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1 <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 Held by Others <br /> ' This balance represents the Town's deferred compensation account <br /> balance. It is held by the ITT Hartford Group and is recorded at fair <br /> market value. <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$ 1,858,738. <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 <br /> financial resources are also reported in the general long-term debt <br /> account group. <br /> ' H. Accrued Employee Benefits <br /> Town employees are granted vacation and sick leave in varying amounts. <br /> Upon retirement, termination, or death, certain employees are compen- <br /> sated for unused sick and vacation leave which is (subject to certain <br /> limitations) at their then current rates of pay. The cost of this unused <br /> ' sick and vacation leave, which is expected to be paid from future finan- <br /> cial resources, is accounted for as a liability of the general long-term <br /> debt account group for governmental fund types. <br /> ' 1. Fund Equity <br /> Reservations of fund balance represent amounts that are not appropri- <br /> able or are legally segregated for a specific purpose. Reservations of <br /> retained earnings are limited to outside third-party restrictions. Desig- <br /> nations of fund balance represent tentative management plans that are <br /> subject to change. <br /> 8 <br />