general rule, the effect of interfund activity has been eliminated from the government-wide
financial statements.
Amounts reported as program revenues include (1) charges to customers or applicants for
goods, services, or privileges provided, (2) operating grants and contributions, and
(3) capital grants and contributions, including special assessments. Internally dedicated
resources are reported as general revenues rather than as program revenues. Likewise,
general revenues include all taxes.
Fund Financial Statements
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized
as soon as they are both measurable and available. Revenues are considered to be available
when they are collectible within the current period or soon enough thereafter to pay
liabilities of the current period. For this purpose, the City considers property tax and
intergovernmental revenues to be available if they are collected within 60 days of the end
of the current fiscal period. All other revenue items are considered to be measurable and
available only when cash is received by the City. Expenditures generally are recorded when
a liability is incurred, as under accrual accounting. However, certain expenditures such as
debt service, claims and judgment, compensated absences, OPEB, and pension are recorded
only when payment is due.
The City reports the following major governmental funds:
« The General Fund is the government’s primary operating fund. It accounts for all
financial resources of the general government, except those required to be accounted for
in another fund.
e The Debt Service Fund is used to account for resources and debt service payments
associated with the bond issuance for the acquisition of Pennichuck Corporation.
The proprietary fund financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Under this method, revenues are
recognized when earned and expenses are recorded when liabilities are incurred.
Proprietary funds (which include both enterprise and internal service funds) distinguish
operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection
with a proprietary fund’s principal ongoing operations. The principal operating revenues
of the enterprise fund are charges to customers for sales and services. Operating expenses
for enterprise funds include the cost of sales and services, administrative expenses and
depreciation on capital assets. All revenues and expenses not meeting this definition are
reported as nonoperating revenues and expenses.
The City reports the following major proprietary funds:
e The Wastewater Enterprise Fund that accounts for the resources and cost associated
with the City’s wastewater treatment.
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