However, the Council may not increase the amounts fixed in the resolution beyond the estimated funds available except to the extent that actual receipts exceed the estimated funds available. 5. Formal budgetary integration is employed as a management control device during the year for the following funds: General Fund Special Revenue Funds Economic Development Authority Fund Enterprise Funds Water Utility Sewer Utility Street Light Utility Recycling Utility For remaining Special Revenue Funds and Capital Project Funds, effective budgetary control is achieved through the use of project controls. Budgetary control for Debt Service Funds is achieved through bond indenture provisions. 6. Formal budgets are adopted on a basis consistent with generally accepted accounting principles (GAAP) for the General Fund, Economic Development Authority Special Revenue Fund, and all Enterprise Funds. ' 7. As required by City Charter, the Council sets the legal level of budgetary control. Control is maintained at the department level, for all budgeted funds. This provides management the ability to alter the budget between line items in each department but the total budgeted for each department for the year cannot be exceeded without specific Council approval. Budgeted expenditure appropriations lapse at year-end. Encumbrances outstanding expire at year-end and are not reported in the financial statements. ii i ~ ,,.