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FUND STRUCTURE AND BUDGET BASIS The financial structure of City of Gem Lake is similar to other governments with the use of funds. Funds are the control structures that ensure that public moneys are spent only for those purposes authorized and within amounts authorized. Funds are established to account for different types of activities and legal restrictions that are associated with a particular government function. The Governmental Accounting Standards Board (GASB) defines a fund as: A fiscal and accounting entity with a self -balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations. All of the funds used by the City must be classified into one of seven "fund types." Four of these fund types are used to account for the City's "governmental -type' activities and are known as "governmental funds." Two of these fund types are used to account for a government's "business -type" activities and are known as "proprietary funds." Finally, the seventh fund type is reserved for a government's "fiduciary activities." The City currently does not operate any fiduciary activities. Governmental Fund types are used to account for governmental -type activities. These are the General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds. The General Fund is used to account for most of the day-to-day operations of the City, which are financed from property taxes and other general revenues. Activities financed by the General Fund are those not accounted for in other funds. There can only be one General Fund. Special Revenue Funds are used to account for revenues derived from specific taxes or other earmarked revenue sources which, by law, are designated to finance particular functions or activities of the City and which therefore cannot be diverted to other uses. The only Special Revenue Fund the City operates is the Park and Playground Fund, which was established to purchase and develop parks and trails in the City through the collection of park dedication fees on new developments or building permits. Debt Service Funds are used to account for the payment of interest and principal on general and special obligation debts other than debt issued for and serviced by a governmental enterprise. The Capital Projects Funds account for all resources used for the acquisition and/or construction of capital equipment and facilities except those financed by Enterprise and Internal Service Funds. Two Proprietary Fund Types are used to account for the City's business -type activities. These are the Enterprise Funds and the Internal Service Funds. The City's only Enterprise Fund is the Sewer Operating Fund. This fund is used to account for the acquisition, operation and maintenance of these facilities and services, which are entirely or predominantly self -supported, by user charges. The operations of the Sewer Operating Fund are accounted for in such a manner as to show a profit or loss similar to private enterprises. Internal Service Funds are used to account for the financing of goods and services provided by one department to other departments of the City, on a cost -reimbursement basis. The City of Gem Lake does not have any Internal Service Funds.