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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2014 <br />Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />B. BASIC FINANCIAL STATEMENTS (CONTINUED) <br />1. Government -Wide Statements (Continued) <br />In the government -wide statement of net position, both the governmental and business -type activities <br />columns: (a) are presented on a consolidated basis by column; and (b) are reported on a full accrual, <br />economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt <br />and obligations. The City's net position is reported in three parts: (1) net investment in capital assets; <br />(2) restricted net position; and (3) unrestricted net position. The City first utilizes restricted resources to <br />finance qualifying activities. <br />The statement of activities demonstrates the degree to which the direct expenses of each function of the <br />City's governmental activities and different business -type activities are offset by program revenues. Direct <br />expenses are those that are clearly identifiable with a specific function or activity. Program revenues <br />include: (1) fees, fines, and charges paid by the recipients of goods, services, or privileges provided by a <br />given function or activity; and (2) grants and contributions that are restricted to meeting the operational or <br />capital requirements of a particular function or activity. Revenues that are not classified as program <br />revenues, including all taxes, are presented as general revenues. <br />2. Fund Financial Statements <br />The fund financial statements provide information about the City's funds, including its fiduciary funds and <br />blended component unit. Separate statements for each fund category (governmental, proprietary, and <br />fiduciary) are presented. The emphasis of governmental and proprietary fund financial statements is on <br />major individual governmental and enterprise funds, with each displayed as separate columns in the fund <br />financial statements. All remaining governmental and enterprise funds are aggregated and reported as <br />nonmajor funds. <br />Proprietary fund operating revenues, such as charges for services, result from exchange transactions <br />associated with the principal activity of the fund. Exchange transactions are those in which each party <br />receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment <br />earnings, result from nonexchange transactions or incidental activities. <br />The City reports the following major governmental funds: <br />General Fund <br />The general fund is the City's primary operating fund. It accounts for all financial resources of the general <br />government, except those required to be accounted for in another fund. <br />General Obligation Improvement Bonds 2005A Fund <br />The general obligation improvement bonds 2005A fund accounts for the accumulation of resources for, <br />and the payment of, interest, principal and related costs on general long-term debt. <br />Improvement Note 2009F Fund <br />The improvement note 2009F fund accounts for the accumulation of resources for, and the payment of, <br />interest, principal and related costs on general long-term debt. <br />Municipal State Aid Fund <br />The Municipal State Aid fund accounts for the collection of assessments on municipal state aid projects. <br />36 <br />