09-11-1989 - Agenda Packet City Council - regular meeting

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r CITY OF 01111NO NOTES TO FINANCIAL. STAT1.4ENT': December It, lu!'P Note 1. SUMMARY Or SIGNIFICANT ACCOUNTING POLICIES A. Organization The City uper.ttes under "Oplinnal I'Ltn A" Iutm ,it governeent a•. defined in the State of Minnesota Statutes. The City Council, cum - posed of an elected mayor and four elected trustees or counclleember%. exercises legislative authority and determines all matters of policy. The Ilnanclal statements and the accounting pulls I.•s of the Ci I. con - lore to generally acceptrd at-,ounting principle% .ts applicable to governmental units. B. Resort (nQ Ent ill For financial reporting purposes the City's tInanctaI statementa include all funds, account groups, departments, commissions, and other organizations over which City officials exercife oversight respon- slbIifty. There are no other organizations that when considered would ' be included in the financial statements. Oversight responsibility includes such aspect. as appointment of governing body members, budget approval, approval of property ta• levies, outstanding debt secured by the City's full faith and credit or revenue, and responsibility fur funding deficits. C. Basis of Statement Presentation The accounts of the City are organized tin the balls of funds and account groups, each of which is considered a srp.tr.tte a(cuunting entity. The City maintains the following funds, grnup.•d by fund type 1 and account group: 1) Governmental Fund Types - ? a) General Fund - The General Fund Is the general operating fund of the City. It is used to account for all flnsnclal resources except those required to be accounted for in another fund. b) Special Revenue Funds - The Special Revenue Funds are used to account fur the proceeds of sprctfic revenue sources (tither than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purpose%. c) Debt Service Funds - The Debt Service Funds are used to account for the accumulation of resources for, and the paym.-nt of, general long-term d.•ht principal, interest, and related costs. CIIY OF ORONO NOTES TO FINA%CIAL STATEMENTS (Continued) December 31, 1988 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) d) Capital Project Funds - The Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). 2) Proprietary Fund Type - a) Enterprise Funds - The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises -- where the intent of the governing bodf is that the cnars of pro- viding goods or services to the general public om a con- tinuing basis be financed or recovered primarily through user charges. )) Fiduciary Fund Type - a) Agency Funds - The Agency Funds are used to account for assets held by the City in the capacity of. trustee or agent. Agetcy Funds are custodial In nature (assets equal ?$abilities) and do not Involve measurement of results c. operations. 4) Account Groups - a) General Fixed Assets - This account group contains the fixed assets acquired principally for general purposes and •acludes fixed assets of the Proprietary Funds. b) General Long -Term Debt - This account group contains the long-term obligations of the City other than those liab'1- Itles included in the Proprietary Funds. D. Basis of Accounting 1) Modified Accrual - The Governmental Fund Types and Agency Fund+ are accounted for using the modified accrual basis of accounting. Generally, only current assets and current liabilities are included in these funds. Governmental funds use the "financial flow" measurement focus. Consequently, their revenue is recognized when It becomes measurable and avatIable as net current assets. Available means collectible within theecurrent period or soon enough thereafter to be used to pay liabilities of the current period.