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CITY OF PEQUOT LAKES <br />ACCOUNTING AND REPORTING POLICIES <br />Adopted: 4-5-OS <br />Amended: October 1, 2013 <br />A. MAJOR FUNDS AND FUND GROUPS <br />The City will report funds as major according to the GASB #34 requirements. In <br />addition, the City has the discretion to show additional major funds (i.e. fire <br />fund). All remaining funds are reported as non-major governmental-type funds. <br />B. ANNUAL OPERATING BUDGET <br />The purpose of establishing an operating budget is to ensure the City's annual <br />operating expenditures are based on a stable stream of revenues. The City follows <br />these procedures in establishing the budgetary data reflected in the financial <br />statements. <br />1. During May or June of each year, the City Clerk and Finance <br />Administrator provide all department heads with budget worksheets. <br />Department heads prepare a proposed operating budget and return the <br />worksheets to the City Clerk and Finance Administrator for review. The <br />City Clerk and Finance Administrator meet with department heads and <br />accept proposed budget work-papers. <br />2. Prior to September 1, the City Clerk submits to the City Council a <br />proposed operating budget for the fiscal year commencing the following <br />January 1. The operating budget includes proposed expenditures and the <br />means of financing them. <br />3. Public meetings or hearings are conducted in accordance with the state <br />truth in taxation statutes to obtain taxpayer comments and adopt the final <br />tax levy and budgets for the governmental, special revenue, and enterprise <br />funds. <br />4. Formal budgetary integration is employed as a management control device <br />during the year for the general fund, special revenue funds and enterprise <br />funds. <br />5. Operating budgets are prepared for the following funds as recorded in the <br />general ledger: General Government - general, police, roads, parks, <br />planning and zoning, cemetery, iire, library, Business Park, housing and <br />redevelopment autharity, and Enterprise — water and sewer. <br />6. Capital outlay carryover is a budget line item for the purpose of <br />assigning monies for future projects, programs, or equipment. <br />C. REVENUE CLASSIFICATION AND USE <br />General Fund revenues typically consist of: various taxes, rental income, grants <br />and contributions, special assessments, fees and charges, fines and forfeits, and <br />grants that are budgeted or indicated for a specific purpose, activity or program. <br />Fees, Charges, and Fines are charges to customers, applicants or others who <br />-3- <br />