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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2021 <br />I. SummM of Significant Accounting Policies (Continued) <br />D. Basis of Presentation — Fund Financial Statements (Continued) <br />The City reports the following major governmental funds: <br />The General Fund is the primary operating fund of the City. It accounts for and reports all financial <br />resources not accounted for in another fund. <br />The Debt Service Fund accounts for and reports financial resources that are restricted, committed, or <br />assigned to expenditures for principal and interest. <br />The Capital Projects Fund accounts for and reports financial resources that are restricted, committed, or <br />assigned to expenditures for capital outlay. <br />The City reports nonmajor funds as Other Governmental Funds which include Special Revenue Funds and <br />a Permanent Fund as follows: <br />The Special Revenue Funds are used to account for and report the proceeds of specific revenue sources <br />that are restricted or committed to expenditures for specific purposes other than for debt service or <br />capital projects. <br />The Permanent Fund is used to account for and report resources that are restricted to the extent that <br />only earnings and not principal may be used. <br />The City reports the following enterprise funds as one major fund: <br />The Water Fund accounts for the water distribution system as well as the billings and collections for that <br />service. <br />The Sewer Fund accounts for the sewer system as well as the collection activities for that service. <br />During the course of operations, the City has activity between funds for various purposes. Any residual balances <br />outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these <br />balances are reported in fund financial statements, certain eliminations are made in the preparation of the <br />government -wide financial statements. Balances between the funds included in governmental activities (e.g., the <br />governmental and internal service funds) are eliminated so that only the net amount is included as internal <br />balances in the governmental activities column. Similarly, balances between the funds included in business -type <br />activities (e.g., the enterprise fund) are eliminated so that only the net amount is included as internal balances in <br />the business -type activities column. Interf ind services provided and used are not eliminated in the process of <br />consolidation <br />Further, certain activity occurs during the year involving transfers of resources between funds. In the fund <br />financial statements, these amounts are reported at gross amounts as transfers in/out. While reported in fund <br />financial statements, certain eliminations are made in the preparation of the government -wide financial <br />statements. Transfers between the funds included in governmental activities are eliminated so that only the net <br />amount is included as transfers in the governmental activities column. Similarly, balances between the funds <br />included in business -type activities are eliminated so that only the net amount is included as transfers in the <br />business -type activities column. <br />28 <br />