Selected Significant Accounting Policies
Reporting Entity - El Paso City Ordinance No.
752, adopted May 22, 1952, established a five member board of trustees
known as the "Public Service Board" (Board) which was given the
complete management and control of the city's water system (System).
The board of trustees consists of the Mayor of the City of El Paso
and four residents of El Paso County, Texas. With the exception
of the Mayor, all other trustees are appointed by the City Council.
In evaluating and determining how to define the Board, for financial reporting purposes, the standards contained
in GAAP were applied. The Public Service Board was determined to be a component unit of the City of El Paso based upon the selection
of the governing authority.
Nature of Activities - The Board provides water
and wastewater services for the El Paso area residents. In addition
to the water and wastewater system revenue, the Board receives funding
from state and federal government sources and must comply with the
requirements of these funding source entities.
Fund Accounting - El Paso Water Utilities is accounted for as an Enterprise Fund.
Enterprise Funds are used to account for operations that are financed
and operated in a manner similar to private business enterprises,
where the intent of the governing body is that the costs (including
depreciation) of providing goods or services to the general public
on a continuing basis be financed or recovered primarily through
user charges. All activities necessary to provide such services
are accounted for in this fund, including, but not limited to, administration,
operations, maintenance, financing and related debt service, and
billing and collection.
Annual Budget - The Board prepares, prior to the
beginning of each fiscal year, a detailed comprehensive annual budget
reflecting estimates of revenues and expenses and other requirements
for the ensuing fiscal year in sufficient detail to indicate the
probable Gross Revenues and Pledged Revenues of the System for such
fiscal year. The budget is prepared using the accrual basis of accounting.
The fiscal year starts March 1 and ends the last day of February
of the subsequent year.
Selected historical ten year financial and statistical information and
selected significant accounting policies is provided.
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