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B - 17 City of Pleasanton Operating Budget • FY 2023/24 - FY 2024/25 APPENDIX BAccounting Systems and Funds There are many separate funds into which all City revenues are placed and from which all expenses are paid. A fund is an accounting entity with a complete set of self-balancing accounting records. Each fund has been established based on accounting principles that define use and restriction on the kind of resource received by that fund. The fund types that comprise the operating budget are described below. General Fund – Accounts for general purpose revenues, e.g. sales taxes, property taxes, building permits and records the transactions of general government services, e.g. police, fire, maintenance of streets and parks, library and recreation. Enterprise Funds – Used to account for the City’s ongoing activities which are operated similarly to a business in the private sector. The City has included in the operating budget the operations and maintenance portions of the Water Fund, the Sewer Fund, the Storm Drain Fund, the Golf Fund, the Cemetery Fund, and the Transit Fund. Internal Service Funds – Used to account for the financing of goods or services provided by one City department to other City departments on a cost-reimbursement basis. The City has internal service funds for Employee and Retiree Benefits, Vehicle, Equipment and Computer Replacement, Facilities Renovation, Street Light Replacement, Traffic Signal Replacement, Public Art Acquisition and Maintenance, Insurance, and Park and Median Renovation. Special Revenue Funds – Used to account for specific revenue sources that are restricted by law to expenditures for specific purposes. In the operating budget, these include DARE, Asset Forfeiture, Recycling Funds (Measure D, Import Mitigation, Beverage Container Recycling, RPPP Recycled Products), Lower Income Housing, Downtown Parking, Landscape and Lighting Districts, Geologic Hazard Districts, HOME Program, Law Enforcement Services Grant, Used Oil Grant, HBPOA Maintenance District, Urban Forestry, Community Development Block Grant, Miscellaneous Donations, Another H.A.P.P.Y. Public Art Donations, Downtown Economic Development Loan and Abandoned Vehicles. Trust Funds – Used to account for assets held by the City in a trustee capacity. The City has a trust fund for the Pleasanton Township County Water District #3 (PTCWD #3). The City’s accounting system operates on a modified accrual basis for the General Fund, the Debt Service Fund and the Special Revenue Funds. In these funds, revenues are recorded when they are received or when they are both measurable and available to finance the expenditures of the current period. Expenditures are recorded when liabilities are incurred. The City uses the accrual method of accounting for the Enterprise Funds and the Internal Service Funds where revenues and expenses are recorded when earned and incurred, respectively. For budgeting purposes, the City uses a Working Capital basis. This means that the focus is on changes in current spendable resources. The budgeted funds are adopted on a basis consistent with generally accepted accounting principles in the United States.