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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1997 <br />Debt Service Funds - to account for the accumulation of resources for, and the payment of, <br />general long -term debt principal, interest, and related costs. <br />Capital Project Funds - to account for fmancial resources to be used for the acquisition or <br />construction of major facilities other than those financed by Proprietary Funds. <br />PROPRIETARY FUNDS <br />Enterprise Funds - to account for operations: (a) that are financed and operated in a manner <br />similar to private business enterprises - where the intent of the governing body is that the <br />costs (expenses, including depreciation) of providing goods or services to the general public <br />on a continuing basis be financed or recovered primarily through user charges; or, (b) where <br />the governing body has decided that periodic determination of revenues earned, expenses <br />incurred, and/or net income is appropriate for capital maintenance, public policy, <br />management control, accountability, or other purposes. <br />FIDUCIARY FUNDS <br />Trust and Agency Funds - to account for assets held by a governmental unit in a trustee <br />capacity or as an agent for individuals, private organizations, other governmental units, <br />and/or other funds. For the City of Lino Lakes, these consist solely of Agency Funds. <br />ACCOUNT GROUPS <br />The governmental fund types are designed to account for the financial flow of a particular <br />fund; therefore, they generally include only current assets and current liabilities on their <br />balance sheets. The City maintains two account groups to account for noncurrent assets and <br />long -term liabilities as follows: <br />General Fixed Assets - The City maintains a separate account group which contains the fixed <br />assets used in the governmental fund type operations. They are assets of the City as a whole <br />and not of individual funds. <br />General Long -Term Debt - This account group contains the long -term obligations of the City <br />including general obligation bonds, certificates of indebtedness, contracts payable and <br />compensated absences payable. These long -term liabilities are expected to be fmanced by the <br />governmental funds. <br />C. BASIS OF ACCOUNTING <br />The accounting and reporting treatment applied to a fund is determined by its measurement focus. All <br />governmental funds are accounted for on a current fmancial resources measurement focus. This <br />means that only current assets and current liabilities are generally included on their balance sheets. <br />Governmental fund operating statements present increases (revenues and other financing sources) and <br />decreases (expenditures and other financing uses) in net current assets. <br />32 <br />