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does not have any Internal Service Funds. Fiduciary Funds are used when a government holds or manages financial resources in an agent or fiduciary capacity. The City of Gem Lake does not operate any of these funds. at the current time. The. Budget Basis .used by the City of Gem Lake is the modified accrual basis of accounting for governmental fund types (for example, the General Fund, Special Revenue Funds; Debt Service and Capital Project Funds). Under this accounting method, revenues are recognized in the accounting period in which they become available and measurable: Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Expenditures are recognized in the period in which the fund liability is incurred., except.for unmatured interest o.n general :long-term debt, which is recognized when due. Enterprise Funds. use the accrual basis of accounting: Under the accrual basis, revenues are recognized when they are measurable and earned, Expenses are recognized in the period incurred,.. if measurable. The budget basis for Enterprise and Internal Service Funds is also the accrual basis with the exceptions noted below. The City's Comprehensive Annual Financial Report (CAFR) shows the status of the City's finances on the basis of "gbnerally.bccepted accounting principles" (GAAP). This conforms. to the way the.City prepares its budget_ The CAFR shows fund expenditures on both a GAAP basis -and budget. basis for comparison purposes. BUDGET PROCESS The budget.process begins in August with the City Treasurer developing a draft budget. The Mayor. and Treasurer then meet in late August or early September to refine the. draft budget. It is this. budget thait is presented to the full. City Council in a workshop session in early September. It is from. this workshop that a preliminary tax levy is presented and adopted no later than September 30th of each year. Once adopted the preliminary levy is certified to Ramsey County. Over the next few months, the Mayor and Treasurer develop a final draft budget and tax levy,. which again is presented to the full City. Council for review in November. From.the meeting a final budget and tax. levy is developed and presented at a public hearing in November. After the public hearing the City Council votes to approve the budget and adopt the final property tax levy. in late December, the final`€evy is certified to the. County Auditor. During the. fiscal year, line items may be overspent as Iong.as the total activity budget is not overspent. The Mayor can recommend changes for activities' budget to the. City Council. The Council can than approve or disapprove the change, in the form of a budget amendment. Only with the. City Council approval can an activity be overspent. and only if funding is available. However, the property tax levy cannot be amended. 4