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NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Equipment Revolving Capital Project Fund — This fund is used to account for resources to finance the replacement of city equipment, vehicles, and/or building facilities. Road Reconstruction/Overlay Capital Project Fund — This fund is used to account for all expenditures related to the reconstruction and overlay projects as outlined in the city's Long -Term Street Maintenance Plan. Public Facilities Construction Capital Project Fund — This fund is used to account for the resources to be used for land acquisition and the construction of public facilities. Fire Station #2 Capital Project Fund — This fund is used to account for the resources used to finance the construction of the citv's second fire station. The City reports the following Major Proprietary Funds: Water Utility Fund — This fund is used to account for the operation of the city -owned water system. Sewer Utility Fund — This fund is used to account for the operation of the city -owned sewer system. Street Light Utility Fund — This fund is used to account for the operation of city -owned streetlights within subdivisions and the priority streetlights throughout the City. Recycling Utility Fund — This fund is used to account for the operation of the City's curbside recycling program and annual recycling days. Storm Water Utility Fund — This fund is used to account for the operation of the city -owned storm water system repair and upkeep. The City also reports the following fund types: Internal Service Fund — This fund is used to account for the City's insurance refunds, dividends, and other miscellaneous insurance related revenues, and to provide for self -insuring the deductible portions of the City's insurance policies. Agency Fund — This fund is used to account for assets held by the City in the capacity of agent. The City maintains one Agency Fund to account for deposits held for developers as security for various services. In addition it accounts for property purchased on behalf of the state and the related liability for future state highway improvements. E. Cash and Investments Cash balances from all funds are combined and invested to the extent available in short-term investments. Earnings from the pooled investments are allocated to the individual funds based on the average monthly cash and investment balances of the respective funds. The Minnesota Municipal Money Market (4M) Fund is an external investment pool regulated by Minnesota Statutes that is not registered with the Securities and Exchange Commission (SEC). The City's investment in this fund is measured at the net asset value per share provided by the pool, which is based on an amortized cost method that approximates fair value. 64