village of wellington, florida

NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Property Taxes (Continued)prior year (2007/2008) property tax revenue. The percentage reduction is calculated based on thecompound annual growth rate in the per capita property taxes levied for fiscal years ended September 30,2002 through 2008. The State law allows local governments to adopt a higher millage rate based on thefollowing approval of the governing body: 1) a majority vote to adopt a rate equal to the prior year rolledbackmillage rate, plus an adjustment for growth in per capita Florida personal income; 2) a two-thirds voteto adopt a rate equal to the prior year adjusted millage rate plus 10%; or 3) any millage rate approved byunanimous vote or referendum. Future property tax growth is limited to the annual growth rate of percapita personal income, which is currently 0% to 1%, plus the value of new construction.On January 29, 2008, Florida voters approved a constitutional amendment that changed the way in whichproperty is assessed for ad valorem taxes. This further limits or reduces the Village’s property tax revenuefor the fiscal year beginning October 1, 2008.Recent Accounting PronouncementsThe GASB has issued Statement No. 51, Accounting and Financial Reporting for Intangible Assets, whichestablishes accounting and financial reporting requirements for intangible assets including easements,contractual rights, and computer software. The requirements of this statement will be effective for theVillage for the fiscal year ending September 30, 2010. Management has not completed its analysis of theeffects of this statement, if any, on the financial statements of the Village.The GASB has issued Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, whichestablishes accounting and financial reporting requirements for derivative instruments entered into by stateand local governments. The requirements of this statement will be effective for the Village for the fiscalyear ending September 30, 2010. Management has not completed its analysis of the effects of thisstatement, if any, on the financial statements of the Village.The GASB has issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, whichestablishes accounting and financial reporting requirements for all governmental funds and establishescriteria for classifying fund balances. The requirements of this statement will be effective for the Village forthe fiscal year ending September 30, 2011. Management has not completed its analysis of the effects of thisstatement, if any, on the financial statements of the Village.Use of EstimatesThe preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements. Estimates also affect the reported amounts of revenues and expenditures/expenses during thereporting period. Actual results could differ from estimates.NOTE 2. DEPOSITS AND INVESTMENTSThe Village is authorized to invest in obligations of the U.S. Treasury, its agencies and instrumentalities,repurchase agreements, certificates of deposit, Florida PRIME, formerly known as the Local GovernmentInvestment Pool (LGIP), any intergovernmental investment pools authorized pursuant to Chapter 163 ofthe Florida Statutes, SEC registered money market funds with the highest credit quality rating from anationally recognized rating agency and money market and mutual funds that restrict its investments toobligations of the U.S. government.37