7.5. SR 06-04-2007 - Laserfiche WebLink

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CITY OF ELK RIVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2006 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The government reports the following major governmental funds: The General fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The Park Dedication special revenue fund accounts for park dedication fees from developers and expenditures for park land acquisitions and park capital improvements. TheImprovement Bonds debt service fund accounts for the resources accumulated and payments made for principal and interest on long-term general obligation special assessment debt. The proceeds were used to finance various street, water, sewer and storm sewer improvements. TheCapital Projects fund is used to account for various improvement projects that are financed by the City. The government reports the following major proprietary funds: TheMunicipal Liquor fund accounts for the operations of the City’s off-sale liquor stores. TheGarbage fund accounts for the activities of the City’s garbage collection and recycling program. TheSewer fund accounts for the activities of the City’s sanitary sewer treatment system. TheWater fund accounts for the activities of the City’s water distribution system. TheElectric fund accounts for the activities of the City’s electric distribution system Additionally, the government reports the following fund types: TheDeveloper Escrow agency fund is used to account for resources received from developers for the payment of expenses incurred by the City for private development projects. The Developer Escrow agency fund is omitted from the government-wide financial statements, and is included separately within the statement of fiduciary net assets. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The government has elected not to follow subsequent private-sector guidance. As a general rule, the effect of interfund activity has been eliminated from government-wide financial statements. Exceptions to this general rule are charges between the City’s sewer, water and electric functions and various other functions of the government. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 37