Annual Financial Report 12/31/1990

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Page 2 of 23 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1990 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) FUNDS AND ACCOUNT GROUPS (continued) GOVERNMENTAL FUNDS General Fund - to account for all financial resources except those required to be accounted for in another fund. Special Revenue Fund - to account for the proceeds of specific revenue sources (other than expendable trusts or for major capital projects) that are legally restricted to expenditures for specified purposes. Debt Service Funds - to account for the accumulation of resources for, and the payment of, general long -term debt principal, interest and related costs. Capital Project Funds - to account for financial resources to be used for the acquisition or construction of major capital facilities. PROPRIETARY FUNDS Enterprise Funds - to account for operations: (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenue earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. FIDUCIARY FUNDS Trust and Agency Funds - to account for assets held by a governmental unit as an agent for individuals, private organizations, other governmental units and/or other funds. ACCOUNT GROUPS The Governmental Fund types are designed to account for the financial flow of a particular fund; therefore, they generally include only current assets and current liabilities on their balance sheets. The City maintains two account groups to account for noncurrent assets and long -term liabilities as follows: General Fixed Assets - The City maintains a separate account group which contain the fixed assets used in the governmental fund type operations. They are assets of the City as a whole and not of individual funds. General Long -Term Debt - This account group contains the long -term obligations of the City including general obligation bonds, special assessment bonds, special obligation bonds and leases payable.