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CITV OF ROSEVILLE. MINNESOTA NOTES TO FINANCIAL STATEMENTS OECEMBER 31, 1988 Note 1- Summar of Si nificant Accountin Policies The City of Rosevilte, Minnesota, was incorporated on May 28, 1948, and became a statutory City on January 1, 1974. The City operates under a Councit-Manager form ot government, and provides various services as authorized by State statute, inctuding the following: general government, pu6Lic satety, pubtic vorks, parks and recreation, water and sewer utiLity, and mmmunity deveLopment. The accounting policies of the City of RoseviLLe conform to generaLLy accepted accounting principles ap- pLicabLe to governmental units. The toLLowing is a summary of the more significant poLicies. A. Reporting_Entity The City has implemented the National Councit on Governmentat Accounting Statement No. 3, Definino the Governmental Entity. In accordance with Statement 3, for financiaL reporting purposes the City's financiaL statements include aLt funds, account 9roups, departments, agencies, hoards, commissions and other organizations over vhich City officials exercise oversight responsibitity. Oversight responsibility inctudes such aspects as appointmeni of governing body memhers, budget revieu, approval of property tax levies, outstanding de6t secured by the City's full faith and credit or revenues and responsi6iLity for funding deficits. �-� As a result of appLying the criteria of Statement No. 3 certain orga�izations have been excWded from the City's financial statements as fotlows: Excluded: Firemen's Relief Association - This association is organized as a non-profit organization by it's members to provide pension and other henefits to their respective members in accordance with Minnesota statutes. Their board of directors are elected 6y the memhers. Att tunding is conducted in accordance with Minnesota statutes, uhere6y state aids flow to the association, and tax Levies are determined by the association. The association pays benefits directly to their mem6ers. The association may certify tax tevies to the County directly if the City does not carry out this function. eecause the association is ahLe to fund it's pro- grams independeotly of the City, it is exduded from the reporting entity. (See Note 13 for disclosures retating to the pension ptan operated by the association.) Independent S<hooL Districts No. 621 and 623: These �istricts, Like atL school disiricts in Minnesota, are compLetety independent of any other governmental entity. They have their own eLected Boards ot Education, levy their ovn taxes and prepare their own financial reports. B. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of uhich is considered a separate acco�nting entity. The operations of each fund are accou�ted for uith a separate set of sett-batancing accounts that comprise its assets, Lia6itities, fund equity, revenues, and 28