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CITY OF RAMSEY Notes to Financial Statements (continued) December 31, 2001 NOTE 1— SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Fund Accounting The accounts of the City are organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, liabilities, equities, revenues, and expenditures or expenses as appropriate. The various funds are grouped by type in the financial statements. The City maintains the following funds, grouped by fund type and account group: 1. Governmental Fund Types a. General Fund — The General Fund accounts for all revenues and expenditures of the City which are not accounted for in other funds. Revenues are primarily derived from property taxes, licenses, permits, fees, and revenues from the state. Expenditures are for general government services, including police and fire protection, parks and recreation, and general administration. b. Special Revenue Funds — The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. They are also used to finance specified activities as required by law or administrative regulation. c. Debt Service Funds — The Debt Service Funds are used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. d. Capital Project Funds — The Capital Project Funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds). 2. Proprietary Fund Types a. Enterprise Funds — The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises — where the intent of the governing body is that the costs of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. b. Internal Service Fund — The Internal Service 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. The Internal Service Fund operates in a manner similar to Enterprise Funds; however, the fund provides services primarily to other departments within the City. 3. Fiduciary Fund Type a. Expendable Trust Funds — The Expendable Trust Funds are used to account for assets held by the City in the capacity of trustee. -12-