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The City uses funds to maintain its financial records during the year. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain City functions and activities. A fund is defined as a separate fiscal and accounting entity with a self-balancing set of accounts. The various funds of the City are

classified financial

into three categories: governmental, proprietary and statements is on major funds, each displayed on


The emphasis

on fund

a separate



fund is

considered major if it is revenues, or expenditures of the corresponding total

the primary operating fund of the City or its total assets, liabilities, of the individual governmental and enterprise fund is at least 10 percent for all governmental and enterprise funds of that category or type; and

total assets, liabilities revenues or expenditures/expenses of enterprise fund are at least 5 percent of the corresponding enterprise ftmds combined.

the individual governmental or total for all governmental and

All interfund transactions between governmental funds and between governmental funds and internal service funds are eliminated on the government-wide statements. Interfund activities between governmental funds and fiduciary funds remain as due to/due from on the government- wide Statement of Activities.

The City reports the following major funds:

The general fund is the primary operating fund of the City. It accounts for all financial resources except those that are required to be accounted for in other funds.

The special revenue fund is used to account for specific revenues that are legally restricted to expenditures for particular purposes. This fund accounts for the receipt and use of proceeds of the City's 2'/2% sales and use tax.

The enterprise fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. The City's enterprise fund accounts for water and sewer services.

C. MeasurementFocus/Basis of Accounting

Measurement focus is a term used to describe "which"

various financial statements.

Basis of accounting


transactions are recorded within the to "when" transactions are recorded

regardless of the measurementfocus applied.


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