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CITY OF ROSEVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2024 Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenue of the City's enterprise funds and internal service funds are charges to customers for sales and services. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. D. ASSETS, LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND NET POSITION/FUND BALANCE 1. Deposits and investments Cash and investment balances from all funds are pooled and invested to the extent available in authorized investments. Investment income is allocated to individual funds on the basis of the fundÓs equity in the cash and investment pool. Investments are stated at fair value, except for investments in external investment pools that meet GASB 79 requirements, which are stated at amortized costs. Interest earnings are accrued at year- end. For purposes of the Statement of Cash Flows, the enterprise and internal service funds participate in the pooling of City-wide cash and investments. Amounts from the pool are available to these funds on demand. As a result, the cash and investments of the enterprise and internal service funds are considered to be cash and cash equivalents for statement of cash flow purposes. Authorized investments are pursuant to applicable Minnesota Statutes including Chapter 118A and the more restrictive City policy. Minnesota Statues authorize the City to invest in the following: a) United States Treasury obligations and United States Government Agency securities (excluding high-risk mortgage-backed securities). b) Obligations of the State of Minnesota or any of its municipalities as follows: 1. any security which a general obligation of any state or local government with taxing powers which is rated "A" or better by a national bond rating service; 2. any security which is a revenue obligation of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; and 3. a general obligation of the Minnesota housing finance agency which is a moral obligation of the State of Minnesota and is rated "A" or better by a national bond rating agency. 4. Any security which is an obligation of a school district with an original maturity is not exceeding 13 months and (i) rated in the highest category by a national band rating service or (ii) enrolled in a credit enhancement program pursuant to section 126C.55. c) BankersÓ acceptance of United States banks eligible for purchase by the Federal Reserve System. 45 Qbhf!64!pg!334