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City of Roseville — 2006 Budget <br />The government reports deferred revenue on its combined balance sheet. Deferred revenues arise when <br />potential revenue does not meet both the "measurable" and "available" criteria for recognition in the <br />current period. Deferred revenues also arise when resources are received by the government before it <br />has a legal claim to them as when grant monies are received prior to the incurrence of qualifying <br />expenditures. In subsequent periods when both revenue recognition criteria are met or when the <br />government has a legal claim to the resources the liability for deferred revenue is removed from the <br />combined balance sheet and revenue is recognized. <br />Expenditures are generally recognized under the modified accrual basis of accounting when the related <br />fund liability is incurred except for principal and interest on general long -term debt which is recognized <br />when due and accumulated unpaid vacation and compensatory time off which are recognized when paid. <br />The accrual basis of accounting is utilized by proprietary fund types. Under this method, revenues are <br />recorded when earned and expenses are recorded at the time liabilities are incurred. Unbilled utility <br />service receivables are recorded at year -end. <br />Basis of Budgeting <br />The City adopts an annual budget for the general and special revenue funds that are prepared on the <br />modified accrual basis of accounting. Proprietary funds are budgeted on an accrual basis. The adopted <br />budget indicates the amount that can be expended by each fund based on detailed budget estimates for <br />individual expenditure accounts. Management may make budget modifications within the fund level. <br />All budget revisions at the fund level must be authorized by the City Council at the request of the City <br />Manager. The Council, under Minnesota Statutes, Section 412.731, can modify or amend the budget if <br />funds are available. All supplemental appropriations are financed either by transfers from the <br />contingency section of the general fund budget or by revenues received in excess of the budgeted <br />amounts. All budget amounts lapse at the end of the year to the extent they have not been expended. <br />The level which expenditures may not legally exceed appropriations is at the fund level. <br />Long Range Planning (Capital Improvement Program (CIP)) Overview <br />As part of the annual budget and the long range planning process, the city also updates a 5 -year Capital <br />Improvement Program (CIP). <br />The Capital Improvement Program process is on going throughout the year, as the City Council studies <br />and approves various projects. The document preparation is an affirmation of those approvals as well as <br />a projection of potential projects that may be approved within the 5 -year period. <br />The general guideline for CIP inclusion would be equipment of a capital nature, and construction project <br />cost generally in excess of $2,000. Items may appear in the CIP that are under the minimum amount, <br />but they are evaluated on the basis of the substance of the expenditure. <br />Budget Procedures (Specific) <br />A budget calendar is developed in early February of each year with the departmental budget material <br />going out to departments in early April. <br />138 <br />