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6.G. - Pa Reel oocT$i� <br />City <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2018 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />C. Major Funds, Continued <br />The City also maintains five agency funds - Employee Benefit Plans Fund, Pacific Shores Community <br />Facilities District Fund, the Shores Transportation Improvement District Fund, the One Marina <br />Community Facilities District Fund, and the Community Benefit Improvement District Fund - as an agent <br />of the bondholders, City employees, or the Downtown Redwood City Community Benefit Improvement <br />District. <br />D. Basis of Accounting <br />The government -wide and proprietary fund financial statements are reported using the economic <br />resources measurement focus and the full accrual basis of accounting. Revenues are recorded when <br />earned and expenses are recorded at the time liabilities are incurred, regardless of when the related <br />cash flows take place. <br />Governmental funds are reported using the current financial resources measurement focus and the <br />modified accrual basis of accounting. Under this method, revenues are recognized when measurable and <br />available. The City considers all revenues reported in the governmental funds to be available if the <br />revenues are collected within 90 days after year-end. <br />The City's fiduciary funds consist of one private purpose trust fund and agency funds which use the <br />accrual basis of accounting. The private purpose trust fund uses the economic resources measurement <br />focus, whereas the agency funds do not have a measurement focus. <br />Expenditures are recorded when the related fund liability is incurred, except for principal and interest <br />on general long-term debt, claims and judgments, and compensated absences, which are recognized <br />as expenditures to the extent they have matured. <br />General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of <br />general long-term debt and acquisitions under capital leases are reported as other financing sources. <br />Non-exchange transactions, in which the City gives or receives value without directly receiving or giving <br />equal value in exchange, include property taxes, grants, entitlements, and donations. On an accrual <br />basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. <br />Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility <br />requirements have been satisfied. Other revenues susceptible to accrual include other taxes, <br />intergovernmental revenues, interest, and charges for services. <br />Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the <br />terms of grant agreements, the City may fund certain programs with a combination of cost - <br />reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and <br />unrestricted net position may be available to finance program expenditures/expenses. The City's policy <br />is to first apply restricted resources to such programs, followed by unrestricted resources if necessary. <br />Certain indirect costs are included in program expenses reported for individual functions and activities. <br />40 246 <br />