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CITY Of ROSEVILLE NOTES TO FINANCIAL STATEMENTS �ECEMBER 31. 1993 Note 1- Sumnarv of Sianificant Accounting Policies The City of Rosevilte, Minnesota, was incorporated on May 28, 7948, and became a statutory city on January 7, 1974. The City operates under a Councit-Manager form of government, and provides various services as authorized by State statute, including the follouing: genereL goverrment, pubLic safety, public uorks, parks and recreation, water and sewer utitity, and comnunity devetopment. The accounting poticies of the City of Roseville conform 2o generelly accepted accounting principats applicable to goverrvnental units. The fotlowing is a surmary of the more significant policies. A. Reporting Entity For financial reporting purposes the City's financial statements incLude all funds, account groups, departments, agencies, boards, cortmissions, and other organizations over which City officiaLs exercise oversight responsibitity. Houever, none of the units incLuded are legally separate organizations and do not qualify as component units under Statement 14 of the Goverrxnental Accounting Standards Board (GASB). Oversight responsibility includes such aspects as appointment of governing body members, budget revieu, financiat accountability, and imposition ot uitl. Certain organizations have been exctuded from the City's financial statements as follows: Exc Wded: Firemen's Relief Association - This association is organized as a non-profit organization by it's members to provide pension and other benefits to their respective members in accordance with Minnesota statutes. Their board of directors are elected by the members. All funding is conducted in accordance with Minnesota statutes, uhereby state aids flou to the association, and tax levies are determined by the association. The association pays benefits directly to their members. The association may certify tax levies to the County directly if the City does not carry out this function. Because the association is able to fund it's programs independently of the City, it is excluded trom the reporting entity. (See Note 9 for disclosures relating to the pension plan operated by 2he association.) Independent Schoot Districts No. 621 and 623 - These Districts, like all school districts in Minnesota, are completely independent of any other 9overnmental entity. They have their own elected Boards of Education, levy their oun taxes and prepare their oun financial reports. B. Fund Accounting The accounts ot the City are organized on the basis of funds and account 9roups, each of uhich is considered a separate accounting entity. The operations of each fund are accounted for uith a separate set of self-balancing accounts that canprise its assets, liabitities, fund equity, revenues, and expenditures, or expenses, as appropriate. Goverrment resources are altocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by uhich spending activities are controlled. The various furxls are grouped in the financial statements report into seven generic fund types and three broad fund categories as follous: GOVERNMENTAL FUNDS General Fund - The General Fund is the primary opereting fund of the City. It i's used to account for aLl financiat resources except those required to be accounted for in another fund. Speciat revenue funds - 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 turids - Debt service funds are used to account for the acc�mulation of resources for, and the payment of generel tong-term debt principaL, interest, and related costs. Capitat projects funds- Capitat projects funds are used to account for financial resources to be used for the acquisition or construction ot major capital facilities other than 2hose financed by proprietary funds. PROPRIETARY Fl1ND5 Enterprise Funds - Enterprise Punds ere used to account for operations that are financed and operated in a manner simiLar to private business enterprises, uhere 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 basis be financed or recovered primarily through user char9es. The City has seven Enterprise Funds: Water Utility fund, Seuer Utility Fund, Storm Drainage Fund, Golf fund, Soid Naste Recycling, Ice Rrena Fund, and the John Rose Minnesota Ovat. 31