2005 Comprehensive Annual Financial Report

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functions that are intended to recover all or a significant portion of their costs through user fees and 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 ob'ectives. 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 be 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 modified accrual schedule presents a summary of general revenues for the year ended December 31, 2005 and the amount and percentages. Revenues 2005 Amount % of Total Taxes. General Property $ 68,139,669 53.5% County Option Income 5,695,618 4.5% County Economic Development 3,464,152 2.7% Professional Sports Development 385,553 0.3% Community Revitalization District 965,052 0.7% Licenses and Permits 246,780 0.2% Intergovernmental 18,665,828 14.6% Charges for Services 15,293,779 12.0% Fines and Forfeits 245,680 0.2% Interest 3,543,469 2.8% Donations 550,550 0.4% Other 10,241,005 8.1% $ 127,43 7,13 5 100.0% 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 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 personal property. The second variable is the application of a tax rate to arrive at the total tax levy. Taxable roperty is assessed at 100% of the true tax value. The City had the ability to increase its general property tax levy by 3.9 %, which it elected to do in 2005. The above general pro erty 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 ggeneral 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 i users, including nonresidents, share n the funding of basic city services. Currently the City's