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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2018 <br /> <br /> <br /> <br /> <br />payments and refunds are recognized when due and payable in accordance with the benefit terms. <br />Investments are reported at fair value. <br /> <br /> <br />P. DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES <br /> <br />In addition to assets, the statement of financial position will sometimes report a separate section for <br />deferred outflows of resources. This separate financial statement element represents a consumption of <br />net position that applies to future periods and so will not be recognized as an outflow of resources <br />(expense) that time. The City has one item that qualifies for reporting in the category. It is the pension <br />related deferred outflows of resources reported in the government-wide Statement of Net Position and <br />the proprietary funds Statement of Net Position. <br /> <br />In addition to liabilities, the statement of financial position reports a separate section for deferred <br />inflows of resources. This separate financial statement element represents an acquisition of net position <br />that applies to future periods, and therefore, will not be recognized as an inflow of resources (revenue) <br />until that time. The City has pension and OPEB related deferred inflows of resources reported in the <br />government-wide Statement of Net Pension and the proprietary funds Statements of Net Position. The <br />City also has a type of item, which arises only under a modified accrual basis of accounting, that <br />qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in <br />the governmental funds balance sheet. The governmental funds report unavailable revenue from the <br />following sources: property taxes and special assessments not collected within 60 days from year-end. <br /> <br /> <br />Q. FUND BALANCE CLASSIFICATIONS <br /> <br />In the fund financial statements, governmental funds report fund balance in classifications that disclose <br />constraints for which amounts in those funds can be spent. These classifications are as follows: <br /> <br />Nonspendable - consists of amounts that are not in spendable form, such as prepaid items and <br />corpus of any permanent fund. <br /> <br />Restricted - consists of amounts related to externally imposed constraints established by creditors, <br />grantors or contributors; or constraints imposed by state statutory provisions. <br /> <br />Committed - consists of internally imposed constraints. These constraints are established by a <br />resolution approved by the City Council, and committed amounts cannot be used for any other <br />purpose unless the City Council removes or changes the specified use by resolution. <br /> <br />Assigned - consists of internally imposed constraints for the specific purpose of the City’s intended <br />use. These constraints are established by the City Council and/or management. The City Council <br />passed a resolution authorizing the Finance Director to assign fund balances and their intended <br />uses. <br /> <br />Unassigned - is the residual classification for the general fund and also reflects negative residual <br />amounts in other funds. <br /> <br />When both restricted and unrestricted resources are available for use, it is the City’s policy to first use <br />restricted resources, and then use unrestricted resources as they are needed. When committed, assigned <br />or unassigned resources are available for use, it is the City’s policy to use resources in the following <br />order: 1) committed 2) assigned and 3) unassigned. <br />54