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Internal Service. Funds are used to accountfor the financing of goods and services provided by one. <br />department to other departments of the City, on a cost -reimbursement basis. The City of Gem Lake <br />does riot have any Internal Service Funds. <br />Fiduciary Funds. are used when a government holds or manages financial resources in an agent or <br />fiduciary capacity. The City of Gem Lake does not operate any of these funds at the current time. <br />The Budget Basis used by the City of Gem Lake is the modified accrual basis of accounting for <br />governmental fund types (for example;. the General Fund, Special Revenue Funds, Debt. Service and <br />Capital Project Funds). Under this accounting method, revenues are recognized in the accounting <br />period in which they become available and measurable. Available means collectible within the current <br />period or soon enough thereafter to be used to pay liabilities of the current period.. Expenditures are <br />recognized in the period in which the fund liability is incurred, except for unmatured interest on general <br />long-term debt, which is.recognized when due. <br />Enterprise Funds. use the accrual basis of accounting. Under the accrual basis, revenues are <br />recognized when they are measurable and earned. Expenses are recognized in the period incurred, if <br />measurable. Th.e.budget basis for Enterprise and Internal Service Funds. 1s.also the accrual basis. with <br />the exceptions noted below. <br />The.City's Comprehensive Annual Financial Report (CAFR) shows the status of the City's finances on <br />the basis of. "generally accepted accounting principles. tGAAPj. This conforms to the way the City <br />prepares its budget. <br />The CAFR shows fund expenditures on tooth a GAAP basis and budget basis forcomparisonpurposes. <br />_. . <br />BUDGET PROCESS <br />The. budget process begins in August with the City%Treasurer developing a draft budget. The Mayor <br />and Treasurer then meet in late August or early September to refine the draft budget. It is this budget <br />that is presented to the full City Council in a workshop session in early September. It is from this <br />workshop that a preliminary tax levy is presented.and adopted no later than September.30'h of each <br />year. Once adopted the preliminary levy is certified.to Ramsey County. Over the next few months the <br />Mayor and Treasurer develop a final draft.budget.and tax levy, which again is presented to the full City <br />Council for review in November. From the meeting a final budget and tax levy is developed and <br />presented at a public gearing in November. After the public hearing the City Council votes to approve <br />the budget and adopt the final property tax levy. In. late December the final levy is certified to the. <br />County Auditor. During the fiscal year line items may be overspent as long as the total activity budget <br />is not overspent. The Mayor can recommend changes for activities' budget to the City Council. The <br />Council can than approve -or disapprove the change, in the form of a budget amendment. Only with the <br />City Council approval can an activity be overspent and only if funding is available. However, the <br />property tax levy.cannot be amended. <br />M <br />