07-27-1998 Council Packet - Laserfiche WebLink

Home Browse Search

‘ ♦ i,. L... ■ : i i'-i i ' »* w If 5 ♦ • *«• — i K -A »-. > CITY OF ORONO, MINNESOTA Notes to Financial Statements December 31,1997 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES A. Organization The City operates under "Optional Plan A" form of government as defined in the State of Minnesota Statutes. Under this plan, the City Council, composed of an elected mayor and four elected tmstees or r 'vncilmembers, exercises legislative authority and determines all matters of policy. The City Council, is responsible for the proper administering of all affairs relating The financial statements and the accounting policies of the City conform to generally accepted accounting principles as applicable tc governmental units. B. Reporting Entity As required by generally accepted accounting principles, these financial statements include the City of Orono (the primary 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 of the primary government misleading. The criteria used to determine if the primary government is financially accountable for a component unit include whether or not the primary government appoints the voting majority of the potential component unit ’s board, is able to impose its will on the potential component unit, is in a relationship of financial benefit 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 clear and redevelop blighted areas within the City and to provide adequate housing for low and moderate income residents. The HRA is fiscally dependent upon the City of Orono, 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, with its funds reported as though they are funds of the City. There are no other organizations that when considered would be included in the financial statements as a component unit. C. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The City maintains the following funds, grouped by fund type and account group: