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CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS ❑ECEMBER 31, 015. 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 general government, except those required to be accounted for in another fund. G.O. Capital Improvements Plan Bonds Series 2007A - The G.O. Capital Improvement Plan Bonds Series 20.07A Fund accounts for all debt service activity related to the 2007A bond, Hoffman Road Fund -- The Hoffman Road Construction Fund accounts for all activity related to the reconstruction activities of Hoffman Road. Street Improvements. Fund - The Sfreetlmprovements Fund is used to account for the accumulation of 'resources that area restricted, committed, or assigned to expenditures for capital outlays, 'including 'the. acquisition or construction. of capital facilities. The City reports the following rnajor,prop�.ietary fund: .Sewer Fund The sewer fund,'accounts for customer sewer service charges. that are used to finance sewer operating expenses. C. Measurement Focus and 'basis of Accounting The .government -wide and.; proprietary fund financial statements are reported using the economic resources measurement focus. and the accrual basis of accounting. Revenues are recorded when 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 all eligibility requirements imposed. by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis. of accounting. Revenues are recognized as soon as they are both measurable and available, The City .considers all revenues to be available if they are collected within 60 days after the end of the current period. Property and other taxes, licenses, and interest are all. considered to be 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 other financing sources, (15)