Comprehensive Annual Financial Report (CAFR) - Johnson City

Both of the government-wide financial statements distinguish functions of the City that areprincipally supported by taxes, licenses and permits, and intergovernmental revenues(governmental activities), from other functions that are intended to recover all or a significantportion of their costs through user fees and charges (business-type activities). The governmentalactivities of the City include general government, public safety, public works, public welfare, cityservices and education. The business-type activities of the City include water and sewer, citysolid waste, regional solid waste, stormwater, power board, public building authority, mass transitand golf courses. The government-wide financial statements can be found on pages 13 through16 of this report.Fund Financial Statements. A fund is a grouping of related accounts that is used to maintaincontrol over resources that have been segregated for specific activities or objectives. The City,·like other state and local governments, uses fund accounting to ensure and demonstratecompliance with fmance-related legal requirements. All of the funds of the City can be dividedinto two categories: governmental funds arid proprietary funds.Governmental funds. Governmental funds are used to account for essentially the same functionsreported as governmental activities in the government-wide financial statements. However, unlikethe government-wide financial statements, the focus is on near-term inflows and outflows ofspendable resources, as well as on balances of spendable resources available at the end of thefiscal year. Such information may be useful in evaluating the City's near-term financingrequirements. Because the focus of governmental funds is narrower than that of governmentwidefinancial statements, it is useful to compare the information presented for governmentalfunds with similar information presented for governmental activities in the government-widefinancial statements. By doing so, readers may better understand the long-term impact of theCity's near-term financing decisions. Both the governmental fund balance sheet and statement ofrevenues, expenditures, and changes in fund balances provide a reconciliation to facilitate thiscomparison between governmental funds and governmental activities.The City maintains twenty-two (22) individual governmental funds. Seventeen (17) of thesegovernmental funds are classified as nonmajor and are summarized under the heading "'OtherGovernmental Funds" in the governmental fund presentation. Information is presented separatelyin the governmental fund balance sheet and in the governmental fund statement of revenues,expenditures, and changes in fund balances for the general fund, general purpose school fund,debt service fund, educational facilities debt sel'Vice fund, school capital project fund andnonmajor governmental funds, all of which are combined into a single, aggregated presentation.Individual fund data for nonmajor governmental funds is provided in the form of combining ·statements elsewhere in this report. The basic governmental fund financial statements can befound on pages 17 through 21 of this report. •The City adopts an annual appropriation budget for its general and other major special revenuefunds. A budgetary comparison schedule has been provided for these funds to demonstratecompliance with this budget.Proprietary funds. The City maintains two (2) different types of proprietary funds includingenterprise and internal service funds. Enterprise funds are used to report the same functionspresented as business-type activities in the government-wide financial statements. The City usesenterprise funds to account for the water and sewer, city solid waste, regional solid waste, masstransit, stormwater, two golf courses, power board and public building authority. Internal servicefunds are an accounting device used to accumulate and allocate costs internally among the City'svarious functions.4