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CITY OP ROSEVILLE, NfINNESOTA N01�5 TO THE PINANCIAL STATEMENTS ll�CEMBER 31, 1980 Note 1- Summary of Sigr�iLicant 2.cr_ouatine,� Policies The City of Roseville, Minnesota, was incorporated on May 28, 1948, and became a statutory City on January 1, 1974. The City operates under a Council-Nanaoer fora of government. The accounts of the City are o-rgaai_zed on the basis of fued; and account grouns: each of which is considered to be a separate accounting entity. Tne operations of each fund are accoanted for by providing a separate set of self-balancing accounts whi.ch comprise each fund's assets, liabilities, fund equity, revenues and expenCitures/ expenses. The 1ega1 or administrative basis for the establishment of each fund is explained on the divider preceding the statements for each of the fund types. The accounting policies of the City of Rosevi=le conform to generally accepted accounting principles applicable to governmental units. The following is a summarti� of the more signiYicant policies. - &asis of Accountin� General, Special Revenue, Debt Service, Capital Projects, Special Assessmznts, Trust and Agency Funds are recognized on the modified accrual basis. Under the modified accrual hasis, revenue is recognized in the accouniin� period in which they becomz available and measurable. ^xp-�.c.d�turzs are reco�ni_zed i� �:ie accounting peri od in which the fund incurred the liability, if ineasurable, except for unmatured interest on general long-term debt and speci.al assessment debt. Enterprise and Internal Service funds ar= rEcugnized o<< �he accx�c:;i basis. �lir:der �!ie ac;.r�..�a:. .._�ais, rzvenue is recognized in the accounting period in which they are earned and become measurable; expenses are recognized in the period incurred, if ineasuraole. The fellowing transactions are accounted for as described below: � (a) General property taxes - Revenue is recognized in the year of .'. -� �� - anticipated collection, with amoui�ts due from the County and � received early in the following year set up as a receivable (unremitted taxes).� A1lowances are providel for the fu11 amount of delinquent taxes receivaUle. This procedure has the effect of recognizing general property taxes as revenue �ohen cash is received because of the uncertainCy of collection of the delin- quent amount. (b) Principal portion of special assessments - Revenue is recognized in the year assessment ro11 adopted by the City Council. (c) Interest revenue on special assessments receivable - Interest rzvenue is recognized ir the year oi anticipated collectien of the current principal installment. (d) Interest expense on bonded indebtedness - Interest expense is recorded as an expenditure when paid; interest is not accrued unless fu11y matured and not paid. 29