2005 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight -line method. Bonds payable are reported net of the applicable bond premium or discount. Debt issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premiums and dis- counts, as well as bond issuance costs, during the current period. The face amount of debt is- sued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from actual debt proceeds received, are reported as debt service expenditures. 10. Fund Equity In the fund financial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. 11. Stewardship, Compliance and Accountability A. Budgetary Information Annual budgets are adopted on the cash basis which is not consistent with accounting principles gen- erally accepted in the United States. All annual appropriations lapse at fiscal year end. Annual bud- gets are adopted for the following governmental funds: General Major governmental funds: Special revenue fund - park and recreation Capital projects fund - county option income tax (COIT) Nonmajor governmental funds: Special revenue funds - motor vehicle highway, recreation nonreverting, community development, local road and street, human rights federal, special events, college football hall of fame Debt service funds - redevelopment bond - studebaker, college football hall of fame debt service Capital projects funds - emergency medical services, park nonreverting capital, cumulative capital development, cumulative capital improvement, economic development income tax On or before August 31, the City Controller submits to the Common Council a proposed operating budget for the year commencing the following January 1. Prior to adoption, the budget is advertised and public hearings are conducted by the Common Council to obtain taxpayer comments. In September of each year, the Common Council through the passage of an ordinance approves the budget for the next year. Copies of the budget ordinance and the advertisement for funds for which property taxes are levied or highway use taxes are received are sent to the Indiana Department of Local Government Finance. The budget becomes legally enacted after the City Controller receives approval of the Indiana Department of Local Government Finance. 34