06-05-2023 Council Work Session Packet

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2022 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 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. The Rookery Activity Center accounts for the activities relating to The Rookery Activity Center. General Obligation Improvement Note of 2009A Fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. The note was used to finance improvement projects at the I-35E and County Road 14 interchange. General Obligation Improvement Bonds of 2016B Fund accounts for the accumulation of resources for, and the payment of, interest, principal and related costs on general long-term debt. The bonds were used to fund the Legacy at Woods Edge improvements. Building and Facilities Fund accounts for the activities associated with the maintenance and replacement of municipal buildings and facilities. 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 infrastructure. MSA Construction Fund accounts for the financing of future reconstruction of state aid eligible streets. The City reports the following major proprietary funds: The Water Fund accounts for customer water service charges which are used to finance water system operating expenses. The Sewer Fund accounts for customer sewer service charges which are used to finance sanitary sewer system operating expenses. The Storm Water Fund accounts for customer storm water charges which are used to finance storm water system operating expenses. C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. 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. 48