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• CITY OF FALCON HEIGHTS, NIINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />For the Year Ended December 31, 2003 <br />NOTE 1-SUMMARY OF SIGNIFICANT ACCOUI~TTING POLICIES <br />D. Assets, Liabilities and Net Assets or Equity (Continued) <br />6. Long-term Obligations (Continued) <br />In the fund financial statements, governmental fund types recognize bond premiums and <br />discounts, as well as bond issuance costs, during the current period. The face amount of <br />debt issued is reported as other financing sources. Premiums received on debt issuances <br />are reported as other financing sources while discounts on debt issuances are reported as <br />other financing uses. Issuance costs, whether or not withheld from the actual debt <br />proceeds received, are reported as debt service expenditures. <br />7. Fund Equity <br />In the fund financial statements, governmental funds report reservations of fund balance <br />for amounts that are not available for appropriation or are legally restricted by outside <br />parties for use for a specific purpose. Designations of fund balance represent tentative <br />• management plans that are subject to change. <br />NOTE 2 -STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY <br />Budgetary Information <br />1. In August of each year, City staff submits to the City Council a proposed operating <br />budget for the fiscal year commencing the following January 1. The operating budget <br />includes proposed expenditures and the means of financing them for the upcoming year. <br />2. Public hearings are conducted to obtain taxpayer comments. <br />3. The budget is legally enacted through passage of a resolution after obtaining taxpayer <br />comments. <br />4. Budgets for the General and Special Revenue Funds are adopted on a basis consistent <br />with accounting principles (GAAP) generally accepted in the United States of America. <br /> <br />50 <br />