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CITY OF ARDEN HILLS <br /> <br />Notes to Basic Financial Statements <br />December 31, 2017 <br /> <br /> <br /> <br />-25- <br />NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES <br /> <br />A. Organization <br /> <br />The City of Arden Hills, Minnesota (the City) was incorporated in 1951 and operates under the “Optional <br />Plan A” form of government as defined in Minnesota Statutes. Under this plan, the government of the <br />City is directed by a council composed of an elected mayor and four elected councilmembers. The City <br />Council exercises legislative authority and determines all matters of policy. The City Council appoints <br />personnel responsible for the proper administration of all affairs relating to the City. <br /> <br />The City provides the following municipal services: public safety (police, fire, civil defense, and animal <br />control), highways and streets, sanitation and health, parks and recreation, public improvements, <br />community development, and general administrative services. <br /> <br />The accounting policies of the City conform to accounting principles generally accepted in the United <br />States of America as applicable to governmental units. The Governmental Accounting Standards Board <br />(GASB) is the accepted standard-setting body for establishing governmental accounting and financial <br />reporting principles. <br /> <br />B. Reporting Entity <br /> <br />As required by accounting principles generally accepted in the United States of America, these financial <br />statements include the City (the primary government) and its component unit. Component units are <br />legally separate entities for which the primary government is financially accountable, or for which the <br />exclusion of the component unit would render the financial statements of the primary government <br />misleading. The criteria used to determine if the primary government is financially accountable for a <br />component unit includes whether or not the primary government appoints the voting majority of the <br />potential component unit’s board, is able to impose its will on the potential component unit, is in a <br />relationship of financial benefit or burden with the potential component unit, or is fiscally depended upon <br />by the potential component unit. <br /> <br />Blended component units, although legally separate entities, are, in substance, part of the City’s <br />operations; therefore, data from these units are combined with data of the City. The City’s blended <br />component unit has a December 31 year-end. The City has the following component unit: <br /> <br />Arden Hills Economic Development Authority (EDA) – The EDA of the City was created <br />pursuant to Minnesota Statutes § 469.090–469.108 to carryout economic and industrial development <br />and redevelopment consistent with policies established by the City Council . It is composed of the <br />members of the City Council and the City has operational responsibility for the component unit. The <br />EDA’s activities are blended and reported in separate special revenue funds . Separate financial <br />statements are not issued for this component unit.