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��TY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31. 1997 Nnrr 1 Summarv of Sienificant Accountin� Policies The City of Roseville, Miruiesota, was ir�corporated on May 28, 1948, and became a stamtory ciry on January 1, 1974. The Ciry operates urder a Courcil-Mam�er fottn of goverrunent ard provides various services as authorized by State statute, inciuding the following: general govemment, public safety, public works, parks ard recreation, water arul sewer utility, and community development. 1'he accouraiq¢ policies of the City of Roseville confonn to generalty accepted accounting principies applicable to governnienwl units. The foilowing is a summary of the more significant policies. A. Reportir� En[ity For financial reporting purposes the City's tinancial statements include all funds, account groups, departments, agencies, boards, commissior�s, ard other or�aniTauons for which the City is finarcially accountable. However, none of the units included are legally separate organizations and do not qualify as component unics under Statement 14 of die Goverrunental Acwunting Standards Board (GASB). B. F,u� AccounSing The accounts of the Ciry are organized on the basis of funds and account groups, each of which is considered a separa[e accounting entiry. The operations of each fiud are accourrted for with a separate sec of self-balancing accowi[s that comprise its assets, iiabilities, fund equity, revemies, ard experditures, or expenses, as appropriate. Govemment resources are allocated to and accounted for in individual funds based upon ihe purposes for which they are ro be spent ard the mear�s by which spending activities are controlled. The various funds are grouped in the firtanciai statements report into seven generic fur.d types and three broad fund categories as follows: GOVERNMENTAL FUNDS Gereral Furcl - The General fiud is the primary operating fund of the Ciry. It is used to account for all fmanciai resources except those required to be accounted for in another fund. Special Revenue Funds - Special revenue funds account for the proczeds of certain specific revenue sources that are legalty restncted ro experditures for specified purposes. Debt Service Furrls - Debt service furds accouru for the acannulation of resources for, and the payment of general long-term debt principal, incerest, ard related costs. Capital projects Furds - Capital projects furds are used ro accoun[ for financial resowces ro be used for the acquisition or construction of major capital facilities other than those financed by proprietary funds. PROPRIETARY FUNDS Enterprise Furds - Enterprise furds are used to account for operations d�ac are firtanced and operated in a manner similar to private business enrerprises, where the intent of the goveming body is that the costs (expenses, including depreciation) of providing goods or services ro the general public on a contiraiing basis be firunced or recovered primarity through user charges. The City has five enterprise funds: W ater Ucility, Sewer U[ility, Storm Drainage, Solid Waste Recycling and Golf Course. Intemal Service Funds - Internal service fm�ds are used to account Yor the financing of goods or services provided by one department or agency to other deparmients or agercies of the Ciry. The City has t}uee intemat service funds: The Workers' Compensation Self-Insurance Furd which accounta for the City's workers' compensation claims, the Long-Tenn Disabiliry Fund, which accounts for monies and claims related to the long-temi disability plan of [he City, and the Risk Management Fund which accounts for ali of the City's generai insurance costs. 29