Annual Financial Report 12/31/1993

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WNW • CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1993 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 As required by generally accepted accounting principles, the financial statements of the reporting entity include those of the City of Lino Lakes and it component units. The component units discussed below are included in the City's reporting entity because of the significance of their operational or financial relationships with the City. COMPONENT In conformity with generally accepted accounting principles, the financial statements of component units have been included in the financial reporting entity either as blended component units or as discretely presented component units. Blended Component Units. The Economic Development Authority (EDA) of Lino Lakes is an entity separate from the City. However, for financial reporting purposes, the EDA is reported as if it were part of the City's operations because the members of the City Council serve as commission members. B. FUND ACCOUNTING 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. The following types of funds and account groups are employed by the City: GOVERNMENTAL FUNDS General Fund - to account for all financial resources except those required to be accounted for in another fund. Special Revenue Funds - to account for the proceeds of specific revenue sources 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 facilities other than those financed by Proprietary Funds.