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G. APPLYING RESTRICTED AND UNRESTRICTED RESOURCES <br /> The city will first use restricted resources to finance qualifying activities. Any remaining <br /> qualifying activities will be financed with unrestricted resources. <br /> H. ALLOCATION OF INDIRECT EXPENSES <br /> Indirect expenses will be allocated to the funds and departments that share in the expense, <br /> if determinable and possible. If the entire city or many city departments are involved, the <br /> cost will be recorded in the city hall department budget. <br /> I. CLASSIFICATION OF OPERATING AND NON-OPERATING REVENUES IN <br /> ENTERPRISE FUNDS <br /> Operating revenues in an enterprise fund are those that support the day-to-day operations <br /> of the activities in that fund. These revenues cover costs such as salaries, supplies, <br /> repairs and maintenance, depreciation, and small tools and equipment. <br /> • Water—user fees (billed monthly), sale of water meters, Gopher State 1-call fees, <br /> inspection fees, water use permits, connect/reconnect fees, penalties, charges for <br /> repairs <br /> • Sewer—user fees (billed monthly), inspection fees, charges for repairs, permits, <br /> penalties <br /> Non-Operating revenues in an enterprise fund are those revenues that occur from non- <br /> operations of the enterprise activities, including,but not limited to, such items as property <br /> taxes; local, state or federal grants; interest income from investments; property rental; <br /> assessments; and other miscellaneous revenue. <br /> J. IDENTIFICATION AND APPLICATION OF RESERVED AND UNRESERVED <br /> FUND BALANCES <br /> Reserved fund balances indicate the portion of fund equity which has been legally <br /> segregated for specific purposes. <br /> Unreserved, designated fund balances indicate the portion of fund equity for which the <br /> City has made tentative plans. <br /> The City will designate up to 50% of available fund balance for cash flow purposes. <br /> Unreserved, undesignated fund balances indicate the portion of fund equity which is <br /> available for budgeting in future periods. <br /> K. DEFINITION OF CASH AND CASH EQUIVALENTS <br /> Cash and cash equivalents include: cash on hand, demand deposits, and short-term <br /> investments with original maturities of 3 months or less from the date of acquisition. <br /> L. ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES <br /> 1-2-07 Revised ACCOUNTING AND REPORTING POLICIES.doc: 12/18/2006 <br /> 6 <br />