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CITY OF MONTE VISTA, COLORADO 1 <br /> NOTES TO THE BASIC FINANCIAL STATEMENTS <br /> December 31, 2011 <br /> • Grants and contributions that are restricted to meeting the operational or capital requirements of a particular <br /> function or segment. Taxes and other items not properly included in program revenues are reported as <br /> general revenues. <br /> Separate financial statements are provided for governmental funds,proprietary funds, and fiduciary funds, even <br /> though the fiduciary funds are excluded from the Government-wide Financial Statements. Major individual <br /> governmental and major individual enterprise funds are reported as separate columns in the fund financial <br /> statements. <br /> MEASUREMENT FOCUS,BASIS OF ACCOUNTING,AND FINANCIAL STATEMENT <br /> PRESENTATION <br /> The Government-wide Financial Statements are reported using the economic resources measurement focus and the 1 <br /> accrual basis of accounting. This measurement is also used for the proprietary fund financial statements. Revenues <br /> are recorded when earned and expenses are recorded when a liability is incurred,regardless of the timing of related <br /> cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants are recognized <br /> as revenue when all applicable eligibility requirements imposed by the provider are met. <br /> Governmental Fund Financial Statements are reported using the current financial resources measurement focus and <br /> the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and <br /> available. Revenues are considered available when they are collectible within the current period or soon enough <br /> thereafter to pay liabilities of the current period. For this purpose,the City considers revenues other than grant <br /> revenues to be available if they are collected within 60 days of the end of the current fiscal period. The City <br /> considers grant revenues to be available if they are collected within 120 days of the end of the current fiscal period. <br /> Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt <br /> service expenditures,as well as expenditures related to compensated absences and claims and judgments, are <br /> recorded only when payment is due. <br /> Sales and use taxes, other taxes, charges for services, intergovernmental revenues, and interest are all considered to <br /> be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of <br /> special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as <br /> revenue of the current period. All other revenue items are considered to be measurable and available only when <br /> cash is received by the City. <br /> The City reports the following major governmental funds: I <br /> • The General Fund is the general operating fund of the City. It accounts for all financial resources of the <br /> general government, except those required to be accounted for in another fund. <br /> • The Grant Fund is used to account for the various grants the City receives. The monies may be expended <br /> only for the purposes defined by the granting agency. <br /> • The Capital Projects Fund is used to account for the expenditure of the Series 2008 Sales Tax Revenue I <br /> Bond monies on capital projects throughout the City. <br /> The City reports the following major enterprise fund: <br /> • The Ciry Service Utility Fund accounts for user charges and expenses for operating, financing, and <br /> maintaining the City's water and sewer systems. <br /> Private sector standards of accounting and financial reporting issued prior to December 1, 1989,generally are <br /> followed in both the Government-wide and Proprietary Fund Financial Statements to the extent that those standards <br /> do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also <br /> have the option of following subsequent private sector guidance for their business-type activities subject to this <br /> same limitation. The City has elected not to follow subsequent private sector guidance. <br /> 26 1 <br />