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CITY OF ELK RIVER, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2018 <br />NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES — CONTINUED <br />V. Interfund Receivables and Payables <br />Activity between funds that is representative of lending or borrowing arrangements is reported as either "due to/from <br />other funds" (current portion) or "advances to/from other funds". Any residual balances outstanding between the <br />governmental activities and business -type activities are reported in the government -wide financial statements as "internal <br />balances". <br />W. 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 <br />revenues include all taxes. <br />Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and <br />expenses generally result from providing services and producing and delivering goods in connection with a proprietary <br />fund's principal ongoing operations. The principal operating revenues of the City's enterprise funds are charges to <br />customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, <br />administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are <br />reported as nonoperating revenues and expenses. <br />NOTE 2: STEWARDSHIP AND ACCOUNTABILITY <br />A. Expenditures in Excess of Appropriations <br />For the year ended December 31, 2018, expenditures exceeded appropriations in the Ice Arena fund by $30,168, which <br />was funded by available fund balance. <br />B. Deficit Fund Balance <br />The following funds had deficit fund balances at December 31, 2018: <br />Primary Government: <br />Park Dedication — capital projects fund $ 284,335 <br />TIF Districts — capital projects fund $2,331,451 <br />The City plans to eliminate these deficits through future park dedication and tax increment fund revenues. <br />44 <br />