2008 Annual Comprehensive Financial Report

Home Browse Search

should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgetary Controls. The City maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) is established at the fund level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Encumbered amounts lapse at year-end; however, encumbrances are generally re-appropriated the following year. As demonstrated by the statements and schedules included in the financial section of the report, the City continues to meet its responsibility for sound financial management. Cash Management. Cash temporarily idle during the year was invested in demand deposits, certificates of deposit, obligations of the U.S. Treasury, and other obligations of the United States government or its agencies. The maturities of the investments range from a few months to 5 years. The average yield on investments, excluding unrealized gains, was 3.6%. The City earned interest revenue of $1.3 million on all investments for the year ended December 31, 2008. The City's investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, deposits were either insured by federal depository insurance or collateralized. All collateral on deposits was held either by the City, its agent or a financial institution's trust department in the City's name. All investments held by the City during the year, and at December 31, 2008, are classified in the category of lowest credit risk as defined by the Governmental Accounting Standards Board. Risk Management. The primary objective of the City’s risk management program is to protect against loss or losses, which would significantly affect personnel, property, the budget or the abilit y of the City to fulfill its responsibility to the taxpayer and the public. Potentially hazardous risk exposures are evaluated on an ongoing basis and, where feasible and cost effective, reduced or eliminated. The City retains risk for its general liability up to the limit of governmental immunity. Colorado Law grants governmental immunity to all governments, which limits the loss on any one claim to $150,000 per person, and $600,000 per occurrence. The City also carries excess coverage for those claims that would not fall under the governmental immunity. The insurance coverage for Workers’ Compensation is through Pinnacol Assurance.