CCP 06-08-1998 - Laserfiche WebLink

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CITY OF ARDEN HILLS, MINNESOTA . NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 . Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . A. Reporting Entity . Tbe City of Arden Hills operates under tbe "Optional Plan A" form of govell1ment as defined in tbe State of Minnesota Statutes. Under this plan, the government of the City is directed by a Council composed of an elected . Mayor and four elected Council Members, Tbe Council exercises legislative autbority and determines all matters of policy . The Council appoints personnel responsible for the proper administration of all affairs relating to tbe City. As required by generally accepted accounting principles, tbe financial statements present tbe City and its component units, entities for wbicb tbe City is considered to be financially accountable, . Blended component units, altbougb legally separate entities, are, in substance, part oftbe City's operations and so data from tbese units are combined witb data of the primary govell1ment. The blended component unit has a December 3 I year end. . Blended Component Units The Economic Development Autbority oftbe City was created pursuant to Minnesota Statutes 469.090 through . 469.108 to carry out economic and industrial development and redevelopment consistent with policies estahlished by the City Council. The EDA activities are blended and reported in a separate Special Revenue Fund. Separate financial statements are not issued for this component unit. . B, Measurement Focus, Basis of Accounting and Basis of Presentation The accounts of the City are organized and operated on the basis of funds and account groups, A fund is an . independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance- related legal and contractual provisions, The minimum number of funds are maintained consistent witb legal and managerial requirements. Account groups are a reporting device to account for certain assets and liabiliti. . of the govell1mental funds not recorded directly in those funds. The City bas tbe following fund types and account groups: Goverllmelltalfullds are used to account for the City's general government activities. Governmental fund types . use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (Le., when . they are "measurable and available"). "Measurable" means the amount of the transaction can be determined, and "available" means collectible within tile current period or soon enougb thereafter to pay liabilities of the current period. The City considers all revenues available if they are collected within 60 days after year end. Expenditures are recorded when the related fund liability is incurred, except for unmatured interest on general . long-term debt which is recognized wben due, and certain compensated absences and claims and judgments which are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes, franchise taxes, licenses, interest and special assessments are susceptible to accrual. Other . receipts and taxes become measurable and available when cash is received by the government and are recognized as revenue at that time. The preparation of general purpose financial statements in conformity with generally accepted accounting . principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. . Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Expenditure driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other grant requirements have been met. . Govell1mental funds include the following fund types: Tbe Generalfund is the City's primary operating fund. It accounts for all financial resources of the City, exc. . those required to be accounted for in anotber fund. -10- .