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CITY OFELK RIVER, K8lNNE8OTA <br />NOTES TOFINANCIAL STATEMENTS <br />DECEMBER 31,2OOO <br />Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br />A. City Structure and Scope of the Entitty <br />TheCdxofBkRivernperatesumderthe"0mtiona|Plan/Y'foxmcfgovemnnnentasdefimedin0l8 <br />Minnesota Statutes. Under this plan, the government Vfthe City iedirected bva Council <br />composed mfamelected Mayor and four elected Council Members. The Council exercises <br />legislative authority and determines all matters ufpolicy. The Council appoints personnel <br />responsible for the proper administration of all affairs relating to the City. As required by generally <br />accepted accounting principles, the financial statements ofthe reporting entity include those ofthe <br />City ofElk River (the primary government) and its component units. The Elk River Public Utilities <br />Commission isconsidered bube part ofthe primary government. <br />The Elk River Public Utilities Commission was eatabUiahedand statutory authority is provided in <br />accordance with Chapter 412.321nfthe Minnesota Statutes. The Commission has three Council <br />approved members who serve overlapping three year terms. The statutes provide the City <br />Council all the discretionary authority necessary to operate the utilities except omits powers have <br />been delegated tothe Commission. The Utility Funds are included with the enterprise funds nf <br />this report. Separate financial statements for the Utilities may be obtained at the Elk River Public <br />Utilities office. 322King Avenue, Elk River. <br />ComDomentUnits <br />Component units are legally separate organizations for which the City is financially accountable <br />and are included within the financial statements of the City because of the significance of their <br />operational urfinancial relationships with the City. The City isconsidered financially accountable <br />for mcomponent unit if (1)itappoints ovoting majority ofthe organization's board and iaable to <br />impose its will on the organization or is in a rellationship of financial benefit or burden with the <br />organization, (2)orthe organization isfiscally dependent onthe City. <br />Blended component units, are insubstance, part ufthe government's operations and soare <br />reported as ifthey were part ofthe primary government, Discretely presented component units, <br />an the other hand, are reported in a separate column in the combined financial statements to <br />emphasize |tislegally separate from the primary government and todifferentiate their financial <br />position and results ofoperations. <br />Included: <br />Blended CommmnemtUnit <br />The Economic Development Authority (EDA) was created tocarry out economic and industrial <br />development and redevelopment within the City imaccordance with policies established bvthe City <br />Council. The seven member board consists ofthree Council Members, the Mayor and three other <br />council approved members. The EDA may not exercise any ofits authorized powers without prior <br />approval ofthe City Council. The activities mfthe EDA are blended and reported eaaspecial <br />revenue fund. Separate financial statements are not prepared for the EDA. <br />10 <br />