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CITY OF ROSEVSLLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS (CON7INUED) DECEM9ER 31, 1988 Note 1- Summarr of Siqnificant Accountinq PoLicies (Continued) expenditures, or expeoses, as appropriate. Government resources are allocated to and accounted for in individual tunds 6ased upon the purposes for which they are to he spent and the means hy which spending activities are controlled. The various tunds are grouped in the financial statements report into seven generic fund types and three 6road fund categories as foLlows: GOVERNMENTAL F�NDS General fund - The Generat Fund is the primary operating fund ot the City. It is used to account for all financial resources excep[ Those required to 6e accounted for in another fund. Speciat revenue fu�ds - Speciat revenue funds are used to account for the proceeds of certain specific revenue sources that are LegalLy restricted to expenditures for specified purposes. Debt service tunds - Debt service funds are used to account for the accumulation of resources for, and the payment of generat Long-term debt principaL, interest, and retated costs. Capitat proje<ts funds - Capital projects fonds are used to account for financiaL resources to he used for ihe acquisition or mnstruction of major capitaL facilities other than those financed by proprietary funds. PROPRIETARY FUNDS -- --- Enterprise Funds�- Enterprise Funds are used to account for operations that are financed and opereted in a manner simitar to private business enterprises, where the intent of the governing body is that the costs (expenses, incLuding depreciation) of providing goods or services to the generaL public on a continuing 6asis be financed or rewvered primarily through user charges. The City has five Enterprise Funds: Water Uiility Fund, Sewer UtiLity Fund, Storm Drainage Fund, Golf Fund and Sce Arena Fund. InternaL Service Funds - Internal Service Funds are used to accou�t for the financing of goods or services provided by one department or agency to other departments or agencies of the City. The City has two InternaL Service Fu�ds, they are: Workers' Compensation Self-Insurance Fund which accounts for the City's workers' mmpensation cLaims, and the Risk Management Fund which accounts for aLL of the City's general insurance <osts. FIDUCIARY FUNDS Agency funds - Agency funds are used to account for the assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. The City's Agency Funds are custodiaL in nature (assets equat tia6ilities) and do not inwLve measurement of resul[s of operations. C. Measureme�t Focus The accounting and reporting treatmeni applied to the fixed assets and long-term Lia6itities associated with a fund are determined by its measurement focus. Governmental funds and ExpendabLe Trust funds are acwunted for on a spending or 'financiaL ftow' measurement focus. This means that only current assets and current Liabilities are generaLty in<tuded on their batance sheets. Their reported fund 6alance is 29