03-22-21 Regular Meeting of the La Porte City Council

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CITY OF LA PORTE, TEXAS Exhibit A-10 NOTES TO FINANCIAL STATEMENTS (continued) Note 1 Î Summary of Significant Accounting Policies (continued) B. Government-wide Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information about the City as a whole. The governmental activities column incorporates data from governmental funds and internal service funds, while business-type activities incorporate data from the CityÓs enterprise funds. Separate financial statements are provided for governmental funds and proprietary funds. As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments for interfund services provided and other charges between the CityÓs various other functions. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned C. Fund Financial Statements The fund financial statements provide information about the CityÓs funds and blended component units. Separate statements for each fund category Î governmental and proprietary Î are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate funds in the fund financial statements. The City reports the following major Governmental Funds: General Fund The General Fund is used to account for all financial transactions that are not accounted for in another fund. The principal sources of revenues of the General Fund are property taxes, sales and use taxes, franchise taxes, licenses and permits, and fines and forfeitures. Expenditures are for general government, public safety, public works and other community services. Debt Service Fund The Debt Service Fund is used to account for the payment of interest and principal on all general long-term debt of the City except for capital leases for which are accounted for in the General Fund. The primary source of revenue for the Debt Service Fund is general property taxes. Capital Improvements Fund This fund is used to account for projects that are generally small in nature and affect the general operation of the City. La Porte Redevelopment Authority Fund The La Porte Redevelopment Authority is used to account for the disposition of property taxes collected on specific parcels within the boundaries of La Porte Tax Increment Reinvestment Zone No. 1 for the exclusive benefit to pay developers for capital improvements. Draft 3-12-21 36 Fiscal Year 2020 Annual Report