07-10-1995 Council Packet - Laserfiche WebLink

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I CITY OF ORONO. MINNESOTA I I I I I I I I I I I I I I I I I I Notes to Financial Statements D«:cmber 31. 1994 NOTE I - SIGNIFICANT ACCOUNTING POLICIES A.Organization The City operates under "Optional Plan A" form of government as defined in the State of Minnesina Statutes. Under this plan, the City Council, composed of an elected mayi^r and four elected irustees ir councilmembers. exercises legislative authority and determines all matters of policy. The CuV Administrator, appointed by the Counril, is responsible for the proper administering of all affairs relating to the City. The financial statements and the accounting policies of the City .onform to generally accepted accounting principles as applicable to governmental units. B.Reporting Entity As required by generally accepted accounting principles, the.se financial statements include the City of Orono (the pr.mary government) and its component unit. A component unit is a legally separate entity for which the primary government is financially accountable, or for which the exclusion of the component unit would render the financial statements I'f the primary government misleading. The criteria used to determine if the primary government is financially accountable fi'r a component >.nit include w’hether or not the primary government appi-ints the voting majority of the potential coniponem unit’s board, i.s able to impose its will on the potential component unit, is in a relationship of financial btn-fit or burden with the potential component unit, or is fiscally depended upon by the potential component unit. The Orono Housing and Redevelopment Authority (HRA) is a legally separate organization created in accordance with Minnesota Statutes § 469.003. Its purpose is to cleat and redevelop blighted areas within the City and to provide adequate hou.sing for low and mi’derate income residents. The HRA is fiscally dependent upon the City of Oriino, and its governing board consists of the City ’s mayor and councilmembers. Therefore, the HRA has been reported as a blended component unit of the City, w'ith its hinds reported a.s though they are funds of the City. There are no other organizations that when considered would be included in the financial .%tatements as a component unit. C.Fund Accounting The accounts of the City are organized on the basis of funds and account group*^. each of w hich is cimsidered a separate accounting entity. The City maintains the following funds, grouped by fund type and account group. -30-