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Town of Palisade, Colorado <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31,2009 <br /> NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES—CONTINUED <br /> 13. Seized Funds <br /> The Town received no current proceeds from the seizure of contraband (seized funds) under the Colorado <br /> Contraband Forfeiture Act. The act requires that seized funds be used for law enforcement activities. <br /> 14. Fund Equity <br /> In the fund financial statements governmental funds report reservations of fund balance for amounts that <br /> are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. <br /> 15. Property Taxes <br /> Property taxes are certified by the Board of Trustees and collected by Mesa County. Property taxes are <br /> remitted to the Town by the 10th day of the month following collection. Property taxes receivable <br /> represents 2009 taxes that will be collected in 2010. <br /> Property taxes attach as an enforceable lien on property as of January 1 of the year in which they are <br /> payable. Taxes are payable either in full on or before April 30 or one half on or before February 28 and the <br /> remaining half on or before June 15. <br /> NOTE B—BUDGETS <br /> Annual budgets are adopted for all funds, except fiduciary funds, of the Town. The Treasurer submits a <br /> proposed operating budget for the following calendar year to the Board of Trustees prior to October 15 of <br /> each year. The budget is prepared using the modified accrual basis of accounting. The operating budget <br /> includes proposed expenditures/expenses and the anticipated revenues. As required by statute, public <br /> hearings are conducted to obtain citizen's comments. Prior to the levy of property tax, the budget is legally <br /> adopted through the passage of a budget adoption and appropriation resolution no later than December 31. <br /> NOTE C—CASH AND INVESTMENTS <br /> The Colorado Public Deposit Protection Act (PDPA) requires that all units of local government deposit <br /> cash in eligible public depositories. Eligibility is determined by state regulators. Amounts on deposit in <br /> excess of federal insurance levels must be collateralized. The eligible collateral is determined by the <br /> ' PDPA. PDPA allows the institution to create a single collateral pool for all public funds. The pool is to be <br /> maintained by another institution or held in trust for all the uninsured public deposits as a group. The <br /> market value of the collateral must be at least equal to 100% of the uninsured deposits. At December 31, <br /> 2009, the Town's cash deposits had a bank balance of $2,797,012 of which $332,992 was covered by <br /> federal depository insurance and $2,464,020 was collateralized. <br /> At December 31, 2009 the Town's cash and cash equivalents consisted of the following: <br /> Cash on hand $ 4,026 <br /> Demand accounts 2,665,258 <br /> Total cash and equivalents $ 2,669,284 <br /> Effective January 1, 2005, the Town adopted Governmental Accounting Standards Board Statement No. <br /> 40, Deposit and Investment Risk Disclosure (GASB 40). GASB 40 establishes and modifies disclosure <br /> requirements related to investment risks including credit risk, custodial risk, interest rate risk and foreign <br /> currency risk. <br /> -24- <br />