Annual Financial Report 12/31/1992

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Ilmow CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 1 of 19 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. The financial statements of the City of Lino Lakes have been prepared in conformity with generally accepted accounting principles as applied to governmental units by the Governmental Accounting Standards Board (GASB). The following is a summary of the significant accounting policies. A . FINANCIAL REPORTING ENTITY In accordance with GASB pronouncements the City's Financial Statements include all funds, account groups, agencies, boards, commissions and other organizations over which the City Council exercises oversight responsibility. Oversight responsibility includes appointment of governing bodies, budget authority, approval of tax levies, outstanding debt secured by the City's full faith and credit or revenues, and responsibility for funding deficits. As a result of applying the entity definition criteria of the Governmental Accounting Standards Board, certain organizations have been included or excluded from the City's fmancial statements as follows: Entity Reason for Inclusion/Exclusion Included Lino Lakes Economic The Lino Lakes EDA was established by the Development Authority (EDA) City Council and is govemed by a board of commissioners consisting of City Council members. The EDA is required to submit a budget for approval to 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 B . FUND ACCOUNTING 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. 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 financial 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.