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CITY OF RAMSEY <br /> Notes to Basic Financial Statements <br /> December 31, 2015 <br /> NOTE 1—SIGNIFICANT ACCOUNTING POLICIES <br /> A. Organization <br /> The City of Ramsey,Minnesota(the City)operates under the Home Rule Charter City form of government <br /> as defined in Minnesota Statutes. Under this plan, the government of the City is run by a City Council <br /> composed of an elected Mayor and elected Councilmembers. The City Council exercises legislative <br /> authority and determines all matters of policy. The accounting policies of the City conform to accounting <br /> principles generally accepted in the United States of America as applicable to governmental units. <br /> B. Reporting Entity <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 units. Component units are legally <br /> separate entities for which the primary government is financially accountable, or for which the exclusion <br /> of the component unit would render the financial statements of the primary government misleading. The <br /> criteria used to determine if the primary government is financially accountable for a component unit include <br /> whether or not the primary government appoints the voting majority of the potential component unit's <br /> Board,is able to impose its will on the potential component unit,is in a relationship of financial benefit or <br /> burden with the potential component unit,or is fiscally depended upon by the potential component unit. <br /> 1. Blended Component Units <br /> The Ramsey Economic Development Authority (EDA) is included as a blended component unit of <br /> the City (primary government). Financial data is reflected as separate Special Revenue Funds. The <br /> basis for blending the EDA includes: 1.) the component unit provides services entirely, or almost <br /> entirely, to the primary government or otherwise exclusively, or almost exclusively, benefits the <br /> primary government even though it does not provide services directly to it. Voting authority rests <br /> with the City Council. This organization is considered a blended component unit of the City and <br /> reported as though its funds were funds of the City. Separate financial reporting for this unit is not <br /> produced in addition to this report. <br /> 2. Jointly Governed Organization <br /> The City is a member of Local Governmental Information Systems (LOGIS), a consortium of <br /> Minnesota municipalities that provides data processing services and support to its members. LOGIS <br /> is a legally separate entity that is financially independent of the City. Further, the City does not <br /> appoint a voting majority of LOGIS' Board of Directors. Therefore,it has not been incorporated into <br /> the City's reporting entity. During the 2015 fiscal year,the City paid LOGIS approximately$169,694 <br /> for services and equipment provided. <br /> C. Government-Wide Financial Statements <br /> The government-wide financial statements (i.e. the Statement of Net Position and the Statement of <br /> Activities)display information about the reporting government as a whole. These statements include all of <br /> the financial activities of the City. Governmental activities, which normally are supported by taxes and <br /> intergovernmental revenues, are reported separately from business-type activities, which rely to a <br /> significant extent on sales,fees,and charges for support. <br /> 61 <br />