1981-02-18 Joint Public Hearing - Laserfiche WebLink

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• CITY OF LA PORTE EXHIBIT 7, P. 1 NOTES TO FINANCIAL STATEMEN_T_S __~ SEPTEMBER 30. 1980 NOTE 1: Sip~nificant_Acco_untin~ Policies Fund accounting principles have been established to show the financial activity of the City of La Porte and to comply with budgetary and other legal requirements. Fund accounts of the City are kept on a modified accrual basis of accounting except that the Water and Sewer Fund and the Airport General Fund are on the full accrual basis. The modified accrual basis of accounting records revenues in the accounting period in which they become both measurable and available to finance expendi- tures of the fiscal period. Taxes collected as well as other revenues are reported as income when received. Receivables due at year end are recorded as deferred revenue items until collected. All expenses are recorded as the expenses are incurred. The City presently records the purchase of General Fixed Assets as Capital Outlay items in the year of purchase but does not formally transfer the assets acquired to a General Fixed Assets group of accounts. Therefore, the General Fixed Assets group of accounts is not included in this report. Under municipal accounting concepts, the Water and Sewer Fund and the Airport General Fund are maintained on an accrual basis • to the fullest extent possible. The accrual basis of accounting records revenues when earned and reflects expenses as incurred, Depreciation is provided for these enterprise funds. The City has established Capital Project Fund accounts for bond proceeds to be used for planned construction projects. Con- struction costs are recorded as encumbrances as contracts are let for each phase of the construction work, Water and Sewer project costs are transferred to the Fixed Assets of the .Utility Fund annually and added to the Construction in Progress Account until construction has been completed, The City operates under budgetary control for all funds except Capital Project Funds which are controlled under bond indentures, Budgets are approved by the City Council prior to each fiscal operating period. The budget is prepared on a basis consistent with generally accepted accounting principles. Reserve accounts which are a part of Retained Earnings/Fund Balances are ,shown as a part of and total of the Fund Equity, The state- ments of Income, Expenses, Retained Earnings/Fund Balances reflect the Undesignated-Unreserved Balance portion of the Retained Earnings/Fund Balance. The Governmental type funds include the General Fund, Revenue Sharing Fund, Library Fund, Debt Service Fund, and Capital Projects Fund, Proprietary fund types include the Utility Fund and the Airport Fund,