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I <br /> Town of Palisade, Colorado <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31, 2009 <br /> NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br /> 1. Organization <br /> The Town of Palisade, Colorado,(the Town) a statutory municipality operates under a Board of Trustees- <br /> Mayor form of government. The Town provides its residents with police protection, sewer service, water <br /> service, sanitation service, fire protection, recreation, swimming pool, streets, cemetery, and parks. The <br /> Town is governed by an elected mayor and a 6-member Board of Trustees. <br /> 1 2. Reporting Entity <br /> The reporting entity consists of (a) the primary government; i.e., the Town, and (b) organizations for <br /> which the Town is financially accountable. The Town is considered financially accountable for legally <br /> rseparate organizations if it is able to impose its will on that organization or there is a potential for the <br /> organization to provide specific financial benefits to, or to impose specific financial burdens on, the <br /> Town. Consideration is also given to other organizations, which are fiscally dependent; i.e., unable to <br /> adopt a budget, levy taxes, or issue debt without approval by the Town. Organizations for which the <br /> nature and significance of their relationship with the Town are such that exclusion would cause the <br /> reporting entity's financial statements to be misleading or incomplete are also included in the reporting <br /> entity. <br /> The Town's financial statements include the activities of the First Street Special Improvement District <br /> and the Palisade Downtown Improvement District as blended component units in the General Fund and <br /> governmental activities. The Districts do not issue separate financial statements. <br /> ' 3. Government-wide and Fund Financial Statements <br /> The government-wide financial statements (i.e., the statement of net assets and the statement of <br /> activities) report information on all of the non-fiduciary activities of the primary government and its <br /> ' component units. For the most part, the effect of inter-fund activity has been removed from these <br /> statements. Governmental activities, which normally are supported by taxes and intergovernmental <br /> revenues, are reported separately from business-type activities, which rely to a significant extent on fees <br /> and user charges for support. The Town has no discretely presented component units. <br /> The statement of activities demonstrates the degree to which the direct expenses of a given function or <br /> segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a <br /> specific function or segment. Program revenues include 1) charges to customers or applicants who <br /> purchase, use, or directly benefit from goods, services or privileges provided by a given function or <br /> segment and 2) grants and contributions that are restricted to meeting the operational or capital <br /> requirements of a particular function or segment. Taxes and other items not properly included among <br /> program revenues are reported as general revenues. <br /> 1 <br /> -20- <br />