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CITY OF ORONO <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1989 <br />m <br />ki <br />m <br />M <br />Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br />A. Organization <br />The City operates under "Optional Plan A" form of government as <br />defined in the State of Minnesota Statutes. The City Council, com­ <br />posed of an elected mayor and four elected trustees or councilmerabers, <br />exercises legislative authority and determines all matters of policy. <br />The financial statements and the accounting policies of the City con­ <br />form to generally accepted accounting ptlnclples as applicable to <br />governmental units. <br />B. Reporting Entity <br />For financial reporting purposes the City's financial statements <br />include all funds, account groups, departments, commissions, and other <br />organizations over which City officials exercise oversight respon­ <br />sibility. There are no other organizations that when considered would <br />be included in the financial statements. <br />Oversight respoi .^ility includes such aspects as appointment of <br />governing body members, budget approval, a proval of property tax <br />levies, outstanding debt secured by the City's full faith and credit <br />or revenue, and responsibility for funding deficits. <br />C. Basis of Statement Presentation <br />The accounts of the City are organized on the basis of funds and <br />account groups, each of which is considered a separate accounting <br />entity. The City maintains the following funds, grouped by fund type <br />and account group: <br />1) Governmental Fund Types - <br />a) General Fund - The General Fund is the general operating <br />fund of the City. It is used to account for all financial <br />resources except those required to be accounted for in <br />another fund. <br />b) Special Revenue Funds - The Special Revenue Funds are used <br />to account for the proceeds of specific revenue sources <br />(other than expendable trusts or major capital projects) <br />that are legally restricted to expenditures for specified <br />purposes. <br />c) Debt Service Funds - The Debt Service Funds are used to <br />account for the accumulation of resources for, and the <br />payment of, general long-term debt principal, interest, <br />and related costs. <br />-27-