Comprehensive Annual Financial Report 12/31/2003

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— CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2003 4 milOr Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. CHANGES IN ACCOUNTING PRINCIPLES For the year ended December 31, 2003, the City has implemented Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements – and Management's Discussion and Analysis – for State and Local Governments. GASB Statement No. 34 creates new basic financial statements for reporting the City's financial activities. The financial statements now include government -wide financial statements prepared on the accrual basis of accounting, and fund fmancial statements which present information for individual major funds rather than by fund -type which had been the mode of presentation in previously issued fmancial statements. The implementation of GASB Statement No. 34 caused the opening fund balance at December 31, 2002, to be restated in terms of "net assets" as follows: Total fund balances - governmental funds - at December 31, 2002 $ 13,850,831 Add: Cost of capital assets at December 31, 2002 73,190,238 Less: Accumulated depreciation at December 31, 2002 (28,235,352) Less: Non - current liabilities: Bond principal outstanding at December 31, 2002 (17,884,450) Compensated absences payable at December 31, 2002 (384,467) Accrued interest payable at December 31, 2002 (353,181) Add: Deferred revenue at December 31, 2002 3,915,006 $ 44,098,625 Note 2 DEPOSITS AND INVESTMENTS DEPOSITS In accordance with Minnesota Statutes, the City maintains deposits at those depository banks authorized by the City Council, all of which are members of the Federal Reserve System. Minnesota Statutes require that all City deposits be protected by insurance, surety bond, or collateral. The market value of collateral pledged must equal 110% of the deposits not covered by insurance or bonds. Authorized collateral includes the legal investments described below and certain other state or local government obligations. Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the City Treasurer or in a financial institution other than that furnishing the collateral. At year -end, the carrying amount of the City's deposits was $738,813 and the bank balance was $876,946. The entire bank balance was covered by Federal depository insurance or by collateral held by the City's agent in the City's name.