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Budget Committee August 7, 1999 Page 2 under general accepted accounting principles, every fund is like a separate entity. Mr. Anderson said each fund is accounted for separately and they are not merged and it is like having restrictive revenues, it can only be spent for certain things. Mr. Anderson said another example is a grant that the City is awarded and it can only be used for one thing. Mr. Anderson wanted to touch on the funds that are currently set up that are budgeted each year and on the Consolidated Statement of Resources and Expenditures page, going from left to right, we have a current operating fund also called the General Fund and it accounts for most of the operations of the City other than the Water and Sewer Fund. This fund accounts for Police, Fire, Public Works which includes Streets, Traffic and Lighting, Sanitation, Finance, City Manager, Municipal Court, City Clerk, and practically every activity other than the Water and Sewer Fund. From the Consolidated Statement of Resources and Expenditures, Mr. Anderson said the next two funds in line are the Interest and Sinking Funds. Mr. Anderson pointed out that if you have bond indebtness, you are always required in the bond agreement, the bond covenant, it is in effect a contract that the City Council agreed to and signed that the City will set up a separate Interest and Sinking Fund to make those debt payments when they come due. With that process, the City will have a debt payment scheduled and will also be required to put so much money back each month in order to see those are made in a timely fashion. The first Interest and Sinking fund is called Revenue Bonds I &S fund and is all water and sewer related indebtness, and the next is the GO Bonds I &S Fund which is a tax supported debt. Mr. Anderson said there are no property taxes that pays anything in that first I &S Fund, and nothing but property taxes that makes the payment in the second 1 &S Fund. Mr. Anderson said the last fund on this particular page is the Community Development Fund and it was a fund that was set up even when he came to the City and what it is utilized for is primarily grant activity. Mr. Anderson stated that Tommy Haynes has been doing a very successful job in getting various grants from HUD or other federal agencies such as housing, rental rehab., occupied rental rehab, curb and gutter, sewer, various and sundry projects that gets funded through grants from the federal government, and most of those are of a community development infrastructure type orientation and