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CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2007 NOTE I SUMMARY OF SIGNIFICANT ACCOUNTING POLICJES' (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. lmprovement Bonds Series 2004A The G:O, Improvement Bonds Series 2004A Fund accounts for all debt service activity related to the 2004A bond. G.O.. Improvement Bonds Series 20.06A. The G.O. Improvement Bonds_ Series 2006A Fund accounts for all debt service activity related to the 2006A bond. G.O. Capital Improvement Plan Bonds Series 2007A — The G.O. Capital Improvement Plan Bonds Series 2007A Fund accounts for all debt service activity related to the 2007A bond. City Hall Construction Fund -- The I City Hall Construction Fund accounts for. all activity related to the construction of the City's new city hall.. 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, proprietary fund, and fiduciary fund financial statements are k 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 flaws. Property taxes are. r 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. Private -sector standards of accounting and financial reporting issued on or before November 30, 1989, generally are followed. in both the government -wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting. Standards Board. Governments also have the option of following subsequent. private -sector guidance for their business - type activities and enterprise funds;. subject to this same limitation. The City has elected not to follow subsequent private=sector guidance..