Comprehensive Annual Financial Report 12/31/2009

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Yaw Inimm Vomw CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2009 Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. RECENTLY ISSUED ACCOUNTING STANDARDS Statement No. 51 Accounting and Financial Reporting for Intangible Assets. The provisions of this Statement are effective for periods beginning after June 15, 2009. GASB 51 addresses the recognition of intangible assets, including easements, water rights, timber rights, patents, trademarks, and computer software. Additionally, it establishes a specified- conditions approach to recognizing intangible assets that are internally generated. GASB 51 provides guidance on determining the useful life of intangible assets when contractual or legal provisions limit the length of their life. This statement is effective for periods beginning after June 15, 2009 and the provisions of this statement are generally required to be applied prospectively beginning in fiscal year 2010 and thereafter. Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions. The requirements of this Statement are effective for financial statement periods beginning after June 15, 2010. Governments that wish to implement earlier than that date are encouraged to do so. The effect these standards may have on future financial statements is not determinable at this time. Note 2 DEPOSITS AND INVESTMENTS A. Deposits The City maintains a cash and investment pool that is available for use by all funds. Each fund type's portion of this pool is displayed on the statement of net assets and the balance sheet as "Cash and Investments." In accordance with Minnesota Statutes the City maintains deposits at financial institutions which are authorized by the City Council. Custodial Credit Risk — Custodial credit risk for deposits is the risk that in the event of a bank failure, the City's deposits may not be returned to it. The City does not have a specific deposit policy for custodial credit risk but rather follows Minnesota Statutes for deposits. Minnesota Statutes require that all 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 corporate surety bonds. Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a U.S. government agency; general obligations of a state or local government rated "A" or better; revenue obligations of a state or local government rated "AA" or better; irrevocable standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by a federal agency. Minnesota statutes require securities pledged as collateral be held in safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust department of a commercial bank or other financial institution not owned or controlled by the depository. The carrying value and bank balance of the City's deposits in banks at December 31, 2009 is $17,331,352 and $17,489,658, respectively, and were entirely covered by federal depository insurance or by surety bonds and collateral in accordance with Minnesota statutes. Cash with Fiscal Agent — Unspent proceeds from the Note Payable to Anoka County of $4,271,141 are presented as cash with fiscal agent and held by Anoka County. See Note 4.