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<br /> <br />OVERVIEW OF THE BASIC FINANCIAL STATEMENTS <br /> <br />Management’s Discussion and Analysis gives an introduction to the City’s basic financial statements. The <br />City’s basic financial statements are comprised of three components: 1) government-wide financial <br />statements, 2) fund financial statements, and 3) notes to the financial statements. The report also contains <br />other supplementary information in addition to the basic financial statements. <br /> <br />Government-Wide Financial Statements <br />The government-wide financial statements are designed to provide readers a broad overview of the City’s <br />finances, in a manner similar to statements of a private-sector business. The Statements are comprised of <br />the Statement of Net Position and Statement of Activities and Changes in Net Position. <br /> <br />The Statement of Net Position presents information on all of the City’s assets and liabilities, with the <br />difference between the two reported as net position. Over a period of time, increases or decreases in net <br />position may serve as a useful indicator of changes in the City’s financial reporting. <br /> <br />The Statement of Activities and Changes in Net Position presents information showing how the <br />government’s net position changed during the fiscal year. All changes in net position are reported as soon <br />as the underlying event giving rise to the change occurs, regardless of the timing of the related cash <br />flows. Thus, revenues and expenses are reported in this statement for some items that will only result in <br />cash flows in future fiscal periods (e.g. uncollected taxes and earned but unused vacation leave and other <br />compensated absences). <br /> <br />The government-wide financial statements distinguish functions of the City that are principally <br />supported by taxes and intergovernmental revenue (governmental activities) from other functions that <br />are intended to recover all or a significant portion of their costs through user fees and charges (business- <br />type activities). <br /> <br />Both of the above financial statements have separate sections for three different types of programs or <br />activities. These three types of activities are: <br /> <br />Governmental Activities - The activities in this section are mostly supported by taxes and charges for <br />services. The governmental activities of the City include General Government (City Council, City <br />Manager, City Clerk, Human Resources, Information Technologies, and Finance), Public Safety, <br />Engineering & Transportation, Recreation and Culture, Library, and Community Development. <br /> <br />Business-Type Activities – These functions normally are intended to recover all or a significant portion of <br />their costs through user fees and charges to external users of goods and services. The business-type <br />activities of the City include the Water Pollution Control Plant, Environmental Services, Shoreline <br />Enterprise, and Storm Water Utility. <br /> <br />Fund Financial Statements <br />A fund is a grouping of related accounts that is used to maintain control over resources that have been <br />segregated for specific activities or objectives. The City, like other state and local governments, uses fund <br />accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the <br />6