village of wellington, florida

NOTE 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)Recreation Programs – This special revenue fund accounts for financial resources and expendituresapplicable to specific recreational programs. The purpose of the fund is to implement a wide variety ofrecreational programs for all ages, as well as various special events, and to provide net operating results.Any shortfalls (program revenues less than program expenditures) are funded by the general fund throughoperating transfers.Capital Projects – This fund is used to segregate all financial activity applicable to governmental capitalexpenditures from governmental operating expenditures. These expenditures are funded by the Village’sGeneral Fund, Recreation Fund, and Surface Water Management Fund through operating transfers andgrant proceeds.The Village reports the following major proprietary funds:Utility System Enterprise Fund – This fund accounts for the activities related to the sewage treatment plant,sewage pumping stations and collection systems, and the water distribution system.Solid Waste Enterprise Fund – This fund accounts for the activities related to solid waste removal andrecycling.Additionally, the Village reports the following fiduciary fund:Employee Retirement Healthcare Trust Fund – This fund accounts for the trust fund established to receiveand invest Village healthcare contributions in a defined benefit other postemployment benefit plan and todisburse these monies to cover retirees’ health insurance in accordance with the trust document. Sincethese assets are held for the benefit of third parties and cannot be used to finance activities or obligations ofthe Village, they are not included in the government-wide financial statements.Private sector standards of accounting and financial reporting issued prior to December 1, 1989, arefollowed in both the government-wide and proprietary fund financial statements to the extent that thosestandards do not conflict with or contradict guidance of GASB. Governments also have the option offollowing subsequent private sector guidance for their business-type activities and enterprise funds, subjectto this same limitation. The Village has elected not to follow subsequent private sector guidance.As a general rule, the effect of interfund activity has been eliminated from the government-wide financialstatements. Exceptions to this general rule are charges between the government’s water and sewer functionas well as the solid waste function and various other functions of the Village. Elimination of these chargeswould distort the direct costs and program revenues reported for the various functions concerned.Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, orprivileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, includingspecial assessments. Internally dedicated resources are reported as general revenues rather than as programrevenues. Likewise, general revenues include all taxes.Proprietary funds distinguish operating revenues and expenses from non-operating items. Operatingrevenues and expenses generally result from providing services and producing and delivering goods inconnection with a proprietary fund’s principal ongoing operations. The principal operating revenues of theVillage’s utility system enterprise fund are charges to customers for sales and services. The principaloperating revenues of the Village’s solid waste collection and recycling enterprise fund are specialassessments. Operating expenses for the enterprise funds include the cost of sales and services,administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting thisdefinition are reported as non-operating revenues and expenses.32