Annual Financial Report 12/31/1990

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41 Iwo Immo limm WM Wm CITY OF LINO LAKES, MINNESOTA Page 1 of 23 NOTES TO FINANCIAL STATEMENTS December 31, 1990 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies of the City of Lino Lakes, Minnesota conform to generally accepted accounting principles as applicable to governmental units. FINANCIAL REPORTING ENTITY The City of Lino Lakes is a public corporation formed under Minnesota Statute 410. As such the City is under home rule charter regulations and applicable statutory guidelines. In accordance with the Codification of Governmental Accounting and Financial Reporting Standards (GASB) Section 2100, Defining the Reporting Entity, for financial reporting purposes the City's financial statements include all funds, account groups, boards and commissions over which the City Council exercises oversight responsibility. Oversight responsibility includes appointment of governing bodies, budget authority, approval of tax levies and responsibility for funding deficits. As a result of applying the criteria of the Codification of Governmental Accounting Standards Board Section 2100, certain organizations have been included or excluded from the City's financial statements: Entity Reason for Inclusion/Exclusion Included Lino Lakes Economic The Lino Lakes EDA was established by the Development Authority (EDA) City Council and is governed by a board of commissioners consisting of City Council members. The EDA is required to submit a budget for approval of the City Council annually. The City of Lino Lakes is responsible for ensuring that the EDA has adequate funding to carry out its activities. Upon the request of the EDA, the City may levy taxes for the benefit of the EDA. Excluded: Lino Lakes Gas Utility Operated as part of the Circle Pines Gas Franchise Utility. City of Lino Lakes exercises minimal management control. City receives annual share of gross revenue. Lino Lakes Senior Center Although the Senior program uses a center funded by the City, the Senior Center has authority over the activities it finances as well as responsibility over fiscal matters. FUNDS AND ACCOUNT GROUPS The accounting system of the City is organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self - balancing set of accounts recording cash and other fmancial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. The following types of funds and account groups are employed by the City.