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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br />Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED <br />14. Revenues and Expenditures/Expenses <br />Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges <br />provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. <br />Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues <br />include all taxes. <br />Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses <br />generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal <br />ongoing operations. The principal operating revenues of the City's enterprise funds are charges to customers for sales and <br />services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and <br />depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues <br />and expenses. <br />Note 2: STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY <br />A. Excess of Expenditures Over Appropriations <br />For the year ended December 31, 2015, expenditures exceeded appropriations in the Ice Arena fund by $128,927, which was <br />funded by available fund balance. <br />B. Deficit Fund Equity <br />The following funds had deficit fund balances at December 31, 2015: <br />Primary Government <br />TIF Districts - major capital projects fund <br />Park Dedication - capital projects fund <br />$ 1,540,086 <br />489,674 <br />The City plans to eliminate these deficits through future park dedication and tax increment fund revenues. <br />-59- <br />