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Fund Financial Statements 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 funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary <br />funds. <br /> <br />Governmental Funds - Governmental funds are used to account for essentially the same functions <br />reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund statements focus on near-term inflows and <br />outflows of spendable resources, as well as on balances of spendable resources available at the end of the <br />fiscal year. Such information may be useful in evaluating a government’s near-term financial capacity. <br /> <br />Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for government funds with similar <br />information presented for governmental activities in the government-wide financial statements. By doing <br />so, readers may better understand the long-term impact of the government’s near-term financing <br />decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, <br />expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. These reconciliations are presented on the page <br />immediately following each governmental fund financial statement. <br /> <br />The City has 25 governmental funds, of which two are considered a major fund for presentation <br />purposes. Major funds are presented separately in the; governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances. The City’s two <br />major funds are the General Fund and the Capital Improvement Capital Project Fund. Individual fund data <br />for each of the non-major governmental funds are provided in the form of combining statements elsewhere <br />in this report. <br /> The City adopts an annual appropriated budget for its General Fund, Capital Improvement Capital Project <br />Fund, and all non-major funds. Budgetary comparison statements are elsewhere in this report to <br />demonstrate compliance with the adopted budget. <br /> Proprietary Funds - The City maintains two different types of proprietary funds: enterprise funds and internal service funds. Enterprise funds are used to report the functions presented as business-type <br />activities in the government-wide financial statements. The City uses an enterprise fund to account for its <br />Water Pollution Control Plant, Shoreline, Storm Water Utility, and Environmental Services. Internal <br />service funds are used to accumulate and allocate costs internally among the City’s various functions. The <br />City uses internal service funds to account for the fleet of vehicles, building and facilities maintenance, insurance services and information systems. Because these services primarily benefit governmental rather <br />than business-type functions, these are included within governmental activities in the governmental-wide <br />financial statements. <br /> <br />Proprietary funds provide the same type of information as the government-wide financial statements, but in greater detail. The proprietary fund financial statements provide separate information for the entire <br />City’s proprietary funds. Conversely, internal service funds are combined into a single, aggregated <br />7