2004 Annual Comprehensive Financial Report

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million; > Completing a cable television franchise agreement with Comcast; ➢ Working with the Town of Superior to complete the McCaslin Interchange Phase I improvements estimated to cost $2.0 million; > Emphasizing the Windy Gap Firming Project to increase raw water storage at a cost of $6.7 million; > Participating in US 36 Environmental Impact Statement process for long term improvements to US 36 and additional mass transit; ➢ Complete over $2.3 million in street improvements including asphalt and concrete replacement; ➢ Plan for expansion of City shops; ➢ Finalize a Franchise agreement between the City and Excel Energy. FINANCIAL INFORMATION Management of the City is responsible for establishing and maintaining internal controls that are designed to ensure that the assets of the City are protected from loss, theft or misuse. Also, management ensures that financial statements are prepared in conformity with generally accepted accounting principles through the compilation of adequate accounting data. Internal controls are designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control 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 by fund. 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, time deposits, and U.S. Treasury and agency obligations. The average yield on investments was 3.0%. The City earned • interest revenue of $896,203 on all investments for the year ended December 31, 2004, an increase of $363,204 from 2003. 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, 2004, 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 ability 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 worker's compensation is through Pinnacol Assurance. • 3