Summary of Significant Accounting Policies
The City complies with Generally Accepted Accounting Principles (GAAP). The City’s reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds apply financial Account Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails.
Basis of Presentation and Fund Accounting
The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as appropriate. Resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The various funds and account groups in these financial statements are as follows:
Special Revenue Fund
Debt Service Fund
Enterprise Fund (Utility) Account Groups
General Fixed Asset Account Group
General Long-Term Debt Account Group
Basis of Accounting
All government funds types use the modified accrual basis of accounting. Under this basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). AMeasurable@ means the amount of the transaction can be determined and Aavailable@ means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers property taxes as available if they are collected within 60 days after year-end. A one-year availability period is used for revenue recognition for all other governmental fund revenues.
Revenues susceptible to accrual are property taxes, occupancy taxes, grants earned, special assessments, charges for services and interest revenue. Sales taxes collected and held by the State at year-end on behalf of the city are also recognized as revenue. Fines, permits, and miscellaneous revenues are not susceptible to accrual because generally they are not measurable until received in cash.
Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recorded as fund liabilities when due or when amounts have been accumulated in the debt service fund for payments to be made early in the following year.
The proprietary fund (utility fund) is accounted for using the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Utility revenues billed to customers are based on monthly meter readings.