VLAWMO Annual Financial Report 2006

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VADNAIS LAKE AREA WATER MANAGEMENT ORGANIZATION NOTES TO FINANCIAL STATEMENTS December 31, 2006 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the Vadnais Lake Area Water Management Organization conform to generally accepted accounting principles as applied to governmental units by the Govemmental Accounting Standards Board (GASB). The following is a summary of significant accounting policies. A. FINANCIAL REPORTING ENTITY The Vadnais Lake Area Water Management Organization (the Organization) was created in the exercise of joining powers to meet the requirements of the Metropolitan Surface Water Management Act, re -codified as Minnesota Statutes chapters 103B and 103D. Its general purpose is to establish an organization to jointly and cooperatively develop a water management plan and program to (1) protect, preserve, and use natural surface and groundwater storage and retention systems; (2) minimize capital expenditures necessary to correct flooding and water quality problems; (3) identify and plan for means to effectively protect and improve surface and groundwater quality; (4) establish more uniform local policies and official controls for surface water, wetland, and groundwater management; (5) prevent erosion of soil into surface water systems; (6) promote groundwater recharge; (7) protect and enhance fish and wildlife habitat and water recreational facilities, and secure other benefits associated with the proper management of surface ground water, and be in accordance with the Act. The Organization is governed by a Board of Commissioners which consists of seven members, one from each of the following participating governmental units: City of North Oaks City of White Bear Lake St. Paul Regional Water Services City of Lino Lakes White Bear Township City of Vadnais Heights City of Gem Lake All property of the Organization is owned by the member's entities in proportion to the total contribution of each participating governmental unit as required by the previous annual budget. Effective January 1, 2007, the Organization approved a new joint powers agreement. The biggest change will be that the St. Paul Regional Water Services will no longer be a part of the joint powers. In 2006, the St. Paul Regional Water Services only accounted for 3.4% of the annual member assessments. The accounting policies of the Organization conform to generally accepted accounting principles as applicable to governmental units.