2002 Comprehensive Annual Financial Report

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Both of the government-wide financial statements distinguish functions of the City that are principally, supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The mayor governmental activities of the City of South Bend include general government and parks and recreation. The major business-type activities of the City include the water utility, wastewater utility and the century center. Fund financial statements. A fund is a grouping of related accounts that is used to maintain control 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 demonstrate compliance with finance-related legal requirements. All of the funds of the City of South Bend can a divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental-fund financial statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near term financing requirements. General Government Revenues -The following schedule presents a summary of general revenues for the year ended December 31, 2002 and the amount and percentages. 2002 Percent of Revenues Amount Total Taxes: General Property $ 58,387,387 52.0% County Option Income 9,531,190 8.4% County Economic Development Income 5,462,867 4.8% Professional Sports Development Tax 316,173 0.3% Licenses and Permits 236,267 0.2% Intergovernmental 20,859,845 18.5% Charges for Services 13,187,884 11.7% Fines and Forfeits 203,837 0.1% Interest 1,559,320 1.4% Donations 1,552,799 1.4% Other 1,735,111 1.5% $ o As shown above,. taxes continue to represent a significant source of revenue needed to support the services provided by the City. The City's single largest source of revenue is generated by property taxation. This revenue calculation is based on a relationship between two variables. The first variable is the assessed property valuation of industrial, commercial and residential parcels, both real and ppersonal property. The second variable is the ap lication of a tax rate to arrive at the total taxlevy Taxable property is assessed at 100% ofpthe true tax value. As described earlier, the City has the ability to increase its general property tax levy by 5%, which it elected to do in 2002. The above general property tax revenue includes taxes collected on behalf of the following funds:. General Fund, Park and Recreation Fund, Cumulative Capital Development Funds, vanous capital funds for the City's Redevelopment Tax Incremental Financing (TIF) Funds and a special levy to cover debt service on general obligation bonds. The increase in property taxes collected on behalf of the TIF funds was the result of an increase in net assessed value and the scheduled roll-off of tax abatements in the Airport Development Economic Area (Blackthorn) TIF.