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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2014 <br /> <br /> <br /> <br />(17) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />B. Basic Financial Statements (Continued) <br /> <br />2. Fund Financial Statements (Continued) <br /> <br />The City reports the following major governmental funds: <br /> <br />General Fund – The General Fund is the City’s primary operating fund. It <br />accounts for all financial resources of the general government, except those <br />required to be accounted for in another fund. <br /> <br />G.O. Improvement Bonds Series 2004A – The G.O. Improvement Bonds <br />Series 2004A Fund accounts for all debt service activity related to the 2004A <br />bond. <br /> <br />G.O. Improvement Bonds Series 2006A – The G.O. Improvement Bonds <br />Series 2006A Fund accounts for all debt service activity related to the 2006A <br />bond. <br /> <br />G.O. Capital Improvements Plan Bonds Series 2007A – The G.O. Capital <br />Improvement Plan Bonds Series 2007A Fund accounts for all debt service <br />activity related to the 2007A bond. <br /> <br />Hoffman Road Fund – The Hoffman Road Construction Fund accounts for all <br />activity related to the reconstruction activities of Hoffman Road. <br /> <br />Street Improvements Fund – The Street Improvements Fund is used to account <br />for the accumulation of resources that are restricted, committed, or assigned to <br />expenditures for capital outlays, including the acquisition or construction of <br />capital facilities. <br /> <br />The City reports the following major proprietary fund: <br /> <br />Sewer Fund – The sewer fund accounts for customer sewer service charges that <br />are used to finance sewer operating expenses. <br /> <br />C. Measurement Focus and Basis of Accounting <br /> <br />The government-wide and proprietary fund financial statements are reported using the <br />economic resources measurement focus and the accrual basis of accounting. Revenues <br />are recorded when earned, and expenses are recorded when a liability is incurred, <br />regardless of the timing of related cash flows. Property taxes are recognized as <br />revenues in the year for which they are levied. Grants and similar items are recognized <br />as revenue as soon as all eligibility requirements imposed by the provider have been <br />met.