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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2019 <br /> <br /> <br /> <br /> <br />governmental and enterprise funds, with each displayed as separate columns in the fund financial <br />statements. All remaining governmental and enterprise funds are aggregated and reported as nonmajor <br />funds. <br /> <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 <br />investment earnings, result from nonexchange transactions or incidental activities. <br /> <br />The City reports the following major governmental funds: <br /> <br />General Fund is the City’s primary operating fund. It accounts for all financial resources of the <br />general government, except those required to be accounted for in another fund. <br /> <br />General Obligation Improvement Note of 2009A Fund accounts for the accumulation of resources <br />for, and the payment of, interest, principal and related costs on general long-term debt. The note <br />was used to finance improvement projects at the I-35E and County Road 14 interchange. <br /> <br />General Obligation Improvement Bonds of 2016B Fund accounts for the accumulation of resources <br />for, and the payment of, interest, principal and related costs on general long-term debt. <br /> <br />Area and Unit Charge Fund accounts for the collection of water and sewer unit charges to be used <br />for debt payments and construction of governmental infrastructure. <br /> <br />MSA Construction Fund accounts for the financing of future reconstruction of state aid eligible <br />streets. <br /> <br />2018 Street Reconstruction Fund accounts for street and utility improvements within the West <br />Shadow Lake Drive and LaMotte neighborhoods. <br /> <br />The City reports the following major proprietary funds: <br /> <br />The Water Fund accounts for customer water service charges which are used to finance water <br />system operating expenses. <br /> <br />The Sewer Fund accounts for customer sewer service charges which are used to finance sanitary <br />sewer system operating expenses. <br /> <br /> <br />C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING <br /> <br />The government-wide financial statements are reported using the economic resources measurement <br />focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues <br />are recorded when earned and expenses are recorded when a liability is incurred, regardless of the <br />timing of related cash flows. Property taxes are recognized as revenues in the year for which they are <br />levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements <br />imposed by the provider have been met. <br /> <br />Governmental fund financial statements are reported using the current financial resources measurement <br />focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both <br />measurable and available. Revenues are considered to be available when they are collectible within the <br />current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the <br />City considers all revenues, except reimbursement grants, to be available if they are collected within 60 <br />46