Ord 1993-037 - Laserfiche WebLink

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12~Þd City of San Marcos, Texas Exhibit 6 Notes to General Purpose Financial Statements September 30, 1992 1. Significant Áccounting Policies Background The City of San Marcos, Texas (the City) was incorporated July 11, 1877, while the City's Home Rule Charter was adopted by election in 1967. The City operates under a Council-Manager-Mayor form of government and provides the following services as authorized by its charter: public safety (police apd fIre), highways and streets, sanitation, health and social services, culture-recreation, public improvements, planning and zoning, general and administrative, electric, water, and wastewater services. The accounting and reporting policies of the City relating to the funds and account groups included in the accompanying general purpose financial statements conform to generally accepted accounting principles (GAAP) applicable to state and local governments. Generally accepted accounting principles for local governments inc1ude those principles prescribed by the Governmental Accounting Standards Board (GASB). The following represent the significant accounting and reporting policies and practices used by the City. The Reporting Entity In evaluating how to define the government for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in GAAP. The basic, but not the only, criterion, for including a potential component unit within the reponing entity is the governing body's ability to exercise oversight responsibility. The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of governing authority, the designation of management, the ability to significantly influence operations, and accountability for fiscal matters. A second criterion used in evaluating potential component units is the scope of public service. Application of this criterion involves considering whether the activity benefits the government and/or its citizens, or whether the activity is conducted within the geographic boundaries of the government and is generally available to its citizens. A third criterion used to evaluate potential component units for inclusion or exclusion from the reporting. entity is the existence of special financing relationships, regardless of , whether the government is able to exercise oversight responsibilities. Based upon the -12-