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1 <br /> ' D. Cash and Cash Equivalents <br /> Cash balances from all funds, except those required to be segregated <br /> by law, are combined to form a consolidation of cash. Cash balances <br /> are invested to the extent available, and interest earnings are recognized <br /> ' in the General Fund. Certain special revenue funds and fiduciary funds <br /> segregate cash, and investment earnings become a part of those funds. <br /> ' Deposits with financial institutions consist primarily of demand deposits, <br /> certificates of deposits, and savings accounts. The Town maintains a <br /> cash and investment pool that is available for use by all funds. Each <br /> fund's portion of this pool is reflected on the combined financial state- <br /> ments under the caption "cash and cash equivalents". The interest <br /> ' earnings attributable to each fund type is included under earnings on <br /> investments. <br /> ' E. Investments <br /> State and local statutes place certain limitations on the nature of deposits <br /> and investment available to the Town. Deposits in any financial institu- <br /> tion may not exceed certain levels within the financial institution. Non- <br /> fiduciary fund investments can be made in securities issued by or uncon- <br /> ditionally guaranteed by the U.S. Government or agencies that have a <br /> maturity of less than one year from the date of purchase and repurchase <br /> agreements guaranteed by such securities with maturity dates of no more <br /> than 90 days from the date of purchase. <br /> F. Property Tax Limitations <br /> ' Legislation known as "Proposition 2 1/2" limits the amount of revenue <br /> the Town can derive from property taxes. The prior fiscal year's tax <br /> ' levy limit is used as a base and cannot increase by more than 2.5 per- <br /> cent (excluding new growth), unless an override or debt exemption is <br /> ' voted. The Town's actual fiscal year tax levy reflected an excess capacity <br /> of $ 1,607,212. <br /> G. Long-Term Obligations <br /> The Town reports long-term debt of governmental funds at face value in <br /> ' the general long-term debt account group. Certain other governmental <br /> fund obligations not expected to be financed with current available finan- <br /> cial resources are also reported in the general long-term debt account <br /> ' group. <br /> 9 <br />