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factors need to be considered, such as changes in the City's tax base and the condition of the <br />City's infrastructure. <br />The government -wide financial statements of the City are divided into two categories: <br />Governmental activities — Most of the City's basic services are included here, such as the public <br />safety, public works, parks and recreation, library services, and general administrative services. <br />Sales and use taxes, property taxes, other taxes, charges for services, and intergovernmental <br />revenue finance most of these activities. <br />Business -type activities — The City charges user fees to customers to recover most of the costs <br />of providing certain services. The City's water, wastewater, storm water, and solid waste <br />utilities, as well as golf facilities, are included here. <br />Fund Financial Statements <br />The fund financial statements provide more detailed information about the City's most significant <br />funds — not the City as a whole. A fund is a grouping of related accounts that is used to <br />maintain control over resources that have been segregated for specific activities or objectives. <br />The City uses fund accounting to ensure and demonstrate compliance with finance -related legal <br />requirements. Some funds are required by State law and by bond covenants. Other funds are <br />established by the City Council to control and manage money for particular purposes or to show <br />that it is properly using certain taxes and grants. <br />All of the funds currently used by the City can be divided into two categories: governmental <br />funds and proprietary funds: <br />Governmental funds — Most of the City's basic services are included in governmental funds, <br />which focus on (1) how cash and other financial assets can readily be converted to cash <br />flow in and out and (2) the balances left at year-end that are available for spending. <br />Consequently, the governmental funds statements provide a detailed short-term view that <br />helps determine whether there are more or fewer financial resources that can be spent in <br />the near future to finance the City's programs. Because this information does not <br />encompass the additional long-term focus of the government -wide statements, we provide <br />additional information at the bottom of the governmental funds statement, or on the <br />subsequent page, that explains the relationship (or differences) between them. <br />Proprietary funds — Services for which the City charges customers a fee are generally <br />reported in proprietary funds. Proprietary funds, like the government -wide statements, <br />provide both long-term and short-term financial information. <br />o The City uses enterprise funds (one type of proprietary fund) to report its business -type <br />activities and provide more detailed and additional information, such as cash flows. <br />o The City uses internal service funds (the other type of proprietary fund) to report <br />activities that provide services and asset replacement for the City's other programs and <br />activities — such as the City's Fleet Management Fund. These funds are reported with <br />governmental activities in the government -wide financial statements. <br />14 <br />