2004 Comprehensive Annual Financial Report

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charges {business -type activities }. The major governmental activities of the City of South Bend include public safety, urban redevelopment and housing and general government. The major business -type activities of the City include the wastewater utility, water utility and solid waste. 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 llund accounting to ensure and dlemonstrate compliance with finance- related legal requirements. All of the funds of the City f South Bend can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds. Governmental funds are used to account for essentially the saane 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, 2004 and the amount and percentages. Revenues 2004 Amount % of Total Taxes: General Property $ 63,806,692 56.2% County Option Income 7,001,198 6.2% County Economic Development 3,448,688 3.0% Professional Sports Development 378,099 0.3% Community Revitalization District 655,269 0.5% Licenses and Permits 223,006 0.2% Intergovernmental 17,968,454 15.8% Charges for Services 15,187,711 13.4% Fines and Forfeits 302,376 0.2% Interest 1,668,050 1.4% Donations 261,189 0.2% Other 2,470,938 2.2% $ 113,371,670 100.0% 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, argest 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 personal property. The second variable is the application of a tax rate to arrive at the total tax levy. Taxable property is assessed at 100% of the true tax value. The City has the ability to increase its general property tax levy by 5 %, which it elected to do in 2004. 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, various 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. One of the major focuses for the City continues to be the need to diversify its revenue streams. This is necessary to reduce the dependency on general property taxes and to ensure that a broad -base of users, including nonresidents, share in the funding of basic city services. Currently he City's property taxpayers carry a disproportionate share of the cost of public safety (police & fire services)