CCP 05-22-2006 - Laserfiche WebLink

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CITY OF ARDEN HILLS. MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 3 L 2005 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLlClES - CONTINUED The City reports the following major governmental fundSI Di '. The General fund is the City's primary operating fiiPd. . - ou except those required to be accounted for in anotbef fund 1EcI . The Economic Development Authority fund accounts for revenue sources that are legally restricted to expenditures for specified purposes (not including major capital projects). The Tax Increment Bonds of 1998Afund accounts for the accumulation of resources and payment of general obligation bond principal and interest from governmental resources and special assessment bond principal and interest from special assessment levies when the City is obligated in some manner for the payment. The Pennanent Improvement Revolvingfund accounts for the acquisition of fIxed assets or construction for tills major capital project not being fmanced by proprietary funds, The City reports the following major proprietary funds: The Water fund accounts for costs associated with the City's water system and insure that user charges are sufficient to pay for those costs. The Sewer fund account". for the costs associated v.rith the City's sewer system and insure that user charges are sufficient to pay for those costs. The RecycIingftnd account,; for costs associated with the City's recycbng operations and msille that user charges are sufficient to pay for those costs. . The Suiface Water Managementfund accounts for costs associated with the City's storm water system and insure that user charges are sufficient to pay for those costs. Private-sector standards of accounting and [mancial reporting issued prior to December 1, 1989, generally are folJowed in both the government-'Wide and proprietary ftmd financial statements to the extent that those standards do not conflict with or contradict guidance ofGASB. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funci,,>, subject to this same limitation. The City bas elected not to follow subsequent private-sector guidance. As a general rule the effect of inter fund activity has been eliminated from government-wide financial statements. Exceptions to this. general rule are payments-ill-lieu of taxes and other .charges berneen the City's water and sewer fUllction and various other functions of the City. Elimination oftbese charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include] ) charges to customers or applicants for goods, services) or privileges provided, 2) operating granls and contnbution, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues oftbe City's enterprise funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system All revenues and expenses not meeting this defInition are reported as nonoperating revenues and expenses. . \Vhen both restricted and umestricted resources are available for use, it is the City's policy to use restricted resources flfS~ then unrestricted resources as they are needed. -25-