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CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2017 <br /> <br /> <br /> <br />(14) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />B. Basic Financial Statements (Continued) <br /> <br />1. Government-Wide Statements (Continued) <br /> <br />The statement of activities demonstrates the degree to which the direct expenses of <br />each function of the City’s governmental activities and different business-type activity <br />are offset by program revenues. Direct expenses are those that are clearly <br />identifiable with a specific function or activity. Program revenues include: (1) fees, <br />fines, and charges paid by the recipients of goods, services, or privileges provided <br />by a given function or activity; and (2) grants and contributions that are restricted to <br />meeting the operational or capital requirements of a particular function or activity. <br />Revenues that are not classified as program revenues, including all taxes, are <br />presented as general revenues. <br /> <br />2. Fund Financial Statements <br /> <br />The fund financial statements provide information about the City’s funds. Separate <br />statements for each fund category, governmental and proprietary, are presented. <br />The emphasis of governmental and proprietary fund financial statements is on major <br />individual governmental and enterprise funds, with each displayed as separate <br />columns in the fund financial statements. All remaining governmental and enterprise <br />funds are aggregated and reported as nonmajor funds. <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. 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.