10-24-2016 Council Packet - Laserfiche WebLink

Home Search

CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <CONTINUED> B. BASIC FINANCIAL STATEMENTS (CONTINUED) I. Government-Wide Statements (Continued) In the government-wide statement of net position, both the governmental and business-type activities columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, economic resource basis, which recognizes alllong-tenn assets and receivables as well as long-term debt and obligations. The City's net position is reported in three parts: (I) net investment in capital assets; (2) restricted net position; and (3) unrestricted net position. The City first utilizes restricted resources to finance qualifYing activities. The statement of activities demonstrates the degree to which the direct expenses of each function of the City's governmental activities and different business-type activities are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or activity. Program revenues include: (I) fees, fmes, and charges paid by the recipients of goods, services, or privileges provided by a given function or activity; and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or activity. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. 2. Fund Financial Statements The fund financial statements provide information about the City's funds, including its fiduciary funds and blended component unit. Separate statements for each fund category (governmental, proprietary, and fiduciary) are presented. The emphasis of governmental and proprietary fund financial statements is on major individual governmental and enterprise funds, with each displayed as separate columns in the fund financial statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or incidental activities. The City reports the following major governmental funds: General Fund The general fund is the City's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. General Obligation Improvement Bonds 2005A Fund The general obligation improvement bonds 2005A fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on generallong-tenn debt. Improvement Note 2009F Fund The improvement note 2009F fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. Area and Unit Charge Fund The area and unit charge fund accounts for the collection of water and sewer unit charges to be used for debt payments and construction of governmental infrastructore. 2015 Street Reconstruction Fund The 2015 Street Reconstruction fund accounts for the construction and improvements to Shenandoah Street. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,2015 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <CONTINUED> B. BASIC FINANCIAL STATEMENTS (CONTINUED) 2. Fund Financial Statements (Continued) The City reports the following major proprietary funds: Water Fund The water fund accounts for customer water service charges that are used to fmance water operating expenses. Sewer Fund The sewer fund accounts for customer sewer service charges that are used to finance sewer operating expenses. Additionally, the City reports the following fiduciary funds: Agency Funds -to account for assets held as an agent for individuals, private organizations, other governmental units, and/or other funds. The City's agency fund accounts for pass-through contractor's deposits relating to prospective developments. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Agency funds, which are included in the Fiduciary Funds, do not have a measurement focus. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. The City considers all revenues to be available if they are collected within 60 days afler the end of the current period. Property and other taxes, licenses, and interest are all considered to be susceptible to accrual. Expenditores are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditores to the extent that they have matored. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. IV-19