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CITY OF GEM LAKE, MINNESOTA NOTES TO. BASIC FINANCIAL STATEMENTS DECEMBER.3'1, 201.6 NOTE.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED.) B. Basic Financial Statements (Continued) 2.. Fund Financial Statements (Continued) The City reports the following major governmental funds: .General Fund — The. General Fund is the City's, primary operating fund. It accounts for all. financial resources of the genera[; government, except those required to be accounted for in another fund. G:O. Capital Improvements Plan Bonds,::Se.ries20©7A — The G.O. Capital Improvement Plan. Bonds Series 2007A ` l=und accounts for all debt service activity related to the 2007A bond. Hoffman Road Fund — The Hoffrrian Road Construction Fdhd accounts for al€ activity related to the. reconstruction .activities of Hoffman Road.:%` Street Improvements Fund — T. e`TStreet 1f6provements Fund is used to account for the accumulation of resources tlat;are restricted, committed, or assigned. to expenditures for capital;; o,ut€ays,..includng the acquisition or. construction of capital facilities. The City reports the following;niajor proprietary fund:. Sewer Fund =;The sewer find:accounts far customer sewer service charges that are used to #inance,;sewer operating expenses. C. Measurement Focus aricl Basis of Accounting The government -wide :ar d``proprietary fund financial. statements are reported using the economic resources teasurement focus and the accrual basis. of accounting. Revenues are recorded wh6 'earned, and expenses are recorded when a liability is incurred, regardless':of the. timing of related cash flows, Property taxes are recognized as revenues in the; year for' which they are levied. Grants and. similar items are recognized as. revenue as.'soon as. al€ eligibility requirements imposed by the provider have been niet, Governmental'; fund financial statements are :reported. using the current financial resources, ri'easurernent focus and the modified accrual basis of accounting: Revenues are recognized as soon as they are both measurable and available. The City considers all revenue.s.to be available if they are collected within 6..0 days after the end of the current period. Property and other taxes, licenses, and interest are all considered to bs susceptible to accrual. Expenditures:. are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences, and claims and judgments, which are recognized as expenditures to the extent. that they have matured. Proceeds of general long-term debt and acquisitions under capital leases are reported as otherfinanc€ng sources. (15)